Reaching net zero emissions by 2050 would require the tripling of investments in clean energy projects and infrastructure over the coming decade, 70% of which needs to be made in emerging and developing economies, the International Energy Agency's World Energy Outlook (WEO) 2021 report said Wednesday.
The report makes it clear that despite the fact that a new energy economy is emerging around the world with solar, wind, electric vehicles and other low-carbon technologies flourishing, this clean energy progress is still far too slow to put global emissions into sustained declined towards net zero.
It highlights the need for an 'unmistakable signal' of ambition and action from governments at COP26 that will take place in Glasgow, Scotland next month.
The report said the strong growth in global coal consumption this year is pushing carbon dioxide emissions towards their second-largest annual increase in history.
'The world’s hugely encouraging clean energy momentum is running up against the stubborn incumbency of fossil fuels in our energy systems,' the IEA Executive Director, Fatih Birol, said. 'Governments need to resolve this at COP26 by giving a clear and unmistakable signal that they are committed to rapidly scaling up the clean and resilient technologies of the future.'
He underlined that the social and economic benefits of accelerating clean energy transitions are huge and the costs of inaction are immense.
According to the Stated Policies Scenario of the report, a path based on the energy and climate measures that governments have actually put in place to date, almost all of the net growth in energy demand through 2050 is met by low emissions sources.
However, it leaves annual emissions still around today's levels and as a result, global average temperatures are still rising and are set to hit 2.6 °C above pre-industrial levels in 2100.
The report's Announced Pledges Scenario, mapping out a path in which the net zero emissions pledges announced by governments are fully and timely implemented, foresees fossil fuel demand peaks in 2025 and global CO2 emissions fall by 40% by 2050.
In this scenario, the global average temperature rise in 2100 is forecast to be around 2.1 °C.
- Need for more ambitious commitments and action
The WEO forecasts that oil demand will decline in all scenarios but the timing and the speed of the drop vary widely.
'If all today’s announced climate pledges are met, the world would still be consuming 75 million oil barrels per day by 2050, down from around 100 million today – but that plummets to 25 million in the Net Zero Emissions by 2050 Scenario,' the report said.
Natural gas demand grows in all scenarios over the next five years but shows sharp divergences after this period.
After decades of growth, the prospects for coal power go downhill in the Announced Pledges Scenario, a decline that could be accelerated further by China’s recent announcement of an end to its support for building coal plants abroad.
The report says this move could result in the cancellation of planned projects that would save around 20 billion tonnes in cumulative CO2 emissions through 2050, which is an amount similar to the total emissions from the European Union reaching net zero by 2050.
The IEA reveals the stark differences between the possible results in the Announced Pledges Scenario and the Net Zero Emissions by 2050 Scenario that highlights the need for more ambitious commitments if the world is to reach net zero by the mid-century.
'Today’s climate pledges would result in only 20% of the emissions reduction by 2030 that are necessary to put the world on a path towards net zero by 2050,' Birol said, stressing that clean energy investment needs to increase dramatically.
He noted that there is a looming risk of more turbulence for global energy markets.
'We are not investing enough to meet future energy needs, and the uncertainties are setting the stage for a volatile period ahead. The way to address this mismatch is clear, a major boost in clean energy investment, across all technologies and all markets. But this needs to happen quickly,' Birol underlined.
The report also affirms that the successful pursuit of net zero would create a market for wind turbines, solar panels, lithium-ion batteries, electrolyzers and fuel cells of well over $1 trillion a year by 2050, comparable in size to the current oil market.
By Nuran Erkul Kaya