4°C in Davos

19 April 2013

By Fatih Birol, IEA Chief Economist. This Commentary appears in the Innovation & Environment section of Issue 4 of IEA Energy: The Journal of the International Energy Agency.

Once a year Davos becomes a frenzied focal point for the world’s political and business leaders. They engage in intense debate intended to shape the global agenda, and my experience over almost a decade is that Davos is an invaluable barometer of opinion among international decision makers.

In the past, I have regularly discussed climate change with attendees and been reassured by how their attitudes chimed with the weight of scientific evidence – namely, that the world needs to focus clearly on limiting global temperature rise to no more than 2°C. This year my confidence was rather shaken. While there were laudable exceptions, a new contingent had become visible that, either by implicit agreement or reluctant resignation, seemed ready to accept a 4°C climate trajectory.

The facts do not justify such a shift, and it is important that such voices do not evolve into a creeping consensus. The central scenario in the World Energy Outlook (WEO) does indeed show that the world is on a climate trajectory closer to 4°C, but it is presented as a reason to raise our ambitions to meet the 2°C target rather than as an excuse to lower our expectations.

Several studies find that in a world where the average global temperature increases by 4°C, the most marked warming will be over land and actually range from 4°C to 10°C. The past decade already featured an exceptional number of extreme heat waves, from Europe in 2003 to Australia early this year. According to almost unanimously accepted scientific research, in a 4°C world such events would become increasingly common. Food production would be negatively affected, droughts much more widespread, and sea levels would rise, increasing coastal flooding, especially in developing countries.

The energy sector is the single largest source of global CO2 emissions and, in 2011, these increased by more than 3% to yet another record high of more than 31 gigatonnes. In fact, the WEO 2012 revealed that unless there is more action to reduce greenhouse gases, the energy infrastructure existing by 2017 will lock in all the emissions allowable under a 2°C trajectory. The energy sector is also vulnerable to extreme weather events. We have already seen the negative impact of droughts on hydropower (such as in Brazil) and of hurricanes on electricity infrastructure (such as in New York) and on offshore oil and gas production.

The body of climate evidence and analysis should provoke a sense of urgency, but there are worryingly few signs of decisive action. We still have not agreed on a much-needed global agreement to cut greenhouse gas emissions. The renewable energy sector, such an important part of any solution to climate change, is growing but not quickly enough. Many renewable energy companies are showing significant signs of strain, while many governments have been reviewing critically their levels of support. Subsidies that encourage the wasteful consumption of fossil fuels also handicap action on climate change, and yet their value jumped by nearly 30% in 2011. These subsidies – valued at more than USD 520 billion worldwide – represent an implicit incentive to emit CO2 equivalent to USD 110 per tonne. By comparison, the carbon price in the European Union currently trades below USD 7.

The energy sector has a crucial role in making meaningful progress on climate change. We need an energy agenda that embraces new solutions and sets out immediate action, keeping the door to 2°C open, as well as vital elements that can be included in a future global climate deal that delivers longer-term sustainability.

We will bring all of these issues and more into the spotlight on 10 June, when the IEA publishes the WEO special report Redrawing the Energy-Climate Map. It is my hope that this report will help bring the temperature in Davos back to 2°C next year.

The International Energy Agency (IEA) produces IEA Energy, but all analysis and views contained in the journal are those of individual authors and not necessarily those of the IEA Secretariat or IEA member countries, and are not to be construed as advice on any specific issue or situation.