PARIS (CU)_The global economy is currently encountering one of the most crippling energy crises in at least a decade. Both China and India are reporting power blackouts, while steel-makers and fertilizer producers in Europe have been forced to halt operations on account of record-high electricity and gas prices. Even then, global emissions in 2021 are on track to post one of their largest annual increases.
Accordingly, the International Energy Agency (IEA) issued a warning this week that the international community is failing to invest in energy on the scale required to minimise effects of climate change and avoid a sharp climb in fossil fuel prices.
In a report that was published just few weeks ahead of the much-anticipated UN climate summit (COP26), the intergovernmental organisation noted that investment in green energy sources remain far behind what is needed to maintain global warming well below 2°C, the key objective set out in the Paris Agreement. On the other hand, the agency pointed out that if demand for oil, natural gas and coal continues to grow at the current rate, spending on fossil fuels over the recent past will be proven to be insufficient.
Over the past year, new oil and gas investment reached a near-record low, as the COVID-19 pandemic caused a sharp decline in demand amid border closures and lockdown restrictions. However, with economies now beginning to recover from the global health crisis, demand has started to soar across the globe.
“There is a looming risk of more turbulence for global energy markets,” IEA’s Executive Director Fatih Birol said in a statement on Wednesday (13 October). “We are not investing enough to meet for future energy needs.”
Previously, the agency has been subjected to sharp criticism by environmental campaigners who accuse the Paris-based body of overlooking the significant drop in green energy costs, as solar and wind power report an explosive growth.
Since then, the organisation has redirected its focus, at times advocating for lower spending on fossil fuels. According to Birol, there are several encouraging signs which suggest green energy is running up against “the stubborn incumbency” of fossil fuels. “Governments need to resolve this at COP26 by giving a clear and unmistakable signal that they are committed to rapidly scaling up the clean and resilient technologies of the future,” he added.
