Continued growth in energy demand, particularly in emerging markets and developing economies, could put more ambitious climate targets ‘increasingly out of reach’, a new study by S&P Global Energy has suggested.
Its Multidimensional Global Energy Pathways study explored energy demand and emissions from emerging markets and developing economies (EMDEs) between now and 2060, while also taking account of economic development, infrastructure, resources, finance and the pace of technology adoption.
As it noted, energy demand in EMDEs could increase by more than 60% by 2060, adding some 155 exajoules (EJ) to global primary energy demand – equivalent to the current energy demand of China.
At the same time, demand from advanced economies – including China – is set to remain ‘broadly flat’ over the same period, with demand growth from AI and data centres, offset by increased electrification and improvements in energy efficiency.
‘Realities of economic development’
“The thinking and policies that have sought to shape the energy transition over the last decade have collided with the realities of economic development, growing energy demand, geopolitics and the pace of technological progress,” commented Daniel Yergin, vice chairman, S&P Global.
“The fundamental fact is that the largest source of long-term energy demand growth will come from emerging markets and developing economies where energy needs are driven by economic development, industrialisation, urbanisation and rising incomes. We hope that this study will contribute to a deeper dialogue about the realities and challenges of the energy transition.”
Potential pathways
The study examines three potential pathways. Under the ‘Emissions Reduction Pathway, which represents the ‘most aggressive’ decarbonisation pathway, global emissions fall by 65% by 2060, and global warming remains within 2°C by the end of the century.
Under this pathway, wind and solar generation capacity increases by eightfold between now and 2060, with an 18-fold increase seen among EMDEs. Global grid battery capacity increases 25-fold under this situation.
The Current Realities Pathway, meanwhile, which S&P Global describes as ‘a more likely pathway in the current policy environment’, global greenhouse gas emissions decline by 17% by 2060, with global warming reaching 2.8°C by the end of the century.
Elsewhere, the Diverging Priorities Pathway, in which advanced economies focus more heavily on emissions reduction while EMDEs prioritise GDP growth, energy affordability, security and economic competitiveness, results in ‘intermediate’ global emissions reduction, and an estimated 2.5°C of warming.
“The energy transition will be increasingly defined by how the world meets large volumes of new demand while also reducing emissions, strengthening security and preserving affordability,” added Nick Lowes, vice president, consulting, S&P Global Energy.
“It will be multidimensional, regionally differentiated and multi-speed. This will require objective and inclusive discussion about the very different perspectives between advanced and developing economies on their respective energy and climate priorities.” Read more here.
