Tag: international cooperation
Beyond North Africa: Ukraine’s Agricultural Engagements with Sub-Saharan Partners
In recent years, the global agricultural landscape has shifted dramatically, shaped by the intersecting crises of climate change, food insecurity, geopolitical tensions, and technological disruption. Against this backdrop, Ukraine and Sub-Saharan Africa have emerged as two regions uniquely positioned to build a complementary partnership in the agri-food sector – one that not only addresses immediate humanitarian and trade challenges but also lays the groundwork for long-term sustainable development. As Ukraine looks to diversify its agricultural partnerships beyond traditional European and Asian markets, Ukraine’s agricultural engagements with Africa offer both a growing consumer base and an investment frontier where Ukraine’s expertise and surplus production capacity can meet critical demand. This policy brief explores how Ukraine’s agricultural engagements with certain African countries can deepen cooperation across the agricultural value chain. Drawing on in-depth regional analyses conducted by the Kyiv School of Economics Agrocenter (Martyshev, Stolnikovych & Piddubnyi, 2024a–d), the discussion considers strategic sectors, regional particularities, and policy innovations essential for a robust and mutually beneficial partnership.
Ukraine Agricultural Engagements with Africa: Opportunities for Growth and Partnership
Ukraine is one of the world’s most productive agricultural exporters, supplying significant volumes of wheat, corn, sunflower oil, and other essential staples. Africa, by contrast, is grappling with an array of food production and security challenges. In many regions, agricultural productivity remains stubbornly low, constrained by underinvestment, poor infrastructure, limited irrigation, climate volatility, and outdated farming techniques. Yet, Africa’s demographic trends suggest a rapidly growing demand for food. Urbanization is accelerating, dietary preferences are shifting, and consumers are increasingly looking beyond subsistence crops toward diversified and processed foods. These dynamics set the stage for Ukraine to serve not just as a food exporter, but also as a strategic partner in Africa’s agricultural transformation.
In a series of recent regional reports by the Kyiv School of Economics Agrocenter, all titled Cooperation Between Ukraine and African Countries in Agriculture, (Martyshev, Stolnikovych & Piddubnyi, 2024a,b,c,d), the Kyiv School of Economics (KSE) explored the mutually beneficial opportunities for collaboration between Ukraine and Africa in the agricultural sector. The full reports covering Central, East, Southern, and West Africa are available at https://agrocenter.kse.ua. This brief summarizes the key findings and insights drawn from those reports.
Data and Methods
A standardized analytical framework across four African regions, Central, East, Southern, and West Africa, focusing on three major countries in each region, was applied. The objective was to, through data-drive insights, assess the potential for agricultural cooperation with Ukraine in food security, trade, production systems, and policy environments.
- Food security analysis relies on indicators from FAOSTAT and the World Bank, including prevalence of undernourishment, dietary energy adequacy, and trends in malnutrition from 2000 to 2022.
- Trade analysis uses data from UN Comtrade, ITC Trade Map, Ukrainian customs, and national sources to evaluate import-export flows, Ukraine’s market share, and commodity dependencies, particularly in cereals and vegetable oils.
- Agricultural sector profiling includes employment, GDP contribution, key crop and livestock outputs, and irrigation coverage. Data are drawn from FAOSTAT, national agricultural statistics, and World Development Indicators.
- Infrastructure and technology assessments are based on literature reviews and secondary sources evaluating the state of storage, logistics, irrigation, and mechanization. Attention is given to adoption of modern tools like drones and ICT platforms.
- Policy and institutional reviews focus on national agricultural strategies, trade policies, food security programs, and land tenure systems, using official government documents and donor evaluations.
- For East and West Africa, findings were also informed by stakeholder input from KSE Agrocenter webinars held in 2024, involving local policymakers, researchers, and trade representatives.
This mixed-methods approach enabled a comparative, region-specific understanding of agri-food challenges and opportunities relevant to Ukraine’s engagement in Africa.
