IEA offers blueprint to deliver on ambitious climate change goals and urges all governments to send a strong signal to spur new investment for clean energy

(Copenhagen) — 14 December 2009

“While the details of a binding agreement may not be completely worked out in Copenhagen, it is more important than ever that participants send a strong, indicative and ambitious signal that can guide energy investment and policy decisions globally,” said Nobuo Tanaka, the Executive Director of the International Energy Agency (IEA), today at the UN Climate Change Conference (COP15) in Copenhagen. “This conference is the most important climate meeting to date, as we urgently need a framework that goes beyond 2012, the end of the Kyoto Protocol first commitment period. The economic crisis, with the resulting fall in global energy-related CO2 emissions of around 3% in 2009, gives us a unique window of opportunity to change our current, highly unsustainable energy path,” said Mr. Tanaka. “Current pledges point in the right direction, but fall short of what is needed to keep the global temperature rise to around 2°C above pre-industrial levels. The IEA proposes an energy policy and technology blueprint that can deliver ambitious climate goals to be agreed in Copenhagen, with energy efficiency at the core of CO2 reduction strategy in both the near and long term.”

With energy accounting for 84% of global CO2 emissions, the IEA has analysed what needs to be done to limit the long-term concentration of greenhouse gases in the atmosphere to 450 parts per million (ppm) of CO2-equivalent, in line with a 2°C increase in global temperature. On current trends, unless new measures are taken, global energy-related CO2 emissions will reach 40 gigatonnes (Gt) by 2030 (29 Gt in 2007) and continue rising thereafter, whereas climate stabilisation requires emissions to peak around 2020 and then decline.

“The 450 Policy scenario of our flagship publication World Energy Outlook 2009 is the right path to green growth but it is a radical departure from current trends,” Mr. Tanaka stressed.

For instance, the world would need to retire a significant portion of today’s coal-fired electricity plants before the end of their lifetimes – by 2030, early closures around the world would amount to the equivalent of today’s total coal-based power generation in Japan, EU and the United States. Around 60% of global electricity production in 2030 would need to come from a mix of renewables (37%), nuclear (18%) and plants fitted with carbon capture and storage (5%). Another illustration is the dramatic shift needed in car sales, with hybrids, plug-in hybrids and electric vehicles representing 60% of sales in 2030, from around 1% today.

The bulk of the emissions reduction could be delivered by energy efficiency, accounting for over half of total abatement by 2030 in the IEA 450 Scenario. Energy efficiency is an absolute prerequisite for the deployment of the more expensive, low-carbon energy supply as it helps lowering demand first. IEA finds that the additional investment can be recouped by end-users through lower energy bills: in industry, buildings and transport, the additional USD 8.3 trillion of required investment would lead to USD 8.6 trillion in savings between now and 2030. “Sharing best policy practice in energy efficiency, and building capacity for implementation should be a priority area for any support from developed to developing countries coming out of Copenhagen,” Mr. Tanaka said. “The social, economic, environmental and energy security benefits of energy efficiency are too large to be missed, yet experience shows that proper policy frameworks are needed to reap these benefits. We are encouraged by the development of energy efficiency policies in countries like China, India, Brazil or South Africa,” Mr. Tanaka added.

To support a global transition to more efficient, low-carbon energy systems, the IEA estimates that USD 10.5 trillion (with USD 8.3 trillion in end-use) are needed by 2030. With such effort, global CO2 emissions would decline after 2020, and be lower than today’s level by 2030. “Countries’ announcements in preparation for Copenhagen are encouraging. Although more is needed to be on track with our 450 scenario, with current pledges, if implemented, more in line with a 550 ppm scenario (leading to a 3°C increase in global temperature). The results in the 2020-2030 decade will be crucial, as this is when most new technologies need to be deployed. The wave of investments that will come with the economic recovery must be climate friendly. A strong signal is needed now. Every year of delay adds USD 500 billion to the energy sector cost of reaching 450 ppm,” Mr. Tanaka stressed.

The IEA has produced several roadmaps on key technologies to meet that challenge, and to guide environmental and energy decision makers on the path to needed innovations (e.g. on carbon capture and storage, wind, electric vehicle and cement manufacturing). “A cost on CO2 is also critical to guide investors toward low-carbon choices,” Mr. Tanaka added. While the Clean Development Mechanism has achieved a lot in certain sectors, it has not curbed the growth in emissions in developing countries. Broader access to the carbon market ought to be a key element in a Copenhagen agreement, e.g. through sector- or policy-based market mechanisms in developing countries. The IEA has shown how such mechanisms could reduce CO2 emissions in key sectors like power generation, but these must be complemented by ambitious energy efficiency improvements on the end-use side.

“The energy path to stabilise climate is clear, but only vigorous action will put our economies on that path to green growth,” Mr. Tanaka emphasised. “A strong political signal is needed now in order to drive the necessary changes. The IEA will work with all countries to turn global climate goals into practical steps for the energy sector, including through the newly proposed international low-carbon energy technology platform,” Tanaka said. The platform which was endorsed by the IEA Ministerial meeting in October, will bring together policy makers, business representatives and technology experts to discuss how best to encourage the spread of clean energy technologies, with a view to doubling investments in RD&D by 2015. “The IEA will be evaluating the energy implications of any emission goal coming out of Copenhagen, to set a clear pathway for the energy sector,” Mr. Tanaka concluded.

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