Who will pay for the world’s transition to renewable energy: Environment Articles ➕1, 02.11.2021

In 2020, Norwegian climatologists have found that global warming has passed the point of no return and is now unstoppable: even if we cut all emissions now, by the end of the twenty-first century, the average temperature on the planet will increase by 2.2 -3.1 degrees Celsius from some level before the industry.

The International Energy Agency claims that is not the case. The organization has developed a scenario in which greenhouse gas emissions cease by 2050 and global warming does not exceed 1.5 degrees Celsius. By the end of the century, according to calculations by the International Energy Agency, the Earth will be 1.4 degrees Celsius warmer than it was in the mid-18th century. This is in line with the purposes of the Paris Agreement, which was signed by 195 countries and the European Union.

For now, this is the most radical scenario for combating global warming. The International Energy Agency believes that it will be possible to revive it through large-scale shifts in energy production and consumption. Thanks to them, by 2030, greenhouse emissions around the world could be reduced by half.

To do this, humanity today must reduce the use of fossil fuels as an energy source (in a broad sense – from electricity generation to refueling). Thanks to these efforts, its share will drop by 2050 from the current 80% to 20%. Half of the energy consumption will come from electricity, and almost 90% of electricity generation will come from renewable sources – solar panels, wind turbines, hydroelectric plants, etc.

One of the main conditions for the scenario is the electrification of transport. By 2040, sales of passenger cars with internal combustion engines should cease in the world, by 2050 – heavy vehicles powered by fossil fuels. 80% of all aircraft and ships in the world will run on low carbon energy sources.

The rest of the industry and the remaining oil and gas energy must become more environmentally friendly. In 2050, 30 kg of carbon dioxide will be emitted for every barrel of oil produced2 (Three times less than a day). What cannot be reduced to zero, the International Energy Agency proposes to capture it at industrial facilities before entering the atmosphere.

Now “captured” carbon dioxide is used for fertilizer production and injection into oil fields to increase production efficiency (40 million tons of carbon dioxide).2 In the year). Under the watchdog scenario, CO2 capture2 It will turn into a huge industry: by 2050, the industry will capture 7.6 billion tons of carbon dioxide2 per year (13% of current global emissions). They will become raw materials for many technological processes.

From net emissions, industrial and mining enterprises will turn into waste users. As a result, global power generation will achieve a negative carbon balance – that is, it will not emit, but rather consume carbon (up to 5 grams of carbon dioxide).2equivalent per kilowatt-hour).

The International Energy Agency identifies five of the most economically promising “green” energy technologies – solar panels, wind turbines, batteries, electrolyzers (equipment for producing hydrogen fuel from water) and fuel cells (generators that produce electricity from hydrogen fuel). By 2050, the global market for these technologies will grow 10 times to $1.2 trillion. That’s how much the entire oil industry is worth today. By the way, by the middle of the century, it will decrease sevenfold – to 180 billion dollars.

In 2030, half of the global green energy market will be in batteries, and by 2050 its share will grow to 70%. And this is not surprising: by this time, the world will have stored 3 billion kilowatt-hours of electricity, and more than 3 billion electric cars will be available on the roads.

Today, the absolute leaders in the introduction and use of renewable energy are China, the European Union and the United States, and the combined contribution of other regions is still small. By 2050, according to the IEA scenario, these leaders will not give up their positions, and the rest of the world will quickly catch up with them.

According to the International Energy Agency, implementing a zero-emissions scenario will require unprecedented investment. By 2030, annual investments in green energy should grow to $4 trillion. That’s four times more than today.

Two thirds of this amount will be private investments – corporate investments in their modernization. The other third will have to supply governments.

IEA analysts assert that by 2050, these investments will pay off in part due to the expansion of markets for windmills, solar panels, batteries, electrolyzers and fuel cells. Its total volume over the next 30 years is estimated at $27 trillion.

To assess the feasibility of the proposed scenario by the International Energy Agency, Plus-one.ru Turned to the experts.

Georgy Safonov, Director of the Health, Safety and Environment Center for Environmental Economics and Natural Resources:

“This is a large amount – about 4% of global GDP. However, it is capital investment that mainly stimulates its growth. It is important that countries support economic growth, so the authorities of many countries are interested in a “green” transition. For investors and companies , this is a unique opportunity to conquer new areas in the world market, to squeeze competitors with more “dirty” production – for example, Russia as a source of fossil fuels, minerals and other carbon-intensive commodities.

Now the priorities are shifting towards “green” technologies that are carbon-neutral. Investors and companies have money. By 2021, they would have withdrawn $41 trillion in fossil fuel assets. And this process continues.”

Sergey Kondratiev, Head of Industry and Infrastructure Sector, Institute of Energy and Finance:

$4 trillion a year is 10% of investment in the global economy. Neither corporations nor governments have such money at the moment. It can only be obtained by raising prices to end consumers. Various mechanisms can be used for this purpose – tax increases for buyers of fossil fuels, the introduction of special fees, etc. The coming decades will likely be an era of “expensive energy” and relatively low growth rates. The cost of electricity in the world could grow by 30-50%, which would be a shock to energy-intensive industries.

Low-income countries in Africa and South Asia, which are exporters of fossil fuels, may find themselves in a very difficult situation. But if the latter can use their income to invest in green energy, the underdeveloped countries will need the help of the global community to successfully transition.”

Georgy Safonov, Director of the Health, Safety and Environment Center for Environmental Economics and Natural Resources:

“Governments and businesses are already investing in renewable energy and scale is on the rise. Let me remind you that one of the goals of the Paris Agreement is to transition global financial flows to a carbon-neutral economy. So this is not an accident or a short-term fad, this is a strategic decision on a global scale.

The timing of achieving climate goals is determined not by the ambitions of politicians, but by business processes, competition, development and implementation of innovations. A simple example: The cost of generating power from solar panels has fallen 10 times in 10 years. No one expected such dynamics. Rapid cost reductions are expected in many areas of carbon-neutral energy, green transportation, and industry. But in the traditional energy sector (coal and gas), costs have not been reduced almost for more than 40 years.”

Sergey Kondratiev, Head of Industry and Infrastructure Sector, Institute of Energy and Finance:

“The proposed scenario can be implemented, but this will require international consensus, planning and coordination of the actions of the major players – the United States, the European Union, China and the larger developing countries. Perhaps the best solution would be to create an international fund or give existing international financial institutions (such as the World Bank) a mandate to prioritize financing for projects green.

In any case, it will be very difficult to achieve the goals set by the IEA. With a high probability, global carbon neutrality will not be achieved until after 2060.”

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Ilya Arzumanov


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