Empirical Findings and Policy Recommendations
Trade: A Nascent but Promising Relationship
The trade relationship between Ukraine and Africa, while still developing, shows considerable potential. Based on empirical trade flow data, Ukraine’s primary exports to Africa include cereals like wheat and corn, along with vegetable oils. Imports from Africa, however, are minimal, revealing the one-sided nature of current trade. This asymmetry is due to limited diversification, logistical barriers, and underdeveloped bilateral trade frameworks. Trade activity is concentrated in North and West Africa, while countries in Central, Eastern and Southern Africa receive fewer Ukrainian goods. Engagement with regional trade blocs such as the Economic Community of West African States (ECOWAS) and the East African Community (EAC) presents both regulatory hurdles and strategic entry points.
Based on observed trade gaps, the policy recommendation is to expand Ukraine’s access to African markets by negotiating preferential trade agreements and eliminating non-tariff barriers. Appointing agrarian attachés in African capitals can facilitate market entry, monitor regional regulations, and promote Ukrainian products in regional fairs and business forums.
Joint Investment Opportunities
Based on field-level evidence and investment data, agriculture in Central and East Africa is constrained by severe infrastructure deficits. Post-harvest losses, driven by the absence of proper storage, cold chains, and road networks, are estimated to cost billions in lost output annually. The strategic proposal is for Ukraine to co-invest in building post-harvest systems, leveraging its expertise in grain storage and export logistics. Ukrainian firms could collaborate with African partners on silos, warehouses, and cold storage tailored to tropical climates.
Food processing also represents a high-potential area. Many East African countries impose protective tariffs on processed food imports to stimulate local industry. Based on these findings, the policy recommendation is for Ukraine to establish agro-processing joint ventures that align with local industrial policies. These ventures would stimulate employment, reduce food imports, and strengthen Ukraine’s position in value-added agriculture abroad.
Technology Transfer Potential
Empirical assessments reveal that low mechanization, climate volatility, and limited access to agri-tech remain persistent barriers to productivity in much of sub-Saharan Africa. Ukraine, with its advanced capabilities in precision agriculture, can provide high-impact technologies such as satellite-based soil monitoring, drones for crop surveillance, and automated irrigation systems. For example, in parts of Southern Africa like Zambia and Namibia, where rainfall is unpredictable, these technologies can help stabilize crop yields and reduce risk for smallholder farmers.
The strategic proposal is for Ukrainian firms to develop demonstration farms and pilot projects that showcase these innovations. Based on successful models from Eastern Europe, these pilots could serve as training grounds for local agronomists and as proof-of-concept for scalable investment.
Regional Variability and Context-Specific Cooperation
Central Africa (e.g., the Democratic Republic of the Congo (DRC), Angola, Cameroon)
Based on food security metrics, Central Africa faces some of the highest levels of undernourishment on the continent. In DRC for example, more than one-third of the population is chronically underfed. Political instability and unclear land rights further hinder agricultural investment.
The strategic recommendation is to continue and scale humanitarian programs like “Grain from Ukraine,” while also offering technical support in veterinary services for cattle and poultry sectors, particularly in Angola and Cameroon. Ukrainian expertise in land reform and extension services could also help unlock investment in rural farming.
East Africa (e.g., Ethiopia, Kenya, Tanzania)
Agricultural productivity is improving in East Africa, but gaps remain. Based on infrastructure and yield data, the region struggles with limited access to farm machinery, irrigation systems, and post-harvest technology. The policy recommendation is to focus on joint research, agricultural education, and training programs that address these specific bottlenecks. Ukrainian institutions could work with African universities to design curricula on crop science, data-driven farming, and agri-business entrepreneurship. Mobile extension services and remote learning platforms could further boost rural outreach.
Southern Africa (e.g., South Africa, Botswana, Namibia)
This region has a more developed agricultural sector with export orientation and mechanization. However, environmental and political factors, such as energy shortages and water scarcity, threaten sustainability. Based on these empirical conditions, the strategic proposal is for Ukraine to engage through agri-consulting and technology partnerships. High-value inputs like hybrid seeds and automated irrigation systems can address local constraints, while cooperation on renewable energy solutions for farming could provide long-term stability.
