IEA says carbon budget will be exhausted by 2040

26th November 2014

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Leslie Harrod

Policy and market developments will not be enough to stem the rise in carbon dioxide emissions by 2040, the International Energy Agency (IEA) has warned in its annual analysis of world energy.

The agency has calculated that the share of fossil fuels in primary energy demand will fall to just under 75% by 2040. However, energy-related carbon dioxide emissions will grow by 20% over the next 25 years, leading to an average global temperature rise of 3.6°C, higher than the 2°C cap scientists say is consistent with averting dangerous climate change.

To limit temperature rise to 2°C, the world cannot emit more than around 1,000 gigatonnes of CO2 from this year, according to the Intergovernmental Panel on Climate Change. However, the IEA calculates that this budget will be used up by 2040. “Since emissions are not going to drop suddenly to zero once this point is reached, it is clear that the 2°C objective requires urgent action to steer the energy system on to a safer path,” the agency’s latest report states.

“Advances in technology and efficiency give some reasons for optimism, but sustained political efforts will be essential to change energy trends for the better,” it concludes.

Changes to policy and markets, and a structural shift in world economies towards services and “lighter” industrial sectors, will limit the rise in the annual demand for energy to 1% after 2025, says the IEA. Over the past two decades, global demand has increased by more than 2% a year.

The agency predicts that energy demand will be “essentially flat” in much of Europe, Japan, Korea and North America. By contrast, demand in other Asian countries, Africa, the Middle East and Latin America will increase.

The IEA advocates reforming energy subsidies. These totalled $550 billion for fossil fuels in 2013, which the agency says held back investment in efficiency and renewables. Global renewable energy subsidies totalled $120 billion in 2013.

Renewable energy will account for almost half of the global increase in total electricity generation to 2040, with its share increasing most in developed countries, reaching 37%. Renewable power generation is also forecast to grow in China, India, Latin America and Africa.

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