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World Energy Outlook Special Report on Energy and Climate Change

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The world is moving towards a crucial climate change meeting in Paris in December 2015 (COP21). The negotiations there will be based on national pledges, formally known as Intended Nationally Determined Contributions, with the goal of setting the world on a sustainable path. As energy production and use is responsible for two-thirds of greenhouse-gas emissions, the IEA feels an obligation to make a contribution to COP21 – a contribution which reconciles climate and energy needs.

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World Energy Outlook Special Report on Energy and Climate Change

  1. 1. © OECD/IEA 2015 London, 15 June 2015
  2. 2. © OECD/IEA 2015 Energy & climate change today  A major milestone in efforts to combat climate change is fast approaching – COP21 in Paris in December 2015  Momentum is building:  Historic US-China joint announcement; EU 2030 targets agreed  Developed & developing countries are putting forward new pledges to reduce emissions  Many energy companies & investors are starting to engage  Energy production & use accounts for two-thirds of global greenhouse-gas emissions  Energy sector must cut emissions, while powering economic growth, boosting energy security & increasing energy access
  3. 3. © OECD/IEA 2015 Energy emissions stall but economic engine keeps running Global energy-related CO2 emissions For the first time, energy-related CO2 emissions stalled despite the global economy expanding by 3% 5 10 15 20 25 30 35Gt 1985 1990 1995 2000 2005 2010 Dissolution of Soviet Union Global economic downturn 2014
  4. 4. © OECD/IEA 2015 Emissions burden moves over time Cumulative energy-related CO2 emissions by region Past emissions are important, although the source of emissions shifts with changes in the global economy 2015-2040 1890-2014 100 200 300 400 500 United States European China Union Russia Japan India Africa Gt
  5. 5. © OECD/IEA 2015 National pledges build towards a global agreement Submitted & signalled INDCs cover two-thirds of energy-related GHG emissions, with implications for future energy & emissions trends Submitted INDCs Signalled INDCs Announced energy policies
  6. 6. © OECD/IEA 2015 Climate pledges shift the energy sector  One-quarter of the world’s energy supply is low carbon in 2030; energy intensity improves three-times faster than the last decade  Renewables reach nearly 60% of new capacity additions in the power sector; two-thirds of additions are in China, EU, US & India  Natural gas is the only fossil-fuel that increases its share of the global energy mix  Total coal demand in the US, Europe & Japan contracts by 45%, while the growth in India’s coal use slows by one-quarter  Climate pledges for COP21 are the right first step towards meeting the climate goal
  7. 7. © OECD/IEA 2015 What does the energy sector need from COP21?  The IEA proposal for COP21: 1. Peak in emissions – set the conditions which will achieve an early peak in global energy-related emissions 2. Five-year revision – review contributions regularly, to test the scope to lift the level of ambition 3. Lock in the vision – translate the established climate goal into a collective long-term emissions goal 4. Track the transition – establish a process for tracking energy sector achievements
  8. 8. © OECD/IEA 2015 1. Peak in emissions: IEA strategy to raise climate ambition Global energy-related GHG emissions Five measures – shown in a “Bridge Scenario” – achieve a peak in emissions around 2020, using only proven technologies & without harming economic growth 20 25 30 35 40 2000 2014 2020 2025 2030 GtCO2-eq Bridge Scenario INDC Scenario Energy efficiency 49% Reducing inefficient coal Renewables investment Upstream methane reductions Fossil-fuel subsidy reform 17% 15% 10% Savings by measure, 2030 9%
  9. 9. © OECD/IEA 2015 1. Peak in emissions: Bridging strategy is flexible across regions The measures in the Bridge Scenario apply flexibly across regions, with energy efficiency and renewables as key measures worldwide GHG emissions reduction by measure in the Bridge Scenario, relative to the INDC Scenario, 2030 United States European Union China India Middle East Latin America Africa Southeast Asia Russia Fossil-fuel subsidies Efficiency Renewables Inefficient coal plants Methane reductions
  10. 10. © OECD/IEA 2015 2. Five-year revision: World’s carbon budget is shrinking A five-year review cycle would enable pledges to keep pace with energy sector innovation; building ambition before the carbon budget is consumed Today 2020 2025 2030 2035 2040 World’s remaining carbon budget
  11. 11. © OECD/IEA 2015 Total 50 100 150 200 2015 2020 2025 2030 2035 2040Million Vehicle sales 3. Lock in the vision: What more does it take for 2 °C? Cost reductions & deployment of electric vehicles An emissions goal would give greater clarity & certainty to the energy sector, strengthening the case for RD&D investment & technology transfer 100 200 300 400 DollarsperkWh Electric Battery costs Electric vehicles (right axis) Solar PV additions Capacity Capital costs Solar PV (right axis) Cost reductions & deployment of all solar PV 25 50 75 100 2015 2020 2025 2030 2035 2040 GW 1 400 2 100 2 800 DollarsperkW 700 Internal combustion
  12. 12. © OECD/IEA 2015 4. Track the transition: Impact of pledges must be monitored Energy sector indicators are needed to track the low-carbon transition; IEA identifies key metrics to monitor energy sector achievements 100 200 300 400 500 600 CO2 intensity Power gCO2perkWh -42% Average fuel consumption of new cars 2 4 6 8 litresper100km -43% Transport Lighting intensity of buildings 2 4 6 8 kWhperm2 -40% Residential 2013 2030
  13. 13. © OECD/IEA 2015 Conclusions  Pledges are not yet enough to achieve our climate goal, but are a basis from which to build ambition  Companies that do not anticipate stronger energy & climate policies risk being at a competitive disadvantage  For COP21, the IEA proposes four key energy sector outcomes: 1. Target a near-term peak in emissions 2. Five-year revision, to test the scope for raising ambition 3. Lock in the vision by setting a long-term emissions goal 4. Track the transition in the energy sector  Climate change will lead the agenda at the IEA’s Ministerial meeting on 17-18 November 2015
  14. 14. © OECD/IEA 2015 www.worldenergyoutlook.org/energyclimate

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