West Africa (e.g., Nigeria, Ghana, Côte d’Ivoire)
According to population and consumption data, West Africa faces mounting pressure on food systems. Despite improving domestic output, infrastructure deficits and policy inconsistency limit food availability. Based on these findings, the strategic recommendation is to invest in logistics infrastructure, such as road and rail links to key ports and warehouses, as well as to diversify the region’s agricultural base. Ukrainian seed companies could introduce crops like barley and legumes, adapted to regional climates, to reduce dependence on cocoa and palm oil.
Conclusion
In conclusion, the partnership between Ukraine and Sub-Saharan Africa in the agricultural sector is not merely a matter of commerce; it is a strategic opportunity with tangible benefits for both sides. Ukraine, as a breadbasket with advanced agri-tech capabilities, can play a pivotal role in enhancing food systems in parts of Africa where food insecurity remains acute, particularly in regions such as the Horn of Africa (e.g., Somalia and Ethiopia), the Sahel (e.g., Niger and Mali) and Central Africa (e.g., the Democratic Republic of the Congo). At the same time, many African nations offer Ukraine access to growing consumer markets, underutilized arable land, and increasing geopolitical relevance in a rapidly evolving global landscape.
To realize this vision, both sides must commit to a comprehensive, long-term strategy built on trust, transparency, and mutual benefit. The road ahead is complex but filled with promise. With smart investments, targeted diplomacy, and collaborative innovation, Ukraine and Africa can co-author a new chapter in global agriculture, one defined not by scarcity and dependency, but by resilience, growth, and shared prosperity.
References
Central Africa
- Martyshev, P., Stolnikovych, H., Piddubnyi, I. (2024a). Cooperation between Ukraine and African countries in agriculture: Central Africa. Center for Food and Land Use Research at Kyiv School of Economics.
- Abia, W. A., Shum, C. E., Fomboh, R. N., Ntungwe, E., & Ageh, M. T. (2016). Agriculture in Cameroon: Proposed Strategies to Sustain Productivity. International Journal for Research in Agricultural Research, 2(2), 1–14.
- Africa24. (2024, January 25). Cameroon reduces state fees for agricultural enterprises by 92%.
- African Development Bank. (2022). Cameroon – Agricultural Production Support Program (PARPAC).
- African Development Bank. (2023). Angola – Agriculture Sector Reform Program (ASRP).
- African Development Bank. (2024). African Economic Outlook 2024: Driving Africa’s Transformation.
- Arsene, M. B., & Mwine Fyama, J. N. (2021). Potential threats to agricultural food production and farmers’ coping strategies in the marshlands of Kabare in the Democratic Republic of Congo. Cogent Food & Agriculture, 7(1), 1933747.
- Binswanger-Mkhize, H. P. (2008). Empowering Rural People for Their Own Development. FAO.
- Boko, M. I., Niang, A., Nyong, C., et al. (2007). Africa Climate Change: Impacts, Adaptation and Vulnerability. IPCC, Fourth Assessment Report.
- CAADP. (2013). Agriculture Investment Opportunities Brief: CAADP Investment Facilitation Programme – DRC.
East Africa
- Martyshev, P., Stolnikovych, H., Piddubnyi, I. (2024b). Cooperation between Ukraine and African countries in agriculture: East Africa. Center for Food and Land Use Research at Kyiv School of Economics.
- Achandi, E., Mujawamariya, G., Agboh-Noameshie, A., et al. (2018). Women’s access to agricultural technologies in rice production and processing hubs: A comparative analysis. Journal of Rural Studies, 60, 188–198.
- African Development Bank. (2024). African Economic Outlook 2024.
- Ayenew, M., & Arquitt, S. (2018). Kenya Agricultural Performance and Targets. CCGA Policy Brief No. 2.
- Bekabil, U. T. (2014). Review of challenges in Ethiopia. Journal of Natural Sciences Research, 4(18), 70–77.
