The Heat Is Online

IEA Urges Urgent Energy Cutbacks

Cuts Urged in China's and India's Energy Growth

 

The New York Times, Nov. 7, 2007

 

China's and India's surging fuel consumption poses a growing challenge to the world's energy systems and, unless curbed, will strain global oil trade, push up prices and lead to substantially higher carbon dioxide emissions in coming decades, according to a report by an influential energy organization.

 

In unusually urgent tones, the International Energy Agency, which provides policy advice to industrial nations, urged advanced economies to work with China and India to cut overall growth in energy consumption.

 

Otherwise, the report said, runaway demand in those countries will put heavy pressure on supplies and make it impossible to achieve meaningful reductions in carbon dioxide emissions, the main culprit in global warming.

 

"There is a need for an electroshock," said Fatih Birol, the agency's chief economist and the lead author of its flagship publication, The World Energy Outlook. "We have to act immediately and boldly."

 

Bolstered by speedy economic development and industrialization, energy demand from Asia has been one of the main contributors to higher oil prices. In the last two years, China and India accounted for about 70 percent of the increase in energy demand.

 

Strong demand has helped push oil prices to a series of records in recent weeks. Oil settled in New York yesterday at a new high of $96.70 a barrel. Prices are closing in on a record level, adjusted for inflation, of $101.70 a barrel in April 1980.

 

The energy agency sees the next decade as crucial for the stability of the global energy system. Decisions made today in China and India  for example, whether to continue investment in coal-fired power plants or to adopt policies to tackle global warming  will have worldwide consequences for decades.

 

Chinas and Indias energy use is projected to double from 2005 to 2030. By 2030, the two countries will account for nearly half the increase in global demand. Worldwide, energy consumption is to rise by about 55 percent.

 

China and India argue that it is unfair to blame them for rising energy prices, and they have resisted calls to limit carbon emissions when their economies are trying to catch up with development levels in the West. Energy use per person in those countries remains much lower than in the industrial nations.

 

In its report, the energy agency recognized the legitimate aspirations of China and India to improve the lives of their people. It said, moreover, that solving energy problems is a global responsibility that demands action by all countries. Chinas and Indias energy challenges are the worlds energy challenges, which call for collective responses, it said.

 

China is expected to overtake the United States and become the largest energy consumer soon after 2010, according to the reports forecasts. In India, where more than 400 million people have no access to electricity, energy demand is expected to more than double by 2030.

 

One consequence of that steep growth will be higher carbon dioxide emissions, expected to increase 57 percent over the next 25 years, the agency said.

 

China will overtake the United States to become the worlds biggest carbon emitter this year, while India becomes the third-biggest emitter around 2015, according to a preview copy of the report, which this year focuses on those two nations.

 

In the next year, China will need to install 800 gigawatts of power-generating capacity, about as much as Europe has. Its emissions per person will reach those of Europe by 2030, the report found.

 

This is a very worrying message, Mr. Birol said. China and India are transforming our energy markets. We have a window of opportunity of 5 to 10 years before it becomes unsustainable and irreversible.

 

The energy agency, based in Paris, was founded in 1974 to provide information and policy advice to industrial nations. It is also in charge of coordinating the emergency response of its 26 members, which include the United States, in the event of an energy crisis.

 

As the need for oil imports grows, and supplies level off in many industrial nations, the world will become increasingly reliant on a smaller number of oil-exporting countries, mainly Russia and in the Middle East. As a consequence, the agency said, global energy security will increasingly be at risk.

 

Chinas and Indias net oil imports are expected to jump to 19.1 million barrels a day in 2030 from 5.4 million barrels in 2006, more than what the United States and Japan now import. By 2030, global oil demand is expected to reach 116 million barrels a day.

 

The use of coal, made attractive by oil and natural gas prices, is expected to rise 73 percent in the next 25 years, mostly because of Chinese and Indian use. The share of natural gas is projected to increase modestly while electricity use doubles.

 

Even if every country adopted economy measures today, the energy agency said carbon emissions would still be 25 percent higher in 2030 than they are now.

 

Cutting carbon emissions in a meaningful way below todays levels would require exceptionally quick and vigorous policy action by all countries, and unprecedented technological advances, entailing substantial costs, the report said.

 

Tougher efficiency standards for air-conditioners and refrigerators in India and China could, by 2020, save the amount of power produced by the enormous Three Gorges dam of China, the agencys report said. Emissions of local pollutants in both countries, like sulfur dioxide and nitrous oxides, would also be reduced sharply by such measures.

 

http://www.nytimes.com/2007/11/07/business/worldbusiness/07energy.html