The Green Transition requires a larger focus than oil cuts
Fatih Birol is cracking skulls once more, according to reports. The boss of the International Energy Agency, which represents global power consumers, issued a stinker in May with recommendations for what the world needs to keep global warming below preindustrial levels to 1.5 degrees Celsius. The implication of his first progress update, ahead of the COP26 meeting, is that the decarbonisation lobbyists' focus may be too broad. read more
The IEAs annual World Energy Outlook includes some good news. At roughly $350 billion a year, oil and gas investments equate to whats needed to remain on the glide path to achieving sunk-zone in 2050. Thats thanks to last year s epidemic shock and, at the same time, to investors in environmental, social, and governance concerned about supporting polluters. read more
IEA believes that this is no cause for celebration. Between now and 2030, the annual investment required in new wind and solar to bridge the gap with hydrocarbons is well over $3 trillion. The world is only making $1 trillion. And the IEAs numbers are dependent in large part on governments targeting fossil fuel demand through straightforward measures like improving the energy efficiency of buildings. When done correctly, the required amount of energy will be reduced from over 550 exajoules in 2050 to under 350 exapples.
Without focusing on demand, all the world will achieve by limiting new supply are sky-high energy prices. Right now, spiraling gas prices are playing a shorter-term version of this supply-demand imbalance. The danger of what Birol warns would be a turbulent and volatile period for global energy markets is that politicians spend all their time figuring out how to limit the impact on consumers at the expense of the more critical green transition read more.
The climate powwow in Scotland, held in November, gives politicians an opportunity to make progress on reducing energy demand and incentivising new renewable energy investment. Without such a push, if companies and financiers were to switch to wind and solar energy, it would not only be wasted, but it may also be counterproductive.
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The International Energy Agency said on Oct. 13 that progress on clean energy is still far too slow to bring global emissions into sustained decline towards net zero, highlighting the need for an unmistakable signal of ambition and action from governments at Glasgows COP26 in November, with an "unbreakable sign of determination and cooperation," the agency said.
The IEA's World Energy Outlook-2021 reported that global deployments of solar and wind were on their way to increasing, but that the world' s consumption of coal had increased this year, putting carbon dioxide emissions at their second-highest annual rise in history.
Fatih Birol, the IEA Executive Director, stated, "The world's hugely encouraging clean energy momentum is catching up to the persistent incumbency of fossil fuels in our energy systems." Governments must resolve this at COP26 by delivering a clear and unmistakable sign that they are committed to rapid expansion of the clean and resilient technologies of future.
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