Investing in the Energy Transition:
from battery metals to electric vehicles
The Paris Agreement of 2015, with its ground-breaking commitment to limit GHG emissions to levels consistent with global warming of between 2 °C and 1.5 °C by mid-century, is a useful starting point for thinking about the features of the energy transition. With an increasing population and greater energy needs, the challenge to reduce emissions will be enormous.
So far, consumption of renewable energy has not increased fast enough, and the electrification of power is just getting started. It will take decades to shift away from fossil fuels to lower carbon energy sources and implies efforts on many fronts. A fair chance of achieving net zero goals requires continued policy and legislative changes, shifts in investor and consumer preferences and, importantly, technological advances across industries.
Multiple decarbonisation solutions are required to deliver net zero by 2050
The following key themes are driving the energy transition towards the Paris Agreement goal of a 1.5 degree future.
According to Wood Mackenzie’s accelerated energy transition scenario (AET-1.5), electrification and renewables underpin the reduction in CO2 emissions . The following graph shows the difference in CO2 emissions from Wood Mackenzie’s base case vs 1.5 degree aligned scenario:
The difference between the base case and 1.5 degree scenario and what is needed to get there
The success of the energy transition will depend on an ‘all of the above’ approach and require a range of technologies and solutions to work together on the path to net-zero.
Electric vehicles, battery technology, solar and wind generation, renewable fuels, and carbon capture are just some of the enablers of this energy transition.
Strategies that combine WisdomTree’s industry leading commodities and thematic ETP expertise
At WisdomTree, we offer a range of thematic strategies, from equities to commodities, that provide comprehensive exposure and contribute to the energy transition megatrend.
- Battery solutions
- Battery and energy transition metals
- Recycling and waste-to-energy
- Carbon allowances
- Automotive innovation
- Renewable energy