Technology for a Low Carbon Future Full Report

8/9/2019 Technology for a Low Carbon Future Full Report

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TECHNOLOGYFOR A LOWCARBON FUTURE

BREAKING THE CLIMATE DEADLOCK

PREPARED By SHANE TOMLINSON, E3G


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BREAKING THE CLIMATE DEADLOCK TECHNOLOGY FOR A LOW CARBON FUTURE

CONTENTS

0204 ExECUTIvE SUMMARY

0511 CHApTER 1:SiGNpOSTS TO THE FUTURE AmBiTiOUS BUT ACHiEvABLE TECHNOLOGY SOLUTiONSFOR CLimATE SECURiTY

1215 CHApTER 2:iNvESTmENT NEEdS ANd RiSk mANAGEmENT TO dELivERTECHNOLOGY SOLUTiONS

1620 CHApTER 3:CRiTiCAL SECTORS FOR ACTiON:pOWER, TRANSpORT, BUiLdiNGS ANd iNdUSTRY

2125 CHApTER 4:ACTivATiNG THE SOLUTiONS WHAT NEEdS TO BE dELivEREd iN COpENHAGEN?

2635 ANNEx

36 CREDITS


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in recent years the scentfc eence on clate change has becoe ncreasngly clear: t s now alost unersallyaccete that, n orer to nse the rs of rreersble aage to our lanet an our lelhoos, we nee tostre to ee the aerage global teerature ncrease below 2C. it s also wely recognse that, to achee ths,we wll nee to ea global essons before 2020 an then reuce the by 50-85% below 20 00 leels, settng ntertargets along the way.

Lewse, the oltcal wll to act s n lace. Heas of goernent fro all arts of the worl hae eclare therwllngness to aot abtous essons targets, both nually an collectely, but hae wante to be sure thatsuch goals, whle certanly challengng, are ractcally acheable. Ths reort shows that ths s nee the case.Fro analyss of the current status of the ajor abateent solutons, we raw fe ajor conclusons:

1.We know the technologies we need, where to deloy them and the inestment reuired.

To ut ourseles on a ath to eet our essons goals, we nee to reuce global essons by 19 Ggatonnes (Gt) n2020 an energy-relate essons by 48 Gt by 2050. in aton to slowng an eentually haltng eforestaton, theglobal roaa for technology eeloent an eloyent ust focus on four ey sectors:

power: Aroxately 38% of total sangs to 2050. Renewable energy, carbon cature an sequestraton (CCS),nuclear ower an boass wll all be crtcal areas.

Transort: Aroxately 26% of total sangs to 2050. key technologes nclue electrc an hyrogen fuel cellehcles, roe effcency an current an next generaton bofuels.

Bulngs: Aroxately 17% of total sangs to 2050. key technologes nclue roe effcency n

bulng alances. inustry: Aroxately 19% of total sangs to 2050. key technologes nclue CCS for nustral rocesses,

an nustral otor systes.

The total requre annual aerage nestent to scale technology u to the requre leel s aroxately $1 trllonbetween now an 2050. Ths s equalent to 40% of global nfrastructure nestent or 1.4% of Gdp. But uch of thsnestent slaces busness as usual senng on hgh-carbon alternates an so the ncreental cost of atonalnestent s uch saller. Estates suggest that a global ncreental cost of atonal nestent of aroxately$317bn annually n 2015, rsng to $811bn n 2030, s requre wth an ol rce of $60 er barrel. But f the ol rce rsesto $120 er barrel, ths wll reuce the cost by $700bn annually ang the ncreental atonal cost oer theero ery sall or een zero.

2. The technologies reuired to meet our 2020 goals are already roen, aailable now and the olicies needed toimlement them known.

Oer 70% of the reuctons neee by 202 0 can be achee by nestng n three areas: ncreasng energy effcency,reucng eforestaton an usng lower-carbon energy sources, nclung nuclear an renewables. We also now thatby leentng just seen roen olces these reuctons can be elere:

Renewable energy stanars: Regulaton to requre or fee-n tarffs to stulate an ncrease roucton ofenergy fro renewable sources, n artcular wn an solar, coul eler 2 .1 Gt of sangs.

inustry effcency: iroe otors an other effcency gans coul eler 2.4Gt of sangs. Bulng coes: irong stanars for new bul an oernsng exstng bulng stoc coul sae 1.3 Gt. vehcle effcency stanars: drng u stanars for ehcle effcency coul sae 0.4 Gt. Fuel carbon content stanars: Reucng the carbon content of fuels coul lea to 0.3 Gt of sangs. Alance stanars: increasng the energy effcency of whte goos an other alances coul reuce

essons by 0.3 Gt. polces to reuce essons fro eforestaton an forest egraaton (REdd): coul eler close to 9 Gt

of reuctons.

All seen olces hae alreay been successfully leente n countres aroun the worl but nee scalng u.Whle ca an trae systes or other eans of creatng a carbon rce can hel roe ncentes for busnesses tonest n low-carbon solutons, n the short ter at least, t s these seen olcy easures an rect acton annestent by goernents that wll achee the targets.

BREAKING THE CLIMATE DEADLOCK TECHNOLOGY FOR A LOW CARBON FUTURE 02

ExECUTIvESUMMARY


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ExECUTIvE SUMMARY


3. Inestment now in the technologies of the future order is essential if we are to meet longer-term targets.

Although we hae the technologes we nee through to 2020, new technologes any aalable but not yetcoercally roen wll be neee to eet the ore challengng long-ter goals. Therefore, at the sae te aswe eloy exstng solutons, we ust nest n future otons, such as carbon cature an storage (CCS), newgeneraton nuclear, concentrate solar ower (CSp) an electrc ehcles, an the nfrastructure, such as sart grs,necessary for the to oerate at scale. instea of locng n hgh-carbon nfrastructure, countres ust agree now tosee u the eloyent of technologes wth otental for long-ter carbon reucton. The stuaton s crtcal. Thestatus of current technologes shows conserable otental for the future but there s a long way to go before theyreach full coercalsaton.

For exale, wthout CCS technology, the cost of ecarbonsaton wll be oer 70% hgher n 2050. Yet there arecurrently no full-scale CCS lans u an runnng anywhere n the worl, een though the technology s execte tocontrbute 20% of global esson reuctons by 2050. For CCS to reach ts full otental we wll nee to hae at leastten full-scale ower eonstraton lants an a further eght nustry eonstraton lants u an runnng by 2015.

Technology wll be eeloe an eloye when the rate sector s resente wth the rght balance of rs anrewar. Acton s therefore requre to create arets for nnoaton an ffuson that wor n a globalse worl. Thswll requre not only the acceleraton of a corehense global carbon aret but also the leentaton of ractcalan collaborate technology olces both natonally an nternatonally. The oerall goal ust be to aggresselyeloy the exstng tre an teste otons that can eler -ter reuctons, an to reare for the long-tereeloent of gae-changng technologes.

A long-ter global carbon rce wll be essental to ull technologes through to coercalsaton an ssenatethe wely. Acceleratng the eeloent of natonal an regonal carbon arets, an tools to ln these together,ust therefore be a rorty. Access to the nternatonal carbon aret wll reuce the total cost of abateent by uto 20%.

But alone ths s not enough. The realty s that carbon rcng oes not aress any other aret falures along thennoaton chan. Oercong these requres worl leaers to eelo an leent olces focuse secfcally ontechnology eeloent an eloyent whch are both ractcal an collaborate. puttng n lace strong oestclegslaton to ecarbonse the ower, transort, bulngs an nustry sectors s an essental startng ont.

Loong ahea, goernents shoul aot a strategc to-own aroach to ensure that crtcal technologes arre

on te an roe nestent n srute otons to allow racal transforaton n the future. Ths s not a olcyof cng wnners; rather t s to guarantee that there wll be enough wnners to c fro.

4. Financial suort will be needed to enable global deloyment of low-carbon technologies but the non-climate

benefits are also significant.

more than 30% of global abateent between now an 2030 wll be n large eergng econoes such as ina anChna, an eelong countres wll requre sgnfcant fnancal flows to enable the to ae the necessarynestents. Estates suggest that ths nees to be aroxately $100bn-$160bn annually between 2010 an 2020.Funng to eelong countres coul be through both aret-base echanss, such as the Clean deeloentmechans, or through ultlateral fnancng such as the Worl Ban Clate inestent Funs.

Yet nestent n low-carbon technologes wll lea to substantal job creaton an growth. Gerany create100,000 jobs n the renewable sector between 2004 an 2006. in the US t s estate that roucng 5% of electrctyfro wn ower by 2020 woul a $60bn n catal nestent n rural Aerca, roe $1.2bn n new ncoe forfarers an rural lanowners an create 80,000 new jobs.

in aton, nestent ust be ae n suortng nfrastructure such as sart gr technology, whch wll facltatethe use of new technologes.

internatonally, eeloe countres shoul also agree to at least ouble ublc research, eeloent aneonstraton (Rd&d) for low-carbon technologes by 2015 an quarule t by 2020. Ths woul eler an atonal$10-$30bn er annu to ush through ey technologes. Countres shoul rortse nternatonal cooeraton forstrategcally ortant technologes such as CCS, CSp an zero-carbon transort. The major Econoes Foru (mEF)coul c-start ths rocess by agreeng to a global eonstraton roject for CCS an CSp technology.


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ExECUTIvE SUMMARY


5. Coenhagen can roide the sur for international collaboration that will bring costs down and accelerate

diffusion and deloyment.

