The International Energy Agency has just released an omnibus report on the pathway to a zero-carbon future and among its top recommendations is a call to stop new drilling for oil and gas wells around the world.
Hundreds of Chevron oil pumpjacks drawing oil from the Lost Hills Oil Field in Central California.Image Credit:Flickr/Richard Masoner
The recommendations call for no investment in new fossil fuel supply projects, and no further final investment decisions for new unabated coal plants starting today.
“No new oil and natural gas fields are needed in the net zero pathway, and supplies become increasingly concentrated in a small number of low-cost producers,” the International Energy Agency wrote of the energy future the world needs to get to net-zero by 2050.
That recommendation is one of several big revelations from the Agency’s report.
Among the others is the fact that from now until 2030, the world can use existing technologies to reach its emissions reduction goals. But the path becomes increasingly difficult thereafter and will require significant investments to get to the finish line of zero emissions by 2050.
Other targets the agency lays out include no sales of new internal combustion engine passenger cars by 2035 and a call for the electricity sector to reach net-zero emissions by 2040.
On the energy production side, solar energy production needs to reach 630 gigawatts by 2030 and wind power needs to reach 390 gigawatts. All told, that’d be four times the record level of renewable energy production set in 2020.
Energy efficiency also needs to improve by a rate of 4% per year through 2030 (that’s over three times the rate of improvement that’s been established across industries).
All of this will require trillions of investments in energy generation technology and new investments in new batteries, electrolyzers for hydrogen production, direct air capture of carbon dioxide and more.
In fact, the IEA puts the price tag on energy spending at roughly $5 trillion, according to data it collected with the World Bank.
And all that spending will create new jobs and new opportunities for investors, the IEA notes.
“The jump in private and government spending creates millions of jobs in clean energy, including energy efficiency, as well as in the engineering, manufacturing and construction industries,” the agency wrote. “All of this puts global GDP 4% higher in 2030 than it would reach based on current trends.”
It’s worth noting that the IEA’s models could be transformed should new, breakthrough technologies appear on the scene (these are the technologies that investment firms like our own FootPrint Coalition Ventures, or Breakthrough Energy Ventures, Fifty Years, Congruent Ventures, Pale Blue Dot, Union Square Ventures, Khosla Ventures, Astanor Ventures, the Microsoft Climate Fund, Amazon’s Climate Fund, Energy Impact Partners, National Grid Ventures… and many many more are working to finance).
“Governments need to create markets for investments in batteries, digital solutions and electricity grids that reward flexibility and enable adequate and reliable supplies of electricity. The rapidly growing role of critical minerals calls for new international mechanisms to ensure both the timely availability of supplies and sustainable production.”
The transition that the IEA calls for also means providing electricity to the nearly 1 billion people who have no access to it, and providing new appliances like cookstoves and refrigerators to the 2.6 billion people who don’t currently have them. It’s a matter of creating more equality and better opportunity, but also providing resource preserving opportunities to billions of people who have been denied them.
“The clean energy transition is for and about people,” said Dr. Fatih Birol, the executive director of the IEA. “Our Roadmap shows that the enormous challenge of rapidly transitioning to a net zero energy system is also a huge opportunity for our economies. The transition must be fair and inclusive, leaving nobody behind. We have to ensure that developing economies receive the financing and technological know-how they need to build out their energy systems to meet the needs of their expanding populations and economies in a sustainable way.”
Those costs will come with a $40 billion price tag, according to the IEA, but that amounts to only 1 percent of the cost of the average annual energy sector. Those upgrades, however steep, can save lives by averting 2.5 million premature deaths per year.
“Since the IEA’s founding in 1974, one of its core missions has been to promote secure and affordable energy supplies to foster economic growth. This has remained a key concern of our Net Zero Roadmap,” Dr. Birol said, in a statement.
Read the full report here.