G8 call for increased investment in energy supply, energy efficiency and lowcarbon technology is timely and urgent - IEA
“The far-reaching effects the current financial and economic crisis will have on energy security andclimate change, coupled with plunging investment, demand urgent and global action to put the worldon a more sustainable path. The IEA is delighted that G8 leaders have put a strong focus on thesepressing energy issues and are ready to step to the forefront in mobilising this global effort”, saidNobuo Tanaka, Executive Director of the International Energy Agency (IEA) after the G8 Summitleaders’ declaration was issued in l´Aquila, Italy. “The G8 has recognised the need for greaterinvestment in energy to expand employment and ensure resumption in economic growth, while alsoachieving reduced emissions of greenhouse gases and more secure energy supplies. At a time ofwidespread uncertainty, governments can and must lead the way through increased energydiversification and most importantly, improved energy efficiency, both of which can reduce oilmarket tightness and volatility.”
The IEA shares the G8 concern that unpredictable energy markets and highly volatile prices hinderindustry efforts to plan and realise new energy investment. IEA calculations show that globalinvestment in upstream oil and gas has already been cut by 21% this year compared to 2008 – areduction of about USD 100 billion. “To reduce excessive volatility of prices and lower investmentrisks, we urge governments to adopt transparent, stable policies to promote energy investment and toimprove their regulation of futures markets. The IEA welcomes the G8 support for our work,” saidNobuo Tanaka. “And, together we must ensure that sound long-term energy investment strategies areat the heart of every economic stimulus package”.
The IEA has calculated that of the total USD 2.6 trillion of public spending in short-term economicstimulus packages announced to date, USD 100 billion have been directed at energy efficiency andclean energy. “This is a step in the right direction. But, much more needs to be done; investment inenergy efficiency and clean technologies would need to increase four-fold if we want to keep the risein global average temperature under 2o C. This means USD 400 billion more every year over the next20 years”, Mr. Tanaka said. Limiting the temperature increase to around 2o C will require that CO2emissions be reduced by at least 50% by 2050. To realise this scenario, the IEA has found thatemissions would need to be limited to 26 gigatonnes (Gt) by 2030, versus our expectation that theywill reach 41 Gt if policies don´t change. Improvements in energy efficiency would account for thebulk of this emissions reduction, 54%, followed by more renewable energy and nuclear power, andcarbon capture and storage (CCS) after 2020.
Against this background, the IEA welcomes the G8 focus on energy savings and is delighted thatSummit leaders support the IEA’s ongoing work on identification and dissemination of best practices,standards and recommendations for increasing energy efficiency. “Energy efficiency policy is wheregovernments truly can make a difference. We are honoured to host the secretariat of the newlylaunched International Partnership for Energy Efficiency Cooperation (IPEEC) – a milestone ininternational cooperation on energy efficiency policy – and welcome the G8 call for IPEEC to takeinto account the 25 G8/IEA efficiency recommendations as it considers its work program”, Mr.Tanaka said. If all IEA recommendations were implemented globally, around 8.2 Gt CO2 per yearcould be saved by 2030. This is more than the current energy-related CO2 emissions of Japan and theUS combined. Even though efficiency policy action is underway in all G8 countries, no country hasrealised the full potential for reduction that these recommendations can provide. The IEA thereforecalls on the G8 and all countries to begin full and urgent implementation.
The G8 communiqué also stresses that efficient markets, including carbon markets, are central toreducing emissions, and highlights the important role that agreements on specific sectors can play incases where nation-wide commitments are lacking. The G8 explicitly welcomes the ongoing work ofthe IEA in this respect. Calling for enhanced technology development and research to mitigate climatechange, it also applauds the Agency´s initiative to develop roadmaps for the most important newenergy technologies. The IEA is currently working on 19 roadmaps, including for solar PV, wind,electric/hybrid vehicles, CCS, nuclear power and the cement industry. Together, they have thepotential to provide almost 90% of the reductions needed to halve global energy-related CO2emissions by 2050. “As those roadmaps are an essential step but not self-implementing, we need tocreate a global platform on low-carbon energy technology that would bring together all countries andthe private sector – a cooperation we consider essential for ensuring full and global roadmapimplementation,” Mr. Tanaka said. “As requested by G8 Energy Ministers at their meeting in Romeearlier this year and reiterated in the G8 leaders’ communiqué, the IEA has begun work to elaborate avision for such a platform and will continue its roadmap work,” he added.
Amongst roadmap technologies, CCS plays a crucial role. At their 2008 Summit in Toyako G8leaders committed to announce at least 20 fully integrated industrial-scale CCS demonstrationprojects worldwide by 2010, with implementation by 2020. Reaffirming this commitment, the 2009G8 communiqué encourages greater involvement of developing countries by better co-operation andinformation diffusion, including through IEA regional roundtables. It also invites the IEA to developits CCS roadmap and to work closely with the Global CCS Institute, the Carbon SequestrationLeadership Forum and the private sector to accelerate the construction and operation of demonstration projects.
“We believe that now is the time for CCS. If we do not develop several large-scale integrated CCSdemonstration projects within the next decade, we won’t be able to deploy the technology in time toprevent CO2 levels from exceeding allowable limits. If that happened, our only alternative would beto develop and deploy novel technologies to remove CO2 from the air, which would be enormouslyexpensive and may not succeed. Time is running out. Strong leadership now is essential to preventthis,” Mr. Tanaka concluded.
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