World's clean energy transition 'too slow': IEA
The IEA says investment in clean energy needs to more than treble over the next decade to meet climate pledges
Roy ISSA AFP/File
Issued on: 13/10/2021
Paris (AFP)
The global transition to clean energy is still far too slow to meet climate pledges and risks fuelling even greater price volatility, the International Energy Agency warned on Wednesday.
"We are not investing enough to meet for future energy needs, and the uncertainties are setting the stage for a volatile period ahead," said IEA chief Fatih Birol.
"The social and economic benefits of accelerating clean energy transitions are huge, and the costs of inaction are immense."
In its annual World Energy Outlook report -- published just weeks before the COP26 summit in Glasgow -- the IEA calculated that investment in clean energy projects and infrastructure would need to be more than trebled over the next decade if those pledges are to be met.
At the summit, countries will come under pressure to commit to decisive action to limit global warming to 1.5 degrees Celsius above pre-industrial levels, as pledged in the landmark 2015 Paris climate agreement.
- Is 1.5C still achievable? - NO
The IEA -- which advises developed countries on energy policy -- said that renewables such as wind and solar energy continued to grow rapidly, and electric vehicles set new sales records in 2020, even as economies were bent under the weight of Covid-19 lockdowns.
However, "this clean energy progress is still far too slow to put global emissions into sustained decline towards net zero" by 2050, which the agency believes will help limit the increase in global temperatures to 1.5C.
The agency analysed two possible scenarios.
Issued on: 13/10/2021
Paris (AFP)
The global transition to clean energy is still far too slow to meet climate pledges and risks fuelling even greater price volatility, the International Energy Agency warned on Wednesday.
"We are not investing enough to meet for future energy needs, and the uncertainties are setting the stage for a volatile period ahead," said IEA chief Fatih Birol.
"The social and economic benefits of accelerating clean energy transitions are huge, and the costs of inaction are immense."
In its annual World Energy Outlook report -- published just weeks before the COP26 summit in Glasgow -- the IEA calculated that investment in clean energy projects and infrastructure would need to be more than trebled over the next decade if those pledges are to be met.
At the summit, countries will come under pressure to commit to decisive action to limit global warming to 1.5 degrees Celsius above pre-industrial levels, as pledged in the landmark 2015 Paris climate agreement.
- Is 1.5C still achievable? - NO
The IEA -- which advises developed countries on energy policy -- said that renewables such as wind and solar energy continued to grow rapidly, and electric vehicles set new sales records in 2020, even as economies were bent under the weight of Covid-19 lockdowns.
However, "this clean energy progress is still far too slow to put global emissions into sustained decline towards net zero" by 2050, which the agency believes will help limit the increase in global temperatures to 1.5C.
The agency analysed two possible scenarios.
At the COP26 summit countries will come under pressure to commit to decisive action to limit global warming to 1.5 degrees Celsius above pre-industrial levels
GOOD LUCK WITH THAT
The first looked at the measures governments had already put in place or specific policies they were actively developing.
And while almost all of the increased energy demand until 2050 could be met by low emissions sources, annual emissions would still be roughly the same as today as developing economies build up their nationwide infrastructure, the IEA said.
Under this scenario, temperatures in 2100 would be 2.6C higher than pre-industrial levels.
The second scenario looked at promises made by some governments to achieve net-zero emissions in the future, which would see a doubling of clean energy investment and financing over the next decade.
If these pledges were fully implemented in time, demand for fossil fuels would peak by 2025, and global CO2 emissions fall by 40 percent by 2050, the IEA said.
Here, the global average temperature increase in 2100 would be around 2.1C, which would represent an improvement, but would still be way above the 1.5C agreed under the Paris accord, it concluded.
- 'Bumpy ride' -
"Reaching that path requires investment in clean energy projects and infrastructure to more than triple over the next decade," Birol said.
"Some 70 percent of that additional spending needs to happen in emerging and developing economies."
The IEA argued that the extra investment might be less of a burden than some might think.
"More than 40 percent of the required emissions reductions would come from measures that pay for themselves, such as improving efficiency, limiting gas leakage, or installing wind or solar in places where they are now the most competitive electricity generation technologies," it said.
The report also highlighted that insufficient investment was contributing to uncertainty over the future.
"Spending on oil and natural gas has been depressed by price collapses in 2014-15 and again in 2020. As a result, it is geared towards a world of stagnant or even falling demand," the IEA said.
"At the same time, spending on clean energy transitions is far below what would be required to meet future needs in a sustainable way."
That means energy markets could face a "bumpy ride" if investment in renewables is not increased, the IEA said.
© 2021 AFP
The IEA is embracing 1.5C ambition, leaving no excuse for new fossil fuel investment
Comment: In a fundamental shift in mainstream thinking, the world’s most influential energy body has for the first time put a net zero scenario at the heart of its forecasting
Ørsted's Anholt Wind Farm (Photo: Ørsted)
Ørsted's Anholt Wind Farm (Photo: Ørsted)
Published on 13/10/2021
By Maria Pastukhova
Today’s launch of the World Energy Outlook (WEO) 2021 by the International Energy Agency (IEA) is one of the most significant energy moments this year.
It represents a fundamental shift in mainstream thinking on energy: it clearly outlines the irreversible coalescence of economic and climate risks, as well the key role that the shift away from fossil fuels towards sustainable energy supply plays in maintaining economic growth in a climate-safe world.
Born in the 1973 oil crisis to ensure security of oil supplies, the IEA has emerged as the most influential advisory and statistical body on energy. The WEO is its most prestigious annual product: it sets the tone in the energy industry and guides public and private finance institutions.
