The International Energy Agency (IEA) – perhaps the world’s most influential energy forecaster – gave the company an easy defence.

In its climate strategy, Total cites the IEA’s most “sustainable development scenario”, which sees methane gas consumption soaring between now and 2040 to meet a quarter of global energy demand.

Gas, Total insists, “is the best option currently available for combating global warming”. This is just one example of how oil and gas companies use IEA forecasts to justify investments in fossil fuels.

Under the direction of Turkish economist Fatih Birol, the agency has become increasingly supportive of clean energy. Yet it continues to appeal to its oil-producing funders, ducking hard questions about the endgame for dirty energy.

“The IEA is an organisation that was set up and designed for a different era and it needs a radical transformation if they are still to have relevance in the modern era,” Kingsmill Bond, an energy strategist at Carbon Tracker, told Climate Home News.

With a reputation for having excellent analytical skills and a deep understanding of the energy system, the IEA could be repurposed to show the full cost of fossil fuels and drive the energy transition, Bond said. That would be “a game-changer”.

Seven countries back Africa’s biggest investment, a $20 billion gas project

The Paris-based energy agency was established in the wake of the 1973 oil crisis to ensure the security of oil supplies. Oil security remains central to the IEA’s mission. It is best known for its in-depth analysis and data on the energy market, which provides reference material for companies and governments alike.

The coronavirus pandemic confronted the IEA with the opposite problem: over-supply. The price of oil tumbled and even turned briefly negative in the US, as demand collapsed – a foretaste of shocks that could be in store if and when action to cut emissions accelerates.

As lockdown measures to contain the pandemic started to take a toll on the economy, Birol led the narrative on putting clean energy at the heart of stimulus packages. In an interview with Climate Home News in March, he said recovery packages offered governments “a historic opportunity” to accelerate the clean energy transition.

The IEA then set out its vision for a sustainable recovery in a special report last month, providing governments with a guide for how short-term energy investments could reboot the economy and create jobs while cutting emissions.

It’s a message many leaders have yet to heed. Major economies in the G20 have so far spent more recovery money supporting fossil fuels than clean energy, according to initial findings of the Energy Policy Tracker launched by 14 research groups earlier this month.

Speaking to CHN this month, Birol said the first tranche of recovery money had been focused on “creating firewalls around the economy, helping businesses and maintaining employment”. He expected stimulus in the second half of the year to focus on renewable energy, energy efficiency for buildings and the modernisation of power grids.

“Even countries that do not put climate change as a key priority in their political agenda need to focus on these energy policies because they will boost economic growth and create jobs. Energy efficiency is a job machine – it is very labour intensive and it will reduce emissions,” he said.

Long read: This oil crash is not like the others

Notably absent from the IEA’s “sustainable recovery” report is any reference to the temperature goals of the Paris Agreement. Under the pact, governments aim to hold global warming “well below 2C” and aim for 1.5C, the tougher target seen as critical to the survival of some vulnerable nations.

Oil Change International said this reflected a chronic failure of climate ambition at the agency. “Given the IEA’s rhetoric and calls for leadership, omitting 1.5C is a pretty significant oversight,” said campaigner Hannah McKinnon.

Then there is a certain evasiveness around what those goals mean for fossil fuels.

On the “mission” page of its website, the IEA says it takes an “all-fuels, all-technology approach”.

In November 2017, the IEA launched a Clean Energy Transition Programme to support clean energy deployment in emerging economies such as Brazil, China and India.

A few months earlier, Birol told an oil and gas conference in the US: “Our message to the oil industry here in Houston is invest, invest, invest”.

Renewables overtake fossil fuels in EU electricity generation

At the World Energy Forum this year, Birol called for “building a grand coalition” to bring down global emissions. He later said 2020 was “the year for the clean energy transition“.

In May, he told an online energy event: “I don’t think it’s the end of oil yet. We still need oil for years to come,” citing ongoing demand from the transport and petrochemical industries.

“There is a strong rhetoric and desire by the IEA to lead on [the clean energy transition],” said Peter Wooders, senior energy director at the International Institute for Sustainable Development (IISD). “But the agency hasn’t always provided all the tools and clear signalling of the way forward…

“By sitting on the fence and backing all forms of energy, there is a danger that they will perpetuate the unsustainable pathway we are on rather than showing what could be achieved in the future.”

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In an interview with CHN this month, Birol called for a phase-out of inefficient fossil fuel consumption subsidies that give citizens cheap petrol or cooking gas, for example. Such subsidies create “a major distortion in the market” and “an artificial challenge for the clean energy transition,” Birol said.

But he avoided questions about subsidies supporting the production of coal, oil and gas, such as the public finance poured into the Mozambique gas project by seven other countries.

Nor would he comment on whether a managed decline of oil and gas production was needed to meet international climate goals.

Claudia Strambo, a research fellow at the Stockholm Environment Institute, said ignoring the supply side of the equation was “extremely problematic”.

The lack of attention to fossil fuel production subsidies misrepresents the relative costs of coal, oil and gas compared with other energy sources, making them appear more competitive than they really are, she said.

By failing to provide policy guidance for a managed transition away from fossil fuels, Strambo said the IEA was doing “a disservice” to producers. “History shows that failing to manage this process can have severe long-term economic, social and political implications.”

Comment: World Bank policy advice boosts oil and gas, undermining climate goals

Business leaders, scientists and investors have urged the IEA to make a 1.5C-compatible scenario central to its flagship annual publication, the World Energy Outlook, opening up a debate over the IEA’s role in setting norms around global energy use.

In response, the IEA last November extended its Sustainable Development Scenario, which sets out what would need to happen for the world to limit global temperature rise to “well below 2C”, to reach the 1.5C goal.

However, it relied on using unproven negative emissions technology towards the end of the century, rather than accelerating a shift away from burning coal, oil and gas.

The campaigning coalition, led by former UN Climate Change head Christiana Figueres, is not impressed.

Guterres confronts China over coal boom, urging a green recovery

Sue Reid, principal advisor on finance at Mission 2020, which convened the campaign, said companies and investors lacked the data they need to align their business plans and investment portfolios with international commitments.

In its 2019 annual report, Italian oil company Eni said it had not tested its investment plan for compatibility with 1.5C because the tools to do so were not yet available.

Reid suggested investors and businesses could seek alternative sources of analysis on 1.5C if the IEA failed to meet demand.

“The more time elapses with the IEA not developing a 1.5C scenario, the more time it gives for other models to emerge that could supersede the IEA’s tools,” Reid told CHN. “It risks losing its influence if it doesn’t catch up with the world’s direction of travel towards 1.5C.”

If the IEA is serious about wanting to accelerate the clean energy transition, McKinnon said it will have to develop a central 1.5C scenario and address fossil fuel production. Its approach to the issue in its next major report in November “could make or break the legitimacy of its climate rhetoric,” she said.

The post For all its green talk, the IEA still gives comfort to oil and gas producers appeared first on Climate Home News.

In its first report since the coronavirus outbreak, the IEA – an influential voice among businesses, investors and governments – reviewed global energy consumption and CO2 emissions trends for the rest of the year.

“Renewable energy has so far been the energy source most resilient to Covid-19 lockdown measures,” the IEA found, noting demand for renewable electricity has been largely unaffected by the overall fall in energy use.

This, it said, came despite the fact the pace of additional renewable power could decline this year as supply chain disruptions and social distancing measures are significantly delaying construction and installation.

Climate Home News previously reported that installations of solar photovoltaic (PV) panels on the roofs of businesses and homes, which is expected to help drive future growth, were hard hit by the economic slowdown.

This could impact previous IEA forecasts that that 2020 will be a record year for additions of electricity generation capacity for solar, wind and other clean energies.

IMF chief: $1 trillion post-coronavirus stimulus must tackle climate crisis

The lifting of social distancing measures in different part of the world and the scope and timing of stimulus packages will influence the amount of additional renewable capacity this year.

But the IEA said this should have a limited impact on total renewable electricity generation this year.

As lockdown measures were implemented in North America and Europe to contain the spread of Covid-19, global energy demand dropped by 3.8% in the first quarter of the year compared with the first quarter of 2019.

Bucking the trend, renewable energy demand increased by 1.5%, which the IEA said was largely driven by the additional wind and solar projects that came online over the past year and the priority given to renewables in most power sectors.

For example, India is likely to have a power surplus in 2020 for the first time following the decline in energy consumption, according to a report by S&P Global Ratings.

The credit rating agency estimates the economic slowdown will only have a limited impact on the Indian renewable sector, which benefits from a “must-run” status compelling power distribution companies to use solar or wind energy whenever it is generated.

The continued growth in renewable energy put further pressure on global coal demand, which fell by almost 8%. The IEA reckoned cheap gas, mild weather and a temporary shutdown of industry in China also contributed to the plunge.

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Travel restrictions and the collapse of air travel led to a near 5% fall in oil demand, while gas demand was down 2% compared with the first quarter of 2019.

“Only renewables are holding up during the previously unheard-of slump in electricity use,” said Fatih Birol, the IEA’s executive director. “It is still too early to determine the longer-term impacts, but the energy industry that emerges from this crisis will be significantly different from the one that came before.”

The IEA projected global energy demand for the rest of the year using a scenario where a global recession caused by months of restrictions measures is followed by a gradual recovery, which includes permanent losses in economic activity.

In these conditions, the IEA estimates global energy demand could contract by 6% this year – the largest ever drop in absolute terms and more than seven times larger than the impact of the 2008 financial crisis.

This could see global energy-related CO2 emissions fall by almost 8% in 2020 compared with 2019 levels, reaching their lowest level since 2010 – the largest decrease in emissions ever recorded.

Earlier in April, analysts at Carbon Brief estimated CO2 emissions could drop by 5.5% compared with 2019.

“As after previous crises, however, the rebound in emissions may be larger than the decline, unless the wave of investment to restart the economy is dedicated to cleaner and more resilient energy infrastructure,” the agency warned.

UN development chief calls for green shift away from ‘irrational’ oil dependence

Under its scenario, the IEA anticipates low carbon sources to “far outstrip” coal-fired generation globally.

It anticipated global oil demand could drop by 9% in 2020, returning to 2012 consumption levels, coal demand could drop by 8% because of an decline in electricity consumption. However, coal demand recovery in China could offset some larger declines elsewhere, such as in India.

Gas is also forecast to “fall much further across the full year than in the first quarter”.

Global consumption of renewable energy is expected to rise by 1% in 2020 and renewable electricity generation could rise by nearly 5% in 2020, according to the IEA – a growth rate that remains smaller than anticipated before the pandemic.

The IEA has previously come under criticism for underplaying the speed of renewable energy deployment.

The post Renewables most resilient to Covid-19 lockdown measures, says IEA appeared first on Climate Home News.

Under the plan, UN Environment urged massive investments in energy efficiency for buildings, a boost for wind and solar energy, cuts in fossil fuel subsidies and a host of other measures. It reckoned the bill would amount to 1% of global GDP, or about $750 billion.

But the global economy rebounded, still reliant on fossil fuels, despite efforts to diversify. Carbon dioxide emissions grew by a huge 5.8% in 2010, after a 1.4% dip in 2009, and have risen most years since.

Will the coronavirus pandemic, which has killed more than 10,000 people worldwide, offer a new chance to shape a greener, more sustainable world when the economy revives?

Read Chloé Farand’s insightful interview with Fatih Birol, the head of the International Energy Agency, in which he says governments have a “historic opportunity” to usher in an era of climate action when they design long-term stimulus packages.

“Well put @IEABirol,” Christiana Figueres, the former head of UN Climate Change and an architect of the Paris Agreement, commented about the article in a tweet. “We have a massive crisis = opportunity on our hands. We cannot afford to waste it. Recovery must be green.”

In recent years, the idea of green new deals – which echo US President Franklin Roosevelt’s 1930s New Deal after the Great Depression – have caught on in many nations as a way to combat the climate crisis.

And the world now has a lesson to learn from the failings a decade ago.

“We have a responsibility to recover better” than after the financial crisis, UN Secretary-General António Guterres said on Thursday, saying the global health crisis was unlike any in the 75-year history of the UN.

“We have a framework for action – the 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change. We must keep our promises for people and planet,” he added.

The task is daunting. The UN says global cuts in greenhouse gas emissions of 7.6% a year are needed over the next decade to get on track to limit global warming to 1.5C above pre-industrial times.

But the Covid-19 emergency has opened a new window for a clean energy transition for the world economy.

Slow burn

The pandemic is slowing developing nations’ efforts to work out more ambitious climate plans, which are due to be submitted before talks in Glasgow, still scheduled for November, at the first five-year milestone of the Paris Agreement.

“We are entering into unknown territory,” said Jahan Chowdhury, in-country engagement director for the NDC Partnership, which supports about 75 developing countries design and deliver their climate plans.

