The International Energy Agency (IEA) has announced the need for a global energy revolution in order to ensure future supplies and to stem the rise of greenhouse gas emissions.
According to the IEA’s annual report, 2008 World Energy Outlook (WEO), published last week, the world's energy system is "at a crossroads" with needs of refurbishment regarding traditional supply and consumption methods.
IEA’s Executive Director, Nobuo Tanaka, explained, "Current trends in energy supply and consumption are patently unsustainable -- environmentally, economically and socially -- they can and must be altered."
The WEO report does not assume new government policies, but it does suggest all governments take action quickly, in order to "steer the world towards a cleaner, cleverer and more competitive energy system."
While the WEO is without government policy suggestions, it does offer a variety of projections. Among these exists the forecast of an increase in energy demand occurring at the rate of 1.6 percent year on year until 2030. This overall increase of 45 percent would result in an estimated cost of $26.3 trillion. Also regarding costs, the WEO sees the "credit squeeze" as a threat, with the power of undermining investment and in turn, causing energy supply troubles in time to come.
The WEO also sees the demand for coal rising so high that it will become greater than that of any other fuel.
As for oil, it "will remain the world's main source of energy for many years to come, even under the most optimistic of assumptions about the development of alternative technology," with a demand rising from 85 million barrels per day to 106 mb/d by the year 2030. This predicted increase in demand does not come as surprising due to the decline of production rates at oil fields and "dwindling opportunities to increase reserves and production" occurring within oil companies.
China and India will help in creating over half of the increased energy demand, according to the WEO, and the Middle East will grow to be a key new demand center. Share of energy demand will rise in cities around the world from two thirds to three quarters by 2030, with nearly all of the fossil-energy production’s rise taking place in non-OECD countries.
Tanaka explained, "Rising imports of oil and gas into OECD regions and developing Asia, together with the growing concentration of production in a small number of countries, would increase our susceptibility to supply disruptions and sharp price hikes…At the same time, greenhouse-gas emissions would be driven up inexorably, putting the world on track for an eventual global temperature increase of up to six degrees Celsius."
These forecasted rates project the increase of energy-related CO2 emissions from their current mark at 28 gigatons to an increased number of 41 gigatons by 2030, resulting in an overall rise of 45 percent.
The stabilization of greenhouse gas concentrations at 550 ppm would invoke a temperature increase of approximately three degrees Celsius. It would also require energy emissions to increase to the point of that no higher than 33 gigatons, and this would need to drop over time.
Both renewable and carbon-efficient fossil-fuel energies are forecasted to contain shares of the energy mix which will need to be increased from 19 to 26 percent by 2030 and will also need to fulfill the requirement of an extra $4.1 trillion of investment, on top of a projected $26.3 trillion figure, in order to accomplish this.
Hitting a 450 ppm target, an accomplishment which, according to NASA scientists, could set off dangerous warming, presents a significantly more difficult situation. Emissions would need to arrive at a level of no more than 26 gigatons, and low-carbon energy would need to supply 36 percent, costing $9.3 trillion (0.6 percent of annual world GDP).
Tanaka further explained the challenges of hitting this 450 ppm achievement: "We would need concerted action from all major emitters. Our analysis shows that OECD countries alone cannot put the world onto a 450 ppm trajectory, even if they were to reduce their emissions to zero."
While these projections only, in fact, serve as such, "one thing is certain,” according to Tanaka. "While market imbalances will feed volatility, the era of cheap oil is over."