By staff reporter Cao Haili

(Caijing.com.cn) If contracting parties to the UN Framework Convention on Climate Change fail to reach any climate agreement in Copenhagen in December 2009, the global energy sector will expend an additional US$ 500 billion annually to cut greenhouse gas emissions by 2030.

In an excerpt of the World Energy Outlook 2009, the International Energy Agency (IEA) pointed out that the energy sector should play a key role in addressing the issue of climate change since it contributes to 65 percent of global greenhouse gas emissions. A “450 Scenario” has been modeled by the IEA, analyzing measures to force energy-related carbon dioxide emissions down to a pace that, would be consistent with ultimately stabilizing the concentrations of all greenhouse gases in the atmosphere at 450 parts per million (ppm). This level of concentration is expected to keep the global temperature increase within two degrees centigrade.

One consequence of tougher climate action would be less fossil fuel consumption, with demand peaking before 2020, the IEA said, and energy-related carbon dioxide emissions in 2020 would be allowed to increase only by 6 percent compared with 2007, according to the report.

The IEA parceled climate action between the Organization for Economic Co-operation and Development (OECD), other major economies and all other countries. According to the 450 Scenario, in 2020, 43 percent of global emissions will be from OECD countries, 40 percent from other major economies and the remainder from all other countries. One decade later, other major economies will overtake the OECD as the leading contributor of greenhouse gases, accounting for 43 percent of the global amount, with the OECD countries accounting for 36 percent. If China thoroughly complies with its existing climate policies, by 2020 it will reduce as many as 1 billion tons of greenhouse gas emissions, in a wide lead over other countries, said Fatih Birol, the IEA chief economist.

The report said US$ 10 trillion in additional energy investment would be needed from 2010 to 2030 to control carbon emissions, or between half and 1 percent of global economic output. But there is the other side of the coin -- energy cost savings by fossil fuel reductions will amount to US$ 8.6 trillion, close to the required investment.

The greatest challenge to adjusting the energy structure is how to maintain sufficient financial support, especially concrete pledges offered to developing countries, said IEA chief Nobuo Tanaka. By 2020, as much as US$ 200 billion, partly from the OECD, needs to be channeled into the energy sector of non-OECD nations, devoted to developing clean energy, improving energy efficiency and financing hybrid electric vehicle programs. Investment within the OECD on these aspects could reach US$ 215 billion.

Although it is a large sum of money, it will be a sound investment because benefits brought by saving energy, decreasing fuel imports, improving air quality and thus avoiding extreme climate change will offset this extra cost, Tanaka added.

Full article in Chinese: http://www.caijing.com.cn/2009-10-07/110274702.html