In a sign of positivity for global aspirations to lower carbon emissions, a recent study by the IEA has found that reaching net zero by 2050 remains attainable, subject to a number of key ‘milestones’. However, many of these goals are ambitious and would mark a significant change in global behaviour; others need to be realised immediately.
Several stand-out conditions include:
Further, the research cautions that these stringent milestones will need to be met; there is little scope for movement in timelines- if any sector lags behind, it could prove impossible to make up the difference elsewhere.
Key milestones on the pathway to net zero
Source: IEA
The report places the impetus on the need for dialogue between nations where current climate goals are not ambitious enough or have not been underpinned with the appropriate near-term measures to see the expectations set out in the IEA roadmap met. Subsequently, the study calls for action to take place now to see the goals realised:
“Commitments made to date fall far short of what is required by the pathway. The number of countries that have pledged to achieve net-zero emissions has grown rapidly over the last year and now covers around 70% of global emissions of CO2. This is a huge step forward. However, most pledges are 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. The continuation of that trend would be consistent with a temperature rise in 2100 of around 2.1 °C. Global emissions fell in 2020 because of the Covid-19 crisis but are already rebounding strongly as economies recover. Further delay in acting to reverse that trend will put net zero by 2050 out of reach.” -IEA[i]
A core finding from the research is the need for substantial changes in energy production, with the IEA noting that “the energy sector is the source of around three-quarters of greenhouse gas emissions today and holds the key to averting the worst effects of climate change”[ii]. To achieve this, substantial investment will be required:
“Over the next decade, the biggest increase will be needed in electricity generation, with annual investment shooting from about $0.5 trillion over the past five years to $1.6 trillion in 2030. By then, annual investment in renewables will have just topped the highest amount ever spent on fossil fuels to reach $1.3 trillion. At the same time, global investment in fossil fuels will need to fall steadily.”[iii]
An important aside to this is that there will also need to be continued spending on electric vehicles, clean energy infrastructure, and measures in place to enhance energy efficiency in buildings, as well as transform industrial processes. This comes at a time when many governments are facing economic fallout from both the covid-19 pandemic and the recent war in Ukraine. Further, whilst current technology will see energy goals obtainable up to 2030, there will need to be greater technological progress and innovation from 2030-2050 to meet the required IEA targets.
As noted above, a rebounding post-lockdown demand, alongside Russia’s invasion of Ukraine driving fears of supply shortages, has caused wholesale energy prices to spike to record levels over recent months. Ultimately, this has driven changes in how and where energy is sourced- sanctions and fear of retaliation leading to explored alternatives to Russian oil and gas. As we discussed in our recent blog, there has been a push by some EU member countries to become energy independent, with many nations seeking expansion of renewable energy offerings. But worryingly, some are exploring fossil fuel expansion- a potential failure of the first major IEA milestone.
As a recent WEF (World Economic Forum) article highlighted, there has been progress with renewable energy capacity installations setting “a record in 2021 with 290 gigawatts (GW) of new wind and solar capacity added worldwide”, however “this remains well below the 960 GW needed annually by 2030 to meet the 2050 net-zero target.” [iv] The IEA has also warned that clean energy investments would have to triple by 2030, finding that energy efficiency improvement alone will help to drive more than 40% of the reduction of energy-related GHG emissions over the next 20 years.
Yet some nations are seeking to increase fossil fuel use in the immediate term to help reduce the impact of soaring wholesale costs and soften the switch to renewables. However, IEA chief Fatih Birol cautioned against increasing fossil fuel reliance due to recent energy supply constraints. Speaking at the recent World Economic Forum in Davos, Switzerland, he said:
“We need fossil fuels in the short term, but let’s not lock in our future by using the current situation as an excuse to justify some of the investments being done; time-wise, it doesn’t work, and morally in my view, it doesn’t work as well.”[v]
The research from the IEA specifically comments on the recovery from the Covid-19 pandemic, addressing the importance of investment and spending towards economic recovery, also being aligned to the net zero pathway. It could be argued that this too will be true of the war in Ukraine, which, once ended, will see nations creating a pathway for economic recovery.
In the immediate term, the IEA suggest that policies should be strengthened to speed the deployment of clean and efficient energy technologies: “Mandates and standards are vital to drive consumer spending and industry investment into the most efficient technologies. Targets and competitive auctions can enable wind and solar to accelerate the electricity sector transition. Fossil fuel subsidy phase-outs, carbon pricing and other market reforms can ensure appropriate price signals. Policies should limit or provide disincentives for the use of certain fuels and technologies, such as unabated coal-fired power stations, gas boilers and conventional internal combustion engine vehicles.”[vi]
They argue that governments must lead the planning and incentivise massive infrastructure investment, including smart transmission and distribution grids. Yet, they must also recognise that a transition of such scale and speed cannot be achieved without sustained support and participation from citizens, whose lives will be affected in multiple ways.
“The clean energy transition is for and about people. 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.” - Fatih Birol, IEA Chief
[i] Net Zero by 2050 - A Roadmap for the Global Energy Sector - Summary for Policy Makers (windows.net)
[ii] Ibid
[iii] Are net zero emissions by 2050 possible? Yes, says IEA | World Economic Forum (weforum.org)
[iv] WEF_Energy_Transition_Index_2022.pdf (weforum.org)
[v] IEA opposes deepening fossil fuel reliance amid escalating energy crisis (cityam.com)
[vi] Net Zero by 2050 - A Roadmap for the Global Energy Sector - Summary for Policy Makers (windows.net)
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
