Energy, inflation and zeroing of emissions. Are you ready for energetic hell?
The International Energy Agency – an influential NGO first launched to respond to global oil supply shocks in the early 1970s during the oil crisis – has just released a report warning that if the world wants to achieve the goals set in the Paris Climate Agreement (which President Biden has just joined), all new oil and gas exploration projects must stop immediately. Great advice when energy prices are rising as well as inflation.
The Paris agreements envisage zeroing CO2 emissions by 2050 to limit the so-called “global warming”, and therefore the only way to achieve this is to stop using fossil fuels. Also because it is not possible to think that things will happen by miracle, and the fanatics of ecological disaster are around the corner.
Of course, if all the energy companies in the world announced that they were halting all mining exploration, the impact on the price of oil would be sudden and rapid, and the effects on the cost of living and people's well-being brutal.
Achieving this goal would require an investment of a staggering size: humanity is expected to invest another $ 5 trillion in energy investments per year by 2030 (compared to about $ 2 trillion today).
According to the FT, the report comes as the IEA faces pressure from climate activists to produce a "roadmap" for meeting climate change goals. Ironically, the final result on the table shows just how unrealistic, stupid, and fundamentally violent these goals are. No one seems to be wondering, anywhere, who will ultimately have to pay for all these changes …
Source: IEA
As a reminder, achieving net zero carbon emissions requires reducing emissions as much as possible, then offsetting the rest with "carbon removal" plans funded by carbon credits, which have given rise to yet another speculative market.
If the economic stimuli work, we should see an increase in energy demand. Ecological scientists predict that by 2050, with more growth and production, there will be 8% lower energy use. Let's hope they are right, but 2050 is "Long Period" the time in which, Keynes said, we will be dead. How do we get to the Long Term?
China also "pledged" to reduce emissions to net zero during President Biden's virtual climate summit earlier this year.
To achieve the reduction modeled by the IEA, the share of fossil fuels in the global energy supply would have to drop by about four fifths by 2050. In this scenario, solar would become the main global energy source, representing 20% of global demand. Do we believe that it is currently possible? Not to mention the challenges for oil-producing countries, which are not only Saudi Arabia and the rich Emirates, which in any case would get away with alternative investments, but are also poor or developing countries, from Venezuela to Indonesia. to Angola. What do we do with them.
Climate activists celebrated the report as a sign that the IEA will join the fight against climate change by putting more pressure on oil companies and member states. But when prices explode and economies collapse, with strong redistributions of wealth to those countries that have faced the search for new energy sources calmly, what will happen to these people? And above all, who will pay for their mistakes.
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The article Energy, inflation and zero emissions. Are you ready for energetic hell? comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/energia-inflazione-ed-azzeramento-delle-emissioni-siete-pronti-allinferno-energetico/ on Wed, 19 May 2021 18:05:49 +0000.