Although any of the olces neee wll be leente natonally or regonally, a strong agreeent n Coenhagenwll roe the fraewor for nternatonal cooeraton to re long-ter change an assst n eloyng exstngtechnologes an to roe Rd&d oortuntes for future technologes. A corehense technology echansust be ut n lace, whch sets the scale an ace of aret an rect fnance suort, efnes the areas wherecooeraton wll tae lace an establshes an nsttutonal structure to easure, reort an erfy actons anfacltate jont entures. Ths echans shoul:

Establsh a Technology deeloent Objecte to scale u aret creaton an fnance for new technology. Agree to the creaton of Technology Acton prograes coerng aret eeloent, global eonstraton an

orhan areas of research for crtcal t echnologes such as CCS. Refor an scale u the Clean deeloent mechans to ensure t can suort technology ffuson n

eelong countres. Establsh a Technology Execute Boar uner the Unte Natons Fraewor Conenton on Clate Change (UNFCC)

to oersee the creaton of global roaas an technology acton rograes. The boar woul also contrbute tothe creaton of easurable, reortable an erfable (mRv) crtera to trac technology acton an suort.

Establsh a rotect an share fraewor for ntellectual roerty rghts (ipR), wth caacty-bulng suort tostrengthen ipR rotecton n eelong countres an roe a clear fraewor for usng the exstng flexbltesn natonal an nternatonal law.

Successfully reucng essons to reent angerous clate change s wthout oubt a huge challenge an wllrequre a reoluton n the way we rouce an consue energy, trael an esgn an anage our urban an ruralenronents. Howeer, the athway to ths reoluton s clear an, by eans of abtous nternatonal collaboratonto eelo an eloy low-carbon technologes, well wthn our gras. We now what we hae to o; ths reort showsus how.


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SIGNpOSTS TO THE FUTURE AMBITIOUS BUT ACHIEvABLE TECHNOLOGYSOLUTIONS FOR CLIMATE SECURITY

innoaton an technology wll be essental to roe the answers to clate change, energy securty an econocgrowth. The solutons are acheable, afforable an realstc but wll requre concerte effort an nternatonalcooeraton to be successfully execute. To o ths we ust hae a ual focus, to aggressely eloy exstng otonsto ea an reuce global essons by 2020, an nest n the technologes of the future to bul the caacty toae ee long-ter cuts. Coenhagen s the oent for the worl to sgnal ths cotent an clearly sgnostthe ath to a sustanable future.

The scentfc eence on clate change s clear: the internatonal panel on Clate Changes (ipCC) FourthAssessent Reort conclues that to stay below a rse of 2C we ust ea global essons before 2020 an reucethe globally by 5085% below 2000 leels by 2050 1. As shown n fgure 1.1, elayng acton wll requre uch fasterrates of reucton later. if there s a ten-year elay n reucng essons, then the rate of cuts requre ncreases oera fe-year ero fro 14% to 31%. The Uk Cottee on Clate Change estate that the cost of elay frostartng on a 550 trajectory an then swtchng to a 450 trajectory later woul be 25bn for the Uk alone2.Technology olcy ust therefore create a crtcal ass of nestent such that we can sultaneously eet both-ter 2020 goals an the long-ter 2050 transforaton n our econoes.

Fgure 1.1: Esson reucton ratesSource: menshausen, 20053

CHApTER 1

1 intergoernental panel on Clate Change (2007) Suary forpolcyaers. in Clate Change 2007: Fourth Assessent Reort,Synthess Reort (AR4). Cabrge Unersty press, Cabrge,Uk,an New Yor, USA.

2 Cottee on Clate Change (CCC) (2008) Bulng a Low-CarbonEconoy: The Uks Contrbuton to Taclng Clate Change.

3 menshausen, m. (2005) On the Rs of Oershoot Two degrees.presente at Aong dangerous Clate Change, 1-3 February,met Offce, Exeter, Uk.


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Creatng technology solutons wll requre a balance of acton all the way along the nnoaton chan. Technologes areat arous stages of eeloent, as shown n fgure 1.2 below, an so solutons ust focus on both near-tercoercalsaton for those technologes near the aret an research, eeloent an eonstraton (Rd&d) forthose further away.

Fgure 1.2: Technology eeloent rortes for ey technologesSource: mofe fro iEA, 20084

CHApTER 1

4 internatonal Energy Agency (2008) E nergy Technology persectes:Scenaros an Strateges to 2050. OECd/iEA, pars.



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The status of current technologes shows conserable otental for the future but there s a long way to go beforethey reach full coercalsaton (as shown n fgure 1.3 below). For exale there are currently no full-scale carboncature an sequestraton (CCS) lants u an runnng anywhere n the worl, een though the technology s execteto contrbute 20% of global esson reuctons by 2050. For CCS to reach ts full otental we wll nee to hae at leastten full-scale ower eonstraton lants an a f urther eght nustry eonstraton lants u an runnng by 2015,an to hae neste n the requre transort nfrastructure for cature CO2 by 2020. Slarly for concentratesolar ower (CSp) there s currently only 436 megawatts (mW) of nstalle c aacty, whch wll nee to be ralyexane to 250 Ggawatts (GW) between 2020 an 2030. in transort, secon-generaton bofuels wll nee to oefro the test lab to full coercalsaton by 2030, an fully electrc an hyrogen fuel cell ehcles wll nee tooe fro rototyes an lte roucton oels to ass aret eloyent. irong bulngs effcencyan alance stanars wll requre anatory regulaton n OECd countres by 2020 an regulaton globally by 2030.

Fgure 1.3: Suary of ey technologes

CHApTER 1

TECHNOLOGY ABATEMENTpOTENTIALBY 2050(GTCO2)

CURRENT STATUS TECHNOLOGY NEEDS DEpLOYMENT NEEDS TOTALINvESTMENTNEEDS(2005-2050BILLION USD)

CCS fossl fuel 4.85 No full scaleeonstraton lant

Rd&d 10 eo lants 2008-2015; full scaleeo lants 2015-2030; transortnfrastructure eeloe 2010-2020

1418.5

Nuclear lants (iii+iv) 2.8 Total caacty ofnuclear ower lants372 GW n 2007

iii+coercalsaton;iv R&d

Gen iii+ Coercal eloyent by2025; 935 GW by 2050; Gen ivCoercal eloyent by 2045;285 GW by 2050

2032.5

Offshore & onsh ore wn 2.1 4 Global cuu latecaacty 94 GW n2007 (anly onshore)

Offshore Rd&d;onshore Rdd&d ancoercalsaton

Offshore coette by 2030, onshorecoette by 2020. Oer 2000 GWcaacty by 2050

1640

Boass iGCC (BiGCC) &co-cobuston

1.45 No large scaleeonstraton

deonstraton aneloyent

10 eo lants of 50 mW each 2010-2020. 100 GW Boass co-cobustonan 65 GW BiGCC caacty by 2050

306

pv systes 1.32 Worl cuulatecaacty 6.6 GW 2006

Rdd&d pv coette by 2020-2030;1150 GWcaacty by 2050

1313.5

CSp 1.19 Total caacty 436 mWat the en of 2008

Rdd&d CSp coette by 2030. 630 GWcaacty by 2050

590

Coal iGCC systes 0.69 17 iGCC lants(totalng 4000 mW)

Rdd&d Oer 100 GW caacty; coette by2030; oer 550 GW caacty by 2050.

727.5

Coal ultra-suercrtalstea cycles (USC-SC)

0.69 Seeral large coallants wth USC(400-1000 mv) n

Jaan an Euroe

Rdd&d 100 GW caacty; coette by 2025.Oer 550 GW caacty by 2050

717.5

Effcency n bulngsan alances

7 Effcency gans 10%to 60% n ost ajoreconoes

Rdd&d ancoercalsaton

manatory ynac stanars by 2020n OECd an 2030 globally. By 2040 fullycoercal.

7100

Heat us 0.77 increasng aretshare n soe OECdcountres

deonstraton,eloyent &coercalsaton

50-70% of bulngs n OECd ftteby 2050

2704.5

Solar sace an waterheatng

0.47 Currently eloyebut relately hghcatal costs


3000 GW caacty by 2050 935

Energy effcency ntransort

6.57 vare technologyeeloent; fueleffcency stanarsn soe countres


Stanars an ncentes by 2015 nOECd an 2020 n non-OECd countres.By 2040 fully coercal

9200

Bofuels 2n Generaton 2.16 None use Rdd&d Full coercalsaton by 2030 5584

Electrc an lug-n

ehcles

2 Lte roucton

(e.g Toyota prus 500)

Rdd&d Coercalsaton between 2020-30

(cuulate 1 llon sales of lug-ns)

4310.5

Hyrogen fuel cells 1.79 prototyes Rd&d 10% of OECd sales by 2030 3892.5

CCS nustry, H2 & fueltransforaton

4.28 No full scaleeonstraton lant

Rd&d 8 eo lants 2008-2015; 15 eolants 2015-2030; transortnfrastructure eeloe 2010-2030

1607.5

inustral otorsystes

1.4 Sgnfcant effcencylosses

C o erc a lsa ton Aera ge effc enc y ga n o f 2 5-30 % 4 17 5



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By 2020 we wll nee to achee global esson reuctons of aroxately 19 Ggatonnes (Gt) of CO2 equalent5.

Analyss by mcknsey suggests that u to half of ths wll be elere through reuce essons fro eforestatonan egraaton an lan use change. Howeer, as shown n fgure 1.4 below, an atonal 9.3 Gt wll nee to beachee through the eeloent an eloyent of exstng an near-aret technologes an effcencyroeents across sectors. Reuctons n the ower sector account for about 20% of the abateent otental.iortant technologes such as wn, solar, coal CCS an geotheral wll be crucal for reuctons n 202 06. Theroaa to 2020 also hghlghts the ortance of technologes to roe energy effcency n transort, bulngsan nustry. For exale n the transort sector, roe ehcle effcency an use of bofuels wll re short-tersangs. in bulngs, roeents n effcency an alance stanars coul eler 1.6 Gt of reuctons by 202 0.in nustry, nestent wll also nee to be ae to roe technologes such as otor effcency systes. it stal that suort for these areas s raly ncrease to roe confence that we can ea an reuce essonsbefore 2020, whle suortng jobs, growth an energy securty.

