IEA suggests reduction in fossil fuel demand

The Copenhagen Conference, the much hyped event to save the fate of the Earth and human race has ended with a letdown and an "accord" rather than the much desired binding "agreement".

The preparatory meetings over the past two years and the marathon sessions in Copenhagen were not enough to bring about a binding agreement to reduce carbon dioxide emissions by 2020 pursuant to the Kyoto protocol which ends by the beginning of 2013.

The reason for failure is the wide differences between the positions of the various groups of countries and even within each group as well. The industrial countries positions ranged from reducing carbon dioxide emissions from the 1990 level by 1.3 per cent for the US to 20-30 per cent for the European Union.

Some industrial countries tied their position to some targets to be agreed by the developing countries as well where a shift in the positions of India and China is observed. Both countries pledged respectively to reduce their emissions intensity, not emissions, by 20-25 per cent and 40-45 per cent from the level of 2005 by 2020.

Therefore, one can see the almost impossibility to bridge the gaps between these basic positions especially when the economic cost of such policies is considered at a time of severe economic recession.

Contributions

The other problems that contributed to failure were related to money. The amounts pledged by the rich countries to the developing countries were deemed to be inadequate as they finally boiled down to $30 billion (Dh110.19 billion) over the next three years, rising to $100 billion per year by 2020, hardly comparable to the spending on wars and armaments by the rich countries around the world. As for technology transfer, it is all talk and studies and suggestions of programmes where no action is yet taken.

This reminds me of a meeting I attended in 1991 in Milano to discuss climate change where a speaker from a rich nation suggested to transfer the design of an efficient wood burning stove to developing countries to help them cook their food and boil water.

Technology transfer

At that time, and without belittling the idea, I knew there will be no technology transfer related to modern energy industry, agriculture, sanitation and other activities that would go a long way in tackling climate change without the developing countries coughing at the cost.

In the last few hours of the conference where it was clear that there will be no agreement, the Copenhagen Accord — a non-binding understanding — emerged through the limited negotiations between the US, China, India, South Africa and Brazil which recognised the "scientific" case for keeping global temperature rise below 2°C, but without any commitments to reduce emissions towards such goal. The negotiation will continue through 2010 to reach a binding agreement.

This accord is more or less similar to the earlier leaked Danish document to stabilise carbon monoxide concentration in the atmosphere to 450 parts per million in order to limit temperature rise to 2°C. It also is similar to the scenario proposed by the International Energy Agency (IEA) few months earlier and therefore its appearance in the accord is not a coincidence.

It is not surprising that the US and China were blamed for this result as the US and UK described it as "meaningful" while others called it "political spin".

Scenario

The IEA scenario is probably the only one that discusses numbers of how to stabilise carbon dioxide concentration as it suggests an energy growth of 20 per cent to 2030 instead of 40 per cent in accordance with current policies.

It suggests huge reductions in coal and oil demand such that the demand for oil in 2030 will only be 89 million barrels per day (mbd) as compared to 83 mbd now.

Obviously, the shares of the expensive alternatives such as nuclear and renewable energy will go up accordingly. This solution will need $26 billion extra investment in the energy industry to implement.

The surprising result is that the production of the Organisation of the Petroleum Exporting Countries will still be 11 mbd higher than it is now because of the decline in production from the rest of the world.

Perhaps this scenario is a way to reduce the opposition of the oil producers to some of the environmental instruments such as taxation where oil is unfairly and highly taxed.

The failure of the environmental debate so far is because its major concentration is on emissions while other areas such as the alleviation of poverty and backwardness are taking second stage or none.

Also the extreme position by advocates on all sides must change. Let us hope that 2010 will bring a fair and equitable agreement and that the rich start paying handsomely.

Saadallah Al Fathi is the former head of the Energy Studies Department at the Opec Secretariat in Vienna.