Electrons, Not Emissions

For a decade, the politics of climate action have been built around an uncomfortable proposition: that cutting carbon emissions would cost households and businesses money now, in exchange for a benefit that was distant and difficult to feel. That proposition is quietly being abandoned — not because the ambition has faded, but because the economics have overtaken it. At COP31 in Antalya this November, co-presided by Turkiye and Australia, the headline target will not be a carbon number at all. It is an electrification target, the so-called '35 by 35' goal, aiming to lift electricity's share of global final energy demand from around 20 to 23 per cent today to 35 per cent by 2035, based on modelling from the International Energy Agency and the International Renewable Energy Agency.

This is a deliberate reframing rather than a lowering of ambition. Fatih Birol, head of the IEA, has made the point plainly: the world is already electrifying, driven as much by energy security and cost as by climate policy, accelerated by the price shocks of the current Gulf conflict and by surging demand from electric vehicles, air conditioning and artificial intelligence. Carbon reduction becomes a consequence of that shift rather than its stated purpose. It is worth being honest about what this leaves out. Fossil fuels account for roughly 70 per cent of global emissions and remain conspicuously absent from the new COP31 agenda — a point Greenpeace and other observers have already raised. Electrification is the tractable, investable half of the transition. The harder half — winding down fossil fuel production itself — has been set aside for another day.

Cost, Not Carbon, Is Moving the Money

The reframing at COP31 is a symptom of something that has already happened in capital markets. Global investment data shows the switch from an emissions argument to a cost argument is not rhetorical — it is where the money has been going for three years. According to the IEA's World Energy Investment series, clean energy investment — covering renewables, nuclear, grids, storage, low-emissions fuels, efficiency and electrification — has run at roughly double the level of fossil fuel investment every year since 2023, and the gap continues to widen.

This is not a subsidy-driven anomaly. Three quarters of the growth in clean energy spending over the past five years has come from net fossil fuel-importing economies — China, Europe and India among them — seeking to reduce import dependence and build industrial advantage, not simply to meet climate pledges. Solar photovoltaic investment alone is on track to exceed 500 billion US dollars in 2026, more than any other single energy technology and more than total global investment in oil supply. When the cheapest new generation asset also happens to be the cleanest, the emissions case stops being the reason to build it. It becomes a by-product of a decision that would have been made on cost grounds regardless.

Proof at the Household Level: Australia and the Gas Peg

Australia offers the clearest live demonstration of this cost mechanism translating into consumer outcomes. Battery storage capacity in the National Electricity Market has grown roughly twenty-five fold since 2020, and in the first quarter of 2026, batteries became the single most frequently price-setting technology in the market, displacing gas from the evening peak for the first time on record. Gas has historically set the wholesale price because it is the last, most expensive generator dispatched to meet peak demand. Batteries now charge on cheap midday solar and discharge directly into the hours gas used to own.

The effect on prices has been material rather than marginal. Wholesale prices across the National Electricity Market fell 12 per cent year on year in the first quarter of 2026, with month-on-month declines of 38 to 52 per cent across individual states by April. The Climate Council attributes a 30 per cent reduction in wholesale prices over the past summer directly to solar, wind and battery storage displacing gas generation. This is the first tangible proof, at national scale, that decarbonising the grid and lowering the cost of living can be the same policy rather than competing ones — and it is why the political framing around electrification is shifting from a climate obligation to a cost of living argument.

Two Adoption Curves, One Explanation

If cost rather than emissions is the operative driver, the clearest test is to look at where electrification is racing ahead and where it has stalled, and ask why. Electric vehicles and heat pumps are usually presented together as twin pillars of the same electrification story. The sales data suggests they are, in fact, a natural experiment — and the result supports the cost argument more precisely than a uniform growth story would.

Global electric car sales have compounded from 10.5 million units in 2022 to an estimated 23 million in 2026, growing every single year regardless of the removal of subsidies in markets such as the United States. The reason is straightforward: falling battery prices, Chinese manufacturing scale and a running cost advantage that is now visible to the buyer at the point of purchase in most major markets. Heat pumps carry an identical emissions case — arguably a stronger one in some climates — yet global sales fell in 2023, 2024 and again in 2025. The IEA attributes this to high interest rates and the size of the upfront purchase relative to a household budget, with the sharpest declines in Europe as natural gas prices retreated from their 2022 peak and removed the cost incentive to switch.

The comparison is instructive precisely because the emissions argument was constant across both technologies while the outcomes diverged completely. Where the cost equation favoured the consumer outright, adoption was relentless irrespective of policy support. Where it required absorbing a large upfront outlay before recovering it over years, adoption stalled even with an identical climate rationale on offer. This is the cleanest evidence available that emissions reduction is not what is moving the purchase decision. Cost is.

The Caveat That Matters: the Gap Between Promise and Delivery

None of this makes the transition automatic. The IEA's own baseline still has electricity's share of final energy rising only to around 24 per cent by 2030 — well short of the pace the COP31 target implies — and IRENA estimates that hitting the 35 per cent by 2035 goal requires roughly doubling annual grid investment globally, to around 1.2 trillion US dollars a year. Nor is the assumption that carbon emissions fall automatically as electrification proceeds an unconditional one. Where grid and storage buildout lags demand — as it has in parts of the United States where data centre developers facing connection delays have resorted to onsite gas generation — the marginal electron gets dirtier rather than cleaner. The heat pump story carries the same lesson from the demand side: cost barriers do not resolve themselves; they require financing structures, manufacturing scale and, in some cases, policy support to close.

This is the space in which the thesis becomes investable rather than merely descriptive. The direction of travel is no longer seriously contested — electrification is becoming the cheaper and faster route to both lower emissions and lower bills — and COP31's choice to make it the headline metric reflects that reality rather than lowering the bar. What remains genuinely open is where the capital is, and which grid, storage and generation infrastructure can be built so as to keep the marginal electron clean as demand accelerates.