The Hindu Business Line : IEA warns of upward trend in energy use

New Delhi, Nov. 13 The International Energy Agency (IEA) on Tuesday sounded caution for countries dependent on imported oil with fragile energy security to be prepared to “make the hard choices needed to combat climate change and enhance global energy security”.

In its latest flagship publication on World Energy Outlook, the Paris-based inter-governmental think-tank of rich industrial countries said that even as one of the welcome results of the world financial crisis the global energy use is set to fall this year, it will not be long before it resumes its upward trend if government policies do not change in the interregnum.

Demand increases

Stating that in its reference scenario demand increases by 40 per cent between now and 2030 reaching 16.8 billion tonnes of oil equivalent, IEA warns that fossil fuels continue to dominate the energy mix, accounting for more than three-quarters of the incremental demand.

What is worrisome is that non-OECD (OECD or Organisation for Economic Cooperation and Development is a club of 29 rich industrial countries) nations account for over 90 per cent of this increase. Within this, China and India alone account for over half of this increase. Besides their known and increasing susceptibility to energy price spikes, the reference scenario projects a persistently high level of spending on oil and gas imports, which would exert a substantial financial burden on import-dependent consumers. China overtakes the US around 2025 to become the world’s biggest spender on oil and gas imports, while India surpasses Japan soon after 2020 to take third spot.

450 scenario

As the countdown for the Copenhagen Conference on world climate approaches, the IEA report also cautions on the continuation of current trends in energy use the world-over, the world is on an unsustainable path for a rise in global temperature of up to 6 degree C, with “catastrophic consequences for our climate”. To avert the most severe weather and sea-level aberration s and limit the temperature increase to about 2 degree C, the greenhouse-gas concentration needs to be stabilised at around 450 parts per million (ppm) carbon dioxide (C02) equivalent.

Additional funding

In the 450 scenario, global energy-related CO2 emissions need to peak just before 2020 at 30.9 gigatonnes (Gt) and decline thereafter to 26.4 Gt in 2030, which is 34 per cent less than in the reference scenario. To realise the 450 scenario, additional investment of $10.5 trillion is needed globally in the energy sector between 2010 and 2030.

While the geographical and sectoral distribution of the abatement and investment in the 450 scenario does not determine how those actions are financed, which is entirely a matter for negotiations at the forthcoming conference, the energy sector in non-OECD countries — including China and India — would need around $200 billion of additional investment in clean energy and efficiency in 2020. This includes $70 billion for nationally appropriate mitigation action (NAMAs) and a similar amount to score sectoral standards in transport and industry.

Interestingly, the IEA states that non-OECD countries account for all the projected increase in energy-related CO2 emissions. In the reference scenario, OECD emission in 2030 is 3 per cent lower than in 2007. By contrast, all major non-OECD economies see their emissions rise.

Of the 11 Gt growth in global emissions between 2007 and 2030, China accounts for 6 Gt, India for 2 Gt and the West Asian countries for one Gt.

Hard bargains for all

But IEA puts a caveat contending that while non-OECD countries today account for 52 per cent of the world’s annual emissions of energy-related CO2, they are responsible for only 42 per cent of the world’s cumulative emissions since 1890.