At a time when the consequences of surging inflation are finally being felt by the population angered by higher gas prices, the International Energy Agency - an influential NGO first launched to respond to global oil supply shocks back in the early 70s during the oil crisis - has just published a report warning that if the world wants to achieve the goals laid out in the Paris Climate Accord (which President Biden just rejoined), all new oil and gas exploration projects must stop.
Perhaps the most important goal set out in the Paris Accords was achieving net zero carbon emissions by 2050. This is considered by climate scientists to be a prerequisite to meet the Paris Climate Accord Goal of Limiting global warming to 1.5 degrees Celsius north of pre-industrial levels, a fine line that's believed to be critical to forestalling the widespread coastal flooding that apocalyptic climate activists have warned will soon be inevitable.
Of course, if all the energy companies in the world announced that they were halting all exploration, the impact on the price of oil would be sudden and swift.
Achieving this would require an investment of staggering scale: Humanity would need to invest another $5 trillion in energy investments per year by 2030 (up from around $2 trillion today).
According to the FT, the report comes as IEA faces pressure from climate activists to produce a "roadmap" to achieving climate change targets. Ironically, the end result simply illustrates how unrealistic many of these widely accepted targets actually are.
As a reminder, achieving net-zero carbon emissions requires reducing emissions as much as possible then offsetting the rest with "carbon removal" plans financed by carbon credits.
However, with economists expecting global growth to expand at even faster rates thanks to the infusion of stimulus inspired by the pandemic, it follows that energy demand will also increase more quickly. Despite this, many economists and scientists expect that improvements in energy efficiency and the shift to renewables means that global energy demand will be around 8% smaller than it is today in 2050, even though the global economy will be more than twice as large as it is today.
Even China "committed' to cutting emissions to net zero during President Biden's virtual climate summit earlier this year.
To achieve the reduction modeled by the IEA, the share of fossil fuels in the global energy supply would need to fall from around four-fifths currently to one-fifth by 2050. In this scenario, solar would become the single biggest global energy source, representing 20% of global demand.
Experts acknowledged that economies that are "reliant" on the oil and gas industry could face "huge challenges".
"Those countries whose economies are relying on oil and gas revenues will face huge challenges," said Birol. "We came up with over 400 milestones, and one of them is — there is no need for new oil, gas and coal development, which includes no need for oil and gas exploration investments"
Climate activists celebrated the report as a sign that the IEA will join the fight against climate change by putting more pressure on oil companies and member states.
Joeri Rogelj, lecturer in climate change at Imperial College, called the IEA’s net zero scenario hugely significant.
"If you look back over the past decade, the IEA scenarios have always been lagging a bit,” said Rogelj. “The IEA is simply a slow, grey, rusty, dusty machine, and it just takes a while . . . but I am really happy to see the IEA has now arrived at a net zero pathway.”
In NYC, Mayor Bill de Blasio has adopted an ambitious target of running the city on 100% renewables by 2020, since he's done such a great job combating all the other problems facing the city.
Read the full report below: