Redrawing the Energy-Climate Map


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Governments have decided collectively that the world needs to limit the average global temperature increase to no more than 2 °C and international negotiations are engaged to that end. Yet any resulting agreement will not emerge before 2015 and new legal obligations will not begin before 2020. Meanwhile, despite many countries taking new actions, the world is drifting further and further from the track it needs to follow.

The energy sector is the single largest source of climate-changing greenhouse-gas emissions and limiting these is an essential focus of action. The World Energy Outlook has published detailed analysis of the energy contribution to climate change for many years. But, amid major international economic preoccupations, there are worrying signs that the issue of climate change has slipped down the policy agenda. This Special Report seeks to bring it right back on top by showing that the dilemma can be tackled at no net economic cost.

The report:

Maps out the current status and expectations of global climate and energy policy – what is happening and what (more) is needed?
Sets out four specific measures for the energy sector that can be quickly and effectively implemented, at no net economic cost, to help keep the 2 °C target alive while international negotiations continue.

Indicates elements of action to achieve further reductions, after 2020.

Demonstrates that the energy sector, in its own interest, needs to address now the risks implicit in climate change – whether they be the physical impacts of climate change or the consequences of more drastic action later by governments as the need to curb emissions becomes imperative.

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Redrawing the Energy-Climate Map

  1. © OECD/IEA 2013London, 10 June 2013
  2. © OECD/IEA 2013Context Climate change is slipping down the policy agenda,even as the scientific evidence continues to accumulate Energy sector accounts for two-thirds of greenhouse gas emissions Mixed news on energy trendsPrice dynamics between gas and coal support emissionsreductions in some regions, but impede them in othersRenewables are on the rise, but investment slowed in 2012Efficiency policies are gaining momentum in many countriesNuclear is facing challenges and CCS still remains distant
  3. © OECD/IEA 2013CO2 emissions at record high in 2012Change in energy-related CO2 emissions, 2012CO2 emissions grew by 1.4% to reach 31.6 Gt in 2012, but trends vary by country-300-200-1000100200300400500World China Japan EuropeanUnionUnitedStatesMt CO2MiddleEastIndia
  4. © OECD/IEA 20137007508008509002003 2006 2009 2012gCO2/kWhChina4004505005506002003 2006 2009 2012gCO2/kWhUnited StatesThe two largest emitters make encouragingsteps toward decarbonisation…CO2 emissions per unit of electricity generationIn 2012, total CO2 emissions in the US were back at the level of the mid-1990s,while total CO2 emissions growth in China was one of the lowest in the last decade
  5. © OECD/IEA 2013…but the world is still moving inthe wrong directionGlobal energy-related CO2 emissionsCO2 emissions trends point to a long-term temperature increase of up to 5.3 °C1890 1910 1930 1950 1970 1990 201248121620242832GtDissolution of the Soviet UnionEnd of World War II1st oil price shockGlobal economic downturn2nd oil price shockGreat depression
  6. © OECD/IEA 2013Four measures to keep the 2 °C target alive National efforts in this decade need to buy time for an internationalagreement, expected to come into force in 2020 Measures to 2020 should meet key criteria: Significant near-term emissions reductions No harm to countries’ economic growth Reliance only on existing technologies and proven policies Significant national benefits other than climate change mitigation Our 4-for-2 °C Scenario proposes four measures that meet thesecriteria
  7. © OECD/IEA 2013Four measures can stopemissions growth by 2020Emissions savings in the 4-for-2 °C Scenario, 2020Four measures can stop the growth in emissions by 2020 at no net economic cost,reducing emissions by 3.1 Gt, 80% of the savings required for a 2 °C path4-for-2°C Scenariodelivers savings of3.1 Gt CO2-eq49%21%18%12%Implement selectedenergy efficiencypoliciesLimit use ofinefficient coal power plantsReduce methanereleases from upstreamoil and gasPartial removal offossil-fuel subsidies
  8. © OECD/IEA 2013Measure 1: Improve energy efficiencyEmissions savings in the 4-for-2 °C Scenario, 2020Energy efficiency reduces emissions by 1.5 Gt, led by minimum energy performancestandards – additional investment is more than offset by fuel bill savings20% 40%BuildingsIndustryTransport80% 100%Industrial motorsHeating & cooling60%Appliances & lightingRoadShare of efficiency savings
  9. © OECD/IEA 2013Measure 2: Limit the use of inefficientcoal power plantsChange in electricity demand& coal-fired electricity generation from the least-efficient plants, 2020Energy efficiency and reducing the role of the least-efficient coal power plantshave important co-benefits for local air pollution-1 000- 800- 600- 400- 200UnitedStatesEuropeanUnion China IndiaLower electricitydemandLower electricitygeneration from least-efficient coal plantsTWh 0
  10. © OECD/IEA 2013Measure 3: Reduce methane releasesinto the atmosphereMethane emissions from the upstream oil and gas industry, 2020In 2010, methane releases were 1.1 Gt CO2-eq;halving the level in 2020 would save twice the gas production of Nigeria today50100150200250300350UnitedStatesOtherOECDMiddleEastRussia Africa OtherNon-OECDReduction in4-for-2 °C ScenarioMt CO2-eq
  11. © OECD/IEA 2013Measure 4: Phase out fossil-fuel subsidiesSavings in the 4-for-2 °C Scenario: 360 MtFossil-fuel subsidies in 2011 were equivalent to an incentive of $110 per tonne of CO2Middle East54%Africa15%RussiaOthernon-OECD14%7%LatinAmerica11%
  12. © OECD/IEA 2013The energy sector needs to adaptto climate changeThe energy sector needs to increase its resilience to the physical impactsof climate change© Natural hazards adapted from Munich RE (2011)oCoCoCoCoCoCoCoC oCoCIncrease of droughtsand/or heat wavesPower plant coolingimpacted
  13. © OECD/IEA 2013Change in tropicalcyclones and stormsTypical cyclonesand track directionsThe energy sector needs to adaptto climate changeThe energy sector needs to increase its resilience to the physical impactsof climate changeExposed oil andgas infrastructure© Natural hazards adapted from Munich RE (2011)
  14. © OECD/IEA 2013Some fossil-fuel reserves remainundergroundPotential CO2 emissions from proven fossil-fuel reserves to 2050On today’s trends, half of the proven fossil-fuel reserves would be leftundeveloped to 2050 – stronger climate action would increase the share04008001 2001 6002 000Coal Oil GasIf all proven reserveswere usedNew Policies ScenarioGt450 ScenarioAdditional emissions inNew Policies Scenario– stronger climate action would increase the share
  15. © OECD/IEA 2013A diverse portfolio matters inthe power sectorNet revenues for new power plants by scenario, 2012-2035Under a 2 °C path, total net revenues for new power plants are $3 trillion higher –2468Nuclear Fossil fuelsRenewablesNew Policies Scenario450 ScenarioTrilliondollars(2011)CCS fittedCCS is an effective protection strategy for fossil fuel assets
  16. © OECD/IEA 2013Key messages Despite encouraging steps in some countries, global emissionskeep rising and the scientific evidence of climate change increases Early national action is required while negotiating towards aglobal deal in Paris in 2015 that then comes into force by 2020 Four measures can stop emissions growth by 2020 and keep the2°C target alive, without harming economic growth There is a need for parallel action to deploy critical low-carbontechnologies at scale after 2020, including CCS The energy sector must adapt to climate change, both in theresilience of its existing assets and in future investment decisions
  17. © OECD/IEA