4.2 Transition readiness Only six As mentioned in Fostering Effective Energy Similar to the progress achieved on global system countries managed Transition 2020 Edition, “the energy system’s performance imperatives, transition readiness to direct more than ability to deliver on the imperatives … depends on enablers sustained a growing global average 1% of their GDP the presence of an enabling environment for the performance over the past 10 years (Figure 12). in 2022 towards energy transition, measured in the ETI framework The direct enablers have been fuelling countries’ investments in by the transition readiness sub-index. Energy transition readiness and showcase the effect of renewables. transition readiness is captured by the stability of recent global focus on the policy and investment the policy environment and the level of political transition choke points. On the other hand, human commitment, the investment climate and access capital and innovation transition enablers did not to capital, the level of consumer engagement, the make substantial progress over the same period, development and adoption of new technologies, underscoring the importance of paying more etc. Some of these factors are beyond the scope attention to these blind spots to unlock further of the energy system”, such as skills or quality of transition momentum. In addition to a set of leading transport infrastructure, “but nevertheless determine advanced European economies, South Korea, China the effectiveness and future trajectory of energy and Japan are among the leading 20 countries 21 transition in a country.” regarding the enabling transition environment in 2023. FIGURE 12 ETI transition readiness trend, 2014-2023 65 60 55 ) 00 50 1 – (0 e 45 Scor 40 35 30 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Regulations and political commitment Education and human capital Innovation Infrastructure Finance and investment Source: World Economic Forum Financial investment in clean energy continues signi昀椀cantly. As of 2023, only 17 out of 120 countries to be a key enabler for transitioning economies. have managed to re昀氀ect their net-zero targets into It nurtures other enablers of transition, such as their respective laws, in a manner that targets all technology development and deployment, while GHG emissions and delivers in 2050 or earlier. actively facilitating the scale-up of renewables capacity and associated infrastructure. Despite the An effective country policy for energy transition progress achieved, investments in clean energy provides the necessary framework to accelerate supply remain a challenge. Only six countries the transition to a cleaner energy system and managed to direct more than 1% of their GDP in address the associated challenges of equity and 2022 towards investments in renewables. China security. While most countries have a strong had the largest share of GDP investments, investing enabling policy environment regarding energy more than 1.5% of GDP in renewables, followed by access, that environment is not as strong for Viet Nam, Azerbaijan, and Bosnia and Herzegovina. policies that enable scaling of renewable capacity or inducing energy ef昀椀ciency. Aside from a set Country commitments to their transition targets of leading advanced European economies, that were set as part of the Paris Agreement have South Korea, India, Mexico and Hungary have been translating into transition strategies. The level recently exhibited a strong enabling regulatory of granularity and maturity of these strategies varies environment to accelerate a balanced transition. Fostering Effective Energy Transition: 2023 Edition 30