1.the sustainable energy challenge

7/29/2019 1.The Sustainable Energy Challenge

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IAC Report | The sustainable energy challenge

The term sustainable energy is usedthroughout this report to denote energysystems, technologies, and resourcesthat are not only capable o supportinglong-term economic and human devel-opment needs, but that do so in a man-ner compatible with () preserving theunderlying integrity o essential naturalsystems, including averting catastrophicclimate change; (2) extending basic en-ergy services to the more than 2 billionpeople worldwide who currently lack ac-cess to modern orms o energy; and (3)reducing the security risks and potentialor geopolitical conict that could other-

wise arise rom an escalating competi-tion or unevenly distributed oil and nat-ural gas resources. In other words, theterm sustainable in this context encom-passes a host o policy objectives beyondmere supply adequacy.

. The sustainable energy challenge

Humankind has aced daunting problems in every age, but todays genera-

tion conronts a unique set o challenges. The environmental systems on

which all lie depends are being threatened locally, regionally, and at a

planetary level by human actions. And even as great numbers o people

enjoy unprecedented levels o material prosperity, a greater number

remains mired in chronic poverty, without access to the most basic o

modern services and amenities and with minimal opportunities or social

(e.g., educational) and economic advancement. At the same time, instabil-ity and confict in many parts o the world have created proound new

security risks.

Energy is critical to human development and connects in undamental

ways to all o these challenges. As a result, the transition to sustainable

energy resources and systems provides an opportunity to address multiple

environmental, economic, and development needs. From an environmen-

tal perspective, it is becoming increasingly clear that humanitys current

energy habits must change to reduce signicant public health risks, avoid

placing intolerable stresses on critical natural systems, and, in particular,

to manage the substantial risks posed by global climate change. By spur-

ring the development o alternatives to todays conventional uels, asustainable energy transition could also help to address the energy security

concerns that are again at the oreront o many nations domestic and

oreign policy agendas, thereby reducing the likelihood that competition

or nite and unevenly distributed oil and gas resources will uel growing

geopolitical tensions in the decades ahead. Finally, increased access to

clean, aordable, high-quality uels and electricity could generate multiple

benets or the worlds poor, easing the day-to-day struggle to secure basic

means o survival; enhancing educational opportunities; reducing substan-

tial pollution-related health risks; reeing up scarce capital and human

resources; acilitating the delivery o essential services, including basic

medical care; and mitigating local environmental degradation.Energy, in short, is central to the challenge o sustainability in all its

dimensions: social, economic, and environmental. To this generation alls

the task o charting a new course. Now and in the decades ahead no policy


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2 IAC Report | The sustainable energy challenge

objective is more urgent than that o nding ways to produce and use

energy that limit environmental degradation, preserve the integrity o

underlying natural systems, and support rather than undermine progresstoward a more stable, peaceul, equitable, and humane world. Many o the

insights, knowledge, and tools needed to accomplish this transition

already exist but more will almost certainly be needed. At bottom the deci-

sive question comes down to this: Can we humans collectively grasp the

magnitude of the problem and muster the leadership, endurance, and will to get

the job done?

1.1 The scope of the challengeLinkages between energy use and environmental quality have always been

apparent, rom the deorestation caused by uelwood use even in early

societies to the high levels o local air and water pollution that havecommonly accompanied the early phases o industrialization. In recent

decades, advances in scientic understanding and in monitoring and

measurement capabilities have brought increased awareness o the more

subtle environmental and human-health eects associated with energy

production, conversion, and use. Fossil-uel combustion is now known to

be responsible or substantial emissions o air pollutantsincluding

sulur, nitrogen oxides, hydrocarbons, and sootthat play a major role in

the ormation o ne particulate matter, ground-level ozone, and acid rain;

energy use is also a major contributor to the release o long-lived heavy

metals, such as lead and mercury, and other hazardous materials into the

environment. Energy-related air pollution (including poor indoor air qual-ity rom the use o solid uels or cooking and heating) not only creates

substantial public health risks, especially where emission controls are

limited or nonexistent, it harms ecosystems, degrades materials and struc-

tures, and impairs agricultural productivity. In addition, the extraction,

transport, and processing o primary energy sources such as coal, oil, and

uranium are associated with a variety o damages or risks to land, water,

and ecosystems while the wastes generated by some uel cyclesnotably

nuclear electricity productionpresent additional disposal issues.

Although the most obvious environmental impacts rom energy produc-

tion and use have always been local, signicant impactsincluding the

long-range transport o certain pollutants in the atmosphereare nowknown to occur on regional, continental, and even transcontinental scales.


