Governments have decided collectively that the world needs to limit the average global temperature increase to no more than 2 °C and international negotiations are engaged to that end. Yet any resulting agreement will not emerge before 2015 and new legal obligations will not begin before 2020. Meanwhile, despite many countries taking new actions, the world is drifting further and further from the track it needs to follow. The energy sector is the single largest source of climate-changing greenhouse-gas emissions and limiting these is an essential focus of action. The World Energy Outlook has published detailed analysis of the energy contribution to climate change for many years. But, amid major international economic preoccupations, there are worrying signs that the issue of climate change has slipped down the policy agenda. This Special Report seeks to bring it right back on top by showing that the dilemma can be tackled at no net economic cost. The report: Maps out the current status and expectations of global climate and energy policy – what is happening and what (more) is needed? Sets out four specific measures for the energy sector that can be quickly and effectively implemented, at no net economic cost, to help keep the 2 °C target alive while international negotiations continue. Indicates elements of action to achieve further reductions, after 2020. Demonstrates that the energy sector, in its own interest, needs to address now the risks implicit in climate change – whether they be the physical impacts of climate change or the consequences of more drastic action later by governments as the need to curb emissions becomes imperative. See more: http://www.worldenergyoutlook.org/energyclimatemap/

1. © OECD/IEA 2013
London, 10 June 2013

2. © OECD/IEA 2013
Context
 Climate change is slipping down the policy agenda,
even as the scientific evidence continues to accumulate
 Energy sector accounts for two-thirds of greenhouse gas emissions
 Mixed news on energy trends
Price dynamics between gas and coal support emissions
reductions in some regions, but impede them in others
Renewables are on the rise, but investment slowed in 2012
Efficiency policies are gaining momentum in many countries
Nuclear is facing challenges and CCS still remains distant

3. © OECD/IEA 2013
CO2 emissions at record high in 2012
Change in energy-related CO2 emissions, 2012
CO2 emissions grew by 1.4% to reach 31.6 Gt in 2012, but trends vary by country
-300
-200
-100
0
100
200
300
400
500
World China Japan European
Union
United
States
Mt CO2
Middle
East
India

4. © OECD/IEA 2013
700
750
800
850
900
2003 2006 2009 2012
gCO2/kWh
China
400
450
500
550
600
2003 2006 2009 2012
gCO2/kWh
United States
The two largest emitters make encouraging
steps toward decarbonisation…
CO2 emissions per unit of electricity generation
In 2012, total CO2 emissions in the US were back at the level of the mid-1990s,
while total CO2 emissions growth in China was one of the lowest in the last decade

5. © OECD/IEA 2013
…but the world is still moving in
the wrong direction
Global energy-related CO2 emissions
CO2 emissions trends point to a long-term temperature increase of up to 5.3 °C
1890 1910 1930 1950 1970 1990 2012
4
8
12
16
20
24
28
32Gt
Dissolution of the Soviet Union
End of World War II
1st oil price shock
Global economic downturn
2nd oil price shock
Great depression

6. © OECD/IEA 2013
Four measures to keep the 2 °C target alive
 National efforts in this decade need to buy time for an international
agreement, expected to come into force in 2020
 Measures to 2020 should meet key criteria:
 Significant near-term emissions reductions
 No harm to countries’ economic growth
 Reliance only on existing technologies and proven policies
 Significant national benefits other than climate change mitigation
 Our 4-for-2 °C Scenario proposes four measures that meet these
criteria

7. © OECD/IEA 2013
Four measures can stop
emissions growth by 2020
Emissions savings in the 4-for-2 °C Scenario, 2020
Four measures can stop the growth in emissions by 2020 at no net economic cost,
reducing emissions by 3.1 Gt, 80% of the savings required for a 2 °C path
4-for-2°C Scenario
delivers savings of
3.1 Gt CO2-eq
49%
21%
18%
12%
Implement selected
energy efficiency
policies
Limit use of
inefficient coal power plants
Reduce methane
releases from upstream
oil and gas
Partial removal of
fossil-fuel subsidies

