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Beyond Net Zero – Fossil fuel free by 2050?

The technology exists, and politicians seem to be heeding societal pressure. So, what is needed to accelerate the decarbonisation drive? We recap the main points from our recent webinar.

Fabrizio Varriale, Place and Space Analyst, RICS
23 November 2021

A fossil fuel-free economy is technically and economically achievable by 2050; the main obstacles are social and political

Mark Z. Jacobson, Professor at Stanford University, argues that we already have the technologies needed to decarbonise most of our economy even sooner than 2050. At the same time, research is ongoing to find solutions for challenging sectors such as long-distance aviation and navigation. The cost of setting up renewable energy generation is now lower than building new infrastructure for natural gas, so the real obstacles hindering the transition are the lack of societal pressure and political will, says Sam Benjamin, Senior Consultant at Element Energy.

Richard Betts, Associate Partner at EY, agrees. But he sees growing societal demand for change, that will have to be met by politicians through more ambitious targets and effective actions towards decarbonisation. Pressure from key stakeholders, including investors, is also growing. Climate risk is increasingly seen as financial risk. But the lingering preference for quick investment gains and the pressure to deliver results within political term times means long-term systemic solutions are often deprioritised. New technologies need public investment before they can be deployed by the private sector. Trillions of dollars are needed globally to reinforce and upgrade energy infrastructure to support a fully electric-powered economy.

The economic and social benefits of the clean energy transition greatly surpass its costs

A fast transition to a fossil fuel-free economy makes economic sense for all high-emitting countries. By electrifying the economy, global demand for energy could fall by 57% thanks to the higher efficiency of electric engines and the elimination of energy demand for fossil fuel extraction and transport. This could mean cost reductions of 33% or more. On top of this, decarbonising energy generation brings substantial benefits, both social and economic, by reducing ecosystem degradation and air pollution. The latter is now the second most common cause of death in the world, with an estimated 7 million people dying every year and an estimated US$30 trillion being spent on related treatment. The clean energy transition is also an opportunity for economic development. Recent studies estimate a potential increase of US$1 trillion in global GDP if renewable energy shares double over the course of the decade. Ten million jobs could be created by financing existing ‘shovel-ready’ energy projects.

“Air pollution is now the second most common cause of death in the world, with an estimated 7 million people dying every year and an estimated US$30 trillion being spent on related treatment.”

“Recent studies estimate a potential increase of US$1 trillion in global GDP if renewable energy shares double over the course of the decade. Ten million jobs could be created by financing existing ‘shovel-ready’ energy projects.”

Richard Betts notes that debates often focus on the cost of climate action, but the cost of inaction cannot be overlooked. Runaway climate change is likely to cause complete and total economic collapse globally. It is true that the clean energy transition comes at a cost. Estimates indicate a need for US$60-62 trillion of investment and some sectors will need to be massively overhauled. The investment, though, will pay for itself in a few years thanks to the economic and social benefits it yields. In Vietnam, 10GW of solar energy generation were installed in the space of a month – equivalent to about 10 nuclear power plants. The technologies are already there; what is needed is ambitious, clear and effective policies to finance action in this decade.  

The way to achieve a decarbonised economy is by creating a flexible and smart energy system, not by attempting to fix fossil fuel generation.

Sam Benjamin explains, as renewable energy sources are now mature and economically viable, the true technical challenge lies in improving their efficiency. Grid flexibility (the capacity to regulate and match supply and demand) is key to enabling 100% renewable energy generation. While renewables like wind and solar are intermittent sources, supply can be predicted with climate science and managed through energy storage solutions. Though still immature, innovative solutions like compressed air and gravity-based storages are likely to partially displace conventional technologies such as lithium batteries.

All panellists agree that technologies designed to reduce the carbon intensity of fossil fuels are the fruits of a sector resisting change and attempting to remain in business. Carbon capture and storage (CCS) delivers very limited carbon savings over its lifecycle. CCS facilities create additional energy demand which is met either through more fossil fuel generation–which defies the initial purpose of having CCS–or through renewable generation. The latter is better employed by directly replacing fossil fuel plants, rather than trying to fix their carbon intensity. Moreover, CCS does not reduce upstream carbon emissions associated with fossil fuel extraction and transportation, nor the atmospheric pollution associated with burning fossil fuels.

As the whole economy needs to decarbonise, carbon-intensive sectors need to embrace new technologies.

Often, when people think about tackling climate change, they focus on the need for renewable energy, but there are economic sectors that deserve more attention. Cement, steel aluminium and fertilisers are highly carbon-intensive industries, where CO2 is released not only because of energy demand but also through the manufacturing process. Market-ready solutions exist to reduce intensity (such as geopolymer-based cement and steel production through green hydrogen) but in other cases the decarbonisation pathway is not as clear. Research and investment are needed to provide more long-term solutions for these sectors.

Consumption of fossil fuel for domestic heating is also a sector in need of urgent intervention. Energy consumption in homes can be reduced and decarbonised through envelope insulation, electrification of heating and renewable, onsite power generation. Challenges remain: private demand must be further stimulated, access to funding made simpler, and the workforce upskilled. In the UK, few households have been able to take advantage of public funding for domestic energy retrofits. This is not due a lack of demand, but rather a shortage of companies able to deliver such a large-scale retrofit programme. This, says Sam Benjamin, is a stark example of the need for government support and long-term vision in this space.

Beyond Net Zero 2050 – Fossil fuel free by 2050?