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© OECD/IEA 2015
London, 15 June 2015
© OECD/IEA 2015
Energy & climate change today
 A major milestone in efforts to combat climate change is fast
approaching – COP21 in Paris in December 2015
 Momentum is building:
 Historic US-China joint announcement; EU 2030 targets agreed
 Developed & developing countries are putting forward new pledges to
reduce emissions
 Many energy companies & investors are starting to engage
 Energy production & use accounts for two-thirds of global
greenhouse-gas emissions
 Energy sector must cut emissions, while powering economic
growth, boosting energy security & increasing energy access
© OECD/IEA 2015
Energy emissions stall but economic
engine keeps running
Global energy-related CO2 emissions
For the first time, energy-related CO2 emissions stalled
despite the global economy expanding by 3%
5
10
15
20
25
30
35Gt
1985 1990 1995 2000 2005 2010
Dissolution of
Soviet Union
Global economic
downturn
2014
© OECD/IEA 2015
Emissions burden moves over time
Cumulative energy-related CO2 emissions by region
Past emissions are important, although the source of emissions
shifts with changes in the global economy
2015-2040
1890-2014
100
200
300
400
500
United
States
European China
Union
Russia Japan India Africa
Gt
© OECD/IEA 2015
National pledges build towards
a global agreement
Submitted & signalled INDCs cover two-thirds of energy-related GHG emissions,
with implications for future energy & emissions trends
Submitted INDCs
Signalled INDCs
Announced energy
policies
© OECD/IEA 2015
Climate pledges shift the
energy sector
 One-quarter of the world’s energy supply is low carbon in 2030;
energy intensity improves three-times faster than the last decade
 Renewables reach nearly 60% of new capacity additions in the
power sector; two-thirds of additions are in China, EU, US & India
 Natural gas is the only fossil-fuel that increases its share of the
global energy mix
 Total coal demand in the US, Europe & Japan contracts by 45%,
while the growth in India’s coal use slows by one-quarter
 Climate pledges for COP21 are the right first step towards
meeting the climate goal
© OECD/IEA 2015
What does the energy sector
need from COP21?
 The IEA proposal for COP21:
1. Peak in emissions – set the conditions which will achieve an
early peak in global energy-related emissions
2. Five-year revision – review contributions regularly, to test the
scope to lift the level of ambition
3. Lock in the vision – translate the established climate goal into
a collective long-term emissions goal
4. Track the transition – establish a process for tracking energy
sector achievements
© OECD/IEA 2015
1. Peak in emissions:
IEA strategy to raise climate ambition
Global energy-related GHG emissions
Five measures – shown in a “Bridge Scenario” – achieve a peak in emissions
around 2020, using only proven technologies & without harming economic growth
20
25
30
35
40
2000 2014 2020 2025 2030
GtCO2-eq
Bridge Scenario
INDC Scenario
Energy
efficiency
49%
Reducing
inefficient coal
Renewables
investment
Upstream methane
reductions
Fossil-fuel
subsidy reform
17%
15%
10%
Savings by measure, 2030
9%
© OECD/IEA 2015
1. Peak in emissions:
Bridging strategy is flexible across regions
The measures in the Bridge Scenario apply flexibly across regions, with energy
efficiency and renewables as key measures worldwide
GHG emissions reduction by measure in the Bridge Scenario,
relative to the INDC Scenario, 2030
United States
European Union
China
India
Middle East
Latin America
Africa
Southeast Asia
Russia
Fossil-fuel subsidies
Efficiency
Renewables
Inefficient coal plants
Methane reductions
© OECD/IEA 2015
2. Five-year revision:
World’s carbon budget is shrinking
A five-year review cycle would enable pledges to keep pace with energy sector
innovation; building ambition before the carbon budget is consumed
Today 2020 2025 2030 2035 2040
World’s remaining carbon budget
© OECD/IEA 2015
Total
50
100
150
200
2015 2020 2025 2030 2035 2040Million
Vehicle sales
3. Lock in the vision:
What more does it take for 2 °C?
