Greg Keller
Paris — The Associated Press Published on Tuesday, Nov. 10, 2009 12:08PM EST Last updated on Tuesday, Nov. 10, 2009 12:23PM EST
The global financial crisis has led to a dangerous drop in energy investment around the world that could choke off the nascent economic recovery, the International Energy Agency said Tuesday.
The warning from the Paris-based agency comes just a month ahead of the major United Nations climate conference in Copenhagen, where world leaders hope to agree on so-called climate finance to help developing countries cut emissions by switching from fossil fuels to cleaner energy such as wind and solar.
The EU has said that there should be a $150-billion (U.S.) annual package of public and private finance by 2020 to help poorer nations develop green industries and adapt to climate change.
The IEA, a policy adviser to 28 mostly industrialized oil-consuming nations, estimates that the financial and economic crisis is responsible for a $90-billion drop in global oil and gas investment this year, a 19 per cent cut from 2008.
“Falling energy investment will have far-reaching and, depending on how governments respond, potentially serious consequences for energy security, climate change and energy poverty,” the IEA said in its annual World Energy Outlook report.
The resulting drop in oil and electricity supplies could “undermine the sustainability of the economic recovery,” the IEA warned.
Investment in renewable energy sources has been particularly hard hit, falling by about one-fifth in 2009 compared to a year earlier. Without the stimulus plans enacted by governments in response to the crisis, renewable energy investments would have fallen 30 per cent this year, the IEA said.
“The financial crisis has cast a shadow over whether all the energy investment needed to meet growing energy needs can be mobilized,” the IEA warned.
The agency estimates that $1.1-trillion needs to be invested annually from now until 2030, for a total of $26-trillion, just to meet energy demand on current growth trends.
Should governments adopt plans to limit greenhouse gas concentrations in the atmosphere to 450 parts per million of CO2 equivalent, an additional $10.5-trillion needs to be invested over that time period, the IEA said.
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