Nations must invest $37 trillion in energy technologies by 2030 to stabilize greenhouse gas emissions at sustainable levels and meet energy needs, the International Energy Agency warned today. IEA's "World Energy Outlook" raises the stakes for U.N. climate talks in Copenhagen, Denmark. Delaying the shift to low-carbon energy by just a few years, it says, will make it impossible to avert catastrophic temperature rises. The report predicts $26 trillion in 2008 U.S. dollars through 2030 is needed for energy projects to meet growing energy demand, if the world continues on its current energy-use trajectory and remains heavily dependent on fossil fuels. Another $10.5 trillion must be spent to lower energy-related greenhouse gas emissions over that span to meet a lower-carbon scenario, the report says. No change in government policies means "rapidly increasing dependence on fossil fuels, with alarming consequences for climate change and energy security," the report says. Nobuo Tanaka, IEA's executive director, said the report provides both a stern warning and cause for optimism. "Continuation of current trends in energy use puts the world on track for a rise in temperature of up to 6 degrees C and poses serious threats to global energy security," Tanaka said in a statement. But, he added, "there are cost-effective solutions to avoid severe climate change while also enhancing energy security -- and these are within reach as the new Outlook shows." The report finds that energy-related carbon dioxide emissions this year could be as much as 3 percent lower due to the economic slump, which coincided with energy demand slackened by the recession. But the report adds that these CO2 savings will "count for nothing" without a strong agreement coming out of next month's pivotal climate change talks in Copenhagen. The report predicts a 2 percent drop in world energy demand this year, the first significant drop since 1981, but says it should rebound soon. IEA forecasts an increase of 2.5 percent annually between 2010 and 2015, then a slowdown as developing economies mature and population growth eases. Overall, the report's "reference" case points to an increase of 1.5 percent yearly between 2007 and 2030. A senior IEA official who asked not to be identified said U.S. pressure forced the report's authors to overstate the potential for oil production increases, The Guardian reported yesterday. That official said the United States pushed IEA to underestimate how quickly existing oil fields may be depleted and hype the development of new reserves in order to prevent a scramble to buy remaining sources, according to the newspaper. Efficiency is key The $10.4 trillion additional investment by 2030 to meet the report's "450 scenario" -- in which atmospheric greenhouse gas emissions are stabilized around 450 parts per million -- would be dominated by investment in building efficiency, the power sector and transportation. The 450 ppm level would limit the odds of global temperatures rising more than 2 degrees Celsius to 50 percent, IEA said. IEA finds that end-use efficiency accounts for more than half of emissions reductions in 2030 compared with the reference case. Efficiency, as well as other "decarbonization" investments including a greater share of nuclear and renewable energy generation in the power sector, provides two-thirds of the carbon reductions in 2030, the report says. Coal demand is reduced by half and natural gas demand would be 17 percent lower in 2030 in the carbon-cutting scenario versus the reference scenario. Carbon capture and storage accounts for 10 percent of the emissions savings in 2030, the report said. Additional investment needed to meet the lower-carbon scenario would be offset by $8.6 trillion in health, security and energy savings benefits, the report says. IEA warns that delaying emission curbs will be disastrous -- and would add far more to the already considerable costs needed to adopt lower-carbon alternatives. "We calculate that each year of delay before moving onto the emissions path consistent with a 2°C temperature increase would add approximately $500 billion to the global incremental investment cost of $10.5 trillion for the period 2010-2030," the report states. "A delay of just a few years would probably render that goal completely out of reach." Oil and gas IEA's reference case predicts that oil demand will grow by a percentage point a year on average, reaching 105 million barrels per day in 2030, compared to 85 million last year. All the growth comes from developing countries, while demand in countries in the Organisation for Economic Co-operation and Development declines. "As conventional oil production in countries not belonging to the Organization of the Petroleum Exporting Countries (OPEC) peaks around 2010, most of the increase in output would need to come from OPEC countries, which hold the bulk of remaining recoverable conventional oil resources," the report says. The scenario needed to stabilize CO2 at 450 ppm would boost the use of electric vehicles and other transport-sector alternatives. Under the 450 case, transportation sector demand sees a savings of 12 million barrels per day. However, oil production is still slightly above 2008 levels in 2030 under the 450 case. The report finds that natural gas "will play a key role whatever the policy landscape." It says demand for natural gas will continue growing for the next 20 years, but how fast it grows depends on climate action. In the reference scenario, natural gas consumption will increase from 3 trillion cubic meters in 2007 to 4.3 trillion cubic meters in 2030, largely driven by India and China and the rest of the developing world. The world will see an "acute glut" of gas in the next few years as market demands continue to be weak but additional production comes online. IEA estimates the global recoverable gas resource base at 850 trillion cubic meters, of which about 45 percent is unconventional gas. Only 8 percent of total recoverable resources have been produced to date, according to the report. "The world's remaining resources of natural gas are easily large enough to cover any conceivable rate of increase in demand through to 2030," the report says. The cost to recover such resources, however, is uncertain, especially in some parts of the world, it says. Electricity The biggest challenges for the electricity generators are financial difficulties and weak demand, the report says. Global electricity demand is expected to fall by about 1.6 percent this year, the first decline since World War II. Overall, this has reduced the need to immediately build new generating capacity, which especially hurts the investment of new renewable energy generation "proportionately more than that in other types of generating capacity" -- close to 20 percent, the report says. Without governments' stimulus packages, it says, the renewable energy investment would have fallen 30 percent. Without any changes to policy, electricity demand is expected to grow 76 percent by 2030 -- about 2.5 percent per year -- requiring 4,800 gigawatts of capacity additions, about 5 times as much existing capacity in the United States, the report says. Coal remains the "backbone" fuel for electricity but renewable energy rises from 18 percent in 2007 to 22 percent in 2030, the report says. Nuclear power as a percentage of overall global electricity generation drops by 2030, although there is growth in non-European countries, it says.

