A investment of $45 trillion is needed to cut global emissions of greenhouse gases (GHG) in half by 2050 according to a report released Friday by the International Energy Agency (IEA).
The study, commissioned by the eight countries with the largest economies, calls for an investment of $10 billion to $100 billion per year over the next 15 years in order to put emission reductions on track and avoid a 150% surge in emissions by 2050 and a 70% increase in demand for oil.
Energy ministers from the Group of Eight countries, as well as ministers from China, India and South Korea, met last weekend in Japan to discuss how to control the rising price of oil.
Scientists say the world must stop and reverse annual increases in GHG emissions in the next ten years to avoid catastrophic climate change including rising seas and more extreme weather.
The report suggests that the power sector must be "decarbonized," by creating a cost for the GHG carbon dioxide of $200 to $500 per ton. The current price per ton of emissions on the European Emissions Trading Scheme is about US$42.
"There should be no doubt — meeting the target of a 50% cut in emissions represents a formidable target. We would require immediate policy action and technological transition on an unprecedented scale," Nobuo Tanaka, Executive Director of the IEA, said in a statement. "It will essentially require a new global energy revolution which would completely transform the way we produce and use energy… We need to act now."
A $45 trillion investment represents about 1.1% of projected global gross domestic product in the period, according to the report.
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