Fifty-nine countries, including the United States and China, have announced net zero targets to limit the global temperature rise to 1.5°C, giving way to a new energy economy. What looks good on paper though, needs tangible backing. The International Energy Agency (IEA) has warned that investment in renewable energy needs to triple by 2030 to effectively fight climate change and keep volatile energy markets under control.
At this stage, even if all governments’ current net zero pledges were implemented in full and on time, the world would only achieve 20 per cent of the emissions cuts by 2030 needed to keep the goal of net zero emissions by 2050 a possibility.
The IEA is calling for an acceleration of the decarbonisation of power generation and scaling up of clean technologies. Increases in transition-related spending have been observed, yet globally, not enough is being invested to meet future energy needs. In fact, spending to date doesn’t even come close to what’s required to meet the rising demand for sustainable energy services.
A massive mismatch between investments in renewables and public spending has been identified and flagged as an instigator of sharp price swings and increased volatility in the future. The Agency cited the changes needed to reach net zero emissions of greenhouse gases by 2050. Investment in oil and gas has aligned with the goal while public spending is lagging, reaching a third of the future levels required.
Annual global energy investment is set to rise to US1.9tn this year, with US370bn being splashed on new renewable power generation. Renewables will account for more than two-thirds of investment in new power capacity this year, according to the IEA.
The rapid return of economic activity across the globe has contributed to record prices for gas and coal, and multiyear highs for oil, as supply has struggled to keep up with demand. In fact, the economic recovery meant that emissions were on course for their second-largest ever annual increase, driven in part by rising coal consumption, according to the IEA.
COP26, the 2021 United Nations climate change conference, is being billed as the world’s best last chance to get runaway climate change under control. From October 31 to November 12, the event will be attended by countries that signed the United Nations Framework Convention on Climate Change (UNFCCC) with the aim of accelerating action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change.