Fossil fuel subsidies obstructing renewable energy investment, warns IEA
Fossil fuel subsidies totalled $550bn in 2013 - more than four-times those to renewables - and are holding back investment in efficiency and renewable energy.
That's according to the World Energy Outlook 2014 (WEO-2014) from the International Energy Agency (IEA) which suggests that international primary energy demand is set to increase by 37% by 2040. However, were it not for efficiency measures helping slow the growth of energy demand, pressure on the global energy system would be even higher. (Scroll down for a summary of the report).
WEO-2014 states that fossil fuels continue to dominate the power sector, although their share of power generation drops from 68% in 2012 to 55% in 2040, while the share of renewables in total production increases from 21% in 2012 to 33% in 2040.
The report suggests that by 2040, demand for gas will be more than 50% higher; coal demand will be 15% higher, but growth will have slowed to a near halt in the 2020s; and world oil demand will have slowed to a near halt.
Nuclear generation capacity will rise by 60% to 624 GW in 2040. However, its share of global electricity generation, which peaked almost two decades ago, will rise by just 1% to 12%.
Global subsidies to renewables reached $121bn in 2013, up 15% on 2012, and will increase to approximately $230bn in 2030 in the New Policies Scenario, before a lack of support for recently deployed capacity will cause a subsidies decrease to $205bn in 2040.
Global Renewable Fuels Alliance (GRFA) reacted to the report, stating that renewable fuels such as biofuels offer both environmental and economic benefits, but require the right policies to be endorsed by governments to increase their production and consumption.
GRFA spokesperson Bliss Baker said: "It seems counter-productive to subsidise the most profitable industry on Earth that contributes the majority of global greenhouse gas emissions, especially when biofuels are growing and are the only commercial alternative to transport fossil fuels."
In the IEA central scenario, the entire carbon budget allowed under a 2C climate trajectory is consumed by 2040, which stresses the need for an ambitious agreement at the COP21 meeting in Paris in 2015.
This is not the only report to condemn the funding of fossil fuels over renewables this week. On Tuesday, edie reported on a report from the Overseas Development Institute (ODI) and Oil Change International (OCI) - The fossil fuel bail-out: G20 subsidies for oil, gas and coal exploration - revealing that, with rising costs for non-renewable reserves and falling coal and oil prices, public subsidies are keeping fossil fuel exploration afloat when it would otherwise be considered unprofitable.
REPORT: IEA World Energy Outlook 2014