The world’s governments are missing a “civilisation changing” opportunity to switch tracks away from a fossil fuel-dominated global economy facing a climate crisis by shifting financial backing to support an accelerated build-out of renewables while turning off the taps on oil and gas, a new report from REN21 has concluded.
Last year, says the thinktank in its 2021 Global Status Report, “could have been a gamechanger” for the energy transition, with emission levels falling precipitously along with energy demand and pandemic-hit economies looking for new growth stimulus strategies.
But despite the “indisputable” benefits of renewable energy in its impacts on health, climate and job creation, the REN21 report found “we are nowhere near the necessary paradigm shift towards a clean, healthier and more equitable energy future”.
Disturbingly, though renewables have been built at a record pace, with some 260GW added last year, globally the share of fossil fuels in the total energy mix remains “as high as a decade ago” – 80.3% versus 80.2% – and renewables’ share only “increased slightly”, from 9% to 11%, the report found.
“The data is mind-blowing when we look back over the last ten years,” said Rana Adib, REN21’s executive director, speaking to Recharge ahead of the report’s launch.
“We are waking up to the bitter reality that the climate policy promises over the past [decade] have mostly been empty words. The share of fossil fuels in final energy consumption has not moved by an inch.
“Clearly we see renewables has grown [at record rates], but so has energy demand, and we continue to use fossil fuels as we do… This is one of the strongest messages from the report: we need to be careful not to create blindspots in dealing with the climate emergency by speaking only about the positive story that renewables is.
She adds that this failure to accelerate the energy transition is “particularly shocking… [at a time when] we see the cost reduction achieved by wind and solar. We see that with bold goals and policies by governments, renewables can deliver — and not just in social and environmental terms but economics too — look at how corporate renewables is growing as the lowest-cost, best ESG option”.
On the positive side, the total number of national targets for achieving net-zero emissions – including targets already in law, proposed and drafted – covered countries accountable for more than 80% of global CO2 emissions, noted the report.
But this must be framed by the fact, it added, that “even with the historic decline in energy consumption last year, the five G20 countries with 2020 renewable-energy targets struggled towards their goals — the other 15 did not even have one”.
The report acknowledges the “wave” of more ambitious commitments in 2020 by governments to climate action, and the raised net zero emissions targets set by countries including the US, China and Japan.
“It doesn’t fit, does it? What is happening today is not for technological or cost reasons, it is to protect fossil-fuel interests. So we need not only to give greater support to renewables now, we need to end fossil fuels too. And we need a roadmap to get us there quickly.”
The report sets out a number of “calls to action” for policymakers and industry executives, including:
- Targets must be set by governments and businesses for renewable energy in all sectors and built on with new “bolder” goals by the time the original target is met
- Policies must be enshrined that support the uptake of renewables by “incentivising and/or mandating their use” while actively phasing out the use of fossil fuels
- Funding must see a “structural shift” that starts re-channeling subsidies for fossil fuels to “energy conservation, energy efficiency and renewable energy”, while “the overall level of renewable-energy investment must be increased dramatically”
- Renewables must become a “key performance indicator” for all economic activities
“The report clearly shows that governments need to give a much harder push to renewables in all sectors. The window of opportunity is closing unless efforts are significantly ramped up, and it will not be easy to do,” says Adib.
“Governments must not only support renewables but also rapidly decommission fossil fuel capacity. A good way to accelerate development is to make the uptake of renewable energy a key performance indicator for every economic activity, every budget and every single public purchase.
“This way”, she adds, “every ministry should have short- and long-term targets and plans to shift to renewable energy coupled with clear end-dates for fossil fuels.”
The report suggests though the oil industry’s energy transition continues to be slow-rolling, the power sector has made “great progress already”, pointing to the global shift to “almost 100%” of all new power capacity being built being renewable.
“In more and more regions, including parts of China, the EU, India and the US, it is now cheaper to build new wind or solar plants than to operate existing coal-fired power plants. This progress could and should be replicated in all other sectors.”
In the wake of recent climate action-led court cases and shareholder activism impacting international oil majors including Shell, BP, Exxon and Chevron, Adib believes a “tipping point has been reached” in the sluggish pace of their energy transition timelines, noting the International Energy Agency (IEA) call on governments in May to halt all new hydrocarbon exploration was the “clearest call” yet of the need for an industrial step-change.
“This recent news about Shell, BP, et cetera on top of the clearest call by the IEA for fossil-fuel [exploration] to be ended — there is now an alignment of narratives and a shared vision and I think this is something that is a real opportunity [for government and industry].
“Lobbying [by pro-fossils interests] will continue. But what you are seeing is an increasing awareness – among shareholders, big business leaders, consumers, and public opinion is being heard in the courts – and this is creating a new momentum.
“Let’s be clear: the value of shares in clean energy companies rose in 2020 by 142% and in oil & gas they fell by 38%, investment in green portfolios surged by 300%. This all points to a big shift.”