By Mitchell Beer
Many countries say they will reach Net Zero by 2050, a huge cut in greenhouse gases by mid-century. Here’s how they can do it.
A longer version of this post originally appeared on The Energy Mix. Find the full story here.
LONDON, 21 May, 2021 − No new investment in oil, gas, or coal development, a massive increase in renewable energy adoption, speedy global phaseouts for new natural gas boilers and internal combustion vehicles, and a sharp focus on short-term action: the key elements of a blockbuster Net Zero by 2050 report released on 18 May by the International Energy Agency (IEA).
The more than 400 sectoral and technological targets in the report would be big news from any source. They’re particularly significant from the IEA, an agency that has received scathing criticism in the past for overstating the future importance of fossil fuels, consistently underestimating the uptake of renewable energy, and failing to align its “gold standard” energy projections with the goals of the 2015 Paris Agreement.
For years, the agency’s projections have been used to justify hundreds of billions of dollars in high-carbon investments, allowing multinational fossil companies to sustain the fantasy that demand for their product will increase through 2040 or beyond. But not any more.
“Beyond projects already committed as of 2021, there are no new oil and gas fields approved for development in our pathway, and no new coal mines or mine extensions are required,” the IEA writes. “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’s not a model result,” analyst Dave Jones of the clean energy think tank Ember told Bloomberg Green. “It’s a call to action.”
“Big Oil and Gas has just lost a very powerful shield!” wrote Oil Change International senior campaigner David Tong.
By 2040, the IEA sees all coal- and oil-fired power plants phased out unless their emissions are abated by some form of carbon capture. Between 2020 and 2050, oil demand falls 75%, to 24 million barrels per day, gas demand falls 55%, and remaining oil production becomes “increasingly concentrated in a small number of low-cost producers.”
OPEC nations provide 52% of a “much-reduced global oil supply” in 2050 and see their per capita income from fossil production decline 75% by the 2030s.
“This is a huge shift from the IEA and highly consequential, given its scenarios are seen as a guide to the future, steering trillions of dollars in energy investment,” Kelly Trout, interim director of Oil Change International’s energy transitions and futures programme, wrote in an email.
“Oil and gas companies, investors, and IEA member states that have been using IEA scenarios to justify their choices and also say they’re committed to 1.5°C are in a tight spot. Will they follow the IEA’s guidance and stop licensing or financing new fossil fuel extraction, or be exposed as hypocrites?”
“ . . . the IEA still creates too much room for dirty fossil fuels and biofuels to linger . . .”
“It’s incredibly important that the IEA has gathered together the case for the benefits of making this transition,” Rocky Mountain Institute managing director James Newcomb told The Energy Mix. “The key elements they point to − 4% higher GDP by 2030, millions of net jobs created, two million fewer premature deaths per year by 2030, and universal energy access − those are all amazing parts of the story. We’re starting to see the multi-dimensional benefits in achieving an energy transition, and it’s exciting that the IEA is bringing us evidence to measure it.”
The report calls for a “historic surge” in renewable energy investment, with public and private finance tripling to US$4 trillion per year by 2030. “This will create millions of new jobs, significantly lift global economic growth, and achieve universal access to electricity and clean cooking worldwide by the end of the decade,” the agency writes.
But to get those short-term emission reductions, the IEA’s net-zero pathway “requires all governments to significantly strengthen and then successfully implement their energy and climate policies,” the IEA states.
“Commitments made to date fall far short of what is required,” with more countries pledging net-zero emissions but most of those promises “not yet underpinned by near-term policies and measures. Moreover, even if successfully fulfilled, the pledges to date would still leave around 22 billion tonnes of CO2 emissions worldwide in 2050,” enough to drive a devastating 2.1°C of average global warming by 2100.
“The scale and speed of the efforts demanded by this critical and formidable goal…make this perhaps the greatest challenge humankind has ever faced,” said IEA executive director Fatih Birol.
“The way we see this scenario is that it’s a very, very narrow pathway,” added IEA chief energy modeller Laura Cozzi, “but it’s still feasible.”
