IEA predicts ‘shocking’ rise in global energy demand

Environmental Finance
www.environmental-finance.com

London, 8 November: The world is failing to curb the growth in energy demand, leading to an increase in projected greenhouse gas (GHG) emissions, the International Energy Agency (IEA) has warned. Climate change could spin out of control, with a 6°C increase in global temperatures by 2030, if governments fail to implement new policies to restrain energy demand, the agency said yesterday.

On current trends, annual global GHG emissions from energy will reach 42 billion tonnes by 2030, producing a 6°C increase in temperature, largely driven by massive growth in energy demand from China and India, concluded the IEA's World Energy Outlook 2007 report. This is a 2 billion tonne increase on the projection made by the IEA in its 2006 report.

World energy demand will be 50% higher than today in 2030, the report says, with almost half of this demand driven by India and China. Within the last two years, China's emissions alone have gone from 35% of US emissions to overtake the US as the world's biggest emitter, the IEA noted. By 2030, India will be the third largest emitter in the world. Meanwhile, unless producers pump investment into global oil fields, the report says that a gap between expected output and expected demand of around 12.5 million barrels of oil a day by 2015 could lead to a supply crunch.

Speaking at the launch of the report in London, Nabuo Tanaka, executive director of the IEA, called its findings "shocking... particularly given the political capital that has been invested to improve the situation in the last few years." He added: "It is time to act." He said the report "demonstrates more clearly than ever that, if governments don't change their policies, oil and gas imports, coal use and greenhouse gas emissions are set to grow inexorably through to 2030 – even faster, in fact, than in last year's Outlook."

Fatih Birol, chief economist for the IEA and lead author of the report, stressed that China and India have a right to the economic growth that is partly leading to this rush forward in energy demand and carbon dioxide emissions. "One third of current emissions in China are embedded, to be exported outside of China," he said, noting that China's role as the production line for the world means that much of its energy is consumed in manufacturing goods to be sold in Europe and North America.

Tanaka added: "This is a legitimate aspiration that needs to be accommodated and supported by the rest of the world." As well as plotting out probable energy and emissions growth resulting from current policy, the IEA produced an alternative scenario – which sets out what would happen if proposed policies on energy efficiency, energy security and climate change were put in place.

The alternative scenario could cut demand for oil by 14 million barrels a day by 2030. Simply by applying European standards on the efficiency of air conditioning units and fridges, China could reduce electricity demand equivalent to two Three Gorges Dams by 2030. However, this would only reduce greenhouse gas emissions to 34 billion tonnes in 2030. Although this represents a 19% reduction on current trends, this would still result in a 3°C increase in temperature, higher than the 2°C target adopted by the EU.

According to the IEA, in order to keep temperature increases within the two degree limit considered necessary to keep climate change in check, every new coal or gas-fired power generation built after 2013 would have to be fitted with Carbon Capture and Storage technology, and 30 nuclear energy plants and 17,000 wind turbines would have to be built every year until 2030. The IEA currently expects renewables to grow from 2% of world energy supply to 4% in 2030.

However, Sven Teske, energy expert at Greenpeace International, cautioned: "What the IEA projects may happen is not inevitable and fails to take into account realistic options for limiting carbon dioxide emissions in both China and India." He added: "To avoid the worst impacts of climate change, all countries urgently need to act," said Teske. "Big emitters like the US must lead the way, starting at next month's UN climate talks, in Bali."