The coronavirus is also disrupting Brussels’ legislative process, now unable to work at full capacity. This may delay the EU’s work on its Green Deal, under which the EU Commission wants Europe to be the world’s first carbon-neutral continent, Frédéric Simon at Euractiv writes.

Side effect  

The economic slowdown in China caused by the virus has at least one positive side-effect that is also now visible by satellites over Italy: less deadly air pollution.

The World Health Organisation says air pollution causes seven million deaths worldwide every year, by triggering cancers, heart and lung diseases.

In China alone, reduced air pollution could avert between 50,000 and 100,000 premature deaths if levels stay low for a whole year, according to researchers at the Center for International Climate Research in Norway. They estimate that more than a million people die every year in China from air pollution.

Contaminated 

Illustrating the risks of international travel and face-to-face meetings, the first coronavirus case in Liberia was recorded after an observer returned from a Green Climate Fund meeting in Geneva, Switzerland.

The meeting went ahead after being moved as a precaution from the GCF headquarters in Songdo, South Korea, at a time when the nation had become one of the world’s hotspots for the virus.

This week’s top stories

• Coronavirus slows developing nations’ plans to step up climate action in 2020
• Coronavirus enters Liberia after observer returns from Green Climate Fund meeting
• Coronavirus response to delay EU Green Deal by weeks
• Governments have ‘historic opportunity’ to accelerate clean energy transition, IEA says
• Coronavirus: China’s economic slowdown curbs deadly air pollution

The post ‘Historic opportunity’ – Climate Weekly appeared first on Climate Home News.

In an interview with Climate Home News on Tuesday, Fatih Birol said stimulus packages to prop up economic recovery marked a critical moment for governments to “shape policies” in line with climate action.

“I am talking with several governments and international financial institutions leaders because they are all busy designing stimulus programmes for the economy – the plans they will put together will be extremely important,” he said.

“This is the reason I am telling them that we can use the current situation to step up our ambition to tackle climate change.”

Birol said he had urged political and global financial leaders to design “sustainable stimulus packages” that focus on investing in clean energy technologies and accelerate the transition away from fossil fuels.

“This is a historic opportunity for the world to, on one hand, create packages to recover the economy, but on the other hand, to reduce dirty investments and accelerate the energy transition,” he said.

Coronavirus: China’s economic slowdown curbs deadly air pollution

The health crisis has hammered the economy in the week since the World Health Organisation declared coronavirus a pandemic. Stock markets have seen some of their toughest days of trading, sparking fears of a global economic recession.

The aviation industry has come under particularly strains in recent weeks, with a number of airlines announcing a dramatic scale-back of their operations and executives calling for government bailouts to avoid bankruptcy.

“The global economy is going through very difficult times and the energy sector is disproportionately affected,” said Birol. “Aviation represents 1% of the global economy but it’s 8% of global oil consumption.”

“I understand that when I talk to governments, they are very much preoccupied with the current economic turmoil but we should keep the eye on the ball that is addressing climate change,” he said.

Birol was speaking before reports in US media that President Donald Trump would be seeking an $850 billion stimulus package, including $50 billion for airlines.

Last year, a report by UN Environment found the world needed to cut emissions by 7.6% per year until 2030 to limit global warming to 1.5C by the end of the century – the tougher temperature goal countries committed to under the Paris Agreement.

Coronavirus may toughen airlines’ goals for curbing emissions in 2020s

In most recent years, global emissions have increased but they stagnated in 2019, according to an IEA analysis.

Birol insisted 2019 could mark a definite peak in emissions, but only if governments seized interventions to recover from the impacts of the coronavirus as the moment to gear the economy towards a green transition.

“It may well be the case that we will see 2020 emissions decline. In my view, this is not a reason to celebrate because emissions reduction should be the result of right energy policies,” he said.

In a statement last week, Birol wrote that such policies could include large-scale investments in clean energy technologies such as solar, wind, hydrogen and carbon capture and storage technologies.

The massive investment plan outlined by Birol echoed proposals such as the EU Commission’s “green deal for Europe” aimed at accelerating the shift of capital towards the green economy while creating climate-proof jobs.

The IEA has previously come under criticism for underplaying the speed of renewable energy deployment and for not considering the Paris Agreement’s more ambitious target of 1.5C in its influential World Energy Outlook scenarios.

