5 March 2015, High Level Workshop
Dr. Fatih Birol CSIS, 26 June 2015
© 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 © OECD/IEA 2015
Energy emissions stall but economic engine keeps running Global energy-related CO2 emissions Gt 35
Global economic downturn
30
Dissolution of Soviet Union
25 20 15 10 5 1985
1990
1995
2000
2005
2010
For the first time, energy-related CO2 emissions stalled despite the global economy expanding by 3% © OECD/IEA 2015
2014
Emissions burden moves over time Cumulative energy-related CO2 emissions by region Gt 500 400 2015-2040 300
1890-2014
200
100
United European States Union
China
Russia
Japan
India
Africa
Past emissions are important, although the source of emissions shifts with changes in the global economy © OECD/IEA 2015
National pledges build towards a global agreement
Submitted INDCs Signalled INDCs Announced energy policies
Submitted & signalled INDCs cover two-thirds of energy-related GHG emissions, with implications for future energy & emissions trends © 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 © 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
© OECD/IEA 2015
1. Peak in emissions: IEA strategy to raise climate ambition Gt CO2-eq
Global energy-related GHG emissions
Savings by measure, 2030
40 INDC Scenario
35
Fossil-fuel subsidy reform Upstream methane reductions
10%
Energy efficiency
15%
Bridge Scenario
49%
30 Renewables investment
25
17% 9% Reducing inefficient coal
20 2000
2014
2020
2025
2030
Five measures – shown in a “Bridge Scenario” – achieve a peak in emissions around 2020, using only proven technologies & without harming economic growth © OECD/IEA 2015
1. Peak in emissions: Bridging strategy is flexible across regions GHG emissions reduction by measure in the Bridge Scenario, relative to the INDC Scenario, 2030 Russia European Union China
United States
Middle East
India
Efficiency Inefficient coal plants Renewables Methane reductions Fossil-fuel subsidies
Latin America
Southeast Asia
Africa
The measures in the Bridge Scenario apply flexibly across regions, with energy efficiency and renewables as key measures worldwide © OECD/IEA 2015
2. Five-year revision: World’s carbon budget is shrinking World’s remaining carbon budget
Today
2020
2025
2030
2035
2040
A five-year review cycle would enable pledges to keep pace with energy sector innovation; building ambition before the carbon budget is consumed © OECD/IEA 2015
3. Lock in the vision: What more does it take for 2 °C?
75
2 100
50
1 400
25
700
2015
2020 2025
Capacity Solar PV additions
2030 2035
2040
Capital costs Solar PV (right axis)
200
400
150
300
100
200
50
100
2015
2020 2025
Vehicle sales Total Internal combustion Electric
2030 2035
2040
Battery costs Electric vehicles (right axis)
An emissions goal would give greater clarity & certainty to the energy sector, strengthening the case for RD&D investment & technology transfer © OECD/IEA 2015
Dollars per kWh
2 800
Million
100
Cost reductions & deployment of electric vehicles Dollars per kW
GW
Cost reductions & deployment of all solar PV
4. Track the transition: Impact of pledges must be monitored
500 400
-42%
300
8 6
-43%
Residential kWh per m2
600
Transport litres per 100 km
g CO2 per kWh
Power
8 6
-40%
4
4
2
2
2030
200 100 CO2 intensity
Average fuel consumption of new cars
Lighting intensity of buildings
Energy sector indicators are needed to track the low-carbon transition; IEA identifies key metrics to monitor energy sector achievements © OECD/IEA 2015
2013
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. 2. 3. 4.
Target a near-term peak in emissions Five-year revision, to test the scope for raising ambition Lock in the vision by setting a long-term emissions goal Track the transition in the energy sector
Climate change will lead the agenda at the IEA’s Ministerial
meeting on 17-18 November 2015 © OECD/IEA 2015
www.worldenergyoutlook.org/energyclimate © OECD/IEA 2015
© 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 © OECD/IEA 2015
Energy emissions stall but economic engine keeps running Global energy-related CO2 emissions Gt 35
Global economic downturn
30
Dissolution of Soviet Union
25 20 15 10 5 1985
1990
1995
2000
2005
2010
For the first time, energy-related CO2 emissions stalled despite the global economy expanding by 3% © OECD/IEA 2015
2014
Emissions burden moves over time Cumulative energy-related CO2 emissions by region Gt 500 400 2015-2040 300
1890-2014
200
100
United European States Union
China
Russia
Japan
India
Africa
Past emissions are important, although the source of emissions shifts with changes in the global economy © OECD/IEA 2015
National pledges build towards a global agreement
Submitted INDCs Signalled INDCs Announced energy policies
Submitted & signalled INDCs cover two-thirds of energy-related GHG emissions, with implications for future energy & emissions trends © 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 © 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
© OECD/IEA 2015
1. Peak in emissions: IEA strategy to raise climate ambition Gt CO2-eq
Global energy-related GHG emissions
Savings by measure, 2030
40 INDC Scenario
35
Fossil-fuel subsidy reform Upstream methane reductions
10%
Energy efficiency
15%
Bridge Scenario
49%
30 Renewables investment
25
17% 9% Reducing inefficient coal
20 2000
2014
2020
2025
2030
Five measures – shown in a “Bridge Scenario” – achieve a peak in emissions around 2020, using only proven technologies & without harming economic growth © OECD/IEA 2015
1. Peak in emissions: Bridging strategy is flexible across regions GHG emissions reduction by measure in the Bridge Scenario, relative to the INDC Scenario, 2030 Russia European Union China
United States
Middle East
India
Efficiency Inefficient coal plants Renewables Methane reductions Fossil-fuel subsidies
Latin America
Southeast Asia
Africa
The measures in the Bridge Scenario apply flexibly across regions, with energy efficiency and renewables as key measures worldwide © OECD/IEA 2015
2. Five-year revision: World’s carbon budget is shrinking World’s remaining carbon budget
Today
2020
2025
2030
2035
2040
A five-year review cycle would enable pledges to keep pace with energy sector innovation; building ambition before the carbon budget is consumed © OECD/IEA 2015
3. Lock in the vision: What more does it take for 2 °C?
75
2 100
50
1 400
25
700
2015
2020 2025
Capacity Solar PV additions
2030 2035
2040
Capital costs Solar PV (right axis)
200
400
150
300
100
200
50
100
2015
2020 2025
Vehicle sales Total Internal combustion Electric
2030 2035
2040
Battery costs Electric vehicles (right axis)
An emissions goal would give greater clarity & certainty to the energy sector, strengthening the case for RD&D investment & technology transfer © OECD/IEA 2015
Dollars per kWh
2 800
Million
100
Cost reductions & deployment of electric vehicles Dollars per kW
GW
Cost reductions & deployment of all solar PV
4. Track the transition: Impact of pledges must be monitored
500 400
-42%
300
8 6
-43%
Residential kWh per m2
600
Transport litres per 100 km
g CO2 per kWh
Power
8 6
-40%
4
4
2
2
2030
200 100 CO2 intensity
Average fuel consumption of new cars
Lighting intensity of buildings
Energy sector indicators are needed to track the low-carbon transition; IEA identifies key metrics to monitor energy sector achievements © OECD/IEA 2015
2013
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. 2. 3. 4.
Target a near-term peak in emissions Five-year revision, to test the scope for raising ambition Lock in the vision by setting a long-term emissions goal Track the transition in the energy sector
Climate change will lead the agenda at the IEA’s Ministerial
meeting on 17-18 November 2015 © OECD/IEA 2015
www.worldenergyoutlook.org/energyclimate © OECD/IEA 2015
