IEA exhorts Ministers to “bridge the gap” between current policies and the new measures that will empower a more secure, environmentally acceptable energy system

(Nairobi) — 14 November 2006

“With current policies, our energy future is insecure and environmentally unsustainable”, said Claude Mandil, Executive Director of the International Energy Agency (IEA) today at the UN Framework Convention on Climate Change 12th annual Conference of the Parties in Nairobi. He referred to the IEA’s just recently published World Energy Outlook 2006 (WEO) that demonstrates this trend. At the same time, the study shows that policies can make a difference, but delaying the implementation of action by even a decade seriously jeopardises our energy security and has unacceptable implications for emissions. “We need to bridge the gap between our present energy structure and policies, and focus on implementing policies and technologies that will empower a different energy future”, Mr. Mandil said and added that there is urgency to “build this bridge in ways that foster economic development, enhance our energy security and seriously reduce emissions. Energy efficiency policies ought to be the foundation for this bridge. They make economic sense, produce energy savings and provide time to develop and reduce costs of technologies which will run our economies in the future”.

Global emissions are increasing rapidly
Latest IEA statistics on CO2 emissions from the energy sector show that we are not moving towards a safer energy future, but in fact are departing further from it. CO2 emissions grew by 1.2 billion tonnes of CO2 between 2003 and 2004, with coal accounting for 60% of the increase. At 26.6 billion tonnes, global CO2 emissions are now 28% above 1990 levels. Since fuel combustion accounts for 80% of greenhouse gas emissions, mitigation efforts must include changes in the way we use energy.

Asia especially has witnessed rapid growth in energy use and emissions over that period, driven by its fast-paced economic development – yet per capita emissions of industrialised countries remain much higher. Further, 1.6 billion people still live in energy poverty, without access to the basic services provided by electricity. Delivering sustainable energy to all should remain a priority.

We can curb emissions
IEA analyses show that there are alternatives – new policies and technologies that can reverse this trend. IEA publications this year – WEO 2006, Energy Technology Perspectives and Light’s Labour’s Lost – all point to actions that will alter this path and do so at low cost. The WEO 2006 Alternative Policy scenario shows that CO2 emissions can be reduced by 16% from the Reference Scenario with policies that more than pay for themselves: 80% of these reductions come from more efficient production and uses of energy. In electric lighting alone, which uses 19% of global electricity production, IEA analysis concludes that energy needs could be reduced by 38% if the least-cost technologies were adopted – at no loss of service to consumers. While the potential for cost-effective savings is great in industrialised countries, it is even greater in developing countries.

Making energy efficiency happen
There are barriers to the efficient use of energy, which isolate consumers from the consequences of their energy choices. Those include:

• Lack of information on, or the low priority given to the energy performance of appliances, buildings and automobiles.
• Tax incentives and subsidies that promote wasteful energy use (e.g. tax breaks that encourage car use).
• Split incentives between investors and end-users with regard to the performance of energy-using equipments (e.g., for building technology choices).
• Failure to incorporate fully the energy security risks in market prices.

Using energy more efficiently and cost-effectively requires political leadership and raising energy efficiency expectations. Governments, in industrialised and developing countries alike, should help consumers make better-informed energy choices by removing these barriers.

As mandated by the G8 at the Gleneagles summit in 2005, the IEA has developed concrete measures to bridge the gap between energy efficiency potentials and implementation. “We are actively researching best policy practice to deliver energy efficiency improvements in transport, appliances, buildings and industry, and we will report on our efforts to the next G8 summits”, Mr. Mandil said.

“If I had one wish, it would be that ministers here commit to return to this conference next year, prepared to report on the energy efficiency measures they have taken – not just promised - in the last twelve months. With this commitment from all ministers, I am sure that in the near future IEA analysis could bring the good news to a COP that we are on a path to a more secure and climate-friendly energy system.”

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