Extreme volatility in energy markets will present a continued risk unless investment in clean power is tripled in the next decade, the head of the International Energy Agency warned, as he issued a call to arms for world leaders ahead of the upcoming UN climate summit.
Fatih Birol, IEA executive director, told the Financial Times that while projected investment in oil and gas was now aligned with the changes needed to reach net-zero emissions of greenhouse gases by 2050, public spending on renewable power was only at a third of the future levels required.
“There is a gross mismatch, and the longer this mismatch persists, the greater the risk of further sharp price swings and increased volatility in the future,” Birol said.
Annual global energy investment is set to rise to $1.9tn this year, according to the IEA, including about $370bn on new renewable power generation.
The warning came as the Paris-based body said that even if all governments’ current net-zero pledges were implemented in full and on time, the world would only achieve 20 percent of the emissions cuts by 2030 needed to keep the goal of net-zero emissions by 2050 a possibility.
Under that scenario, outlined in its annual World Energy Outlook released on Wednesday, global average temperatures would rise by 2.1C above preindustrial levels by 2100, far higher than the target of an ideal limit of 1.5C laid out in the 2015 Paris climate accord.
After carbon emissions dropped steeply in 2020 because of the coronavirus pandemic, this year’s strong economic recovery meant that emissions were on course for their second-largest ever annual increase, driven in part by rising coal consumption, the IEA said.