The International Energy Agency is calling for strong policy action to move the world onto a more sustainable energy path, according to a report released Tuesday.
According to the World Energy Outlook 2006, the energy picture has changed substantially since the 2004 Outlook, the IEA’s last major update. Oil and gas prices have been three to four times higher than in 2002, and China and India are the largest sources of global energy demand growth.
“WEO-2006 reveals that the energy future we are facing today, based on projections of current trends, is dirty, insecure and expensive,” said Claude Mandil, Executive Director of the IEA. “But it also shows how new government policies can create an alternative energy future which is clean, clever and competitive - (which is) the challenge posed to the IEA by the G8 leaders and IEA ministers.”
In a Reference Scenario, which provides a baseline vision of how energy markets are likely to evolve without new government measures, global primary energy demand will increase by 53 percent between now and 2030. Over 70 percent of this increase will come from developing countries led by China and India. China will overtake the United States as the world’s biggest emitter of CO2 before 2010. These trends would highlight consuming countries’ vulnerability to a severe supply disruption. They would also increase the possibility of global climate change.
In the Alternative Policy Scenario, future energy challenges can be substantially improved if governments implement the policies currently under consideration. In this scenario, global energy demand is reduced by 10 percent in 2030, equivalent to China’s entire energy consumption today and global carbon-dioxide emissions are reduced by 16 percent.
World economic growth has remained robust, as the recessionary effects of higher energy prices have been more than offset by other factors. Coal is now cheaper than natural gas for electricity generation, while nuclear power may, in some cases, be cheaper than both coal and gas, even where there is no penalty for emitting CO2. Coal has led the recent surge in global energy demand and is on a stronger growth path than in previous Outlook reports.
The Outlook demonstrates that nuclear power could make a major contribution to reducing dependence on imported gas and curbing CO2 emissions in a cost-effective way.
Biofuels could make a significant contribution to meeting future road-transport energy needs, helping to promote energy diversity and reducing emissions. Biofuels reach 4 percent of road-fuel use in the Reference Scenario in 2030 and 7 percent in the Alternative Policy Scenario, up from 1 percent today. The United States, the European Union and Brazil account for the bulk of the global increase and remain the leading producers and consumers of biofuels in both scenarios.