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Financial crisis offers narrow window to take climate action

Financial crisis offers narrow window to take climate action

LONDON, United Kingdom, The International Energy Agency on Tuesday called on world leaders to strike a deal to address climate change, warning that the current business-as-usual scenario is unsustainable and will lead to skyrocketing energy demand, price spikes and up to a 6 degree temperature rise.

The recession is projected to put a slight dent in emissions growth in 2009, the IEA said in releasing its latest World Energy Outlook, offering a small window of opportunity for the world to act. Without an international climate change agreement in Copenhagen next month, however, the savings "will count for nothing" because energy demand will continue growing once the economy revives.

Failing to act beyond 2010 would also cost the world an additional $500 billion each year, Reuters reported.

"World leaders gathering in Copenhagen next month for the UN Climate summit have a historic opportunity to avert the worst effects of climate change," IEA Executive Director Nobuo Tanaka said in a statement Tuesday. "The World Energy Outlook 2009 seeks to add momentum to their negotiations at this crucial stage by detailing the practical steps needed for a sustainable energy future as part of a global climate deal."

Its World Energy Outlook offers two sets of predictions: a reference scenario where current government policies remain unchanged, and a 450 scenario with a timetable of actions designed to prevent greenhouse gas concentration from exceeding 450 parts per million, which scientists predict will keep global temperature rise below 2 degrees Celsius in order to avoid the worst impacts from climate change.

Under the reference scenario, energy demand will surge 40 percent between 2007 and 2030, with coal seeing the largest increase, followed by gas and oil. The vast majority of demand growth comes from energy needs for power generation in non-OECD countries such as China and India. Meeting this demand through will carry a heavy price tag: $26 trillion, more than half of which must be spent in non-OECD countries.

Runaway fossil fuel consumption would result in potentially catastrophic and irreversible climate change, according to the IEA.

"Even taking account of the impact of the financial crisis, the projected rise in emissions in the reference scenario puts us on a coarse for doubling the concentration of those gases in the atmosphere to around 1,000 parts per million (ppm) of CO2-equivalent by the end of the century," the report said. "This would entail an eventual global average temperature increase of up to 6 degrees Celsius."

However, achieving the 450 Scenario is possible, according to the IEA, through a blend of cap-and-trade systems, sectoral agreements and national measures. This may include retirement of inefficient coal-fired power plants, increased deployment of renewables, additional nuclear capacity and carbon capture and storage technologies.

The world needs to invest $10.5 trillion between 2010 and 2030 to reach this goal but the spending will be more than offset by the fuel cost savings, the IEA said.


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