According to a recent report by the International Energy Agency (IEA), the global transition towards renewable energy is “unstoppable.” The agency forecasts that renewables will make up 50% of the world's electricity supply by the year 2030. However, the report raises concerns that the pace of phasing out fossil fuels is insufficient to maintain global temperatures within a critical 1.5C increase.
Although the report identifies robust advancements in renewable energy, it stipulates that the level of investment in fossil fuels needs to be halved to mitigate climate change effectively. IEA Executive Director Fatih Birol emphasized the global nature of the clean energy transition. “It's not a question of ‘if', it's just a matter of ‘how soon' – and the sooner the better for all of us,” said Birol.
The report also acknowledges the role of oil and gas in the world economy. It insists that while some level of investment in fossil fuels is “essential,” current funding levels are twice as high as they should be. The critique seems to indirectly address recent decisions by governments like the UK to authorize new oil fields. Earlier this year, the Rosebank oil field off Scotland's coast received approval despite environmental objections. The UK government defended the decision by asserting the continued role of oil and gas in the country's energy mix.
Despite advancements in renewables and electric vehicles — one in five cars sold in 2023 is electric, up from one in 25 in 2020 — global temperatures are projected to rise by an average of 2.4C by 2100. This exceeds the commitment made in 2015 to limit temperature increases to “well below” 2C and strive to keep them under 1.5C.
COP28, the upcoming UN climate summit in Dubai, is expected to be a pivotal meeting where new commitments could be made, including potential agreements to phase out “unabated” fossil fuels. This term refers to technologies not yet scalable, designed to capture emissions from burning fossil fuels.
The IEA report also touched on geopolitical concerns, especially in the Middle East. It cited rising tensions as an additional uncertainty factor in global energy markets, likening the situation to the 1973 oil crisis. The agency warned that volatile gas prices, as evidenced by the UK's increased LNG imports following the Ukraine invasion, compound these uncertainties.
However, the IEA remains optimistic that the expansion of solar and wind energy could provide long-term stability to global energy supplies.
