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Australian politicians and companies are being urged to abandon plans for new coal power, gas and oil investments after a major report by the world’s leading energy agency found fossil fuel expansion must end now if the planet is to address the climate crisis.
The International Energy Agency (IEA) found a “narrow and extremely challenging” pathway to net-zero greenhouse gas emissions by 2050 – a target set by more than 100 countries, and which the Morrison government says it would “preferably” like to achieve – would require advanced economies such as Australia to have a zero-emissions electricity grid by 2035.
It suggested wealthy countries should phase out coal-fired power plants by the end of the decade, the sale of new petrol and diesel cars should be banned by 2035 and global investment in clean energy should more than double to US$5tn (A$6.4tn) a year by 2030.
Its executive director, Fatih Birol said the transition to a clean future would be a net benefit to the economy, not an economic burden as regularly framed in political debate.
The report, titled Net Zero by 2050: A Roadmap for the Global Energy Sector, comes as the prime minister, Scott Morrison, backs a “gas-fired recovery” from the coronavirus pandemic, and federal and state Coalition and Labor politicians continue to back the expansion of coal mines and gas fields.
The Morrison government announced on Tuesday night it would spend $600m on a new gas-fired power plant in New South Wales despite the head of the Energy Security Board, Kerry Schott, warning it made little commercial sense.
Erwin Jackson, the director of policy with the Investor Group on Climate Change, said it was the IEA’s first document that aligned with the goals of the Paris agreement signed in 2015.
He said it showed that improving energy systems, accelerating existing technologies and lifting research and development could rapidly decarbonise the energy system, boost economies and “create good jobs”.
“[It] puts a nail in the coffin of the claim that companies and governments should be continuing to expand the fossil fuel industry,” Jackson said. “Companies and governments need to focus much more on winding down legacy fossil fuel assets and ensuring support for communities heavily exposed to the … irreversible transition to zero emissions.”
The report is particularly noteworthy because previous IEA analyses have been cited by the gas industry to claim new gas developments were consistent with the goals of the Paris agreement.
Climate-focused shareholder activists said it strengthened their case that ASX-listed companies must drop all new fossil fuel projects.
Dan Gocher, from the Australasian Centre for Corporate Responsibility, said it had “enormous implications” for companies involved in oil and gas production such as BHP, Origin, Santos and Woodside, power plant owners such as AGL and Origin, and fuel refiners Ampol and VIVA Energy.
“Those oil and gas projects that have yet to be sanctioned, including Woodside and BHP’s Scarborough project, Santos’ Narrabri project and Origin’s Beetaloo project, are simply not consistent with a net-zero-by-2050 pathway,” he said.
A spokesperson for Woodside said the IEA report was “a valuable insight into how the world could accelerate its energy transition to net zero by 2050”, but the pathway it laid out was the “most ambitious end” of plans that could align with the Paris agreement.
“Woodside is working with its customers, all of whom are in countries that have committed to net zero, to ensure we can supply them with the energy they are seeking in order to achieve their decarbonisation pathways.”
Bruce Robertson, a gas analyst with the Institute for Energy Economics and Financial Analysis, said it was noteworthy that the IEA report was reviewed by major oil and gas companies, including Shell, ENI and BP. “So it is certainly not overly biased against fossil fuels,” he said.
Robertson said it suggested the trade in global liquefied natural gas would fall by 60% between 2020 and 2050.
Gocher said: “The IEA report makes a mockery of the Australian government’s so-called gas-fired recovery, as well as its recently announced subsidies for fuel refineries, and its do-nothing electric vehicle policy.”
A spokesperson for the emissions reduction minister, Angus Taylor, did not directly address the IEA’s call on fossil fuels, but said Birol had been correct to point out there had been a growing gap between “rhetoric and what’s happening in the real world” on climate.
“Australia’s track record is one of delivery and meeting and beating our commitments,” the spokesperson said. “Many countries with very ambitious targets do not have the same record of delivery.”
A recent analysis found Australia was on track to have the most carbon-intensive economy of any major developed country in 2030 after other developed nations significantly increased their commitments to cut emissions this decade.
Labor did not respond to a question about the IEA report before publication.
The Greens leader, Adam Bandt, said the report was a “a code red alarm call” to Liberal and Labor to phase out coal by 2030.
“In balance of power after the next election, the Greens will kick the Liberals out and rely on this report to push Labor to phase out coal, oil and gas,” he said.
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