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International Energy Agency warned that volatility in the energy markets is here to stay, and in light of rising energy prices worldwide to record levels with the occurrence of energy crisis in Europe and Asia.
The Paris-based agency said, in its annual report, that the world is not now investing in future energy consumption, which would make the transition to net zero emissions "unstable".
"There is an imminent risk of further disruptions to global energy markets," IEA Executive Director Fatih Birol said in a statement. “We are not investing enough to meet future energy needs, and uncertainties are setting the stage for a volatile period ahead.”
The report noted that for the first time in its forecast, oil demand is seen declining in each scenario, but the pace varies widely.
This in turn creates challenges for energy producers. On clean energy, the report said that in order to reach net zero emissions by 2050, spending on clean energy must reach $4 trillion annually by the end of this decade.
He added that the amount of investment required creates "tremendous economic opportunities" for clean energy technologies including wind turbines, solar panels, lithium-ion batteries, electrolyzers and fuel cells.
The International Energy Agency has estimated that the market for these green technologies will reach $1 trillion annually by 2050, which is equivalent to the current size of the oil market.
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