Fgure 1.4: key technology esson reuctons to 2020 can eler 9.3 Gt of CO2eqSource: mofe fro mcknsey analyss, mAC 2.0, 2009

CHApTER 1

5 1 Ggatonne s equalent to 1 bllon tonnes. mcknsey (2009) pathwaysto a Low-Carbon Econoy: verson 2 of the Global Greenhouse GasAbateent Cost Cure. mcknsey & Coany.

6 project Catalyst analyss 2009.



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But these exstng otons wll not be suffcent to eler the ee cuts n essons that wll be requre by 2050.The internatonal Energy Agencys (iEA) BLUE ma Scenaro suggests that 48 Gt of CO2 sangs wll be requre by 2050

7.To o ths we ust also nest now n the research, eeloent an eonstraton of new technologes toguarantee that we can eet our long-ter goals. The iEA technology roaas entfy 17 ey technologes that wllbe resonsble for aroxately 80% of reuctons to 2050, equalent to 42 GtCO2 (see fgure 1.5). delerng theseresults wll requre actons toay across a range of atonal ower, transort, bulngs an nustry technologes toensure they can be fully coercalse after 2020. in the ower sector, accelerate eonstraton s requre forCCS, as well as next-generaton nuclear an concentrate solar ower. in transort, we nee to nest now n the nextgeneraton of bofuels, electrc an lug-n ehcles an hyrogen fuel cells. For bulngs, heat us an solarsace an heatng technologes are ortant. Fnally for nustry, CCS an fuel transforaton technologes anroeents n nustral otor systes wll hae a ey role.

Fgure 1.5: key technology esson reuctons to 2050 can eler 42 Gt of CO2Source: iEA (2008)

These reuctons cannot be achee n solaton. Successful transforaton of our energy systes wll requrenestents n suortng nfrastructure an technologes. For exale n the ower sector, sart grs an storagetechnologes wll be necessary to achee all of the ossble sangs. in transort, nfrastructure to suort hyrogenfuel cell ehcles or fully electrc cars wll nee to be ut n lace.

7 internatonal Energy Agency (2008) E nergy Technology persectes:Scenaros an Strateges to 2050. OECd/iEA, pars.

CHApTER 1



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it s clear that there s no sngle technology that wll el er all the esson abateent we nee. instea we nee tofocus on a ortfolo of technologes across all of the ajor sectors. These new an exstng technologes wll neeto be eloye an ffuse globally n orer to ao hgh carbon loc-n, as shown n fgure 1.6 below. Large eergngeconoes such as Chna an ina wll be crucal, gen ther rojectons for ra oestc growth, but so too wllestablshe eeloe countres n Euroe an North Aerca. if eelong countres o not artcate, the cost of60 Gt of abateent wll rse by 20%8 an just oer half of the oerall abateent otental of these ey technologeswll be cature n non-OECd countres n 2050. For exale:

CCS: 34% n OECd countres; 66% n other eelong countres nclung Chna an ina. Onshore an offshore wn: 43% n OECd countres; 57% n other eelong countres nclung Chna an ina. Solar (pv an CSp): 46% n OECd countres; 54% n other eelong countres nclung Chna an ina. Electrc an lug-n ehcles: 49% n OECd countres; 51% n other eelong countres nclung Chna an ina.

Fgure 1.6: Regonal energy-relate CO2 reuctons n 2050 (17 ey technologes ~42 GtCO2 n total)Source: iEA (2008), BLUE ma Scenaro

in each of these sectors there are nown technologes at fferent stages of eeloent. But n aton tosuortng these technologes t s also crucal that the rght fraewors are establshe to allow new srutetechnologes to enter the aret. The ublc sector has a crucal role n ensurng that the nnoaton systewors as a whole. Wthout the rght regulatory an hyscal suortng nfrastructure, new technologes wll not becoercalse n suffcent te. Hstory s relete wth exales of nnoatons cong on to the aret frounexecte quarters. Energy aret forecasts n the 1970s not foresee the ra eeloent of gas-oweregeneraton through ntegrate gasfcaton cobne cycle (iGCC) lants an t s ery ossble that slar newenergy otons wll arre n f uture. An exale of one such rosng technology, Bochar, s outlne n box 1.1 below.To allow these technologes to floursh we ust create oen an coette arets where new entrants can gana foothol, an ensure that suort s roe n a broa an transarent anner rather than narrowlyconcentratng on rong u the exstng ncubents.

Bo 1.1: potential disrutie technologies - Biochar

Bochar s a charcoal-le ateral rouce by heatng boass wth nal oxygen (yrolyss). Bochar canbe use to enhance the sol carbon sn. Early estates of ts otental to reoe carbon fro the atoshererange between about 1 Gt an 9 Gt a year. Bochar systes nee to be eeloe on a eanngful scale toeterne better ther true sequestraton otental.

A we range of organc feestoc can be use, nclung forest an cro resues, anure, sewage an greenwaste. Boass that currently releases greenhouse gases as t ecooses or s burnt coul nstea be returneto the sol as neralse carbon an rean stable for centures. The yrolyss rocess also rouces syngas that

can be burne to generate electrcty, an a crue ol substtute sutable for lastcs roucton. moern yrolysslants can be run on the syngas rouct alone.

Bochar also offers clate change aataton alue, fertlsng the sol an helng t to retan water.

CHApTER 1

OECd Euroe, 6.1

Other, 10.1

OECd North Aerca, 9.4

OECd pacfc, 3.1

Chna & ina, 12.9

8 project Catalyst analyss 2009.



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The sx ey areas that can eler 58% of the tec hnology-relate reuctons (alost 30% of all reuctons) to 2020are wn ower, solar (pv an CSp), nuclear, bulngs effcency, nustry effcency an transort effcency. Wthoutolces to eler these technologes, we wll not be on trac to eet our -ter targets an econoes wll beloce nto hgh-carbon growth.

The ast ajorty of energy effcency roeents alreay offer oste econoc returns an so wll not beaffecte by the carbon rce. To oercoe the aret falures, such as hgh transacton costs or rncal agentrobles that reent ther utae, goernents wll nee to establsh strong regulaton wth ynac stanarsto re u the erforance of bulngs, nustry an transort systes.

delerng wn, solar an nuclear roeents wll requre goernents to create the rght aret contons forrate nestent an oercoe non-aret barrers. Establshng nu Renewable portfolo Stanars (RpS),requrng ncrease roucton of energy fro renewable sources, an fee-n tarffs coul eler solar an wnroeents. Goernents shoul also suort ths wth regulaton to ao enalsng nterttency annestent to suort strbute generaton systes. inestent n research, eeloent an eonstraton(Rd&d) to roe solar an wn technologes wll also be neee. Nuclear technology wll requre nsurance anregulatory suort n orer to accelerate eloyent.

To bul the caacty to ae ee cuts by 2050 the sx ey technologes that ust be accelerate through Rd&d by2020 are CCS n ower, CCS n nustry, thr- an fourth-generaton nuclear technology, secon-generaton bofuels,electrc an lug-n ehcles an hyrogen fuel cell ehcles. Together these technologes are execte to contrbute

37% of energy-relate sangs by 2050. it s therefore essental that ther eeloent s accelerate to ensure thatthey can be wely eloye after 2020 , nclung n eelong countres.

CCS for both ower an nustry wll requre at least ten full-scale ower eonstraton lants an a further eghtnustry eonstraton lants to be establshe globally by 2015. it s also essental that by 202 0 we hae neste nthe requre transort nfrastructure for cature CO2 to allow wesrea usage thereafter. Thr-generatonnuclear technology wll requre sgnfcant R&d nestents an testng n orer to be reay for eloyent by 2025,wth contnung eeloent of fourth-generaton systes for eloyent n later eros.

We ust also nest globally to accelerate secon-generaton bofuels. Ths wll requre both R&d an globaleonstraton to ensure that they can reach full coercalsaton by 2030. The rate sector s alreay nestnghealy n full electrc an hyrogen fuel cells. Howeer, ths eeloent wll nee to be suorte by nestent n

gr an hyrogen nfrastructure an the eeloent of new regulatons an stanars for these technologes.Electrc an lug-n ehcles nee to reay for full coercalsaton by 2020 , an hyrogen fuel cell ehcles areexecte to account for 10% of OECd sales by 203 0.

if we are to succee, goernents ust tae two bg ecsons: frst, to get the nestent flowng nto thetechnologes of the future; an secon, aggressely to eloy exstng tre an teste otons to roe energyeffcency an eler -ter reuctons. To achee ths t s tal that countres cooerate to ensure that therght technologes are eeloe an eloye, at the rght scale an see, n orer to anage rss an aohgh-carbon loc-n.

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INvESTMENT NEEDS ANDRISK MANAGEMENT TO DELIvERTECHNOLOGY SOLUTIONS

The rocess of global nnoaton s achee largely through the rate sector an s ncreasngly nternatonal nnature. Howeer, the ublc sector stll has a tal role an n ey areas such as energy R&d t acc ounts for ore than60% of R&d senng n nustralse countres9. Goernent cooeraton wll be crucal to scale u the currentrate of nnoaton an ffuson. A ey conseraton for goernent shoul be creatng the rght balance of rs anrewar n nnoaton arets to leerage rate sector actty.

Acton s therefore requre to c reate arets for nnoaton an ffuson that wor n a globalse worl. maretsare tools for elerng outcoes; but, as the recent fnancal crss has shown, wthout the rght syste of regulatonan ncentes, a ajor sallocaton of resources can occur. Ths s esecally releant for clate an aatatonnnoatons, where we nee to eet clate, energy securty an econoc growth objectes sultaneously. Wthoutnatonal an ultlateral acton, rate coanes wll not ae the necessary nestents to eet these goals.

