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Green transition needs a wider focus than oil cuts


LONDON, Oct 13 (Reuters Breakingviews) – Fatih Birol is cracking skulls once more. The boss of the International Energy Agency, which represents world energy customers, brought on a stink in May with prescriptions for what the world needs to maintain world warming to 1.5 levels Celsius above pre-industrial ranges. The implication of his first progress update, forward of the COP26 gathering, is that the focus of decarbonisation lobbyists could also be too slender. learn extra

The IEA’s annual World Energy Outlook incorporates some good news. At round $350 billion a 12 months, oil and gasoline investments tally with what’s wanted to stay on the glide path to a net-zero world in 2050. That’s because of final 12 months’s pandemic shock and, on the margin, the attentions of environmental, social and governance traders frightened about supporting polluters. learn extra

Yet, that is no trigger for celebration, the IEA says. The annual funding wanted between now and 2030 in new wind and photo voltaic to make up the hole with hydrocarbons is effectively over $3 trillion. The world is simply managing $1 trillion. And the IEA’s numbers rely crucially on governments collectively focusing on fossil gas sector demand by way of no-brainer steps like bettering the vitality effectivity of buildings. Done correctly that helps minimize the required quantity of vitality from over 550 exajoules in 2050 to beneath 350 exajoules.

Without specializing in demand, all of the world will obtain by limiting new provide is sky-high vitality costs. A shorter-term model of this supply-demand imbalance is enjoying out with spiralling gasoline prices proper now. The hazard of what Birol warns can be a “turbulent and volatile” interval for world vitality markets is that politicians spend all their time determining methods to restrict the affect on customers on the expense of the extra important inexperienced transition learn extra .

November’s local weather powwow in Scotland provides politicians a chance to make some progress on reducing vitality demand and incentivising new renewable vitality funding. Without such a push, a wholly laudable effort to get firms and financiers to pivot to wind and solar energy couldn’t solely go to waste, however show counterproductive.

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– Progress on clear vitality continues to be far too sluggish to place world emissions into sustained decline in the direction of web zero, highlighting the necessity for an “unmistakeable signal of ambition and action” from governments at Glasgow’s COP26 in November, the International Energy Agency stated on Oct. 13.

– The IEA’s World Energy Outlook-2021 confirmed that world deployments of photo voltaic and wind have been going from energy to energy, however the world’s consumption of coal had grown this 12 months, pushing carbon dioxide emissions in the direction of their second-largest annual improve in historical past.

– “The world’s hugely encouraging clean energy momentum is running up against the stubborn incumbency of fossil fuels in our energy systems,” stated Fatih Birol, the IEA Executive Director. “Governments need to resolve this at COP26 by giving a clear and unmistakeable signal that they are committed to rapidly scaling up the clean and resilient technologies of the future.”

Editing by Rob Cox and Katrina Hamlin

Reuters Breakingviews is the world’s main supply of agenda-setting monetary perception. As the Reuters model for monetary commentary, we dissect the massive enterprise and financial tales as they break all over the world on daily basis. A worldwide group of about 30 correspondents in New York, London, Hong Kong and different main cities supplies knowledgeable evaluation in actual time.

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