The International Energy Agency estimates that energy consumption will only make a small recovery this year and is nowhere close to reaching the net-zero target by 2050.
The International Energy Agency warns of an alarming trend: our world has not yet made it on track for zero emissions, even with predictions estimating more favorable growth in 2020. If we don’t devise new strategies quickly enough, carbon pollution levels are predicted to exceed 400 ppm sometime between 2030 and 2040—placing us at risk for unprecedented global warming over time.
The organisation has warned that the gap between current investment trends and what is required to spend on climate mitigation can be a critical fault line in the clean energy transition. They say significantly more investments needs to be directed into the clean energy sector, especially for emerging markets and developing countries where it will see an increase of activity throughout the year.
The future of energy is definitely going to be clean; It is predicted that global spending on renewable and non-renewable resources will reach $1.9 trillion in 2021, with investment into cleaner sources rising by 7% over the same period up to a height of around $750 billion.
Although this sounds positive, the IEA says that a world with an energy system aligned to true cleanliness is unattainable due to insufficient financial commitment. The World Energy Council says that we are not investing enough in renewable energy. Despite the IEA’s optimism, their report shows that this level of financial commitment falls far below what is necessary to make our world a cleaner place. It’s tough to believe that world leaders could so grossly underestimate the amount of money we need for a clean future.
With the world’s climate rapidly changing, it is crucial that we find a way to limit global warming. Currently there are two targets for this:
1) Limiting temperature increases by 2 degrees Celsius and
2) Keeping total net CO2 emissions from all human sources below 300 gigatonnes of carbon dioxide equivalent (GtCO2e).
Clean energy spending will need to triple in the 2020s if these goals are going to be met.
With the global energy industry shifting towards renewables and away from fossil fuels, 70% of investment in power generation is set to be made up this year, with energy spending trends continuing to shift towards electricity markets.
According to the latest findings from a recent study published by Bloomberg New Energy Finance (BNEF), renewable sources will account for more than two-thirds of global investments into generating capacity over the next five years. This is because clean and sustainable resources such as wind turbines or solar panels have become significantly cheaper than coal or gas fired plant during their lifetime operation costs – so even without subsidies they can often produce lower cost electricity.
The IEA suggests that the proportion of capital spending directed into clean energy by the oil and gas industry could reach 4% this year.
The International Energy Agency (IEA) notes 2021 is likely to be sixth consecutive year in which spending on power exceeds traditional fossil fuel supply, acknowledging although upstream investment will rise by a tenth, it remains “well below” pre-crisis levels. The report also states while investments may increase as planned for 2020 from $410 billion last year to around $430bn next and then up again over three years after 2022 towards an anticipated peak at between $520-$550bn annually in 2030 – still falls short of what needs to happen if we are serious about reaching sustainability goals.