At last, we confront the heart of the matter.

For three decades, international climate negotiations played out as a discussion of targets, timetables and temperatures, but with surprisingly little discussion of the primary cause of the climate crisis.  

Early on, the subject did come up. In the 1990s, the countries of the world agreed to a treaty aimed at limiting the damage from global warming. At the first formal negotiating session, in Berlin in 1995, a politician named John Gummer stood up. “In dealing with this complex and difficult issue, we must not be trapped into making a false choice between our children’s interest and our own shorter term interests,” declared Mr Gummer, representing Britain as its secretary of state for the environment. “Climate change and the unsustainable use of fossil fuels threaten us all — economically as well as environmentally.”¹

His words were quickly forgotten.² No explicit commitments to phase out fossil fuels were made that April in Berlin, nor in any of the 27 subsequent negotiating sessions. After all, modernity was built on fossil fuels, and for decades it was unclear how to move away from them. The temperature goals that countries adopted over the years, especially those agreed to in Paris in 2015, certainly implied a radical reduction in the use of fossil fuels, but that rarely became explicit.

Then, in their 28th year of negotiating, climate delegates finally crossed the Rubicon. Meeting in the United Arab Emirates, an oil-producing country, late last year, the world’s climate negotiators finally agreed to state the obvious. Under heavy pressure from environmental activists and forward-looking countries, they declared at the climate talks in Dubai that the nations of the world needed to commit themselves to begin “transitioning away from fossil fuels in energy systems” in order to limit the damage from climate change.³ It was as weak as any agreement mentioning fossil fuels could have been: language calling for a ‘phase-out’ of the fuels was rejected, and no detail about how to achieve this momentous change in the world economy was included in the text. 

But still: transitioning away from fossil fuels is now a formal goal of public policy, written into international law.

What will it take to achieve that goal?

This year, our report looks forward to try to answer that question. We will examine the economy sector by sector, reporting on where the energy transition stands in each segment of the economy.

On many levels, the task of phasing out fossil fuels seems as daunting as it ever has. Production of the three main fuels, coal, oil and gas, is at or near record highs. Emissions from the combustion of those fuels hit yet another record in 2023.⁴ Despite occasional dips during economic downturns, global emissions of greenhouse gases have yet to begin the long-term structural decline that would suggest we stand a chance of meeting the targets that countries have set for themselves.

At the Dubai meeting, the world’s climate delegates may have failed to include any meaningful phase-out plans in their main agreement, but numerous countries agreed to side deals setting new goals relating to the energy transition, with some of that language rolled into the final communiqué. Those deals give us new ways to measure progress.

In the most important deal, nearly 200 countries — including almost all the rich ones — agreed to triple the world’s installed base of renewable electricity by 2030, a mere six years from now. This is not a pipe dream: renewable energy is growing so fast that tripling it by 2030 looks achievable, although it will certainly take new national policies.⁵ And meeting the goal would likely mean driving huge volumes of coal and gas out of the electricity system, going a long way to clean up the world’s electric grids.

The reason it is so critical is that those grids are the key to the future. As electric cars displace petrol cars, emissions will fall — but those cars need clean power, of course. As electric heat pumps replace gas furnaces and boilers, emissions will fall — but again, clean power is required. Steel and chemicals can be produced with hydrogen made from clean electricity, displacing fossil fuels and driving emissions down further. This list goes on. 

This basic strategy is called ‘electrify everything,’ and it requires running all those newly electrified devices from a clean power grid. The strategy implies that demand for electricity has to rise even as fuel combustion falls. It is starting to work, most visibly in the deployment of electric cars and heat pumps in countries where a substantial clean-up of the power grid has already occurred. Forecasts of power demand are up in many countries for the first time in a decade,⁶ but on the whole, countries are not going fast enough. We will analyse the required pace of change in more detail below, but the critical point is that we now have a way to measure whether countries are on track to create the clean grids that will be central to the transition. 

Year by year, we can ask: is their installation of renewable power accelerating to meet the global goal of tripling by 2030?

China and India initially resisted the tripling pledge. They were deterred by another part of the deal, a commitment by each signatory country to double the rate at which the energy efficiency of its economy is improving, as well as by language about the need to end new investment in coal-burning power plants. Doubling the rate of efficiency improvement will be no small task in any country, but it may be particularly difficult in those still dependent on energy-hungry heavy industry. Both China and India did agree to the final language of the overall deal, including the ‘transitioning away’ language. China is almost certainly on track for a tripling of renewable energy by 2030, and the task is not out of the question for India, either.

The situation is far more tenuous in other developing countries, even though many of them did sign the pledge. Many poorer countries have yet to take part in any major way in the renewable energy boom, with the exception of some parts of Africa where portable solar gear is providing lights and phone charging to people with no other access to electricity. Large solar and wind farms are difficult to finance in these countries, with money either unavailable or available only at interest rates that are double or triple those in the richer countries. 

As we will detail below, this financing shortage has emerged as one of the most critical problems of the energy transition, and the world has yet to offer the poor countries any broad solution. The rich countries did agree in Dubai to create a new fund to help poor countries adapt to the climate crisis, but have yet to settle on a target amount. This will be a major topic at the upcoming climate conference this autumn in Baku, Azerbaijan.

