IEA report recommends radical near-term reductions in energy sector CO2 emissions

The renewables-led transformation of the power sector has been the focus of debates on energy security in every climate change summit.  The International Energy Agency (IEA), an autonomous agency that promotes energy security amongst its 29 member nations and offers analyses on ways to ensure reliable, affordable and clean energy, has released a World Energy Outlook 2016 report to provide a “comprehensive examination of the new era opened up by the Paris Agreement”.

The promise of low-carbon energy

Growth in energy-related CO2 emissions, as per the report, stalled in 2015, primarily because of the gains in energy efficiency and the expanded use of cleaner energy sources worldwide. In fact, a large share of the US$1.8-trillion investment each year in the energy sector has been allocated to clean energy. Simultaneously, the investment in oil and gas has fallen. The fossil-fuel consumption subsidies dropped to $325 billion in 2015 from almost $500 billion in 2014.

Energy poverty in large swathes of Africa

Despite concerted efforts in many countries, a large chunk of global population is likely to remain without modern energy in the coming decades. More than half a billion people, mostly in rural areas of sub-Saharan Africa, is unlikely to have access to electricity in 2040. About 1.8 billion people will remain reliant on solid biomass as a cooking fuel (2.7 billion people are currently reliant on biomass). The report concludes that the exposure to indoor pollution will continue. This indoor pollution is linked to 3.5 million premature deaths each year.

Climate pledges by countries

While most countries are on track to achieve, and even exceed many of the targets set in the Paris Agreement, it will slow down the rise in global energy-related CO2 emissions. However, it is not enough to limit warming to less than 2°C.

In case of China, infrastructural growth in recent decades relied heavily on energy-intensive industrial sectors, but the energy demand from these sectors is projected decline by 2040, hence, bringing down China’s industrial coal use. By 2040, the coal’s share in the growth of China’s power generation is expected to come down from three-quarters today to less than 45 per cent.

In India, coal’s share in power generation will drop from 75 per cent to 55 per cent by 2040. According to this IEA report, it is a major shift in a country that will witness electricity demand more than triple.

Though the developed economies such as the US, the EU and Japan are on track to meet their climate pledges, delivering on further improvements in energy efficiency will be vital. Going by the estimated growth in energy-related CO2 emissions (to 36 gigatonnes) in 2040, the Paris Agreement’s goal is unlikely to be met.

Other relevant findings

• The challenge of limiting the global warming to less than 2°C requires a major reallocation of investment capital for the energy sector.
• For a reasonable chance of remaining within the temperature goal of 1.5°C, the world would have to ensure net-zero emissions at some point between 2040 and 2060. According to the report, it requires “radical near-term reductions in energy sector CO2 emissions, employing every known technological, societal and regulatory decarbonisation option”.
• While all fossil fuels will see continued growth by 2040, the oil demand is likely to return to the levels of the late 1990s (under 75 millions of barrels per day). Even coal use will get back to levels of the mid-1980s (under 3 000 million tonnes). Only gas will see an increase in consumption level.
• Over the coming decades, the demand for oil will be generated mainly from freight, aviation and petrochemicals sectors where alternatives are scarce. The oil supply, however, will increasingly concentrate in the Middle East.
• By 2040, the inter-dependencies between energy and water will intensify and the amount of energy used in the water sector will be more than double. Currently, the energy sector is responsible for 10 per cent of global water withdrawals, mainly for power plant operation. These requirements will grow by 2040.

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