Part of a new industry series: Powering the Future™: Climate Risk Intelligence For The Energy Industry
The energy sector has a paradoxical role in the climate crisis: it is both a significant source of global greenhouse gas emissions and a vital part of building climate resilience. Approximately three-quarters of global emissions originate from the production and consumption of energy, primarily through the burning of fossil fuels for electricity, heating, industry, and transportation. As a result, changing how we produce, deliver, and consume energy is the most effective way to limit global warming to well below 2°C, as outlined in the Paris Agreement.
While energy systems are at the core of the problem, they are also vital to the solution. Every approach to climate adaptation, from climate-smart agriculture to coastal protection, from water purification to data infrastructure, relies on reliable, affordable, and increasingly clean electricity. Without resilient energy systems, societies cannot effectively respond to rising temperatures, extreme weather, or climate-related economic shocks. Power outages during hurricanes, grid failures during heat waves, and energy shortages in drought-affected hydropower areas serve as clear reminders that climate adaptation heavily depends on energy.
Furthermore, decarbonizing the energy system through renewables, storage, electrification, efficiency, and digital controls is essential not only for mitigation but also for enhancing system flexibility in response to unpredictable climate patterns. The move toward distributed generation, smart grids, and electrified end-use creates both opportunities and vulnerabilities that must be assessed in terms of climate risk.
In summary, energy is not just another sector facing climate risk; it is the core infrastructure on which all other sectors rely. Recognizing and managing the dual role of energy, as both emitter and enabler, will shape the future of climate action. For the energy industry, this means not only lowering emissions but also ensuring the systems that sustain societies can withstand and adapt to the disruptions caused by climate change.
Ready to get started? To learn more about how ClimaTwin can help you assess the physical and financial impacts of future weather and climate extremes on your infrastructure assets, capital programs, and investment portfolios, please visit www.climatwin.com today.
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