Leaders must resist the urge to slacken the clean energy transition and set clear goals in Paris to accelerate the switch to keep to the 2C goal, the IEA said on Tuesday, launching the 2015 edition of its flagship World Energy Outlook.
“World leaders meeting in Paris must set a clear direction for the accelerated transformation of the global energy sector,” said IEA executive director Fatih Birol in a statement to the report.
Its central scenario shows the growth in energy-related emissions slowing dramatically, but the emissions trajectory implies a long-term temperature increase of 2.7C by 2100.
A major course correction is still required to achieve the world’s agreed climate goal. “As the largest source of global greenhouse-gas emissions, the energy sector must be at the heart of global action to tackle climate change,” Birol added.
The IEA advises industrialised nations on energy policy, though environmental campaigners and some analysts have been critical in recent years that its scenarios underestimate the increased deployment of renewable energy.
DECOUPLING
The IEA said world energy demand would grow by nearly one-third between 2013 and 2040 in its central scenario, with the net growth driven entirely by developing countries.
The links between global economic growth, energy demand and energy-related emissions weaken with all nations adopting more energy efficient technologies, although a prolonged period of lower oil prices could undercut this energy transition, it warned.
“Diminished incentives and longer payback periods mean that 15% of the energy savings are lost in a low oil price scenario. Lower prices alone would not have a large impact on the deployment of renewables, but only if policymakers remain steadfast in providing the necessary market rules, policies and subsidies.”
It said an extended period of lower oil prices would benefit consumers but would trigger energy-security concerns by heightening reliance on a small number of low-cost producers, or risk a sharp rebound in price if investment falls short.
With a slowing of oil supply, the IEA said this should lead to a price around $80 per barrel by 2020 but sustained lower prices would put a greater reliance on low cost supply from the Gulf, raising long-term energy security issues for India and China.
By Ben Garside – ben@carbon-pulse.com
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