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Global carbon emissions from energy use will drop 8% this year after the Covid-19 pandemic halted transportation, according to BloombergNEF’s New Energy Outlook 2020.
The pandemic dip will not be enough to keep global warming below a two degrees Celsius increase by 2050, however, despite forecasts of cleaner energy use. Indeed, carbon emissions themselves may have peaked last year, suggesting that a reduction will take significant time.
Greenhouse gas emissions will start to bounce back alongside economic recovery from the pandemic, which the study predicts will take place through 2027. Investments in greener energy generation will start to take effect after that date and lead to emissions declining again through 2050.
That decline rate, however, will not be fast enough to prevent a two-degree increase in global temperatures, according to the forecast. Whether or not more can be done remains to be seen.
Climate change has resulted in a shrinking polar ice cap and an increase in severe weather, which contributes to fires, floods, storms and large-scale economic damage. The fallout has prompted governments from Europe to China to employ policies that seek carbon neutrality in the next 30-40 years.
In conjunction, many of the world’s international leading oil producers, such as BP and Total, have shifted investment strategies away from petroleum production and toward electricity generation using wind and solar and clean fuels.
Wind and solar are forecast to grow to meet 56% of global electricity demand by 2050, with leading countries set to see up to 70-80% saturation before hitting the economic limits of alternative energy sources, according to the report. Wind is expected to regain its earlier position as the leading alternative generator of electricity, after being eclipsed by solar.
Oil demand is seen as peaking in 2035 and then falling 0.7% year-on-year to return to 2018 levels by 2050. The main reason for this shift will be improvements in pricing for electric vehicles over the next 5 years, after which transition in scale will follow.
Meanwhile, consumption of natural gas, which is used as fuel in utilities power generation, is expected to grow continuously. Natural gas burns cleaner than oil and is generally less expensive to use.
BloombergNEF has been the industry leader in providing news, data, information and analysis on the renewable energy boom which has taken place over the past decade.
The main takeaway trends from the report – greater wind and solar generation and greater use of electric vehicles – are already well underway. Given the announced plans and investments by leading energy companies to pursue alternative energy, along with regulatory will to contain carbon emissions around the globe, there is little reason to dispute that these trends will only accelerate in the future.
Nevertheless, the details of any forecast reaching 30 years into the future will be arguable and subject to the unexpected.
But, in general, there is a very big body of investment, regulation, intellectual capital, time and research moving toward these goals. Once that institutional or industrial momentum is all pointing in the same direction, stopping the march towards alternative energy will be like – pardon the irony – trying to stop an oil tanker. That’s the direction things are headed.