In what some analysts see as a serious gap in the IEA’s thinking, the scenario relies increasingly on emerging technologies as the middle of the century approaches. “Most of the reductions in CO2 emissions through 2030 come from technologies already on the market today. But in 2050, almost half the reductions come from technologies that are currently at the demonstration or prototype phase,” the agency writes, in an unfortunate echo of US climate envoy John Kerry’s remarks to the BBC.
“Major innovation efforts must take place this decade in order to bring these new technologies to market in time,” the IEA writes.
“I strongly disagree with that,” replied Sven Teske, research director at Australia’s Institute for Sustainable Futures, in a statement to The Mix. “The main technologies to decarbonise the global energy system are market-ready, and are either already cost-competitive or will be within the next five to 10 years.”
The report shows global demand for critical metals like copper, cobalt, manganese and rare earth minerals growing almost seven-fold this decade, exceeding revenue from coal mining well before 2030. “This creates substantial new opportunities for mining companies,” the agency writes. “It also creates new energy security concerns, including price volatility and additional costs for transitions, if supply cannot keep up with burgeoning demand.”
Which points to serious issues for communities and organisations dealing with the often horrid environmental impacts and human rights records of extractive industries
Step by step
The report lays out the IEA’s pathway to zero in five-year chunks:
• In 2020, emissions stood at 33.9 billion tonnes of carbon dioxide or equivalent, with building retrofit rates below 1%, solar and wind delivering nearly 10% of the world’s power generation, electric vehicles accounting for 5% of global car sales, and fossil fuels providing nearly 80% of total energy supply.
• As of 2021, no new oil and gas projects, coal mines, or unabated coal power plants are approved for development, and global sales of fossil fuel boilers end by 2025.
• By 2025, emissions fall to 30.2 billion tonnes, all new buildings in advanced economies are zero-carbon-ready, solar and wind hit 20% of global power production, and the last unabated coal plants under construction are completed.
• By 2030, emissions fall to 21.1 gigatonnes, 60% of global car sales are electric, global coal demand has fallen 50% since 2020, solar and wind are adding 1,020 gigawatts of new capacity per year, and everyone in the world has access to energy.
• By 2035, emissions are down to 12.8 Gt, global fossil fuel use is down 50% since 2020, electricity generation in advanced economies has hit net-zero emissions, internal combustion cars are no longer available, and the model calls for four billion tonnes of carbon capture.
• By 2040, emissions stand at 6.3 Gt, oil demand is down 50% since 2020, all unabated coal- and oil-fired power plants have been phased out, half of all existing buildings have been retrofitted to zero-carbon-ready levels, about 90% of today’s heavy industrial equipment has been replaced as it reached the end of its investment cycle, half of aviation fuels are low-emission, and global electrolyzer capacity has reached 2,400 GW.
• In 2045, emissions fall to 2.5 billion tonnes, new energy technologies are widespread, and low-emission industries are flourishing. Half of global heating demand is met by heat pumps, and natural gas demand has fallen 50% since 2050.
• In 2050, the IEA sees emissions falling to zero, with more than 85% of buildings zero-carbon ready, nearly 70% of global power generation coming from solar and wind, more than 90% of heavy industry deemed low-emission, and 7.6 billion tonnes of carbon capture per year.
Follow the money
Perhaps the most profound impact of the IEA’s new analysis will be its message to investors with trillions of dollars at their disposal, many of whom look to the Paris-based agency for guidance on the future shape of global energy markets. The unmistakable signal is that “we’ll have ongoing investment in production, and especially in emissions control and reducing methane leakage, but no additional investment in new supply is required,” Rocky Mountain’s Newcomb said.
That shift was already understood by some investors, he added. But “it’s incredibly important that it’s out there in black and white in this report, and it will certainly have a wide impact as it works its way through the financial community.”
“You could say the IEA is catching up to and building on our message,” wrote Oil Change International’s Kelly Trout. And yet “the IEA still creates too much room for dirty fossil fuels and biofuels to linger.”
The report “notes that a faster shift to truly clean energy sources is possible if we prioritise more investment in them. So it’s not a question of what’s possible, but of the political will to make it happen.” − Climate News Network