Countries accounting for over 70% of the world’s GDP and greenhouse gases have now pledged to reach net zero emissions by mid-century.
The shift to a green energy system is still in its infancy (the transition is less than 10% complete) and we are at a critical start of a century that should transform the system on an epic scale. Every stakeholder—governments, businesses, investors, and citizens—will need to make sure that the net zero target does not slip out of reach. The number of countries pledging to reach net zero continues to rise—but so do greenhouse gas emissions.
The International Energy Agency just recently released a 190-page report on what needs to happen in order to reach net zero emissions by 2050. It is the first comprehensive study of its kind that looks at the necessary pathway away from fossil fuels and the uncertainties surrounding the pathway.
The reports sets out clear milestones and describes the most technically feasible, cost‐effective, and socially acceptable pathway to achieve them—at least from what we currently know about the differing economics of green energy sources.
It is highly recommended reading. Detailed reading is no must, but as an investor and civilized being I would at least skim it.
Here are some main conclusions. To stay on track for net zero, by 2030:
- Annual clean energy investment will need to more than triple to around $4 trillion globally.
- Energy efficiency improvements needs to be pushed to three times the average of the last two decades.
- Annual additions of solar and wind needs to be four times higher than it was last year. For solar PV, this is equivalent to installing the world’s current largest solar park roughly every day.
- Electric vehicles needs to take up 60% of global car sales.
Some more from The Economist:
- Annual EV production needs to be ten times higher than it was last year and the number of roadside charging stations 31 times bigger.
- Global mining firms may have to raise the annual production of critical minerals by 500%.
- Perhaps 2% of America’s land will have to be blanketed in turbines and solar panels.