To avoid the worst impacts of climate change and realize the goals of the Paris Agreement, greenhouse gas emissions should fall to net zero by mid-century.
To avoid the worst impacts of climate change and realize the goals of the Paris Agreement, greenhouse gas emissions should fall to net zero by mid-century and then reach net negative emissions thereafter. Responding to the science, 60 countries, as well as scores of companies and cities, have already adopted net-zero targets, and many more are expected to do so. To the extent that such net-zero targets are robust, it will be even more critical to set in motion policies, actions and investments that match the speed and scale required to realize a net-zero future. What should this future look like in the energy sector, which is responsible for roughly three-quarters of all greenhouse gas emissions? What does it mean in terms of the types of actions that investors, the private sector, governments and consumers need to take today, in the next decade and beyond?
The International Energy Agency (IEA) released a roadmap for realizing net-zero carbon dioxide (CO2) emissions in the energy sector by 2050. For a number of years, many have called for the agency to develop a scenario aligned with a goal to limit global temperature rise to 1.5 degrees C (2.7 degrees F) and integrate it into its annual World Energy Outlook (WEO), which puts forward future energy-related scenarios. The IEA’s reports, including the WEO, are critically important because many governments, businesses and other institutions rely upon their data to guide actions and investments. Prior to this report, the IEA had only put forward a sustainable development scenario that achieved net-zero CO2 emissions in the energy sector by 2070, limiting warming to 1.8 degrees C.
The new net-zero model signals a critical shift in the IEA’s ambition, moving the yardstick for achieving net-zero emissions two decades earlier. Importantly, the roadmap does this while simultaneously achieving equitable energy access by 2030 and delivering key economic and health benefits. The IEA’s net-zero scenario shows an ambitious 38% emissions reduction from today’s levels by 2030.
While the IEA’s net-zero scenario is only a pathway, rather than the pathway, to achieving net-zero CO2 emissions in the energy sector by 2050, it is worth taking stock of its assumptions and implications. The more transparent IEA can be with its data, the more all stakeholders can use it to act. What is clear is that achieving net-zero emissions is critically important, and will require rapid transformation and equitably deploying zero-carbon, efficient technologies at unprecedented speed and scale while phasing out fossil fuels.
Here are five takeaways:
1. Annual renewable electricity installations must triple by 2030.
When it comes to reducing emissions in the power sector, the battle will be won or lost in the next decade.
In the IEA’s scenario, 630 gigawatts (GW) of solar PV and 390 gigawatts of wind will need to be added annually by 2030. (In the case of solar, this is equivalent to installing the world’s largest solar farm every day.) Together, the solar and wind capacity added in 2030 would be more than triple the amount installed in 2020. This may sound daunting, but solar and wind capacity additions already more than tripled between 2010 and 2020. If we did it once, we can do it again — as long as governments provide the right support and conditions. And many developing countries are only now starting to scale up to their renewable energy potential.
Decarbonizing the power sector with renewables must be complemented by a concerted effort to switch other sectors such as transportation, buildings and industry to take advantage of those new renewables. This electrification process, a growing global population and increased economic development means that total electricity needs will increase drastically. In the IEA’s net-zero scenario, electricity demand is 2.5 times today’s levels by 2050. The Energy Transitions Commission developed a scenario with even higher levels of electrification — 110,000 terawatt-hours/year compared to 71,000 terawatt-hours/year in the IEA scenario. Both analyses cement the need for more renewable energy capacity and investment in demand-side energy efficiency, as well as grid-based solutions such as transmission and distribution capacity, battery storage and grid flexibility.
In the IEA’s scenario, renewable energy would provide almost 90% of electricity generation by mid-century, including almost 70% from wind and solar. New analysis finds that pathways that rely even more heavily on renewables are possible: the Energy Transitions Commission modeled feasible and cost-effective scenarios that reach 75-90% solar and wind in 2050. The IEA itself briefly analyzes two side cases that rely more heavily on renewables, but it warns that they would cost more, a finding that deserves more scrutiny given that the IEA may be conservative on how fast the costs of renewables will continue to fall.
2. Fossil fuel phaseout is inevitable. It must also be equitable.
On the IEA’s pathway to net-zero emissions by 2050, there is no investment in new coal, oil or gas supply. This is a huge step forward for the IEA and an important signal that the world must move away from fossil fuels today — not tomorrow.
In addition to its assumption that we can reach net zero without new coal development, the IEA calls for all unabated coal plants in advanced economies to be phased out by 2030 and in all economies by 2040. Similarly, WRI and ClimateWorks Foundation’s State of Climate Action report shows the share of unabated coal in electricity generation falling to 0-2.5% in 2030 and 0% in 2050.
This rapid decline in fossil fuel use must be led by advanced economies, which are well-equipped to accelerate the transition to renewables. Phasing out fossil-based energy such as natural gas in developing countries may take longer, particularly if we are to achieve net zero in a fair and equitable way. The IEA’s net-zero scenario factors in development needs and achieves universal electricity access by 2030, which is important because not all 1.5 degrees C-compatible pathways include this.
The IEA’s net-zero scenario shows that universal energy access can be achieved by 2030 without any investment in new fossil fuel supply. That being said, there may be a need for some additional natural gas use in certain countries — such as in parts of Africa — to support economic opportunities and energy access, even as global use of unabated gas declines. However, this should be balanced by an awareness of the risk of overinvestment in fossil energy, which can saddle countries with stranded fossil fuel assets and a second wave of economic costs as they shift to renewable energy later. Any new investments in natural gas should focus narrowly on situations in developing countries where viable renewable energy alternatives do not yet exist.
