Paris Agreement's 1.5-degree target has become extremely challenging to achieve: GenZero

Meeting the Paris Agreement's target of keeping the global temperature increase within 1.5 degrees Celsius for this century has become extremely challenging, said Frederick Teo, CEO of GenZero, on Oct. 16 at the launch event of a report titled Asia Pacific's Energy Transition Outlook.

GenZero is the decarbonization investment platform of Singapore's state investment company Temasek. Teo highlighted that meeting this target is particularly challenging due to the lack of near-term signals for catalyzing sufficient capital toward frontier technologies essential for energy transition.

Teo said such inability to catalyze capital must be addressed in the upcoming UN Climate Change Conference, or COP29, in Baku, Azerbaijan, which is widely known as a finance COP. Policymakers should come up with incentives and create more debt financing opportunities for new decarbonization technologies, he emphasized.

"If governments, for example, through proactive regulation to mandate the use of particular new solutions, or themselves are consumers of some of these new solutions, then that can give private investors and companies far greater confidence in investing ahead of time into some of these new solutions, where maybe the pure economic side of it wouldn't suggest," Teo explained.

The report, jointly published by GenZero and BloombergNEF, developed a net-zero scenario, assuming that all essential decarbonization technologies will scale up at an optimistic pace, from lower-hanging fruits such as solar PV and electric vehicles (EVs), to higher-hanging fruits like technology-based carbon capture and hydrogen. As such, net-zero emissions can be achieved globally by 2050.

Realizing this scenario requires Asia-Pacific countries to increase solar and wind generation capacities by about 10 times over 2023-2050. The battery storage capacity and power grid transmission length also need to scale up in a timely manner to accommodate the rapidly growing renewable capacities.

By 2050, the demand for hydrogen and sustainable aviation fuel must also increase significantly to 5.3 times and 1,221.9 times of the 2023 levels, respectively. In comparison, the baseline or most likely scenario forecasted that hydrogen demand would only increase to 1.8 times and SAF demand would only increase to 66.7 times of the 2023 levels.

To make the net-zero target on track, the report also called for a complete phase-out of unabated coal-fired power plants, adding that the carbon capture and storage capacity need to increase to 5.4 gigatons by 2050.

In the near term, the Asia-Pacific region will need annual investment in these technologies to triple to $2.3 trillion over 2024-2030, the report showed.

However, even if the ambitious net-zero scenario can be achieved, it will only manage to keep the global temperature increase within 1.75 degrees Celsius, the report revealed.

TABLE 1: Key forecasts in the net-zero scenarios

* Note: Asia-Pacific countries need to increase solar capacity to 11.8 times of the 2023 level