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Birol also advocated for countries to capitalise on low interest rates to boost innovation on hydrogen and carbon capture and storage technology, and use the opportunity of steep reductions in oil prices to cut fossil fuel consumption subsidies.

The IEA estimates annual fossil fuel consumption subsidies are worth $400 billion worldwide, 40% of which are used to make oil products cheaper.

Birol expressed optimism governments could bend the emissions growth curve this year because of a number of favourable factors.

An IEA analysis found that 70% of global energy investments is driven by governments directly or indirectly as a response to policy. Meanwhile, the low cost of clean energy strengthens the economic case for the clean energy transition to drive stimulus packages.

“This is a huge opportunity we cannot miss,” he said. “Here the issue is not only the level of money [dedicated to stimulate the economy] but the direction of the money,” he said.

The post Governments have ‘historic opportunity’ to accelerate clean energy transition, IEA says appeared first on Climate Home News.

The agency’s World Energy Outlook (WEO) is regarded as a reference for governments, companies and investors on the state of the world’s energy prospects and explores possible futures for global energy trends.

In the report, published on Wednesday, the IEA extended its Sustainable Development Scenario to achieve the tougher Paris Agreement goal of 1.5C.

Under this scenario, the IEA sets out what would need to happen for the world to limit global temperature rise to “well below 2C”: oil demand peaks within the next few years, universal energy access is achieved by 2030 and energy-related CO2 emissions fall 3.8% per year to less than 10 gigatonnes in 2050 to put the world on track to achieve net zero emissions by 2070.

On this trajectory, the IEA found the world would have a two in three chance of limiting global temperature rise to 1.8C without having to remove CO2 from the air by producing bioenergy with carbon capture and storage (Beccs), for instance.

IEA develops pathway to ambitious 1.5C climate goal

Under the same scenario, the IEA gives a 50% change of meeting the 1.5C goal by using negative emissions technologies after 2070 to absorb around 300Gt of CO2 – making-up for overshooting the emissions limits that would keep temperatures below 1.5C.

The IEA acknowledged there are “uncertainties” about the scale, impacts and costs of negative emissions, which require large amounts of land, potentially conflicting with food production. But its scenario is only modelled to 2050 and does not assess whether the deployment of negative emissions at scale in the last part of the century is feasible or sustainable.

Instead, the IEA argues its scenario would use less negative emissions than the average level of CO2 that needs to be removed from the air in IPCC scenarios, which give a 50% chance or more of limiting warming to 1.5C.

Source: IEA’s World Energy Outlook 2019

For Joeri Rogelj, a scientist at Imperial College and a lead author on the International Panel on Climate Change’s (IPCC) 1.5C report, the comparison with IPCC scenarios is “a smoke screen” masking the IEA scenario’s lack of consistency with long-term sustainable development.

“The amount of CO2 removal needed after 2070 to meet 1.5C would go well beyond the sustainable limits that the IPCC has identified,” he said, describing it as “really problematic”.

Instead, the scenario “ends in 2050 with a world warming beyond a level science considers compatible with sustainable development of poor and vulnerable populations,” he told CHN.

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The WEO report does include a short and undetailed pathway for the world to achieve the 1.5C goal without negative emissions. Under this pathway, developed countries achieve carbon neutrality by 2045 and developing countries by 2050 – a goal that is not currently being considered by large emitters such as China and India.

Rogelj said the IEA’s “hesitant” attention to the 1.5C goal was “a positive step” but also a “missed opportunity” to fully align the WEO with international ambition.

In June, CHN reported that the IEA was exploring options to develop a scenario aligned with the 1.5C goal after the agency came under fire in a letter from scientists, business leaders and campaigners for not considering the Paris Agreement’s more ambitious target.

This opened a debate about the role of the IEA setting norms around global energy use. The agency’s business as usual scenario, which charts a world on track to at least 2.7C of warming, remains the WEO’s central reference for investors, rather than a scenario aligned to the Paris goals.

“It’s simply not enough to explore 1.5C in a couple of paragraphs if the bulk of the analysis remains focused on this default pathway that would put us on track for a catastrophic path of warming,” said Kelly Trout, senior research analyst at Oil Change International.

“By continuing to fall short on ambition, the IEA normalises disastrous levels of fossil fuel investment,” she added.

The post IEA World Energy Outlook outlines 1.5C scenario appeared first on Climate Home News.