Global emissions are likely to have peaked as renewables take hold

The world is choking on emissions more than ever, but that trend will reverse starting next year as the cost of solar panels and batteries crowd out coal and hold back oil growth, a new report says.

DNV, a Norwegian risk management company, believes that global emissions have probably peaked, but the transition to clean energy remains “too slow”.

“Worryingly, our forecast decline is well short of the trajectory needed to meet the goals of the Paris Agreement,” DNV chief executive Remi Eriksen wrote in the report. “In particular, hard-to-electrify sectors need renewed political impetus.”

Although renewable energy growth continues to break records, some countries continue to struggle, the report said. More military spending and tough economic conditions mean nations sometimes back away from ambitious climate goals.

“There is a growing mismatch between short-term geopolitical and economic priorities versus the need to accelerate the energy transition,” Eriksen added.

The cost of deploying solar panels and battery technology is expected to drop by 19% by 2030, helping to deliver record amounts of low-carbon energy. Renewables should increase 2.2 times by 2030, well below the tripling set during the COP28 United Nations Climate Change Conference. Similarly, energy efficiency improvements are occurring at about half the rate recommended by the UN climate body.

DNV cut its 2050 forecast for wind power by 18%, the second year in which it has lowered expectations. Higher financing costs, supply chain issues and turbine quality issues are to blame, it said.

Hydrogen also cut its outlook by 21% from last year’s estimate. The clean fuel is now set to provide 1.5% of global energy by 2040, down from 2.6% set last year. The high cost of hydrogen and the lack of visibility of the carbon price are a major challenge for the sector, according to DNV. And carbon capture technology is not expected to make a huge contribution to reducing emissions for similar reasons, DNV said.

Photo: Smoke and water vapor from Ulaanbaatar Thermal Power Plant no. 4 combined heat and power plant at dawn in Ulaanbaatar, Mongolia, Sunday, March 12, 2023. Photo credit: SeongJoon Cho/Bloomberg

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