2022 was about restoring trust, 2023 should be about nurturing it: How Morocco stays the course on a just transition towards sustainable development

A nation loses critical energy supplies and looks for alternatives, balancing its near-term needs against longer-term sustainability goals. Most would think this refers to a European country following the Russia-Ukraine war of 2022. But it also describes the Kingdom of Morocco, which managed to meet its #development needs without derailing the #sustainability agenda while increasing energy #security , primarily for #trust .

2022 will be remembered as the year when an underdog, Morocco’s national soccer team, reached the World Cup’s semi-finals and restored the trust of a nation and that of the Global South. 2022 will also be remembered as the year when consumers favored short-term security over sustainability. However, security concerns are neither temporary nor superfluous. Energy transition takes time and could require investments of $250 trillion over 30 years. After lockdowns, wars and market dislocations, 2022 offered us a clear conviction: this is the wrong time to lose credibility and trust after years of advocacy on the climate emergency, nature and biodiversity protection. In fact, 2022 is not to blame, since electricity price futures reached record €800 per MWh in 2021. But let’s get back to how Morocco is managing to restore and maintain trust.

On October 31, 2021, a 10 billion cubic meter natural gas pipeline between Africa and Europe shut down, cutting Morocco off. The country could have gone down the irreversible path of retooling the energy system to fill the gap with cheap and dirty fuels. Instead, on November 1st, it joined the world at COP-26 in Glasgow in resolutions to move beyond coal. The country, like others, was still recovering from the economic shockwaves of COVID, and turned this new challenge into opportunity. A few weeks before Russian troops entered Ukraine, we had a roadmap in place for energy security. This included fast-tracking sustainable access to the international Liquefied Natural Gas (LNG) market to “power past coal,” decarbonize industries, and address the intermittency of renewables. After all, LNG was created to transcend boundaries and diversify supplies away from pipeline gas which, at times, could be used as a political weapon.

Some questioned the timing of Morocco’s entry into a strained LNG market and if such entry, even for a tiny portion of the global market, would exacerbate the energy crisis. Hot air. This entry was a critical move to restore the trust of people, investors, and allies on both sides of the Mediterranean Sea, with a just and informed energy, economic and social transition. Financing gas projects was still cumbersome. The fuel was a “bridge to nowhere”, not a transition fuel to meet climate ambitions. Again, I recall in November 2021 holding up Ukraine as an example: wary of relying on Russia’s supplies, Kiev had reversed pipelines with its neighbors to access the LNG market. Against this backdrop of uncertainty, we too decoupled supply from infrastructure. We increased the system’s security, sustainability, and flexibility by enabling more renewables, by pushing for more efficiency and by increasing the integration with global markets – three pillars of our energy strategy.

In Europe, commodities and utilities bills soared to record levels. Countries scrambled to acquire supplies or curtail consumption. For some, 2022 resembled the 1970s oil price shocks in which Japan and Europe lost some competitiveness. This time, countries have barely emerged from a global pandemic, with soaring inflation, tightening monetary policies, and a dollar at its strongest level in a generation. Europe is not the only region suffering. Energy poverty, supply insecurity, and environmental degradation have already become the norm in many countries, alongside food and water crises.

A difficult global environment also makes informed sustainable economics even more critical. On a trip to Berlin in April, I was met with disbelief when I expressed a $2 per kg breakeven cost cap for hydrogen and emphasized economics over green, blue, or pink color designations. Then, we received private offers for green hydrogen produced for less than $1.8 per kg. The July 2022 Inflation Reduction Act’s “Hydrogen shot” incentives target $1 per kg by 2031. This is very positive but while some are lifting fracking bans, re-firing coal, and arbitrarily pricing in and out externalities, politicians and leaders must ensure that taxpayers’ money is not used to incentivize new bubbles that generate negative returns to society, stranded assets, or bankruptcies. Our actions, unilaterally, bilaterally and multilaterally, need informed consistency. As we are considering the theme of the sixth session of the United Nations Assembly for Environment (UNEA-6), the call to reinvigorate multilateralism to overcome the multiple crises that put the viability of life on earth at risk is more pressing than ever. It needs to be heard and supported with informed decisions.

If financial institutions and the private sector say that, with the right economies of scale and incentives, properly structured investments, and the right balance between adaptation and mitigation, we can move together toward a just, informed, affordable and bankable transition, why don’t we do just that? To restore and nurture trust. That is my wish for 2023.