$45 trillion urged in battling carbon emissions
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BRUSSELS: In one of the strongest warnings so far about the world's thirst for energy, the International Energy Agency said Friday that investment totaling $45 trillion might be needed over the next half-century to prevent energy shortages and greenhouse gas emissions from undermining global economic growth.
The executive director of the agency, Nobuo Tanaka, called for "immediate policy action and technological transition on an unprecedented scale." Tanaka said the world needed to "completely transform the way we produce and use energy."
The IEA report said that the combination of growing demand for energy, especially in countries like China and India, the dangers of climate change and the scarcity of resources was going to require huge shifts in the way the global economy was organized. To meet those challenges, it said, nations would have to overcome objections to building nuclear power plants and storing large amounts of carbon dioxide underground or beneath the ocean floor.
"I am very pleased the International Energy Agency has put such a high figure on the cost of making this transition," said Pierre Noël, an energy expert and senior policy fellow at the European Council on Foreign Relations. "It is high time we got rid of the myth that we can decarbonize our economies on the cheap," he said.
In its report, the IEA, which gives advice on energy policy to its 27 member nations, which include the United States, Canada, Japan, Australia, New Zealand, South Korea and most of Europe, described emissions-cutting measures that broadly match the advice of some leading scientists, who have recommended cutting emissions in half by 2050 as a way of avoiding devastating climate change. Environment ministers from the Group of 8 have backed this target, and they have said governments should officially endorse the goal at a G-8 summit meeting in July in Japan.
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The report did not say how such large sums of money should be raised. The IEA said member nations of the UN Framework Convention on Climate Change, or Unfccc, the parent treaty of the Kyoto Protocol, must negotiate ways of encouraging governments and businesses to lower emissions.
John Hay, a spokesman for the convention, said markets operating under the Kyoto treaty that put a price on carbon pollution, like Europe's Emissions Trading System, were already playing an important role in driving investment, but could not be solely relied on to raise the sums described by the IEA. Two years ago, Yvo de Boer, the executive secretary of the Unfccc, estimated that carbon trading could generate investments in climate-friendly technology in the developing world worth about $100 billion annually - a fraction of the amounts the IEA said was required.
The IEA report foresees "a dramatic transformation of the energy industry, and how that level of investment can be achieved is a major question," said Robert LaCount, head of climate change and clean energy research at Cambridge Energy Research Associates. "Governments at all levels will need to help and support the emergence of new technologies so that they can reach commercialization," he said.
Among the energy agency's chief messages is that current energy policies are unsustainable, with emissions of carbon dioxide expected to climb 130 percent and demand for oil to rise by 70 percent by 2050. Tanaka warned that oil demand could be five times the current production of Saudi Arabia by that time, and that carbon emissions of such a magnitude could raise global average temperatures by 6 degrees Celsius (10.8 degrees Fahrenheit), changing all aspects of life and creating irreversible changes in the natural environment.
A major problem for the planet is that the rising cost of oil and natural gas is prompting a switch to coal, particularly in India and China. Coal is inexpensive and plentiful but highly polluting, and its increasing use is contributing to the accelerating growth in emissions of carbon dioxide. But Noël, of the foreign relations council, said the rising cost of fossil fuels should be a cause for optimism, because they would be the main factor driving large-scale investments.
"It's not primarily a global agreement between heads of state that will make technologies like nuclear power or like carbon capture reach take off," Noël said. "It's primarily expectations about energy prices," he said.
The IEA recommended taking measures now that would ensure that carbon emissions were down to at least present-day levels by mid-century by using technologies that already exist, including steps for improving energy efficiency and reducing emissions from power generation. Such measures would cost $17 trillion between now and 2050, or 0.4 percent of global output, costing about $400 billion a year.
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