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IAC Report | The sustainable energy challenge 3

And at a global level, climate change is emerging as the most consequen-

tial and most dicult energy-environment linkage o all. The production

and use o energy contributes more than any other human activity to thechange in radiative forcingthat is currently occurring in the atmosphere;1

in act, ossil-uel combustion alone currently accounts or well over hal o

total greenhouse gas emissions worldwide (ater accounting or dierent

gases carbon dioxide equivalent warming potential). Since the dawn o the

industrial era, carbon dioxide levels in the atmosphere have increased by

about 40 percent; going orward, trends in energy production, conversion,

and usemore than any other actor within human controlare likely to

determine how quickly those levels continue to rise, and how ar. The

precise implications o the current trajectory remain unknown, but there

is less and less doubt that the risks are large and more and more evidence

that human-induced global warming is already underway. In its recent,Fourth Assessment report, or example, the Intergovernmental Panel on

Climate Change (IPCC) concluded that evidence or the warming o the

Earths climate system was now unequivocal and identied a number o

potential adverse impacts associated with continued warming, including

increased risks to coasts, ecosystems, resh-water resources, and human

health (IPCC, 2007a: p. 5; and 2007b) . In this context, making the transi-

tion to lower-carbon energy options is widely acknowledged as a central

imperative in the eort to reduce climate-change risks.

Another issue that will continue to dominate regional, national, and

international energy policy debates over the next several decades is energy

security. Dened as access to adequate supplies o energy when needed, inthe orm needed, and at aordable prices, energy security remains a

central priority or all nations concerned with promoting healthy economic

growth and maintaining internal as well as external stability. In the near to

medium term, energy security concerns are almost certain to ocus on oil

and, to a lesser extent, on natural gas. As demand or these resources

grows and as reserves o relatively cheap and readily accessible supplies

decline in many parts o the world, the potential or supply disruptions,

trade conficts, and price shocks is likely to increase. Already, there is

concern that the current environment o tight supplies and high and vola-

tile prices is exacerbating trade imbalances, slowing global economic

growth, and directly or indirectly complicating eorts to promote interna-tional peace and security. The problem is particularly acute or many

Radiative forcing is a measure of the warming effect of the atmosphere. It is typicallyexpressed in watts per square meter.


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developing countries that devote a large raction o their oreign exchange

earnings to oil imports, thus reducing the resources available to support

investments needed or economic growth and social development.Providing the energy services needed to sustain economic growth and,

conversely, avoiding a situation where lack o access to such services

constrains growth and development, remains a central policy objective or

all nations, and an especially important challenge or developing nations

given the substantial resource and capital investments that will be

required. Within that larger context, a third important set o issues (in

addition to the environmental and energy-security issues noted above)

concerns the specic linkages between access to energy services, poverty

alleviation, and human development. These linkages have recently drawn

increased international attention and were a major ocus o the 2002

World Summit or Sustainable Development in Johannesburg, whichrecognized the importance o expanded access to reliable and aordable

energy services as a prerequisite or achieving the United Nations Millen-

nium Development Goals.2 These linkages are discussed in detail in other

reports (notably in the 2000 and 2004 World Energy Assessments under-

taken by the United Nations Development Programme, United Nations

Department o Economic and Social Aairs, and World Energy Council)

and summarized in Box 1.1 (DFID, 2002).

In brie, substantial inequalities in access to energy services now exist,

not only between countries but between populations within the same

country and even between households within the same town or village. In

many developing countries, a small elite uses energy in much the sameway as in the industrialized world, while most o the rest o the population

relies on traditional, oten poor-quality and highly polluting orms o

energy. It is estimated that today roughly 2.4 billion people use charcoal,

rewood, agricultural residues, or dung as their primary cooking uel,

while some 1.6 billion people worldwide live without electricity.3 Without

Millenniun Development Goals (MDG) call for halving poverty in the world's poorest coun-tries by 05. According to a United Nations (005: p. 8)) report, The link between energyservices and poverty reduction was explicity identified by the World Summit for SustainableDevelopment (WSSD) in the Johannesbury Plan of Implementation (JPOI), which called forthe international community to Take joint actions and improve efforts to work together atall levels to improve access to reliable and affordable energy services for sustainable develop-ment sufficient to facilitate the achievement of the MDGs, including the goal of halving theproportion of people in poverty by 05, and as a means to generate other important serv-ices that mitigate poverty, bearing in mind that access to energy facilitates the eradication ofpoverty. Data on the numbers of people without access to modern energy services are at best highly

Energy and the MillenniumDevelopment Goals

Box 1.1

Energy services can play a varietyof direct and indirect roles in help-ing to achieve the MillenniumDevelopment Goals:

To halve extreme poverty.Access toenergy services acilitates econom-ic development micro-enterprise,livelihood activities beyond daylighthours, locally owned businesses,which will create employment andassists in bridging the digital di-vide.

