Daud Olatunji
A stark reality emerges as nations worldwide grapple with the challenging target of reducing emissions by 2030.
According to a recent report from Wood Mackenzie, titled ‘Energy Transition Outlook 2023,’ there is no clear evidence that any major country is making significant strides toward meeting their 2030 emissions reduction goals.
The report underscores the daunting financial commitment required for a successful transition to a net-zero future. It estimates that an average annual capital expenditure of $2.7 trillion (£2.16 trillion) will be needed between 2030 and 2050.
Notably, 79 percent of this colossal investment must be directed toward “Power and renewables,” while only 7 percent will be allocated to upstream oil and gas.
The remaining funding is earmarked for crucial elements such as enhancing the power grid, bolstering electric vehicle infrastructure, advancing hydrogen technologies, developing carbon capture and utilization, and promoting sustainable practices in mining and materials.
Simon Flowers, Chairman and Chief Analyst at Wood Mackenzie, expressed the gravity of the situation, stating, “Net zero pledges now cover 88 percent of annual global emissions. But no major country is on track to meet their 2030 emissions reduction goals, let alone achieve net zero.”
Flowers emphasized the need for a dynamic policy landscape that supports technological innovation while addressing barriers such as permitting restrictions and challenges in the electricity supply chain.
While the report paints a sobering picture of the global emissions reduction progress, it does highlight some encouraging developments. The UK and the European Union are the only entities that come close to meeting their 2030 targets.
In a more optimistic projection, the report anticipates that energy-related emissions will peak in 2027 and then decline by approximately 25 percent by 2050 compared to 2019 levels.
It also predicts that low-carbon energy will account for 14 percent of final consumption by 2030, increasing to 28 percent by 2050.
Renewable energy sources like wind and solar are expected to surge from their current 13 percent to an impressive 53 percent, even as total power demand doubles.
Prakash Sharma, Vice President of Scenarios and Technologies Research at Wood Mackenzie and lead author of the report, stressed the need for urgent action to rapidly build low-carbon power supplies and infrastructure to achieve the 1.5-degree target.
Fossil fuels currently dominate 69 percent of end-use energy demand in 2023, but the report suggests this figure could decline to 53 percent by 2050 due to improved end-use efficiency and increased electrification.
Mr. Sharma concluded, “Oil and gas still have a role to play as part of a managed transition.
There will be a natural depletion as low and zero-carbon options develop, but supply still needs to be replenished as we move towards net zero.”
The report underscores the immense challenges ahead for countries to align with their emission reduction commitments and emphasizes the urgency of immediate and sustained efforts to combat climate change.
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