The International Energy Agency (IEA) released a report earlier this month titled “Net Zero by 2050: A Roadmap for the Global Energy Sector”. In it, they map out a pathway that they call Net Zero Emissions (NZE), that lays out a cost-effective transition to a net-zero energy system.
Though they aren’t the first to publish a report that charts a path to net zero (SNC-Lavalin also released a report in March that I covered in an article on the blog), this report does contain several key elements that sets it apart from others.
In addition to this, the report is published by an organization that is widely regarded as a leading authority for being a reliable source of information, statistics, and analysis for the entire energy industry. Originally established in the wake of the 1973 oil crisis, the IEA’s current role has expanded to cover the entire global energy system as an acting policy advisor to countries worldwide.
Abruptly halting all new fossil fuel projects
A key milestone the IEA maps out in its NZE pathway is the end of all new fossil fuel projects in 2021. This would be a massive blow to the fossil fuel industry, although an abrupt halt of new oil and gas projects by next year still seems unlikely. Currently, there are major projects planned for 2021 in Europe, China, Africa, Saudi Arabia and even Canada.
But the report argues that this is a necessary step on the path to net zero; the world currently derives 4/5 of its energy from oil, gas, or coal and this must be reduced to 1/5 by 2050.
There is already a growing trend toward fossil fuel divestment. Environmental, Social, Governance (ESG) investing has been quickly trending upwards over the last few years. In fact, in 2020, ESG funds more than doubled from the previous year.
Ethical funds have been performing well on the market and providing investors with strong returns, adding to the momentum. This has been accompanied by campaigns focused on the divestment of fossil fuel projects, which aim to stigmatize fossil fuels and raise uncertainty around their use, reducing their attractiveness as financial assets.
An energy sector dominated by renewables
The NZE pathway calls for a complete energy overhaul by 2050, proposing that the sector should be comprised of 90% renewables with the remaining 10% being supplemented by mostly nuclear. This requires global generation from renewables to grow eightfold by 2050 where wind and solar will each need to start generating 23,000 TWh by 2050.
To put this into perspective, you would need 460,000 wind turbines and 331,000 sq km of solar panels to generate this much electricity.
The NZE also highlights the role nuclear must play, stating that current capacity must double by 2050.
At its peak in the 2030s, global nuclear capacity additions would reach 30 GW per year, which is five times the rate of the past decade.
The report isn’t overly enthusiastic about nuclear, claiming that “despite an increase in new construction builds and an emphasis on small modular reactors over the next 15 years, nuclear's share of total generation in advanced economies falls from 18% in 2020 to 10% in 2050”, with most of the new nuclear power capacity built in emerging economies.
Phasing out combustion engine vehicles by 2035
With the transportation sector responsible for 16.2% of GHGs worldwide, the IEA has included the transformation of this heavy-hitting industry as an integral milestone in the NZE.
Among the range of government decisions needed for this transformation, the report highlights the important role that governments must play to signal the end of sales of new internal combustion engine (ICE) vehicles by 2035.
To meet this target, the private sector needs to make massive investments in manufacturing and sourcing out supply chains for precious metals needed for batteries.
In addition, governments need to enhance infrastructure and strategically place charging stations where motorists need them most. While these changes are necessary, it is perhaps even more important that consumer confidence grows to support this transition. This will require actions that could include incentives like rebates for EVs, penalties for combustion cars and ensuring access to charging stations on well travelled routes.
Behavioural changes driven by government policies and investment
The NZE pathway emphasizes how critical behavioural changes are needed to cut energy demand and emissions, most of which (75%) will be directly attributed to government policy.
These would include measures to phase out polluting cars, reducing speed limits on highways, and using strategic pricing and campaigns to encourage more discretionary changes like reducing wasteful energy usage in homes and offices.
Private companies also play an important role in promoting the behavioural change needed for the NZE. While companies can reduce the carbon footprint of their commercial buildings, they can also influence behavioural changes of their employees by promoting the use of public transit or encouraging working from home when possible.
An ambitious but achievable path
The IEA has established a clear set of milestones needed to achieve net-zero by 2050, laid out simply in the graphic below. The steps they suggest are no doubt ambitious, but they are achievable.
And if there is one thing this report and others like it make clear, it is this: immediate action is needed if we are going to save this planet.
Net zero is essentially a math problem with multiple solutions. The real challenge will be mobilizing governments, companies, and individuals to be part of the solution today while there is still time.
Susie Ho is the Senior Advisor at NII's Bruce Power Centre for Next Generation Nuclear.