Dozens of investors slam IEA over fossil fuels and renewables projections
Allianz, Zurich Insurance Group and Orsted's pension fund are among 65 finance bodies to have written to the International Energy Agency (IEA), urging to body to hep global energy firms align with the Paris Agreement.
In a letter to the IEA’s executive director Dr Fatih Birol, sent on Sunday (17 November), the investors criticised the methodology behind the Agency’s World Energy Outlook (WEO) – an annual report which contains predictions around how rapidly financial markets could shift from fossil-fuel-based energy systems in favour of clean power.
The report bases predictions on factors such as existing national climate policies and past corporate action, but its methodology has been widely criticised by scientists and climate action groups this year for failing to encourage ambitious actions from policymakers and business.
Under the IEA’s sustainable development model, global carbon emissions from the energy sector should peak immediately and fall to 10 gigatonnes (or 10bn tonnes) by 2050. This would require emissions in advanced economies to fall at an average of 5.6% every year until 2050, and by 3.2% in developing economies.
But the Agency has repeatedly warned that the achievement of this model is unlikely and posits several higher-carbon pathways in the WEO. The signatories of Sunday’s letter claim that the WEO should, instead, provide a “fully transparent” scenario showing how the global energy sector could align with the Paris Agreement’s 1.5C trajectory.
“As the WEO can become a self-fulfilling prophecy, it carries a major responsibility that goes way beyond that of other publications that are merely descriptive,” the letter states. “The IEA cannot be derelict of this responsibility.”
The letter continues: “The year 2020 marks a turning point for the world – the year when we either grasp the challenges and opportunities before us or continue delaying and obstructing the low-carbon transformation. This is an opportunity for the IEA to step out in front and show the world what is necessary for us to deliver a 1.5ºC future.”
In a response statement seen by Reuters, Birol said the IEA will take into account “evolutions” within the science, technology, policy and finance spaces as it prepares to deliver the 2020 edition of the WEO.
This year’s WEO notably added projections around energy efficiency for the first time, among other climate-related actions. But the signatories to the letter, which also include the IKEA pension fund and the Unilever pension fund, described these new elements as “minor improvements” in a place where “urgently needed substantial changes” are needed.