- Some notes on COP28 from those clever people at Wood Mackenzie
Global Energy Transition Outlook
- The world is on a 2.5-degree Celsius warming trajectory. If transformative action is not taken now, the 1.5-degree Paris Agreement goal will likely be missed.
- A minimum of US$2.7 trillion annual average investment must be invested in renewables, infrastructure and energy transition technologies (1.5 degree net zero scenario).
- Electricity to become the major energy market, with renewables the main source of power supply.
- Oil & gas still have a role to play as part of a managed transition.
Middle East Energy Transition Outlook
- Large oil and gas reserves in the Middle East have resulted in especially low domestic energy prices and provide little incentive to transition to low carbon alternatives.
- The Middle East could play a key role in decarbonising the global economy given its abundant natural resources, both fossil-based and renewable.
- Despite ambitious targets, the region’s emissions are still forecasted to remain at current levels of 2 billion tonnes (Bt) CO2 through to 2050 in Wood Mackenzie’s base case, with the Middle East expected to reach net zero by 2065 in the pledges scenario.
COP28 Preview: Five things to look for
- Global stocktake: None of the 195 signatories is on target. There’s progress, but it’s not fast enough. COP28 needs to secure government alignment on more ambitious targets and effective delivery.
- Industry on the hook to pay for emissions: Assuming collective agreement is achieved, governments in turn must find ways to put the onus on individual sectors in the economy to pay to emit.
- Oil & gas: The industry is responsible for up to a quarter of human-caused methane emissions. While some large companies have made commitments to reduce methane emissions, generally governments have not been tough enough – reduction targets are largely voluntary or tied to general emissions goals.
Mission invisible: tackling the oil and gas industry’s methane challenge
- Methane is responsible for almost a third of the emissions-induced increase in global temperatures since the start of the industrial era and the oil and gas industry is estimated to account for up to a quarter of human-caused (anthropogenic) methane emissions.
- COP28 could prove a landmark moment for methane reduction commitments, and companies and governments will need to take strong steps to reduce emissions and enforce new standards.
Source: Woodmac
