I'm still absorbing the analysis, but the best way to describe the message of the report is "sobering".
According to IEA analysis, unless the world takes "bold" action (their term) to change our energy policies, we will be locked into an "insecure, inefficient and high-carbon" energy system. They go on to say, "Governments need to introduce stronger measures to drive investment in efficient and low-carbon technologies. The Fukushima nuclear accident, the turmoil in parts of the Middle East and North Africa and a sharp rebound in energy demand in 2010 which pushed CO2 emissions to a record high, highlight the urgency and the sale of the challenge."
The IEA typically explores futures by scenario analysis. The "New Policies Scenario" is, given our current direction, probably the best that can be hoped for. In this scenario, recent government commitments are implemented in a "cautious" manner. Under this assumption, and given current population and economic mega-trends, the year 2035 looks like this:
- Total global primary energy demand has increased by 1/3 relative to 2010 levels. Ninety percent of this demand growth is in non-OECD countries. China is consuming 70% more energy than the U.S., with per-capita demand still less than half that of the average American.
- The percentage of energy supplied by fossil fuels drops from today's 81% to 75%. Renewables share of energy production rises from 13% to 19%, based on subsidies that rise from $65B in 2910 to $250B in 2035. (Want to take odds on all those subsidies coming through?) It is worth noting, though that the IEA calculates that global fossil subsidies in 2010 amounted to $409B.
- Oil demand rises from 87 million barrels/day in 2010 to just 99 million barrels/day in 2035. Virtually all of this is driven by growth in the transportation sectors of emerging economies. (Everyone wants a personal automobile.)
- The 2035 price of oil is assumed to reach just $120/barrel in 2010 dollars. (I think this is a low-ball assumption).
- The use of coal RISES 65% by 2035.
- Nuclear power output rises by only 70% by 2035.
- Natural gas's share of energy production rises dramatically, almost equaling that of coal.
- Carbon dioxide emissions between 2010 and 2035 amount to 3/4 of the total emitted during the past 110 years.
- Approximately $38 Trillion in investments is required by 2035 – about $1.5 Trillion per year – to achieve this scenario. The investment breakdown is: $16.9 trillion in the Power sector, $10.0 trillion in the Oil sector, $9.5 trillion in the Gas sector, and $1.2 trillion in the Coal sector.
- The global average temperature rise is 3.5 ºC.
The IEA also looked at a "450 Scenario", which lays out a pathway to to achieving a 2ºC global average temperature rise. There's some really sobering news here. According to EIA's analysis, given the existing energy infrastructure in place, all of the emissions allowed through 2035 will be emitted by 2017. We are "locked-in". A major redirection of global policies would be required to address this problem. According to the EIA, "Delaying action is a false economy: for every $1 of investment in cleaner technology that is avoided in the power sector before 2020, an additional $4.30 would need to be spent after 2020 to compensate for the increased emissions." As they say, "the door to 2ºC is closing...
The IEA also conducted some interesting parametric analyses which they've not yet posted. They have a "low nuclear" variant in which nuclear energy drops by 15% by 2035. They also focus quite a bit of attention on China's per-capital energy demand growth... Most of the variants appear to make matters worse.
Given all of this news, and an attention deficit world awash in all sorts of distractions, it's not unreasonable to consider scenarios in which efforts to reduce carbon emissions are not successful. In that event, we can (a) hope the climate modelers are wrong, (b) pursue terra-forming to alter the atmospheric dynamics, or (c) prepare to deal with all of the ramifications of a warmer climate.
Quite a Gedanken Experiment!