IEA warns of steep climb to world of net-zero emissions

Source: By Nathanial Gronewold, E&E News reporter • Posted: Wednesday, October 14, 2020

But getting there will require an enormous effort by governments, business and citizens — a task made more difficult by the coronavirus pandemic, Birol and other IEA officials noted in their latest World Energy Outlook (WEO).

Achieving net-zero emissions also will require all forms of low-carbon energy technology, Birol said, pointing to hydrogen, modular fission nuclear power and hydropower. The world must face the net-zero challenge “with clear eyes,” he added, pledging to see his IEA “lead the global clean energy transition.”

For the first time, Paris-based IEA has incorporated a net-zero emissions global energy scenario in its forecasts. The agency’s thinking was laid out in an online launch of the 2020 WEO that IEA hosted yesterday.

The newest WEO report also closely examines the impact of the COVID-19 pandemic on the world’s energy systems. Emergency measures implemented in response to the virus pandemic caused a steep global recession and cut energy demand, particularly for coal and oil.

Oil demand is set to rebound as economies recover, but “there is no such rebound for coal,” said Tim Gould, head of energy supply outlooks.

The report confirms that renewable energy sectors, in particular wind and solar, have fared better in the pandemic-driven upheaval. IEA singles out the solar photovoltaic industry for its resilience, declaring that solar “the new king of global electricity markets,” in Birol’s words.

Early in the crisis, analysts predicted that renewables would ride out the economic recession sparked by COVID-19 better than fossil fuel sectors (Climatewire, March 31). Yesterday’s IEA report largely vindicated this forecast.

IEA’s researchers again confirmed that global carbon dioxide emissions fell as a result of a steep drop in demand for coal-fired electricity and oil-fired transportation.

Oil felt the “largest shock” with a 5% plunge in demand. This year, the world is slated to experience “the lowest level of energy demand growth since the 1930s” as economic activity recovers, said Gould.

IEA doesn’t necessarily see this as a good thing.

While emissions are down worldwide, the agency already is seeing signs of increasing greenhouse gas output in economies recuperating faster, especially China.

Laura Cozzi, IEA’s chief energy modeler, said the research foresees China’s greenhouse gas emissions for this year exceeding last year’s levels at the current rate of recovery — even with the pandemic’s economic fallout.

Though China has pledged to peak its emissions output by 2030, Birol argued that China must reduce its emissions within the next five years in order to meet the targets of the Paris Agreement on climate change.

But IEA officials said they are also concerned about the steep hit to revenues experienced by energy companies — as it will be power providers and other primary energy producers financing much of the transition to lower-carbon energy sources.

Though emissions may have fallen, the economic hit could delay companies’ investments in cleaner energy sources as they struggle to continue operating, officials explained.

The COVID-19 “pandemic’s scars will be felt across the energy sector for many years to come,” Birol predicted.

Also yesterday, the International Monetary Fund issued an updated World Economic Outlook that continues to paint a grim picture of the state of the global economy.

Though economic activity is recovering, IMF still predicts that global gross domestic product will contract by 4.4% this year. IMF says a possible exception to the trend is China, which is on track to recover completely and could demonstrate stronger overall output in 2020 compared with last year.

IMF pressed for more concerted action by governments to address the health crisis and get people back to work. It endorsed a green approach to this problem.

“A public green infrastructure investment push in times of low interest rates and high uncertainty can significantly increase jobs and accelerate the recovery, while also serving as an initial big step towards reducing carbon emissions,” wrote IMF’s chief economist, Gita Gopinath, in an overview.

But the window to act is narrowing.

IEA says that even with stronger emissions reduction commitments and more nations pledging to reach net-zero emissions by 2050, average global temperatures still are poised to increase by 3 degrees Celsius by 2100 — double the Paris Agreement target of 1.5 C.

“As the economy starts rebounding, emissions will go up,” warned Cozzi.