- Casaburi, L., Kremer, M., & Mullainathan, S. (2016). Contract farming and agricultural productivity in Western Kenya. In S. Edwards et al. (Eds.), African Successes, Vol IV. University of Chicago Press.
- Charles, G., Jeppesen, S., Kamau, P., & Kragelund, P. (2016). Food-processing sector study. Forum for Development Studies, 44(1), 109–131.
- FAO. (2015–2016). AQUASTAT Country Profiles – Kenya, Ethiopia, Tanzania.
- Government of Kenya. (2007). Kenya Vision 2030.
- Government of Tanzania. (2015). Agricultural Sector Development Strategy II (ASDS II).
- Kashindi, G. (2020). Local agricultural production in Kenya. KAS African Law Study Library, 7.
- Laichena, J., Kiptoo, E., et al. (2022). Kenya agricultural policy profile. IWMI/CGIAR.
Southern Africa
- Martyshev, P., Stolnikovych, H., Piddubnyi, I. (2024c). Cooperation between Ukraine and African countries in agriculture: South Africa. Center for Food and Land Use Research at Kyiv School of Economics.
- Acquah, B. K. (2004). In Shaping the Future of African Agriculture for Development. AAAE.
- AgriSA. (2024). Key Issues for South African Agriculture.
- Bank of Namibia. (2017). Feeding Namibia: Agricultural Productivity and Industrialisation.
- Commission on Restitution of Land Rights. (2021). Strategic Plan 2021–2024.
- Department of Agriculture, Land Reform and Rural Development. (2022, 2024). Agriculture and Agro-Processing Master Plan; State Land Lease and Disposal Policy.
- Department of Rural Development and Land Reform. (2013). NARYSEC Booklet.
- Financial and Fiscal Commission. (2021). Strategic Plan 2020–2025.
- Fortunato, A., & Enciso, S. (2023). Food for Growth: Namibia’s Agriculture Sector. Harvard Growth Lab.
- Giesel, C. (2023). Agriculture Challenges in South Africa. Bizcommunity.
- GIZ. (2020). Sector Brief: Namibia Agriculture.
- Government of Namibia. (2004–2017). Vision 2030, Agriculture Policy, Development Plans, and Cooperative Policy.
- Namibia Statistics Agency & UNICEF. (2021). Multidimensional Poverty Index Report.
West Africa
- Martyshev, P., Stolnikovych, H., Piddubnyi, I. (2024d). Cooperation between Ukraine and African countries in agriculture: West Africa. Center for Food and Land Use Research at Kyiv School of Economics, https://kse.ua/wp-content/uploads/2024/06/COOPERATION-BETWEEN-UKRAINE-AND-AFRICAN-COUNTRIES-IN-AGRICULTURE-WEST-AFRICA-.pdf
- Banson, K., Nguyen, N., & Bosch, O. (2014, 2015). Systems Research and Behavioral Science.
- Diallo, S., Fofana, I., & Diallo, M. (2020). AGRODEP Working Paper 0041. IFPRI.
- FAO. (2005–2016). AQUASTAT Country Profiles – Ghana, Nigeria, Côte d’Ivoire.
- FAOSTAT. (2023). Food, Beverages and Tobacco Data.
- FMARD. (2022). National Rice Development Strategy II (2020–2030).
- Ghana Business News. (2009). The Challenge of Agriculture in Ghana.
- Jalloh, A., Nelson, G., Thomas, T., et al. (2013). West African Agriculture and Climate Change. IFPRI Monograph.
- JICA. (2023). Côte d’Ivoire Country Analysis Paper (JCAP).
- King, C. (2008). Community resilience in agri-ecological systems. Systems Research and Behavioral Science, 25(1), 111.
- Kouassi, J-L., Gyau, A., et al. (2021). Land, 10(4), 429.
- NEPAD. (2003). Maputo Declaration on Agriculture and Food Security.
- Nitag Consults Ltd. (2009). Agricultural Development Review.
- Olukunle, O. (2013). Challenges and Prospects of Agriculture in Nigeria. Journal of Economics and Sustainable Development, 4(16).
