The world’s energy watchdog says consumers would be cushioned against future energy price shocks like the one affecting many countries today, if the world adopts policies that put it on a path to net-zero emissions.
However, governments are a long way from that trajectory and are failing to deliver on their promise of “green recovery” after the covid-19 pandemic, says the International Energy Agency.
The Paris-based group’s World Energy Outlook report warns that this year will see the second biggest annual rise in CO2 emissions from energy. Despite rapid growth in renewables, a strong demand for coal and oil are driving 2021’s increase, which is set to wipe out two-thirds of the CO2 savings brought about by lockdowns and other restrictions last year.
For the first time since the World Energy Outlook was originally published in 1977, oil demand will fall in all of the authoritative report’s three main scenarios – peaking this decade at the earliest, or in the mid-2030s at the latest.
Tim Gould at the IEA says the current energy price spikes the world is facing, which are driven primarily by soaring gas prices, are not caused by a transition to cleaner energy. In fact, the group’s analysis suggests that renewables, energy efficiency and electric cars may hold the answer to protecting against a repeat of today’s crisis.
The IEA modelled a price shock in 2030, where coal, gas and oil prices reached the highest levels they hit in each region between 2010 and 2020. The group found it would be 30 per cent less costly for households in a scenario where the world is on a trajectory to net zero by 2050 than a scenario similar to the path we are currently on.
“That all sounds great. [But] those benefits don’t come for free,” says Gould. He notes the net zero route would require significant up-front investment, such as for upgrading buildings and buying electric cars. Protecting vulnerable citizens in that transition will be key, he says. “If you find a way to do that, you’ve not just insulated your home, but you’ve insulated your wallet,” says Gould.
He says the anticipated rise in emissions this year, of 1.2 billion tonnes of CO2, is a sign that not enough money was being ploughed into clean energy investments in the early stages of the covid-19 pandemic. “We are witnessing an unsustainable recovery from the pandemic. It varies region by region but if you look at the global trends, we’re just not seeing that green recovery,” he says.
The IEA says getting the world on track to one of the Paris Agreement’s goals, of holding global warming to no more than 1.5ۜ°C, will require “unambiguous direction” from next month’s COP26 climate summit in Glasgow. The path to that target is “difficult and narrow”, write the report’s authors, but they say their main message is “nonetheless a hopeful one”.
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