Posted on 28 November 2022 by dana1981

This is a re-post from Yale Climate Connections

Anew analysis by the Global Carbon Budget, published in the journal Earth System Science Data, shows global carbon emissions from burning fossil fuels have fully recovered from the temporary dip driven by the COVID-19 pandemic, setting new records in 2021 and 2022. But it’s not all bad news: With most of that rebound occurring in 2021, global fossil pollution is projected to rise by just 1% in 2022, and the rate of global deforestation has slowed over the past two decades.

Global carbon emissions from burning fossil fuels and land use change like deforestation. Source: Global Carbon Project

With Russia’s invasion of Ukraine and resulting disruptions of natural gas supplies to Europe, global fossil gas consumption is projected to decline 0.2% in 2022, but some of that energy demand has been met by a 1% increase in global coal consumption over the year. Carbon pollution from oil also rose 2.2% in 2022, although it remains slightly below pre-pandemic levels, as travel and transportation have not fully recovered.

Despite the continued rise in global carbon emissions, the International Energy Agency (IEA),  in its 2022 World Energy Outlook report, painted a relatively optimistic vision of future climate pollution. Recent policy changes – including the Inflation Reduction Act (IRA) in the U.S. – have shifted the scales heavily in favor of clean energy technologies.

Peak for fossil fuels on the horizon as demand declines

In one key conclusion of the report, IEA projects that based on laws countries around the world have already passed (its Stated Policies Scenario, or ‘STEPS’), and even in the absence of further climate policies, global fossil fuel consumption will peak by 2025. Its words: “Coal demand peaks in the next few years, natural gas demand reaches a plateau by the end of the decade, and oil demand reaches a high point in the mid-2030s before falling slightly. From 80% today – a level that has been constant for decades – the share of fossil fuels in the global energy mix falls to less than 75% by 2030 and to just above 60% by mid-century.”

In a recent analysis, the consulting firm McKinsey similarly projects global fossil fuel demand will peak by 2025, and energy experts at RMI believe that the world has already reached peak fossil fuels. The reason? They point to the rapid deployment of clean and increasingly cheap technologies like solar panels, wind turbines, electric vehicles (EVs), and electric heat pumps, in combination with energy efficiency improvements.

In the U.S. the IEA expects solar and wind capacity to nearly triple and EV sales to increase sevenfold from today’s levels by 2030 in response to tax credits passed as part of the IRA. Because of a massive expansion of clean energy and EVs in China, their coal and oil consumption are projected to peak before 2030. The E.U.’s numerous clean energy and efficiency policies are expected to reduce its fossil gas and oil demand 20% by 2030, with its coal use declining by 50% over the same period. Although India’s fossil fuel consumption will continue to rise rapidly to meet the country’s rapid economic development, renewables are projected to meet two-thirds of its increased electricity demand in the coming years. And a plethora of other nations are likewise undergoing a rapid transition to a green economy, leaving peak fossil fuel demand in their wake.

Profound effects of Russia’s war in Ukraine

Russia is the world’s second-largest producer of oil and gas, behind only the United States. Its invasion of Ukraine thus disrupted the global fossil fuel market, especially for the E.U., which had relied upon Russia to supply about 40% of its fossil gas consumption. Many of Russia’s trade partners now are searching for new suppliers and accelerating the transition away from fossil fuels toward clean technologies.

As a result, the IEA projects that Russia’s “share of internationally traded oil and gas falls by half by 2030 in the STEPS … One of the effects of Russia’s actions is that the era of rapid growth in natural gas demand draws to a close.” 

For example, most European nations are rapidly replacing fossil gas furnaces with electric heat pumps. The war appears to have a silver lining of accelerating the global transition away from fossil fuels.

For Russia, for which oil and gas account for about 40% of federal budget revenues and 60% of exports, the IEA concludes that the international backlash to its invasion will have dramatic economic repercussions:

‘There are no easy options for Russia in its search for new markets for the gas it was exporting to Europe. Sanctions undercut the prospects for large new Russian [liquified natural gas] projects, and long distances to alternative markets make new pipeline links difficult,” IEA said. “In the Announced Policies Scenario, Russia’s share of internationally traded gas, which stood at 30% in 2021, falls by 2030 to less than 15%, and its net income from gas exports (revenue minus costs) falls from $75 billion in 2021 to $25 billion in 2030.”

What it will take to meet the 2015 Paris targets

The IEA’s current policies ‘STEPS’ scenario would lead to about 2.5 degrees Celsius (4.5 degrees Fahrenheit) global warming above pre-industrial levels by the year 2100, exceeding the international Paris target of 1.5–2°C (2.7–3.6°F). 

Meeting countries’ Paris pledges and limiting global warming to less than 2°C (IEA’s Announced Pledges Scenario, or ‘APS’) would require additional policies to reduce climate pollution by about two-thirds by 2050. Limiting global warming to the “aspirational” 1.5°C in IEA’s Net Zero Emissions (NZE) scenario would require a steep decline in global carbon emissions by 2030, reaching net zero by 2050.

The good news is that the costs of some clean technologies like solar panels, batteries, and electrolyzers to make green hydrogen from water molecules are falling so fast that IEA anticipates their deployment will approach what’s needed to meet the APS scenario even in the absence of new policies. But supplies of some key minerals like lithium and copper will need to continue to increase in order to meet the projected demand in this scenario. Some countries like the U.S. will also need faster deployment of EVs in order to stay on track with their Paris commitments.

The IEA also notes that clean infrastructure permitting could act as a bottleneck constraining the rate of clean energy deployment. Electric transmission lines – needed to connect new solar and wind farms to population centers – take a particularly long time to build in the U.S. and in the E.U. in light of slow permitting processes. These countries will need to address permitting issues in order to meet their 2030 Paris pledges.

Overall, there remains a plausible, though difficult, path to meet the Paris targets. The combination of national climate policies and plummeting clean technology costs appears to have put the world at an inflection point. With demand for fossil fuels peaking, the looming question now is just how fast they will be replaced with cheaper, cleaner, and more efficient alternatives. 

The race to try to meet the 2015 Paris climate agreement targets is on.