- USDA. (2023). Nigeria Grain and Feed Update (GAIN Report NI2023-0008).
Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.
OECD DevTalks: The Transformation and Reconstruction of Ukraine
The war in Ukraine, caused by Russia’s invasion, remains a profound humanitarian crisis with far-reaching economic and social consequences worldwide. In response, the Organisation for Economic Co-operation and Development (OECD) has strongly condemned Russia’s actions. Moreover, it is now advancing a new strategy to strengthen Ukraine’s recovery and reconstruction efforts.
The OECD’s work builds on a Memorandum of Understanding first signed with Ukraine in 2014 and renewed in 2021. Since then, the organisation has deepened its collaboration with Ukrainian partners to rebuild the nation’s economy and institutions. In addition, the OECD Development Centre plays a crucial role by providing policy expertise and data-driven analysis. It supports multiple sectors, including governance, innovation, and sustainable growth. As a result, these coordinated efforts aim to help Ukraine achieve long-term stability and resilience.
Webinar on Ukraine’s Economic and Social Transformation
On Tuesday, 17 May 2022, the OECD DevTalks series hosted a high-level webinar focusing on Ukraine’s economic and social transformation, both before and after the full-scale invasion. The event gathered leading economists, policymakers, and development experts to discuss:
- The state of Ukraine’s economy prior to 2022
- The impact of the war on social and economic structures
- Priorities for reconstruction and recovery
- The role of international support and cooperation
This discussion contributed to shaping a shared vision for Ukraine’s future, highlighting the resilience of its people and institutions amid ongoing challenges.
Distinguished Speakers
- Mathias Cormann, Secretary-General, OECD
- Vadym Omelchenko, Extraordinary and Plenipotentiary Ambassador of Ukraine to France
- Yuriy Gorodnichenko, Quantedge Presidential Professor of Economics, University of California, Berkeley
- Nataliia Shapoval, Head of KSE Institute & Vice President for Policy Research, Kyiv School of Economics
- Tymofii Brik, Acting Wartime Vice-President of International Affairs & Head of Sociological Research, Kyiv School of Economics
- Torbjörn Becker, Director, Stockholm Institute of Transition Economics (SITE), Stockholm School of Economics
- William Tompson, Head of Eurasia, Global Relations and Co-operation, OECD
- Ragnheidur Elín Árnadóttir, Director, OECD Development Centre
About OECD DevTalks
OECD DevTalks is a continuing series of expert panel discussions and blogs organized by the OECD Development Centre. Each session brings together global thought leaders to exchange ideas on sustainable development, inclusive growth, and policy innovation. For more #DevTalks – a series of online panel discussions, along with Development Matters blogs, follow the OECD #DevTalk page.
Disclaimer: Opinions expressed during events and conferences are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.
Green Transition: Adapting Markets and Policies
This policy brief summarizes the discussion at the 8th annual SITE Energy Day conference, devoted to market adaptations and policies necessary to address the green transition. Recent energy trends with ever more green energy-mixes will have consequences for the functioning of related markets as well as implications for appropriate policy responses. New financial solutions, technological developments, international cooperation, and national policy initiatives in both developing and developed countries are examples of adaptations to this transition process. To discuss these issues, the conference brought together a group of distinguished experts from the energy industry, policy community and academia.
In December 2014, world leaders have gathered in Peru (Lima) for the 20th annual meeting of the United Nations Framework Convention on Climate Change. This convention has as an objective to “stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system” (see UNFCCC’s webpage). Even though the agreement to reduce emissions to a sustainable level may take years to be negotiated, at least 195 countries have ratified the UFCCC convention. The willingness to reduce environmentally harmful emissions has led to many countries changing their energy profile to include more green energy, a process that is often referred to as “green transition”.
