IEA projects that fossil fuel demand will peak by 2030 – ‘the beginning of the end’ of the fossil fuel era
This week, the International Energy Agency (IEA) head predicted we are reaching the ‘beginning of the end’ of the fossil fuel era, projecting that demand for oil, coal and natural gas will peak in 2030.
This indicates a rapid growth in sustainable energy production in the coming decade, but also shows that we are still very far from emissions goals recommended by international organisations like the IEA and UN.
According to recent UN data, global emissions will need to be halved by 2030 to avoid the worst effects of climate change, a scenario incompatible with fossil fuel consumption peaking that year.
Mixed with the rather hopeful finding that the fossil fuel era may be coming to an end, comes the disheartening truth that the world will feel its effects for decades to come.
The UN released its technical report on the first global stocktake of the Paris Agreement, in what could be interpreted as a “report card” of the world’s progress towards the climate goals it set in 2015. Unsurprisingly, the report found that almost all countries are far from meeting their emissions targets and contributing to a catastrophic warming scenario.
The report did say however that the implementations of goals in the Paris agreement had helped avoid some carbon emissions and noticeably slowed the growth of greenhouse gases in the atmosphere.
The UN argued that governments and global businesses must accelerate the implementation of existing plans and step up their ambition in solving crucial issues. Sustainable finance providing capital to many necessary climate-oriented projects will be vital to meet this obligation, which will require trillions in investment, particularly in developing countries.
A coalition of small island nations began court proceedings at the International Tribunal for the Law of the Sea (ITLoS) on Monday, seeking a ruling that would classify greenhouse gases absorbed by the ocean as pollution. If successful, this ruling would increase the obligation of nations to reduce their emissions under international law as part of their legal obligation to protect the ocean from pollution.
The oceans absorb nearly a quarter of global emissions and are vital for stabilising the planet’s natural equilibrium. The increasing severity of climate change, as well as human-driven factors such as overfishing have threatened the ocean’s health. For small island nations that depend on the ocean, this represents a near-existential threat to their way of life.
As the number of climate lawsuits accelerate, investors can expect to see more and more regulatory change emerge from courts, particularly on the international scene, where consensus among nations is difficult to achieve.
New data released by Brazil’s National Institute for Space Research, which monitors Amazon deforestation via a network of satellites, have shown that the rate of deforestation in the Amazon has decreased dramatically under Brazil’s new administration. The new government has made tackling deforestation a major priority, tackling illegal logging and ranching and enforcing existing regulation more consistently.
The Amazon, which is crucial for combatting the effects of climate change, has been under threat for decades by the expansion of animal agriculture as well as commercial logging. Previous administrations have sought to capitalise, and even maximise, the economic benefit associated with deforestation at a dramatic cost to an area that teems with natural life.
Over the summer, Brazil announced an ambitious green transition plan due to be released this month that would include billions in public investment as well as incentives for private investment in green initiatives. The country aims to raise almost $2 billion in Sovereign Sustainability Linked bonds to pay for this initiative.
The nation’s embrace of ESG concerns will come as a relief for sustainable investors, who had begun to disengage from Brazil under the previous administration.