The erate for technology acton s also central to a sustane econoc recoery. By creatng the global aretsfor low-carbon an aataton technology, we wll re growth an job creaton. Accorng to the Geran enronentnstry (BmU), Gerany ha 166,000 jobs relate to renewables n 2004 an an estate 260,000 n 200610. Globally,the wn sector eloys about 300,000 eole. The US deartent of Energy (dOE) estates that a goal of roucng5% of US electrcty fro wn by 2020 woul a $60 bllon n catal nestent n rural Aerca, roe $1.2 bllonn new ncoe for farers an rural lanowners an create 80,000 new jobs by that year11. The solar theral sectorcurrently eloys ore than 600,000 eole worlwe. Slarly, concentratng solar ower (CSp) uner theoerate eloyent scenaro coul create about 200,000 jobs by 2020 an ore than a llon of jobs by 2050 12.These technologes wll also free us fro a eenence on orte fossl fuels, ensurng robust energy securty.

deelong an elerng these technologes wll requre a shft n global nestent. Ths shft has three coonents:frst, the oerall change n nestent atterns for both ublc an rate senng requre to eler thetechnologes an nfrastructure; secon, the ncreental cost of ths atonal nestent oer busness an usual

nestents; an thr, the fnancal flows to eelong countres requre to suort ther ecarbonsaton.

The total global nestent costs for these 17 technologes between now an 2050 s sgnfcant but anageable.Total annual aerage nestent for R&d, eloyent an coercalsaton s estate at close to $1 trllon forboth ublc an rate nestent. Ths s equalent to aroxately 40% of global nfrastructure nestent13 or1.4% of worl Gdp14. The ncreental cost of atonal nestent s uch saller an hghly eenent on the olrce. mcknsey estate that a global ncreental cost of atonal nestent of aroxately $317bn annually n2015, rsng to $811bn n 2030, s requre wth an ol rce of $60 er barrel. But f the ol rce rses to $120 er barrel,mcknsey estate that ths wll reuce the ncreental atonal cost of abateent by $700bn annually angthe cost oer the ero ery sall or een zero. Gen rojectons on future ean growth an resource scarcty,there s a hgh robablty of a long-ter ol rce of $120 er barrel or een hgher. The iEA recently exresse tsconcerns about the ossblty of new hghs n ol rces by 2010 leang to a otental recesson n 2013 anly ren

by the ecrease n global ol suly caacty an growng ean

15

.

CHApTER 2

9 doornbosch, R. an Uton, S. (2006) do We Hae the Rght R&dprortes an prograes to Suort the Energy Technologes of TheFuture? Roun Table on Sustanable deeloent. OECd, pars.

10 BmU (2007) Renewables nustry roes wor for 235,000 eole.BmU press Release, Berln: 17 Seteber 2007.

11 US Goernent Accountablty Ofce (GAO) (2004), Wn powersContrbuton to Electrc power Generaton an iact on Fars anRural Countes. Reort to the Ranng deocratc meber,Cottee on Agrculture, Nutrton, an Forestry, US Senate,GAO-04-756, Washngton, dC.

12 Greeneaceinternatonal,SolarpACESanESTELA(2009)ConcentratngSolar power Global Outloo 2009: Why Renewable Energy is Hot.

13 OECd estate that between 2005 an 2030, $7 1 trllon wll beneste n nfrastructure. OECd (2006) infrastructure to 2030:Teleco, Lan, Transort, Water an Electrcty. OECd, pars.

14 imF estate the global Gdp as $72 trllon n 2009 (imF WorlEconoc Outloo database, 2009).

15 iEA estates that nestent n ol an gas exloraton n 2009 hasroe by 21% fro 2008 (equalent to US$100 bllon). See Tanaa, N.(2009) The iact of the Fnancal an Econoc Crss on GlobalEnergy inestent. presente at G8 Energy mnsteral meetng, Roe,italy, 2425 may 2009. OECd/iEA, pars.



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deelong countres wll requre sgnfcant fnancal flows to enable the to ecarbonse an aat to clatechange. Estates suggest ths nees to be aroxately $100bn-$160bn annually between 2010 an 202016. Thebalance of acton an suort between eeloe an eelong countres s stll uner negotaton. Howeer, theBal Acton plan clearly establshes a recrocal relatonsh between eelong countres unertang enhanceactons to reuce ther essons an eeloe countres rong fnance, technology an caacty-bulngsuort. The Uk goernent has calle for fnance rosons of $100bn annually for eelong countres tgatonan aataton by 202017. Ths coul be generate ether through aret echanss such as nternatonal offsetsan auctonng of countres assgne aount unts (AAUs), or through cash echanss such as taxaton ofnternatonal buner fuels or rect transfers. Funng coul be elere to eelong countres agan by way ofboth aret-base echanss such as the Clean deeloent mechans or by ultlateral an blateral fnancngsuch as the Worl Ban Clate inestent Funs or natonal eeloent agency suort. All fnancng shoul eetnternatonal easurable, reortable an erfable (mRv) crtera to ensure that the funng s both generate anuse arorately.

Howeer, although the total nestent requre to eelo an eloy technologes s anageable, ths oes notean that t wll autoatcally be achee. delerng the rght low carbon technology otons wll requre both theeeloent of a global carbon aret an scale-u ublc sector suort n ey areas. in 2007 the global carbonaret was worth $64bn, ore than oublng fro $31bn n 2006, wth a trae olue of aroxately 3 Gt ofCO2eq

18. Howeer, ths s stll far too sall to re the ace an scale of nestent that s requre to aohgh-carbon loc-n. in orer to ncentse the rate sector t s tal that the aret s exane an that regonalan natonal systes can be lne together to allow for nternatonal trang.

drect ublc fnance suort wll also be requre n aton to the carbon aret, as shown n fgure 2.1 below.maret falures along the nnoaton chan requre ublc senng to re technologes own ther cost cure to aont where the carbon rce can tae oer an accelerate ther eloyent. Ths wll be esecally ortant nhelng technologes cross the alley of eath between eonstraton an re-coercal fnancng. Estatesfro the Stern Reew an Bosett et al. suggest a oublng of ublc energy R&d suort to $20 bllon er annubetween 2015 an 202519 an an ncrease of u to seen tes to $70 bllon by 205020. Conserng a we range ofestates, the Euroean Cosson suggeste global ublc suort for energy Rd&d shoul at least ouble by 2012an quarule by 2020. The Stern Reew also suggests that global ublc suort for eloyent shoul be oubleto aroun $66 bllon er annu n 2015, rsng to $163 bllon by 2025, although art of ths fnancng coul beroe through the carbon aret.

Fgure 2.1: innoaton chan

CHApTER 2

16 project Catalyst analyss 2009.17 ddECC (2009) The Roa to Coenhagen: The Uk Goernents Case for

an Abtous internatonal Agreeent on Clate Change.18 Worl Ban (2007) State an Trens of the Carbon maret 200 7.Worl

Ban insttute, Washngton dC.19 Stern Reew (2006) Stern Reew on the Econocs of Clate Change.

Hm Treasury, Uk.20 Bosett, v., Carraro, C., massett, E. an Taon, m. (2007) Otal Energy

inestent an R&d Strateges to Stablse Greenhouse GasAtosherc Concentratons. CESfo Worng paer No. 2133.CESfo, munch.



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The balance between ush an ull factors for ey technologes s outlne n fgure 2.2 below. Between now an2030, Rd&d ush s requre for ost technologes to re the towars nnoaton. Ths s esecally releant forCCS, next-generaton nuclear an renewable technologes. Howeer, n the short run, ull factors for coercalnestent are also requre for energy effcency, electrc an hyrogen fuel cell ehcles an heat us. Beyon2030, ull factors are execte to onate nearly all the technologes.

Fgure 2.2: Technology roaas annual aerage nestent costs for Rd&d an coercalsatonof new technologes ($bn)

CHApTER 2



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Goernents ust also anage the technology an nestent rss to elerng clate securty. polcy falure ayean that we ay not be able to achee the recte essons sangs fro energy effcency an forests. Fro acost-beneft ersecte, any energy effcency roeents shoul alreay roe oste econoc returns.Howeer, the fact that they are not beng taen u suggests the resence of sgnfcant aret falures, whch wllrequre new regulatons to oercoe. Energy effcency roeents are also subject to a reboun effect, wherebythe econoc sangs fro roe effcency ay be neste n other carbon ntense acttes. For exale, afaly that nsulates ther house an oes to a ore effcent car ay choose to sen t he oney they sae nheatng an fuel on an atonal flght abroa for a holay. Ths reboun effect coul sgnfcantly unernecurrent esson athways as t s extreely har to oel n aance. Slarly, sangs fro reuce essonsfro eforestaton an egraaton are har to realse, as escrbe n box 2.1 below.

Bo 2.1: Difficulty of achieing carbon saings from forest

mcknsey estates 12 GtCO2e can be sae fro forestry an agrculture. Ths conssts of both reucngeforestaton an forest egraaton an then reforestng exstng areas an new argnal lan. Howeer estethe large abateent otental an aarent low costs, caturng these oortuntes wll be hghly challengng.more than 90% of these areas are locate n the eelong worl an are tghtly lne to econoc an socalcrcustances n the regons concerne. The nee for local caacty bulng to realse the sangs s hgh an soften lne to any socal ssues such as the rghts of ngenous eole. Oercong these challenges sotentally ffcult, een wth current lannng. many trocal forests are locate n regons wth relately weagoernance systes such as the Congo, otentally ang t ffcult to leent olces.

Ae to ths s the ffculty n easurng an ontorng essons n ths sector, such as ganng accessto reote areas to assess changes on the groun. Ths results n a hgh egree of uncertanty n abateentotental, ang conserable rs to current feasblty an cost estates.

Slarly, f clate change contnues to worsen, suggestng acts are occurrng faster than we reously thought,we wll hae to eler nnoatons sooner than s currently antcate, nclung those releant for aataton.The ipCC assessents hae systeatcally ncrease both the threat leel an the see at whch clate change soccurrng. if ths tren contnues, then current ecarbonsaton oels wll unerestate the scale an see atwhch essons wll nee to be reuce.

