Nobuo Tanaka Executive Director International Energy Agency The Alliance to Save Energy Washington , 25 September 2008 International Policy Leaders Dialogue on Energy Efficiency: Cost-Effective Carbon Reduction

A New Energy Revolution…. Cutting Energy Related CO 2 emissions Improved efficiency and decarbonising the power sector could bring emissions back to current levels by 2050. To ac hieve a 50% cut we would also have to revolutionise the transport sector.

To bring emissions back to current levels by 2050, a CO 2 incentive of $50/t is needed Reducing emissions by 50% would require a $200-$500/t incentive Marginal cost of cutting CO 2 emissions High Estimate Low Estimate End-use efficiency Transport alternative fuels Power Sector Industry fuel switching &CCS

The IEA‘s 25 Energy Efficiency recommendations to the G8 offer h uge CO 2 savings potential Global implementation of recommendations could save around 8.2 GtCO 2 /yr by 2030. Equivalent to 20% of global reference scenario energy related CO 2 emissions in 2030. WEO 2007 Projection

Examples of Global Savings from IEA Energy Efficiency Recommendations Recommendation Exajoules 2030 Mt CO2 2030 Building Codes for New Buildings 4.7 - 7.0 203 - 305 Mandatory Appliance Standards and Labels 7.6 – 10.9 1332 - 1903 Low power modes for electronic equipment 2.5 – 3.0 437 - 525 Incandescent light bulb phase-out 3.3 – 4.3 N/A Fuel Efficient Tyres for automobiles 2.8 – 4.7 180 - 300

The IEA‘s Energy Efficiency recommendations: Scorecards of implementation Lighting Transport Buildings Appliances Industry Cross-sectoral Full implementation Partial implementation Implementation Planned Investigation underway/ not implemented All recommendations

Energy Indicators, Tracking Trends & Identifying Potentials : The Example of Coal Power Generation © OECD/IEA 2008 Currently achievable The average efficiency of coal power plants is between 26-39%. Over 1.7 GT CO 2 could be saved each year by raising this to 40%.

Energy Indicators - Tracking Trends & Identifying Potentials : The Example of Iron & Steel Adoption of best practice technologies in industry could save 1.9 – 3.2 Gt of CO 2 per year. The global technical potential in the iron and steel sector is 360 Mt of CO 2 per year, with the largest savings from blast furnace improvements

But what is CDM doing for energy efficiency? CERs to 2012 by CDM project type © OECD/IEA - 2007 As of July 2007

Deep emission reductions by 2050 require unprecedented action E mission stabilisation = decarbonising power generation Emission halving = also revolutionising transport Energy-efficiency offers the cheapest large-scale abatement but current resource allocations are far too small for the global potential to be delivered Policy instruments are needed that address all major barriers – not just incremental technology costs – thus CDM may need revision Fresh thinking is needed to develop the right blend of instruments to deliver a dramatic increase in abatement through EE Key Messages

Deep emission reductions by 2050 require unprecedented action

E mission stabilisation = decarbonising power generation

Emission halving = also revolutionising transport

Energy-efficiency offers the cheapest large-scale abatement but current resource allocations are far too small for the global potential to be delivered

Policy instruments are needed that address all major barriers – not just incremental technology costs – thus CDM may need revision

Fresh thinking is needed to develop the right blend of instruments to deliver a dramatic increase in abatement through EE