Falling oil and gas prices have short-circuited rollouts of renewable energy and alternative vehicle use, setting back progress toward reaching climate goals, the world’s top energy body said Monday.
In a new report, the International Energy Agency warns much more investment will be needed in technologies like the one Tesla unveiled Friday because current rates of financing are not enough to allow by less than the 2° Celsius.
Many analysts had been hopeful that renewable investment could withstand the price drop brought about by America’s shale oil and gas boom.
“Even with the price of oil being lower, cheaper materials have made solar still far more practical,” Jeff Osborne, an analyst with financial services company Cowen Group, told CNBC in December.
But the IEA says it’s not happening.
“It is troubling that advances in those areas that were showing strong promise – such as electric vehicles and all but solar photovoltaics (PV) in renewable power technologies – are no longer on track to meet [2° Celsius] targets,” the group said.
“While the recent drop in fossil fuel prices changes the short-term economic outlook of energy markets, using it to justify a delay in energy system transformation would be misguided in the long term. Short-term economic gains and delaying investment in clean energy technologies will be outweighed by longer-term costs.”
They outline which countries are making progress the most progress toward decarbonizing their energy systems. The largest fossil fuel producers, like the U.S. and Russia, have shown almost none.