Pressure is mounting for wealthy countries, including Australia, on the back of the latest report from the OECD’s energy agency.
The International Energy Agency (IEA) Roadmap outlines a global pathway towards net zero emission energy by 2050. The new report puts fossil fuels on notice, showing that no new investment in oil, gas and coal assets globally beyond 2021, and that developed economies need to have phased out all coal by 2030.
With expectations for wealthy countries to lift ambition, Australia has been in the spotlight as a nation with the resources and capability to do more. The country is on track to exceed its 26-28 per cent national emissions reduction target (from 2005 levels) due to state and territory commitments alone. Yet the current target is not aligned to the Paris Agreement, and Climateworks analysis shows Australia has opportunities to reduce emissions to around 50-75 per cent by 2030 below 2005 levels.
The 2020 analysis, Decarbonisation Futures, outlines how major sectors of the Australian economy could move to net zero emissions through investing in technological solutions that already exist. The IEA’s global equivalent shows most of the global reductions in emissions between now and 2030 come from technology that is available now, but calls on increased investment in innovation to achieve 2050 goals. It also highlights the enormous economic opportunities rapid decarbonisation presents to create millions of jobs worldwide. The IEA calculates that 30 million new jobs are needed to implement the net zero pathway, and around 5 million jobs lost, which requires training and clean energy job opportunities to be directed at those affected.
The IEA report also shows global gross domestic product (GDP) increases if the net zero energy pathway is implemented. The massive scale up of clean energy technologies means total annual energy investment surges to USD 5 trillion by 2030, adding an extra 0.4 percentage point a year to annual global GDP growth. The IEA notes this “brings significant economic benefits as the world emerges from the Covid‐19 crisis. The jump in private and government spending creates millions of jobs in clean energy, including energy efficiency, as well as in the engineering, manufacturing and construction industries. All of this puts GDP 4% higher in 2030 than it would be based on current trends.”
“The IEA report provides a clarion call for increased action and focus and a clear guidebook for governments to work together and with businesses, investors and citizens.” Climateworks CEO Anna Skarbek said of the report’s release. “It shows that we have a narrow but achievable pathway towards global decarbonisation, and that 2030 goals are within reach using existing technological solutions. This echoes Climateworks’ research that shows that the Australian economy has the technological capacity to cut national emissions in half by 2030. It also makes clear, as did our Decarbonisation Futures, that this requires immediate and massive deployment of all available clean and efficient energy technologies.”
This is significant from the IEA, an agency historically regarded as conservative on renewable energy and comprised of 30 member countries from the OECD, including Australia, with 8 association member countries including Indonesia. The IEA’s World Energy Outlook is used globally to guide energy and infrastructure investment. Previous modelling has been inconsistent with the Paris Agreement, with the inclusion of significant fossil fuel use which has been used as evidence by fossil fuel companies as evidence of continued demand for their resources.
The latest report sets out 400 milestones as part of a global journey to net zero by 2050 and outlines big declines in coal, oil and gas. It states that beyond projects that have already been committed in 2021, no new oil and gas fields should be approved, nor any new coal mines or mine extensions.
The net zero pathway aligns with the 1.5C global goal of the Paris Agreement, and calls for scaling up solar and wind rapidly this decade – installing four‐times the annual record levels set in 2020 by 2030, improving energy efficiency at three‐times the average rate achieved over the last two decades, and increasing electric vehicles (EVs) from around 5% of global car sales to more than 60% by 2030. From 2025, bans on new fossil fuel boilers in buildings need to start being introduced globally, driving up sales of electric heat pumps, and most old and all new buildings complying with zero‐carbon‐ready building energy codes. From 2030 onwards, the pathway would see three new hydrogen‐based industrial plants built every month, and 2 GW of electrolyser capacity added at industrial sites worldwide each month.
The IEA makes clear that government research and development (R&D) spending needs to be increased and reprioritised, and that support is also needed to accelerate the roll‐out of demonstration projects, to leverage private investment in R&D, and to boost overall deployment levels to help reduce costs. Climateworks’ submission to the Australian Government’s Technology Investment Roadmap Discussion Paper last year highlighted the importance of this in an Australian context.
With commitments from the US-led Leader’s Climate Summit currently aligned to 2.4 degree global heating, greater ambition will be expected at the most important Conference of the Parties to-date. The IEA report has been designed to inform the negotiations at COP26 in Glasgow this November.
You can read the full IEA report here and find out more about how Australia can achieve net zero emissions by 2050 here.