International investment in the energy transition must more than double to almost $4.5 trillion a year by early next decade if the world is to stay on the path to net zero, the International Energy Agency has warned
A record $1.8 trillion is expected to be ploughed into the shift to clean energy this year but the IEA said that to keep the goal of net zero emissions by 2050 in reach “a huge policy-driven ramping up of clean energy capacity” was needed this decade.
In it's newly-published net zero roadmap, the agency also said that “continued investment is required in some existing oil and gas assets” to avoid a costly supply shock.
However, it repeated its 2021 conclusion that no long-lead-time new oil, gas or coal developments were needed beyond those already approved.
The IEA was founded in 1974 as a forum for energy co-operation to try to secure oil supplies after the 1973 oil embargo. Its members include Britain and America.
“Keeping alive the goal of limiting global warming to 1.5 °C requires the world to come together quickly. The good news is we know what we need to do – and how to do it," said IEA Executive Director Fatih Birol.
"Our 2023 Net Zero Roadmap, based on the latest data and analysis, shows a path forward - but we also have a very clear message: Strong international cooperation is crucial to success. Governments need to separate climate from geopolitics, given the scale of the challenge at hand.”
The IEA first published a roadmap for meeting the goal two years ago, attracting criticism from the oil and gas industry over its conclusion that no new fields were needed. Governments including Britain’s have also resisted this conclusion, citing geopolitical concerns following Russia’s invasion of Ukraine as they seek to develop new fields.
But the IEA reiterated its view that in a scenario in which the world hits net zero by 2050,
In the updated scenario, a huge policy-driven ramping up of clean energy capacity drives fossil fuel demand 25% lower by 2030, reducing emissions by 35% compared with the all-time high recorded in 2022. By 2050, fossil fuel demand falls by 80%.
Nonetheless, continued investment is required in some existing oil and gas assets and already approved projects, the report says, adding that "sequencing the increase in clean energy investment and the decline of fossil fuel supply investment is vital if damaging price spikes or supply gluts are to be avoided."
Dr Birol added: “Removing carbon from the atmosphere is very costly. We must do everything possible to stop putting it there in the first place.
“The pathway to 1.5 °C has narrowed in the past two years, but clean energy technologies are keeping it open. With international momentum building behind key global targets such as tripling renewable capacity and doubling energy efficiency by 2030, which would together lead to a stronger decline in fossil fuel demand this decade, the COP28 climate summit in Dubai is a vital opportunity to commit to stronger ambition and implementation in the remaining years of this critical decade.”