The economic downturn should not delay action on tackling greenhouse gas emissions and securing energy supplies, the International Energy Agency (IEA) urged yesterday.
The call came as the IEA published its annual World Energy Outlook which predicted that carbon dioxide emissions would rise by 45 per cent by 2030 - putting the Earth in line for temperatures rises of up to 6C.
Limiting temperature increases to 3C would require expanding the share of energy provided by low carbon sources, including hydropower, nuclear, biomass and conventional power plants fitted with technology to capture carbon emissions, from 19 per cent in 2006 to 26 per cent by 2030. The switch to more low carbon energy would require extra investment of £2.7 trillion - equivalent to 0.2 per cent of GDP, the IEA report said.
Some £700 billion more would have to be spent on power plants while about £11 per person per year would be spent on more efficient cars, appliances and buildings.
But improving energy efficiency could deliver savings on the cost of fuel to the tune of more than £4.6 trillion.
And investment to meet the overall rise in global energy demand, which the IEA predicts will increase 45 per cent between 2006 and 2030, will require £17.3 trillion up to 2030, the report said.
More than half the increase in energy demand will come from China and India, with the Middle East also emerging as a major new area demanding more power.
The predicted increase, of 1.6 per cent per year, is slightly slower than forecast last year because of the economic slowdown, higher energy prices and some policy initiatives. The IEA warned that the credit crunch could delay investment, leading to problems with supply that could prevent economic recovery.
It also warned current trends, with rising imports of gas and oil to developed nations and Asia and a growing concentration of production in a small number of countries, could lead to supply disruptions and price increases.
IEA executive director Nobuo Tanaka said: “We cannot let the financial and economic crisis delay the policy action that is urgently needed to ensure secure energy supplies and to curtail rising emissions of greenhouse gases. We must usher in a global energy revolution by improving energy efficiency and increasing the deployment of low-carbon energy.”
And, while oil prices yesterday dipped below $60 a barrel, he insisted that although “market imbalances will feed volatility, the era of cheap oil is over”.
But oil would remain the world’s main source of energy for many years, despite growing declines in oilfield output, and he said production must be expanded in the lowest-cost countries to meet the world’s needs at reasonable cost.
Demand for coal - one of the most polluting fuels - is expected to rise more than any other energy source, according to the World Energy Outlook. But renewables will grow most rapidly, to overtake gas as the second-largest source of electricity soon after 2010, the report launched in London predicted.