Many believe that climate technology is facing a downturn, with both political and financial backing appearing to wane—a striking contrast to the ongoing rise in global temperatures.
However, a recent publication from the International Energy Agency argues that there has never been a more opportune moment to fully embrace climate technology. Comparing this with the IEA’s outlook from ten years ago, it’s evident that global perspectives on the future have shifted dramatically within a single generation.
Back in 2014, the International Energy Agency projected that, without coordinated global action to limit carbon emissions, pollution would keep climbing steadily. Even their most hopeful scenario at the time only showed a slower rate of increase, simply extending the existing trend through 2050.
Jump to the present, and what the IEA now considers the worst-case scenario matches what was once their most optimistic outlook. Ten years ago, the world was on track to emit 46 billion metric tons of CO2 annually by 2040 if nothing changed. If nations met their commitments, the best possible outcome was 38 billion metric tons per year by 2040.
IEA projections have undergone major revisions over the past ten years.
Image Credits:International Energy Agency/TechCrunch under a CC BY 4.0 (opens in a new window) license.
Now, if countries continue on their current path, the IEA anticipates emissions will stabilize at 38 billion metric tons per year. Should nations fulfill their promises, emissions could drop to around 33 billion metric tons annually by 2040. While this is still far from achieving net zero by 2050, it marks a notable transformation in a relatively short period.
Given that the IEA’s earlier outlooks were more pessimistic than reality, what should we make of today’s predictions?
Your interpretation of that depends on how you read the trends.
When looking ahead, do you focus solely on current figures, or do you also consider how our expectations have evolved? (Or, to put it another way, do you approach the problem with algebraic or calculus thinking?)
To frame it differently: will the world achieve net zero by 2050? Current projections indicate we’re likely to fall short. Yet, if you examine how forecasts have shifted over the last decade, you might see evidence that the pace of change is accelerating, suggesting we could be at a turning point where global emissions start to decline.
There are some recent examples that hint we may indeed be at such a pivotal moment.
For instance, Germany has seen record-breaking electric vehicle sales even after government incentives were withdrawn in 2023. In emerging economies, renewable energy is transforming markets that were once considered slow to adopt clean technology. Meanwhile, China, which had previously resisted setting emission reduction targets, has now pledged that its emissions will peak before 2030.
Over the last ten years, the global outlook on carbon emissions has shifted dramatically. This progress has been driven by a variety of innovations, such as affordable solar and wind energy combined with low-cost batteries.
Looking ahead, advancements in geothermal power and smart grid software could fuel the next wave of optimism. Investors who share this view may see significant potential gains.
Although many climate tech investors might feel discouraged right now, there are still promising developments amid the challenges.
