A respected think tank called Carbon Tracker has moved up the date when global demand for fossil fuels will peak, which is good news for the environment but may spell trouble for some.
In a new report, the London-based analysts predict that fossil fuel demand will level off and begin to decline between 2020 and 2027, but most likely in 2023. Most prognosticators had put that date in the 2030s, or even 2040.
But Carbon Tracker says the rapid growth of solar and wind energy, advancements in battery storage technology and pressure to ward off climate change will combine to bring that date forward.
“Fossil fuel demand has been growing for 200 years, but is about to enter structural decline,” said Kingsmill Bond, who wrote the report. “Entire sectors will struggle to make this transition.”
That’s probably not good for countries like Russia, Saudi Arabia and Venezuela, which depend on coal and oil income. It presents challenges for oil companies, which have trillions of dollars in assets that may not be needed anymore. And, the report said, it means that investors need to adapt their portfolios for the new situation.
Worldwide coal use, by the way, already peaked in 2014.
Are those good tradeoffs for cleaner air and a healthier planet? At Echo Environmental, we think so. Plus, the great energy transition will probably leave a lot of old equipment needing to be recycled. We’ll be ready.