June 2021 – Mariana Vargas – Climate science has made a close approximation stating that an extent of global warming is proportional to the amount of carbon dioxide that human activities add to the atmosphere. Therefore, in order to stabilize climate change, CO2 emissions need to fall to net zero.
World leaders are aware of such declarations and research made by specialists and it’s why they have had numerous resolutions on the matter; Paris Treaty, the United Nations Framework Convention on Climate Change and now the Net – Zero policy.
Fatih Birol, Executive director of International Energy Agency, has said that the path to net zero by 2050 is narrow, however achievable if governments act now.
Let`s explain briefly the Net Zero path. By 2025 a major clean energy investment shall be made. Expecting that in 2050 annual clean energy investment worldwide will need to more than triple by 2030 to around $4 trillion. (IEA report, 2021) This large investment would also benefit societies increasing job opportunities and lift global economic growth.
By 2030 there shall be a universal energy access, all new buildings must be zero-carbon ready, 60% of global car sales must be electric, there shall be an use of clean technologies in heavy industry demonstrated at scale and 1 020 GW annual solar and wind additions in electricity and heating sectors, also, coal must be phased out in advanced economies. (IEA report, 2021)
5 years later, in 2035, 50% of heavy truck sales are electric and net zero emissions electricity in advanced economies. Low numbers shall be expected from coal, gas and oil markets globally, phasing out all unabated coal and oil power plants by 2040. (IEA report, 2021)
Electricity generation should also reach net zero emissions globally by 2040 and be on its way to supply almost half of total energy consumption. IEA mentions it will require huge increases in electricity system flexibility to ensure reliable supplies.
In 2045 cars will be running on electricity, planes will be relying in advanced biofuels and synthetic fuels and hundreds of industrial plants will be using carbon capture or hydrogen around the world. Making 2050 the golden year in a clean energy world, based largely in renewables with solar as the main source of supply, achieving cleaner and healthier energy sources.
The policy seems to be well thought out, nevertheless, it’s unlikely to expect countries such as the Peoples Republic of China and India to quit its use of coal in industrial plants, or expect regions to phase out the use of oil and gas in their sectors only to invest millions of dollars in new technology and infrastructure.
It also seems that 30 years isn’t enough. According to plan by 2025 there must be a large clean energy investment worldwide. Will countries invest the next 4 years in clean energies or will they invest in COVID -19 vaccines, public health policies and attempt to stabilize their economies after a hard pandemic hit? What about under developed countries?
Certainly all topics are important, but the world remains pragmatic and realistic. Without the support of consuming countries this plan has low possibilities of making it. A precedent has been made in the Netherlands when the Civil Court ruled in favor and declared that Shell must lower its CO2emissions by 2030 compared to 2019 numbers, certainly activists have shown their influence and won.
On another hand, Saudi Arabia`s prince Abdulaziz has said “Zero stars, two thumbs down” and “It seems to be a sequel of [the] Lalaland movie” told reporters June 1st after OPEC+ ministers met to affirm production levels. Also, Mark Stoeckle senior portfolio manager told Reuters that “repositioning Exxon Mobile from a company focused on oil to one focused on climate change issues will take a long, long time.”
We can take these reactions and state that energies are not replaced overnight, but are gradually shifted through many incentives. A radical policy is not the way to renewables. Countries and large companies are not willing to migrate or to invest large amounts of money in a short time and with uncertain returns. Powerful lobbies are programmed to persuade companies to gradually invest in renewables and reduce their CO2 emissions.
Forbes published a global index for 2020 showing the world’s top oil companies based on their revenues: The top three places went to state-owned companies: Petrochina, Sinopec and Saudi Aramco. A few years ago that position was disputed by Shell and Exxon Mobil. The success of the net zero policy will depend on the decisions made by state-owned oil companies. Latin America is not ready to leave oil in the ground. Oil and gas will continue to be an important pillar of state revenues as long as it is economically viable.