A large majority of the world’s countries have formally committed themselves to reaching net-zero emissions by 2050 or 2060, meaning any greenhouse emissions remaining by then are supposed to be small enough that they can be balanced with removals from the atmosphere. An organisation called Net Zero Tracker puts the number of countries committed to net zero at 147, out of 197 countries that the group analyses.

Unfortunately, in most cases, those supposed commitments are not accompanied by any serious plans to meet the net-zero goal. In effect, the political leaders of these countries have made promises but little effort to fulfil them, burdening their mid-century successors — children today, if they have even been born yet — with the task of redeeming those pledges.

Only a handful of countries have fleshed out their plans with serious commitments to phase out fossil fuels. In doing so, they generally consider coal, oil and gas separately, and they may make commitments to phase out exploration for, production of or use of those fuels. According to the database maintained by Net Zero Tracker, only 11 countries that have made net-zero commitments have ticked one of those three boxes in relation to a single fossil fuel, almost all of them European countries.

For most countries of the world, the numbers imply a profound disconnect between their stated commitments to net-zero emissions by 2050 and their actual plans with regard to fossil fuels.

We thus see a new frontier dawning in global climate politics. The imperative will be to persuade countries to adopt phase-out targets for all fossil fuels, to write those targets into law and to start crafting the regulations and industrial policies that will allow the targets to be met. This work needs to begin immediately, as the countries of the world are scheduled to present new national plans in 2025, expanding their efforts to tackle the climate crisis. We think no national plan should be regarded as serious unless it grapples with the need to exit from fossil fuels.

In short, we need a worldwide wave of new laws setting legally binding end dates for all activities related to fossil fuels. Even if we pass such laws, it will be difficult to make them stick, but they would send a critical signal in the near term to corporations and capital markets that governments are finally getting serious about the transition.

We reported a year ago that the climate crisis had finally moved to the centre of global politics, driven not just by extreme weather disasters but by the war in Ukraine. The outbreak of that war highlighted the hazards of depending on authoritarian states like Russia, as well as the unpredictable fluctuations in the costs of imported fossil fuels. Europe has done a remarkable job of weaning itself off Russian gas, far better than anyone expected it could when the war started. Fears that Europe would burn a huge amount of coal over that winter did not come to pass, partly thanks to unseasonably warm weather.

On renewable energy, European governments have a history of making promises they do not deliver, but this time, with Russian guns at their backs, they are delivering. They have cut red tape to get the installation of renewable energy moving. The government of Germany, Europe’s largest economy, once required 36,000 pages of printed documentation for a single small wind farm; it has now slashed such onerous requirements. The pace of wind-power installations in Germany has doubled in two years, and the government is targeting another three-fold increase by 2025.⁷ Other countries are overcoming short-term disruptions in the supply chains for renewable energy. Money from America’s big new climate law, known as the Inflation Reduction Act, is starting to flow in the billions of dollars.⁸

Yet, despite these successes, the politics of climate change are only growing more difficult. 

As climate policy starts to bite around the world, we see a rising backlash. A good deal of it is being conjured and financed by the fossil-fuel companies, but certainly not all. Resistance to climate policy is one strand of the right-wing populism that is making waves across the democratic world.

In both the United States and Europe, public opposition to wind and solar farms is making it more difficult to site them. Only a few years ago, the northeastern United States looked to be set for a huge boom in offshore wind production, but rising opposition and rising costs have slowed the build-out.⁹ Farmers in multiple countries are rebelling against modest policies needed to cut the emissions from agriculture. The German government, led by a coalition that includes the Green Party, has been forced to dial back some of its more ambitious climate goals. On its way to losing an election this past summer, the Conservative-led government of the United Kingdom retreated from some of that country’s main climate goals. How ambitious the new Labour-led government will be in restoring British ambition is still unclear.

Electric cars continue to grow in importance and are on their way to taking over the world’s largest car market, in China; electric models are now half of new-car sales there.¹⁰ Yet in some markets the rate of growth has slowed; the torrid pace of the last few years could not have continued indefinitely.¹¹ Many countries have failed to build enough public charging stations. The biggest obstacle has been the price of electric cars compared to petrol cars, but a wave of affordable new models is coming to market. Strong public policies will be required, over the course of at least two decades, to complete the transition to electric vehicles, along with firm commitments and large investments from the legacy car-makers.

In 2021, when the big global climate meeting was held in Glasgow, the British government managed to coax forth a wave of apparent ambition. Coalitions of countries, bankers and insurers formed, all promising greater climate action. Three years later, some of those coalitions are falling apart as leaders realise what it would take to meet their own promises. This unfortunate back-pedalling can be taken as one more sign of how hard the climate transition is going to be.

The backlash against climate policy represents yet another political headwind to be overcome. If we are to counter it and keep moving forward, we must conjure a more demanding politics of climate change, one that insists the tough decisions need to be made now, not later.

The 30th anniversary of the global climate negotiations is little more than a year away. The history of those decades can be read as one grand exercise in climate hypocrisy, of talking endlessly about the problem without taking the steps necessary to solve it.

If we ever had time for that, we have run out.