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article imageInternational Energy Agency calls for an end to oil subsidies

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By Stephanie Dearing     Nov 9, 2010 in World
London - The International Energy Agency (IEA) has released its World Energy Outlook 2010, forecasting energy use, production, investment and trading into 2035. The Agency has zeroed in on greenhouse gas emissions.
It's not too late to take steps to reduce greenhouse gas emissions, the International Energy Agency said in its 2010 report, released Tuesday in London, United Kingdom. This year's forecast contains a a new feature -- a road map for preventing climate change. In a press release the IEA said "The energy world faces unprecedented uncertainty."
One way of reducing that uncertainty, according the IEA's executive summary rests on developing fossil fuel resources in the Caspian area. The European Union is working on developing cooperation with Caspian countries in the interests of energy security, according to a Market Observatory for Energy document.
The Agency noted global demand for fossil fuels will continue to increase over the next 25 years, saying China would be leading the world in demand. Tanaka warned “It is hard to overstate the growing importance of China in global energy. How the country responds to the threats to global energy security and climate posed by rising fossil-fuel use will have far-reaching consequences for the rest of the world."
The IEA focused on the 2009 Copenhagen Accord pledges, warning "... A lack of ambition in the Copenhagen Accord pledges has increased our estimated cost of reaching the 2°C goal by $1 trillion and undoubtedly made it less likely that the goal will actually be achieved." Tanaka said “The message here is clear. We must act now to ensure that climate commitments are interpreted in the strongest way possible and that much stronger commitments are adopted and taken up after 2020, if not before. Otherwise, the 2°C goal could be out of reach for good."
The Agency sees the elimination of oil subsides as being key to meeting Copenhagen Accord pledges, but the organization said holding to those pledges was not enough. Tanaka said “The Copenhagen Accord and the agreement among G20 countries to phase out subsidies are important steps forward. But, these moves still fall a very long way short of what is required to set us on the path to a truly sustainable energy system."
While Executive Director of the IEA, Nobuo Tanaka said "We need to use energy more efficiently and we need to wean ourselves off fossil fuels by adopting technologies that leave a much smaller carbon footprint," the organization said that fossil fuels would remain important energy sources into the future.
Steps to remove subsidies by nations such as the United States have met with resistance. President Barack Obama had promised to end $36.5 billion in tax cuts for US petroleum companies beginning Janauary 1, 2011, reported Reuters. In response, the petroleum industry "strongly condemned" the plan. It is not certain how the planned cuts will play out.
Earlier this year, Business Week reported the IEA's Chief Economist Fatih Birol told the leaders of the Group of 20 that ending oil subsidies by 2020 "would reduce global oil demand by 6.5 million barrels a day, or about a third of the current U.S. use." Birol told Business Week, “This is the only single policy item that could make such a major change in the global energy and climate-change game."
Those subsidies, said the IEA on Tuesday, amounted to $319 billion in 2009.
Energy from renewable sources will continue to grow into the future, the Agency said, but the rates of growth will remain small in comparison to predicted for fossil fuels. Governments, the Agency says, play a key role in increasing renewable energy production.
The IEA has also predicted the price of oil will continue to rise into the future.
The IEA has been urging that governments adopt measures to curb greenhouse gas emissions for years.
The Agency "is an intergovernmental organisation which acts as energy policy advisor to 28 member countries in their effort to ensure reliable, affordable and clean energy for their citizens. Founded during the oil crisis of 1973-74, the IEA’s initial role was to co-ordinate measures in times of oil supply emergencies. As energy markets have changed, so has the IEA. Its mandate has broadened to incorporate the “Three E’s” of balanced energy policy making: energy security, economic development and environmental protection."
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