Consistency with the Paris Agreement, negotiated by 195 countries at the end of 2015, would require a full decarbonization of the global economy before the end of the century. This transformation will be particularly challenging for the energy sector – the largest source of carbon emissions. Every existing and new power plant risks being shut down before the end of its anticipated lifetime, unless it can operate on renewable energy or find a feasible and yet unknown means for the capture and storage of carbon.
Should this global climate agreement be implemented, investment patterns will need to shift rapidly to low-carbon electricity. It is estimated that energy production and use will have to be entirely emissions-free by 2055 or 2080, in order to reach the agreement’s ambitious targets of 1.5°C or 2°C, respectively (Rogelj et al., 2015).
The G20 member states, representing the world’s major economies, have an important leadership and marketdevelopment role to play in this transition. The first conference of G20 energy ministers in October 2015 emphasized the need for good policy practice in attracting private investment. Nevertheless, it lacked clear leadership commitment to the decarbonization of the energy sector.
Source : Allianz