Limiting global warming to 1.5 degrees to cost at least €6 trillion – Consultancy.uk
According to a new report, if the global energy sector fails to rapidly decarbonise and increase its generation capacity, the world will lose the race to net zero. However, with a number of fossil fuels companies currently suing governments for any action on climate change that impacts their profitability, a laissez faire approach to such changes seems increasingly unlikely to yield the changes needed.
Launched in August 2021, one of the first reports from the Intergovernmental Panel on Climate Change (IPCC) found that strong and sustained reductions in CO2-emissions and other greenhouse gases are key to limiting climate change. At the same time, it found that human actions still have the potential to determine the future course of climate.
Following on from this, a new study from Arcadis has highlighted how the energy sector has the key role to play in the slowing of climate change to within 1.5C. However, the road ahead is not an easy one. All countries in this report would need to halve energy sector emissions by 2029, most of them within the next four years if they are to help realise the goals of the Paris Climate Accord.
Alexis Haass, Chief Sustainability Officer at Arcadis, commented, “It’s time for an accelerated energy transition. Creating a net zero energy sector is essential because this will allow the rest of the economy to decarbonise. This is how we can bend the curve of the climate crisis back toward a 1.5 degree world.”
Arcadis’ new report uses economic modelling to simulate the conditions necessary for the global energy sector to rapidly shift from fossil fuels to renewable power generation. It focuses on how ten key markets would need to contribute to a global energy transition, drawing out takeaways that can support in guiding the transition to renewable energy and decarbonise with a heightened sense of urgency. In order to facilitate such a transition, however, Arcadis found that the global energy sector would need to dramatically expand its electricity generation capacity to meet growing demand.
This would require a sizeable investment of €6 trillion globally, according to the researcher’s estimations. This would go towards major infrastructure projects, including renewable energy technology and grid expansion – but would also require a sea-change in current investments from the world’s governments in fighting climate change.
Haas added, “We think Supercharging Net Zero illustrates the magnitude of the challenge that we are facing. At the same time, it demonstrates where opportunities lie. We hope this report helps to shape the discussion around the energy transition and that it creates a sense of urgency with key stakeholders in politics and in the energy sector.”
Most investment would be needed over the next decade, as transmission and distribution within global energy grids would need a €2.47 trillion investment, peaking in 2030 when existing levels need to have tripled to €360 billion. After this, investment would gradually reduce, slowing to €335 billion per year by 2050. Arcadis argued that in the long-run the changes would pay for themselves. A statement at the release of the report asserted, “If done right, the energy transition could bring down the cost of electricity and free up billions of euros in disposable income.”
However, as mentioned, this requires a major shift in stance from almost all the world’s governments – especially in the developed world. Even the little that is being spent is currently being stretched by legal proceedings from the fossil fuel lobby. As reported by Sky News, fossil fuel companies are suing governments across the world for more than $18 billion, after action against climate change has threatened their profits.
According to research conducted by campaign group Global Justice Now, British energy company Rockhopper, TC Energy, RWE, Uniper and Ascent Resources are bringing cases under the Energy Charter Treaty. The cases are being hosted within the International Centre for The Settlement of Investment Disputes, a branch of the World Bank.