The World Energy Outlook and North Pole Crocodiles

So the International Energy Agency (IEA) produced its annual World Energy Outlook this year. The central message seems to be: PANIC! IT MAY BE TOO LATE.

When a sober organisation full of technocrats and policy wonks screams panic, you know something is up. However, the IEA was founded precisely on panic: in the aftermath of the 1973-4 oil crisis, industrialised countries decided they needed an organisation to help them think about managing both unstable oil supply and worries about scarcity of fossil fuel resources.

Now the panic is different: the problem is not that we have too little oil, coal and gas, but precisely the opposite—that we have too much of it. The consequence of unrestrained use of these wonder-resources is a world changed beyond recognition. The IEA suggests that such unrestrained use will lead to a world 6°C warmer than pre-industrial temperatures. The last time the world was that much warmer, there were crocodiles at the poles.

The IEA does suggest that the more probable current trajectory is what they call their ‘New Policies Scenario’.  Here, countries adopt a modest set of measures to favour investment in renewable energy, nuclear energy (in countries that already have it) and energy efficiency. This scenario restrains growth in primary energy demand considerably: while Gross World Product will roughly double between 2010 and 2035 (their time frame), primary energy demand only grows by 33%.

This is a significant improvement in the energy intensity of the global economy. But it still leads to dramatic increases in greenhouse gas emissions (as opposed to the dramatic reductions that the world’s principal governments are rhetorically committed to under the Copenhagen and Cancun agreements in the climate change regime). It still leads to a world, according to the IEA, that is around 3.5°C warmer than the pre-industrial age. Lots of scare quotes need to be put round the precision with which we treat these numbers, but the general picture is probably about right; it’s certainly consistent with IPCC scenarios. The last time the world was that warm (about 40 million years ago), sea levels were around 50m higher than they are today.

So back to the panic. The IEA is clear that the world is on a course for potential disaster, which only dramatic changes in energy policy will avoid. These changes must involve a dramatic reduction in fossil fuel use in favour of renewables and nuclear, aided by radical improvements in energy efficiency (well beyond those envisaged in their ‘New Policies’ scenario). In effect, while it describes a set of likely trends in energy use and production, the report says that the world must not allow these trends to be realised. Much of the problem is well-known: because energy investments last 40-50 years, we are increasingly ‘locked-in’ to fossil fuels every time we open a new coal-fired power plant, oil rig or refinery, or fracking operation.

The logic of the report would dictate the bold step of prohibiting new fossil fuel investments. This generates another sort of panic, unsurprisingly. I can see the National Post’s headline now: “Crazy Greens Trying to Shut Down the Economy”. But hang on, it’s coming from the IEA, a club of rich countries that got together to manage the global energy industries for their own benefit and to counter the power of OPEC. Radical greens they are not.

Panic generates denial, as no one wants to accept this logic. Cue all sorts of measures that claim to get round the logic (e.g. carbon capture and storage (CSS), solar radiation management or other sorts of geoengineering). As symptoms of the panic, they are perfect. But CCS is either simply not going to work (at least on the scale its promoters imagine) or is in fact much more expensive than shifting investment to a low-carbon economy via renewables and radical improvements in energy efficiency (as shown regularly in the McKinsey cost curve for greenhouse gas reductions). And geoengineering, now being rebranded as “solar radiation management”, is full of its own dangers. We may know in fact that we have become “weathermakers”, but this does not mean we should trust ourselves to do it deliberately without messing it up in grand style.

Nevertheless, while the IEA’s report ought to be a wake-up call, its message has not yet sunk in: in the same week it appeared, the delay in the Keystone XL pipeline was greeted for the most part with denunciations across Canada. The issue seen still as if the sort of radical challenge that the IEA sets out exists in another universe. It is, of course, in another universe: one with only the 2°C increase in temperatures to which we are now more or less committed, as opposed to a possible universe with crocodiles at the North Pole. The latter is the one to which Keystone XL and similar projects are heading us.


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