Continuing on today’s energy path, without any change in government policy, would mean rapidly increasing dependence on fossil fuels, with alarming consequences for climate change and energy security. The Reference Scenario sees a continued rapid rise in energy-related CO2 emissions through to 2030, resulting from increased global demand for fossil energy. Having already increased from 20.9 gigatonnes (Gt) in 1990 to 28.8 Gt in 2007, CO2 emissions are projected to reach 34.5 Gt in 2020 and 40.2 Gt in 2030 — an average rate of growth of 1.5% per year over the full projection period.
In 2020, global emissions are 1.9 Gt or 5% lower than in the Reference Scenario of WEO- 2008. The economic crisis and resulting lower fossil-energy demand growth account for three-quarters of this improvement, while government stimulus spending to promote low-carbon investments and other new energy and climate policies account for the remainder. Preliminary data suggest that global energy-related emissions of CO2 may decline in 2009 — possibly by around 3% — although they are expected to resume an upward trajectory from 2010. Non-OECD countries account for all of the projected growth in energy-related CO2 emissions to 2030. Three-quarters of the 11-Gt increase comes from China (where emissions rise by 6 Gt), India (2 Gt) and the Middle East (1 Gt). OECD emissions are projected to fall slightly, due to a slowdown in energy demand (resulting from the crisis in the near term and from big improvements in energy efficiency in the longer term) and the increased reliance on nuclear power and renewables, in large part due to the policies already adopted to mitigate climate change and enhance energy security. By contrast, all major non-OECD countries see their emissions rise. However, while non-OECD countries today account for 52% of the world’s annual emissions of energy-related CO2, they are responsible for only 42% of the world’s cumulative emissions since 1890. These trends would lead to a rapid increase in the concentration of greenhouse gases in the atmosphere. The rate of growth of fossil-energy consumption projected in the Reference Scenario takes us inexorably towards a long-term concentration of greenhouse gases in the atmosphere in excess of 1 000 ppm CO2-eq. The CO2 concentration implied by the Reference Scenario would result in the global average temperature rising by up to 6°C. This would lead almost certainly to massive climatic change and irreparable damage to the planet. The Reference Scenario trends also heighten concerns about the security of energy supplies. While the OECD imports less oil in 2030 than today in the Reference Scenario, some non-OECD countries, notably China and India, see big increases in their imports. Most gas-importing regions, including Europe and developing Asia, also see their net imports rise. The Reference Scenario projections imply an increasingly high level of spending on energy imports, representing a major economic burden for importers. Oil prices are assumed to fall from the 2008 level of $97 per barrel to around $60 per barrel in 2009 (roughly the level of mid-2009), but then rebound with the economic recovery to reach $100 per barrel by 2020 and $115 per barrel by 2030 (in year-2008 dollars). As a result, OECD countries as a group are projected to spend on average close to 2% of their GDP on oil and gas imports to 2030. The burden is even higher in most importing non-OECD countries. On a country basis, China overtakes the United States soon after 2025 to become the world’s biggest spender on oil and gas imports (in monetary terms) while India’s spending on oil and gas imports surpasses that of Japan soon after 2020 to become the world’s third-largest importer. The increasing concentration of the world’s remaining conventional oil and gas reserves in a small group of countries, including Russia and resource-rich Middle East countries, would increase their market power and ability to influence prices. Expanding access to modern energy for the world’s poor remains a pressing matter. We estimate that 1.5 billion people still lack access to electricity — well over one-fifth of the world’s population. Some 85% of those people live in rural areas, mainly in Sub-Saharan Africa and South Asia. In the Reference Scenario, the total number drops by only around 200 million by 2030, though the number actually increases in Africa. Expanding access to modern energy is a necessary condition for human development. With appropriate policies, universal electricity access could be achieved with additional annual investment worldwide of $35 billion (in year-2008 dollars) through to 2030, or just 6% of the power-sector investment projected in the Reference Scenario. The accompanying increase in primary energy demand and CO2 emissions would be very modest.