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Trading Carbon : December - January 2011
The world will within five years find it impossible to avoid r unaway climate change because it is rolling out carbon-intensive power plants, factories and buildings at such a fast rate, the International Energy Agency (IEA) said in a report on November 9. The Paris-based agency, which co- ordinates energy policy on behalf of 28 industrialised countries, said efforts at UN climate talks to limit a rise in global temperatures to below 2C would fail unless the world's energy infrastr ucture is changed rapidly over the next five years. "Without a bold change of policy direction, the world will lock itself into an insecure, inefficient and high- carbon energy system," said Marie van der Hoeven, the agency's executive director, in the 2011 World Energy Outlook. The Fukushima nuclear accident -- which threatens to slow the development of low-carbon atomic energy -- and a 5 percent rise in carbon dioxide (CO2) emissions in 2010 underlined the need for urgent action, the IEA chief added. Stronger measures Van der Hoeven said governments would need to introduce stronger measures to drive investment in energy efficient and low-carbon technologies and slow the surging use of coal in large developing countries. The report said that if c urrent government commitments to build lower carbon energy infrastr ucture were to be implemented cautiously, then the world is on track to see a rise in average global temperatures of 3.5C, rising to 6C if the new policies are not implemented at all. Scientists say temperatures will rise by more than 2C above pre- industrialised levels if the amount of CO2 in the atmosphere reaches 450 parts per million (ppm), up from the c urrent level of 390 ppm. Climate scientists say an increase in global temperatures beyond 2C would mean a big rise in global sea World has fve years to avoid dangerous climate change: IEA 08 Dec 2011/Jan 2012 www.pointcarbon.com levels, more severe droughts, famines and floods. Above 3.5C would see huge swathes of the planet rendered uninhabitable, while most of the world's species could become extinct. Warning against the cost of inaction, IEA chief economist Fatih Birol said that without further action by 2017, power plants, factories and buildings would generate all the CO2 emissions that could be permitted to keep emissions below 450ppm. "Delaying action is a false economy: for every $1 of investment in cleaner technology that is avoided in the power sector before 2020, an additional $4.30 would need to be spent after 2020 to compensate for the increased emissions," he said. Connie Hedegaard, the EU's climate commissioner, said the IEA report showed that "delaying climate action is not an option and does not make economic sense". She added: "One wonders how many more worrying figures the world needs...Hopefully, the other major economies will have read this important report carefully before leaving for Durban." Calls by the IEA for a revolution in the development of cleaner energy come at a time when major economies are str uggling to deal with their own mounting debt and UN climate talks have failed to yield a new legally- binding agreement to cut emissions. With no legally-binding pledges to cut emissions and put a price on CO2, rich countries have been slow to elaborate on promises of $100-billion a year in funding by 2020 to help finance cleaner energy in developing nations. And, while a chunk of the cash is expected to come from the private sector, many investors have stalled spending on cleaner energy projects that generate carbon credits under the Kyoto Protocol because of uncertainty about the 1997 pact's future. Low carbon prices With CO2 prices in the EU carbon market, the world's biggest, languishing near three-year lows European emitters have little incentive to invest in low-carbon technologies. Earlier this year, the IEA said setting a global price for carbon wouldn't be enough on its own to spur a revolution in the deployment of clean energy required to keep emissions below 450ppm. A big boost in research and development, a removal of barriers to cleaner energy, smart energy grids and the scrapping of subsidies for fossil fuels and would also be needed, the IEA said in June. REUTERS/JASON LEE