TWO-hundred-and-fifty billion tonnes. That's the bottom line. If we
are serious about avoiding dangerous climate change, 250,000
megatonnes is the maximum amount of carbon we can put into the
atmosphere. Keep going at current rates andwe will have used up that
ration in 20 years.

The challenge for delegates at the week-long meeting in Denmark's
capital is to agree on ways of ensuring we do not exceed it - ever.

Why this year? Two years ago in Bali, member nations of the UN
Framework Convention on Climate Change (UNFCCC), which is convening
the Copenhagen summit, agreed that they would accelerate their efforts
and draft a long-term plan to avoid dangerous climate change. Their
deadline for doing so is the close of this year's summit, on 18
December.

Hasn't the Kyoto protocol shown all this to be pointless? Not
necessarily. The Kyoto protocol was always intended as a first step.
There are a number of differences this time around, most notably that
the US opted out of the Kyoto protocol but is very much engaged in the
Copenhagen process.

Why 250,000 megatonnes? We have already emitted over 500,000
megatonnes of carbon - equivalent to about 1,800,000 megatonnes of
carbon dioxide - mostly by burning fossil fuels and cutting down
forests. This year, climate scientists calculated that if we emit no
more than 750,000 megatonnes in total, we will have a 75 per cent
chance of limiting global warming to 2 °C.

What is the significance of 2 °C? The objective of the UNFCCC is to
prevent "dangerous" climate change. Although any amount of warming may
have consequences - including biodiversity loss, changing weather
patterns and disappearing coastlines - many climate scientists predict
that some of those changes will be irreversible beyond 2 °C and others
will pose a serious threat to millions of people. As a consequence, 2
°C has been adopted by politicians as the threshold for dangerous
climate change.

Is 2 °C little enough? That all depends: little enough for what? No
amount of warming is risk-free, and modelling studies indicate that at
2 °C an additional 1 billion people will suffer water shortages and
most of the world's corals will be bleached. The world's poorest
nations, which include a number of island states that are particularly
vulnerable to sea-level rise, are campaigning to limit warming to 1.5
°C. Given the effort that is going to be required to reach the 2 °C
target, this is unlikely to be achieved. Moreover, lags in climate
systems, plus the removal from the atmosphere of the fine aerosol
particles now cooling the world, mean past emissions are likely to
result in a 1.9 °C warming.

There are no two ways about it: to have any chance of avoiding the
disastrous consequences of exceeding our carbon budget, we must usher
in a new era of low-carbon societies.

How this is done will depend on what deal can be reached between rich
and developing nations. Both must agree to cut emissions according to
their means and historical responsibility.

Developing nations will also need money and technology to green their
industrialisation. Where this will come from will be a key
preoccupation for the Copenhagen negotiators

Developed and wealthy nations must cut emissions by:   BY 2020         BY 2050
NEED TO CUT BY                                                             25-40 %         80-95 %
AGREED TO CUT                                                              10-24 %         40-80 %

Undeveloped and poor nations must cut emissions by:
NEED TO CUT BY                                                             15-30 %         50-60%
AGREED TO CUT                                                              10-15 %         20-25% 

It could cost the poorest nations hundreds of billions of dollars a
year to curb their emissions and adapt to inevitable climate change.

Rich nations are responsible for most of the gases that are already
heating the planet, and have a duty to help foot this bill.
Negotiators in Copenhagen will have to agree on how.

Funds could be raised through taxes on emissions permits, for
instance, or on international airline tickets. Or there could be a
levy on all carbon emissions above certain national thresholds - as
proposed by Switzerland.

The European Union agreed last week to push for a fund worth €100
billion a year by 2020.

Around 15 per cent of emissions come from deforestation. WWF believes
this could be cut by three-quarters by 2020, but that requires giving
governments, landowners and forest communities incentives to stop
destroying their forests.

Two years ago, climate negotiators promised to sign such a deal -
dubbedReducing Emissions from Deforestation and Forest Degradation
(REDD) - in Copenhagen.

The cash could come from rich nations buying carbon offsets to meet
their emissions targets.

Brazil and Indonesia - which account for 60 per cent of emissions from
deforestation - are keen. But close monitoring is essential to ensure
loggers claiming cash for a forest do not continue chopping down
individual trees or move their operations elsewhere.

Also, countries such as Costa Rica that have protected their forests
say it unfairly rewards those who got rich destroying theirs.

Two billion people worldwide do not have access to mains electricity.

To bridge that gap and power industry in developing countries, the
International Energy Agency says $13 trillion must be invested in the
developing world in the next 20 years.

In Copenhagen, negotiators must seal a deal to ensure this goes mostly
into low-carbon technologies - but how?

Western engineering firms want an open door to developing markets,
perhaps secured by a "green free trade" deal. Countries like India and
China want deals with rich nations that would give their own companies
free access to western know-how.

Who might thwart a deal?

The US may not be able to make credible promises if Congress has not
passed a climate change bill in time.

If China and India think the US is not serious, they will hold back on
pledges to green their own economic development.

Others might wield a veto, too. Some newly industrialised countries -
Malaysia and South Korea for instance - now have emissions higher than
many European countries. They may protest if asked to sign up to firm
targets.

Malaysia's emissions are four times what they were in 1990 and, per
head of population, equal to the UK's.

Saudi Arabia's emissions have doubled and, per head, now beat all
European countries except Luxembourg.

Qatar's per-capita emissions are four times those of the US.

Gulf states tried to torpedo Kyoto because they felt it threatened oil
exports. Copenhagen could threaten their internal industrialisation
plans.