A further $5,300 billion of investment is needed to stabilise the concentration of CO2 in the atmosphere below dangerous levels, according to a study by Bloomberg New Energy Finance, an energy consultancy. EURACTIV’s partner Journal de l’Environnement reports.
Many observers have suspected all along that the “low-carbon” investments pledged by the international community would not be enough to achieve the objective of the Paris Agreement, to stabilise global warming at two degrees above pre-industrial times by the end of the century. Now their doubts have been confirmed.
In its annual energy outlook published on Monday (13 June), Bloomberg New Energy Finance (BNEF) painted a portrait of the global energy system up to 2040. The study takes into account the promises contained in the Intended Nationally Determined Contributions (INDCs) presented by UN member states at the COP 21, as well as important trends like population growth and the expected slow-down of the Chinese economy.
Wind and solar the cheapest
For different reasons, BNEF believes the price of the major energy sources will drop significantly over the next three decades.
Coal and natural gas prices will fall by one third, while the cost of onshore wind will fall by 40% and photovoltaic by 60%. In many countries, according to BNEF, onshore wind and solar will become the cheapest sources of electricity.
Green technologies could produce more than two thirds of all electricity in Europe by 2040, and 44% in the United States.
This should be encouraging news for investors and electricity providers, who will invest $7,800 billion in renewable energies by 2040, including $3,400 billion in solar and $3,100 billion in wind.
Progress indeed, but BNEF warns that it will not be enough to cut the energy sector’s greenhouse gas emissions by the amount needed to stabilise the concentration of CO2 in the atmosphere at 450 parts per million (ppm). This is the level which scientists believe will lead to catastrophic and irreversible climate change.
The current concentration of CO2 in the Earth’s atmosphere is around 400 ppm.
Coal is not dead
To reduce their carbon footprint to the necessary levels, energy providers must invest a further $5,300 billion in low-carbon or carbon neutral energy sources, the report said. They must also put a complete stop to the use of the most polluting energy sources.
Yet for the consultancy, it seems unlikely that the big emerging countries, notably India, would willingly part with coal. The only solution currently tabled by New Delhi to meet its rising demand for energy, which is set to quadruple over the next 30 years, is to invest more than $2,000 billion in the most polluting fossil fuel.
But in China things are changing. The slow-down in economic growth, combined with Beijing’s new five-year plan, should drastically reduce the country’s reliance on coal.
Based on estimates it made last year, BNEF predicts that China’s coal-fired power stations will produce less than 1,000 terrawatts per year by 2040. This is equivalent to two years’ energy production by all the power stations in France.