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Clean Technology Needs $45 Trillion Investment, G8 Says

The world needs to invest a whopping $45 trillion in clean technology to cut carbon emissions in half by 2050, according to a new report by the International Energy Agency. In the absence of these investments, carbon emissions will climb 130% over that period while oil consumption will rise by 70%. The agency’s second annual Energy Technology Perspectives Report, which responds to the G8’s request for the agency’s guidance on how the group should meet the current energy and global warming challenges, estimates carbon emissions prices rising to anywhere between $200 and $500 per ton. A ton of carbon emissions sells in Europe currently for approximately $30 per ton.

“We are very far from sustainable development, despite the widespread recognition of the long-term problem. In fact, CO2 emissions growth has accelerated considerably in recent years,” said Nobuo Tanaka, Executive Director of the International Energy Agency. “Higher oil and gas prices result in a rapid switch to coal. Moreover rapid growth in China and India, both coal-based economies, has also contributed to this deteriorating outlook.”

The report prescribes the following formula for meeting the carbon challenge:

• 35 coal and 20 natural gas power plants must be must be decarbonised between 2010 and 2050
• 32 nuclear power plants and 17,500 wind turbines must be installed annually
• At least $10 billion (and potentially as much as $100 billion) must be spent each year on research and development in clean technology for the next 15 years

“There should be no doubt - meeting the target of a 50% cut in emissions represents a formidable challenge. We would require immediate policy action and technological transition on an unprecedented scale. It will essentially require a new global energy revolution which would completely transform the way we produce and use energy,” Mr. Tanaka emphasized. “The energy security benefits of such a development, however, would be tremendous. Oil demand by 2050 would be 27% below the level of 2005. Yet massive investments in remaining reserves will be needed to make up for the shortfall as low-reserve provinces are exhausted.”

The Other Approach to Climate Change

The main competitor of the International Energy Agency is the United States Energy Information Agency. “Competitors” might seem like an aggressive characterization of their relationship, but historically the organizations have projected wildly different forecasts for world energy supply, demand and now carbon emissions.

And as for the EIA’s energy use projections . . .