The Energy Transition Is in Full Swing. It’s Not Happening Fast Enough

Even if you follow these things closely, it can be hard to understand where the world’s fight against climate change stands. On the one hand, news abounds of the clean energy revolution, as wind farms and solar panels pop up in communities across the globe and automakers promise to go electric. On the other hand, scientists continue to warn that fossil fuels have placed the planet and everyone who lives on it on an unavoidable collision course with catastrophe.

A new report from the International Energy Agency (IEA) published Wednesday explains the dynamic in sharp detail: the world has begun a momentous shift in how we power the economy that will touch virtually every corner of human society, with investment in oil and gas slowing and spending on clean energy rising. But it’s not happening fast enough to avoid dangerous levels of warming.

“A new global energy economy is emerging,” IEA Executive Director Fatih Birol tells TIME. But when it comes to the necessary levels of investment in clean energy, there is “a gross mismatch.”

The IEA’s annual World Energy Outlook is designed to inform policymakers about the state of global energy markets as well as the emerging trends expected to define energy in the years to come. Its origins are undeniably wonky, but this year’s report takes on new significance with climate change on the rise in public consciousness and on the international stage. The agency released the 2021 report a month early to help inform talks among the delegates who will gather in Glasgow, Scotland, in early November for the biggest United Nations climate summit in years.

Perhaps nothing is more urgent than the report’s key message that countries need to dramatically accelerate their efforts to cut emissions for the world to have any hope of limiting temperature rise to 1.5°C, the level at which scientists say we might expect to see widespread catastrophic effects of climate change. Current pledges from countries to cut emissions only reduce carbon pollution by 20% of what’s necessary to avoid reaching that marker, according to the report’s analysis.

The report offers no shortage of solutions to make up the gap. Climate politics can often end up mired in debates about controversial topics like carbon capture and nuclear energy, but the report highlights four straightforward areas that would address the problem: electrification, energy efficiency, tackling methane emissions and advancing innovation. To make all of those happen, the world needs to grow annual investment in clean energy by close to $4 trillion by the end of the decade, according to the report. “Finance is the missing ingredient to accelerate,” says Birol.

Looming energy crises

The analytical work that underpins the report began long before the energy crunch gripping Europe and China and threatens to spread across the globe. Nonetheless, the report warns that the energy crisis—which the IEA attributes to a rise in energy demand amid the economic recovery from the pandemic, among other things—may presage future energy crises that could occur if governments fail to plan carefully.

At the heart of the agency’s concern is an underinvestment in clean energy. Investment in oil and gas has stalled in a way that is consistent with limiting warming to 1.5°C. At the same time, spending on clean energy infrastructure remains far below what it needs to be, creating the possibility of volatility and supply disruptions much like the world is facing today. “The longer this mismatch persists, the greater the risk for increased volatility,” says Birol. “What we need is very clear: to increase investment in clean energy technologies.”

Even as investment in oil and gas has slowed, the IEA warns that the economic recovery from the worst of the COVID-related downturn has failed to live up to the promises of a “green recovery” that was commonly touted as governments spent trillions to help prop up their economies in 2020. Just 2% of $16 trillion spent by countries around the world on COVID economic support was spent on clean energy, according to the report. As a result, the world is now experiencing the second largest uptick in carbon emissions in history, in large part as a result of growth of coal use to power the economic recovery. “We are now witnessing an unsustainable recovery,” says Birol.

The release of this year’s outlook follows just a few short months after the agency published a global roadmap to net zero emissions by 2050. That report shook up the energy world with its declaration that the world needs no further investment in developing fossil fuel supplies, among a slew of other findings. In just a few weeks, as more than 100 heads of government gather in Glasgow, the world will see whether governments have taken any of the IEA’s messages to heart.