The world is on course for a 45 per cent increase in greenhouse gas emissions by 2030, the International Energy Agency (IEA) has warned. This would lead to a temperature rise of 6ºC when scientists have warned that this must be kept below 2ºC to avoid catastrophic climate change.

The IEA's World Energy Outlook report says increasing demand and use of energy is unsustainable and has to be curbed. It says use of low-carbon energy through hydropower, nuclear, biomass, and other renewables needs to expand from 19 per cent in 2006 to 26 per cent by 2030.

Coal and gas fired power plants will also have to be equipped with carbon capture and storage technology (CCS) to limit the average temperature rise to even 3ºC.

The switch to more low carbon energy will require extra investment of £2.7 trillion – equivalent to 0.2 per cent of GDP, – the IEA report said, with an average £11 spent per head worldwide on more efficient cars, appliances and buildings. The improved energy efficiency would deliver fuel-cost savings of almost £4.5 trillion.

Three-quarters of the projected rises in energy-related CO2 emissions will be accounted for by China, India and the Middle East. IEA executive director Nobuo Tanaka said: "Current trends in energy supply and consumption are patently unsustainable – environmentally, economically and socially – they can and must be altered.

"Rising imports of oil and gas into Organisation for Economic Co-operation and Development (OECD) regions and developing Asia, together with the growing concentration of production in a small number of countries, would increase our susceptibility to supply disruptions and sharp price hikes.

"At the same time, greenhouse-gas emissions would be driven up inexorably, putting the world on track for an eventual global temperature increase of up to 6°C."

The report says that, assuming no new government policies, world energy demand will grow by 1.6 per cent per year on average between 2006 and 2030 – an increase of 45 per cent. This figure is lower than projected last year because the economic slowdown has reduced demand.

Demand for oil will rise from the current 85m barrels per day to 106m barrels by 2030. Demand for coal will rise more than any other fuel – despite the environmental damage it causes – accounting for more than a third of the increase in energy use. The renewable energy industry will grow rapidly and will become the second-largest source of electricity soon after 2010.

The report claims oil will remain the world's main source of energy for many years to come even with the rapid development of alternative renewable energy technology but the amount of oil remaining, production costs and consumer price will remain unpredictable. "One thing is certain", said Mr Tanaka, "while market imbalances will feed volatility, the era of cheap oil is over".

He said big international oil and gas companies would in the future have limited scope to increase reserves and production while in contrast national companies are projected to account for about 80 per cent of the increase of both oil and gas production to 2030.

But it was uncertain whether the companies will be willing to find the investment needed and increasing production in the lowest-cost countries – most of them in OPEC – will be central to meeting the world's oil needs at reasonable cost.

The report says measures to curb CO2 emissions will improve energy security by reducing global fossil-fuel energy use but this should not alarm the world's major oil producers. "OPEC production will need to be 12m barrels per day higher in 2030 than today. It is clear that the energy sector will have to play the central role in tackling climate change," said Mr Tanaka.

Dr Keith Allott, head of climate change at WWF-UK agreed with the IEA than an energy revolution was needed but added:

"What concerns us is that, despite acknowledging the damaging effect of high carbon energy sources, the IEA fails to call for an end to 'business-as-usual' coal.

"Currently, even countries such as the UK, which has positioned itself as a leader on climate change, are considering plans to develop new unabated coal-fired power stations.

"This would lock us into a high carbon future, when globally, our focus should be placed on developing clean and renewable energy sources."

(Telegraph, 13/11/2008)