World Energy Outlook: Locking ourselves in to an unsustainable future

The neighbour of a friend has a plan to supply cheap, sustainably-sourced energy using a combination of tidal power and electric eels. I can’t tell you the details because he doesn’t want the big oil companies to steal his idea, but he’s not the only one promoting crackpot schemes to fuel the world economy. The latest World Energy Outlook 2011 published today by our colleagues at the IEA describes a number of insecure, inefficient and downright dangerous approaches, known as the “business as usual” scenario.

A couple of examples: subsidies that encourage wasteful consumption of fossil fuels jumped to over $400 billion last year, and despite promises to increase energy efficiency, global energy intensity worsened for the second straight year.

Fukushima and the turmoil in the Middle East have cast doubts on the reliability of energy supply, while the sovereign debt crisis has both distracted government attention from energy policy and limited their means of intervention. That doesn’t look promising for attempts to limit global warming. The IEA warns that at present rates, emissions are consistent with a long-term average temperature increase of more than 3.5°C, and that without new policies “we are on an even more dangerous track, for a temperature increase of 6°C or more.”

Four-fifths of the total energy-related CO2 emissions permissible by 2035 in the so-called 450 Scenario for limiting global warming are already “locked-in” by existing capital stock – power plants, buildings, factories, and so on. (it’s called 450 because it means limiting the long-term concentration of greenhouse gases in the Earth’s atmosphere to 450 parts per million of CO2 equivalent.)

Without stringent new action by 2017, the energy-related infrastructure then in place will generate all the CO2 emissions allowed in the 450 Scenario up to 2035, leaving no room for additional power plants, factories and other infrastructure unless they are zero-carbon, which would be extremely costly.

Delaying action is a false economy: for every $1 of investment avoided in the power sector before 2020, an additional $4.3 would need to be spent after 2020 to compensate for the increased emissions.

All of this would be of only theoretical interest to the 1.3 billion people without access to electricity if they weren’t concentrated in poor countries that are likely to suffer most from climate change. Lack of access to cheap, safe power doesn’t just hold back development, it can kill you. As we pointed out in this post last year, if nothing is done, household air pollution from the use of biomass in inefficient stoves will lead to over 1.5 million premature deaths per year, over 4000 a day. Many of them are young children who are at home all day, breathing in the pollution from the stove.

It wouldn’t cost a fortune to provide access. Around $9 billion was invested globally to provide first access last year, but $48 billion, needs to be invested each year if universal access is to be achieved by 2030. It sounds a lot, but that’s only around 3% of total energy investment to 2030.

A change of policy could help too. Only 8% of the subsidies to fossil-fuel consumption in 2010 reached the poorest 20% of the population.

Here’s the IEA’s Chief Economist Fatih Birol presenting the main points of the Outlook:

If you can’t see the video, click here

Patrick Love

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  1. Rachel Kasumba - 16/11/2011 Reply

    Patrick, energy is proving to be one the greatest challenge of our time indeed. Speaking of the 1.3 billion without access to electricity in poor countries, the effects of climate change are already being felt. Some of the factors contributing to climate change in these countries include:

    1) Deforestation. Whether to pave way for an increase in demand for charcoal, timber (for export, furniture, construction), cash or food crops, real estate development and other infrastructure, these and other economic driven activities have led to soil erosion and a change in weather patterns.

    2) Over-farming. Large family sizes have led to increasing subdivision of existing land with each successive generation engaging in poor forms of subsistence farming. This has led to a decrease in soil fertility.

    3) Unreliable Electricity and Gas Supply. This has led to a widespread and continued reliance on traditional forms of fuel like charcoal and kerosene stoves and lamps, even among the thriving middle class.

    4) Rapid Industrialization. Industries, infrastructure development, real estate construction, etc all these activities are going on simultaneously to cater for the increasing demands of the middle class, sometimes at the expense of the environment. There is a lot of pollution but enforcement is sometimes hampered by corruption and lack of a formalized regulatory framework.

    5) Urbanization. A change in Lifestyle including an increase in household waste that is sometimes not properly disposed of, leading to both health hazards and environmental degradation.

    While a lot of emphasis in the climate debate has been concentrated on how industrialized and BRICS countries can stop pollution, it is important to also address these factors affecting the 1.3billion and look for solutions to mitigate against climate change before it is too late. Thank you.

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