Paris Agreement Emphasizes Shift Away From Oil

Dec 14, 2015 | 21:03 GMT

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Paris Agreement Emphasizes Shift Away From Oil

For almost two weeks, representatives from nearly 200 nations met in Paris to hammer out the language of a new global approach to climate change policies. On Dec. 12, the parties finally approved the Paris agreement, which aims to limit the extent of climate change and hasten the transition beyond oil in the coming decades.

The shift away from oil is already well underway, and the Paris agreement is just one part of a much larger transition for the energy sector. Throughout history, humans have gradually adopted new resources alongside the development and dispersion of new technologies. Just as mankind's primary energy source has changed over the centuries, first from wood to coal and then from coal to oil, new resources are already on the rise to take oil's place. Not only has natural gas become a prevalent source of power, but several new competitors have also emerged on the energy scene, cutting into oil's marketplace predominance.

According to the International Energy Agency, nearly half the new additions to global energy capacity in 2014 came from renewables. Likewise, efficiency technologies, or those that enable populations to do more with less, are having a growing effect on the energy marketplace. By reducing the amount of energy needed to perform tasks, more energy-efficient technologies will make climate targets easier to meet without sacrificing as much economic growth.

Regardless of which resource rises to the top, oil will not disappear entirely, just as coal did not vanish before it. Its importance will wane, however, as will the status of those that produce it, at least to some degree. And so, while policy changes at the national or international level could accelerate the transition already underway, the world is headed away from oil. Technological developments driven by concerns about economics, energy security and the environment are already taking place. However, the developing world, which will be responsible for most of the growth in energy consumption that takes place in the coming decades, has not yet caught up. Thus, the pace of the transition will depend on how quickly new technologies reach the world's developing nations.