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How much will net zero cost? $2.7 trillion a year.
Energy consultancy Wood Mackenzie says the world is on pace for 2.5 degrees Celsius of warming.
CLIMATEWIRE | The world's biggest polluters are lagging behind their climate goals as billions of dollars in renewable energy investments fall short of preventing temperature increases beyond 1.5 degrees Celsius by 2100, according to energy consultancy Wood Mackenzie.
The planet is expected to warm 2.5 C — a full degree warmer than the Paris climate agreement's most ambitious goal — if nations fail to make aggressive changes to clean energy policies, the group said in an analysis released Thursday. Scientists have called the 1.5 C threshold a “tipping point" after which Earth could suffer irreversible damage.
“The global economy still depends on fossil fuel,” Jonathan Sultoon, head of markets and transitions at Wood Mackenzie, told reporters ahead of the report's release. “Low carbon technologies and infrastructure need to scale up much quicker than what we're seeing.”
The United States is expected to only reduce carbon emissions 15 percent compared to 2005 levels by 2030 if the current trend continues, the report said. That's far off the Biden administration's goal of cutting carbon emissions in half by the same year.
It's still possible to prevent global temperatures from rising by more than 1.5 C, the report said, but it would be difficult.
It would mean pouring an additional $2.7 trillion every year into renewable energy projects, transmission lines, carbon capture systems and battery technology until 2050, according to the report. Oil and gas consumption — which is projected to increase until 2032 in the most likely scenario — would have to start falling rapidly this year.
The expansion of clean energy has been hampered by slow permitting, higher costs from inflation and supply chain problems, and uncertainty around government incentives, the report says.
In August, the Treasury Department missed its deadline for issuing new guidance on the Inflation Reduction Act tax credit for low-emission hydrogen. The industry has asked for a clear set of rules for federal incentives, which is expected to require hydrogen producers to buy a matching amount of renewable power to offset their electricity consumption.
Companies “interested in investing in low-carbon hydrogen are waiting in the wings to see exactly what those policies are,” said David Brown, a director of energy transition practice at Wood Mackenzie. The report estimates that hydrogen would have to provide a third of global power by 2050 in order to reach net-zero emissions by midcentury.
Fossil fuel production will continue to flourish as clean energy technologies ramp up, said Prakash Sharma, vice president of scenarios and technology at Wood Mackenzie. In the meantime, record-high investment is needed to prepare countries around the world for an eventual flood of renewables, batteries and carbon capture systems.
“Patience is important,” Sharma said. “The current energy system is around 80 to 90 percent hydrocarbon based, so you can't switch off that energy supply immediately.”
This story also appears in Energywire.
