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Energy Economist: Time Has Run Out On Climate
Dr. Fatih Birol, chief economist of the International Energy Agency, gave a stark assessment of global energy needs and the world’s failure to address climate change in the final installment of
SIPA’s Leaders in Global Energy lecture series on December 1.
Economic instability, growing Chinese consumption and the potential for greenhouse gas regulations have created “unprecedented uncertainties” in the global energy sector, Birol said.
The cost of reducing climate change has increased by $1 trillion since negotiations broke down in Copenhagen in 2009, and it may be impossible to limit global warming to 2 degree Celsius, he said.
“This will change all of our lives and our children’s lives,” Birol predicted.
Watch the video of Dr. Birol's lecture here. 
View his presentation here.
View a photo album. 
China’s rapidly growing economy accounts for more than half the global growth in oil demand. While only 3 percent of the Chinese own cars, compared with 70 percent of Americans, car ownership is expected to increase dramatically in China in the coming decades.
Iraqi oil production must grow sharply to meet rising global demand, but this will depend on reducing the country’s political tensions, Birol said. Natural gas is also expected to provide an increasing share of global energy. However, gas production has outpaced demand, and energy markets are experiencing a “gas glut.”
In the Middle East, subsidies for fossil fuels lead to overconsumption. In certain countries, gasoline is as cheap as 8 cents per liter. Only 10 percent of these energy subsidies go to the poor, while 90 percent go to the middle and upper class, Birol said.
Oil demand could decrease, however, if the world moves to electricity to power its cars. According to the International Energy Agency’s recommendations, electric and plug-in hybrid vehicles should make up 39 percent of new sales by 2035.
Efforts to reduce greenhouse gas emissions must increase fourfold in order to limit climate change, Birol said. This should include renewable energy, nuclear power and improved energy efficiency, as well as capturing and storing carbon dioxide emissions.
Birol answered questions on topics including solar power, biofuels and the potential for a climate change agreement. The United Nations is the only institution that can convene climate negotiations, Birol said, and efforts to reach an agreement there must continue.
“The place where we find solutions should be the UN,” he said.
Creating sustainable energy while protecting the environment and reaffirming corporate citizenship is one of the great challenges of this century. The Leaders in Global Energy series, supported by a gift from EDP-Energias de Portugal, is a centerpiece of SIPA’s initiative to identify solutions. The lectures were organized and moderated by Visiting Professor Manuel Pinho, former Portuguese minister of economy and innovation.
Other Leaders in Global Energy speakers included: Nobuo Tanaka, executive director of the International Energy Agency, Andris Piebalgs, European Union development commissioner, and Fatih Birol, chief economist of the International Energy Agency.
Also in the fall 2010 semester, SIPA also hosted several world leaders in energy and sustainable development including José Manuel Barroso, president of the European Commission, and José Sócrates, prime minister of Portugal.
Tim Shenk, 12/05/2010