Slowly but Surely, a Farewell to Fossil Fuels

IMF Blog, January 18, 2018

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"This has never happened before. Never." — three years of stagnating carbon dioxide emissions coupled with relatively healthy global economic growth.
"Eighty percent of the world’s energy consumption is based on fossil fuels," which "account for most of the greenhouse gases that are warming the planet."
Declines in emissions alongside growth were driven by:
- the declining energy intensity of the Chinese economy,
- "rapid, large-scale investments in renewable energy—especially in solar power," and
- "a large-scale shift from use of coal to natural gas."
Structural shifts from coal to gas are "ongoing in the United States, and to a lesser degree also in China," and "it has an impact on reducing carbon emissions."

The overwhelming majority of clean energy investment is in the electricity sector; therefore, "there must be a persistent push on renewable and low-carbon energy sources into electricity."
"There are technological solutions, but countries have to rethink their electricity regulations in a quite comprehensive fashion."
Limits of current technology are acknowledged: "For example, do not expect to see an electric aircraft anytime soon." Continued innovation is required to develop additional technological solutions that will replace fossil fuels.

Large-scale shifts in economies create political challenges and job losses are a central concern.
On technology and employment, Laszlo Varro observes: "In the past 12 months in the U.S., the retail industry lost more jobs because of Amazon than the coal industry’s job losses in the last five years combined."
Varro suggests that shifts in energy sources are not necessarily the largest driver of employment change relative to other technological and market forces.

A podcast features International Energy Agency Chief Economist Laszlo Varro discussing leaving fossil fuels in the past.
Other pieces referenced: "End of the Oil Age: Not Whether But When"; "Chart of the Week: Electric Takeover in Transportation"; "Countries Are Signing Up for Sizeable Carbon Prices."

Source: Slowly but Surely, a Farewell to Fossil Fuels (The Editors), January 18, 2018; updated January 19, 2018.