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COP15: Low-carbon and renewable energy will need investment of US$10.5tr by 2030

The world must invest in renewable energy and other low-carbon energy sources immediately, because every year of delay adds US$500 billion to the cost of protecting the global environment, says the head of the International Energy Agency (IEA).

“While the details of a binding agreement may not be completely worked out in Copenhagen, it is more important than ever that participants send a strong, indicative and ambitious signal that can guide energy investment and policy decisions globally,” Nobuo Tanaka told the UN climate change conference COP15 in Copenhagen.

“The economic crisis, with the resulting fall in global energy-related CO2 emissions of 3% in 2009, gives us a unique window of opportunity to change our current, highly unsustainable energy path.”

The IEA has proposed an energy policy and technology blueprint for an ambitious climate goal, placing energy efficiency at the core of a carbon reduction strategy in both the near and the long term, he explained. “Current pledges point in the right direction, but fall short of what is needed to keep the global temperature rise to around 2°C above pre-industrial levels.”

Energy accounts for 84% of global CO2 emissions and, based on current trends without new measures, global energy-related CO2 emissions will reach 40 Gigatonnes (Gt) by 2030 vs 29 Gt in 2007, and will continue rising, Tanaka warned. The world would need to retire a significant portion of current coal-fired electricity stations by 2030, before the end of their lifetime, and early closures would equal today’s total coal-based power generation in Japan, EU and the United States.

Renewable energies would need to generate 37% of global electricity by 2030, with nuclear generating 18% and fossil-fired plants with carbon capture and storage accounting for 5%, while hybrids, plug-in hybrids and electric vehicles would need to represent 60% of car sales by that time, compared with 1% today, he noted. The bulk of emissions reduction could be achieved through energy efficiency, which is an “absolute prerequisite” for the deployment of the more-expensive low-carbon and renewable energy supply.

In industry, buildings and transport, the additional US$8.3 trillion of required investment would lead to US$8.6tr in savings between now and 2030, said Tanaka. “The social, economic, environmental and energy security benefits of energy efficiency are too large to be missed, yet experience shows that proper policy frameworks are needed to reap these benefits.”

To support a global transition to more-efficient low-carbon and renewable energy systems, the IEA estimates that US$10.5tr is needed by 2030, which would allow global CO2 emissions to decline after 2020 and to be lower than current levels by 2030. “The wave of investments that will come with the economic recovery must be climate friendly; a strong signal is needed now,” he added. “Every year of delay adds US$500bn to the energy sector cost of reaching 450 ppm.”

The IEA has produced roadmaps on key technologies and to guide decision-makers on the path to innovations in wind, carbon capture, electric vehicles and cement production. While the Clean Development Mechanism (CDM) under the UN’s Kyoto Protocol “has achieved a lot in certain sectors, it has not curbed the growth in emissions in developing countries,” added Tanaka.

“The current crisis alone will not put us on the right path to green growth and a stabilised climate,” he explained. “There are very clear co-benefits that would come with CO2 emission reductions, over and above the avoided climate change. There are benefits for health, through lower pollution. There are also benefits for energy security (lower energy imports), and also in reduced energy costs.”

The IEA forecasts that renewable energy and biofuels would produce 23% of the global carbon abatement by 2030, compared with 10% for nuclear and 57% for efficiency. 

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