Last week the International Energy Agency (IEA) released its much-anticipated World Energy Outlook (WEO) 2011. Most notably, it warned that our chances to keep the world to 2°C of warming are fast slipping away. Without further action, the IEA says, by 2017 all CO₂ emissions budgeted for in a 2°C scenario will be “locked-in” by existing power plants, factories and buildings.
The IEA is a consortium of mostly OECD countries, set up in the 1970s in response to the oil shocks as a way to help decrease exposure to Middle East oil supply. Membership of the IEA requires a 30-day reserve of oil to be kept for emergencies. This happened recently when the Libyan oil supply was disrupted.
The IEA has traditionally been very strong in collecting information from its members on oil, coal and gas reserves and projected use. It has expanded its attention to the role of renewable energy in recent years.
The Energy Technology Perspectives series published by the IEA has considered scenarios of up to 50% emission reductions on 2000 levels by 2050. It is typically bullish on technologies such as carbon capture and storage and nuclear, as well as wind, solar and hydro power.
This year’s typically conservative WEO discusses in detail a scenario that comes closest to avoid 2°C of warming (WEO calls it a “450ppm” case - where CO₂ makes up 450 parts per million in the atmosphere). One of the key results in the report is that we are perilously close to the point of making this goal much more costly to achieve than it needs to be.
The infrastructure we have already installed globally (including power plants and factories) will produce 90% of the emissions budgeted for to keep concentrations of carbon dioxide below 450ppm. On current trajectories, we reach 100% of the available carbon budget in 2017. At that point, no more new fossil fuel power capacity can be added without going over the limit.
The longer the delay before we get onto the path towards low carbon generation technology, the steeper the climb needs to be. We are rapidly heading towards the point where the path becomes impossibly steep. In that circumstance, the target cannot be met unless existing infrastructure is retired early, which is clearly very inefficient and costly. The report shows that each dollar of delayed investment today will cost four times as much in the period 2021-2035.
But the problem becomes significantly worse when we consider that China and India will have strong growth in their energy generation capacity, and that much of this will come from coal and gas fired plants.
Unless we can work out a way to argue that they have less right to emit carbon than developed countries, the developed world has already used up its quota of “locked in” plant: no new fossil fuel generation can be built from now on.
That includes natural gas. Unless much of the existing coal fired generation is retired now to allow the less carbon intensive gas fired generation to take its place, the so-called “golden age of gas” is too late.
The IEA has little optimism that the 2°C goal can be meet. There are two other scenarios in the WEO. The first is a business as usual case, which results in concentrations consistent with an unthinkable 6°C.
A “New Policy” scenario has steady advances in policies that promote renewable energy, resulting in a disastrous 3.5°C increase in global temperatures. In this scenario renewable generation sees the largest growth, but natural gas is a close second with significant increases in coal and oil, the latter to supply soaring vehicle ownership in China and India.
The IEA notes that in the decade 2000-2010 - even with the known problems of global warming - coal-fired generation was by far the largest contributor to increased generation capacity. During this period, government subsidies to the global fossil fuel industry leapt to $409 billion, while those for renewable energy trailed at $66 billion.
If subsidies for fossil fuel are still increasing, it seems clear that the world’s governments are yet to seriously accept the reality of the climate change situation.