The 21st Century climate challenge

per barrel. While prices may retreat, a return tothe low levels of the late 1990s is unlikely. Somecommentators interpret these market trends asevidence to support the ‘peak oil’ thesis—theidea that production is in long-run declinetowards the exhaustion of known reserves. 71 Inparallel to these market developments, politicalconcern over the security of energy supplies hasmounted in the face of growing terrorist threats,political instability in major exporting regions,high-profile disruptions in supply, and disputesbetween importers and exporters. 72Energy security and climate security—pulling in different directions?The energy security background is importantfor climate change mitigation strategies.However, hopes that rising prices for fossilfuels will automatically trigger an earlytransition to a low-carbon future are likely toprove misplaced. Proponents of the ‘peak oil’argument overstate their case. New suppliesare almost certainly going to be more costlyand more difficult to extract and deliver,raising the marginal price of a barrel of oil overtime. Yet the world will not run out of oil anytime soon: proven reserves could cover fourdecades of current consumption and much moremay be discovered. 73 The bottom line is thatthere is more than enough affordable fossil fuelavailable to take the world over the threshold ofdangerous climate change.With current technologies, exploitationof even a small fraction of the Earth’svast reservoir of fossil fuels would guaranteesuch an outcome. Whatever the pressure onconventional oil sources, proven reservesof oil slightly exceed the volume used since1750. In the case of coal, known reservesare around 12 times post-1750 use. Usingjust half of the world’s known coal reservesduring the 21 st Century would add around400 ppm to atmospheric stocks of greenhousegases, guaranteeing dangerous climatechange in the process. 74 The availability of fossilfuel reserves underlines the case for prudentcarbon budget management.Current market trends reinforce that case.One possible response to the rise in prices foroil and natural gas is a ‘dash for coal’. Thisis the world’s cheapest, most widely dispersedand most CO 2-intensive fossil fuel: for eachunit of energy generated, coal generates around40 percent more CO 2than oil and almost 100percent more than natural gas. Moreover, coalfigures very prominently in the current andfuture energy profiles of major CO 2emitterssuch as China, Germany, India and the UnitedStates. Experience in the transition economiespoints to wider problems. Consider the directionof energy policy in the Ukraine. Over the past10 to 15 years coal has been steadily replaced bycheaper (and less polluting) imported naturalgas. However, with the interruption of suppliesfrom the Russian Federation in early 2006 andthe doubling of import prices, the Ukrainiangovernment is considering a shift back towardscoal. 75 The case demonstrates the way in whichnational energy security may conflict withglobal climate security goals.Energy demand scenarios confirm thatrising fossil fuel prices are not pushingthe world towards a sustainable emissionspathway. Demand is projected to increaseby half between now and 2030, with over 70percent of the increase coming from developingcountries. 76 These projections suggest thatthe world will spend around US$20 trillionbetween 2005 and 2030 in meeting thosedemands. Much of that investment is stillbeing directed towards carbon-intensiveinfrastructures that will still be generatingenergy—and emitting CO 2—in the secondhalf of the 21 st Century. The consequencescan be assessed by comparing energy-relatedCO 2emission scenarios developed by theInternational Energy Agency (IEA) and theIPCC with our sustainable emissions pathwaysimulations:• Our sustainable emissions pathway pointsto a trajectory that requires a 50 percentcut in greenhouse gas emissions worldwideby 2050 against 1990 levels. The IEAscenario, in contrast, points to an increaseof around 100 percent. Between 2004and 2030 alone, energy-related emissionsare projected to increase by 14 Gt CO 2,or 55 percent.There is more thanenough affordable fossilfuel available to take theworld over the threshold ofdangerous climate change1The 21 st Century climate challengeHUMAN DEVELOPMENT REPORT 2007/2008 55