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What To Expect From The European Green New Deal

The European Commission is set…

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Is This The Only Way To Curb Global Warming?

Unless greenhouse gas emissions fall…

Robert Rapier

Robert Rapier

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There’s No Quick Fix To Global Emissions Growth

Last week the International Energy Agency (IEA) released its World Energy Outlook (WEO) 2019. The WEO projects global energy supply and demand through 2040, under three different scenario assumptions:

  • The Current Policies Scenario (CPS) shows what happens if the world continues along its present path, without any additional changes in policy.
  • The Stated Policies Scenario (SPS) incorporates today’s policy intentions and targets.
  • The Sustainable Development Scenario (SDS) maps out a way to meet sustainable energy goals in full, requiring rapid and widespread changes across all parts of the energy system.

Under the CPS, energy demand rises by 1.3% each year to 2040. This would result in a steady climb in energy-related emissions, and growing strains on almost all aspects of energy security.

With the SPS, low-carbon sources, led by solar photovoltaics (PV), supply more than half of all energy growth. Natural gas, aided by increasing trade in liquefied natural gas (LNG), accounts for another third of energy growth. Oil demand would flatten in the 2030s, and coal use would decline. The rise in carbon dioxide emissions slows, but still climbs by 6% through 2040.

The SDS requires rapid and widespread changes across all parts of the energy system. This scenario charts a path aligned with the Paris Agreement to keep the rise in global temperatures to “well below 2°C”. But the report acknowledges that “the breadth of the world’s energy needs means that there are no simple or single solutions.” A sharp increase in efficiency improvements is the single most important element that would enable the SDS. Energy demand would have to fall from current levels through 2040.

Global oil demand in the SPS rises by around 1 million barrels per day (BPD) on average every year until 2025. Oil demand for passenger cars peaks in the late 2020s as electric vehicles increase their penetration. This slows overall demand growth in the late 2020s and during the 2030s to 0.1 million BPD. Oil demand reaches 106 million BPD by 2040. Related: Forget OPEC: China Now Moves The Oil Markets

Most of the new oil production that will be required is expected to come from the U.S. Over the next decade, 85% of the total oil production increase is expected to come from the U.S., as is 30% of the expected global increase in natural gas. This turns the U.S. into a net exporter of both fuels. By 2025, total U.S. shale oil and gas alone overtakes total oil and gas production from Russia.

Higher U.S. oil production will further cut into the market share of OPEC countries and Russia. This may force OPEC to continue to ramp down production in order to prop up prices, or they could once more attempt a price war for market share as they did in 2014.

The biggest transition will take place in the electric sector. Wind and solar PV will provide more than half of the additional electricity generation to 2040 in the SPS and almost all the growth in the SDS. In the SPS, solar PV will become the world’s largest source of electricity around 2035. (I have argued for years that solar power would probably become our most important source of energy).

The bad news is that global carbon dioxide concentrations will continue setting new records through 2040 in all but the SDS. But the SDS relies on “new technologies” and is more a goal than an actual plan for reducing carbon dioxide emissions.

By Robert Rapier

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