The Global Crisis Response Group on Food, Energy and Finance of the United Nations is urging the establishment of energy policies that reconcile the need for immediate action with long-term sustainable development.

According to the group, increasing energy costs are feeding the vicious circle of tight household budgets, food insecurity, energy poverty, escalating social discontent and hastening the cost of living problem.

The problem is seriously affecting weaker people in developing nations and jeopardizing hard-won improvements in access to electricity.

Major oil and gas companies recently reported record profits despite this worrying situation, which Secretary-General António Guterres, who released the brief, branded “immoral.”

“The combined profits of the largest energy companies in the first quarter of this year are close to $100 billion. I urge governments to tax these excessive profits, and use the funds to support the most vulnerable people through these difficult times,” he said.

The third brief from the GCRG urges governments to find the most efficient means to finance energy solutions, including through windfall taxes on the biggest oil and gas companies, as well as through publically supported cash transfers and rebate schemes, to safeguard all vulnerable populations.

The brief also calls for a switch to renewable energy.

The document follows the historic Black Sea Grain Initiative, which Russia, Turkey, and Ukraine agreed to on July 22 under the auspices of the UN, clearing the way for the first grain cargo from Ukraine to leave the port of Odesa on August 1.

It also emphasised the growing concern that many developing nations, particularly the most vulnerable populations, may be priced out of energy markets as a result of rising energy prices.

According to the brief, these countries have already been hardest hit by the cost-of-living dilemma due to significant setbacks in energy access and advancements in sustainable development since the COVID-19 pandemic.

More concerningly, the brief cautioned that there may be a potential “scramble for fuel” where only countries paying the highest prices can access energy. It added that governments must have the financial flexibility to support their most vulnerable populations to prevent levels of energy poverty from worsening or losing access to energy completely.

The report also recognized the risk that short-term energy policies will put developing nations on a path toward a costly and high-emission energy future due to a lack of policies that strike a balance between urgency and sustainability.

“Developing countries don’t lack reasons to invest in renewables. Many of them are living with the severe impacts of the climate crisis including storms, wildfires, floods and droughts. What they lack are concrete, workable options,” added Guterres.

It said the conflict in Ukraine and the ensuing global energy crisis serve as a harsh reminder of the need for energy resilience and a stronger push toward the switch to renewable energy sources. However, as the Secretary-General noted, policies, including social protection measures for those affected by the transition, technologies, subsidies, investments, and materials to promote renewables need to be put in place and easily accessible if countries are to hasten the transition.

The brief emphasised the need for any short-term policies and protection measures to assist manage the situation rather than make it worse, such as blanket subsidies for fossil fuels or initiatives to promote energy efficiency and demand reduction. To reach net-zero, the world must increase its reliance on renewable energy in the medium- to long-term.

The brief emphasises the need for any short-term policies and protection measures to assist manage the situation rather than make it worse, such as blanket subsidies for fossil fuels or initiatives to promote energy efficiency and demand reduction. To achieve net-zero goals, combat energy poverty, and improve and diversify the world’s energy mix in the medium- to long-term, the world must increase its reliance on renewable energy sources.

The brief emphasized the requirement for much more global investment.

According to the Secretary-General of the UN Conference on Trade and Production (UNCTAD), who coordinates and leads on the development of the GCRG briefings, renewable energy is frequently the least expensive and fastest to deploy source of electricity for many nations. But only if countries guarantee that supply chains function well and are free of bottlenecks.

According to her, the workforce has the right skills and that enough funds will be made available for the initial investments.

“To meet these conditions we have to scale up financing and technology transfer for the developing countries and the energy poor of the world,” she said.

The brief said by 2030, an ambitious renewable energy transition that includes skill development could add 85 million new employment in the fields of efficiency, renewable energy, and other energy-related industries.

Countries would also benefit from energy security provided by renewable energy production, which lessens future exposure to the volatility of oil, gas, and coal prices. Renewable energy production is frequently the least expensive energy production source with the quickest installation times.