To reduce hunger and improve ac-cess to safe drinking water. Energyservices can improve access topumped drinking water and pro-vide uel or cooking the 95 percento staple oods that need cookingbeore they can be eaten.

To reduce child and maternal mor-tality; and to reduce diseases.Ener-gy is a key component o a unction-ing health system, contributing, orexample, to lighting operating the-atres, rerigerating vaccines andother medicines, sterilizing equip-ment, and providing transport tohealth clinics.

To achieve universal primary educa-tion, and to promote gender equali-ty and empowerment of women.Energy services reduce the timespent by women and children (es-pecially girls) on basic survival ac-tivities (gathering frewood, etch-ing water, cooking, etc.); lightingpermits home study, increases se-curity, and enables the use o edu-cational media and communica-tions in schools, including inorma-tion and communication technolo-gies.

To ensure environmental sustain-ability. Improved energy efciencyand use o cleaner alternatives canhelp to achieve sustainable use onatural resources, as well as reduceemissions, which protects the localand global environment.


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access to aordable, basic labor-saving devices or adequate lighting and

compelled to spend hours each day gathering uel and water, vast numbers

o people, especially women and girls, are deprived o economic andeducational opportunities; in addition, millions are exposed to substantial

health risks rom indoor air pollution caused by traditional cooking uels.

The challenge o expanding access to energy services revolves primarily

around issues o social equity and distributionthe undamental problem

is not one o inadequate global resources or o a lack o available technolo-

gies. Addressing the basic energy needs o the worlds poor is clearly

central to the larger goal o sustainable development and must be a top

priority or developing countries in the years ahead i some dent is to be

made in reducing current inequities.

1.2 The scale of the challengeThe scale o the sustainable energy challenge is illustrated by a quick

review o current consumption patterns and o the historic linkages

between energy use, population, and economic growth. Human develop-

ment to the end o the 18th century was marked by only modest rates o

growth in population, per capita income, and energy use. As the Industrial

Revolution gathered pace, this began to change. Over the last century

alone, world population grew 3.8 times, rom 1.6 to 6.1 billion people;

worldwide average per capita income increased nine-old (to around

US$8,000 per person in 2000)4; annual primary energy use rose by a

similar amount (ten-old) to 430 exajoules (EJ); and ossil-uel use alone

increased twenty-old.5Throughout this period, energy use in many countries ollowed a

common pattern. As societies began to modernize and shit rom tradi-

tional orms o energy (such as wood, crop residues, and dung) to

commercial orms o energy (liquid or gaseous uels and electricity), their

energy consumption per capita and per unit o economic output (gross

domestic product) oten grew rapidly. At a later stage o development,

approximate and vary depending on the source consulted. Hence it is probably more appro-priate to focus on the fact that available data point to a significant fraction of the world's popu-lation rather than on the specific numeric figures cited by different sources.4 In 000, the gross world product on a purchasing power parity basis was US$49 trillion(population 6. billion).5 Estimates for 900 vary from 7 to 50 EJ, an estimate of 40 EJ is used here; and estimatesfor 000 vary from 400 to 440 EJ and an estimate of 40 EJ is used here [ EJ equals 09 giga-joules (GJ); GJ equals 0.7 barrels of oil equivalent equals 0.07 million cubic meters (mcm)gas equals 0.04 metric ton (mt) coal equals 0.8 megawatt-hour.]


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however, urther growth in energy consumption typically slowed as the

market or energy-using devices reached a point o saturation and as

wealthier economies shited away rom more energy-intensive manuac-turing and toward a greater role or the less energy-intensive service sector.

The rate o growth in energy consumption also diminished in some indus-

trialized countries as a result o concerted energy eciency and conserva-

tion programs that were launched in the wake o sharp oil price increases

in the early 1970s. Figure 1.1 shows declining energy intensity trends or

OECD and non-OECD countries over the last 18 years.

In recent years, the energy intensity o the worlds industrialized econo-

mies has been declining at an average annual rate o 1.1 percent per year,

while the energy intensity o the non-OECD economies has been declin-

ing, on average, even aster (presumably because these economies start

rom a base o higher intensity and lower eciency). Because the rate odecline in energy intensity has generally not been sucient to oset GDP

growth, total energy consumption has continued to grow in industrialized

countries and is growing even aster in many developing countries.

0

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

World Non-OECD total OECD total

World: -1.25% per year

Non-OECD total: -1.42% per year

OECD total: -1.10% per year

1985 1990 1995 2000 2005

toeperthousand2000US$PPP

Figure . Energy intensity versus time, 985-2005

Note: TPES is total primary energy supply; GDP is gross domestic product; PPP ispurchasing power parity; toe is ton oil equivalent.

