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Big Coal's wet dream « Previous | |Next »
November 15, 2012

The 2012 World Energy Outlook, released by the International Energy Agency, makes for sobering reading. This presents current views of possibilities over the next 25 years for energy markets and energy-related CO2 emissions, with these possibilities presented through three core scenarios.

This is based on the assumptions and output of the World Energy Model (WEM), which in the IEA's words, is a large-scale mathematical construct designed to replicate how energy markets function and is the principal tool used to generate detailed sector-by-sector and region-by-region projections for various scenarios. While these scenarios differ, many exogenous factors are kept consistent between scenarios ie.,
assumptions about population and economic growth are the same in each scenario.

The Outlook reinforces the emphasis in the Energy White Paper about Australia's expansion of coal and gas exports to facilitate the economic growth of China and India; and the Gillard Government's primary concern to secure another wave of resources investment.

The assumption here is the business-as-usual one in which the world does nothing about climate change. According to the World Energy Outlook, locks the world into average temperature rises of 6C; coal demand grows by 1.9 per cent per year out to 2035, and coal actually dethrones oil as the leading primary fuel around 2025, settling in at a share of just under 30% of the global energy market by 2035.

This scenario is Big Coal's wet dream---Gina Rinehart, Clive Palmer, and BHP Billiton and Rio Rio Tinto stand to make billions of dollars. Hence the coal industry's (miners and generators) deep opposition to the science of climate change and secondly against doing something about it through making a shift to a low carbon economy.

A second scenario takes account of the broad policy commitments and plans that have been announced by countries around the world--ie taking action in the form of the politics of climate change. In this scenario, whioch locks in average global warming of 3.6C, gas (Woodside, Santos and Origin) has a “very bright” outlook to the mid 2020s whilst the coal industry use is predicted to rise by 21 per cent by 2035. So the less action that is taken to reduce global warming means the greater profits for the fossil fuel industry. So they have no interest in reducing global warming to 2.0C and every economic reason to oppose it.

Taking climate change science seriously and achieving the 2 °C goal means the collapse of coal, unless carbon capture and storage (CCS) technology is widely deployed. Coal's share of the global primary energy mix (which includes all forms of enegy), tumbling to just 16 per cent by 2035, by which time it is overtaken by renewables and gas. King Coal faces dethronemen if the decarbonisation crowd wins. Hence the importance of (CCS) technology for Big Coal.

This is the IEA's 450 Scenario and it is the one that it supports. It is a scenario in which fossil fuel subsidies are abolished, fast.

| Posted by Gary Sauer-Thompson at 11:54 AM |