Insights: Demystifying decarbonisation

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The Gulf has had a summer like no other. Temperatures breached 50°C several times this season. At the same time, the Saudi Ministry of Health issued an alert in the last week of July urging people to take caution while outdoors due to a severe heatwave. Globally, scientists confirmed that July was the hottest month ever recorded on Earth. UN Chief Antonio Guterres issued a warning on climate change, saying that “the era of global warming has ended; the era of global boiling has arrived.”

This extreme weather highlights climate change’s risk to humanity and the planet. To avert the worst consequences of this global crisis, we must act swiftly and decisively to reduce our carbon footprint and embrace a greener and cleaner future. This is where decarbonisation comes in.

Tackling CO2 emissions 

Decarbonisation defines the process of cutting down and ultimately eliminating CO2 emissions from various sectors of the economy, also known as net zero. The strategy establishes a path to break free from the global dependence on fossil fuels, the main culprit behind CO2 emissions, and a mass switch to renewable and clean energy sources. The UN’s Intergovernmental Panel on Climate Change indicates that greenhouse gas emissions must decline 45 per cent by 2030 to limit global warming to 1.5°C.

The source of about 75 per cent of global greenhouse gas emissions, the energy sector is critical to responding to the world’s climate challenge. Our traditional reliance on fossil fuels such as coal, oil, and natural gas to power our economies and lifestyles comes at a high cost: enormous air, water, and land pollution. Meanwhile, fossil fuels significantly contribute to global warming and climate change.

To mitigate these risks, we must turn to renewable energy sources like solar, wind, hydro, and geothermal power to decarbonise the energy sector. These sources offer a sustainable, predictable and abundant energy supply that can meet our growing energy needs.

But decarbonising the energy sector is a challenge like no other. Reaching Net Zero by 2050, in line with guidance from the UN’s Intergovernmental Panel on Climate Change (IPCC), calls for nothing short of a complete transformation of the energy system underpinning the global economy, as 80 per cent of today’s energy supplies still rely on fossil fuels. The Sharm el-Sheikh Implementation Plan, released at COP27, noted that a global transformation to a low-carbon economy requires investments of at least $4-6tn annually.

Transport is another major priority in our transition to a greener world. According to the IEA, the industry has the highest reliance on fossil fuels of any sector and accounts for nearly 40 per cent of CO2 emissions from end‐use sectors. Getting transportation on track with agreed-upon commitments requires modal shifts to the least carbon-intensive travel options and energy efficiency measures to reduce the carbon intensity of all transport modes.

This entails mass adoption of electric vehicles (EVs) and investments in other sustainable transportation systems such as e-fuels. EVs, in particular, have made remarkable progress in recent years with battery technology and charging infrastructure improvements. However, more work is needed to make EVs affordable and accessible and eventually phase out ICE vehicles.

Another crucial aspect of decarbonisation is improving energy efficiency. Energy efficiency measures involve using energy more wisely and reducing waste. This can be achieved through retrofitting buildings to make them more energy-efficient, using smart technologies for energy management, and implementing energy-saving practices in industries.

According to the IEA, energy efficiency represents more than 40 per cent of the emissions reduction needed by 2040. The global energy agency defines energy efficiency as the ‘first fuel’ whose adoption supports tackling the unprecedented challenge, supporting net zero energy goals at lower costs, and delivering a wide array of benefits for society.

The challenges accompanying decarbonisation

Decarbonisation is not without its set of challenges. The process involves navigating a complex web of economic, political, and social challenges. Any abrupt shift will expose industries that heavily rely on fossil fuels to significant disruptions or economic hardships for communities that depend on these industries for jobs.

Addressing these challenges requires a tight balancing act that considers the needs of affected workers and communities while simultaneously pursuing decarbonisation goals.

Moreover, decarbonisation is not a one-size-fits-all solution. Different countries and regions have different circumstances and capacities to decarbonise their economies. Therefore, we must consider their development goals, resource availability, and social and cultural factors and pursue net-zero strategies tailored to each country and region’s needs and contexts.

Progress is being made

Despite these challenges, impressive progress is being made. Based on current trends alone, EVs are set to displace over five million barrels of oil demand a day by 2030. Meanwhile, the world will add as much renewable power in the next five years as it did in the past twenty, overtaking coal as the largest source of electricity generation.

Meanwhile, regional and global efforts to tackle the crisis are accelerating. The Paris Agreement, signed by nearly 200 countries, provides a framework for global action on climate change and aims to limit global warming to well below 2 degrees Celsius above pre-industrial levels. It emphasises the need for countries to set and achieve ambitious emissions reduction targets, adapt to climate change impacts, and provide financial and technological support to developing nations.

In the GCC, the UAE has established an environmental policy to increase the clean energy contribution in the UAE energy mix to 50 per cent by 2050 while reducing energy consumption at the individual and institutional levels by 40 per cent. Meanwhile, the Saudi Green Initiative aims to increase domestic generation capacity from renewable energy to 50 per cent by 2030 and cut global methane emissions by 30 per cent.

The most significant environmental conference of the year, COP28, is being held in MENA for the second consecutive year to unite the world towards agreement on solutions to our time’s most pressing global challenge.

COP28 is of particular significance as it marks the conclusion of the first Global Stocktake, a comprehensive assessment of the progress made in achieving the goals of the Paris Agreement. As host, the UAE has pledged to mobilise action around a “major course correction” to accelerate emissions reductions while ensuring energy security.

These efforts demonstrate that decarbonisation is a feasible goal that can bring multiple benefits to our planet and society.

Decarbonising our economies can mitigate climate change and its impact, improve our health, create jobs, enhance energy security, and foster innovation and competitiveness.

 The writer is managing director of ENGIE Energy Solutions GCC