Source: IEA, 2005


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Looking ahead, current projections suggest that the worlds population

will grow by another 50 percent over the rst hal o this century (to

approximately 9 billion by 2050), world income will roughly quadruple,6and energy consumption will either double or triple, depending on the

pace o uture reductions in energy intensity. But projections are notori-

ously unreliable: patterns o development, structural economic shits,

population growth, and liestyle choices will all have a proound impact on

uture trends. As discussed later in this report, even small changes in aver-

age year-to-year growth or in the rate o intensity reductions can produce

very dierent energy and emissions outcomes over the course o several

decades. Simply boosting the historical rate o decline in energy intensity

rom 1 percent per year to 2 percent per year on a global average basis, or

example, would reduce energy demand in 2030 by 26 percent below the

business-as-usual base case. Numerous engineering analyses suggest thatintensity reductions o this magnitude could be achieved by concerted

investments in energy eciency over the next hal century, but even seem-

ingly modest changes in annual average rates o improvement can be di-

cult to sustain in practice, especially over long periods o time, and may

require signicant policy commitments.

Conronted with the near certainty o continued growth in overall energy

demand, even with concerted eorts to urther improve eciency, reduce

energy intensity, and promote a more equitable distribution o resources,

the scale o the sustainability challenge becomes more daunting still when

one considers the current mix o resources used to meet human energy

needs. Figure 1.2 shows total primary energy consumption or the OECDcountries, developing countries, and transition economies (where the

latter category chiefy includes Eastern European countries and the ormer

Soviet Union), while Figures 1.3 and 1.4 show global primary energy

consumption and global electricity production, broken down by uel

source.

Non-renewable, carbon-emitting ossil uels (coal, oil, and natural gas)

account or approximately 80 percent o world primary energy consump-

tion (Figure 1.3). Traditional biomass comprises the next largest share (10

percent) while nuclear, hydropower, and other renewable resources

(including modern biomass, wind, and solar power), respectively, account

or 6, 2, and 1 percent o the total. Figure 1.4 shows the mix o uels used togenerate electricity worldwide. Again, ossil uelsprimarily coal and

6 To a gross world product on a purchasing price parity basis of US$96 trillion (USDOE,006).


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natural gasdominate the resource mix, accounting or two-thirds o

global electricity production. The nuclear and hydropower contributions

are roughly equal at 16 percent o the total,7 while non-hydro renewablesaccount or approximately 2 percent o global production.

Most projections indicate that ossil uels will continue to dominate the

worlds energy mix or decades to come, with overall demand or these

uels and resulting carbon emissions rising accordingly.8

Table 1.1 shows a reerence case projection or uture energy demand

developed by the International Energy Agency (IEA) based largely on busi-

ness-as-usual assumptions. It must be emphasized that these projections

7 Note that Figure . shows the nuclear power contribution to primary energy supply as

roughly three times the hydropower contribution, even though as noted in the text and inFigure .4 electricity production from these two sources worldwide is roughly equal. This isbecause the thermal energy generated at a nuclear power plant is included as primary energyin Figure . (an accounting convention that may be justified because this thermal energycould, in principle, be used).8 Typically fossil fuel supply would double by 050 accounting for over 60 percent of primaryenergy supply [IEA estimates for 00 are 8 percent].

Figure .2 Regional shares in world primary energy demand, includingbusiness-as-usual projections

Note: megaton oil equivalent(Mtoe) equals .9 petajoules.

Source: IEA, 200

0

2,000

4,000

6,000

8,000

10,000

Transition economies

Developing countries

OECD countries

2030201520041990

Energydemand(Mtoe)


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Figure . World electricity production by energy source, 200

Note: Total world electricity production in 200 was ,08 terawatt-hours (or 3 exajoules).

Source: IEA, 200.

l

l

l

l

Renewables

Hydro

Nuclear

Gas

Oil

Coal

Gas 20%

Nuclear 16%

Coal 40%

Oil 7%

Hydro 16%

Renewables 2%

Biomass & waste: 62%Wind: 22%Geothermal: 15%Solar: 1%Tide & wave: 0%Excluding hydro

Figure .3 World primary energy consumption by uel, 200

Note: Total world primary energy consumption in 200 was ,20 megatons oil equivalent(or 8 exajoules).

Source: IEA, 200

Other renewables

Biomass & waste

Hydro

Nuclear

Gas

Oil

Coal

Gas 21%

Nuclear 6%

Hydro 2%

Biomass & waste 10%

Other renewables 1%

Coal 25%

Oil 35%

l

l

l

l

ll

l


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do not incorporate sustainability constraints (such as mitigation measures

that might be necessary to manage climate risks)as such, they are not

intended to portray an inevitable uture, much less a desirable one. Rather

the useulness o such projections lies in their ability to illuminate the

consequences o allowing current trends to continue. For example, IEAs

reerence case projections assume moderate growth in the use o renew-

able energy technologies. But since non-hydro renewables accounted or

only 2 percent o world electricity production in 2004, ossil-uel

consumption and global carbon emissions continue to grow strongly by2030. Indeed current orecasts suggest that a continuation o business-as-

usual trends will produce a roughly 55 percent increase in carbon dioxide

emissions over the next two decades.

