WASHINGTON –While some countries have been burning more fossil fuels such as coal in 2022 in response to natural gas shortages caused by the war in Ukraine, that effect is expected to be short-lived, the International Energy Agency said on Thursday in its annual World Energy Outlook, which forecasts global energy trends to 2050.
And for the first time, the agency now predicts that worldwide demand for every type of fossil fuel will peak in the near future.
The 524-page report says the energy crisis sparked by Russia’s invasion of Ukraine is likely to speed up rather than slow down the global transition away from fossil fuels and towards cleaner technologies such as wind, solar and electric vehicles.
One major reason for a peak in emissions is that many countries have responded to soaring prices for fossil fuels in 2022 by embracing wind turbines, solar panels, nuclear power plants, hydrogen fuels, electric vehicles and electric heat pumps.
In the United States, Congress approved more than US$370 billion (S$521 billion) in spending for such technologies under the recent Inflation Reduction Act. Japan is pursuing a new “green transformation” programme that will help fund nuclear power, hydrogen and other low-emission technologies. China, India and South Korea have all ratcheted up national targets for renewable and nuclear power.
And yet, the shift towards cleaner sources of energy still is not happening fast enough to avoid dangerous levels of global warming, the agency said, not unless governments take much stronger action to reduce their planet-warming carbon dioxide emissions over the next few years.
Based on current policies put in place by national governments, global coal use is expected to start declining in the next few years, natural gas demand is likely to hit a plateau by the end of this decade and oil use is projected to level off by the mid-2030s.
Meanwhile, global investment in clean energy is now expected to rise from US$1.3 trillion in 2022 to more than $2 trillion (S$2.81 trillion) annually by 2030, a significant shift, the agency said.
“It is notable that many of these new clean energy targets are not being put in place solely for climate change reasons,” said Dr Fatih Birol, the agency’s executive director, in an interview. “Increasingly, the big drivers are energy security as well as industrial policy – a lot of countries want to be at the leading edge of the energy industries of the future.”
Current energy policies put the world on track to reach peak carbon dioxide emissions by 2025 and warm roughly 2.5 deg C by 2100 compared with pre-industrial levels, the energy agency estimated. That is in line with separate projections released on Wednesday by the United Nations, which analysed nations’ stated promises to tackle emissions.
In contrast, many world leaders hope to limit average global warming to around 1.5 deg C to avoid some of the most dire and irreversible risks from climate change, such as widespread crop failures or ecosystem collapse. That would require much steeper cuts in greenhouse gases, with emissions not just peaking in the next few years but falling nearly in half by the end of this decade, scientists have said.
“If we want to hit those more ambitious climate targets, we’d likely need to see about US$4 trillion in clean energy investment by 2030,” Dr Birol said, or double what the agency currently projects. “In particular, there is not nearly enough investment going into the developing world.”
In 2022, global carbon dioxide emissions from fossil fuels are expected to rise roughly 1 per cent and approach record highs, in part because of an uptick in coal use in places such as Europe as countries scramble to replace lost Russian gas. Coal is the most polluting of all fossil fuels.
Still, that is a far smaller increase than some analysts had feared when war in Ukraine first broke out. The rise in emissions would have been three times as large had it not been for a rapid deployment of wind turbines, solar panels and electric vehicles worldwide, the agency said. Soaring energy prices and weak economic growth in Europe and China also contributed to keep emissions down.
And the recent rise in coal use may prove fleeting. European nations are currently planning to install roughly 50 gigawatts worth of renewable power in 2023, which would be more than enough to supplant 2022’s increase in coal generation. And globally, the agency does not expect investment in new coal plants to increase beyond what was already expected.
Russia, which had been the world’s leading exporter of fossil fuels, is expected to be hit especially hard by the energy disruptions it has largely created.
As European nations race to reduce their reliance on Russian oil and gas, Russia is likely to face challenges in finding new markets in Asia, particularly for its natural gas, the report said. As a result, Russian fossil fuel exports are unlikely to return to their pre-war levels.
But even though the current energy crisis is expected to be a boon for cleaner technologies in the long run, it is exacting a painful toll now, the report found.
Governments around the world have already committed roughly US$500 billion in 2022 to shield consumers from soaring energy prices. And while European nations appear to have enough natural gas in storage to get them through a mild 2022 winter, the report warns that next winter in Europe “could be even tougher” as stocks are drawn down and new supplies to replace Russian gas, such as increased shipments from the US or Qatar, are slow to come online.
The situation looks even more dire in developing countries such as Pakistan and Bangladesh, which are facing energy shortages as deliveries of liquefied natural gas are diverted to Europe. Nearly 75 million people around the world who recently gained access to electricity are likely to lose it this year, the report said. If that happens, it would be the first time in a decade that the number of people worldwide who lack access to modern energy has risen.
There is still a possibility that soaring energy prices could produce social unrest and pushback against climate and clean energy policies in some countries.
The new report comes less than two weeks before nations are set to gather at UN climate talks in Sharm El Sheikh, Egypt, where diplomats will discuss whether and how to step up efforts to curb fossil fuel emissions and provide more financial aid from richer to poorer nations. NYTIMES