Sharm-el-Sheikh, Egypt—”Demand for fossil fuels will decline in this decade,” asserted Daniel Wetzel, the head of the International Energy Agency’s Tracking Sustainable Transitions unit. He called this a “truly pivotal moment” in the way the world will produce energy in the future. He made this bold claim during a session today on scaling up global renewable energy production, based on an analysis of projected global energy production trends in a report by the IEA, World Energy Outlook 2022. Crucially the IEA’s analysis relies on scenarios in which governments are expected to deliver on their promises with respect to the future deployment of renewable energy technologies.
Competitive Enterprise Institute Senior Fellow Mario Loyola proceeded during the questions and answers session to elegantly puncture the sunny “stated policies” predictions of rapid renewable energy deployment as “a fantasy,” at least in the United States. The Biden administration has the stated policy of deploying enough low-carbon energy production to cut U.S. greenhouse gas emissions by 50 percent below their 2005 levels by 2030. Loyola argued that these ambitious goals are “totally impossible” to achieve because federal and state bureaucracies will only be able to issue “a tenth of the necessary permits under current law.”
Assuming away the red tape barrier for a moment, what is the world’s energy future under the IEA’s three policy scenarios? Stated policies tracks the trajectory of currently enacted energy policies; announced pledges assumes all aspirational targets are met; and net zero maps the energy pathways to achieve a 1.5 C stabilization in the rise in global average temperatures.
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