A detailed look at ways to decarbonise the energy sector

24 December 2014

With the recent UN climate negotiations in Lima committing all countries to contribute to the reduction of greenhouse gas (GHG) emissions, a new IEA publication examines an array of available policy options toward this end, such as how to accelerate the decarbonisation of coal-fired power generation, how best to implement emissions trading systems (ETS) and how clean air policies can most effectively contribute to mitigating climate change.

For instance, the new publication, Energy, Climate Change and Environment: 2014 Insights, addresses the linkages between air pollution policies and GHG emissions, examining how this highly topical issue with global relevance is playing out differently in the world’s two largest emitters, China and the United States. It finds that while efforts by the Chinese government to improve air quality may also help reduce GHG emissions, policies must be structured to achieve these dual objectives. Meanwhile, the US government is adapting longstanding air pollution regulations to target GHG reductions, expecting significant air quality “co-benefits” as a result. How these diverse policies are managed will have important implications for both countries as they seek to fulfil their commitments announced in November’s joint US-China climate deal.

Previous analysis in the IEA’s World Energy Outlook Special Report: Redrawing the Energy-Climate Map has shown that the global decarbonisation challenge will not only require greater investment in clean energy technologies, but that existing “locked in” high-emissions infrastructure must also be addressed, which is unlikely to occur without policy intervention. Using the example of coal-fired power generation, Energy, Climate Change and Environment assesses a number of policies to “unlock” these assets, e.g. through early retirement, retrofits and conversions, that are being implemented or under consideration in Europe, Australia, China, Canada and the United States, and what more could be done.  

The publication also reviews ETS implementation and operation as a means of pricing carbon to advance energy system decarbonisation. As well as analysing key ETS design choices, the report addresses how to improve the integration of a carbon trading system with other complementary energy and climate policies, and to better manage the impact on electricity prices. It also looks at how an ETS can be implemented in a more regulated energy system like China’s, and considers how the rise of such markets could affect an international climate agreement.

Once under way, energy sector decarbonisation needs to be tracked, and Energy, Climate Change and Environment offers a detailed look at various metrics. These include GHG-focused measures but also alternative metrics that can be framed around energy efficiency, new investment in power generation and even advances in research, development and deployment, helping to identify opportunities for actions with long-term as well as short-term impacts. The publication also assesses whether and how such metrics might be used to monitor and advance the diverse range of nationally determined mitigation goals that is likely to emerge in any new global climate agreement reached at the 2015 UN climate talks in Paris.

Finally, Energy, Climate Change and Environment features an update of key energy and emissions statistics at a global level and for ten world regions.