Putting Net Zero by 2050 in Perspective — Be Prepared to Walk by Yves Siegel, CFA

In Our View: The IEA’s Energy Transition Pathway to Net Zero Emissions by 2050 is Highly Uncertain
In May, The International Energy Administration (IEA) released, “Net Zero by 2050, A Roadmap for the
Global Energy Sector.” This detailed report highlights one possible pathway to achieve global net-zero
emissions by 2050 and limit the long-term increase in average global temperatures to 1.5 degrees Celsius.
This herculean (or “impossible,” according to some skeptics) task “requires all governments to
significantly strengthen and then successfully implement their energy and climate policies.” The IEA
report grabbed headlines for noting in its roadmap that to achieve the targeted emissions goals, there
should be no new investments in oil and gas exploration projects starting in 2021. Under this scenario, oil
and natural gas demand would fall by about 50% and 75%, respectively, by 2050. Fossil fuels’ share of
energy supply would fall from about 80% to 20%. Solar will become the dominant source and account for
about 20% of energy supply. OPEC’s market share of a shrinking pie would grow from about 37% to 52%.
To be fair, the IEA acknowledges that this road to net-zero emissions is uncertain and additional pathways
may need to be considered. We agree.

Globally, we’re moving in the right direction.

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