Sri Lanka's energy crisis is a glimpse of what's coming

November 4, 2022
Sri Lanka energy Reuters

Drivers push auto rickshaws in a line to buy petrol from a fuel station, amid Sri Lanka's economic crisis, in Colombo, Sri Lanka, July 29, 2022.

REUTERS/Kim Kyung-Hoon

When Sri Lanka’s fuel crisis hit in June, waiting in a petrol queue for over 14 hours in Colombo gave time for some truths to sink in. One is that going to get that coffee to keep you awake would inevitably prompt the queue to move. Another is that when a crisis strikes, not everyone suffers equally.  

The reality is that when the current fuel shortage - and the worst economic crisis in more than 70 years - hit Sri Lanka, and petrol queues backed up for days across Colombo, it was the poorest who queued longest, facing an uphill struggle against rising prices.  

Compounded by the COVID-19 pandemic and war in Ukraine, the crisis in Sri Lanka is a symptom of a bigger problem unfolding globally. The consequences of relying on finite fossil fuels tied to volatile markets to supply our energy and drive our economies should have hit home during the fuel, food and financial crisis of 2008. 

As we recovered, this was a moment to prioritize social protection to cushion the poor from future destabilizing price hikes.

And yet, here we find ourselves again. According to data analyzed by energy think-tank Ember Climate for the Financial Times, European governments will spend at least 50 billion euros this winter on new and expanded fossil fuel infrastructure and supplies, including gas and coal to fuel power plants, amid severe cuts to gas supplies from Russia and record-high prices. For the past 200 years, our economies have been shaped by fossil fuels, and the addiction is hard to shake. 

We can’t do away with fossil fuels overnight – as being stuck in a petrol queue reminded me. And of course, our current energy crisis cannot be blamed on fossil fuels alone: these issues stem from a combination of political leadership, short-sightedness and poor application of agricultural reforms.   

In contrast with crises from previous decades though, renewable technology has become significantly cheaper. Since 2010, there has been a sustained decrease of up to 85 percent in the costs of solar and wind energy, and batteries. 

With the energy sector accounting for almost three quarters of human-caused greenhouse gas emissions, shifts to clean, renewable sources are critical. But there is still much more to do. 

First on the list is to debunk the view that now is not the time for fossil fuel subsidy reform. It is astonishing that the world spends US$423 billion annually to subsidize polluting fuels to make them more available for people. In the wake of price hikes, many countries have resorted to heavy subsidization of fuel and electricity.

Just transition

We urgently need progressive reform that leads us away from fossil fuels that put a strain on the economy and on the planet, and towards social protection measures that support the poor and vulnerable.

In Sri Lanka, such reform could include conversion of three-wheelers and buses to EV technology that can reduce the burden of foreign exchange payments for fossil fuel imports and an automatic fuel pricing system considering who should pay and who could pay.

These measures can effect behavioral change at a scale that will trigger other positive outcomes. For example, Sri Lanka’s QR Code system implemented during the crisis, to distribute petrol quotas for vehicles depending on their size, showed signs of reduced daily petrol consumption among three-wheelers, motorbikes and cars.

The question is, can we make these behavioural changes last, and on a scale that can reduce pressure on foreign exchange reserves while reducing global carbon emissions?

The way we deal with the energy crisis cannot be about development trade-offs. Globally about three-quarters of a billion people still live without electricity, half of them in fragile or conflict-affected settings.

As economies recover from the impacts of COVID-19, investing in green recovery can reduce extreme poverty compared with a pre-pandemic baseline, according to UNDP’s flagship ‘SDG Push’ research. Nature-based solutions like habitat restoration, reforestation, coastal protection and invasive species removal create jobs at over 10 times the rate of fossil fuels.  

Energy access and climate goals don’t have to be competing agendas. When COVID-19 hit Costa Rica, with about 97 percent of the population using renewable energy, the country was able to earmark a large chunk of its recovery budget to welfare and job support. 

At the end of my fuel queue, the shopkeeping who sold me my coffee as I left in a hurry, tapped on my window. “You forgot your change,” he said, handing it to me. It is the kind of solidarity we need – urgently and as a global community – to stem our fossil fuel addiction. Not for the benefit of a few in the short-term. But for the benefit of all in the long term.


This article was originally published here.