That is the overarching conclusion of a landmark report by the International Energy Agency (IEA), released today, which offers the world’s first comprehensive roadmap for transitioning to a net zero energy system by 2050, complete with more than 400 milestones that set out how governments and businesses could navigate the rapid transformation of the global economy.
Requested by the UK government to help inform crucial climate negotiations set to take place at the COP26 summit in Glasgow later this year, the wide-ranging report from the influential think tank calls for an “unprecedented transformation” in how energy is generated, transported, and used in order to build a net zero emission global economy by 2050.
The report makes clear that huge changes are already underway across the global energy system that will have “far reaching consequences” for fossil fuel producers as the economy rapidly embraces clean technologies.
However, it stresses that bolder policies and investment decisions are urgently required to put the world on track for delivering on its net zero emissions goals. Most notably, it argues that an immediate halt in developing new oil and gas fields and unabated coal power plants is required worldwide, and as such no investments in new fossil fuel supply projects – be they for oil, gas, or coal infrastructure – should be committed beyond 2021. “The unwavering policy focus on climate change in the net zero pathway results in a sharp decline in fossil fuel demand, meaning that the focus for oil and gas producers switches entirely to output – and emissions reductions – from the operation of existing assets,” it explains.
The IEA’s roadmap also suggests that a global net zero energy system in 2050 would be dominated by wind and solar, with a small role for nuclear power, and fossil fuels confined only for use in the production of plastics and at some heavy industrial manufacturing sites or facilities equipped with carbon capture capability.
Amongst a host of key milestones, the proposed pathway would see electricity generation achieve net zero emissions by 2040 worldwide – and by 2035 in more economically advanced nations – with around 90 per cent of demand met by renewable sources and nuclear power making up the remaining 10 per cent, it said.
In order to deliver a decarbonised power network, 630GW of new solar capacity and 390GW of onshore and offshore wind capacity would need to be coming online every year by 2030, which is around four times the record-setting amount added in 2020, the report estimates. The required solar power additions alone amount to installing the world’s largest existing solar power plant every single day over the next decade, it added.
Energy efficiency also has an essential role to play, according to the report, with improvements averaging four per cent per year over the next decade, as the global economy moves towards an almost doubling in size by 2050 while using eight per cent less energy.
Moreover, the IEA’s scenario suggests no new fossil fuel cars should be sold after 2035, with electric vehicles making up around 60 per cent of sales by the end of the current decade. The number of public charging points would also need to rise from one million today to 40 million by 2030, and annual battery production for EVs would grow to 600GWh, up from 160GWh today.
To fund this unprecedented expansion in clean energy infrastructure, a net zero energy pathway would require total annual energy investment to surge to around $5tr by the end of the current decade. However, the IEA stressed that this investment blitz would add around 0.4 percentage points a year to global GDP growth. By 2030, global GDP could be around four per cent higher under the net zero transition scenario than it would otherwise have reach based on current trends, it added.
Fatih Birol, the IEA’s executive director, said the pathway to net zero emissions by 2050 was “narrow but still achievable” if priority actions to ramp up deployment of clean technologies and phase-out fossil fuels are taken rapidly by governments and businesses worldwide.
“The scale and speed of the efforts demanded by this critical and formidable goal – our best chance of tackling climate change and limiting global warming to 1.5C – make this perhaps the greatest challenge humankind has ever faced,” he said. “The IEA’s pathway to this brighter future brings a historic surge in clean energy investment that creates millions of new jobs and lifts global economic growth. Moving the world onto that pathway requires strong and credible policy actions from governments, underpinned by much greater international cooperation.”
Most of the reductions in greenhouse gas emissions from the global energy system envisaged by the IEA would come from existing technology, according to today’s report, but by 2050 around half of the projected emissions reductions would likely to come from newer technologies, that are either in the demonstration or prototype phase.
As such, a rapid increase in research and development programmes is needed today in order to provide the foundations for future decarbonisation, the IEA stressed, with progress particularly needed on hydrogen electrolysers, batteries, and direct air carbon capture (DAC) technologies.
The report also emphasises the important role for citizens in the transition, whose lives it argues will be affected in multiple ways. Key to the transition will be providing electricity to around 785 million people worldwide who currently do not have such access, as well as delivering clean cooking solutions to 2.6 billion people who currently lack them. But while closing these gaps in energy access is likely to cost around $40bn a year – around one per cent of annual average energy sector investment – it will also drive major health benefits through cleaner air, cutting the number of premature deaths by 2.5 million per year worldwide, it said.
“The clean energy transition is for and about people,” said Birol. “Our roadmap shows that the enormous challenge of rapidly transitioning to a net zero energy system is also a huge opportunity for our economies. The transition must be fair and inclusive, leaving nobody behind. We have to ensure that developing economies receive the financing and technological know-how they need to build out their energy systems to meet the needs of their expanding populations and economies in a sustainable way.”
The report’s findings are hugely significant, as it signals an end to the centuries-long dominance of fossil fuels within the space of a single investment cycle. The IEA’s projections are widely used by governments and companies around the world to plan major investment decisions and observers will be hoping that the new scenario can act as a crucial reference point for the growing number of governments and corporates that have set net zero emissions targets.
The IEA has previously faced criticism for consistently underestimating growth projections for renewable energy its annual World Energy Outlook reports, but has in recent years increasingly highlighted the urgent need for a rapid shift towards a clean energy system worldwide.
Dave Jones, global lead at green energy think tank Ember, said that by signalling a massive shift away from oil, gas and goal over the coming decades, the IEA’s report today was “truly a knife into the fossil fuel industry”. “This is a complete turnaround of the fossil-led IEA from five years ago,” he said.
Meanwhile, Maria Pastukhova, senior policy advisor on energy diplomacy at climate think tank E3G, said the report marked a “turning point for the global gas industry”, which has to date argued that unlike coal it could yet have a significant part to play in the transition to a net zero emission economy, thanks to its lower levels of emissions, the emergence of carbon capture technologies, and its potential role as a feedstock for the production of hydrogen.
However, Pastukhova noted that these arguments had been dealt a major blow by the IEA’s new analysis. “A continuous expansion trajectory is no longer plausible, instead this report is charting the exit pathways of some parts of the gas value chain already, in particular the upstream,” she said. “While not as outspoken on other sectors, this report precludes gas as a ‘bridge fuel’ in the power sector – both for industrialised and (most) developing countries. With projected massive shifts in energy systems and investment flows away from gas, this should be a wakeup call to investors around the globe.”
The report comes ahead of several crucial global summits, including the COP26 Climate Summit in Glasgow in November and next month’s G7 meeting in Cornwall, at which the UK Prime Minister Boris Johnson has signalled the climate and environmental crises will be a top priority, alongside the need to engineer a global economic recovery from Covid-19.
COP26 President-Designate Alok Sharma welcomed the IEA’s report, which he said set out a clear roadmap for achieving net zero emissions, and underscored the need to scale up clean technologies in all sectors and phase out both coal power and polluting vehicles in the coming decade.
“I am encouraged that it underlines the great value of international collaboration, without which the transition to global net zero could be delayed by decades,” Sharma added. “Our first goal for the UK as COP26 Presidency is to put the world on a path to driving down emissions, until they reach net zero by the middle of this century.”
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