Four energy policies can keep the 2 °C climate goal alive
June 17th, 2013An International Energy Association report shows how to stop growth in energy-related emissions by 2020 at no net economic cost. The Missionary Oblates engage oil and gas companies on the need for emissions reductions, and this report is a useful tool in that work.
Warning that the world is not on track to limit the global temperature increase to 2 degrees Celsius, the International Energy Agency (IEA)* has urged governments swiftly to enact four energy policies that would keep climate goals alive without harming economic growth.
“Climate change has quite frankly slipped to the back burner of policy priorities. But the problem is not going away – quite the opposite,” according to IEA Executive Director Maria van der Hoeven. The IEA’s World Energy Outlook Special Report, Redrawing the Energy-Climate Map, highlights the need for intensive action before 2020.
Noting that the energy sector accounts for around two-thirds of global greenhouse-gas emissions, Ms van der Hoeven added: “This report shows that the path we are currently on is more likely to result in a temperature increase of between 3.6 °C and 5.3 °C but also finds that much more can be done to tackle energy-sector emissions without jeopardising economic growth, an important concern for many governments.” A temperature rise of this magnitude is expected to have catastrophic impacts on human societies as well as natural systems on which we depend for our survival. Agriculture, in particular, would be seriously affected.
The new IEA report presents the results of a 4-for-2 °C Scenario, in which four energy policies are selected that can deliver significant emissions reductions by 2020, rely only on existing technologies and have already been adopted successfully in several countries.
“We identify a set of proven measures that could stop the growth in global energy-related emissions by the end of this decade at no net economic cost,” said IEA Chief Economist Fatih Birol, the report’s lead author. “Rapid and widespread adoption could act as a bridge to further action, buying precious time while international climate negotiations continue.”
In the 4-for-2°C Scenario, global energy-related greenhouse-gas emissions are 8% (3.1 Gt CO2-equivalent) lower in 2020 than the level otherwise expected.
The four proposed measures are:
- Targeted energy efficiency measures in buildings, industry and transport. These would account for nearly half the emissions reduction in 2020, with the additional investment required being more than offset by reduced spending on fuel bills.
- Limiting the construction and use of the least-efficient coal-fired power plants. This measure would deliver more than 20% of the emissions reduction and would additionally help curb local air pollution. The share of power generation from renewables would increase (from around 20% today to 27% in 2020), as would that from natural gas.
- Actions to halve expected methane (a potent greenhouse gas) releases into the atmosphere from the upstream oil and gas industry in 2020 would provide 18% of the savings.
- Implementing a partial phase-out of fossil fuel consumption subsidies would account for 12% of the reduction in emissions and supports efficiency efforts.
The report also finds that the energy sector is not immune from the physical impacts of climate change and must adapt. In mapping energy-system vulnerabilities, it identifies several sudden and destructive impacts, caused by extreme weather events, and other more gradual impacts, caused by changes to average temperature, sea level rise and shifting weather patterns. To improve the climate resilience of the energy system, the report highlights governments’ role in encouraging prudent adaptation (alongside mitigation) and the need for industry to assess the risks and impacts as part of its investment decisions.
The financial implications of climate policies that would put the world on a 2°C trajectory are not uniform across the energy sector. Net revenues for existing renewables-based and nuclear power plants increase by $1.8 trillion (in year-2011 dollars) collectively through to 2035, offsetting a similar decline from coal plants. No oil or gas field currently in production would need to shut down prematurely. Some fields yet to start production are not developed before 2035, meaning that around 5% to 6% of proven oil and gas reserves do not start to recover their exploration costs. Delaying the move to a 2 °C trajectory until 2020 would result in substantial additional costs to the energy sector and increase the risk of assets needing to be retired early, idled or retrofitted. Carbon capture and storage (CCS) can act as an asset protection strategy, reducing the risk of stranded assets and enabling more fossil fuel to be commercialized.
About the IEA
The International Energy Agency is an autonomous organization, which works to ensure reliable, affordable and clean energy for its 28 member countries and beyond. Founded in response to the 1973/4 oil crisis, the IEA’s initial role was to help countries co-ordinate a collective response to major disruptions in oil supply through the release of emergency oil stocks to the markets. While this continues to be a key aspect of its work, the IEA has evolved and expanded. It is at the heart of global dialogue on energy, providing reliable and unbiased research, statistics, analysis and recommendations.