• Growing demand for energy services for a range of uses, including data centres and artificial intelligence;
• Serious concerns over the resilience of energy systems against a range of threats, from cyberattacks to droughts, storms, floods, and wildfires;
• The “acute vulnerability” of critical mineral supplies;
• The dawn of what the agency has previously dubbed the Age of Electricity, with electrification rising by about 40% by 2035 in the CPS and STEPS scenarios and 50% in the NZE;
• The increasing role of renewable energy;
• A “shift in the centre of gravity of the energy system” toward India and other emerging economies beyond China;
• A comeback for nuclear energy.
The IEA is postponing release of a fourth model—the Announced Pledges Scenario, which assumes that governments will keep their promises under the Paris climate agreement, in full and on time. Countries’ emission reduction commitments for 2035 have only recently been filed with the United Nations climate secretariat, and so far only 60 countries representing 63% of global emissions have bothered to submit their paperwork.
’Zombie Scenario’ vs. a 1.5°C Future
The mixed result produced a critical response from the climate and energy analysts who follow the IEA’s work.
“Trump has pressured the IEA to resurrect a zombie scenario from the past—the Current Policies Scenario, in which the current momentum of the energy transition evaporates,” said Climate Analytics CEO Bill Hare. “This is an unrealistic assumption when we look at the progress renewables are making around the world. And even if the CPS were realized, it only shows is that Trump’s vision is a disaster for the economy, household bills, and the climate.”
The IEA’s Net Zero Scenario “shows that, although overshoot is now inevitable due to insufficient action to date, it is still possible to bring temperatures back below 1.5°C before the end of this century,” Hare added.
“This year’s World Energy Outlook sets out a stark and simple choice: we can protect people and communities by aiming for 1.5ºC, settle for a disastrous business-as-usual 2.5ºC, or choose to backslide into a nightmare future of much higher warming,” said Oil Change’s Tong. “Holding warming to 1.5ºC means no further delay, no new fossil fuels, and public planning and funding to guarantee a just energy transition.”
The report “shows Donald Trump’s dystopian future, bringing back the old, fossil-fuel intense, high pollution Current Policies Scenario, charting an unrealistic pathway where governments drag their energy policies backwards and rates of renewable energy adoption stall, leading to high energy prices and unmitigated climate disaster,” Tong added.
“Crucially though, the IEA has also confirmed that no single country can stop the energy transition, with oil and coal demand to peak by 2030 in its business-as-usual scenario, with gas to follow by 2035. And, again, it has reconfirmed that there is no investment in new oil and gas fields for 1.5ºC.”
“The International Energy Agency has made a regrettable choice, published against a backdrop of the climate talks in Brazil, to no longer provide a credible scenario for keeping warming as close as possible to 1.5°C,” said Reclaim Finance analyst Christophe Etienne. “By avoiding the problem of fossil fuel expansion and offering a new scenario that leads us toward 3°C of warming, it is failing to provide the necessary economic, political, and financial guidance on managing the energy transition.”
But even though “some may wish to turn back the clock,” said European Climate Foundation CEO Laurence Tubiana, one of the architects of the Paris accord, “the direction of the energy system is clear. More than $10 trillion has been invested in clean energy since 2014, and oil demand is on track to peak before 2030 in the IEA’s main scenario. The electricity age is well under way. The choice now is between accelerating or paying later to undo the damage: every tonne of carbon we avoid today saves far greater costs tomorrow.”
“There’s a revolution happening right now and it’s in renewables and electrification. The evidence on the ground is overwhelming—EV sales are taking off in many emerging countries, solar is permeating even through the Middle East,” and “grid batteries now mean solar is increasingly dispatchable,” said Ember chief analyst Dave Jones. “Scenarios based on current policies and legislation are behind the curve of technology change as the electrotech revolution gathers pace.”
Giving In to the Bully
The WEO has always presented multiple scenarios, and in years past, climate policy analysts have paid close attention to the order in which those scenarios are presented—since the most prominent in the series makes the headlines that can guide many billions of dollars’ worth of energy investments. Beginning in 2021, when political change in the United States shifted the composition of the IEA board, the agency became a data-driven champion for a faster, wider energy transition.
That momentum began to shift over the summer, when the Trump administration threatened to pull out of the IEA—taking 40% of the agency’s funding along with it—if it didn’t bring its independent forecasts in line with the administration’s “drill, baby, drill” agenda.
“We will do one of two things: we will reform the way the IEA operates or we will withdraw,” U.S. Energy Secretary Chris Wright told Bloomberg in July. “My strong preference is to reform it.”
That threat reflected “growing tensions between the Trump administration’s energy priorities and the IEA’s focus on clean energy transitions,” Forbes reported at the time. The criticism from Wright, an oilfield services CEO before he joined the Trump cabinet, “centres on the IEA’s reports and projections, which he and other critics of the agency argue are overly optimistic about renewable energy adoption and fail to adequately prioritize energy security.”
The overt pressure had intensified by mid-September, prompting Bloomberg energy columnist Javier Blas to report on the IEA’s plans to restore the outmoded Current Policy Scenario and project healthy demand for oil through 2050. By giving the CPS pride of place as the first scenario in the series, the WEO became a case of “good analysis, but terrible comms,” veteran IEA-watcher Greg Muttitt writes on LinkedIn.
“We knew the IEA had acceded to U.S. demands to resurrect its obsolete Current Policies Scenario (CPS), which tells a story of continued fossil fuel growth. The trouble is how prominent CPS is: it’s the first scenario presented,” Muttitt explains.
“For all IEA’s warnings that CPS is not ‘business as usual’, putting it first means that’s how people will read it. And the name doesn’t help. The CPS doesn’t describe a future based on current policies—that comes later, in the Stated Policies Scenario”(STEPS).”
But “you have to wade through a lengthy discussion of the CPS before you get to the real story: where existing policies are taking us, in STEPS, [is] “the prevailing direction of travel for the energy system”.
In the IEA’s own cautious framing, the report invites readers to choose their own adventure. “There is no single storyline about the future of energy, which is why the World Energy Outlook presents multiple scenarios, none of which is a forecast,” the IEA states.
But even so, “options to reduce emissions substantially are well understood and, in many cases, cost-effective,” the report adds. “A pathway that mitigates the most severe risks from climate change remains feasible and there is strong momentum behind key technologies.”
But some countries’ commitments to the Paris targets have “waned” over the last decade, and countries’ new climate commitments for 2035 “do little, in aggregate, to move the needle beyond the outcomes already projected in the STEPS.”
So while the net zero scenario is still within reach, “implementing these actions at scale would require an intensified international push to increase transition-related investment in emerging and developing economies, and much more practical efforts to ensure that these investments deliver tangible near-term social and economic benefits.”
Cover photo: By The Energy Mix
