Wind turbines and coal photographed in Maryland, United States.
Chip Somodevilla | Getty Images | News Getty’s paintings
According to a recent report from the International Energy Agency, global energy investment is expected to reach around $2.8 trillion in 2023, with greater than $1.7 trillion going to clean energy technologies reminiscent of electric vehicles, renewables and storage.
While supporters of the transition to a sustainable future will welcome the latter figure, they may likely be delay by the IEA’s projections that coal, gas and oil are still on course to attract “just over” $1 trillion in investment this 12 months.
“Today’s investment in fossil fuels is now greater than double the levels required in a net-zero emissions scenario by 2050.”
“The inconsistency in the case of coal is particularly striking: today’s investments are almost six times higher than the requirements of the 2030 NZE scenario,” he added.
The environmental impact of fossil fuels is significant. The UN says that since the nineteenth century, “human activity has been a serious driver of climate change, mainly due to the burning of fossil fuels reminiscent of coal, oil and gas.”
The shadow of the 2015 Paris Agreement looms over the IEA report. The landmark agreement goals to “limit global warming to well below 2, preferably 1.5 degrees Celsius, compared to pre-industrial levels.”
Reducing man-made carbon dioxide emissions to net zero by 2050 is seen as key to achieving the 1.5 degree Celsius goal.
The important debate
Over the past few years, high-profile figures reminiscent of UN Secretary-General Antonio Guterres have voiced their views on fossil fuels.
Last June, Guterres slammed recent funding into fossil fuel exploration. He described it as “delusional” and called for an end to fossil fuel funding.
Despite these concerns, the oil and gas industry continues to develop projects around the world.
For instance, in October 2022 blood pressure Chief Bernard Looney said his company’s strategy focused on investing in hydrocarbons while investing money in the planned energy transition.
Change is coming?
While there can be concerns about money flowing into fossil fuels, Fatih Birol, executive director of the IEA, has tried to highlight what may very well be a big change in the future.
“Clean energy is moving fast – faster than many individuals realize,” he said in an announcement released alongside the IEA report. “This is clearly seen in the investment trends where clean technologies are moving away from fossil fuels.”
“For each dollar invested in fossil fuels, about $1.70 now goes into clean energy,” added Birol, explaining that the ratio was one to one just five years ago.
“An ideal example is investments in solar energy, which is able to exceed the amount of investment in oil production for the first time.”