TOKYO -- The spread of COVID-19 has changed our lives.
More people work from home. What used to require an air trip to London or New York now is done using online conferencing. Even after the coronavirus crisis is over, we will not return to the way we worked before it.
Energy demand for transportation may not increase as before. Furthermore, the shift to a decarbonized society is not only forcing change on the energy supply-demand structure, but on international politics and business as well. Who will lead the energy revolution? The next five years have much to do with it.
Key economies across the world have geared up to decarbonize. In addition to the European Union and Japan, U.S. President-elect Joe Biden has pledged to ensure greenhouse gas emissions will reach net zero no later than 2050. China, the biggest emitter of greenhouse gases, has set a target of reducing emissions to zero by 2060.
Realizing these goals require drastic technological innovation and a shift in economic and social structures. According to the International Energy Agency, the total unit sales of electric vehicles will have to grow 20-fold and the supply of hydrogen 100-fold by the end of 2030.
The required shift to a power system centered on renewable energy is estimated to require investment totaling $1.6 trillion, or 166 trillion yen, four times the current levels, over a period until 2030.
In the decarbonized society, countries and businesses that control technologies enabling such a shift will have the competitive edge, not the amount of natural resources they control, such as oil and coal. If the 20th century was the age of oil, it is China that will challenge the United States which led the energy order in that age.
China is set to hold a dominant share in the global market for technologies and products that support climate change-combating measures -- such as solar panels, wind turbines, electric vehicles and batteries used in them -- because of the country's programs to promote the introduction of renewable energy and boost related industries. Furthermore, major deposits of rare earth minerals, which are essential to manufacture magnets for electric vehicle motors and wind turbines, are located in China.
Energy is now the front line in U.S.-China friction as they compete for technological dominance. How will countries stably secure core technologies and materials essential for achieving a decarbonized society? Resource security driven by the energy shift will become an important challenge for efforts to maintain growth.