Dialogue on Climate Change, Clean Energy and Sustainable Development
Ministerial Meeting 1 November 2005, London
Claude Mandil Executive Director International Energy Agency
Our Dialogue on Climate Change, Clean Energy and Sustainable Development
Ministers and distinguished representatives. It is a great honour for me to be invited to address this most important meeting. At the Gleneagles Summit, which I attended on behalf of the International Energy Agency, the leaders of the G8 recognised climate change as a serious and long term challenge that has the potential to affect every part of the globe. Also, the leaders of Brazil, China, India, Mexico, and South Africa recognised the climate change “has and for the foreseeable future will continue to have, a profound impact on the development prospects of our societies”. And the 26 member countries of the IEA, which I represent, have since expressed their support for the leadership shown by the G8 at the meeting of our Governing Board on 16 September. These developments are important, because they have removed any doubt that there is now global recognition of the seriousness of the threat of climate change and of the need to address it urgently. We are all in this together. Today we are aiming to build bridges and to agree at least some elements of our response. I will speak first about the nature of the task that we face and the tools that are available to us. Then I will talk about the very specific Plan of Action that the G8 has adopted, and the IEA’s role in carrying out that plan. In concluding I will express the hope that we can work with developing countries represented here today, who are not of course, themselves, parties to that plan, but who, I believe may find value in working with us on major elements of it. It is a huge task. Let no-one have any doubts about that. We in the IEA do not set targets. But as an example, if we were to aim to limit the concentration of greenhouse gasses in the atmosphere to no more than 550 parts per million – already more than double the pre-industrial level – then global emissions would need to peak no later than 2030. We must remember that CO2 emissions, once released, have a long life in the atmosphere. This means that to stabilise concentrations at any level we will eventually need to reduce net emissions to near zero. Of course, stabilisation at a safe level is an explicit objective of the United Nations Framework Convention on Climate Change. Are we on track to achieve this? This is one question that is very easy to answer. No, we are not!
20,000
Source: W EO 2004
16,000
M t of CO 2
12,000
8,000
4,000
0 1970 1980 1990 2000 2010 2020 2030
OE CD
Transition Econom ies
D eveloping C ountries
Figure 1 - Global CO2 Emissions in WEO 2004 Reference Scenario
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Global CO2 emissions, which are of course mostly energy related, are continuing to rise in the developed OECD countries and also in developing countries. The rate of growth is fastest in developing countries – and of course that is due to the increasing pace of development, which we all welcome. But it is also growing in developed countries. And if policies worldwide do not change, even with the high energy prices we face now, CO2 emissions will increase by more than 50% by 2030.
0% A e g %C a g p r Y a (% v ra e hne e er )
-1%
-2%
-3% 1973-1990 1990-2003 2003-2030
Figure 2 - OECD CO2 Emissions per GDP
In fact OECD emissions have been accelerating since 1990, because the rate of improvement in energy efficiency has declined, as you can see from the Figure. And if policies do not change, energy efficiency rates will not improve, as shown by the right-hand bar. In the World Energy Outlook 2004 we included an Alternative Policy Scenario in which we analysed the difference it could make if Governments adopted the more ambitious energy efficiency and climate change policies they are already considering, but have not yet acted on.
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40 000
35 000 Mt of CO 2
30 000
25 000
20 000 1990
2000 Reference Scenario
2010
2020 Alternative Scenario
2030
Figure 3 - Global CO2 Emissions WEO 2004 Reference Scenario and Alternative Policy Scenario It demonstrated the potential to reduce 2030 emissions by 16%. Most of these savings come from getting energy efficiency back on track. It would be a big step forward, but it is plainly not enough. The task of bringing emissions to a plateau over the next twenty or so years is mainly a matter of policies and incentives to fully deploy effectively the technologies that we already have. Much of the G8’s Plan of Action is, rightly, focused on these areas. And in this, “Season of mists and mellow fruitfulness” I will allow myself the cliché – yes there are “low hanging fruits” already available. For example; At the Gleneagles Summit, in their Plan of Action, G8 leaders committed to promote the IEA’s One Watt initiative to reduce the waste of standby power. The savings, in the OECD, could be equivalent to 20 major power plants. I assume that – in ways appropriate to each G8 country – this is happening and that we will soon see specific regulatory or other measures in place. Another example is the deployment of least cost lighting options. Early next year, under the title “Light’s Labours Lost” the IEA will show how electricity demand could be reduced by more than 30% in this way. These are just examples, although significant ones, of what can be done without new technology. A large part of the work that the IEA will be doing under the G8 Plan of Action is aimed at helping Governments, all over the World to identify the best options for them. Measures of this kind can help us to stem the growth of CO2 emissions in the medium term. But eventually, to achieve large reductions in greenhouse gas emissions, which will be essential, we will need new technology. Research, demonstration, and deployment of new technologies takes time, especially when long lived capital equipment has to be replaced. There are no quick results. But for the same reasons the need for action to redouble research, development, and demonstration efforts is urgent. Otherwise we are locking in a high carbon energy infrastructure for the next generation. Which technology should we be concentrating on? This is not a question that we can answer. This is not because the IEA’s crystal ball is cloudy – although of course this is true. It is because the task is so huge that the solution is bound to be found in the deployment of a wide range of technologies in
