The global energy crisis causing higher prices at the pump may speed up the world’s transition toward cleaner energy, according to a new report from the International Energy Agency.
As the world grapples with high costs and other economic concerns spurred on in part by Russia’s invasion of Ukraine, the IAE’s World Energy Outlook released Thursday forecasted that global demand for fossil fuels will peak or plateau over the next few decades.
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Falling demand for coal and natural gas coupled with rising demand for electric vehicles will likely contribute to a decline in the need for oil, according to the report.
International efforts to combat the energy crisis by diversifying their energy sources are also helping hasten the shift toward clean energy.
“Governments around the world are responding to the crisis by doubling down on clean energy – in the US, EU, Japan, China, India & elsewhere[.] Their new policies are set to help global clean energy investment rise above $2 trillion a year by 2030, an increase of over 50% from today,” said IEA’s executive director, Fatih Birol, on Twitter Thursday.
The report notes the U.S. Inflation Reduction Act among other global programs and policies that may “accelerate structural changes” and alleviate the demand for fossil fuels.
Birol noted, however, that the current policies won’t stave off a climate crisis.
The report also found that global average temperatures are expected to rise 2.5 degrees Celsius by the end of the decade under the current trajectory, a full degree more than the target limit of 1.5 degrees Celsius set in the Paris climate agreement.
“This isn’t enough to avoid severe climate impacts, but it’s progress from where we were a few years ago. Stronger policies can steepen the decline,” Birol said.
More robust investments in clean energy from global governments will also help shore up the international community against additional economic crises like the one now underway, according to the report.
“The environmental case for clean energy needed no reinforcement, but the economic arguments in favor of cost-competitive and affordable clean technologies are now stronger – and so too is the energy security case,” Birol said.