Chronic. Clearly, the surge in the price of oil and gas, which worries households and panics governments, is not attributable to a single cause. Climatic hazards, storage behavior, Russian attitude… Contingent explanations are piling up, particularly in the context of an economy disrupted by the pandemic shock. But there is a cause that should alert, because it has a structural character: it is the impact of the ecological transition – or more exactly of the way in which it is initiated.
Some 80% of the energy consumed in the world today comes from fossil fuels (plus 5% from nuclear). To limit global warming, we will have to increase to 60% by 2030 and 25% by 2050. This transformation will involve a considerable effort in research, conversion of energy systems, adaptation of networks and construction of infrastructure.
All in all, the available estimates of the additional investment required converge, for 2030, to 2% of world gross domestic product per year, net. The International Energy Agency estimates that the energy investment will have to increase from 2,000 billion dollars (1,720 billion euros) per year in recent years to 5,000 billion in 2030, before gradually dropping down. And that’s not all: the transition will also involve a transfer to renewables of investment in brown energies, which still represents a good half of the total. Ultimately, new investment will have to amount to around three points of global GDP per year.
This is considerable, and it will not go without a hitch. The macroeconomic issue is important. The energy issue too, because the transition will deeply disrupt the delicate balance of the world market. If the rise in renewables is not accompanied by a parallel decline in fossil fuel extraction, there will be excess supply and the price of fossil fuels will collapse; if, conversely, the disinvestment in yesterday’s energies is faster than the development of new capacities, prices will soar.
Credibility deficit
It is this second trend that we are currently observing. In its report, the IEA compares three scenarios: the first, normative, leads to carbon neutrality in 2050; the second, less ambitious, corresponds to the national objectives announced in the framework of the Paris agreement; and the third to the policies actually in place, which are far from being in line with the stated objectives. However, if investment in coal and gas is today at the level forecast in the first scenario, investment in renewables is still nearly four times lower than what is needed.
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