The esson athways escrbe aboe ae sgnfcant assutons about the early coercalsaton of ey

technologes such as carbon cature an storage, new bofuels, hgh-enetraton renewables, electrc ehcles anlow-carbon ceent an steel roucton. if soe of these ey technologes fal or arely unererfor, thenore low-carbon technology otons wll be neee earler than recte to ee on trac. For exale the Uk seta goal of reucng essons by between 76 an 86 llon tonnes of carbon n 2010, whle the actual reuctonsare now execte to be 15 llon tonnes lower21. Unererforance n current olcy wll requre faster acton anaccelerate use of new technology n the future.

managng these rss wll requre nestent an cooeraton across a ortfolo of ey technologes. Ths wll roencrease certanty for the rate sector to nest an allow for acceleraton or correcte acton f we oe off trac.

The athway for future technologes s c lear. We nee a global focus on four ey sectors: ower, transort, bulngsan nustry. We nee to balance -ter reucton wth long-ter nestent. We nee to create a global carbonrce to leerage rate sector acton an roe ublc suort to oercoe aret falures. The cost s realstcan afforable an wll hel re future growth an job creaton. The ey to success wll be fnng the oltcal wllto ae ths haen.

CHApTER 2

21 Cottee on Clate Change (2008) Bulng a Low-Carbon Econoy:

The Uks Contrbuton to Taclng Clate Change.



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CRITICAL SECTORS FOR ACTION:pOWER, TRANSpORT, BUILDINGSAND INDUSTRY

Technology can be use to anage clate rss. dong so wll roe a asse boost to jobs an growth, freeeconoes fro orte fossl fuels an roe the strategc caablty for long-ter ecarbonsaton.

Goernents shoul aot a strategc to-own aroach to ensure that crtcal technologes arre on te anroe nestent n srute otons to allow racal transforaton n the future. Ths s not a olcy of cngwnners; rather t s to guarantee that there wll be enough wnners to c fro. A ortfolo aroach wll ensurethat suort s srea across a range of fferent technologes wth a balance of ush an ull factors along thennoaton chan. Ths wll roe the rght scale an scoe of suort so that ey technologes can cross gas n thennoaton chan, such as large-scale CCS eonstraton that encoasses the range of re-an ost-cobustonotons an storage scenaros, whle aong the rs of a yoc focus on only one or two areas. At the sae te,strengthenng ull factors an regulaton wll ensure that arets hae a strong coercalsaton role an aothe ublc sector tryng to re wesrea eloyent.

ACTION IN THE pOWER SECTOR

decarbonsng the ower sector wll be crucal uner all esson athways. it s a ajor source of essons nboth eeloe an eelong c ountres an s hghly exose to ol rce olatlty. internatonal ebate on owersector ecarbonsaton has long been shroue n scetcs an concerns oer costs an otental loss ofcoetteness. But the clear econoc an securty benefts fro ower sector ecarbonsaton exose the flawsn ths arguent an roe a new oortunty to show that bol acton wll brng large rewars, as shown n box 3.1below. Future coetteness wll be gane by sezng ths oent of change, not rong u outate nustres.Future securty wll be achee through transforaton, not reseraton of the status quo.

Bo 3.1 Danish leadershi in renewable energy

denar s a leang layer n the wn energy nustry. it has gone fro beng 99% eenent on foregn ol sourcesto becong energy self-suffcent after 30 years of focuse energy olcy. dansh wn coanes account for40% of the worl aret, eloyng aroxately 20,000 eole, wth a c obne turnoer of 3 bllon22.

dansh suort for the renewables nustry uses both ush an ull easures:

a tax on the use of fossl fuels a sot rce enronental reu (13/mWh) an an atonal coensaton for balancng costs (3/mWh)

for 20 years are aalable for new onshore wn fars fxe fee-n tarffs exst for sol boass an bogas uner certan contons, an subses are aalable for

CHp lants base on natural gas an waste (boass, beng CO2 neutral, s exet fro CO2 uty) fscal suort through taxaton: a CO2 tax s lee on electrcty roucton fro fossl sources. Renewable

energy recees coensaton fro ths, n orer to nternalse the external costs of fossl fuels.For cooerate oeratons, no ncoe tax s ayable on ens u to dkk30 00 (400)

anstrate suort at the uncal leel an acte noleent of local utlty technologcal eeloent through early goernent suort, startng n the 1980s, focuse on creatng an

ngenous wn energy anufacturng nustry.

Between now an 2020, ecse acton s requre to scale u the eloyent an ffuson of a range of technologes.Renewable energy wll be a ajor focus, n artcular onshore an offshore wn, solar hotooltacs (p v) an soegeotheral energy. Nuclear ower an boass CCS wll also be ortant n the eu ter. These technologesalreay exst an so suort s requre to create the rght regulatory enronent for the to oerate, close the costga wth fossl fuel alternates an nest n the suortng nfrastructure such as strbute generaton systes,whch wll allow the to thre. in the ast, clate oels hae sgnfcantly unerestate the see wth whchtechnologes can be brought to aret f the rght contons are roe. The iEA estates urng the 1990s ofwn enetraton by 2020 were actually et n 200 4, 16 years ahea of scheule23. decse acton now coul acheeslar results.

CHApTER 3


22 mnstry of Foregn Affars of denar, 2009.23 Rah, L (2009) interew: Hans Jrgen koch Exlans Why iRENA is 50

tes more than the iEA. 16 June 2009, onlne atRenewableEnergyWorl.co.


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Sgnfcant nestent an cooeraton ust also be ae to eler new technologes that wll roe the caactyfor long-ter ecarbonsaton. As shown n fgure 3.1 below, the carbon ntensty of electrcty generaton ust bereuce by ore than 80% between now an 2050. Only new technologes can eler ths transforaton. Crtcalareas for ths nclue carbon cature an sequestraton (CCS), concentratng solar ower (CSp) an thr- an fourth-generaton nuclear ower. CCS n artcular wll be a tal technology, gen the large oestc coal reseres n ajoreconoes such as Chna an the Unte States. The unabate lfete essons fro new fossl lants lanne n thenext 30 years s estate at 210 bllon tonnes of CO2 whch coul reclue a 2C worl

24. Urgent acton to eonstrateCCS technology, nclung n eelong countres, shoul therefore be an eate rorty for nternatonalcooeraton. deloyent n Chna an other ajor eelong countres as well as eeloe c ountres wll be crtcalf these technologes are to reach coercalsaton25. Analyss by mcknsey requres 50 CCS eonstraton lants tobe u an runnng globally by 2020 to ensure CCS wll tae off coercally afterwars, an the iEA estate that CCSwll account for 19% of esson reuctons n 2050. Wthout CCS, the annual cost for essons halng n 2050 s 71%hgher than n the BLUE ma Scenaro26.

Fgure 3.1: Carbon ntensty of electrcty rouctonSource: iEA, 2008

Howeer, at a te when there s a global nee to scale u the use of ower sector technologes, goernent suortfor energy Rd&d has raly eclne. publc sector suort n G7 countres has eclne fro a hgh of oer $12bn an 1985 to only $10bn a n 200 5, a ro of 50% n real t ers27. Ths eclne ust be reerse an all goernentsshoul loo to scale u energy Rd&d n future.

To enable ower sector ecarbonsaton, acton shoul also be taen to transfor suortng nfrastructure.prorty areas woul be nestng n the next generaton of sart grs an ower storage otons. These large, luynestents wll requre sgnfcant olcy an funng suort to achee an wll not haen through rate sectoracton alone. Strong ublc sector cotent to nfrastructure roson woul be a creble sgnal for nestors toact ore broaly. poltcal roses are soetes broen, but tangble assets cannot be gnore.


CHApTER 3

600

500

400

300

200

100

0

2005 Blue Map 2050

OECD

Global average

Carb

onintensity(gCO2

/kWh)

24 iEA (2004) Worl Energy Outloo, OECd/iEA, pars.25 iEA (2008) Energy Technology persectes: Scenaros an Strateges

to 2050. OECd/iEA, pars.26 iEA (2008) CO2 Cature an Sto rage: A key Carbon Abateent Oton.

OECd/iEA, pars.27 iEA (2008) Energy Technology persectes: Scenaros an Strateges

to 2050. OECd/iEA, pars.


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ACTION IN TRANSpORT

The transort sector reresents a crtcal area on the ath to 2C. Essons n transort are rojecte to ncrease by84% n 2030 uner busness as usual assutons. The lac of current coercal otons for racal abateent aesths a crucal area for technology eeloent. in the iEA scenaros, 70% of oerall atonal nestent n the BLUEma Scenaro oer busness as usual s n the transort sector. it s therefore essental that olcyaers balance are towars energy effcency roeents n the short run wth the eeloent of long-ter alternates.

Effcency roeents an frst- an secon-generaton bofuels are execte to re the ajorty oftransort sangs between now an 2020. dynac stanars an regulaton to enhance ehcle effcency wll beessental to eler these benefts. polcy nstruents to o ths are alreay eloye n any countres oestcallyan nternatonally. The CAFE stanars for cars an lght trucs n the US are one of the best-nown exales ofenronental stanars. The Obaa anstraton has recently announce new an ore abtous targets of a40% ncrease n fuel effcency for moel 2 011 cars an lght trucs. it s estate that ths coul sae oer 2 llonbarrels of ol eery ay -- nearly the entre aount of ol that the US orts fro the persan Gulf28. Howeer, eenwth these ncreases there s sgnfcant otental to ush ehcle stanars een hgher.

We ust also nest now n the srute new technologes that wll roe ore racal sangs n the long run.key technologes such as fully electrc cars, hyrogen fuel cells, thr- an fourth-generaton bofuels an effcencyaccount for ore than 25% of oerall reuctons n 2050. The rate sector s alreay healy engage n ths area an

uch of the rojecte nestent conssts of ncrease Rd&d n the next 15 years to ae these technologes able.Howeer, the eeloent of these technologes wll requre sgnfcant nestents n suortng nfrastructuren orer to reach full coercalsaton. Ths wll nclue nestents n the ower sector an gr nfrastructure tosuort electrc ehcles, an hyrogen nfrastructure an networs for fuel cells. The latter wll also requre thecoornaton of fuel nfrastructure eeloent at the global leel an so the ublc sector wll nee to hae anacte role n shang an suortng these arets.

