Two IEA climate-policy scenarios show how we could stabilize the concentration of greenhouse gases at 550 or 450 parts per million of carbon dioxide equivalent. The 550 scenario equates to an increase in global temperature of approximately 3ºC, while the 450 scenario implies an increase of around 2ºC.
In the 550 scenario, energy demand up to 2030 rises by about 32 percent, with the share of fossil fuels falling markedly, and average demand up 1.2 percent yearly, compared with 1.6 percent in the Reference Scenario. Energy-related carbon dioxide emissions would peak in 2025 and decline slightly by 2030.
The 450 scenario presents an immense challenge. The 2030 emissions level for the entire world would be less than the emissions projected for non-OECD countries alone in the Reference Scenario. In other words, even if OECD countries reduce their emissions to zero, they alone could not put the world onto the 450ppm trajectory. To do so would mean a technology shift that — in terms of scale and speed of deployment — is unprecedented.
The good news is that we already know many of the policies and technologies that can deliver substantial savings in energy consumption and carbon dioxide emissions. But making and implementing the right decisions must begin now.
We’re talking about significant changes in the pattern of investment across the supply and demand chains, as well as huge additional spending on new capital stock, especially in power plants and in more energy-efficient equipment and appliances.
Although the sheer scale of the transformation means placing a substantial burden on both public and private sectors, the current financial crisis should be used as an opportunity rather than as a barrier to launching it.
Renewable energy will have a major role to play. Global renewables-based electricity generation (mainly hydro and wind, but also solar and biomass) is set to double between 2006 and 2030. In the EU, wind’s share in total power generation is set to rise to 14 percent by 2030 from 2 percent today, and would account for well over half the total increase in the EU’s power generation. In the 450 scenario, renewables will be 30 percent of the EU’s power generation mix in 2030, up sharply from 10 percent today.
Governments must galvanize this transformation. Clear price signals, including carbon pricing, are crucial, and many non-OECD countries, in addition to needing financial support to help reduce their greenhouse gas emissions, can benefit from the removal of fuel subsidies.
But clear price signals are not enough, as a low-carbon future requires major breakthroughs in technology development and deployment. Governments can create incentives to innovate, encourage research and break down international barriers. And much of the additional spending needs to be made by households, driven by a profound change in social attitudes to energy efficiency.
Fatih Birol is chief economist at the Paris-based International Energy Agency.
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