Filenews 1 August 2021 - by Dimitris Konstantinidis
Today the energy sector is the source of about 75% of greenhouse gas emissions and is the key to preventing the worst effects of climate change. Perhaps it is the greatest challenge mankind has ever faced. The zeroing of global carbon dioxide (CO2) emissions by 2050 is in line with efforts to limit the long-term increase in the average global temperature to 1.5 ° C. This requires a complete transformation of how we produce, transport and consume energy. The growing political consensus to achieve the zero pollution target sends an important signal of optimism about the progress humanity can make. However, the changes needed to achieve zero emissions worldwide by 2050 are particularly difficult to understand even by governments. Huge work is needed to turn today's impressive ambitions into reality, given the range of differentiated situations between countries and their different ability to make the necessary changes.
The recent special report of the International Energy Agency (IEA) sets the trajectory for achieving this goal, so that we have a clean and resilient energy system that will bring significant benefits for human well-being and well-being. The global path to clean emissions by 2050 detailed in the IEA's 224-page report requires all governments to significantly strengthen and then successfully implement their energy and climate policies. The commitments made to date fall far short of what is required for this course. Fortunately, the number of countries committed to achieving zero emissions has increased rapidly over the past year, now accounting for around 70% of global CO2 emissions. This is a huge step forward.
However, most commitments are not yet supported by short-term policies and measures. Moreover, even if these commitments are successfully fulfilled, in 2050 they will have left behind some 22 billion tonnes of CO2 emissions worldwide. The continuation of this trend will result in an increase in temperature in 2100 of around 2.1 ° C. It is a fact that global gas emissions have decreased in 2020 due to the Covid-19 crisis, but are already recovering strongly in parallel with the recovery of economies. Further delay in the recovery of this trend will leave the zero pollution target by 2050 out of range. And in 2100 perhaps world leaders should discuss how to deal with the tragic climate reality in conditions so graphically depicted by Spanish artist Isaac Cordal in various capitals of the world.
The IEA report outlines the key conditions for the global energy sector to reach net CO2 emissions by 2050 and is aimed primarily at policymakers. It highlights the priorities that are needed today, so that the opportunity for clean energy by 2050 is not lost. Advanced economies need to reach zero emissions before emerging markets and developing economies to help them reach and/or achieve the target. Climate neutrality will require countless decisions and adjustments by people around the world, but the primary goal is to awaken policymakers, who have the greatest margin and responsibility to bring the world closer to its climate goals.
The main priorities highlighted by the ILO, which in religious terminology could also be called 'mandates', are summarised below.
First Mandate: Make the 2020s this massive expansion of clean energy
All the technologies needed to achieve deep cuts in global gas emissions by 2030 already exist, as do the policies that can drive their development. But as the world continues to face the effects of the Covid 19 pandemic, it is essential that the wave of investment to support economies aligns with the zero emissions target. Policies need to be strengthened to accelerate the development of clean and efficient energy technologies. Directives and standards are vital to drive consumer spending and industrial investment into the most efficient technologies. In this context, wind and solar power can accelerate changes in the electricity sector. The abolition of the fossil fuel subsidy, the increase in emission rights prices and other market reforms can send the right signals and influence price formation. Policies should limit incentives or impose disincentives for the use of certain fuels and technologies, such as the use of coal fuels in power stations, natural gas and conventional internal combustion engines. Governments must lead the way in planning and incentivising massive investment in infrastructure, including smart transmission and distribution networks.
Second Commandment: Prepare for the next phase of the transition by enhancing innovation;
Governments' R&D (R&D) spending needs to be increased and prioritised again. Important sectors, such as electricity, hydrogen, bioenergy and carbon capture, use and storage, currently receive only about one third of the public funding for R&D of the most established low-carbon and energy efficiency electricity generation technologies. It also requires support for the development of demonstration projects, the promotion of private investment in R&D and the strengthening of the level of development with a view to reducing costs. Around $90 billion of public money needs to be mobilised globally as soon as possible to complete a portfolio of demonstration projects before 2030. Currently, the budget for this period amounts to only about $25 billion. The promotion and development of these technologies will create important new industries, trade opportunities and jobs.
3 Third Mandate: Make clean energy jobs widely, which will increase by far
The energy transition must take into account the social and economic impact on individuals and communities and treat people as an active mass involved.
The transition to zero emissions brings with it substantial new employment opportunities, with 14 million jobs created by 2030, thanks to new activities and investments in clean energy. An additional 16 million workers will be required for more efficient appliances, electric vehicles and fuel cell vehicles, as well as for energy efficient construction. Unfortunately these opportunities are often in different locations, skill groups and sectors than those jobs that will be lost as fossil fuels decline.
Some 5 million jobs will be lost along this route. Most of these locations are close to places with fossil fuel reserves and well paid for, which means that structural changes can cause shock to communities, with the impact being medium to long term. This requires careful policy in order to deal effectively with job losses. These problems must be minimised by retraining workers, placing - where possible - new clean energy installations in affected areas and providing regional assistance.
Fourth Commandment: Set short-term milestones to meet long-term goals;
Governments need to work out credible step-by-step plans to meet their zero emissions targets and to build trust among investors, industry, citizens and other countries.
In 2050 instead of fossil fuels, the energy sector will rely heavily on renewable sources. Two thirds of the total energy supply will come from wind, solar, geothermal, hydropower and bioenergy. Solar energy will become the largest source, accounting for a fifth of energy supply. Solar photovoltaic capacity will increase by 20 times, while wind power will increase by 11 times.
Zero emissions means a huge reduction in the use of fossil fuels. Almost 4/5 of today's total energy supply will fall to just over a fifth by 2050. Fossil fuels remaining in 2050 will be used in products where carbon will be incorporated into the product, such as plastics, and in areas where low-emission technology options are rare. By 2050, almost 90% of electricity generation will come from renewable sources, with wind and solar power accounting for almost 70%. Most of the rest will come from nuclear power.
