The agency published its annual World Energy Outlook on Tuesday (10 November), detailing what needs to be done to move to a sustainable energy future.
With a month to go before the UN climate conference in Copenhagen, the IEA hopes to add momentum to the negotiations that are now expected to produce a political framework agreement rather than a detailed, legally binding text (EurActiv 06/11/09).
Although the financial crisis is expected to reduce global energy use this year, the upward trend will soon resume if governments continue business as usual, the agency said. It predicted that energy demand will increase by 1.5% each year up to 2030.
The report says fossil fuels will remain the main energy source globally, as three quarters of new energy demand is expected to be met by these polluting sources. Over half of the increase will take place in China and India, reflecting a shift of energy politics towards Asia, the report outlined.
The IEA estimates that the world has enough energy resources to cover the projected demand increase well beyond 2030 but this would come at a high cost for the environment and energy security. "The continuation of current trends would have dire consequences for climate change," it said.
Profound transformation needed
Containing climate change is only possible with a "profound transformation of the energy sector," the agency argued. It said that halting global warming below 2°C as recommended by the UN's scientific body, the Intergovernmental Panel on Climate Change (IPCC), would require energy-related CO2 emissions to peak just before 2020 (EurActiv 08/10/09). In 2030, these emissions would need to be 34% below the business-as-usual scenario, it said.
The IEA proposes a portfolio of measures, including cap-and-trade systems, sectoral agreements for transport and industry, and national action.
Improved energy efficiency would bring the lion's share of CO2 cuts in 2030, according to the report. Deployment of renewables would account for another fifth, while using biofuels in the transport sector would bring cuts of about 3%. Finally, carbon capture and storage (CCS) technologies and nuclear could each slash emissions by 10%, it said.
The IEA sees a forerunner role for China, where national policies and measures that are already planned by the government could bring 25% of the total cuts required.
Nevertheless, the IEA argued that the required extra $10.5 trillion of investment in energy efficiency and low-carbon energy by 2030 will more than pay itself back. Energy bills in transport, buildings and industry alone would be reduced by $8.6 trillion over the next two decades, it said.
"The challenge for climate negotiators is to agree on instruments that will give the right incentives to ensure that the necessary investments are made and on mechanisms to finance those investments in non-OECD countries," said Nobuo Tanaka, IEA executive director.
The agency estimates that developing countries will require additional investment in the range of $197 billion in 2020 to fight climate change. This is nearly twice as much as the €100 billion figure that the EU put on the table last month (EurActiv 30/10/09).
