Analysis by BloombergNEF calls for more investment in low-carbon energy. Land use for raw material extraction, for example, is also a challenge.
Numerous countries worldwide have committed to achieving net-zero emissions by 2050 and limiting global warming to 1.5 degrees Celsius in the Paris Climate Agreement. This goal has not yet been achieved, but decisive action must be taken now, according to a new analysis by BloombergNEF (BNEF).
The report shows what progress has already been made, for example, in accelerating the energy transition. Despite this momentum, emissions are still too high, and a reduction is urgently needed. According to BNEF, greener electricity generation could make the most significant contribution here: to reach net zero, the capacity of renewable energies would have to be tripled by the end of the decade. This would leave more time to tackle other sectors that are more difficult to convert, such as steel production and aviation, where cost-effective low-carbon solutions are not yet fully developed.
More Investment Needed – More Space as Well
However, a faster energy transition also requires more spending. According to BNEF’s calculations, for every dollar spent on fossil fuels, an average of three dollars would need to be invested in low-carbon energy by 2030. A complete decarbonization of the global energy system by 2050 could cost 215 trillion dollars—an enormous contribution but only 19 percent higher than in a scenario that falls short of the Paris Agreement targets.
According to BNEF, other challenges must be overcome, including land use, as the demand for different sectors, such as food production and biodiversity conservation, is also growing. For example, onshore wind and solar projects would require much more land than the fossil fuel technologies they are replacing. In addition, more mines are needed to supply the raw materials required for net zero – an area larger than Uruguay would be necessary for this by 2041. By 2050, however, the area needed for critical minerals would decrease slightly.
Read more: More investment in climate-friendly technologies to reduce global greenhouse gas emissions – this call echoes the conclusions of numerous other reports, such as the International Renewable Energy Agency. Meanwhile, there is a particular lack of capital in the mining sector, whose role in the energy transition is often underestimated.
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