Cost reductions & deployment of
electric vehicles
An emissions goal would give greater clarity & certainty to the energy sector,
strengthening the case for RD&D investment & technology transfer
100
200
300
400
DollarsperkWh
Electric
Battery costs
Electric vehicles
(right axis)
Solar PV
additions
Capacity Capital costs
Solar PV
(right axis)
Cost reductions & deployment of
all solar PV
25
50
75
100
2015 2020 2025 2030 2035 2040
GW
1 400
2 100
2 800
DollarsperkW
700
Internal combustion
© OECD/IEA 2015
4. Track the transition:
Impact of pledges must be monitored
Energy sector indicators are needed to track the low-carbon transition;
IEA identifies key metrics to monitor energy sector achievements
100
200
300
400
500
600
CO2 intensity
Power
gCO2perkWh
-42%
Average fuel
consumption
of new cars
2
4
6
8
litresper100km
-43%
Transport
Lighting intensity
of buildings
2
4
6
8
kWhperm2
-40%
Residential
2013
2030
© OECD/IEA 2015
Conclusions
 Pledges are not yet enough to achieve our climate goal, but are
a basis from which to build ambition
 Companies that do not anticipate stronger energy & climate
policies risk being at a competitive disadvantage
 For COP21, the IEA proposes four key energy sector outcomes:
1. Target a near-term peak in emissions
2. Five-year revision, to test the scope for raising ambition
3. Lock in the vision by setting a long-term emissions goal
4. Track the transition in the energy sector
 Climate change will lead the agenda at the IEA’s Ministerial
meeting on 17-18 November 2015
© OECD/IEA 2015
www.worldenergyoutlook.org/energyclimate

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World Energy Outlook Special Report on Energy and Climate Change

  • 2. © OECD/IEA 2015 Energy & climate change today  A major milestone in efforts to combat climate change is fast approaching – COP21 in Paris in December 2015  Momentum is building:  Historic US-China joint announcement; EU 2030 targets agreed  Developed & developing countries are putting forward new pledges to reduce emissions  Many energy companies & investors are starting to engage  Energy production & use accounts for two-thirds of global greenhouse-gas emissions  Energy sector must cut emissions, while powering economic growth, boosting energy security & increasing energy access
  • 3. © OECD/IEA 2015 Energy emissions stall but economic engine keeps running Global energy-related CO2 emissions For the first time, energy-related CO2 emissions stalled despite the global economy expanding by 3% 5 10 15 20 25 30 35Gt 1985 1990 1995 2000 2005 2010 Dissolution of Soviet Union Global economic downturn 2014
  • 4. © OECD/IEA 2015 Emissions burden moves over time Cumulative energy-related CO2 emissions by region Past emissions are important, although the source of emissions shifts with changes in the global economy 2015-2040 1890-2014 100 200 300 400 500 United States European China Union Russia Japan India Africa Gt
  • 5. © OECD/IEA 2015 National pledges build towards a global agreement Submitted & signalled INDCs cover two-thirds of energy-related GHG emissions, with implications for future energy & emissions trends Submitted INDCs Signalled INDCs Announced energy policies
  • 6. © OECD/IEA 2015 Climate pledges shift the energy sector  One-quarter of the world’s energy supply is low carbon in 2030; energy intensity improves three-times faster than the last decade  Renewables reach nearly 60% of new capacity additions in the power sector; two-thirds of additions are in China, EU, US & India  Natural gas is the only fossil-fuel that increases its share of the global energy mix  Total coal demand in the US, Europe & Japan contracts by 45%, while the growth in India’s coal use slows by one-quarter  Climate pledges for COP21 are the right first step towards meeting the climate goal
  • 7. © OECD/IEA 2015 What does the energy sector need from COP21?  The IEA proposal for COP21: 1. Peak in emissions – set the conditions which will achieve an early peak in global energy-related emissions 2. Five-year revision – review contributions regularly, to test the scope to lift the level of ambition 3. Lock in the vision – translate the established climate goal into a collective long-term emissions goal 4. Track the transition – establish a process for tracking energy sector achievements
  • 8. © OECD/IEA 2015 1. Peak in emissions: IEA strategy to raise climate ambition Global energy-related GHG emissions Five measures – shown in a “Bridge Scenario” – achieve a peak in emissions around 2020, using only proven technologies & without harming economic growth 20 25 30 35 40 2000 2014 2020 2025 2030 GtCO2-eq Bridge Scenario INDC Scenario Energy efficiency 49% Reducing inefficient coal Renewables investment Upstream methane reductions Fossil-fuel subsidy reform 17% 15% 10% Savings by measure, 2030 9%
  • 9. © OECD/IEA 2015 1. Peak in emissions: Bridging strategy is flexible across regions The measures in the Bridge Scenario apply flexibly across regions, with energy efficiency and renewables as key measures worldwide GHG emissions reduction by measure in the Bridge Scenario, relative to the INDC Scenario, 2030 United States European Union China India Middle East Latin America Africa Southeast Asia Russia Fossil-fuel subsidies Efficiency Renewables Inefficient coal plants Methane reductions
  • 10. © OECD/IEA 2015 2. Five-year revision: World’s carbon budget is shrinking A five-year review cycle would enable pledges to keep pace with energy sector innovation; building ambition before the carbon budget is consumed Today 2020 2025 2030 2035 2040 World’s remaining carbon budget
  • 11. © OECD/IEA 2015 Total 50 100 150 200 2015 2020 2025 2030 2035 2040Million Vehicle sales 3. Lock in the vision: What more does it take for 2 °C? Cost reductions & deployment of electric vehicles An emissions goal would give greater clarity & certainty to the energy sector, strengthening the case for RD&D investment & technology transfer 100 200 300 400 DollarsperkWh Electric Battery costs Electric vehicles (right axis) Solar PV additions Capacity Capital costs Solar PV (right axis) Cost reductions & deployment of all solar PV 25 50 75 100 2015 2020 2025 2030 2035 2040 GW 1 400 2 100 2 800 DollarsperkW 700 Internal combustion
  • 12. © OECD/IEA 2015 4. Track the transition: Impact of pledges must be monitored Energy sector indicators are needed to track the low-carbon transition; IEA identifies key metrics to monitor energy sector achievements 100 200 300 400 500 600 CO2 intensity Power gCO2perkWh -42% Average fuel consumption of new cars 2 4 6 8 litresper100km -43% Transport Lighting intensity of buildings 2 4 6 8 kWhperm2 -40% Residential 2013 2030
  • 13. © OECD/IEA 2015 Conclusions  Pledges are not yet enough to achieve our climate goal, but are a basis from which to build ambition  Companies that do not anticipate stronger energy & climate policies risk being at a competitive disadvantage  For COP21, the IEA proposes four key energy sector outcomes: 1. Target a near-term peak in emissions 2. Five-year revision, to test the scope for raising ambition 3. Lock in the vision by setting a long-term emissions goal 4. Track the transition in the energy sector  Climate change will lead the agenda at the IEA’s Ministerial meeting on 17-18 November 2015