The implications o these projections, rom a climate perspective alone,

are sobering. I the trends projected by IEA or the next quarter century

continue beyond 2030, the concentration o carbon dioxide in the atmo-

sphere would be on track to reach 540970 parts per million by 2100

anywhere rom two to three times the pre-industrial concentration o 280

parts per million. By contrast, it is increasingly evident that the responsible

mitigation o climate-change risks will require signicant reductions in

global greenhouse gas emissions by mid-century. As part o its FourthAssessment Report, the IPCC has identied numerous adverse impacts on

water supplies, ecosystems, agriculture, coasts, and public health that

would be predicted (with high or very high condence) to accompany

Table 1.1 World primary energy demand by fuel

Million ton oil equivalent (Mtoe)Average annual

growth rate

1980 2004 2010 2015 2030 2004-2030

Coal 1,785 2,773 3,354 3,666 4,441 1.8%

Oil 3,107 3,940 4,366 4,750 5,575 1.3%

Gas 1,237 2,302 2,686 3,017 3,869 2.0%

Nuclear 186 714 775 810 861 0.7%

Hydro 148 242 280 317 408 2.0%

Biomass and waste 765 1,176 1,283 1,375 1,645 1.3%

Other renewables 33 57 99 136 296 6.6%

Total 7,261 11,204 12,842 14,071 17,095 1.6%

Note: million ton oil equivalent equals .9 petajoules.

Source: IEA 200


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continued warming. Moreover, the current IPCC assessment places the

onset or several o these key impacts at a global mean temperature

change o 23 degrees Celsius (IPCC, 2007a: p 13). The IPCC urther esti-mates that limiting global warming to a 23 degrees Celsius change will

require stabilizing atmospheric concentrations o greenhouse gases some-

where in the range o 450550 parts per million in carbon dioxide equiva-

lent terms. Based on numerous IPCC-developed scenarios, achieving

stabilization within this range could require absolute reductions in global

emissions o as much as 3085 percent compared to 2000 levels by mid-

century (IPCC 2007b: p 23-5). Hence, a major goal o this report is to oer

recommendations or shiting the worlds current energy trajectory

through the accelerated deployment o more ecient technologies and

sustainable, low-carbon energy sources.

The consequences o current trends are also troubling, however, rom anenergy security perspective given the longer-term outlook or conventional

oil supplies and given the energy expenditures and environmental impacts

it implies, or countries struggling to meet basic social and economic-

development needs. Recent orecasts suggest that a continuation o busi-

ness-as-usual trends will produce a nearly 40 percent increase in world oil

consumption by 2030, at a time when many experts predict that produc-

tion o readily accessible, relatively cheap conventional oil will be rapidly

approaching (or may have already reached) its peak. Moreover, IEA reer-

ence case projections, though they anticipate a substantial increase in

energy consumption by developing countries, assume only modest prog-

ress over the next several decades toward reducing the large energy inequi-ties that now characterize dierent parts o the world. This is perhaps not

surprising insoar as the IEA projections are based on extrapolating past

trends into the uture; as such they do not account or the possibility that

developing countries might ollow a dierent trajectory than industrialized

countries.

1.3 The need for holistic approachesBeyond the scope and scale o the issues involved, the challenge o moving

to sustainable energy systems is complicated by several additional actors.

First is the act that dierent policy objectives can be in tension (or even at

odds), especially i approached in isolation. For example, eorts to improveenergy securityi they led to a massive expansion o coal use without

concurrent carbon sequestrationcould signicantly exacerbate climate


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risks. Similarly, emulating historic patterns o industrialization in develop-

ing countries could, in a 21st century context, create substantial environ-

mental and energy-security liabilities. Achieving sustainability almostcertainly requires a holistic approach in which development needs, social

inequities, environmental limits, and energy security are addressedeven

i they cannot always be resolved at the same time. Priorities should be set,

by region and by country.

