IEA Shoutout: Nukes, Renewables, Energy Efficiency Key to Climate Change Battle

(MoneyWatch)  The world -- in the eyes of the International Energy Agency -- cannot resume its trip down the same fossil fuel path.

Instead, the Paris-based agency, which released Tuesday its 2009 World Energy Outlook, called for a profound change within the energy sector and a global agreement to limit the long-term concentration of greenhouse gases in the atmosphere to 450 parts per million of carbon-dioxide equivalent.

BNET Energy already wrote about the IEA's embrace of natural gas as a bridge fuel. But there were several other energy sources touted by the agency.

The IEA gives a robust shout out to energy efficiency, renewable and nuclear energy as well as a cap-and-trade system, where carbon is priced at $50 per ton. Under that scenario, which includes an additional investment of $10.5 trillion through 2030 and a global agreement at the climate summit on Copenhagen, the 450 ppm scenario can be reached.

The IEA projects energy demand will rise about 40 percent by 2030 compared to 2007 levels -- the vast majority of which will come from developing countries such as China and India. World electricity demand is projected to grow at a 2.5 percent rate each year through 2030, with coal being the go-to fuel of the power sector.

Meeting the IEA's projected energy demand will cost $26 trillion -- equal to 1.4 percent of global gross domestic product per year on average. And all of this means, more emissions and an increase in global temps, the IEA said.

So, the answer?

It's not cheap. Remember the $10.5 trillion investment number?

It's also complicated.

It will require virtually every country's participation and an investment in alternative energy sources, the IEA said.

Developed countries such as the U.S. and Europe will have to carry much of the burden and invest $200 billion by 2020into emission-reduction and clean energy projects in developing countries like India, IEA's chief economist Fatih Birol said during a Tuesday press conference. That's on top of what these developed countries spend at home to reduce greenhouse gas emissions.

The outlook for the do-nothing approach isn't much cheaper. Each year of delay will add $500 billion to mitigation costs between today and 2030, the IEA said.

Plus, the investment, the IEA contends, will be more than offset by cheaper fuel bills. Oh, and the avoidance of devastating consequences related to climate change.

Here are IEA's go-to solutions. The emissions reduction figures are based on the IEA's 450 ppm scenario.

1. Energy efficiency would make the largest dent in emissions with a 57 percent reduction by 2030. The U.S. and China together could reduce global power-sector emissions by half.
2. Renewable energy and biofuels would reduce emissions by 23 percent by 2030.
3. Nuclear energy reduce emission 10 percent by 2030. Birol says nuclear will play a "crucial role."
4. Improvements in fuel economy and new vehicle technologies like hybrid and electric vehicles.
5. Carbon capture and storage also makes the list and could represent 10 percent of total emissions savings in 2030, relative to the IEA primary scenario.

See additional IEA 2009 World Energy Outlook coverage:

• IEA's Chief Economist: U.S. Nat Gas Industry a Global Game-Changer
• IEA: Has the Titanic Sighted the Iceberg?