Winds of change
War in Ukraine likely to speed, not slow, shift to clean energy, IEA says
It’s notable that many of these new cleanenergy targets aren’t being put in place solely for climate change reasons. Fatih Birol
The energy crisis sparked by Russia’s invasion of Ukraine is likely to speed up rather than slow down the global transition away from fossil fuels and toward cleaner technologies such as wind, solar and electric vehicles, the world’s leading energy agency says.
While some countries have been burning more fossil fuels such as coal this year in response to natural gas shortages caused by the war in Ukraine, that effect was expected to be short-lived, the International Energy Agency said in its annual World Energy Outlook out yesterday — a 524-page report that forecasts global energy trends to 2050.
Instead, for the first time, the agency now predicts that worldwide demand for every type of fossil fuel will peak in the near future.
One major reason is that many countries have responded to soaring prices for fossil fuels this year by embracing wind turbines, solar panels, nuclear power plants, hydrogen fuels, electric vehicles and electric heat pumps. In the United States, Congress approved more than $370 billion ($633b) in spending for such technologies under the recent Inflation Reduction Act.
Japan is pursuing a “green transformation” programme to help fund nuclear power, hydrogen and other low-emissions technologies. China, India and South Korea have ratcheted up national targets for renewable and nuclear power.
And yet, the shift toward cleaner sources of energy still wasn’t happening fast enough to avoid dangerous levels of global warming, the agency said, not unless governments took much stronger action to reduce their planet-warming carbon dioxide emissions over the next few years.
Based on current policies put in place by national governments, global coal use is expected to start declining in the next few years, natural gas demand is likely to hit a plateau by the end of this decade and oil use is projected to level off by the mid-2030s.
Meanwhile, global investment in clean energy was now expected to rise from $1.3 trillion in 2022 to more than $2t annually by 2030, a significant shift, the agency said.
“It’s notable that many of these new clean-energy targets aren’t being put in place solely for climate-change reasons,” said Fatih Birol, the agency’s executive director.
“Increasingly, the big drivers are energy security as well as industrial policy — a lot of countries want to be at the leading edge of the energy industries of the future.”
Current energy policies put the world on track to reach peak carbon dioxide emissions by 2025 and warm roughly 2.5C by 2100 compared with preindustrial levels, the energy agency estimated. That is in line with separate projections released this week by the United Nations, which analysed nations’ stated promises to tackle emissions.
By contrast, many world leaders hope to limit average global warming to about 1.5C to avoid some of the most dire and irreversible risks from climate change, such as widespread crop failures or ecosystem collapse.
That would require much steeper cuts in greenhouse gases, with emissions not just peaking in the next few years but falling nearly in half by the end of this decade, scientists say.
“If we want to hit those more ambitious climate targets, we’d likely need to see about $4t in clean-energy investment by 2030,” Birol said, or double what the agency currently projects.
“In particular, there’s not nearly enough investment going into the developing world.”
This year, global carbon dioxide emissions from fossil fuels are expected to rise roughly 1 per cent and approach record highs, in part because of an uptick in coal use in places such as Europe as countries replace lost Russian gas.
Still, that is a far smaller increase than some had feared when war in Ukraine broke out. The rise in emissions would have been three times as large but for a rapid deployment of wind turbines, solar panels and electric vehicles worldwide, the agency said. Soaring energy prices and weak economic growth in Europe and China also helped keep emissions down.
But even though the current energy crisis was expected to be a boon for cleaner technologies in the long run, it was exacting a painful toll now, the report found.
Governments around the world have already committed roughly $500b this year to shield consumers from soaring energy prices. And while European nations appear to have enough natural gas in storage to get them through a mild winter, the report warns next winter in Europe “could be even tougher” as stocks are drawn down and new supplies to replace Russian gas, such as increased shipments from the US or Qatar, are slow to come online.
The situation looks even more dire in developing countries such as Pakistan and Bangladesh, which are facing energy shortages as deliveries of liquefied natural gas are diverted to Europe. Nearly 75 million people around the world who recently gained access to electricity were likely to lose it this year, the report said.
If that happens, it will be the first time in a decade that the number of people worldwide who lack access to modern energy has risen.
There is still a possibility that soaring energy prices could produce social unrest and pushback against climate and clean-energy policies in some countries. While the report concludes that climate-change policies are not chiefly responsible for the spike in prices — instead, it notes that renewable power and home weatherisation efforts have actually blunted the impact of energy shocks in many regions — there is always risk governments could feel pressured to change course, Birol said.
The new report comes less than two weeks before nations are set to gather at UN climate talks in Sharm elSheikh, Egypt, where diplomats will discuss whether and how to step up efforts to curb fossil-fuel emissions and provide more financial aid from richer to poorer nations.