Energy industry contributing to its own plight

19th June 2014

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Jonathan Cotterell

The energy industry is increasingly exposed to the impacts of climate change, finds new report.

According to research by the World Energy Council (WEC), the University of Cambridge Institute for Sustainability Leadership, the Cambridge Judge Business School, and the European Climate Foundation, all energy sectors will be affected by the impacts of climate change. The oil and gas industry is likely to suffer from increased disruption and production shutdowns due to extreme weather events, while power plants will also be disrupted and those in coastal areas will be affected by rising sea levels, says the report. In addition, energy transport infrastructures, including oil and gas pipelines and electricity grids, will be impacted by storms and extreme temperature changes, and electricity generation from thermal and hydroelectric stations, renewables and bioenergy crops will be affected by adverse weather patterns.

Yet, the industry can help limit such outcomes by mitigating its greenhouse-gas (GHG) emissions. The industry is the largest contributor to global GHG emissions and its share accelerating, outpacing growth in overall emissions by around 1% year-on-year. In 2010, 35% of direct GHG emissions came from energy production, up from 26% in 2004. The growing proportion of cheap coal-fired electricity production worldwide is largely responsible for driving this increase in emissions.

According to the WEC report, without strong international mitigation policies, CO2 emissions associated with fossil-fuel use in energy supply and transport could double by 2050. Rajendra Pachauri, chair of the Intergovernmental Panel on Climate Change, said understanding the implications of climate change will help the energy sector plan for the future. “The energy sector has a critical role to play in the mitigation of GHGs and in helping the world to adapt to the inevitable impact brought by climate change, some of which would directly affect energy-related activities.”

The report says the share of low-carbon electricity generation by 2050 will need to triple or quadruple to reduce GHG emissions to levels commensurate with the internationally agreed goal of keeping the temperatures below the 2°C threshold. The WEC says switching to a low-carbon economy can be achieved by investing in lower-carbon fuels, increasing use of renewables and nuclear, improving energy efficiency and introducing carbon capture and storage. But investment costs needed for a low-carbon economy are estimated to be up to $900 billion a year, on average, over the next 35 years.

WEC secretary general Christoph Frei commented: “The time has come to get real about the challenges facing the energy sector. Climate change is certain to impact the energy sector. We need robust and transparent policy frameworks to unlock the required long-term investments that are urgently needed to deliver the future we want….There is no climate framework without national energy policy.”

Nick Blyth, policy and practice lead at IEMA agrees. “We need consistent long-term policies that enable the sector and energy users to invest with confidence. Long-term certainty is vital for business to secure investment in measures that transition us to a low-carbon economy,” he said.


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