Extending basic energy services to the billions o people who now lack

access to electricity and clean cooking uels, or example, could be accom-

plished in ways that would have only minimal impact on current levels o

petroleum consumption and carbon dioxide emissions (Box 1.2). Indeed,

closer examination o the relationship between energy consumption and

human well-being suggests that a more equitable distribution o access to

energy services is entirely compatible with accelerated progress towardaddressing energy-security and climate-change risks. Figure 1.6 compares

per capita consumption o electricity in dierent countries in terms o

their Human Development Index (HDI) a composite measure o well-

being that takes into account lie expectancy, education, and GDP.9 The

gure indicates that while a certain minimum level o electricity services is

required to support human development, urther consumption above that

threshold is not necessarily linked to a higher HDI. Put another way, the

gure indicates that a relatively high HDI (0.8 and above) has been

achieved in countries where per capita levels o electricity consumption

dier by as much as six-old.

In act, U.S. citizens now consume electricity at a rate o roughly 14,000kilowawtt hour per person per year while Europeans enjoy similar stan-

dards o living using, on average, only 7,000 kilowatt-hours per person per

year.10 Improvements in energy eciency represent one obvious opportu-

nity to leverage multiple policy goals, but there are others most notably,

o course, changing the energy supply mix. To take an extreme example: i

the resources used to meet energy needs were characterized by zero or

near-zero greenhouse gas emissions, it would be possible to address

climate-change risks without any reductions in consumption per se. In

9 The HDI is calculated by giving one-third weight to life expectancy at birth, one-thirdweight to education (both adult literacy and school enrollment), and one-third weight to percapita GDP (adjusted for purchasing power parity). It is worth noting that a graph that simplycompares per capita GDP to energy (or electricity) consumption would show a considerablymore linear relationship (UNDP, 006).0 Per capita electricity consumption in some European countries, such as Sweden andNorway, is higher than in the United States.


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Box 1.2 A focus on cooking in the developing world

Figure .5 The energy ladder: Relative pollutant emissions per meal

Note: Health-damaging pollutants per unit energy delivered: ratio o emissions to liquidpetroleum gas (LPG). Using a log scale in Figure .5, the values are shown as grams permegajoule (g/MJ-d) delivered to the cooking pot.

Source: Smith and others, 2005.

Clean, efcient stoves represent a majoropportunity to extend energy and publichealth benefts to the billions o peoplewho rely on traditional uels or theirhousehold cooking needs.

Household energy ladder. Over 2. bil-lion people in developing countries stillrely on solid biomass uels or theircooking needs. This number increasesto 3 billion when the use o various typeso coal or cooking is included. In act,the use o solid biomass uels or cook-ing accounts or as much as 3090 per-cent o primary energy consumption insome developing countries. As incomesrise, people generally upgrade rom dirt-

ier uels (animal dung, crop residues,wood, charcoal, and coal) to liquid uels(kerosene) to gaseous uels (liquid pe-troleum gas, natural gas, and biogas)and fnally, sometimes, to electricity.Conversely, when prices o liquid andgaseous petroleum-based uels rise,people tend to downgrade again to sol-id uelsat least or certain tasks. Ashouseholds move up the energy ladder,the uels and stoves they use tend to be-come cleaner, more efcient, and easierto controlbut also more costly. Be-cause solid-uel combustion or cook-

ing is oten inefcient and poorly con-trolled, the cost per meal prepared isgenerally not a simple unction o thecost o the uel or stove technologyused.

Health and environmental impacts. Theuse o traditional uels or cooking, o-ten under poorly ventilated conditions,is a signifcant public health issue inmany developing counties (Figure .5).Globally, exposure to smoke romhousehold uel combustion is estimat-ed to be responsible or . milliondeaths annually, a death toll almost ashigh as that rom malaria. Small chil-dren are disproportionately aected:

they account or roughly million othese deaths each year, usually romacute lower respiratory inections.Women are the next most aectedgroup: they account or most o the re-maining deaths, primarily rom chronicpulmonary obstructive diseases (WHO,2002).In addition to generating highlevels o air pollution, extensive relianceon some traditional solid uelsnota-bly woodcan lead to unsustainableharvesting practices that in turn contrib-ute to deorestation and generate otheradverse impacts on local ecosystems.

Moreover, some recent research sug-gests that biomass uels used in cook-ing, even when they are harvested re-newably (as crop residues and animaldung invariably are), can generate evenhigher overall greenhouse gas emis-sions than petroleum-uel alternativeswhen emissions o non-carbon dioxidepollutants rom incomplete combus-tion are accounted or (Smith and oth-ers, 2005).

