The World Economic Forum predicts a $13.5 trillion investment by 2050 for decarbonisation, aiming to transition key sectors to achieve net-zero emissions targets through clean power, hydrogen production, and carbon capture technologies.
Decarbonisation reduces or eliminates CO2 and other greenhouse gas (GHG) emissions to mitigate climate change. The importance of decarbonisation lies in its ability to help stabilise global temperatures and limit climate change’s dangerous and irreversible effects by achieving net-zero GHG emissions. It means balancing the amount of GHG emitted with an equivalent amount removed from the atmosphere.
Key sectors acting as sources of global emissions include energy, transportation, buildings, and agriculture. The transportation sector plays a significant role due to emissions from vehicles and aircraft, while building operations and agriculture contribute through energy use and methane emissions, respectively.
The role of renewable energy
The transition from fossil fuels to renewable energy will lead to decarbonisation efforts. In 2023, the world witnessed a surge in renewable energy capacity, increasing by 50 per cent from the previous year, led by advancements in solar and wind technologies. For instance, the cost of solar PV and onshore wind power has become competitive, making them cheaper than new and existing fossil fuel power plants.
Countries like China, the United States, the European Union, and Brazil led this expansion. China alone expected to install more than half of the new global capacity required by 2030, ahead of its targets due to the economic attractiveness of these technologies. Similarly, the United States is seeing accelerated renewable additions, spurred by policies like the Inflation Reduction Act.
India is making rapid strides in the renewable energy sector. As of 2023, India has substantially increased its investments in renewable energy, aiming to achieve 50 per cent from non-fossil fuel sources by 2030.
Advancements in energy storage and grid management
Advancements in energy storage and grid management handle the increasing input from renewable energy sources and improve energy distribution efficiency. Recent years have seen a reduction in battery costs, particularly lithium-ion batteries, which have fallen by about 50 per cent in price. This trend is expected to continue, making energy storage systems affordable and accelerating their deployment across electric grids.
On the technological front, the U.S. Department of Energy has recently allocated $15 million to promote long-duration energy storage innovations. These initiatives will develop storage solutions lasting over 10 hours and are cost-effective, thus supporting a more reliable and clean energy grid. This effort includes enhancing zinc, lead, and flow battery technologies, for diversifying and securing the energy storage supply chain.
The advancements in energy storage and grid management are closely aligned with the nation’s push towards a more sustainable and resilient energy framework. With an investment projection exceeding $35 billion annually by 2030 for advanced energy solutions, India is poised for significant growth in this sector. The focus is on battery storage, with planned investments of $9–10 billion annually, aiming to achieve a massive scale-up to 47 GW of battery storage capacity by 2031–32.
This scale-up will manage the intermittency of renewable energy sources and grid stability. The Indian Energy Storage Alliance (IESA) highlights the burgeoning market potential, with the energy storage market expected to grow to 260 GWh by 2030. This expansion is forecast to stimulate approximately $15 billion in annual demand by 2030, encompassing applications in electric vehicles and grid-scale stationary storage.
Carbon consultancy
Carbon consulting steers the global effort to decarbonise by providing expert advice and strategies to reduce carbon footprints. By analysing emissions data, consultants help businesses identify key areas where they can implement sustainable practices. For instance, the carbon consultancy sector has been reducing emissions in the industrial sector by up to 30 per cent through energy efficiency improvements and renewable energy integration. These consultants also develop carbon management plans that include short- and long-term goals aligned with international standards like the Paris Agreement. Additionally, they facilitate the transition to a low-carbon economy by assisting companies in purchasing carbon credits and investing in green technologies, thus reducing millions of tonnes of CO2 emissions.
Policy, investment, and the future of decarbonisation
Government policies, international agreements, and corporate commitments drive decarbonisation efforts. The World Economic Forum underscores that industries and governments need to work together using science and human ingenuity to accelerate the transition to net-zero emissions. This includes leveraging digital technologies to optimise energy use and using clean technologies like hydrogen and synthetic fuels.
Investments are the future of decarbonisation. According to the World Economic Forum’s Net-Zero Industry Tracker, a substantial investment of $13.5 trillion will be required by 2050 to transition key industrial and transport sectors to net zero. This funding will help scale clean power, hydrogen production, and carbon capture technologies. These sectors, which are currently heavy emitters of greenhouse gases, need infrastructural and technological upgrades to meet global climate targets.
Policy measures and financial incentives encourage the adoption of these technologies and make them economically viable, thereby ensuring a sustainable and resilient energy transition.
Decarbonisation will lead us to meet global climate goals. By reducing carbon emissions, we can combat climate change effectively. This approach is urgent and feasible, with current technologies and policies supporting the transition to a low-carbon future.