Therefore, country administrations should establish long-term policy frameworks to allow all government branches and stakeholders to plan for changes and facilitate a smooth transition. Long-term low-emission national strategies required by the Paris Agreement need to be defined. Long-term objectives need to be linked to measurable short-term milestones and policies. The IEA outlines more than 400 sectoral and technological milestones to guide the world on the zero-emissions journey by 2050.
Fifth Mandate :Promote a historic increase in investment in clean energy
The new ILO model, in addition to the projects already undertaken to date, does not include new approved oil and gas deposits for exploitation, and certainly no new coal mines or extensions of existing mines are required. Coal demand in 2050 will fall by 90% to just 1% of total use for energy production. Gas demand will fall by 55% to EUR 1 750 billion by 2020. cubic meters, while that of oil by 75% (to 24 million barrels per day from about 90 million in 2020).
Annual investments in transmission and distribution networks will expand from the current $260 billion to $820 billion in 2030. The number of public electric vehicle charging points is increasing from about 1 million today to 40 million in 2030, requiring annual investments of nearly $90 billion in 2030. Annual battery production for electric vehicles from current levels of 160 gigawatts per hour (GWh) will reach 6 600 GWh in 2030. Finally, the installation of hydrogen and the retention, use and storage of carbon, which will be required after 2030, means an increase from the current US$1 billion to approximately US$40 billion in 2030 for investments in CO2 pipelines and hydrogen infrastructure.
Governments should therefore design policies that send clear signals to the market, so that new business models unlock and mobilise private investment and spending, especially in emerging economies.
International public funding will therefore be crucial for the energy transition to zero emissions, especially in developing economies, but ultimately the private sector will have to cover the bulk of the extra investment required. Mobilising capital for large-scale infrastructure will require closer cooperation between companies, investors, public financial institutions and governments. Reducing risks for investors will be necessary to ensure a successful and economically tolerable transition to clean energy.
Many emerging markets and developing economies, which rely mainly on public funding for new energy projects and industrial installations, will have to reform their political and regulatory frameworks to attract more private funding.
Sixth Mandate: Address the emerging risks of energy security here and now
Total annual energy investment will swell to US$5 trillion by 2030, adding an additional 0.4% to annual growth in global GDP. This unprecedented increase brings significant economic benefits as the world emerges from the Covid-19 crisis. The rise in private and public spending creates millions of jobs in clean energy, including energy efficiency, as well as in engineering, industrialisation and construction. All this puts global GDP 4% higher in 2030 than it would be based on current trends.
New technologies could boost productivity and create completely new industries by providing opportunities in areas that see job losses in incumbent industries (e.g. lignite fields). Improvements in air quality will have significant health benefits, with 2 million fewer premature deaths worldwide from air pollution in 2030 than today. Achieving universal access to energy by 2030 would provide a significant boost to prosperity and productivity particularly in developing economies.
Shrinking oil and gas production will have far-reaching implications for all countries and companies producing these fuels. On the path to zero emissions there are no new oil and gas fields, and oil and gas supplies will increasingly be concentrated in a small number of low-cost producers. Annual per capita income from oil and gas in the producing countries will fall by about 75%, (from US$ 1800 in recent years to US$ 450 by the 2030s), which could have social implications. Structural reforms and new sources of revenue are therefore needed, although they are unlikely to fully compensate for the decline in oil and gas revenues. Fortunately, the know-how of the oil and gas industry fits well with technologies of hydrogen, retention, coal use and storage and offshore wind power.
The energy transition requires significant quantities of critical metals, and the supply of them appears as an important area of development. The overall size of the critical metals market, such as copper, cobalt, manganese, lithium and rare earths, will increase almost seven-fold between 2020 and 2030. The annuities of these metals are larger than those of lignite well before 2030. This creates significant new opportunities for mining companies. But it also creates new stress on energy security, including price volatility and additional costs, if supply cannot keep up with rising demand.
The energy transition requires a significant increase in all flexible sources: batteries, demand response and flexible low-carbon power stations, supported by smarter and more digital electricity networks. The resilience of electrical systems to cyberattacks and other emerging threats must also be strengthened.
It follows from the above that the issue of energy security will dominate, as dependence on renewable electricity sources increases, while the role of oil and gas will decrease. Governments need to create markets for investment in batteries, digital solutions and electrical grids to allow an adequate and reliable supply of electricity. The increasing reliance on critical metals needed for key clean energy technologies requires new international mechanisms to ensure both the timely availability of supplies and their sustainable production. At the same time, concerns about the safety of traditional energy will not disappear, as oil production will become more centralised
Seventh Commandment: Take international cooperation to new heights
International cooperation will be crucial to achieving the net emissions target by 2050. The path to zeroing polluting gases will be based on unprecedented international cooperation between governments, in particular innovation and investment. The IEA has announced that it is ready to support governments in preparing national and regional projects, provide guidance and assistance for their implementation and promote international cooperation to accelerate the global energy transition. Global challenges must be addressed through coordinated actions.
Governments must therefore work together in an effective and mutually beneficial way to implement coherent measures beyond their borders. This means careful management of job creation locally, but in the context of the collective global need to develop clean energy technology. Accelerating innovation, developing international standards and coordinating to upgrade clean technologies must be done in a way that connects national markets. Cooperation must recognise the differences in the stage of development of the different countries. For many rich countries, achieving net zero emissions will be more difficult and more costly without international cooperation. For many developing countries, this is not possible without international assistance. Technical and financial support is needed to ensure the development of key technologies and infrastructures. Without great international cooperation, global CO2 emissions will not be reduced to zero until 2050.
