The world is facing an imminent threat—climate change—and the energy transition to renewable sources has been identified as a crucial step to mitigate the crisis of irreversible effects. However, a recent report by the International Renewable Energy Agency (IRENA)—the World Energy Transitions Outlook 2023—highlights that the energy transition is off-track.
The aftermath of COVID-19 and the ripple effects of the Ukraine conflict have further compounded the challenges facing the transition. The stakes could not be higher, as even fractional changes in global temperature can have detrimental and far-reaching consequences for natural systems, human societies, and economies globally.
By delving into the report, we learn how imminent this is and the impacts that must be made through energy transition and other actions to decarbonise industrial processes.
Closing the emissions gap is critical
Limiting global warming to 1.5°C, as outlined in the Paris Agreement, necessitates cutting carbon dioxide (CO2) emissions by approximately 37 gigatonnes (Gt) from 2022 levels and achieving net-zero emissions in the energy sector by 2050. Despite some progress, significant gaps remain between the current deployment of energy transition technologies and the levels required to achieve this goal. A successful transition would require a holistic transformation of energy consumption and production across societies.
According to IRENA's report, current pledges and plans fall well short of the agency's 1.5°C pathway. If fully implemented, nationally determined contributions (NDCs), long-term low greenhouse gas emission development strategies (LT-LEDS), and net-zero targets could reduce CO2 emissions by 6% by 2030 and 56% by 2050 compared to 2022 levels. However, many climate pledges are still awaiting translation into detailed national strategies and plans supported by adequate policies, regulations, and funding.
The report also highlights that without urgent action, the energy-related emissions gap is projected to reach 34 Gt by 2050, underscoring the critical need for comprehensive measures to accelerate the transition.
Deploying renewables and investing in sustainable power
To stay on track for the 1.5°C pathway, the world needs to deploy approximately 1,000 GW of renewable power annually. However, in 2022, only 300 GW of renewable capacity was added globally, accounting for 83% of new capacity, while fossil fuels and nuclear combined accounted for the remaining 17%. The volume and share of renewables need to increase substantially to achieve the necessary targets, and this is both technically feasible and economically viable.
But, policies and investments are not consistently moving in the right direction. While 2022 witnessed record renewable power capacity additions, it also saw the highest levels of fossil fuel subsidies ever. Many governments implemented these subsidies to cushion the impact of high energy prices on consumers and businesses. Furthermore, global investments in all energy transition technologies reached a record high of USD 1.3 trillion in 2022.
Nevertheless, fossil fuel capital investments were nearly double that of renewable energy investments. Governments must redouble their efforts to ensure investments are aligned with renewable energy goals, considering the role of renewables in meeting climate commitments, energy security, and affordability objectives.
Why is action against climate change so imminent?
The gap between what has been achieved and what is required to combat climate change continues to widen each year. IRENA's energy transition indicators demonstrate the pressing need for significant acceleration across various energy sectors and technologies. This includes deeper end-use electrification of transport and heating, direct renewable energy usage, energy efficiency enhancements, and infrastructure development.
Delays in taking action only exacerbate the existing challenge of meeting the emission reduction targets outlined by the Intergovernmental Panel on Climate Change (IPCC) for 2030 and 2050 to stay on a 1.5°C trajectory. Furthermore, this lack of progress will lead to increased future investment needs and escalating costs associated with the worsening effects of climate change.