Saving energy and saving lives. Severalstrategies have been tried in variousplaces around the world to reduce theadverse impacts o cooking with soliduels. Typically they combine simultane-

ous eorts to address three areas o op-portunity: reducing exposure, reducingemissions, and using cleaner uels. Op-tions or reducing exposure include in-creasing ventilation, providing stoveswith hoods or chimneys, and changingbehavior. Options or reducing emis-sions include improving combustion e-fciency, improving heat transer ef-ciency, or preerably both. Fuel up-grades can involve switching to bri-quettes or charcoal (which creates prob-lems o its own) and biogas. Severalcountries have subsidized shits to ker-

osene and liquid petroleum gas inort to help poor households leaup the energy ladder. Smith (200shown that i even a billion pswitched rom solid biomass couels to liquid petroleum gas, this wincrease global emissions o carboxide rom ossil uels by less thancent. Emissions o greenhouse on an equivalent basis might acdecrease. Subsidizing cleaner however, suers rom several impdrawbacks: it is expensive (Indiapenditures or liquid petroleum gasidies exceed all its expenditures ucation); it is inefcient (governsubsidies oten end up ben

households that do not need tand it can actually increase housspending on energy as subsidizedget diverted to other uses (or exakerosene and liquid petroleum goten diverted to transportation Some countries, notably China,implemented very successul progto replace traditional cookstovescleaner models. Elsewhere, as in such programs have had mixed re

100

10

1

0.1

Biogas LPG Kerosene Woodresidues

Roots Crop Dung0.1

0.3

2.51.0 1.0 1.0

3 4.2 1.3

19 1726 22

1830

6032

124

64115

63 Carbon monoxide (CO)

Hydrocarbons

Particulate matter (PM)g/MJ-d


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0 2,500 5,000 7,500 10,000 12,500 15,000 17,500 20,000 22,500 25,000 27,5000.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

HumanDevelopmentIndex(HDI)

Electricity consumption (kWh/person.year)

Mexico

AustraliaPoland

Brazil

China

IndiaSouth Africa

Pakistan

Russian Federation, Saudi Arabia

Japan, France, Netherlands, Italy, United Kingdom,Germany, Israel, Republic of Korea

Kuwait

NorwayCanadaArgentina

Zambia

Niger

United States

reality, o course, some combination o demand reductions and changes in

the supply mix will almost certainly be necessary to meet the sustainability

challenges o the coming century. Meanwhile, deploying renewable and

other advanced, decentralized energy technologies can improve environ-

mental quality, reduce greenhouse gas emissions, stimulate local

economic development, reduce outlays or uel imports, and make it moreeasible to extend energy services to poor households, especially in remote

rural areas.

Other actors complicate the sustainable energy challenge and urther

Figure . Relationship between human development index (HDI) and per capita electricityconsumption, 2003 200

Note: World average HDI equals 0.. World average per capita annual electricity consumption,at 2,90 kWh per person.year, translates to approximately 9 gigajoules (GJ)/person.year [0,000kilowatts (kWh) = 3 GJ]

Source: UNDP, 200.


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underscore the need or holistic policy approaches. A high degree o iner-

tia characterizes not only the Earth atmosphere climate system but also

much o the energy inrastructure that drives energy-usage patterns, aswell as the social and political institutions that shape market and regula-

tory conditions. Because the residence times o carbon dioxide and other

greenhouse gases in the atmosphere are on the order o decades to centu-

ries, atmospheric concentrations o greenhouse gases cannot be reduced

quickly, even with dramatic cuts in emissions. Similarly, the momentum

behind current energy consumption and emissions trends is enormous:

the average automobile lasts more than ten years; power plants and build-

ings can last 50 years or longer; and major roads and railways can remain

in place or centuries. The growth that has recently occurred in worldwide

wind and solar energy capacity is heartening, but there are very ew exam-

ples o new energy orms penetrating the market by indenitely sustaininggrowth rates o more than 20 percent per year. Fundamental changes in

the worlds energy systems will take time, especially when one considers

that new risks and obstacles almost always arise with the scaling up the

deployment o new technologies, even i these risks and obstacles are

hardly present when the technologies are rst introduced. As a result, the

process o transition is bound to be iterative and shaped by uture develop-

ments and scientic advances that cannot yet be oreseen.

Precisely because there are unlikely to be any silver-bullet solutions to

the worlds energy problems, it will be necessary to look beyond primary

energy resources and production processes to the broader systems in

which they are embedded. Improving the overall sustainability o thesesystems requires not only appropriate market signalsincluding prices

that capture climate change impacts and other externalities associated with

energy usebut may also demand higher levels o energy-related invest-

ment and new institutions. Most current estimates o energy sector invest-

ment go only so ar as delivered energy, but investments in the devices and

systems that use energyincluding investments in buildings, cars or

airplanes, boilers or air conditionerswill arguably matter as much, i not

more.11 In all likelihood, much o the required investment can be taken up

in normal capital replacement processes. With estimated world income in

2005 o US$60 trillion (based on purchasing power parity) and an average

capital investment rate close to US$1 trillion per month, there should besubstantial scope to accelerate the deployment o improved technologies.

For example, IEA estimates of cumulative energy industry investments for 004 00amount to US$7 trillion.


