Download London, 10 June 2013 © OECD/IEA 2013

London, 10 June 2013
© OECD/IEA 2013
Context
 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 emissions
reductions 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
© OECD/IEA 2013
CO2 emissions at record high in 2012
Change in energy-related CO2 emissions, 2012
Mt CO2 500
400
300
200
100
0
-100
-200
-300
World
China
Japan
Middle
East
India
European
Union
United
States
CO2 emissions grew by 1.4% to reach 31.6 Gt in 2012, but trends vary by country
© OECD/IEA 2013
The two largest emitters make encouraging
steps toward decarbonisation…
United States
600
gCO2 / kWh
gCO2 / kWh
CO2 emissions per unit of electricity generation
550
900
850
500
800
450
750
400
700
2003
2006
2009
2012
China
2003
2006
2009
2012
In 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
© OECD/IEA 2013
…but the world is still moving in
the wrong direction
Global energy-related CO2 emissions
Gt 32
Global economic downturn
28
Dissolution of the Soviet Union
24
2nd oil price shock
20
1st oil price shock
16
12
8
End of World War II
Great depression
4
1890
1910
1930
1950
1970
1990
2012
CO2 emissions trends point to a long-term temperature increase of up to 5.3 °C
© OECD/IEA 2013
Four measures to keep the 2 °C target alive
 National efforts in this decade need to buy time for an international
agreement, 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 these
criteria
© OECD/IEA 2013
Four measures can stop
emissions growth by 2020
Emissions savings in the 4-for-2 °C Scenario, 2020
Partial removal of
fossil-fuel subsidies
12%
Reduce methane
releases from upstream
oil and gas
Implement selected
energy efficiency
policies
18%4-for-2°C Scenario
delivers savings 49%
of
3.1 Gt CO2-eq
21%
Limit use of
inefficient coal power plants
Four 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 path
© OECD/IEA 2013
Measure 1: Improve energy efficiency
Emissions savings in the 4-for-2 °C Scenario, 2020
Buildings
Heating & cooling
Appliances & lighting
Industrial motors
Industry
Road
Transport
20%
40%
60%
80%
100%
Share of efficiency savings
Energy efficiency reduces emissions by 1.5 Gt, led by minimum energy performance
standards – additional investment is more than offset by fuel bill savings
© OECD/IEA 2013
Measure 2: Limit the use of inefficient
coal power plants
Change in electricity demand
& coal-fired electricity generation from the least-efficient plants, 2020
TWh
0
- 200
- 400
United
States
European
Union
China
India
Lower electricity
demand
Lower electricity
generation from leastefficient coal plants
- 600
- 800
-1 000
Energy efficiency and reducing the role of the least-efficient coal power plants
have important co-benefits for local air pollution
© OECD/IEA 2013
Measure 3: Reduce methane releases
into the atmosphere
Methane emissions from the upstream oil and gas industry, 2020
Mt CO2-eq 350
Reduction in
4-for-2 °C Scenario
300
250
200
150
100
50
United
States
Other
OECD
Middle
East
Russia
Africa
Other
Non-OECD
In 2010, methane releases were 1.1 Gt CO2-eq;
halving the level in 2020 would save twice the gas production of Nigeria today
© OECD/IEA 2013
Measure 4: Phase out fossil-fuel subsidies
Savings in the 4-for-2 °C Scenario: 360 Mt
Other
non-OECD
14%
Russia
7%
Latin
America
11%
Middle East
54%
Africa
15%
Fossil-fuel subsidies in 2011 were equivalent to an incentive of $110 per tonne of CO2
© OECD/IEA 2013
The energy sector needs to adapt
to climate change
o
C
o
C
o
C
o
C
o
C
o
C
o
C
o
C Increase of droughts
and/or heat waves
o
Power plant cooling
impacted
C
o
C
© Natural hazards adapted from Munich RE (2011)
The energy sector needs to increase its resilience to the physical impacts
of climate change
© OECD/IEA 2013
The energy sector needs to adapt
to climate change
Typical cyclones
and track directions
Change in tropical
cyclones and storms
Exposed oil and
gas infrastructure
© Natural hazards adapted from Munich RE (2011)
The energy sector needs to increase its resilience to the physical impacts
of climate change
© OECD/IEA 2013
Some fossil-fuel reserves remain
underground
Potential CO2 emissions from proven fossil-fuel reserves to 2050
Gt 2 000
If all proven reserves
were used
1 600
Additional
emissions
New Policies
Scenarioin
New Policies Scenario
1 200
450 Scenario
800
400
0
Coal
Oil
Gas
On today’s trends, half of the proven fossil-fuel reserves would be left
undeveloped to 2050 – stronger climate action would increase the share
© OECD/IEA 2013
A diverse portfolio matters in
the power sector
Net revenues for new power plants by scenario, 2012-2035
Trillion 8
dollars
(2011)
6
New Policies Scenario
450 Scenario
CCS fitted
4
2
Renewables
Nuclear
Fossil fuels
Under a 2 °C path, total net revenues for new power plants are $3 trillion higher –
CCS is an effective protection strategy for fossil fuel assets
© OECD/IEA 2013
Key messages
 Despite encouraging steps in some countries, global emissions
keep rising and the scientific evidence of climate change increases
 Early national action is required while negotiating towards a
global deal in Paris in 2015 that then comes into force by 2020
 Four measures can stop emissions growth by 2020 and keep the
2°C target alive, without harming economic growth
 There is a need for parallel action to deploy critical low-carbon
technologies at scale after 2020, including CCS
 The energy sector must adapt to climate change, both in the
resilience of its existing assets and in future investment decisions
© OECD/IEA 2013
www.worldenergyoutlook.org/energyclimatemap
© OECD/IEA 2013