The United Nations’ Emissions Gap Report 2022 has issued a stark warning to the international community: Current global action is far from meeting the Paris Agreement’s goal of limiting global warming to 1.5°C this century. In order to address this urgent climate crisis, governments must take targeted, concrete response measures, and without delay.

Later, in the follow-up negotiations to COP 28, more than 200 countries signed an important agreement to accelerate the energy transition: By 2030, the world needs to triple its renewable energy capacity and double its energy efficiency.

PDD205A1121-3BHE025335R1121 Great change

To do so, the world must reduce greenhouse gas emissions at an unprecedented scale and speed. This ambitious goal can only be achieved through a massive, rapid, and systematic transformation. The United Nations Environment Programme believes that to keep global warming within the 1.5°C limit, global emissions must be reduced by 45% by 2030 compared with current policy projections. Even the more lenient goal of limiting global warming to 2°C would still require a 30% reduction in emissions from current policy projections.

The report of the Intergovernmental Panel on Climate Change (IPCC) makes clear that the largest and fastest growing share of total greenhouse gas emissions is carbon dioxide from the burning of fossil fuels and industrial processes, followed by methane. Therefore, to effectively reduce greenhouse gas emissions, we must drastically reduce our demand for fossil fuels (i.e., oil, gas, and coal).

At present, the global primary energy structure is still dominated by fossil fuels, accounting for 82% of global energy use. Hydropower, nuclear and modern renewables account for only 7%, 4% and 7%, respectively. According to the Energy Institute’s 2023 report, oil remains the world’s most commonly used fuel, and the consumption of fossil fuels continues to grow.

Economy and reliability

PDD205A1121-3BHE025335R1121 Energy security has been an important pillar of energy policy in net importing countries. According to the International Energy Agency (IEA), long-term energy security involves timely investments to secure energy supplies in line with economic and environmental needs. Short-term energy security focuses on the ability of energy systems to respond quickly to sudden changes in the balance of supply and demand. Energy can meet people’s basic needs, and its cost accounts for a large proportion of many households’ expenditures. As a result, high fuel prices can provoke a bad political reaction. Second, unless the technology and infrastructure to reliably produce, store, and use renewable energy are readily available, including the expansion of power grids around the world, substitutions between fuels will not happen immediately. Therefore, maintaining investment in all types of energy to meet existing demand remains key to ensuring reliable supply in the future.

While price volatility has always been a feature of fossil fuel markets, the 2022 energy crisis has also shown that fossil fuels can react fairly quickly to such volatility. This is a key capability that green energy sources such as solar or wind do not currently have.