Stop New Oil Investments to Hit Net-Zero Emissions, IEA Says
Investment in new fossil-fuel supply projects must immediately cease if the world is going to slash net carbon emissions to zero by 2050, the International Energy Agency said Tuesday.
The Paris-based energy watchdog also said in a report that hitting the net-zero target would require a rapid acceleration of wind and solar capacity and a halt in sales of combustion-engine cars by 2035.
The IEA said hitting net-zero emissions is crucial in limiting the rise in global temperatures to 1.5 degrees Celsius above preindustrial levels—a goal laid out in the 2015 Paris climate agreement.
The U.S. rejoined that agreement earlier this year and is proposing to halve its emissions by the end of the decade. Other signatories such as the European Union and the U.K. have said they plan to achieve carbon neutrality by 2050. Major companies across several high-polluting sectors have set similar net-zero goals ahead of the United Nations’ COP26 climate conference later this year.
However, the IEA said that climate pledges by governments so far—even if fully achieved—would fall well short of reaching net-zero emissions by the middle of this century.
Offering what it claimed is the first comprehensive road map to hitting that goal, the IEA said greater investment was needed along with seismic changes in the way that the world produces and consumes energy.
The report highlights the shifts required to ensure a path to “net-zero emissions by 2050—narrow but still achievable—is not lost,” said IEA Executive Director Fatih Birol, who added that he expected the increase in clean-energy spending to boost the global economy and jobs market.
Several of the world’s biggest oil companies, including BP BP -0.81% PLC, Royal Dutch Shell RDS.A -1.76% PLC and Total SA, TOT -1.38% have signaled their intention to reduce their dependence on fossil fuels and invest more in lower-carbon energy.
However, the IEA’s suggestions go far beyond what any of those companies have pledged so far, with many still dependent on income from oil and natural gas to fund their transition plans.
Most countries have also stopped short of calling for an end to fresh fossil-fuel projects.
Of the world’s oil-producing countries, only Denmark—a small producer by global standards—has said it would end new oil and gas exploration, with similar moves by the likes of France and New Zealand seen more as symbolic gestures.
The IEA said that if global oil and gas supply shrinks in line with its road map, the Organization of the Petroleum Exporting Countries—the cartel that currently controls more than a third of global supply—would by 2050 control more than half of the world’s oil supply.
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The IEA’s call to end sales of combustion-engine cars by the middle of the next decade also goes beyond the stated policies of many developed countries, though the U.K. recently brought forward its plans to phase out the sale of new gasoline and diesel-powered cars to 2030.
While companies and governments are encouraging the adoption of electric vehicles, they represented just 4.6% of the vehicles sold in 2020, the IEA said.
Meanwhile, the IEA said investment in the global energy sector will need to more than double to $5 trillion by 2030 from its current level of $2 trillion to guarantee a reliable and economic supply of low-carbon energy. That will enable the quadrupling of the annual growth in solar and wind power by the end of the decade, according to the report, even after 2020’s record growth rate.
While most of the reductions in carbon emissions needed before 2030 can be met by methods already in widespread use, the IEA said, almost half of the reductions needed by 2050 will depend on technologies currently little used or in their prototype stage.
The IEA highlighted low-carbon hydrogen, advanced batteries and carbon capture among the technologies that it said needed to scale up quickly.
Write to David Hodari at David.Hodari@dowjones.com
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Published at Tue, 18 May 2021 05:00:00 +0000