3. Clean energy investments will benefit the economy and human health in the near team.
Reaching net-zero emissions will require investment in clean energy and energy infrastructure to triple by 2030. These investments will increase GDP 0.4% per year, and by 2030, global GDP will be 4% higher than it would be based on current trends. By contrast, there will be severe risks to the economy if the world doesn’t act fast enough on climate change. A new report from Swiss Re estimates that if the world misses the Paris Agreement’s goals, the impacts of climate change could cost around 10% of global GDP by 2050.
According to the IEA, 14 million new jobs will be created from investments in clean energy by 2030, and another 16 million from investments in efficient appliances, electric and fuel cell vehicles, and building retrofits and energy-efficient construction. Only about 5 million jobs will be lost, mostly in the fossil fuel industry. Governments will need to ensure these workers and their communities receive support, social safety nets and new investments. This must be done through active social dialogue among workers, communities, businesses, governments and civil society.
This complements IEA and International Monetary Fund research from last year which found that each $1 million invested in solar photovoltaics, building efficiency or urban transport infrastructure creates more than twice as many jobs as the same amount invested in gas or coal. Our own research from the New Climate Economy also finds high near-term jobs gains from climate action.
Human health will also benefit from the low-carbon shift. The IEA estimates that because of decreased air pollution in the net-zero scenario, two million fewer people will die prematurely each year by 2030 compared with today. This doesn’t even include the health benefits from decreased exposure to climate-related disasters and extreme heat.
4. Carbon capture and storage can help tackle emissions, but it isn’t the only solution.
The IEA’s net-zero scenario relies heavily on the use of carbon capture and storage (CCS), outlining that 7.6 gigatonnes CO2 should be captured and stored annually by 2050, up from around 0.04 gigatonnes CO2 today.
This assumes that CCS will help tackle emissions from existing energy sources, provide a solution for industrial sectors where emissions are hardest to reduce and help capture emissions produced by natural gas-based hydrogen production (even as green hydrogen produced by renewable-powered electrolysis should be prioritized). While CCS may be a critical part of the energy system in some instances, the question remains at what scale and cost? The technology is still expensive, and consumers remain uncertain about options for storing CO2. The Energy Transitions Commission, for example, leans much more heavily on the strong deployment of renewables, storage technologies and improved grid infrastructure and flexibility for the power sector, and prioritizes CCS as a critical technology for decarbonizing the industrial sector, particularly cement manufacturing and other heavy industry. In IEA’s net-zero scenario, energy-related emissions in industry account for almost 40% of the CO2 captured in 2050.
5. The use of bioenergy may compete with other critical human and ecological needs — including storing carbon.
The IEA’s net-zero scenario relies on the hefty use of 100 exajoules (EJ) of biomass for bioenergy in 2050. While this is a significant improvement on the IEA’s previous exaggerated assumptions on significant new bioenergy use, it’s still likely unrealistic. This amount of biomass is still equivalent to roughly five times the world’s existing commercial harvest of wood, and would likely conflict with land use for food.
For most of the biomass included in its scenario — about 60 EJ — the IEA relies on organic waste, forestry residue and industrial waste. This amount is roughly consistent with scenarios proposed by the Energy Transitions Commission, which suggest a technical potential of 50 EJ from such sources. Using some forestry residue for bioenergy may be appropriate, though it should still not be considered carbon-free because its burning speeds up release of carbon to the atmosphere that would otherwise occur over a couple of decades. And while organic waste does have some potential for bioenergy, it is extraordinarily challenging to turn it into usable fuels.
The IEA also requires that by 2030, the world eliminate the use of fuelwood, which constitutes most of the energy supply in many developing countries today. Doing so, plus reducing biofuels from food crops, would free up land that the IEA then would devote to “woody bioenergy crops.” Eliminating traditional fuelwood is a goal worth exploring, though it is a challenge. In these respects, the IEA’s scenario takes land use competition seriously and seeks biomass sources that do not add to the world’s demand for land. It is a strong caution to countries instead just subsidizing the harvest and burning of wood or increasing use of biofuels.
Though the IEA recognizes the need to avoid competition with food, it unfortunately still views land otherwise as a “carbon-free asset,” which means it has not factored in an opportunity cost. In fact, land dedicated to producing biomass for energy is land that could also be used for storing carbon, since it could instead be restored or turned into forests. The IEA’s assumptions still rely on 70 million hectares of marginal land, including grazing land, and another 70 million hectares of cropland, which together would provide 25 EJ of biomass.
With food and wood demand expected to increase more than 50% from 2010 to 2050, improving this land for agriculture and wood production is probably still needed to meet human needs without encouraging deforestation of other lands. Even if these lands are not needed in these ways, reforesting this land rather than using it for bioenergy would typically benefit the climate more than bioenergy for many decades. Other energy strategies, such as hydrogen, would be superior because they both replace fossil fuels and allow the benefits of reforestation — resulting in a double benefit.
Achieving Net-Zero Emissions by 2050
The IEA’s net-zero-by-2050 roadmap is an extremely important milestone in our journey to reimagine the global energy economy. While emissions dropped in 2020 in response to the COVID-19 pandemic, they’re already rising again as economies reopen and recover, highlighting the urgency of low-carbon solutions — especially in the power sector, where we can already make rapid progress on renewable energy.
The IEA’s roadmap launches a critical dialogue around the necessary speed, scale and support needed to deliver a net-zero power sector. A huge amount of action is needed to turn this ambitious pathway into reality, requiring governments to strengthen their climate policies and the private sector to mobilize finance, technology and investment. While the number of countries and companies that have committed to net-zero targets by mid-century is impressive, many do not have concrete strategies to achieve them. The solutions laid out in this roadmap must be top-of-mind for leaders throughout this critical year.
Written by By Jennifer Layke, Joel Jaeger, Katie Pastor, Kelly Levin and Tim Searchinger
Source: World Resources Institute, The International Energy Agency (IEA)