It may be worth mentioning that the label “green transition” consists of two conceptual components. “Green” refers to the ability to generate environmentally friendly energy, which has become a key challenge for our society. Indeed, a majority of people now recognize the pressing need to cut pollution in the face of climate change and environmental degradation. The wording “transition” acknowledges that a shift toward a greener energy mix seems unavoidable, but this shift may not occur immediately or uniformly around the globe. The required time for change is long and the shift itself may not be smooth. To put it differently, the green transition has had and will continue to have wide-ranging consequences for businesses, governments, and the international community.
As a result, there is a need to carefully address the potential implications for the existing energy and related markets and market players, and for government policies, as well as new markets and new policies triggered by the green transition. These topics were the focus of the 8th SITE Energy Day, a half-day conference held at the Stockholm School of Economics on December 2, 2014.
Green Transition and the Energy Markets
The first panel focused on how energy markets have responded to green transition and how they may react in the future. Speakers from electricity companies, regulatory bodies and think tanks discussed how the green transition may affect the use of traditional financial instruments by energy companies; the choice of economically viable technology for producing green energy; and the way markets could be integrated to increase the efficiency of green energy.
As green transition almost always introduces more intermittent production, it is likely that market uncertainty will increase. This is one of the reasons why traditional financial instruments may not be fully adequate. The first speaker Laurent Cheval, Head of Nordic and Fuel Origination in the business division Asset Optimization & Trading at Vattenfall discussed this issue extensively. Energy companies face substantial financial risks since both prices and quantities may be highly volatile. To mitigate these risks, market participants may use an array of financial products. In mature energy markets, the products are fairly standardized. However, more complex and tailor-made financial products are required to face the ongoing changes in the sector. For example, the increased share of renewable energy combined with more interconnected markets create specific market risks. To hedge against risks associated with weather changes, future fuel costs, interest rates and so on, more and more energy providers trade customized derivatives “over-the-counter” (OTC) rather than through a centrally-cleared exchange. Another example is the development of decentralized power production and the rise of the “Prosumer” who simultaneously produces and consumes power. So far, the relevant regulation is underdeveloped and there is an additional demand for innovative financial solutions. Large energy companies such as Vattenfall are for instance offering a range of financial hedging solutions combined with actual physical handling and delivery of energy products.
Green transition should in the long run lead to a domination of environment friendly energy. However it is important that only economically viable technologies subsist. It is therefore necessary to assess the cost of producing green energy. Lars Andersson, Head of Wind Power Unit at the Swedish Energy Agency, reported on an extensive study done by the Agency on this issue. Over the last five years, the production cost of wind power has fallen consistently and capacity usage has increased. This dramatic change in the wind power industry likely implies that the existing subsidies for building wind power plants gradually will be phased out. It is unclear how the industry will react to these cuts in subsidies. Furthermore, according to Andersson, wind production faces at least two challenges. Without developing the capabilities for energy storage, electricity markets will face more energy imbalances as the share of wind power increases. Additionally, the support from the local communities is needed to ensure an expansion of wind power. Addressing these issues requires the development of new regulation and defining a common goal which may promote cooperation between stakeholders.
Ultimately the green transition will end when and if the green energies are largely adopted around the globe. One way to accelerate this green transition may be to coordinate action and development of governmental policies. Martin Ådahl, Chefsekonom at Centerpartiet, and Daniel Engström, Programchef Miljö och Klimat at Fores, presented the current state of the international climate policy and discussed the benefits of linking carbon emission rights markets. Because of conflicting interests, the likelihood of reaching an agreement within the current United Nations climate negotiations is rather small.
However, Ådahl and Engström suggested that the focus should instead be on reaching agreements between big polluter countries that contribute the lion’s share of global emissions. Indeed, regional emission trading schemes already exist in the EU, the US and China, the three regions which together account for over 50 percent of global emissions. One potential shortcoming of this suggestion is that it may not be enough to stabilize greenhouse gas concentrations in the atmosphere. Thereby, Ådahl and Engström discussed the possibility to link current cap-and-trade markets, as a first step toward an international system with a more formal global agreement. Linking cap-and-trade markets has many benefits, especially in the form of efficiency gains. However, emission caps vary across countries and regions because of different political goals or priorities. When markets are linked, difference in abatement costs (or allowance prices) would lead to a flow of allowances and emissions from countries/regions with low abatement cost to countries with higher ones. Thereby prices would be equalized, benefiting entities with cheaper allowances. To avoid opportunistic behavior, countries would first have to agree ex ante on an exchange rate between different countries’ emission rights. Second, a clear regulatory framework is required. Both Ådahl and Engström emphasized the need of an international organization devoted to climate economics. Such an institutional body could not only regulate the links between cap-and-trade markets, but also provide concrete solutions and technical models to improve on the market design.
