No credit crunch comfort on climate change

The credit crunch (or perhaps more accurately the confidence crisis) is closing down good businesses, putting people out of work and out of their homes and slowing down production of many goods and leaving most of the service industry not providing as many services. Is there an environmental silver lining? It may be that with less economic activity we can get those wretched greenhouse gas emissions down to a level that the planet can cope with.

Most emissions (by far) are from energy use and with less economic activity there will be less demand, so what do the experts predict about future energy use in light of the credit crunch? The International Energy Agency are experts.founded in the 1974 oil crisis to provide advice to 28 of the most prosperous nation on earth.

The International Energy Agency (IEA) has studied, as it studies every year, energy consumption trends, what will happen to carbon dioxide emissions associated with energy consumption, tasking into account all existing energy policies, on the assumption that no new energy policies are brought into being. Its World Energy Outlook is published every year; it out to be read more widely as the Agency is a widely respected body whose studies are created without political motive and without any agenda.

The IEA now expects world wide energy use to grow more slowly to 2030 than it has projected in previous years. It expects energy demand to increase by a massive 45% by 2030 at an average growth rate of 1.6% each year. Fossil fuel will provide 80% of the growth of energy. In other words a 36% increase in carbon dioxide emissions from fossil fuel, assuming that the fossil fuel mix is the same as at present.

The IEA foresees that large energy users in the developed world will be importing more and more natural gas and oil. The IEA has taken the present credit crisis into account in its calculations; otherwise its projected energy consumption would be higher. Out of the fossil fuels, oil will remain dominant, but the demand for coal will rise more than for any other fossil fuel, with the coal being used the generate electricity. The IEA points out that energy is subsidised in the twenty largest countries outside the OECD by more than $310 billion. Subsidising fossil fuel energy may be politically expedient in the short term but it is environmental terrorism.

The IEA forecasts a massive growth in renewables but the growth in energy created from this source is less than a fraction of the growth in energy from demand created by increases in population and increases in prosperity. India and China together will account for more than half of the increased energy use between now and 2030.

The Middle East alone will contribute 11% to the incremental world demand for energy. These increases in demand create a greater need for international co-operation in order to ensure that the energy supply routes are kept working. There will almost certainly be created increased competition for energy and with almost all energy coming from fossil fuel I shall expect very large price increases in real terms for oil, natural gas and coal, as more nations chase larger supplies, most of which will come from non OECD nations.

Certainly on the IEA’s projections there is little sign of any credit crunch comfort on climate change.