“Many of the pandemic recovery packages have largely focused on protecting, rather than transforming, existing industries," Eriksen said. "A lot of ‘building back’ as opposed to ‘building better’ and although this is a lost opportunity, it is not the last we have for transitioning faster to a deeply decarbonized energy system.”
The report estimates a global temperature increase of 2.3°C by the end of the century. Significant research, development, and investment are needed in hard-to-decarbonize sectors, the report argues, and scaling of hydrogen technologies won't arrive soon enough to make an impact under current investment.
Fossil fuels will continue to make up 50% of energy demand by 2050, with gas maintaining its position, according to the report. The authors argue for the rapid scaling of hydrogen and carbon capture technologies.
“Extraordinary action will be needed to bring the hydrogen economy into full force earlier - but these are extraordinary times. The window to avoid catastrophic climate change is closing soon, and the costs of not doing so unimaginable," Eriksen said.
There is hope, however, in the growth of energy efficiency in fighting climate change, according to the consultancy. Efficiency gains will flatten energy demand over the next 30 years and present the greatest opportunity for companies and governments.
Renewable energy forecasts
While the report acknowledges that the current power system is not set up to fully depend on renewable sources, declining costs, government incentives, and carbon pricing will allow renewables to soon become the dominant source.
The report estimates that 12% of all grid-connected electricity will come from solar PV + storage by 2050, making the source directly competitive with thermal, nuclear, and hydropower.
Wind will provide 33% of the world's electricity output by 2050, the report forecasts. The report predicts rapid expansion of offshore wind, making up 40% of total wind electricity generation by 2050.