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different circumstances. Governments need to adopt a portfolio approach to their research, development, and demonstration programmes, reflecting this reality. But there are some pointers that we can give: In the short to medium term, as I have said, energy efficiency is key – it calls for strong policy actions. It includes the efficiency of fossil fuel power generation, including coal, as well as energy transmission and use. In the medium to longer term the capture and storage of carbon emissions will also be essential. – This urgently requires full scale demonstration. Renewables will be vital to achieve long term sustainability - we must work to make them cost-effective. Nuclear can make a big contribution where it is accepted as an option - the major challenges are new reactor technology and waste management. This is the challenge. And these are the tools available. The next question is the practical one that we face today. How can we get concrete results from the Dialogue that we are initiating? The Plan of Action is an immensely valuable initiative. I am able to say that not simply because it is my own view but because it has the full backing of the IEA’s Governing Board. It covers all the areas that I have outlined above. It is strongly focused on those topics that can make the most difference in the short and medium term while also supporting collaboration for R&D for the longer term. It is a Plan for dialogue and it embraces the financial as well as the analytical and policy aspects of climate change, engaging the World Bank and other financial institutions. Of course it is a plan of the G8. But it is relevant to all nations. As the five non-G8 countries recognised at Gleneagles, climate change has an impact on the prospects of all societies, including developing nations. And they are even more immediate problems such as the high cost of energy imports, local pollution hazard from energy, and the need for clean energy to sustain the pace of development. All of these issues are addressed in this Plan. The IEA is not a regulator. Our role is to advise and assist Governments in their energy policies. We have received an outstandingly clear and specific request from the Energy Ministers of our 26 member countries and also from the G8 – in virtually identical language – to “advise on alternative energy scenarios and strategies aimed at a clean, clever, and competitive energy future”. We have been asked to participate in the Dialogue and to play a major role in the delivery of the Plan of Action – working in partnership, where appropriate, with the World Bank. The IEA warmly welcomes this challenge. We believe that we have, in our energy network, the right skills and experience. And we already have major links and the experience of working closely and constructively with major energy consumer countries. We are taking this work forward vigorously and energetically. All delegates have in your packs for today a small brochure of our G8 programme plus a much fuller document which describes the main activities that we are proposing in more detail. We are planning an extensive international programme of analysis, workshops, and sharing of knowledge and experience. We want to work with existing international collaborative programmes where that is appropriate. We will work with the World Bank and other international financial institutions. We hope that major energy consuming nations will want to work with us and we hope that many of the events that we plan can be located in developing countries and co-hosted by you.
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The work must be results oriented. We will be producing new scenarios and “pathways” towards a new energy future that will clearly illustrate, on a global basis the key policy measures that will be required. We of course already publish the Alternative Policy Scenario of the World Energy Outlook and this will be developed further in the 2006 WEO to be published next year. In March next year we will publish a new, Global Energy Technology Perspectives book, which will present scenario analysis of the impacts different technologies can make out to 2050. A major result of our Plan of Action work will be to identify “best practice” for achieving energy efficiency in all main areas, including buildings, industry, transport, appliances. We want to present Government with clear advice on what they will need to do meet these standards. Another major area for the work is clean coal technology. This includes analysis of the efficiency of existing coal power stations and identification, and where appropriate facilitation, of the highest standards for new investment. We want to extend and enhance the network of international energy technology collaboration that we already have - working through Implementing Agreements for each technology. We would like to initiate discussions particularly with developing countries to identify ways in which a greater participation in this network can contribute to your energy development needs. We want to work with you. We have an outstanding opportunity today. What can we hope to achieve? I hope that there will be a common resolve to act on climate change options that are already available. And I hope that we can agree on common objectives for our dialogue and on processes for taking them forward together. And specifically in relation to the IEA’s role, I hope that we can have some initial discussions on how we can make a success of our part of the Plan of Action, to establish some key contacts, and to have initial discussions on the sorts of participation that you will find most valuable.
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