On 4 December the Economist Intelligence Unit launched its Industries in 2020 report, predicting that the rising use of renewables in 2020 will not be enough to meet targets set in the Paris Climate Change Agreement. The Industries in 2020 report forecasts growth and assesses key risks in six business sectors for 2020: automotive, retail, energy, FS, healthcare and telecoms.
• Global energy consumption will be subdued in 2020, rising by just 1.4% in a sluggish global economy. But capacity of non-hydro renewables will rise by 14%.
• Growth in renewables will not be fast enough to meet pledges made under the Paris Climate Change Agreement.
• Donald Trump will take the USA out of the Paris Agreement entirely if he wins next November’s presidential election.
The EIU’s latest report forecasts that energy consumption from non-hydro renewables will rise by 14% next year, and they will account for two-thirds of the new power generation capacity that comes on line. By contrast, energy consumption from oil will grow by just 1%, with prices remaining range-bound despite political tensions in the Middle East. Natural gas will lead growth among the fossil fuels, rising by 2.6%. This will also put it ahead of hydro power and nuclear energy, while coal consumption will edge down slightly.
Peter Kiernan, chief energy analyst at the EIU, commented: "The use of renewables is being driven by the falling cost of the technology and government policies, including the use of competitive auctions in markets like India. Even so, global energy supply is still a long way from being decarbonised. The world will still depend mainly on fossil fuels in 2020, with rising use of natural gas and oil more than compensating for a slight decline for coal."
The march towards renewables will not therefore allay concerns over climate change. The Paris Climate Change Agreement will use 2020 as the base year against which the 2030 targets will be measured. The EIU expects those targets to be missed, particularly if the US goes ahead with its plan to exit the Agreement. If Donald Trump wins the presidential election on 3rd November 2020, then this exit will take effect the next day. This will make developing countries less willing to sacrifice economic growth in order to cut emissions.
The EIU provides impartial intelligence for companies, government agencies, financial institutions and academic organisations around the globe. It is headquartered in London, UK, with offices in more than 40 cities.