Isra-Mart srl : IEA: Fossil fuel subsidies choking renewables growth

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New report warns coal and gas support worth $312bn could make 2050 climate targets an impossibility
Removing fossil fuel subsidies worth $312bn worldwide is essential if clean energy is to thrive and the world is to end its dependence on coal and gas, the International Energy Agency (IEA) said today.

Cost reductions in renewable technologies and growth rates of 30 to 40 per cent have resulted from the $57bn of green subsidies dished out in 2009, but more action will be needed of the global economy is to halve global energy-related CO2 emissions by 2050, according to the IEA's latest Clean Energy Progress Report.

Expansion of renewable generation and energy efficiency has been overshadowed by the continued dominance of coal, which the report says has met 47 per cent of global demand over the past decade.

The IEA warned that the continued reliance on fossil fuels was leading to political instability and threatened the planet's environmental sustainability.

To deal with the problem governments must remove fossil fuel subsidies and implement better incentives to attract private sector capital into cleaner energy generation, the report says.

"Despite countries' best efforts, the world is coming ever closer to missing targets that we believe are essential for meeting the goal agreed in Cancun to limit the growth in global average temperatures to less than two degrees Celsius," said Richard Jones, deputy executive director of the IEA, when presenting the report at the Clean Energy Ministerial meeting in Abu Dhabi today.

"A number of countries have shown that achieving rapid transition to cleaner technologies is possible, and can be done from the bottom up. We must see more ambitious, effective policies that respond to market signals while providing long-term, predictable support."

The IEA said that policy support over the past 10 years has seen significant increases in wind and solar energy capacity. But it warned that renewables capacity will still have to double from today's level by 2020 if the world is to have any chance of meeting its 2050 emissions goal.

This will entail annual growth rates of 17 per cent for wind and 22 per cent for solar, which the report notes have been exceeded in the past few years but will need to be continued.

In addition, the IEA said that around 100 large-scale carbon capture and storage (CCS) projects will be needed by 2020 and over 3,000 CCS plants will need to be in place by 2050. Currently, there are just five CCS projects in operation and 70 planned, many of which are at risk because of delays in allocating public funds.

"It is uncertain how many of [the 70 projects] will be realised," the report concludes. "The currently available public funding for large-scale demonstration projects [$25bn] is not enough."

The report also argues that governments must accelerate the deployment of low carbon transport, particularly electric cars and biofuels.

Price incentives, investment in infrastructure, and integrated systems will be needed to build sustained markets and ensure that the target of putting seven million EVs on the road by 2020 is met.

In addition, the IEA stated that biofuels production, which currently accounts for just three per cent of transport fuel, will have to increase more than tenfold over the next 40 years without compromising on sustainability to meet the 2050 target.