But there’s a catch: The transition away from coal, oil and natural gas isn’t happening fast enough to avoid dangerous levels of global warming, the agency said, unless governments take much stronger action to reduce their planet-warming carbon dioxide emissions over the next few years.
The International Energy Agency’s annual World Energy Outlook, a 386-page report that forecasts global energy trends to 2050, comes just weeks before world leaders gather for a major United Nations climate summit in Glasgow, Scotland, to discuss how to accelerate the shift away from fossil fuels and prevent the planet from overheating.
“The world has made a remarkable amount of progress on clean energy over the past decade,” Fatih Birol, the agency’s executive director, said in an interview. “But there’s still so much more that needs to happen.”
The new report finds that the world has made significant strides in the fight against climate change. Wind and solar power are the cheapest source of new electricity in most markets and growing briskly. Sales of electric vehicles worldwide hit records last year. Across the globe, approvals for new coal-fired power plants, a major source of emissions, have slowed dramatically in recent years, as governments and banks have increasingly refused to finance them.
Governments are also stepping up their policies to curb emissions. The European Union has been increasing the price it charges large polluters to emit carbon dioxide. India has ratcheted up efficiency standards for new air-conditioners. China has said it would stop financing new coal plants overseas.
As a result, the International Energy Agency now projects that humanity’s emissions of carbon dioxide will reach a peak by the mid-2020s and then drop slowly in the decades thereafter. Global coal use is expected to fall between now and 2050, despite an uptick this year driven by increased industrial activity in China, while global oil demand is expected to enter into permanent decline by the 2030s, as people switch to electricity to fuel their cars.
That alone would be a remarkable shift. Ever since World War II, global carbon dioxide emissions have been on a seemingly inexorable upward trajectory, with only temporary dips during recessions, as the world relied on ever greater quantities of fossil fuels to power homes, cars and factories. A turning point is now in sight, the report says.
Even so, this shift is still nowhere near enough to avert some of the most perilous consequences of climate change, the agency warned.
Current energy policies will still put the world on track to heat up roughly 2.6 degrees Celsius (4.7 degrees Fahrenheit) by 2100 compared to preindustrial levels, the report found. Last month, the United Nations warned that such an outcome would be “catastrophic,” noting that countries are already suffering much higher risks of deadly heatwaves, droughts, floods and wildfires after just 1.1 degrees Celsius of global warming to date.
Many world leaders hope to limit average global warming to around 1.5 degrees Celsius to avoid some of the most dire and irreversible risks from climate change, such as widespread crop failures or ecosystem collapse.
To meet that goal, it won’t be enough for global emissions to simply peak and then decline gently in the decades ahead, as they are currently on track to do, the International Energy Agency said. Instead, the world’s nations would have to move much faster to slash emissions nearly in half this decade and stop adding carbon dioxide to the atmosphere altogether by around 2050.
Earlier this year, the agency laid out a detailed road map for what such an effort might look like. By 2030, for instance, electric vehicles would have to make up more than half of new car sales globally, up from just 5% today. By 2035, wealthy countries would have to shut down virtually all fossil-fuel power plants in favour of cleaner technologies like wind, solar or nuclear power. By 2040, all of the world’s remaining coal plants would have to be retired or retrofitted with technology to capture and bury their carbon emissions.
Nations would need to triple their investment in clean energy over the next decade, to roughly $4 trillion per year, the agency said. Most of that increased spending would need to flow to developing countries, which have been responsible for the bulk of emissions growth in recent years but have often struggled to gain access to financing.
“So far only about 20 percent of clean energy investments are going to emerging countries,” Birol said. “That needs to change. This is a race that no one wins unless everyone finishes the race.”
The report noted that many countries are contemplating more forceful action, at least on paper. More than 50 countries, including China and the United States as well as the European Union, have now announced targets to get to “net zero” — that is, to reach the point where they are no longer adding carbon dioxide to the atmosphere — over the next few decades.
If every country followed through on that promise, the world could potentially limit total global warming to around 2.1 degrees Celsius by 2100, the report found. But even this outcome is far from assured, since most of the nations pledging to go net zero have not yet enacted policies to achieve that goals.
The new report also warns that the transition to a cleaner energy economy could prove bumpy without careful planning. Over the past six years, global investment in new oil and natural gas development has sagged, particularly in the wake of the pandemic. But if the world doesn’t invest heavily enough in clean energy alternatives to replace those sources, many countries could find themselves in an energy crunch, as Europe is experiencing this fall.
“This needs to happen quickly,” the report said, “or global energy markets will face a turbulent and volatile period ahead.”
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