Deployment of energy efficiency measures is vital if the world’s nations are to achieve the agreed target of limiting the long-term average global temperature rise to 2 degrees Celsius (3.6 degrees Fahrenheit).
Existing and planned energy efficiency policies are likely to leave two-thirds of the global economically viable energy efficiency potential untapped, while renewable energy deployment is already on track to deliver their expected contribution to climate targets, the International Energy Agency (IEA) says.
In its World Energy Outlook Special Report, Redrawing the Energy-Climate Map the IEA says that tackling energy efficiency in buildings, industry and transport – expected to deliver nearly half of needed emissions reduction – is one of four key energy policies the world’s nations should adopt to keep the door open to the 2ºC goal. The report shows the path the world is currently on is more likely to result in a temperature increase of between 3.6ºC and 5.3 ºC.
The agency calls for a limit on the construction and use of the least-efficient coal-fired power plants, to deliver more than 20% of the emissions reduction, while halving expected methane (a potent greenhouse gas) releases into the atmosphere from the upstream oil and gas industry by 2020 would provide 18% of the savings. Finally, implementing a partial phase-out of fossil fuel consumption subsidies, would deliver 12% of the reduction in emissions and supporting efficiency efforts.
Those four energy policies would together account for 80% of the emissions reductions required under a 2ºC trajectory, the IEA says, insisting they would have no net economic cost to the world – although individual companies and sectors may suffer.
In fact revenues across the world’s power sector – which accounts for around two-thirds of global greenhouse-gas emissions – would rise significantly if nations stick to their agreed target of limiting the long-term average global temperature rise to 2ºC.
Gross revenues would be $1.3 trillion higher between 2012 and 2035 if the target was met, compared to a business-as-usual scenario. Gross revenues are made up of a combinaton of wholesale electricity revenues (volume of electricity generation multplied by the wholesale electricity price) and support received from governments for renewables (volume of supported renewables generation multplied by the level of support).
Renewable assets would account for a third of all revenues coming from power-generation capacity built over the next two decades under the 2ºC scenario. Wind, hydro and solar PV grow most strongly under this scenario, with total renewable sources supplying almost half of the world’s electricity by 2035.