Plausible pathways still exist for net zero to get on track to below two degrees Celsius of global warming, if governments and companies take determined action to transition to low-carbon energy technologies.
That’s according to the 2022 New Energy Outlook by BloombergNEF that explores how the world’s energy system, and the energy systems of nine critical countries that make up 63 per cent of global emissions, may evolve between now and 2050, under two scenarios: the so-called Economic Transition Scenario, and the Paris-aligned Net Zero Scenario.
In the Economic Transition Scenario (ETS), which assumes no new policy action to accelerate the clean energy transition, the rapid growth of renewable energy and electrification of transport eliminate about half of the world’s energy-related emissions in 2050, against a baseline where no such transition takes place. These technologies win on their own merit, without need for additional subsidy, thanks to the dramatic cost reductions in wind, solar and battery technology over the last decade – which are expected to resume following a hiatus during the current inflationary crunch.
Wind and solar provide about two-thirds of the world’s power generation by 2050 in the ETS, and these two technologies, combined with battery storage, account for an overwhelming 85 per cent of the 23 terawatts of new power capacity additions installed over the next three decades. Power sector emissions fall by 57 per cent and emissions in the overall transportation sector fall by 22 per cent to 2050, driven by the road segment’s transition to electric vehicles. Global coal, oil and gas use all peak over the next decade, with coal reaching a high point and starting to decline immediately, while oil does the same in 2028 and gas in the early 2030s
Despite rapid gains for clean energy, the Economic Transition Scenario falls far short of achieving net zero by mid-century. By 2050, emissions have fallen 29 per cent but unabated coal, oil and gas still emit 24.6 gigatons of CO2 per year. The result is a trajectory consistent with 2.6C of global warming, breaching the goals of the Paris Agreement.
In the Net Zero Scenario (NZS), BNEF modelling indicates that the world can stay on track for 1.77C, and global net zero by 2050, with rapid deployments of clean power generation, electrification, and, to a lesser extent, carbon capture and storage and hydrogen.
Switching power generation from fossil fuels to clean power is the single biggest contributor to global emissions reduction, accounting for half of all emissions abated over 2022-50. This includes displacing unabated fossil fuel with wind, solar, other renewables and nuclear – largely mature technologies that exist at scale today. By 2050, the global power system is dominated by wind (48 per cent of generation) and solar (26 per cent), with the rest provided by other renewables (seven per cent), nuclear (nine per cent), hydrogen and coal or gas with carbon capture.
The report includes prescriptions for six key action areas for policy makers and private sector actors, building on a framework developed by Bloomberg and BNEF for the NetZero Pathfinders initiative. These are:
Accelerate deployment of mature climate solutions
Support the development of new climate solutions
Manage the transition or phase-out of carbon-intensive activities
Create appropriate climate transition governance structures
Support the transition in emerging markets and developing economies
Scale up the supply of critical materials