With world population growth and constant urbanisation, world energy consumption and greenhouse gas emissions should increase twofold over the next 40 years, as was the case between the beginning of the 1970s and 2013. This forecast by the International Energy Agency (IEA) and its consequences on climate change and the environment require that we reconsider the way we produce and consume energy.
Two thirds of emissions result from energy production and use; this sector is therefore most concerned by global efforts to reduce reliance on fossil fuels (oil, coal and natural gas). For instance, oil accounts for 40% of total energy consumption1.
With limited global reserves of fossil fuels, one of tomorrow’s major challenges will be to switch to more sustainable sources of energy and to use renewable energy more widely. There are already signs of progress. The increase of CO2 emissions generated by the production of energy slowed in 2015 due to greater energy efficiency and to the development of renewable energies. The IEA estimates that the share of renewable energy in the total primary consumption of energy will increase from 19% in 2014 to 29% in 2040.
Awareness is rising with the Paris Agreement on climate change coming into force in November 2016. 190 countries have made a commitment to reduce their CO2 emissions to limit the increase of global warming to 2 degrees compared with the pre-industrial levels. The private sector also confirmed its commitment to fight against climate change.
This issue was one of the main topics discussed during the World Economic Forum in Davos in 2017. In spite of Donald Trump’s scepticism, this announcement represents an unprecedented international support in the fight against climate change.
To reach the COP21’s goal, the IEA estimates that the cumulated investments required represent 8,800 billion dollars in low carbon emission technologies (particularly in the energy sector) and 23 billion dollars in energy efficiency by 2040. Many sectors are concerned: from the growth of activities to curb climate change such as renewable energy generation (onshore wind farms, solar photovoltaic systems), to waste and pollution management. Companies working on low CO2 emission and energy efficient solutions such as electric transport, energy-efficient buildings, household appliances, lighting and equipment should also benefit from this transition towards a low carbon economy. This long-term trend will therefore offer many investment opportunities.