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1.4 Summary points

The multiple linkages between energy, the environment, economic and

social development, and national security complicate the task o achievingsustainable outcomes on the one hand and create potentially promising

synergies on the other.

The scope and scale of the sustainable energy challenge require

innovative, systemic solutions as well as new investments in

infrastructure and technology. Much o the inrastructure investment

will need to happen anyway, but in most places the market and

regulatory environment is not currently providing the eedback signals

necessary to achieve a substantial shit in business-as-usual patterns.

And by several measures, current worldwide investment in basic energy

research and development is not adequate to the task at hand.12

Change will not come overnight. Essential elements o the energyinrastructure have expected lie o the order o one to several decades.

That means the energy landscape o 2025 may not look that dierent

rom the energy landscape o today. Nevertheless, it will be necessary

within the next decade to initiate a transition such that by 2020 new

policies are in place, consumer habits are changing, and new

technologies are gaining substantial market share.

The problem of unequal access to modern energy services is

fundamentally a problem of distribution, not of inadequate resources or

environmental limits. It is possible to meet the needs o the 2 billion-

plus people that today lack access to essential modern orms o energy

(i.e., either electricity or clean cooking uels) while only minimallychanging the parameters o the task or everyone else. For example, it

has been estimated that it would cost only US$50 billion to ensure that

all households have access to liquid petroleum gas or cooking. Moreo-

ver, the resulting impact on global carbon dioxide emissions rom ossil-

uel use would be on the order o 1or 2 percent (IEA, 2004; 2006).

Reducing current inequities is a moral and social imperative and can be

accomplished in ways that advance other policy objectives.

A substantial course correction cannot be accomplished in the time-

frame needed to avoid significant environmental and energy-security

risks if developing countries follow the historic energy trajectory of

already industrialized countries. Rich countries, which have consumedmore than their share o the worlds endowment o resources and o the

Public investment in energy research and development (R&D) in 005, by OECD and non-OECD countries, has been estimated at US$9 billion, or a mere . percent of all public R&Dexpenditures. Historically, private investment in energy R&D, as a percent of energy expendi-tures, has also been low compared with other technology sectors.


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absorptive capacity o the planets natural systems, have the ability and

obligation to assist developing countries in leaprogging to cleaner and

more eicient technologies.To succeed, the quest for sustainable energy systems cannot be limited

to finding petroleum alternatives for the transport sector and low-carbon

means of generating electricityit must also include a set of responsible

and responsive demand-side solutions. Those solutions must address

opportunities at the city level (with special ocus on the use o energy

and water), new energy-industrial models (incorporating modern under-

standing o industrial ecology), and advanced mobility systems. In addi-

tion, it will be necessary to ocus on opportunities at the point o end-use

(cars, appliances, buildings, etc.) to implement the widest range o

energy-saving options available. Most o the institutions that rame

energy policy today have a strong supply-side ocus. The needs o the21st century call or stronger demand-side institutions with greater

country coverage than is, or example, provided by the IEA with its

largely indusrialized country membership.

Given the complexity of the task at hand and the existence of substantial

unknowns, there is value in iterative approaches that allow for experi-

mentation, trying out new technologies at a small scale and developing

new options. Science and engineering have a vital role to play in this

process and are indispensable tools or inding humane, sae, aordable,

and environmentally responsible solutions. At the same time, todays

energy challenges present a unique opportunity or motivating and

training a new generation o scientists and engineers.The experience of the 20th century has demonstrated the power of

markets for creating prosperous economies. Market orces alone

however will not create solutions to shared-resource problems that all

under the tragedy-o-the-commons paradigm (current examples include

international ishing, water and air pollution, and global warming emis-

sions).13 Governments have a vital role to play in deining the incentives,

price signals, regulations, and other conditions that will allow the market

to deliver optimal results. Government support is also essential where

markets would otherwise ail to make investments that are in societys

Tragedy of the commons refers to a situation where free access to a finite resource inevi-tably leads to over-exploitation of the resource because individuals realize private benefitsfrom exploitation, whereas the costs of over-exploitation are diffuse and borne by a muchlarger group. As applied to the problem of climate change, the finite resource is the absorp-tive capacity of the Earth s atmosphere. As long as there is no restriction on emit-ting greenhouse gases and as long as the private cost to individual emitters does not reflectthe public harm caused by their actions, overall emissions will exceed the amount that wouldbe optimal from the standpoint of the common good.


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long-term best interest; examples include certain types o inrastructure,

basic research and development, and high-risk, high-payo technolo-

gies.

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the Millennium Development Goals. London, United Kingdom.

IEA (International Energy Agency). 2006. World Energy Outlook 2006. Paris. http://www.

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1.the sustainable energy challenge

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