COVID-19 knocked fossil fuels off their perch
While we certainly won’t miss the disruption caused by COVID-19 to our daily lives, one of the consequences of the pandemic could be a profound effect on limiting fossil fuel demand.
It is certainly not an understatement to say that 2020 was a turning point for the fate of planet Earth. In order to prevent global temperatures rising by more than 1.5 degrees celsius above pre-industrial levels, the IPCC suggested that carbon emissions must peak no later than 2020.
A consultancy firm has now revealed that the pandemic may have dented the demand for fossil fuels to such an extent that their growth trajectories are permanently reduced. Is this enough to avert damaging climate change.
The end of an era
McKinsey and Company estimates that demand for coal, oil and gas experienced a severe decline in 2020, from which it might never recover from.
While the pandemic has certainly provided a substantial shock for the energy sector across all fuel sources, the story of the century is still a rapid and continuous shift to lower-carbon energy systems.– Christer Tryggestad, Senior Partner McKinsey and Company
Christer Tryggestad, Senior Partner at the firm, explained: “While the pandemic has certainly provided a substantial shock for the energy sector across all fuel sources, the story of the century is still a rapid and continuous shift to lower-carbon energy systems.”
Demand for coal, one of the grubbiest and most polluting of fossil fuels, already peaked back in 2014. We wrote previously about how the UK expects to become coal-free by 2025, with promising signs as the number of days of coal-free energy generation annually have become increasingly commonplace.
However, the world remains heavily dependent on oil to fuel growth for the remainder of the 2020s, according to McKinsey and Company’s report, with demand for so-called black gold not expected to peak until 2029 at the earliest.
Natural gas may prove to be the hardest fossil fuels for countries to wean themselves off, with demand not peaking until 2037. However, on an aggregate basis, the declines in coal demand might be just enough to ensure that total fossil fuel demand peaks in 2027. But is this enough to avert a damaging rise in temperatures?
A narrow window of opportunity
Crucially, McKinsey and Company expects that a gradual decline in fossil fuel demand by 2027 might not be enough to bring down emissions quickly enough to avert a damaging rise in temperatures. If we can ensure that 50 per cent of global energy production stems from renewables by 2035, this will put us on a path of peak global carbon emissions in 2023.
However, such a reduction falls far short of the Paris Agreement’s 1.5 degree pathway, and would only manage to reduce emissions down to 20Gt of CO2 per annum by 2050. By contrast, the 1.5 degree pathway requires much faster reductions, to ensure emissions of only 2.5 Gt of CO2 per annum by 2050.
Despite the arduous task required in the next 30 years, all is not lost, as Mr Tyggestad claims: “Given the unparalleled size of many economic recovery packages post COVID-19, the focus of the stimulus measures will play a key role in shaping energy systems in the decades to come.”
So long as governments make the COVID-19 recovery a green one, with enough renewable energy infrastructure in the pipeline, the 1.5 degree pathway could be closer than we might think.