Last week the International Energy Agency (IEA) released its annual World Energy Outlook for 2011 and the news could not be more sobering. If we continue on our current path of rapidly growing energy consumption and carbon emissions, we could lock in potentially catastrophic global warming of 3.5°C to 6°C (6.3°F to 10.8°F). Without further action, as soon as 2017, we will have locked in the emissions that are consistent with a 450 ppm trajectory (which IEA equates to 2°C of global warming).
Quoted in the Guardian, Fatih Birol, chief economist at the International Energy Agency, said: “The door is closing. I am very worried – if we don’t change direction now on how we use energy, we will end up beyond what scientists tell us is the minimum [for safety]. The door will be closed forever.”
Delaying action is extremely costly
An especially crucial insight the report provides is that delaying climate and energy policies is costly:
The long lifetime of capital stock in the power sector means that the sector accounts for half of the emissions locked-in to 2035. If action were to be delayed until 2015, around 45% of the global fossil-fuel capacity installed by then would have to be retired early or refurbished by 2035. Delaying action is a false economy. For every $1 of investment in the power sector avoided before 2020, an additional $4.3 would need to be spent after 2020 to compensate for the higher emissions.
Energy efficiency is our best solution
In its 450ppm scenario, the IEA projects that energy efficiency could account for half the reductions in energy use needed. Renewable energy, carbon capture and storage and nuclear power could also play an important role in cutting emissions, according to the IEA.
A recent UCS analysis shows how the U.S. can make deep cuts in its emissions by ramping up efficiency and renewable energy and saving consumers money. Furthermore, transitioning away from fossil fuels will bring valuable health benefits, both here in the U.S. and around the world.
Existing large fossil fuel subsidies are a bad idea
The IEA puts it plainly:
Fossil-fuel subsidies carry large costs. They encourage wasteful consumption, exacerbate energy-price volatility by blurring market signals, incentivise fuel adulteration and smuggling, and undermine the competitiveness of renewables and other low-emission energy technologies… Eliminating fossil-fuel subsidies could bring important economic and environmental benefits.
According to IEA estimates, global fossil fuel subsidies are currently over 6 times greater than subsidies to renewable energy ($409 billion v. $66 billion in 2010). Leveling the playing field is an important step toward a transition to clean energy – and that includes removing these distorting subsidies to fossil fuels, as well as making energy producers take into account the health and environmental costs of pollution from these fuels.
Energy access for the poor continues to be a pressing need
Lest one forgets, as the IEA points out:
Today, 1.3 billion people do not have electricity and 2.7 billion people still rely on the traditional use of biomass for cooking. We estimate that, in 2009, around $9 billion was invested globally to provide first access to modern energy, but more than five-times this amount, $48 billion, needs to be invested each year if universal access is to be achieved by 2030. Universal access by 2030 would increase global demand for fossil fuels and related CO2 emissions by less than 1%, a trivial amount in relation to the contribution made to human development and welfare.
A time for bold action
This report from the IEA is just the latest in a long series of analyses that show that tackling climate change is feasible and affordable. And that the most expensive thing we can do is nothing. It is time (and the window is fast closing!) to make the bold investments in our energy infrastructure that will help reduce the risks of calamitous climate change for generations to come.
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