Despite the ongoing global credit crunch, the International Energy Agency (IEA) said today that the world can’t afford to pull back on renewable energy and efficiency programs, forecasting that $4.1 trillion will need to be spent to avoid an energy supply crunch on a much warmer and more energy-hungry planet.
The Paris-based IEA, founded in 1974 after the oil crisis, is an energy policy adviser to 28 member countries, including the U.S., the UK, Germany, Japan and Australia. The group said without a shift in government policy and spending, global energy demand will expand by 45 percent by 2030, including the need for four times the current oil capacity of Saudi Arabia, leading to an eventual global temperature increase of up to 6 degrees Celsius.
Even without a shift in policy, renewables stand to do very well over the next few years, overtaking natural gas soon after 2010 to become the second largest source of electricity behind coal — but you have to go by the IEA’s definition of “renewable,” which includes massive amounts of hydro power, likely including the not-so-environmentally-friendly Three Gorges Dam in China.
To keep the global temperature in check, the IEA said a carbon cap and trade system is needed in the world’s wealthier nations, as well as emissions agreements covering industries like iron and steel, cement, aviation and road transport. To keep greenhouse gas concentrations stabilized at 550 parts per million, the group said national policies will also need to be implemented for all industries in developing countries and worldwide in the buildings sector.
Most of the $4.1 trillion the IEA says is needed would be spent on the demand side, with $17 per person per year spent worldwide through 2030 on more efficient cars, appliances and buildings. This “550 Policy Scenario” (referring to the target level fro atmospheric concentration of greenhouse gases) aims to cut the predicted rise in temperature to a slightly less catastrophic 3 degrees Celsius.
That extra spending would come on top of the $26.3 million the IEA said will already be spent on energy supply infrastructure through 2030, even without a push for renewables. The good news that comes along with the extra investment, in addition to a cut in greenhouse gases, is savings of more than $7 trillion from energy efficiencies.
An even more drastic energy scenario was proposed in the report, which would result in temperatures going up by only 2 degrees Celsius, but the IEA said it would be tough to achieve even if the wealthier nations reduced their emissions to zero.