Funding of the Energy Transition by Monetary Sovereign Countries

If global energy consumption returns to its pre-pandemic growth rate, it will be almost impossible to transition to a zero-emission or net-zero-emission energy system by 2050 in the absence of large-scale CO2 removal. Since relying on unproven technologies for CO2 removal is speculative and risky, this paper considers an energy descent scenario for reaching zero greenhouse gas emissions from energy by 2050. To drive the rapid transition from fossil fuels to carbon-free energy sources and ensure demand reduction, funding is needed urgently in order to implement four strategies: (i) technology change, i.e., implementing the growth of zero-carbon energy production, end-use energy efficiency and ‘green’ energy carriers, together with ongoing R&D on CO2 removal;(ii) reducing climate impacts;(iii) reducing energy consumption by social and behavioural changes;and (iv) improving human wellbeing while increasing social justice. Modern monetary theory explains how monetary sovereign governments, with their own fiat currencies, can create the necessary funding without financial constraints, although constraints do result from the productive capacities of their economies. The energy transition could be part-funded by a significant transfer of resources from monetary sovereign countries of the global North to the global South, financed by currency issuance.

Scenarios for mitigating CO2 emissions from energy supply in the absence of CO2 removal

Key policy insights This paper investigates the effectiveness of different energy scenarios for achieving early reductions in global energy-related CO2 emissions on trajectories to zero or near-zero emissions by 2050. To keep global heating below 1.5°C without overshoot by 2050, global CO2 emissions must decline by about half by 2030. To achieve rapid, early emission reductions entails substantially changing recent pre-COVID (2000–2019) observed trends, which comprise increasing total primary energy supply (TPES) and approximately constant fraction of TPES derived from fossil fuels (FF fraction). Scenarios are developed to explore the effects of varying future trends in these variables in the absence of substantial CO2 removal, because relying on the latter is speculative and risky. The principal result is that, to reduce energy-related emissions to at least half the 2019 level by 2030 en route to zero or near-zero CO2 emissions by 2050, either TPES must be reduced to at least half its 2019 value by 2050 or impossibly rapid reductions must be made in the FF fraction of supply, given current technological options. Reduction in energy consumption likely entails economic degrowth in high-income countries, driven by policies that are socioeconomic, cultural and political, in addition to technological. This needs serious consideration and international cooperation. If global energy consumption grows at the pre-COVID rate, technological change alone cannot halve global CO2 emissions by 2030 and hence cannot keep global heating below 1.5°C by 2050. In the absence of substantial CO2 removal, policies are needed to reduce global energy consumption and hence foster degrowth in high-income economies. Policies to drive technological and socioeconomic changes could together cut global energy consumption and thus total primary energy supply and associated emissions by at least 75% by 2050. If global energy consumption grows at the pre-COVID rate, technological change alone cannot halve global CO2 emissions by 2030 and hence cannot keep global heating below 1.5°C by 2050.In the absence of substantial CO2 removal, policies are needed to reduce global energy consumption and hence foster degrowth in high-income economies.Policies to drive technological and socioeconomic changes could together cut global energy consumption and thus total primary energy supply and associated emissions by at least 75% by 2050. [ FROM AUTHOR] Copyright of Climate Policy (Taylor & Francis Ltd) is the property of Taylor & Francis Ltd and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full . (Copyright applies to all s.)