Large-scale transformation of the energy sector could slash CO2 emissions and create new jobs, says OECD/IEA report
1 December 2011
The challenges of providing reliable, affordable and sustainable energy sources face energy producers and consumers alike. A new report from the International Energy Agency (IEA) and Organisation for Economic Co-operation and Development (OECD) highlights how they can be addressed successfully using green growth policies.
Such policies, the report argues, will spur a large-scale transformation of the energy sector and could reduce worldwide energy-related emissions of CO2 by half in 2050, using a combination of existing and new technologies.
The key policies that are required to transform the energy sector include:
- Eliminating fossil fuel subsidies
- Putting a price on emissions of CO2 and other greenhouse gases, such as methane and nitrous oxide
- Making sure energy market rules and regulations don’t inadvertently lock us into carbon-based technologies but encourage the use of appropriate new technologies
- Radically improving energy efficiency and
- Fostering innovation and green technology policy
"Rising global energy demand and the need to drastically cut CO2 emissions require a transformation in the way we produce, deliver and consume energy," says Ambassador Richard Jones, Deputy Executive Director of the IEA.
"The timing is right to make crucial choices for the future of the energy sector. As developed countries renew their energy infrastructure and developing countries build new power plants to meet growing energy demand, the OECD and IEA are urging governments to adopt a suite of policies to increase energy efficiency and lower the carbon-intensity of the energy sector. As the energy sector is responsible for the majority of manmade CO2 emissions, reforming it is critical to solving the climate change dilemma."
The new joint report, Green Growth Studies: Energy, says that the transformation of the energy sector will require substantial new investment – some USD 46 trillion before 2050 – to improve energy efficiency, increase carbon capture and storage, increase the deployment of renewable-energy technology, and support the development of new technologies. From 2007 to 2009, annual investment in low-carbon technologies averaged approximately USD 165 billion annually rising to nearly USD 250 billion in 2010.
It also finds that the transition to a low-carbon energy system is likely to have a positive impact on employment in the energy sector because renewables tend to be more labour intensive at the manufacturing, installation and maintenance phases than fossil fuel-based energy where labour requirements are higher at the extraction phase. Increased deployment of solar PV would likely yield the largest number of jobs with strong growth also expected in the energy efficiency, geothermal and solar thermal sectors.
Transforming the energy sector, the report concludes, presents substantial opportunities for innovation and economic growth, which governments can catalyse by creating enabling policy frameworks.
What is green growth?
Green growth is about fostering economic growth and development while ensuring that the natural resources and environment on which our well-being relies last indefinitely. To do this government policies must be carefully designed to encourage the investment and innovation needed to underpin sustained growth and give rise to new economic opportunities. (OECD definition).
Read the OECD press release
Read the report
For further information, journalists can contact Cecilia.Tam@iea.org, a Policy Analyst at the IEA, who is attending the United Nations Climate Change Conference in Durban, South Africa