The ublc sector wll also hae a sgnfcant role n rng nestent n low-carbon ublc transort nfrastructure.Hgh-see ral lns can reuce ean for ar trael, an zero-esson buses an other ass transt systes cancut essons n ajor ctes.

CHApTER 3

28 The Whte House (2009) Fro perl to progress. The Brefng Roo Blog,26 January 2009.



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ACTION IN BUILDINGS

To achee esson reuctons to 2020, a strong focus on energy effcency n bulngs an alances s requre.Large otental sangs can be ae through roe bulng regulaton an stanars; an estate 75% ofabateent n the bulng sector shows oerall net econoc benefts. Ths wll be esecally ortant n largeeergng econoes, whch hae hgh rates of new bulng constructon. in eeloe countres, retrofttng exstngbulngs, esecally to roe nsulaton an heatng systes, can eler sgnfcant roeents. Stanars toroe energy effcency n alances an ar contonng systes wll also be ortant for -ter reuctons.

Soe rograes are alreay n lace, such as To Runner n Jaan, an the EU s also n t he rocess of raftngregulatons for a nuber of energyusng roucts (Eups) uner ts Eco-desgn drecte. Cobne heat an owersystes (CHp) are a able nter easure to reuce essons fro the bulng sector, but ther otental s orelte n the long ter as full ecarbonsaton n the ower sector s elere.

To achee long-ter sangs, nestent s also requre for new heat u an solar sace an heatng technologes.Lghtng effcency s roe by two-thrs to three-quarters n the BLUE ma Scenaro, reucng energy consutonto aroun half the baselne leel. The iEA suggests ths coul be reuce een further, eenng on the success ofcoercalsng LEd lghtng (box 3.2). These technologes, n cobnaton wth otental roeents n bulngaterals, shoul encourage the ra establshent of stanars for zero-carbon houses. mang zero-carbon hoesrealstc an afforable wll be essental for ang the ee essons cuts requre by 2050.

Bo 3.2: Efficiency saings from the use of light emitting diodes (LEDs)

Lghtng accounts for 19% of the worls electrcty consuton an generates 1.9 Gt of CO2 annually, accorngto the internatonal Energy Agency (iEA). Lghtng s about to get brghter an uch ore energy-effcent, as LEdsan sarter control technologes enetrate global arets.

LEd chs rouce lght when electrons ju across a sanwch of two fferent se-conuctng aterals,le a swtch. its a uch ore effcent rocess than tratonal lghtng technologes, has any co-benefts anallows sart controls to easly control the aount of current gong nto the ch an, thus, the lght rouce.LEd lghtng an sart controls are alreay ganng a foothol n the outoor aret street lghts, arng lots,tunnels, brges an bulng securty. intal lots n the US are showng energy use reuctons n the 5070%range. if outoor lghtng worlwe were to coletely tae u LEd an sart control technologes n that range,the energy sangs achee woul be enough to charge u oer 60 llon lug-n hybr pruses annually.

many barrers rean to aret transforaton, howeer, nclung hgh cost an c urrent lghtng stanars.Just as goernents are acceleratng the use of renewables wth fee-n tarffs an other subsy rograes,LEds an sart controls, whch are uch ore costly than conentonal las, also requre fnancal suortto ju start the aret. Chna s the frst country to establsh a large LEd rograe, hang just announcesuort for 210,000 LEd street las to be nstalle n 21 c tes.

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ACTION IN INDUSTRY

As n the ower sect or, so too nustry can achee substantal sangs u to 2020. There are large otental sangsfro cross-nustral effcency nclung otor systes effcency, an to a lesser extent fro clner substtutonby fly ash.

in the longer ter, whle energy effcency an fuel shft rean ey areas for reuctons, other technologes such asCCS gan ortance n the technology x. CCS n nustry accounts for 9% of reuctons n 2050 (4.3 GtCO2). Howeer,

n orer to hae CCS coercally aalable, 15 eonstraton lants are neee between 2015 an 2030, an thetransort nfrastructure ust be reay by 2020. iroeents n nustral otor systes are also essental anacton s requre to eler 25-30% global effcency gans by 2050.

Together, acton n these four sectors woul create a g lobal roucton an oortunty agena for the econoy,energy securty an clate change. The global oulaton has hear an ncreasngly unerstans the threats.Now s the te to ut forwar the solutons. Leaers ust confently tae acton to create the fraewors forentrereneursh whch wll enable ths to haen. Ths wll requre uttng n lace strong oestc legslaton toecarbonse the ower, transort, bulngs an nustry sectors. Goernents shoul wor to roe a balance ofush an ull easures such as ublc fnancng for Rd&d, fee-n tarffs for renewable energy an ynac stanarsfor energy effcency. Goernents shoul also nest n suortng nfrastructure such as sart gr technology.in general, strong olcy acton n sx ey areas coul eler 40% of the requre sangs u to 2020:

1. mnu renewable ortfolo stanars (RpS): Regulaton to requre an ncrease roucton of energy frorenewable sources coul eler 2.1 Gt of sangs by 2020.

2. inustry effcency: Coul eler 2.4 Gt of sangs by 202 0.3. Bulng coes: irong stanars for new bul an oernsng exstng bulng stoc coul sae 1.3 Gt by 2020.4. vehcle effcency stanars: drng u stanars for ehcle effcency coul sae 0.4 Gt by 2020.5. Fuel carbon content stanars: Reucng the carbon content of fuels coul lea to 0.3 Gt of sangs by 2020.6. Alance stanars: increasng the energy effcency of whte goos an other alances coul reuce essons

by 0.3 Gt by 2020.

in aton, goernents shoul agree to at least ouble ublc Rd&d for low-carbon technologes by 2015 anquarule the by 2020; an to aggressely exan natonal, regonal an nternatonal carbon arets to suortffuson. They shoul also rortse nternatonal cooeraton for strategcally ortant technologes such as CCS,

CSp an zero-carbon transort. mechanss for acheng ths are escrbe n the next chater.

Fnally, leaers ust ae Coenhagen the oent for nternatonal cooeraton to re long-ter change. No otherforu has the reach or legtacy, an no other foru can roe the strong ln between technology, essonsreuctons an aataton. Worl leaers ust therefore tae ecse acton to ensure that the Coenhagenagreeent nclues a strong technology cooeraton echans to assst n eloyng exstng technologes anrong research, eeloent an eonstraton for future technologes.

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ACTIvATING THE SOLUTIONS WHAT NEEDS TO BE DELIvEREDIN COpENHAGEN?

The Coenhagen agreeent ust reresent suffcent abton on global esson reuctons an fnance to be ontrac to stay below 2C n the eu ter, an bul t he nsttutonal fraewor for long-ter change. it ustsgnal that those coanes that want to oerate an roser n a low-carbon econoy wll hae a leg u, an thosethat ont wll be left behn. For technology ths eans settng the scale an ace of aret an rect fnancesuort, efnng the areas where cooeraton wll tae lace an establshng an nsttutonal structure to easure,reort an erfy actons an facltate jont entures.

Howeer, t wll be ortant to reeber t hat there wll not be a sngle route to ec arbonsaton an, reflectng thefferent structures of ther econoes, eeloe an eelong countres wll not necessarly follow the saecourse. The ol ea that all technology wll be eeloe n the North an transferre to the South s ea. The onlyway to beat the tcng cloc of clate change s to cooerate on those tal areas that wll oen the ath to futurecotents. But for ths to wor we ust be clear that ths cooeraton s not charty. All ses ust brngsoethng to the table, an all ses ust be wllng to share success wth others.

The Coenhagen agreeent shoul nclue a Technology deeloent Objecte to scale u aret creaton anfnance for new technology. in the ast ebates hae focuse on ether elerng essons reuctons or on eelongnew technology. it s now clear that we ust o both. Therefore, alongse essons targets the Technologydeeloent Objecte shoul hae an equal ehass on nnoaton. The Objecte ust eler suffcent technologyffuson to be on trac for -ter targets n 2020 an suffcent nestent n technology eeloent to elerlong-ter reuctons. The Objecte shoul also ge a anate to create a global roaa an Technology Actonprograes for cooeraton on strategc technologes.

The Technology Acton prograes shoul efne three clear areas where nternatonal cooeraton s necessary f orsecfc technologes:

maret eeloent: Ths s necessary to create global arets for new technologes. it can tae the for ofcooeraton to generate a suffcent global rce to ae a technology able, such as electrc cars, or the creatonof nche arets for technology eeloent, such as zero-carbon bulngs. Global cooeraton to coornateregulatons an stanars between countres wll be crucal for acheng ths.

Global eonstraton rograes: Ths s releant for large-scale, hgh rs technologes, often wth colextranssson an storage nees, such as carbon cature an sequestraton (CCS) an concentrate solar ower (CSp).The sze an colexty of these technologes ae t ffcult f or the rate sector to neenently fnanceeonstraton. The success of these technologes also reles on geologcal or other locaton-secfc factors,whch ean that eonstraton nees to occur n a nuber of countres to achee full coercalsaton. Globalcooeraton s therefore necessary to fully roe the technology an allow t to becoe coercal.

Orhan areas of research: Ths s releant to ortant technologes where there s currently a lac of ean,for exale owng to a lac of ablty to ay, such as rought-resstant cros for least-eeloe country farers,

or because ncubents n hghly concentrate arets are resstant to nestng n new technology, such as nsteel an ceent. Global cooeraton n ublcly fune research an eeloent rojects or the creaton ofrzes or aance urchase cotents s necessary to oercoe these barrers.

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The success of fferent technologes wll requre fferent tyes of cooeraton, as outlne n fgure 4.1 below. Forexale concentrate solar ower (CSp) requres both aret eeloent to create nche areas where t can gan afoothol an a global eonstraton rograe to re t along the nnoaton chan.

