IEA Says $ 5 Trillion needed to Prevent Global Warming

International Energy Agency (IEA) was established in November 1974 in response to the global oil crisis created by the Organization of the Petroleum Exporting Countries (OPEC) oil embargo. Its primary mandate was to promote energy security amongst its member countries by organizing a collective response to future oil embargo's or other disruptions in the oil supply. Over the years the mission has evolved to include holding global warming at 2°C by providing policy recommendations for ways to ensure reliable, clean energy for its 28 member countries (which includes the United States). The IEA has become a tracker of carbon dioxide releases and investment in carbon control technologies. They released their annual progress report to member countries on implementing clean energy and carbon dioxide controls worldwide geared to preventing global temperatures from increasing more than 2°C above pre-industrial levels called the Energy Technology Perspectives 2012 2°C Scenario Report, EDP 2DC for short .

Though filled with cheerful statement about accomplishments in installing solar panels and the growth in wind turbines, the report tells us that the world is not really doing that well at instituting clean energy technologies. The EDP 2DC, states that it is still feasible to prevent the earth’s temperature from rising more than 2 degrees Celsius if “timely and significant government policy action is taken, and a range of clean energy technologies are developed and deployed globally,” but we’re pretty much out of time. The government action required is spending more money, much more money. The money is to be spent for the development and implementation of clean technologies to reduce Energy related CO2 emissions by over 5 billion metric tons before 2020 and continue to fall thereafter to less than half of the current level while world population continues to grow. The IEA estimates that the  additional investment cost of achieving these carbon reductions would cost $5 trillion by 2020, but the countries would save $4 trillion (in future dollars) in fuel not burned from the scenario where the world just marches forward on its current path and doubles it’s fossil fuel use by 2050.

Worldwide CO2 emissions are up 6% from 2009, to over 30 billion metric tons, in 2010. Thirty billion metric tons of CO2 is an increase of 40% above the 1990 levels and it seems impossible that any group of policy recommendations will stop the increase in energy use in the emerging markets from continuing. The IEA estimates that the since 2000, China has more than tripled its installed capacity of coal power plants, while India’s capacity has increased by 50%. Unfortunately, they have not used to most efficient designs and technologies available in those plants. In addition, while the IEA strategy includes doubling the nuclear power capacity by 2025, almost 440 nuclear reactors in operation across the world remained virtually constant over the past decade, with 32 reactors shut down and the same number added to the grid. Overall, nuclear capacity increased by 6%, due to installation of larger reactors and power upgrades in existing reactors.  However, Germany, Belgium, Switzerland and Japan have developed plans to phase out their nuclear reactors in the next decade in response to the damage to the nuclear reactors that occurred in the Japanese tsunami. Finally, while wind and solar power have enjoyed significant growth in the past few years, the world economic climate has forced many nations (notably Germany and Spain) to reduce or eliminate solar incentives and IEA doubts that the growth rate in this area can be sustained. 

The worldwide level of CO2 is higher than the worst-case scenario outlined by climate experts just five years ago, but fortunately temperatures have not (yet) risen as projected by the climate models.  The relationship of climate change to worldwide CO2 levels may not be the one assumed in the climate models, nonetheless, the IEA report assumes the projections of the climate models are the absolute trajectory of global temperatures.  Recently,  the U.S.Environmental Protection Agency (EPA) announced total gross US emissions of CO2 equivalents in 2010 was to 6,822 million metric tons of carbon dioxide gross,and 5,746 million metric tons of CO2 net of the carbon sink of our forests. The peak of CO2 emissions in the US was 2007 and though emissions have increased since 2009, they are still below 2007 levels. This is true for most of the older first world nations whose carbon emission have already peaked or have slowed their growth significantly. Now the developed world is struggling with huge budget deficits, how to implement austerity measures and how to fund the entitlements programs, pensions, health care and other government promises. The emerging nations are sprinting to build power infrastructure in their nations where significant portions of their citizens do not have reliably available electric power or yet have cars. This does not seem to be a scenario where the recommended policies and strategies are likely to be implemented.

The IEA report talks about how technologies from electric vehicles, solar panels, nuclear generators, to wind farms and technologies to sequester carbon can make a decisive difference in limiting global temperature rise to 2°C above pre-industrial levels. EDS 2DC provides policies for nations on how to spend their way to a cleaner energy future. The IEA believes that the technologies with the greatest potential for energy and carbon dioxide (CO2) emissions savings are making the slowest progress: “carbon capture and storage (CCS) is not seeing the necessary rates of investment into full-scale demonstration projects and nearly one-half of new coal-fired power plants are still being built with inefficient technology; vehicle fuel-efficiency improvement is slow; and significant untapped energy-efficiency potential remains in the building and industry sectors.”

The development of carbon sequestion technology is a one of the big leaps of faith, but the implementation of energy saving strategies like insulation, efficient lighting and higher efficiency heating and air conditioning systems, on commercial and residential buildings are seemingly easy improvements because they show a short term and immediate return on investment and are simple to do. Commercial and residential buildings account for 32% of energy use and improved insulation and changes in temperature settings, lighting efficiency and other small choices could reduce world energy use 8-10% yet nations have failed to adopt regulations and implementation strategies to promote this. We have failed to accomplish even the most straight forward of the policy goals while spending huge amounts of money on renewable energy incentives. The IEA continues to pursue a mirage of a future where renewable energy and carbon sequestion will save us. Instead, IEA needs to spend their brain power and resources in developing strategies for living in the world we are going to find ourselves in.