This is an excerpt from EERE Network News, a weekly electronic newsletter.

November 10, 2010

IEA: Current Government Policies Inadequate to Address Climate Change

The broad greenhouse gas policy commitments and plans of countries around the world will not be sufficient to avoid significant increases in average global temperatures, according to the International Energy Agency (IEA). The IEA released its annual World Energy Outlook on November 9, and this year's report includes a "New Policies Scenario" that includes commitments such as the Copenhagen Accord. But even under that scenario, world energy demand increases by 36% between 2008 and 2035, or 1.2% per year on average, and fossil fuels still dominate the world's energy mix in 2035. As a result, the concentration of greenhouse gases in Earth's atmosphere are projected to stabilize at the equivalent of 650 parts per million (ppm) of carbon dioxide, resulting in a likely long-term temperature rise of more than 3.5°C (6.3°F) above pre-industrial levels. In contrast, the Copenhagen Accord has a stated goal of limiting the long-term temperature rise to less than 2°C, which is thought to correspond to stabilizing greenhouse gases at the equivalent of 450 ppm of carbon dioxide.

Under the New Policies Scenario, developing countries account for 93% of the projected increase in world energy demand, with China contributing 36% of that projected growth. And although fossil fuels lose market share to renewable energy and nuclear power, they still dominate the energy mix, with oil remaining the leading fuel, followed by coal and natural gas. Oil consumption continues to grow, even though prices are expected to reach $113 per barrel in 2035. But of the three fossil fuels, gas consumption grows most rapidly, increasing 44% by 2035. Meanwhile, renewable energy use is expected to triple, causing its share of world energy demand to increase from 7% in 2008 to 14% in 2035. A key to that growth is a boost in worldwide government support for renewable energy, increasing from an estimated $57 billion in 2009 to $205 billion in 2035.

The IEA has also created a "450 Scenario," that is, a scenario that stabilizes the atmospheric concentration of greenhouse gases at the equivalent of 450 ppm of carbon dioxide. Reaching that goal requires meeting the more ambitious targets included in the Copenhagen Accord and rapidly cutting fossil-fuel subsidies, which the IEA estimates at $312 billion in 2009, down from $558 billion in 2008. The result is a more rapid transformation of the global energy system, causing oil and coal demand to peak before 2020, while natural gas demand peaks before 2030. Renewable energy and nuclear power grow rapidly under this scenario, doubling their share of global energy use to 38% in 2035. Sales of plug-in hybrid vehicles and electric vehicles also increase rapidly in this scenario, reaching 39% of new sales by 2035. But the IEA also notes that in the year that has passed since its last issuance of the World Energy Outlook, the global cost of achieving the 2°C goal has increased by $1 trillion, making it less likely that the goal will be achieved. See the IEA press release and the World Energy Outlook Web site, which includes links to a presentation, executive summaries in nine languages, six fact sheets, and nine key graphs.

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