Global Energy Outlook: Problems ahead!
The consequences for China, India, the OECD and the rest of the world of unfettered growth in global energy demand are alarming, notes the Outlook. If governments around the world stick with current policies the world’s energy needs would be well over 50% higher in 2030 than today.
Long recognized as the most authoritative source of global long-term energy market analysis, the WEO releases two types of annual publications: In even numbered years it provides energy demand and supply projections, by fuel and by region, through to 2030. In odd numbered years it covers a systematic, objective and comprehensive analysis of a topical issue or challenge confronting the energy sector.
This year’s report reviews different scenarios based on current global trends, policies and policy proposals. The Reference Scenario or ‘business as usual’ case, is the focus of the report and its most likely outcome. The Alternative Policy Scenario, the best possible outcome, is based on the immediate implementation of real climate change and energy measures being considered by governments around the world.
WEO 2007 reviews the future economic growth and energy demands of China and India and describes the reference scenario as “worse than predicted in 2006” with the high ground scenario not faring much better.
According to the WEO, global energy demands are expected to increase by one half, with China and India contributing to 45% of that increase. The report notes that 60% of the planet’s energy requirements will be met with fossil fuels and that the use of oil and coal will increase by 37% and 73% respectively.
The WEO paints a grim picture regarding climate change. This will remain a global crisis as carbon dioxide emissions are expected to increase by 57% by 2030. China, the United States, India and Russia will account for two thirds of the emission growth.
Globally, fossil fuels will continue to dominate the fuel mix. These trends lead to continued growth in energy related emissions of carbon-dioxide (CO2) and to increased reliance of consuming countries on imports of oil and gas – much of them from the Middle East and Russia. Both developments would heighten concerns about climate change and energy security.
Under the Alternative Policy (Best case) Scenario, emissions would peak by the mid 2020s at 550 parts per million (ppm), which would increase long-term global temperatures by 3 degrees Celsius.
The WEO believes governments must work together to curb emissions to a peak of 450 ppm in 2015. This would require more aggressive policies and the elimination of coal plants, the primary cause in of the surge of global emissions, in favor of emission free technologies such renewable energy and nuclear power. This may prove difficult as coal is expected to be main source of energy in both China and India.
According to the World Energy Outlook, the growth in energy consumption in China and India will also have profound impacts on world markets - both good and bad.
The good news is that third party countries will be able to invest in the development of China’s and India’s growing energy infrastructure and market. Both countries are also expected to be net importers of energy, which is good news for exporters.
However, the rising global energy demand and dependency of both countries on foreign oil is expected to have a negative impact on world energy security, driving energy prices up in the near future.
To read the entire executive summary of the World Energy Outlook or to learn more about the publication, click here.
For More Information: World Energy Outlook
You can return to the main Market News page, or press the Back button on your browser.