Fgure 4.1: Tyes of nternatonal cooeraton requre for ey technologes

CHApTER 4

MARKET DEvELOpMENT GLOBAL DEMONSTRATION pROGRAMME ORpHAN AREA OF RESEARCH

pOWER SECTOR

CCS

Offshore wn

Onshore wnNuclear iii/iv

Solar pv

CSp

Boass

power storage

Sart grs

BUILDINGS SECTOR

Effcency

Heat us

Solar heatng + coolng

Zero carbon bulng

TRANSpORT SECTOR

Electrc & lug-n ehcles

Hyrogen fuel cells

Bofuels

INDUSTRY SECTOR

CCS & fuel transforaton

inustral otor systes



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An exale of a Technology Acton prograe for CCS s outlne n box 4.1 below.

Bo 4.1: Eamle of a Technology Action programme for carbon cature and seuestration (CCS)

EU heas of goernent, G8 energy nsters, the internatonal Energy Agency an the Carbon SequestratonLeaersh Foru (CSLF) hae all calle for broa coercal eloyent of CCS by 2020.

in June 2008, G8 energy nsters agree to collaborate to launch 20 large CCS eonstraton rojects worlweby 2010 to hel accelerate coercal CCS eloyent n eeloe an eelong countres by 2020. Byleentng ths cotent at the July 2009 Sut n LAqula, italy, G8 leaers coul nject sgnfcantoentu nto the Coenhagen clate negotatons. Furtherore, the major Econoes Foru (mEF), whchs ue to tae lace aroun the G8 sut n July, roes a new oortunty for alogue an breathroughs.A ajor oeent n the mEF towars technology bulng, as outlne n the Bal Acton plan, woul bul trustwth eelong countres n the lea-u to Coenhagen.

Exstng but searate cotents by mEF countres artly fulfl the energy nsters recoenaton. indeceber 2008 EU heas of goernent agree ublc funng for u to 12 CCS eonstraton lants by 2015.Sgnfcant funng for CCS eonstratons has also been announce by the US, Canaa, Norway an Australa.The G8/mEF now nees to algn these efforts globally.

Howeer, outstanng requests fro coal-ntense eelong countres for fnancal an techncal assstance

wth CCS eonstratons rean unfune. These early stage eonstraton rojects wll carry extra catalcosts of aroun 400 llon er 400mW n eeloe countres, n aton to the 500 bllon cost of the bascower lant. Costs n eelong countres are lely to be 3 0-50% lower.

The G8/mEF shoul further leent the energy nsters call f or nternatonal acton to artner, bul caactyan share nforaton wth eergng econoes, where coal s an essental art of any realy aalable routeout of oerty for hunres of llons of eole. in aton to the 20 rojects target, fnancal suort shoul beoffere for at least three further CCS eonstratons n Chna, ina, inonesa an South Afrca.

The July G8/MEF Summit should launch a leader-led rocess to delier a CCS Technology Action programme

(TAp) identifying all the core elements in commercialising CCS globally. By Noember, leaders from a grou of

key countries could agree on those core elements and be ready to begin imlementing them.

The Leaers intate woul cot to jontly suort three CCS eonstratons n eelong countres, anreterate earler cotent for elerng 20 full-scale CCS eonstraton lants n eeloe countres.

The ntate shoul nclue a fnancng acage, agreeents on nowlege sharng an caacty bulng anagreeent to exlore otons for nclung CCS nse Coenhagen sectoral an technology echanss, wththe a of eelong a jont roosal.

A worng arty coul reort to the UN General Assebly n Seteber, or to the mnsteral sesson of the CSLFn Lonon n -October.

A CCS TAp n Noeber, wth a reort to the leaers, woul be a ajor ste along the crtcal athway. Fraewor agreeents wth the eelong countres shoul be announce at Coenhagen, an wor woul

contnue nto 2010 once the ajor eleents hae been agree.

Ths ntate can bul on (an fully fun) the 200 5 Near-Zero Essons Coal (NZEC) CCS cooeraton between theUk, the EU an Chna. it woul also bul on recent meorana of Unerstanngs on low-carbon technologesbetween italy an Chna, italy an the Uk, an italy an the US.Cotents coul be anstere through the Asa pacfc partnersh on Clean deeloent an Clate(App), whch has a fossl fuels rograe chare by Canaa an Australa. Alternately, eelong countryartnershs coul be coornate by the Global CCS insttute (GCCSi).

A Technology Execute Boar uner the UNFCCC shoul be establshe to oersee the creaton of global roaasan Technology Acton prograes. The boar woul be resonsble for reortng bac rogress to the UNFCCCConference of the partes (COp) an ntatng correcte acton f the rograes are off trac. To ontor rogress,the boar woul also contrbute to establshng easurable, reortable an erfable (mRv) crtera for technologyassstance an acton.

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The Coenhagen agreeent ust also set the fraewor to hel catalyse jont entures. publcrate anraterate jont entures wll be essental to eler the rght technology n the rght laces. Ths shoul bul onthe extense rate sector exerence of these relatonshs to accelerate the ace an scale of actty wtheelong countres by rong oel telates for lcensng an jont entures, whch can be talore to secfccrcustances. Coenhagen shoul both refor an exan the Clean deeloent mechans (Cdm) an act as asrngboar for the growth of oestc an regonal carbon arets. A refore Cdm c oul hel re ratenestent n eelong countres an accelerate the ffuson of coercal technologes.

The senste ssue of ntellectual roerty rghts (ipR) shoul be hanle through a rotect an share fraewor.Ths woul roe fnancng for eelong countres to strengthen ther oestc ipR rotecton systes n returnfor goernent-to-goernent guarantees that nestors rghts wll be rotecte. Countres that o not rotect ipRwoul rs hang ther access to future funs bloce. The fraewor woul also allow for the use of exstngflexbltes n the WTO Trae Relate Asects of intellectual proerty Rghts (TRipS) Agreeent an natonal law toaccelerate the sharng of technology. publc nestent n global technology eonstraton rograes ustleerage ncrease nowlege sharng to accelerate further eloyent. The rotect an share agreeent shoulroe telates to hel structure ublcrate jont entures to ensure that ublc returns are generate forublc nestent.

Bo 4.2: Use of IpR fleibilities

Thans to TRipS flexbltes, the rce of ant-retrorals, whch are use n the treatent of Hiv/AidS atents,

has raatcally reuce29. in low- an le-ncoe countres, the aerage rces of ost frst-lne ecnesecrease by 30-64% fro 2004 to 2007, ang the treatent aalable ore wely excet n ost easternEuroean an Latn Aercan countres30.

These flexbltes also exst n natonal law. For exale, coulsory lcensng (CL) occurs often between ratesector frs, an t has been use qute frequently n the US an Canaa; courts n the US hae aroe conserablenubers of CL requests31. Recently, the US Suree Court aroe a new stanar oer atent nfrngeents ncertan cases. Ths le, as n the case between pace an Toyota oer atents that nole a hybr ehcleroeent, that a eranent njuncton woul not lely ssue; nstea, the court woul establsh aages nthe for of a reasonable royalty32.

Although the rate sector shoul roe the bul of technology-relate nestent, sgnfcant ublc fnancng

wll also be requre. Ths wll be necessary both to suort the areas of nternatonal cooeraton an to buleelong countres own caacty to aat an utlse technology. Rather than tryng to centralse all funng throughultlateral nstruents, Coenhagen shoul establsh easurable, reortable an erfable (mRv) crtera forboth blateral an ultlateral fnancng to be counte towars eeloe countres eetng UNFCCC cotents.Blateral fnancng wll be crucal to bul on the exstng technology artnershs an actons an to create thennoate saces where new oes of collaboraton can be achee. But new ultlateral fnancng wll be necessaryto cature the global ublc-goo asects of clate technology an bul c aacty n least eeloe countres.it shoul be roe ether by exstng ultlateral nsttutons, such as the Clate inestent Funs of the WorlBan, or by a new ecate technology fun uner the UNFCCC.

Bo 4.3: Eamle of ongoing cooeration that could contribute towards meeting UNFCCC commitments

the Asia-pacific partnershi

A nuber of exstng technology cooeraton ntates offer ossble telates for the future an coul contrbutetowars eetng UNFCCC cotents through the use of arorate easurable, reortable an erfable(mRv) crtera. The Asa pacfc partnersh (App), for exale, brngs together goernents an nustres froAustrala, Canaa, Chna, ina, Jaan, korea, an the US. The urose of ths non-legally bnng ntate s theeeloent, ffuson, eloyent an transfer of exstng, eergng an longer-ter cost-effecte, cleaner,ore effcent technologes an ractces. Snce ts nceton n 2006, App has establshe a nuber of wornggrous ealng wth a range of energy- an carbon-ntense nustres nclung ceent, alunu, steel anower generaton. The unque ebersh of the grou llustrates the otental for roucte collaboratonaong eeloe an eelong countres. By rong a robust set of mRv crtera uner the UNFCCC, suortroe through the App coul be counte towars countres eetng ther cotents. Such a systewoul ao tryng to centralse all suort n a sngle UN echans an encourage the eeloent of new,create artnersh arrangeents.

if Coenhagen elers the rght technology objecte wth the rght oes of cooeraton an the rght nsttutonalstructures, ths wll roe the bass to achee the next ecaes worth of esson reuctons, ao carbon loc-nan bul the rght nfrastructure for the future.

CHApTER 4

29 Barton, J. H. (2008) Stateent to the Senate Fnance Cottee:Hearng on internatonal Enforceent of intellectual proerty Rghtsan Aercan Coetteness, 15 July.

30 WHO (2008) Towars Unersal Access: Scalng U prorty Hiv/AidSinterentons n the Health Sector. progress Reort.

31 Rechan, J. H., wth Hasenzahl, C. (2003) Non-voluntary Lcensngof patente inentons: Hstorcal persecte, Legal Fraewor unerTRipS, an an Oerew of the practce n Canaa an the USA. issuepaer No: 5, UNCTAd/iCTSd.

32 pace LLC . Toyota motor Cororaton, 2006WL 2385139(E.d.Tex. Aug 16, 2006) (NO. 2:04Cv211dF).



