Five trillion dollars of investment is needed worldwide by 2020 in renewable power, energy efficiency and cleaner transportation to contain rising global temperatures, the International Energy Agency said.
After fuel savings of $4 trillion are taken into account, the net investment required by 2020 is about $1 trillion to ensure the temperature gains since industrialization don’t exceed 2 degrees Celsius (3.6 Fahrenheit), IEA Deputy Executive Director Richard Jones told energy ministers from 23 nations today in London.
While renewable energy is on track to deliver its share of the savings, Jones said industries are falling behind in efforts to build projects employing nuclear power, carbon capture and storage, biofuels, efficiency measures and technology that cuts emissions from coal plants.
“Under current policies, we estimate that energy use and CO2 emissions would increase by a third by 2020, and almost double by 2050,” Jones said. “This would likely boost global temperatures at least 6 degrees Celsius. Such an outcome would confront future generations with significant economic, environmental and energy security hardships.”
Jones was addressing the third meeting of the so-called Clean Energy Ministerial group, hosted by U.K. Energy Secretary Ed Davey and U.S. Energy Secretary Steven Chu. Ministers from 23 economies accounting for 80 percent of greenhouse gas emissions and 90 percent of global clean energy investment are attending to help devise policies that cut carbon emissions.
Chu told ministers that one of the biggest gains to be made in reducing emissions was to ratchet up the efficiency standards for household appliances, a measure he described as a “no-brainer.” Construction efficiency standards also represent an opportunity to cut carbon, he said.
“It will save your citizens money and your country energy,” Chu said. “There’s a tremendous opportunity to build an infrastructure that literally could be twice as efficient as the ones that were built in the previous century.”
Davey from the U.K. said that ministers have a challenge in making sure clean energy investment “soars” even in a “sluggish” economy. Britain’s economy shrank in the first quarter, pushing the nation into the first double-dip recession since the 1970s, according to figures published today.
“The risk is that recession delays low-carbon investment, leaving us a high-carbon legacy even when the global economy recovers and making meaningful action on climate change more expensive,” Davey said. “We don’t start from a good place. Eighty percent of our emissions from energy are already locked in, and the emissions gap is growing.”
The U.K. today announced plans to offer 35 million pounds ($57 million) in funds to support entrepreneurs who start businesses developing and demonstrating low-carbon technologies. U.K. Deputy Prime Minister Nick Clegg yesterday pledged 25 million pounds of new aid to help scale up renewable energy in developing nations.
Global investment in clean energy dropped $27 billion in the first quarter, its lowest since the depths of the financial crisis three years ago, Bloomberg New Energy Finance said on April 12. The research group’s Chief Executive Officer Michael Liebreich told delegates today that new banking rules are making it harder for wind farms to get financing, while trade friction between the world’s biggest economies is also hindering wind, solar and other forms of renewables.
Jones said that for every euro not spent on carbon reductions before 2020, 4.3 euros will be required afterwards to get the world back on a track to 2 degrees of warming rather than the 6 degrees that may result from current policies.
Prior to the ministerial discussions, members of United Nations Secretary General Ban Ki-Moon’s “Sustainable Energy for All” panel met yesterday in London.
The group, led by Bank of America chairman Chad Holliday and UN-Energy Chairman Kandeh Yumkella, devised an “action agenda” to advise governments on how ton increase energy access for the poorest people while promoting efficiency and renewables.
The panel recommended governments support lower carbon development in seven sectors including cooking appliances and fuels, renewable energy, small-scale off grid electricity generation, transportation, appliances and buildings, grid infrastructure and industrial and agricultural processes.