The World’s Top Energy Agency Is Pressing for Aggressive Carbon Cuts

(Bloomberg) -- The world’s most authoritative body of energy analysts, the International Energy Agency, has found in its annual flagship report that the world is headed toward global warming higher than the Paris Agreement’s most aggressive limit of 1.5°C. The agency, long known for its expertise in fossil fuels, lays out a path for countries to move toward using more renewable energy on an aggressive timeline. Getting fossil fuels substantially out of the energy system, it says, would cost 25% more than the $54 trillion the world is already expected to invest by 2040.

In its 2020 World Energy Outlook, the IEA breaks with an approach to energy projections that has long drawn criticism for underestimating the rise of renewables and accelerating climate emergency. 

“We are very determined—I am personally very determined—to make the IEA the agency for the global clean-energy transition,” said Fatih Birol, the IEA’s executive director.

The IEA looks at four different world energy future scenarios in its report: a continuation of current trends, a longer-than-expected pandemic, a sustainable-development scenario, and an even more aggressive case that would meet scientists’ mid-century deadline for eliminating emissions. The net-zero case, which activists and climate-minded investors have been demanding for years, would require aggressive—and increasingly personal—short-term decision-making. By 2030, 75% of global electricity must come from low-carbon sources, up from 40% in 2019. Just 2.5% of new cars sold last year were electric, a figure that would have to rise to more than 50% by 2030. The developing world would need to perform energy retrofits on a third of its existing building stock in less than 10 years—a fraction that rises to half for richer nations.

Reaching net-zero emissions on time requires unprecedented behavioral changes by the 7 billion people who enjoy at least partial access to modern energy. It means lower-CO₂ trains or vehicles must replace short flights. Local car trips of 3 kilometers (about 1.9 miles) or shorter would give way to walking or cycling, and everyone would have to keep their air conditioners at least 3°C warmer in the summer heat. 

These behavioral changes aren’t restricted to the rich. “Not only in London or Paris or New York. This has to happen everywhere,” said Birol. 

A global sprint to slash emissions, which scientists have implored nations to pursue for decades, is further complicated by the Covid-19 pandemic. 

The IEA estimates that the world’s energy-related carbon dioxide emissions will fall 7% this year, because of the decline in demand caused by the pandemic. The dip won’t be sustained as economies emerge from the crisis. Emissions will bounce back to their 2010’s trend without a “step-change in clean energy investment,” calling for governments and the private sector to spend about $1 trillion for each of the next three years.

“There’s a lot of work to be done in the energy sector,” said Birol. “But the actions of the energy sector alone will not be enough.”

©2020 Bloomberg L.P.