IPCC Fourth Assessment Report: Climate Change 2007
Climate Change 2007: Working Group III: Mitigation of Climate Change

4.1 Introduction

This chapter addresses the energy-supply sector and analyses the cost and potential of greenhouse gas (GHG) mitigation from the uptake of low- and zero-carbon-emitting technologies (including carbon capture and storage) over the course of the next two to three decades. Business-as-usual fossil-fuel use to meet future growth in energy demand will produce significant increases in GHG emissions. To make a transition by 2030 will be challenging. Detailed descriptions of the various technologies have been kept to a minimum, especially for those that have changed little since the Third Assessment Report (TAR) as they are well covered elsewhere (e.g., IEA, 2006a).

The main goal of all energy transformations is to provide energy services that improve quality of life (e.g. health, life expectancy and comfort) and productivity (Hall et al., 2004). A supply of secure, equitable, affordable and sustainable energy is vital to future prosperity. Approximately 45% of final consumer energy is used for low-temperature heat (cooking, water and space heating, drying), 10% for high-temperature industrial process heat, 15% for electric motors, lighting and electronics and 30% for transport. The CO2 emissions from meeting this energy demand using mainly fossil fuels account for around 80% of total global emissions (IEA, 2006b). Demands for all forms of energy continue to rise to meet expanding economies and increases in world population. Rising prices and concerns about insecure energy supplies will compromise growth in fossil fuel consumption.

Energy supply is intimately tied in with development in the broad sense. At present, the one billion people living in developed (OECD) countries consume around half of the 470 EJ current annual global primary energy use (IEA, 2006b), whereas the one billion poorest people in developing countries consume only around 4%, mainly in the form of traditional biomass used inefficiently for cooking and heating. The United Nations has set Millennium Development Goals to eradicate poverty, raise living standards and encourage sustainable economic and social development (UN, 2000). Economic policies aimed at sustainable development can bring a variety of co-benefits including utilizing new energy technologies and improved access to adequate and affordable modern energy services. This will determine how many humans can expect to achieve a decent standard of living in the future (Section 4.5.4; Chapter 3).

There are risks to being unprepared for future energy-supply constraints and disruptions. Currently, fossil fuels provide almost 80% of world energy supply; a transition away from their traditional use to zero- and low-carbon-emitting modern energy systems (including carbon dioxide capture and storage (CCS) (IPCC, 2005), as well as improved energy efficiency, would be part solutions to GHG-emission reduction. It is yet to be determined which technologies will facilitate this transition and which policies will provide appropriate impetus, although security of energy supply, aligned with GHG-reduction goals, are co-policy drivers for many governments wishing to ensure that future generations will be able to provide for their own well-being without their need for energy services being compromised.

A mix of options to lower the energy per unit of GDP and carbon intensity of energy systems (as well as lowering the energy intensity of end uses) will be needed to achieve a truly sustainable energy future in a decarbonized world. Energy-related GHG emissions are a by-product of the conversion and delivery sector (which includes extraction/refining, electricity generation and direct transport of energy carriers in pipelines, wires, ships, etc.), as well as the energy end-use sectors (transport, buildings, industry, agriculture, forestry and waste), as outlined in Chapters 5 to 10 (Figure 4.1).


Figure 4.1: Complex interactions between primary energy sources and energy carriers to meet societal needs for energy services as used by the transport (Chapter 5), buildings (6), industry (7) and primary industry (8 and 9) sectors.

In all regions of the world energy demand has grown in recent years (Figure 4.2). A 65% global increase above the 2004 primary energy demand (464 EJ, 11,204 Mtoe) is anticipated by 2030 under business as usual (IEA, 2006b). Major investment will be needed, mostly in developing countries. As a result, without effective mitigation, total energy-related carbon dioxide emissions (including transformations, own use and losses) will rise from 26.1 GtCO2 (7.2 GtC) in 2004 to around 37–40 GtCO2 (11.1 GtC) in 2030 (IEA, 2006b; Price and de la Rue du Can, 2006), possibly even higher (Fisher, 2006), assuming modest energy-efficiency improvements are made to technologies currently in use. This means that all cost-effective means of reducing carbon emissions would need to be deployed in order to slow down the rate of increase of atmospheric concentrations (WBCSD, 2004; Stern, 2006).


Note: EECCA = countries of Eastern Europe, the Caucasus and Central Asia. 1000 Mtoe = 42 EJ.

Figure 4.2: Global annual primary energy demand (including traditional biomass), 1971 – 2003 by region.

Implementing any major energy transition will take time. The penetration rates of emerging energy technologies depend on the expected lifetime of capital stock, equipment and the relative cost. Some large-scale energy-conversion plants can have an operational life of up to 100 years giving a slow rate of turnover, but around 2–3% per year replacement rate is more usual (Section 4.4.3). There is, therefore, some resistance to change, and breakthroughs in technology to increase penetration rate are rare.

Technology only diffuses rapidly once it can compete economically with existing alternatives or offers added value (e.g. greater convenience), often made possible by the introduction of new regulatory frameworks. It took decades to provide the large-scale electricity and natural-gas infrastructures now common in many countries. Power stations, gas and electricity distribution networks and buildings are usually replaced only at the end of their useful life, so early action to stabilize atmospheric GHGs to have minimal impact on future GDP, it is important to avoid building ‘more of the same’ (Stern, 2006).

Total annual capital investment by the global energy industry is currently around 300 billion US$. Even allowing for improved energy efficiency, if global energy demand continues to grow along the anticipated trajectory, by 2030 the investment over this period in energy-carrier and -conversion systems will be over 20 trillion (1012) US$, being around 10% of world total investment or 1% of cumulative global GDP (IEA, 2006b). This will require investment in energy-supply systems of around 830 billion US$/yr, mainly to provide an additional 3.5 TW of electricity-generation plant and transmission networks, particularly in developing countries, and provide opportunities for a shift towards more sustainable energy systems. Future investment in state-of-the-art technologies in countries without embedded infrastructure may be possible by ‘leapfrogging’ rather than following a similar historic course of development to that of OECD nations. New financing facilities are being considered because of the G8 Gleneagles Communiqué on Climate Change, Clean Energy and Sustainable Development of July 2005 (World Bank, 2006).

It is uncertain how future investments will best meet future energy demand while achieving atmospheric GHG stabilization goals. There are many possible scenarios somewhere between the following extremes (WEC, 2004a).

  • High demand growth, giving very large productivity increases and wealth. Being technology- and resource-intensive, investment in technological changes would yield rapid stock turnover with consequent improvements in energy intensity and efficiency.
  • Reduced energy demand, with an investment goal to reduce CO2 emissions by one per cent per year by 2100. This would be technologically challenging and assumes unprecedented progressive international cooperation focused explicitly on developing a low-carbon economy that is both equitable and sustainable, requiring improvements in end-use efficiency and aggressive changes in lifestyle to emphasize resource conservation and dematerialization.

The last century has seen a decline in the use of solids relative to liquids and gases. In the future, the use of gases is expected to increase (Section 4.3.1). The share of liquids will probably remain constant but with a gradual transition from conventional oil (Section toward coal-to-liquids, unconventional oils (Section and modern biomass (Section

A robust mix of energy sources (fossil, renewable and nuclear), combined with improved end-use efficiency, will almost certainly be required to meet the growing demand for energy services, particularly in many developing countries. Technological development, decentralized non-grid networks, diversity of energy-supply systems and affordable energy services are imperative to meeting future demand. In many OECD countries, historical records show a decrease in energy per capita. Energy reduction per unit of GDP is also becoming apparent with respect to energy supplies in developing countries such as China (Larson et al., 2003).