A strong correlation exists between energy access and human prosperity. Nations with “very high human development” (a Human Development Index above 0.8) consume more than 20 MWh of primary energy per capita. Fortunately, we can do more with less energy: over the past three decades, the global energy intensity of GDP has decreased by 34%. Further improvements in energy efficiency are critical, while energy access in developing economies must expand.

Fossil fuels represent 80% of energy use and 70% to 75% of GHG emissions globally; coal alone produces over 25% of global emissions. Renewables must rise from 12% of energy supply in 2021 to 50% to 70% by 2050. Solar and wind generation capacity must increase tenfold, and global electric grids must expand by 2.5x—with similar investment levels in both areas. We must also abate emissions from remaining use of fossil fuels, including methane emissions.

Through 2030, proven technologies such as energy efficiency, electrification of end uses, solar photovoltaics, and wind are mainstays of the transition. In the 2030s, emerging technologies—including grid-scale batteries; new types of nuclear reactors; low-carbon hydrogen and carbon capture, utilization, and storage—will scale, given the right investment and effort. Meanwhile, significant investment in direct air capture is critical in this decade to lower its costs in the decades to come. Longer term, big bets such as fusion could be game changers.

We must swiftly phase out coal. However, most net zero scenarios call for oil and gas supply in 2030 equivalent to 50% to 80% of 2021 supply and 15% to 30% in 2050—particularly for fuel use in hard-to-abate sectors and as feedstock in petrochemicals. Current productive assets will not meet 2030 demand and beyond. We must create conditions that ensure selective investment in the development of the most affordable, least GHG-intensive oil and gas volumes.

Energy will shift from an extracted to a manufactured resource, with heavier upfront investment but lower operating costs. Energy storage and incentives for customers to shift consumption to off-peak periods will be essential with lower supply-side controllability. Today, electricity storage covers only one to two hours of average consumption in Europe and the US versus over 1,000 hours for oil and gas. And energy transportation costs will multiply, resulting in less global movement of energy.

Cyclicality, increasing volatility, and uncertainty in energy markets put the speed of the transition at risk. Large price swings will occur more frequently, especially in spot and balancing markets. Current market investment signals are insufficient to ensure the needed pace of change and system-level coordination. Uncertainty and risk premiums constrain new investments. But promising efforts to redesign markets are underway—for example, in the UK and the EU.

The transition requires massive new investment of some $37 trillion in energy and industrial infrastructure through 2030. Even if all $19 trillion in planned energy-sector investment is realized, an $18 trillion gap remains, $9.3 trillion of which involves end use, according to BCG analysis. Inflation, supply chain constraints, and higher costs of capital make closing that gap more challenging. Financing the energy transition will require collective action, including through ecosystems of public and private players.

At current trajectories, the US, Europe, China, and India will be responsible for about 60% of global emissions through 2050. These regions must lead on mitigation. Already a leader in low-carbon manufacturing, China can accelerate the transition by reducing its coal use. Notably, action in these four regions has positive ripple effects: as they scale low-carbon technologies, deployment costs for technologies in other markets will also decline.

New centers of low-cost, low-carbon energy will emerge. Industries in which energy accounts for a sizable share of overall costs—for example, ammonia production, data centers, aluminum, pulp and paper, and steel manufacturing—could be leading candidates to relocate to such centers. Without structural action, many current industrial centers could become uncompetitive and might need to repurpose. Already, high energy prices have put base chemical manufacturing, such as ammonia production, in Europe at a disadvantage.

Actions that make energy systems more sustainable tend to make them more independent, more secure, and—on average—more economically sound. Investing in a low-carbon energy supply can avoid many of the tradeoffs inherent in the energy trilemma (the challenge of ensuring energy sustainability, affordability, and security) and, ultimately, build public support for decarbonization. Because initial costs and benefits will be distributed unequally across society and across regions, ensuring a just transition is vital.