G8 Preparatory Meeting

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Better Air Quality Conference 10 November,
Bangkok
Climate Change Impacts in Asia Understanding the
Challenge
Lew Fulton International Energy Agency,
Paris www.iea.org
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• International Energy Agency
• Created in 1974 currently 28 Member Countries
• Autonomous agency linked with the OECD
• Goals
• energy security
• environmental protection
• economic growth
• Activities
• co-ordinates efforts to ensure energy security
• conducts policy analysis
• links research activities and governmental
  directives
• compiles energy statistics
• reviews energy policies programs
• convenes, mobilizes science technology experts
• www.iea.org

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IEAs Long-term View Energy Technology
Perspectives 2008

• A Low CO2 world to 2050 what it looks like and
  how to get there
• A study primarily about the role of technology
• Achieving IPCC CO2 emission targets
• Transport does not have to achieve zero
  emissions, but it would clearly help.
• Identifying short and medium term technology and
  policy needs
• Scenario analysis three main scenarios
• Baseline WEO2007 Reference Scenario, extended to
  2050
• Global stabilization by 2050 (ACT up to
  USD50/tonne)
• Global 50 reduction by 2050 (BLUE up to
  USD200/tonne)

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IEA Energy Technology Perspectives 2008
Baseline Liquid Fuels to 2050
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IEA ETP 2008Baseline Transport Energy Demand
ProjectionAbout a tripling world-wide, 2005-2050
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IEA ETP 2008 - AsiaBaseline Transport Energy Use
Projection About an 8-fold increase, 2005-2050
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IEA ETP 2008 - AsiaBaseline Transport Energy
Demand Projection By Mode
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ETP vehicle ownership projectionsCars per 1000
as a function of GDP/cap
Personal income, thousand real USD (using PPPs)
per capita
Based on a scenario where ownership/income
relationships in non-OECD countries track those
in OECD countries Income growth based on OECD/WB
projections
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Ownership close-up for Asia
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ETP vehicle ownership projections Total car
stocks by region
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Why should we care?1 energy security and
balance of payments

• International oil costs will account for
  transfers on order of USD 2 trillion during 2008
• Dramatic price swings will probably continue
• Consumers are unlikely to address the problem
  without government help
• Higher fuel prices will have only a small effect
  on demand for vehicles
• We will need massive investments in efficient
  transport infrastructure

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IEA Medium Term Oil Market Outlook (published
July 2008)

• Underlying forecast is 2.6 mb/d lower than last
  year for 2012
• OPEC crude liquids drive 2008-2010 growth
• Lull in 2011/2012 on project slippage and mature
  field decline
• But signs of recovery from 2013?

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2. IPCC we need a global 50 CO2 cut by 2050
IEA ETP 2008 Where CO2 reductions come from
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To bring emissions back to current levels by 2050
options with a cost up to USD 50/t are needed.
Reducing emissions by 50 would require options
with a cost up to USD 200/t, possibly even up to
USD 500/t CO2
ETP BLUE Map - A New Energy Revolution ?
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Primary Energy DemandImportant supply security
benefits
Transport sector accounts for 78 of oil savings
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ETP Scenarios Transport CO2 Emissions
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ETP and Modal Shift

• ETP does not include travel behaviour changes,
  except some modal shift
• Passenger hold transit shares to 60 rather
  than drop to 30 by 2030, via strong BRT and NMT
  investments
• Passenger high-speed rail investments
  sufficient to induce a shift of 5 of highway
  trips and 10 of air trips to rail in 2030
• Freight rail investments sufficient to cut
  trucking over 750km by 25 in 2030
• Net effect is a 20 reduction in car travel, 10
  reduction in truck travel compared to baseline
  case in 2030
• The problem is that travel increases 4-6 fold in
  baseline

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Vehicle fuel economy, new salesBaseline ETP

• Fuel economy does improve in the baseline
  scenario, but not much after 2015
• The new CAFE law in US and the Top runner in
  Japan are included. In Europe fuel economy
  reaches 130g CO2 per km by 2015

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Vehicle fuel economy, stockBaseline ETP

• New car improvements are passed on to the total
  stock, but stock turnover takes time

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Resulting LDV (Car, SUV) Fuel Use in Asian Regions
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How LDVs can achieve large oil use and CO2
emissions reductions

• Efficiency improvement generally is our cheapest
  option
• Clearly our most important near term option
• Electric and hydrogen vehicles are important
  long-term options, but will take time
• Plug-in hybrids are a likely first step
• Biofuels could be important, but only if
  sustainable and really deliver CO2 reductions
  big questions

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ETP 2008 Low Cost Transport Option

• New LDVs can become 50 more efficient by 2030
• In some countries, progress toward this 50
  target has already begun
• This is, very roughly, moving from 8 L/100 km to
  4. EU is already well below 8.
• Some individual vehicles, like Prius are there
  already
• Involves maximum use of available technology,
  including hybrids
• Important to constrain increases in vehicle size,
  weight and power
• Plug-in hybrids may play a significant role if
  battery costs come down further

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IEA ETP 2008New LDV Fuel Economy
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IEA Estimates FE improvement potential in OECD
Countries

• Based on an analysis of technology potential and
  current market penetrations for engines,
  drive-trains, components, weight reduction and
  aerodynamic improvements

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IEA Fuel Economy Estimates Range of Technology
Costs and Fuel Savings per Vehicle

• The fuel savings values in this figure can be
  obtained from the FE improvement estimates in
  previous figure and either of the following
  assumptions a) fuel saved over 200k km of
  driving, oil at 60/bbl, no tax or b) fuel saved
  over 100k km of driving, 100/bbl, 0.25/litre
  fuel tax.

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LDV Technology CostsETP Net cost per tonne CO2
Opt optimistic, pes pessimistic based on
60/bbl oil and undiscounted vehicle and fuel
costs
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ETP Cumulative Additional Investment and Fuel
Savimgs
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Biofuels Use in BLUE Map26 of Transport Fuel
Use in 2050
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Biofuels Land Use in BluePerhaps about 150
million hectares worldwide
Based on yields for different feedstocks reported
in literature assumes 100 from
agricultural/forest crops other sources like
residues would reduce land requirement.
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Conclusions

• Without policy interventions oil use in Asian
  countries may expand by an order of magnitude by
  2050
• Reduction in vehicle travel growth rates will be
  key, via strong transit investments and
  comlementary measures
• It appears reasonable to target a 50 reduction
  in vehicle energy intensity, on average around
  the world by 2030
• However we need better data on baseline values
  and current trends in individual countries
• Biofuels, EVs, possibly FCVs will play a role
  but extent and timing is quite uncertain for each