The International Energy Agency (IEA) warned on Wednesday that the global transition to clean energy is still too slow to meet climate pledges and risks fueling greater price volatility.
The Paris-based international organization urged governments to make stronger commitments to reduce greenhouse gas emissions at the upcoming UN climate summit, warning that the world was not on track to meet environmental goals and that new investments in clean energy were needed to “shock the energy system.” On a new set of bars.
“We are not investing enough to meet future energy needs, and uncertainties are setting the stage for a volatile period ahead,” said Fatih Birol, head of the International Energy Agency.
“The social and economic benefits of accelerating clean energy transitions are enormous, and the costs of inaction are enormous,” Birol noted.
In its annual Global Energy Outlook – published a few weeks before the 26th United Nations Climate Change Conference, known as COP26 – the International Energy Agency calculated that investment in clean energy and infrastructure projects must more than triple by the end of the decade if it is to The world hopes to combat climate change effectively and keep volatile energy markets under control.
“An unmistakable sign”
Representatives of more than 200 countries will gather for the Climate Summit from October 31 to November 12 in Glasgow, Scotland, to discuss new targets for reducing or limiting the growth of emissions that contribute to climate change.
The goal under the 2015 Paris Climate Agreement is to limit the rise in global temperatures to less than 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels while pursuing efforts to limit the rise to 1.5 degrees.
The United Nations Scientific Committee on Climate Change has said emissions must be cut to net zero – when greenhouse gases are balanced by removal from the atmosphere – by 2050 to reach the 1.5 degree limit.
The International Energy Agency described the Glasgow meeting as “the first test of countries’ readiness to make new and more ambitious commitments under the 2015 Paris Agreement” and “an opportunity to provide an ‘unequivocal signal’ that an acceleration of the transition to clean energy around the world”.
Is the 1.5 degree limit still achievable?
The agency – which advises developed countries on energy policy – said renewables such as wind and solar power continued to grow rapidly, and electric vehicles set new sales records in 2020, even as economies slumped under the weight of COVID-19 lockdowns.
But the report said the economic recovery from the pandemic also saw an increase in coal and oil use, as well as a jump in emissions. Burning fossil fuels produces carbon dioxide, the main greenhouse gas that scientists blame for climate change.
“This clean energy progress remains too slow to put global emissions into a sustained decline toward net zero” by 2050, which the agency believes will help limit the increase in global temperatures to 1.5 degrees.
The agency has analyzed two possible scenarios.
The first looked at measures that governments had already taken or specific policies that they were actively developing.
The IEA said that while nearly all of the growing energy demand up to 2050 could be met with low-emission sources, annual emissions would remain roughly the same as today as developing economies build their infrastructure nationwide.
Under this scenario, temperatures in 2100 would be 2.6 degrees 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 are fully implemented in a timely manner, the demand for fossil fuels will peak by 2025, and global carbon dioxide emissions will drop by 40% by 2050, the IEA said.
It concluded that the average global temperature increase in 2100 would be about 2.1 degrees, which would be an improvement, but would still be well above the 1.5 degrees agreed under the Paris Agreement.
“Reaching this path will require investment in clean energy and infrastructure projects to more than triple over the next decade,” Birol said.
“About 70% of this additional spending should occur in emerging and developing economies.”
The International Energy Agency has argued that the additional investment may be less onerous than some might think.
“More than 40% of the needed emissions reductions will come from actions that pay for themselves, such as improving efficiency, reducing gas leaks, or installing wind or solar power in places where electricity generation technology is now the most competitive,” she added.
The report also highlighted that insufficient investment contributes to uncertainty about the future.
“Spending on oil and natural gas has fallen due to the price crash in 2014-2015 and again in 2020. As a result, it is heading towards a world marked by stagnant or even waning demand,” the IEA said.
“Transformation-related spending is gradually increasing, but it is still far below what is needed to meet the growing demand for energy services in a sustainable way.”
The International Energy Agency said this means energy markets could face a “bumpy road” if investment in renewables is not increased.