IEA World Energy Outlook 2021: All eyes on net zero

In its World Energy Outlook 2021 (WEO-2021), the International Energy Agency (IEA) could not be clearer: even the international community’s boldest announced pledges will not be enough to limit global temperature rise to 1.5°C above pre-industrial levels. It will take considerable progress by 2030 to keep long-term emissions reductions efforts on track, along with unwavering political commitment to prevent competing energy concerns, like energy security and affordability, from sapping global momentum toward net zero.

A shift to near-term implementation strategies

WEO-2021 comes on the heels of the distressing Sixth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC) in August, which stated for the first time that human activity has unequivocally warmed the planet. The IPCC report, with its extensive depiction of human impact throughout the climate system, laid out the dimensions of the problem. With the COP26 climate negotiations fast approaching, it is now incumbent on policymakers to find solutions.

Like the IPCC report, WEO-2021 also begins by describing the stakes of climate impact. It presents three scenarios: the Stated Policies Scenario (STEPS), which accounts for the climate plans on which states have already begun working; the Announced Pledges Scenario (APS), which models the new pledges countries have made in preparation for COP26; and the Net Zero Emissions by 2050 Scenario (NZE). The three scenarios represent three different levels of ambition in climate action—with the NZE modeling the most aggressive climate measures—and by 2050, their outcomes diverge significantly.

WEO-2021’s core, though, is its focus on implementation. It states in plain language the inadequacy of the pledges included in the APS, it details the necessary steps to fund and secure the energy transition, and it emphasizes the forgotten parts of the net zero debate—like methane reductions, which often get lost in discussions about decarbonization—that nonetheless represent pivotal subgoals within the larger drive. But perhaps most importantly, it sets a deadline for world leaders to get their 2050-centered efforts into gear: 2030. By lowering leaders’ gazes from lofty yet nebulous 2050 campaigns to checkpoints that must be met by the end of the decade for those campaigns to even have a chance, WEO-2021 ratchets the pressure on climate negotiators up even higher. The time to hash out future worst-case scenarios is ending; advancing the conversation to policy formation right now is the only way to prevent them from occurring.

Net zero as a framework

By now, the net zero target has taken up permanent residence in energy discussions around the world. Espousing net zero emissions as a goal is mainstream. But WEO-2021 goes further. It treats net zero as a framework, a lens through which all other energy matters should be viewed. Coming at a time when anxieties over energy supply, security, and affordability have reached fever pitch, WEO-2021 is groundbreaking in its efforts to address all these issues with a steadfast dedication to clean energy development.

This understanding of net zero has become especially valuable during the current energy crunch. It would be easy to cast blame on the growth of renewable energy sources, and to snap back to a “stable” system built on coal, oil, and gas. And to be sure, WEO-2021 recognizes the energy security issues of rapid fossil fuel divestment in the absence of a commensurate boost in clean energy spending.

The solution, however, is more investment in the transition, not less. Reliable baseload power supply is essential to fill in solar and wind generation gaps and keep the lights on, but it can and must be provided using clean technologies, such as battery storage and nuclear power. This would also allow the energy economy to get out from under the inherent volatility in international fossil fuel markets, characterized by unstable prices, rampant hoarding, and geopolitical weaponization. To achieve net zero by 2050, energy security and climate action must not be mutually exclusive. Accordingly, in WEO-2021, they are one and the same.

The net zero framework is used to address a wide swath of concerns in WEO-2021’s NZE. For energy consumers, it boasts declining renewable energy costs, protection from commodity price shocks, and lower household energy bills in the long run. For workers, it promises continued employment in the energy sector right at home, both in new construction operations and in repurposed or retrofitted plants. For investors and energy conglomerates, it presents a market opportunity with a value projected to climb above $1 trillion by 2050, driven by widespread uptake of next-generation clean energy technologies and lucrative enough to alleviate worries about stranded assets.

In short, net zero is for everyone. And given both its importance and its universality, treating it like yet another policy objective would be reductive. The net zero imperative cannot be left to vie with competing concerns for political capital or financial resources. Instead, it must be an organizing principle, a yardstick against which all other policy decisions, from treaty negotiations to free trade agreements, are measured. By pushing for the concordant resolution of other major energy issues with the energy transition, WEO-2021 does exactly that.

The COVID-fueled uncertainty of the past two years has elevated COP26 to an unmatched level of importance. As pressure rises on all sides, climate negotiators can use WEO-2021 to kickstart near-term emissions reduction efforts and to pursue energy solutions of all stripes with net zero firmly in mind. It will require heavy doses of initiative, flexibility, and political resolve, but the narrow path to 1.5°C stabilization can be held open if policymakers heed the IEA’s advice in Glasgow.

Ameya Hadap is a program assistant at the Atlantic Council Global Energy Center.

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Image: The Rampion Offshore Wind Farm, off the coast of the UK. (Nicholas Doherty, Unsplash)