News: Recently, the International Energy Agency (IEA) published the World Energy Investment Report, 2021.
Increased Investment in Energy Sector:
- Global energy investment is expected to rebound in 2021 and increase 10%year-on-year to around USD 1.9 trillion.
- Most of this investment will flow towards power and end-use sectors, shifting out of traditional fossil fuel production.
- The scenario is perfectly aligned with the projection that global energy demand will rise 4.6% year-on-year in 2021, offsetting its contraction in 2020.
- Renewable powerwill have the largest share – around 70% of the total will be spent on new power generation capacity. There will be substantial gain of renewable energy as the future energy outlook has been dependent on technological development, well-established supply chain and demand from consumers for carbon-neutral electricity.
- Upstream (production and exploration) investment in oil is expected to grow 10%.This expansion in fossil fuels was planned with novel technologies like Carbon Capture and Storage (CCS) and bioenergy CCS, which are yet to attain commercial success. The increment of coal-fired power in 2020, mostly driven by China, is indicating that coal is down but not yet out.
- The above positive scenarios will still not deter the increase in carbon dioxide emission, after contraction in 2020 mainly due to economic slowdown induced by the novel coronavirus pandemic.
- Global emission is set to grow by 1.5 billion tonnes in 2021. Many developing nations’ supporting policy and regulatory frameworks are not yet aligned with long-term net-zero goals.
- Net zero emissions refers to achieving an overall balance between greenhouse gas emissions produced and greenhouse gas emissions taken out of the atmosphere. In many Emerging Market and Developing Economies (EMDEs), investment in renewables was hit harder by Covid-19 than in developed nations – and now many EMDEs have prioritised coal and oil in recovery plans.
Factors responsible for rise in emission:
- The emerging market is almost 70% responsible for demand growth and India plays an important part in this block.
- China is showing a tremendous expansion in coal-based power production— their coal consumption in December 2020 was a historic high — though the country has a commendable renewable growth.
- The responsibility-share of developed nations should not be undermined.Their in-country growth of emission is moderate but their exported emission is of concern.
- Australia’s exported emission through coal is double its domestic emission. Although the US has shown renewed commitment to the multilateral United Nations system for tackling climate change by re-joining the Paris agreement. Its fascination with cheap shale gas is creating an investment distortion and adversely affecting the sustainability of developmental pathways of countries like India.