Urgent Action on Energy Efficiency Necessary, Says IEA

The International Energy Agency (IEA) has been ringing the alarm on climate change over the past year and its latest annual World Energy Outlook is no different. 

This report issues stark warnings about the world’s continuing dependency on fossil fuels and reminds leaders that they are doing way too little on energy efficiency. On the positive side, renewables are gaing ground, expected to be the world’s second-largest power generation source by 2015.

If the world is to stay below its 2°C goal (3.6°F), it’s already used up 80% of the allowable emissions through 2035 in existing power plants, buildings and factories (governments agreed to keep average warming under 2°C to prevent catastrophic, runaway climate change).

That means "No more than one-third of proven fossil fuel reserves can be consumed prior to 2050," they say, unless carbon capture and storage technology is widely deployed.

Expected production from tar sands alone exceeds that amount.

By 2017, all allowable emissions will be locked in without significant action to cut carbon emissions. But that lock-in can be postponed until 2022 by rapidly deploying energy-efficient technologies.

Global carbon emissions rose 2.5% in 2011, reaching record levels of 34 billion metric tons – 50% higher than in 1990. Although US and EU emissions dropped, China’s surged 9.3%.

To stay below 2°C, emissions can’t exceed 44 billion metric tons in 2020.

Energy Efficiency Holds the Key

Investments in efficiency are so powerful that they could buy governments five more years to find a path to address climate change.

Aggressive attention to efficiency could cut growth in global energy demand in half (from 2010 levels) under IEA’s best case scenario.

No technological breakthroughs are needed, but governments have to remove barriers that are obstructing implementation of energy efficiency measures that are economically viable.

An investment of $11.8 trillion in energy efficiency technologies would be more than offset by reduced fuel expenditures, facilitating a gradual reorientation of the global economy. By 2035, it would give the world economy a cumulative $18 trillion boost, especially in the US, Europe,  China and India.

Universal access to modern energy would be easier to achieve and air quality improved, as emissions of local pollutants fall sharply. Energy related CO2 emissions would peak before 2020, with a decline thereafter consistent with a long-term temperature increase of 3°C.

"Action to improve energy efficiency could delay the complete ‘lock-in’ of allowable emissions of carbon dioxide under a 2°C trajectory – which is currently set to happen in 2017 – until 2022, buying time to secure a much-needed global climate agreement," says Fatih Birol, IEA Chief Economist and lead author of the report.

IEA notes some of the key efficiency strategies recently put in place: China’s target to reduce energy intensity 16% by 2015; new fuel economy standards for vehicles in the US; EU’s commitment to cut energy consumption 20% by 2020; and Japan’s target to cut electricity consumption 10% by 2030.

Although these are an improvement on the "disappointingly slow progress in global energy efficiency over the last decade," four-fifths of the potential in the building sector and more than half in the industrial sector remain untapped, IEA says.

"Our analysis shows that in the absence of a concerted policy push, two-thirds of the economically viable potential to improve energy efficiency will remain unrealised through to 2035," says the report.

Renewables Closing in On Coal

IEA predicts that renewables will be the world’s second-largest power generation source by 2015, and will provide a third of all generation by 2035, closing in on coal.

"A steady increase in hydropower and the rapid expansion of wind and solar power has cemented the position of renewables as an indispensable part of the global energy mix,” they say.

It is increasing rapidly because of falling technology costs, rising fossil-fuel prices and carbon pricing, but mainly because of  continued subsidies.

Last year, renewable energy received $88 billion in subsidies worldwide and that will rise to $240 billion by 2035, says IEA. Support for fossil fuels dwarfs that, however, increasing 30% to $523 billion last year alone. And subsidies for renewables are contracting rather than expanding, notably in the US and EU. 

To keep global warming under 2°C, renewable energy subsidies must rise exponentially, to $4.8 trillion in total by 2035.

And although the US is experiencing newfound energy independence from increased use of fossil fuels, it will not increase national security if it leads to runaway climate change.

Most of those fossil fuel reserves must be left in the ground.

"The US is a hotbed of technological innovation. It must use this creative muscle to develop a low-cost, clean energy revolution. It will only achieve this if the massive vested interests of the American oil industry are brought under democratic control," Ed Matthew, director of thinktank Transform UK, told The Guardian. 

Over the past year, IEA has expressed strong support for a price on carbon, eliminating fossil fuel subsidies and vastly increasing them for renewables, and rapidly ramping

In 2009, the G20 pledged to stop subsidizing fossil fuels, but that has yet to happen. With a price on carbon, solar can provide a third of the world’s energy by 2060, says IEA, and renewables could provide 80% by 2050.  

Read the IEA’s executive summary: