Financing developing world green transition key to Paris goals but governments falling short – IEA

LONDON (ICIS)–Financing the clean energy transition in developing countries is a key measure to slow down global warming but pledges at the COP26 summit fell short of the backing necessary to achieve that, the head of the International Energy Agency (IEA) said.

The recent global climate summit in Glasgow, UK, resulted in a raft of significant agreements, including most of the global economy signing on to reach net zero emissions by 2050, and over 100 countries agreeing to cut methane emissions by 30% by 2030.

A longstanding barrier to reaching the Paris climate targets is the financing of clean energy projects in emerging markets, and this remains lacking, according to the IEA’s executive director, Fatih Birol.

“We have seen some peer efforts at COP 26 to improve [developing world clean energy project financing] but we believe it is far from being satisfactory,” he said, speaking at an IEA press conference on Wednesday.

“The fault line of meeting our climate goals is to finance clean energy transitions in the emerging world.”

Advanced economies, particularly in the EU, are pushing more and more stringent emissions-reduction targets but represent a comparatively small proportion of  global carbon dioxide (CO2) emissions, compared with other parts of the world.

Some developing world ministers, including India’s Minister of Power, New and Renewable Energy, Raj Kumar Singh, have called for economies such as the EU to strive for carbon negative emission levels rather than net zero, to give countries that are still industrialising the emission headroom to develop.

Advanced economy climate tsars such as John Kerry in the US and Frans Timmermans in the European Commission have called instead for developing countries to set their sights on jumping fossil power and for some citizens’ first experience of grid connectivity to be from clean sources.

Despite this shortfall, and criticisms by some observers that more could have been done in Glasgow, the conference resulted in several agreements such as countries representing 90% of global GDP committing to net zero by 2050, that could stand to have a substantial impact, if commitments translate into action, according to Birol.

“We are, of course, well aware that these are commitments, and they just are not enough on their own. Implementation is key, but commitments are central to the architecture of the Paris Agreement,” he said.

The net-zero and other targets agreed could stand to keep global temperature increases to 1.8 degrees Celsius by 2050, according to Birol.

The target from 105 countries to cut methane emissions by 2030 stands to have a substantial impact if carried through by policymakers, he added.

The main methane emitting sectors are agriculture, waste, and the energy sector, and it will be necessary for energy players to take the lead if the targets are to be met.

“In our view, it’s the energy sector that really needs to take the lead, because we believe that many of the most cost-effective opportunities for reduction are in fossil fuel operations, notably from oil and gas, but also from coal,” said IEA chief energy economist Tim Gould.

Focus article by Tom Brown