Governments face cost hurdle to cut carbon dioxide

The International Energy Agency (IEA) sees the first early signs of an energy technology revolution underway across the globe but has urged that much more needs to be done to achieve the necessary long-term carbon dioxide cuts. For several years the IEA has been calling for an energy revolution to tackle climate change and enhance energy security and economic development. For the first time we see early indications that such a revolution is under way said Nobuo Tanaka Executive Director of the IEA. Presenting the new IEA study 'Energy Technology Perspectives (ETP) 2010' in Washington DC he said after sowing the seeds for such a revolution in our last edition in 2008 by demonstrating that greater reliance on low-carbon technologies can transform the way we produce and use energy ETP 2010 now highlights the first 'green shoots' of what could become such a fundamental change.Global investment in renewable electricity generation led by wind and solar reached an all-time high of US$112 billion in 2008 and remained broadly stable in 2009 despite the economic downturn. Many major car companies are adding hybrid and all-electric vehicles to their fleets. Expanded production of such vehicles combined with the purchase incentives available in many countries could put more than five million such vehicles on the road in the next 10 years. In OECD countries the rate of energy efficiency improvement has increased to almost 2% per year more than double the rate seen in the 1990s. Funding for low-carbon energy research development and demonstration (RD&D) has increased by one-third between 2005 and 2008 helping to reverse a declining trend that started in the early 1980s; with IEA countries and many other major economies aiming to double such investments by 2015.ETP 2010 demonstrates that all these efforts are vital if we are successfully to limit climate change; but current developments are still fragmented and fragile and the rate of progress is still far too low to prevent dangerous increases in global temperatures. What we need is rapid large-scale deployment of a portfolio of low-carbon technologies; we need a massive decarbonisation of the energy system breaking the historical link between carbon dioxide emissions and economic output and leading to a new age of electrification said Mr Tanaka. Noting that 1.5 billion people still lack access to electricity he stated this adds tremendous urgency to electrification efforts worldwide.The ETP2010 Baseline scenario shows that without new policies fossil fuels will continue to provide most of the world's energy needs with energy-related carbon dioxide emissions almost doubling to 57 Gigatonnes (Gt) by 2050. In contrast the ETP2010 BLUE Map scenario charts a least-cost path for halving global energy-related carbon dioxide emissions by 2050 (compared to 2005 levels) consistent with a long-term temperature rise of 2? to 3?C. It also shows how the transition to a low-carbon economy will enhance energy security and support economic development. Under this scenario the global demand for oil for gas and for coal in 2050 would all be lower than today with world oil demand alone being 27% less than in 2007. For instance oil demand in the United States and OECD Europe would drop by more than 60% and 50% respectively; in China oil demand would only increase to half the level seen in the Baseline scenario. Also in the BLUE Map scenario global oil demand would plateau around 2030-2035. This would mean less pressure on prices and reduced import dependency for many countries. However Mr Tanaka stressed we should not forget that even with this low-carbon revolution fossil fuels still account for 46% of primary energy demand in 2050 meaning that we still will need significant investment in these fields.