Investment in new oil and natural gas projects must stop today, and sales of petrol and diesel-powered vehicles must stop from 2035. These are some of the milestones the International Energy Agency said on Tuesday to reach the global energy industry to achieve net carbon emissions by 2050.
These conclusions seem surprisingly strong for the agency, a multilateral group whose main mandate is to ensure energy security and stability. But it has increasingly taken on a role in combating climate change under its executive director, Fatih Birol.
At a news conference, Mr. Birol said he wanted to close the gap between the ambitious climate change commitments made by the government and CEOs, and the reality that global emissions are still rising sharply.
Only a year ago, the agency was deeply concerned about the disruptive effects of the collapse of the oil market as a result of the pandemic. At the time, Mr. Birol refers to April 2020 as ‘Black April’.
Now Birol analysts give an explanation in a report which looks like decades of disruption to the global energy industry. Oil production, for example, will have to fall from almost 100 million barrels per day to around 24 million per day by 2050, the report said.
The agency acknowledges that the disruption to the global energy sector, which produces three-quarters of greenhouse gas emissions, could threaten 5 million jobs. “The contraction in oil and natural gas production will have far-reaching consequences for all the countries and companies that produce these fuels,” the Paris group said in a news release.
Oil producing countries can see different impacts. This report is likely to lead to further calls from environmental groups to end the UK Government, which is chairing the United Nations Climate Change Conference (COP26), to end new oil and gas drilling to set a global example. A strike will threaten jobs in the declining but still large oil and gas industry.
On the other hand, members of the Organization of the Petroleum Exporting Countries are likely to see their share in a much reduced market rise by about a third to more than 50 percent as countries with less efficient, higher-cost oil industries cut back.
At the same time, Mr. Birol said there will be huge economic benefits from the billions of dollars in investments in wind, solar and other renewable energy sources. By doing so, it could create 30 million jobs and add 0.4 percent to the world’s economic growth annually, he said.
