In Short : The World Economic Forum’s (WEF) 2024 Annual Meeting at Davos presents a blueprint for transformative change, envisioning a Net Zero World by 2050. This roadmap outlines strategies and commitments to achieve a sustainable and carbon-neutral global future.
In Detail : Amidst the snowfall in Davos, there is a sense of urgency in the fresh mountain air. The International Energy Agency’s report “Net Zero by 2050” paints a stark picture of climate change. We are teetering under the weight of fossil fuel emissions with the world hurtling toward a point of no return. The time for action is now!
However, there is a glimmer of hope. We are seeing a shift away from fossil fuels to sustainable renewable energy options. As beautifully described by the World Economic Forum, COP28 was the ‘Beginning of the End’ of fossil fuels. Deloitte forecasts a $2 trillion market by 2030 and the revolution is already underway with the gears of change in the energy space turning with ever-increasing momentum.
Global Renewable Capacity: The world added a record renewable energy capacity in 2023 reaching around 507 GW. While this is a robust increase of nearly 50% over 2022, we need to triple global renewable capacity to tame the energy demand beast. Over the next five years, solar and wind power additions are projected to more than double with an addition of almost 430GW by 2028. India will add 205GW of this amount and become the third-largest market in the world for renewables. While there is little doubt that ramping up renewable energy will be pivotal for energy transition, there are many more complex pieces that need to fall in place.
Electricity Consumption and Decarbonisation: The twenty-first century has seen global energy consumption growing faster than the previous century with an average annual increase of 3.4% as against 1-2% earlier. In 2022, the world’s electricity consumption reached approximately 25,500 terawatt-hours. India is also moving on the same path with electricity consumption increasing by nearly 8% to 847 billion units in the first half of FY24 with peak power demand reaching a record high of 241 GW. And it continues to grow. This is a challenge as well as an opportunity rolled into one. This energy is sourced from clean, green sources that can power a sustainable engine of economic growth which will benefit humanity exponentially, especially the more vulnerable nations. India stands to gain not just in terms of a faster growing and globally competitive economy but also as a dependable supply chain hub for the world’s green energy demands.
To achieve our net zero targets and meet our quadrupled electricity demand, wind, and solar must contribute 75% to the entire energy mix, revolutionizing how we generate and utilize energy. This increase in demand is setting the stage for a paradigm shift in the use of renewable energy that pushes us beyond conventional boundaries, demanding and driving a comprehensive ecosystem transformation spanning over generation, integration, storage, distribution and consumption.
One also has to look beyond data to the impact on humans and the economy.
Job Creation and Relocation: This transformation is both a promise and a challenge. The transition to net-zero could result in a gain of about 200 million and a loss of about 185 million direct and indirect jobs globally by 2050. New opportunities will emerge in renewable power, hydrogen, and biofuels by 2050. The scale of workforce reallocation may be smaller than that from other trends including automation, but will require proactive skills development and reskilling initiatives.
However, the risks arising out of delayed climate action are catastrophic compared to the challenges in doing so.
Sustenance of a liveable Planet: The undeniable scientific consensus rings clear: As per the IPCC report, the impact of climate change has already begun. Every moment of delay in uniting for global action brings us perilously close to missing the fleeting opportunity to safeguard a future that is not just sustainable but truly liveable.
Impact on GDP: The stakes are high. Without any climate action, we face a potential 5.5 to 14% loss of global GDP by 2050. The economic consequences are dire and underline the need for urgent collective action. The economic cost of addressing climate change damage will far out-weight the cost of investing in climate action.
Uneven Regional Impact: The burden of climate change is being borne disproportionately by developing economies and vulnerable communities. Bridging this gap requires targeted initiatives and an equitable distribution of resources failing which global strife and human calamities could reach monumental levels.
Technology can act as the Bridge to Net Zero. But this will require massive investments.
CO2 Removal Capacity: Our current arsenal of CO2 removal technologies is woefully inadequate. While two billion tonnes of carbon dioxide are being removed from the atmosphere every year, nearly all of it is thanks to forests. Technology is only responsible for 0.1% of carbon dioxide removal. Around 1,300 times more carbon dioxide removal from new technologies will be needed by 2050 to achieve net-zero. Promising technologies such as direct air capture and bioenergy with carbon capture and storage (BECCS) have huge potential but require significant investment – potentially $1-2 trillion per year by 2050.
Investment in Key Technologies: Critical climate technologies such as green hydrogen, solar photovoltaics, and direct air capture require up to $7 trillion in annual investment. Bridging this gap requires enabling policies such as carbon pricing and innovation incentives to attract the necessary capital.
Working Together to Bridge the Gap: The public and private sectors must join forces in strong partnerships. Governments can pave the way with visionary policies, businesses can drive innovation and investment, and investors can allocate capital to sustainable solutions.
The message coming to the world from Davos is clear! The technology, resources, and human ingenuity to transform energy generation and consumption by 2050 are within reach. We must work to ensure a cleaner and healthier world for our future generation. Let us leave Davos with a resolute promise to the people of the world to join hands to address the challenge of climate change and usher in an era of clean, renewable energy!