To reach global net zero emissions goals there needs to be increased investment in the area, but those investments create huge economic opportunities and many of the areas ripe for carbon reductions can pay for themselves, according to the IEA’s World Energy Outlook 2021.
The report says that successfully achieving net zero emissions could create a market for wind turbines, solar panels, lithium batteries and fuel cells of more than $1 trillion comparable in size to the current oil and gas market. The IEA also says 40% of the required emissions reductions to meet net zero objectives can come from measures that will pay for themselves.
Those areas include improving efficiency or installing wind or solar power in areas where they are the most competitive in electricity generation.
Although the IEA says such investment is lagging and is far below what is needed to reach sustainability.
“There is a looming risk of more turbulence for global energy markets,” says IEA Executive Director Faith Birol said. “We are not investing enough to meet future energy needs, and the uncertainties are setting the stage for a volatile period ahead. The way to address this mismatch is clear – a major boost in clean energy investment, across all technologies and all markets. But this needs to happen quickly.”
Investment in sustainability outlooks continues to be both a problem and what could be an opportunity. The UN’s sustainable development goals face a funding gap of $100 trillion, according to a report by Force for Good, but the goals could bring in $12 trillion of business opportunities if tackled reasonably. Businesses globally continue to say they will invest more in sustainability, with one recent survey indicating double-digit growth in spending toward ESG objectives.
The IEA report says that fossil fuels still are too widely used for energy consumption and that the use of coal, aiding the second highest yearly increase in carbon emissions on record.
The report calls for two areas of action to help continue advancing toward net zero. One is the Stated Policies Scenario, which represents actions that governments have already put into place, and the other is an Announced Pledges Scenario, which are plans that have been stated but not necessarily carried out.
The World Energy Outlook says that the Stated Policies Scenario will result in almost all the net growth in energy demand through 2050 is met by low emissions sources, but still leaves annual emissions at today’s levels. For announced pledges, the IEA sees demand for fossil fuels peak by 2025 and carbon emissions drop by 40% worldwide by 2050. If that is fulfilled all industries see a decline, with electricity driving the biggest improvement.
Under both the scenarios oil demand goes into decline for the first time in a WEO report, although the IEA says timing varies widely. Coal could also drop in the advanced pledges scenario, especially with China saying it will halt production of coal plants. The IEA says that could save 20 billion metric tons of carbon emissions by 2050.
Similarly, the EU has pledged a rapid increase in renewable energy after recent power crunches. The IEA report says the EU will save a comparable amount of emissions as China if it reaches its 2050 net zero goals.
Still, the IEA says the differences in what have been done and what are pledged to be done is stark and what is currently in place only result in 20% of the necessary emissions reductions by 2030 that are necessary to reach net zero by 2050.
“In every scenario, this report forecasts that fossil fuel demand will soon peak and begin to decline, if it hasn’t already,” says Andrew Logan, senior director of oil and gas at Ceres. “This makes it clearer than ever that each dollar invested in fossil fuel development today increases the risk of future stranded assets and represents a missed opportunity to invest in much-needed clean energy technologies and infrastructure. This new reality is why investors have increasingly called on companies to disclose and reduce emissions and set transition plans.”
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