The IEA has always positioned itself as a rational actor focusing on ‘realistic’ development pathways and security of supply – predominantly of oil and gas.
This year’s WEO signals a historic shift as the IEA introduces a new rationality, where security of energy supply and global economic growth no longer revolve around oil and gas. Instead, they are unequivocally tied to rapidly shifting the resource base on which the global economy has been operating – away from fossil fuels towards increasingly decarbonized energy mix.
For the first time, the WEO is centred on a global development pathway aligned with the goal of keeping the global warming below 1.5C – the “Net Zero Emissions by 2050” scenario. It confirms that the current energy system is not equipped to address the challenges posed by the climate change to economic growth, with a “low emissions revolution” being long overdue.
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The bad news is that the “stubbornness of the status quo” has already locked many economies into stranded assets, even in the gas sector, so often considered the “last transition fuel”. The IEA projects that most of the 200 billion cubic metres worth of LNG projects under construction will not recover their invested capital, with the total stranded capital estimated at $75 billion – enough to have covered three quarters of investments needed to reach 2030 renewable energy targets in all African countries. It reiterates that no investments in new coal mines and power plants or new oil and gas fields are required in the transitioning global economy.
The good news is that cost-effective solutions to decarbonize the global economy and boost its resilience to climate risk are readily available. Among these are measures to reduce methane emissions from fossil fuels; rapid scaling up investment in existing low-carbon technologies (most of all solar, wind and storage); and boosting energy efficiency, which will reduce energy bills for households and industry and provide resilience to price spikes.
No one has the same capacity as governments to steer the global energy sector to a climate-safe pathway. Some steps in the right direction have been taken this year, including the G7’s pledge to phase out fossil fuel finance, China’s commitment to quit financing coal abroad, the new US policy to de-facto exclude fossil fuels from multilateral development finance, and the recently announced Global Methane Pledge.
The rapid action on energy transition has, however, not yet become the rationale of global energy policy.
For that to happen, commitments made need to be substantiated by clear timelines and actions to 2030. Governments need to push major oil and gas companies and industrial end-users to invest in decarbonization, while, at the same time, alleviating transition impacts on poorer households and fossil fuel workers and communities. Crucially, they need to actively engage with national and international finance institutions to align public finance with a resilient, climate-safe development pathway. It’s time to wake up to the new normal.
Maria Pastukhova is a senior policy adviser at E3G.
By Maria Pastukhova
Today’s launch of the World Energy Outlook (WEO) 2021 by the International Energy Agency (IEA) is one of the most significant energy moments this year.
It represents a fundamental shift in mainstream thinking on energy: it clearly outlines the irreversible coalescence of economic and climate risks, as well the key role that the shift away from fossil fuels towards sustainable energy supply plays in maintaining economic growth in a climate-safe world.
Born in the 1973 oil crisis to ensure security of oil supplies, the IEA has emerged as the most influential advisory and statistical body on energy. The WEO is its most prestigious annual product: it sets the tone in the energy industry and guides public and private finance institutions.
The IEA has always positioned itself as a rational actor focusing on ‘realistic’ development pathways and security of supply – predominantly of oil and gas.
This year’s WEO signals a historic shift as the IEA introduces a new rationality, where security of energy supply and global economic growth no longer revolve around oil and gas. Instead, they are unequivocally tied to rapidly shifting the resource base on which the global economy has been operating – away from fossil fuels towards increasingly decarbonized energy mix.
For the first time, the WEO is centred on a global development pathway aligned with the goal of keeping the global warming below 1.5C – the “Net Zero Emissions by 2050” scenario. It confirms that the current energy system is not equipped to address the challenges posed by the climate change to economic growth, with a “low emissions revolution” being long overdue.
Want climate news in your inbox? Sign up for free to get our weekly newsletter and occasional extra bulletins
The bad news is that the “stubbornness of the status quo” has already locked many economies into stranded assets, even in the gas sector, so often considered the “last transition fuel”. The IEA projects that most of the 200 billion cubic metres worth of LNG projects under construction will not recover their invested capital, with the total stranded capital estimated at $75 billion – enough to have covered three quarters of investments needed to reach 2030 renewable energy targets in all African countries. It reiterates that no investments in new coal mines and power plants or new oil and gas fields are required in the transitioning global economy.
The good news is that cost-effective solutions to decarbonize the global economy and boost its resilience to climate risk are readily available. Among these are measures to reduce methane emissions from fossil fuels; rapid scaling up investment in existing low-carbon technologies (most of all solar, wind and storage); and boosting energy efficiency, which will reduce energy bills for households and industry and provide resilience to price spikes.
No one has the same capacity as governments to steer the global energy sector to a climate-safe pathway. Some steps in the right direction have been taken this year, including the G7’s pledge to phase out fossil fuel finance, China’s commitment to quit financing coal abroad, the new US policy to de-facto exclude fossil fuels from multilateral development finance, and the recently announced Global Methane Pledge.
The rapid action on energy transition has, however, not yet become the rationale of global energy policy.
For that to happen, commitments made need to be substantiated by clear timelines and actions to 2030. Governments need to push major oil and gas companies and industrial end-users to invest in decarbonization, while, at the same time, alleviating transition impacts on poorer households and fossil fuel workers and communities. Crucially, they need to actively engage with national and international finance institutions to align public finance with a resilient, climate-safe development pathway. It’s time to wake up to the new normal.
Maria Pastukhova is a senior policy adviser at E3G.
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