Ten trillion well spent

The IEA has a message for all the negotiators in Copenhagen: keep on doing things the way we’re doing them now and catastrophe is just around the corner. That’s the stark conclusion from the latest World Energy Outlook, released in London on 10 November. “Continuation of current trends in energy use puts the world on track for a rise in temperature of up to 6°C and poses serious threats to global energy security” according to the IEA.
The reference scenario sees demand increasing by 40% between now and 2030, and pollution would worsen, with fossil fuels accounting for over three-quarters of the extra demand. The good news is that it would only take $10.5 trillion over the next 20 years to keep the temperature rise below 2°C.
If that sounds exorbitant even in these days of trillion dollar financial rescue packages, the IEA calculated that energy bills in transport, buildings and industry alone would be reduced by $8.6 trillion. And in addition to avoiding severe climate change, this cost would also be offset by other economic, health and energy-security benefits.

Patrick Love

2 comments to “Ten trillion well spent”

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  1. Laura Nasr - 10/12/2009 Reply

    Realistically, it’s unlikely that that ten trillion will be spent to keep climate change in check, despite our knowing that it would be more than cost-effective. If we can’t do what needs to be done (and it has been clear that something does need to be done about climate change) when doing so will benefit us, what will it take for us to take action when spillover benefits can’t be guaranteed to outweigh the costs?

  2. Douglas Bain - 14/12/2009 Reply

    Moving towards the 450 ppm Scenario is really challenging, and requires China and India to either lead the way, or be led.

    Government has to do more to encourage the technical innovation that is out there, which is currently modest in size because market economics do not support stand-alone investment. Innovation needs pace and momentum to deliver the impact that 450 requires.

    For example, more encouragement (primarily fiscal) could provide significant pace and momentum on carbon sequestration and carbon capture projects, aligned with the necessary yet unpopular coal investments. There are potential projects out there, but they are being run as competitions with only one “winner”. We need multiple projects.

    We also need to explore opportunities to replicate the success of coal bed methane in USA, Canada and Australia, and encourage the private sector to evaluate and pursue shale opportunities around the world on a timely basis. Shale may be the next big global unconventional gas play, but it needs to happen faster than a traditional market-based system facilitates. Government therefore needs to encourage.

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