8. © OECD/IEA 2013
Measure 1: Improve energy efficiency
Emissions savings in the 4-for-2 °C Scenario, 2020
Energy efficiency reduces emissions by 1.5 Gt, led by minimum energy performance
standards – additional investment is more than offset by fuel bill savings
20% 40%
Buildings
Industry
Transport
80% 100%
Industrial motors
Heating & cooling
60%
Appliances & lighting
Road
Share of efficiency savings

9. © OECD/IEA 2013
Measure 2: Limit the use of inefficient
coal power plants
Change in electricity demand
& coal-fired electricity generation from the least-efficient plants, 2020
Energy efficiency and reducing the role of the least-efficient coal power plants
have important co-benefits for local air pollution
-1 000
- 800
- 600
- 400
- 200
United
States
European
Union China India
Lower electricity
demand
Lower electricity
generation from least-
efficient coal plants
TWh 0

10. © OECD/IEA 2013
Measure 3: Reduce methane releases
into the atmosphere
Methane emissions from the upstream oil and gas industry, 2020
In 2010, methane releases were 1.1 Gt CO2-eq;
halving the level in 2020 would save twice the gas production of Nigeria today
50
100
150
200
250
300
350
United
States
Other
OECD
Middle
East
Russia Africa Other
Non-OECD
Reduction in
4-for-2 °C Scenario
Mt CO2-eq

11. © OECD/IEA 2013
Measure 4: Phase out fossil-fuel subsidies
Savings in the 4-for-2 °C Scenario: 360 Mt
Fossil-fuel subsidies in 2011 were equivalent to an incentive of $110 per tonne of CO2
Middle East
54%
Africa
15%
Russia
Other
non-OECD
14%
7%
Latin
America
11%

12. © OECD/IEA 2013
The energy sector needs to adapt
to climate change
The energy sector needs to increase its resilience to the physical impacts
of climate change
© Natural hazards adapted from Munich RE (2011)
o
C
o
C
o
C
o
C
o
C
o
C
o
C
o
C o
C
o
C
Increase of droughts
and/or heat waves
Power plant cooling
impacted

13. © OECD/IEA 2013
Change in tropical
cyclones and storms
Typical cyclones
and track directions
The energy sector needs to adapt
to climate change
The energy sector needs to increase its resilience to the physical impacts
of climate change
Exposed oil and
gas infrastructure
© Natural hazards adapted from Munich RE (2011)

14. © OECD/IEA 2013
Some fossil-fuel reserves remain
underground
Potential CO2 emissions from proven fossil-fuel reserves to 2050
On today’s trends, half of the proven fossil-fuel reserves would be left
undeveloped to 2050 – stronger climate action would increase the share
0
400
800
1 200
1 600
2 000
Coal Oil Gas
If all proven reserves
were used
New Policies Scenario
Gt
450 Scenario
Additional emissions in
New Policies Scenario
– stronger climate action would increase the share

15. © OECD/IEA 2013
A diverse portfolio matters in
the power sector
Net revenues for new power plants by scenario, 2012-2035
Under a 2 °C path, total net revenues for new power plants are $3 trillion higher –
2
4
6
8
Nuclear Fossil fuelsRenewables
New Policies Scenario
450 Scenario
Trillion
dollars
(2011)
CCS fitted
CCS is an effective protection strategy for fossil fuel assets

16. © OECD/IEA 2013
Key messages
 Despite encouraging steps in some countries, global emissions
keep rising and the scientific evidence of climate change increases
 Early national action is required while negotiating towards a
global deal in Paris in 2015 that then comes into force by 2020
 Four measures can stop emissions growth by 2020 and keep the
2°C target alive, without harming economic growth
 There is a need for parallel action to deploy critical low-carbon
technologies at scale after 2020, including CCS
 The energy sector must adapt to climate change, both in the
resilience of its existing assets and in future investment decisions

17. © OECD/IEA 2013
www.worldenergyoutlook.org/energyclimatemap