Environmental Policies: International Experience
The second panel focused on how governments may promote green transition. Anna Pegels, Senior Researcher at the German Development Institute (DIE), reviewed green policy initiatives in developing countries. Pegels argued based on evidence from e.g. India and South Africa that it is possible to combine substantial growth with green energy. This is good news since emerging countries are among the highest polluters. However, to change a country’s energy profile, governments need to intervene and develop new industrial policies.
Governments can set long-term goals, which are supported by short- and mid-term targets. However, given the large profits that are at stake, officials may likely be subject to the risk of capture and corruption. To limit such risks, Pegel emphasized the need to introduce competition in the energy sector as a whole. Subsidized feed-in tariffs for renewable energy for example should be only a first step, to reach a certain scale of production. But the technology is mature enough that producers should be able to bear some additional risk in their current activity. This should increase the scope for competition. Finally, it is essential that governments continuously engage in policy revision cycles and learn from other countries’ experiences.
Benjamin Sovacool, Professor of Business and Social Sciences at Aarhus University and Director of the Danish Centre for Energy Technologies, talked about the process of low carbon transition in the Nordic region. In spite of large investments into renewable energy, fossil fuels still dominate the consumption in the Nordic countries and considerable measures need to be taken in the decades ahead to make the transition to a greener energy mix. Sovacool highlighted four areas which could help reduce the carbon footprint of the Nordic countries: renewable energy, increased energy efficiency of buildings, transportation, and carbon capture and storage (CCS). In order to be successful, the green transition has to bring about a systemic change engaging actors across the economy, particularly including end-users. There should also be a focus on additional technological progress. Finally, Sovacool noted that a rapid emission reduction such as the one planned in the Nordic countries is unlikely to be followed on a global scale in the near future due to a lack of political feasibility.
Conclusion
The green transition is expected to have a profound impact on the functioning and structure of energy markets as well as the policies that facilitates this transition.
There is an ongoing process of decentralization in the energy sector, with the rise of “prosumer” market places that alter market dynamics. Moreover, market uncertainty is increasing due to more intermittent production (due to renewables) and a stronger interconnectedness between energy markets. It is likely that energy imbalances will be a major concern and that more and more energy trade will take place on real time markets (as opposed to e.g. on the day-ahead market). As markets’ linking becomes stronger, the interdependence between markets in terms of energy type and geographical location will be intensified. The need for coordination and international cooperation will be even more pressing. The uncertainty regarding the development of international cooperation, but also regarding national policy changes, may however disrupt energy markets. Measures such as withdrawing existing subsidies must be handled in a gradual and strategic manner so as not to discourage investment. A key issue for governments is to have a credible green policy in the long-term. Such credibility will also depend on the level of involvement of different actors in the green transition, including the necessity to have a multilevel engagement of the end-users.
References
- Energimyndigheten, (2014), Produktionskostnads-bedömning för Vindkraft i Sverige, ER 2014:16
- Pegels, A. (Ed.). (2014), Green industrial policy in emerging countries, Vol. 34, Routledge
- Rutqvist, J., Engström, A.and Ådahl, M., A Bretton Woods for the Climate. Fores, 2010
- SITE 8th Energy Day, http://www.hhs.se/en/about-us/calendar/site-external-events/2014/site-energy-day/
- UNFCCC, (n.d). First steps to a safer future: Introducing The United Nations Framework Convention on Climate Change, http://unfccc.int/essential_background/convention/items/6036.php [8 December 2014]