By Maria van der Hoeven, Executive Director, International Energy Agency
The stalling global effort to mitigate climate change recently passed a grim milestone, when carbon concentration in the atmosphere topped 400 parts per million at the Mauna Loa Observatory in Hawaii. This is uncharted territory in the history of modern humans. While it may not represent a tipping point per se, that milestone is symbolic of our failure to respond adequately, and to fulfil our own national and international pledges to limit global temperature rises to 2 degrees Celsius over the long term. If we continue with business as usual, that rise could be as much as 5.3 degrees, with potentially disastrous implications in terms of extreme weather events, rising sea levels, and huge costs to society and industry in terms of economic welfare and human life.
In short, when it comes to addressing the problem of global climate change, the world is drifting off-track. That is the case when it comes to policy implementation, and also to technology deployment, according to an IEA report on “Tracking Clean Energy Progress” presented to the Clean Energy Ministerial in April. Our Carbon Intensity Index showed that despite technological advances, the average unit of energy produced today is as dirty as it was in 1990.
COP 19 will represent an important opportunity to take stock of efforts to move toward a consensus as to how to limit carbon emissions. In reality, though, we expect that global negotiations are unlikely to yield a comprehensive multilateral agreement before 2015. Even if an agreement is reached that year in Paris (which is not guaranteed), full-fledged implementation is unlikely to yield significant carbon reductions before the end of the decade.
Amid concerns over global economic pressures, climate change has quite frankly slipped to the back burner of policy priorities. Yet the problem is certainly not going away. Major catastrophic weather events in 2012 and 2013 highlighted their increasing frequency, and Arctic sea ice during those years reached record lows. Now is the time to urgently bring these policy priorities back in line with the scale of the challenge.
In June, the IEA released the latest World Energy Outlook Special Report, entitled “Redrawing the Energy Climate Map”. The report outlines the intensive action which we need to start implementing today, without waiting to 2020 or later for a global agreement to take effect. Those actions are in the energy sector (which accounts for about two-thirds of greenhouse gas emissions), do not harm economic growth, and can be taken immediately at national level. That kind of immediate and feasible action is necessary because by 2020 global energy-related greenhouse-gas emissions are projected to be nearly 4 gigatonnes higher than a level consistent with attaining the 2 degree target.
They can also sidestep a costly blame-game. The fact is that while discussions turn around who is responsible for global warming, this is simply no longer a “rich world problem”.Major emerging markets contributed the lion’s share of emissions increases in 2012, despite China’s emissions increasing by one of the smallest amounts in a decade thanks to the deployment of renewable energy technologies and its declining energy intensity. Europe and the US have seen falling emissions due to economic contraction and coal-to-gas switching, respectively. Meanwhile Japan’s emissions have risen as the country has switched off nuclear reactors.
Global climate change is a problem that we must tackle together. But each country can do its part to take action now, without relying on international agreement. Our June report lays out four energy policies that can keep the door open to the 2 degree target, at zero net economic cost. Critically, they are measures that can be implemented nationally with existing technologies that are proven and feasible.
The first of these policy groups outlines the adoption of specific energy efficiency measures. Energy efficiency is indeed the low-hanging fruit in many countries, and these measures would account for almost half the overall carbon savings to 2020. That is equivalent of Russia’s emissions today.
The second set of policies limits the construction and use of the least-efficient coal-fired power plants. This would reduce emissions from the plants themselves and encourage alternative technologies.
The third set aims to minimise methane (CH4) emissions from upstream oil and gas production. That is especially focused on reducing flaring and venting in places like Russia, Africa, and the Middle East.
Finally, we call for policies to accelerate the (as yet partial) phase-out of subsidies to fossil-fuel consumption. The IEA has highlighted this issue for years, and the time has come to act. Currently, 15% of global CO2 emissions receive an incentive of $110 per tonne in the form of fossil-fuel subsidies, while only 8% are subject to a carbon price. That must change.
Not only will acting on these policies save long-term costs to society as a whole, but the energy sector itself will see benefits in terms of reduced risks to infrastructure and projects. Savings across the economy will be even higher. Delaying stronger climate action to 2020 would come at a cost. $1.5 trillion in low-carbon investments are avoided before 2020, but $5 trillion in additional investments would be required thereafter to get back on track. According to the IEA’s Energy Technology Perspectives 2012, by 2025 fuel savings alone from efforts to stay on track to 2 degrees would outweigh investments. By 2050, savings would reach $100 trillion.
The question is not whether we can afford the necessary investments given the current economic climate. It is precisely because of the global economy that we simply cannot afford to delay.
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