Quick Bites | Decarbonising the economy, it’s complicated!

The developed world is committing to decarbonising the energy supply. Despite this commitment and the urgency, as noted previously, it will probably take 2 or 3 decades.

There are two processes required to decarbonise the world’s energy systems. Firstly, generating more power from renewable resources like solar, hydro, and wind rather than oil, coal, and gas (the supply – where we get energy from). Second, is the electrification of demand (what we need the energy for).

Electric vehicles are a great example of this second point. Instead of burning fossil fuel in the vehicle, an electric motor uses energy stored in a battery, but generated elsewhere. Some of that energy may currently come from coal or natural gas, but in time it might mostly come from solar and wind.

Transport is just one of the sectors that needs to be electrified. The chart below shows how energy is consumed. The brown portions (i.e. most of it) are the parts of the economy that use energy by burning fossil fuels directly. To decarbonise energy consumption, all of that needs to be electrified, or the fuels need to be replaced with cleaner alternatives.

Source: JP Morgan, Simply Wall Street

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