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IEA sees $65 billion R&D funding gap for net-zero technologies
The world is facing a $65-billion funding gap for research and development on decarbonization technologies required to reach net-zero emissions by 2050, putting the Paris Agreement's climate goal at risk, according to the International Energy Agency (IEA).
More than 130 countries and 630 companies have pledged midcentury net-zero targets in the hope of capping global warming at 1.5 degrees Celsius, the latest data from Net Zero Tracker shows.
In the COP26 Sustainable Innovation Forum (SIF) 8 November, IEA Deputy Executive Director Mary Warlick said that $90 billion was needed to line up demonstration projects for low-carbon technologies by 2030 so they can be commercially adopted in time to meet the 2050 goal.
"That's significantly higher than where we are today, which is at around the $25 billion mark," Warlick said.
In its net-zero scenario, the IEA estimated technologies in today's market would be almost sufficient to achieve a 40% reduction in CO2 emissions by 2030 from 2019 levels.
But nearly 50% of CO2 reductions required by 2050 must come from technologies currently under development.
"We'll need to have technologies that are not yet commercially available. And this will require pilot projects to drive down costs," Warlick said.
The funding is needed to support low-carbon hydrogen, advanced batteries, sustainable bioenergy, small modular nuclear reactors, and carbon capture, utilization and storage (CCUS), according to the IEA.
"[We] also require innovative production pathways for heavy industries such as steel, cement, and chemicals…and a real strong [spending] focus on industries like transportation," Warlick added.
In a research note published 4 November, IHS Markit analysts Edurne Zoco, Paola Perez Pena, and Soffia Alarcon-Diaz said negative emissions technologies are also needed to achieve long-term decarbonization targets.
"To adhere to a 1.5 degrees Celsius pathway, massive deployment of solutions to reduce and remove emissions will be required. Emissions reduction technologies will be the main pathway to meet net-zero targets," they wrote.
Need for acceleration
Also, the Paris-based IEA suggested that technology developers need to reduce the time spent on commercializing their products by 20% when compared with the fastest energy technology developments in the past.
This means CCUS in cement production and green ammonia-fueled ships have to be brought into the market in the next three to four years, hydrogen-based steel production and direct air capture in six years, and solid-state batteries in nine years for the world to achieve net-zero emissions by 2050.
"There is lots and lots of work that needs to be done …We must make the down payment today on these new technologies for them to be available when we truly need them in the future," Warlick said.
The IEA also estimates the cumulative investments for wind turbines, solar panels, lithium-ion batteries, electrolyzers, and fuel cells will amount to $27 trillion by 2050 in the net-zero scenario.
"These five equipment markets alone would be comparable to today's oil market by mid-century in terms of annual revenues," Warlick said. "These emerging energy markets have huge growth potential. Early movers will be rewarded with huge commercial, industrial, and employment opportunities."
During the first week of COP26, many countries pledged to phase out coal-fired power and end fossil fuel financing, while multilateral banks promised hundreds of billions of dollars in support of the energy transition.
But participants in those side deals are generally not legally bound to fulfill their commitments. In the negotiating rooms, UN members are struggling to scrutinize rich nations' climate finance commitments to developing countries, and to reform transparency and international carbon trading rules.
"These announcements may generate headlines, but assessing their true worth is hugely difficult, especially at speed during a COP meeting. They are eye candy, but the sugar rush they provide are empty calories," said Mohamed Adow, director of energy and climate at think tank Power Shift Africa.
"It's time for a dose of reality in Glasgow. Countries need to realize they are not on track and there's major work to be done this week to fix that," he said via his Twitter account.
US Deputy Secretary David Turk defended the recent pledges, saying they provide strong signals to financiers, political and business leaders. "They are not sufficient themselves, but they are the first step," he told the SIF.
Much to be done
Based on its latest calculations, the IEA said 4 November the world is on track to limit global warming to 1.7 degrees Celsius by 2100 if all countries can implement their pledges. This compared with an expected temperature rise of 2.1 degrees Celsius pre-COP26.
But the energy watchdog's latest progress report, also released earlier this month, found only two of the 46 energy technologies and sectors under evaluation are on track to help create a net-zero world by 2050.
The best-performing sectors are lighting, where light-emitting diodes accounted for 51% of global sales last year, and electric vehicles, whose sales rose 40% year on year to 3 million units in 2020.
Meanwhile, the development of low-carbon hydrogen, advanced energy storage, renewables, and nuclear energy is progressing, but not quickly enough.
The pace of phasing out coal-fired power, reductions in methane emissions and flaring, transportation decarbonization, and CCUS in power and industry are among the worst laggards.
"What is essential is for governments to turn their pledges into clear and credible policy actions and strategies," IEA Executive Director Fatih Birol said last week. "Ambitions count for little if they are not implemented successfully. Tracking and accountability will be critical."
- Singapore tackles GHGs from major emitters at heart of its industrial hub
- Anglo American CEO: Miners need to decarbonize to harness rising demand in low-carbon future
- What does net zero mean? Debates drag on amid greenwashing worries
- Mitsubishi Heavy Industries plans to reach net zero with CCUS
- Indonesia, Vietnam show ambition in coal phaseouts but face strong challenges in electricity reforms
- LNG industry aims for transparency with new frameworks to assess carbon neutrality of global shipments
- RWE earmarks nearly $57 billion for renewables amid coal phaseouts
- EU calls on other major emitters to do more to meet 1.5 degrees C goal
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