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SUMMARY OF KEY ACTIONS FOR COpENHAGEN

1. Establsh a Technology deeloent Objecte to scale u aret creaton an fnance for new technology.2. Agree to the creaton of Technology Acton prograes coerng aret eeloent, global eonstraton an

orhan areas of research for crtcal t echnologes such as CCS.3. Refor an scale u the Clean deeloent mechans to ensure t can suort technology ffuson n

eelong countres.4. Establsh a Technology Execute Boar uner the UNFCCC to oersee the creaton of global roaas an

Technology Acton prograes. The boar woul also contrbute to the creaton of mRv crtera to tractechnology acton an suort.

5. Establsh a rotect an share fraewor for ipR, wth caacty-bulng suort to strengthen ipR rotecton neelong countres an roe a clear eans of usng the exstng flexbltes n natonal an nternatonal law.

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CARBON CApTURE ANDSEqUESTRATION (CCS): FOSSIL FUELFACT SHEET

Current technology status

CCS noles three an stes: cature, transortaton an storage of CO2. These stes hae been usean alate on a sall scale, but not yet ncororate nto large ower lants.

There are currently no full-scale CCS eonstraton lants n the worl.

Abatement otential

CCS esson reuctons are rojecte to account for 4.85 GtCO2 essons sangs (10% of oerall energy-relateessons sangs) n 2050.

Wthout CCS the cost of ecarbonsaton ncreases by 70%. Howeer, gen the nee for further Rd&d, these sangs are only execte to be ae at scale after 2020.

Inestment need

Between now an 2030, $3.74bn er annu s requre (total nestent coerng both ublc an rate sector)for R&d, eonstraton an eloyent n orer to ush technology towars coercal scale. Between 2030 an2050, coercal nestent of $66bn er annu s requre to ffuse the technology globally.

The bul of the cost of CCS rojects s assocate wth CO2 cature (eenng on the technology use, t canaccount for ore than half of the oerall cost er tonne CO2 aoe). in aton to that, fttng coal or gas owerlants wth CCS les an energy enalty. Soe stues estate that ang CCS to a ower lant woul neeroughly 10-40% ore energy than a lant of equalent outut.

Deloyment athways

Ten eonstraton lants are neee between 2008 an 2015. Ths woul be followe by an atonal 20 full-scaleeonstraton lants between 2015 an 2030 for coercalsaton. Full-scale eloyent of CCS requres asgnfcant effort n eonstraton an the eeloent of a sutable nfrastructure. infrastructure for thetransortaton of CO2 wll nee to be eeloe between 2010 an 2020.

66% of the essons sangs wll be cature n eelong countres nclung Chna an ina, whle 34% wll ben OECd countres.

Goernents an rate sector shoul lug the fnancal gas n early CCS rojects to enable wesreaeloyent of CCS after 2020.

To ao loc-n to hgh-carbon nfrastructure, new ower lants shoul nclue cature/storage reanessconseratons n ther lans by 2015.

Rd&d s neee to reuce cature cost, roe oerall syste effcences an ensure storage ntegrtyan ontorng.

deelo an enable legal an regulatory fraewors for CCS at the natonal an nternatonal leels, nclunglong-ter lablty reges. integrate CCS nto Essons Trang Schee (ETS) an ost-kyoto nstruents Share best ractce an lessons nternatonally an jontly fun large lants n eelong countres by ultlateral

lenng nsttutons, nustry an goernents.

ANNEx



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ONSHORE AND OFFSHORE WINDFACT SHEET


Global wn ower nstalle caacty n 2007 was 94 GW (reonantly onshore). Snce 2001, nstalle wncaacty worlwe has grown by 20-30% a year. The bul of the caacty s nstalle n iEA eber c ountres le byGerany, US an San. Wn roe 156 TWh electrcty n 2006, just uner 1% of global electrcty suly.

Coare to onshore wn technology, offshore wn ower technology s less ature an currently about 50%ore exense, although t offers ore otental n the future owng to the larger scale of offshore nstallatons.

Although wn ower s ncreasngly coercal, uch Rd&d reans to be one f wn s to eler ts full otentalto roe ale zero-esson electrcty suly. Offshore wn s n a re-coercal eeloent hase, buteloyent s rogressng. it requres substantal R&d an eonstraton suort, whle onshore wn neesanly further eonstraton, eloyent an coercalsaton.

Goernent suort for Rd&d of wn technology, whch has le to sgnfcant cost reuctons, has laye a crtcalrole n the sector. Oer the ero 1974 to 2006, goernent Rd&d bugets for wn ower n iEA countres wereabout US$3.9bn.

Abatement otential

Wn technologes can reuce 1.25 GtCO2eq n 2020 (36% of ower sector esson reucton). in 2050, esson sangs fro wn technologes are rojecte to ncrease to 2.14 GtCO2 (4.5% of oerall

energy-relate essons reucton or about 12% of essons sangs n ower sector).

Inestment need

Between now an 2035, R&d, eonstraton an eloyent nestent of $21bn er annu s requre (totalnestent coerng both ublc an rate sector) to re the technology to full coercal otental. Between2035 an 2050, coercal nestent of $67bn er annu s requre to ffuse the technology globally.

Deloyment athways

900 GW caacty nees to be nstalle by 2025 to ae onshore coette by 2020 an offshore by 2030. Oer2000 GW caacty nees to be nstalle by 2050. By 2050, global cuulate nstalle caacty ncreases by a factorof 21 (ore than 2010 GW), an wn consttutes 12% of global electrcty roucton.

The iEA BLUE ma Scenaro ensages that 57% of abateent otental of ths technology wll be cature neelong countres nclung ina an Chna, whle 43% wll be n the OECd countres.

Contnue Rd&d s neee to roe further reuctons n cost an uncertanty to fully cature the otental.OECd rate an ublc nestent n Rd&d shoul be n the regon of $300 llon er annu.

Stable, rectable olcy suort to encourage nestent s neee. Lowcost, long-range transsson systes nee to be n lace. Lea tes for the lannng an constructon

of new transsson shoul be reuce. New nfrastructure shoul be eeloe to eet the nees of large wn

lants n the lannng stage. Cost of gr connectty coul be share across the ower sector. inestent n ower storage technology wll be ortant to anage nterttency ssues.

ANNEx



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CONCENTRATING SOLAR pOWER (CSp)FACT SHEET


Concentrate solar ower (CSp) uses rect sunlght, concentratng t seeral tes to reach hgher teeratures.The heat s then use to oerate a conentonal ower cycle such as a stea t urbne. it s best sute for areas wth hgh rect solar raaton such as ar an se-ar areas. These areas are

wesrea across the globe, but not unersal. CSp has the otental to eler ower on ean, e.g. by storng heat n arous fors. it can also wor n tane

by burnng fossl fuel n hybr ower lants to rouce electrcty on a contnuous bass. Total nstalle caacty of CSp was just 436 mW at the en of 2008. Howeer, the nustry has been exanng raly

an rojects uner constructon at the oent, ostly n San, wll a 18 GW to the nstalle caacty by 2017. CSp electrcty s uch cheaer than hotooltacs (pv), although t s not yet coette wth fossl fuel or

wn ower. Therefore, t nees technology roeents through further R&d, eonstraton an eloyent tobecoe fully coette.

Abatement otential

CSp can reuce 0.24 GtCO2eq by 2020 (7 % of essons reucton n ower sector). in 2050, CSps share n essons reucton ncreases to 1.19 GtCO2 (6.5% of ower sector essons reucton).

Inestment need

Between now an 2030, R&d, eonstraton an eloyent nestent of $11.3bn er annu s requre (totalnestent coerng both ublc an rate sector) to re the technology to full coercal otental. Between2030 an 2050, coercal nestent of $15.5bn er annu s requre to ffuse the technology globally.

plants uner constructon are execte to generate electrcty at a cost of between $125/mWh an $225/mWh,ostly eenng on the locaton. The nustry consers that learnng an econoes of scale coul achee costcoetteness n the next ten to 15 years. Future costs ay le n the range of $35$62 er mWh.

Deloyment athways

250 GW caacty nees to be nstalle between 2020 an 2030 to ae CSp coercally coette; 630 GWcaacty nees to be nstalle by 2050.

The iEA BLUE ma Scenaro ensages that 63% of abateent otental of ths technology wll be cature neelong countres nclung ina an Chna, whle 37% wll be n the OECd countres.

There s conserable scoe to reuce costs on all eleents of CSp through Rd&d. Howeer, ths otental wll bereache only f there s an acte aretlace that can suort technology learnng. Cost reuctons fro currentleels woul coe fro ncrease olue roucton, lant scale-u an technologcal aances.

key suortng nfrastructure such as low-cost, long-range transsson systes also nee to be roe n orerto econocally connect CSp lants to the gr.

ANNEx



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SOLAR pHOTOvOLTAIC (pv) FACT SHEET


Solar pv systes rectly conert solar energy nto electrcty. pv systes can be gr-connecte or stan alone(off-gr). Off-gr pv systes are artcularly ortant n reote areas an eelong countres. These consttute

10% of the total pv aret. The solar pv aret has grown exonentally n the last 15 years an s execte to accelerate further n the nextfew years. Total worl cuulate caacty was 6.6 GW n 2006. Total cuulate pv caacty n selecte iEAcountres (5.7 GW) has ncrease by a factor of eght snce 2000.

Gerany, Jaan an the Unte States account for aroxately 70% of global cuulate caacty, an 63% ofglobal pv anufacturng.

Solar pv nees technology roeents through further R&d, eonstraton an eloyent to becoefully coette.

Abatement otential

Solar pv can reuce 0.33 GtCO2eq by 2020 (aroun 10% of ower sector essons reucton). in 2050, solar pvs share n essons reucton ncreases to 1.32 GtCO2 (about 7% of ower sector

essons reucton).

Inestment need

Accorng to the iEA BLUE ma Scenaro, n orer to achee full solar pv abateent otental, R&d, eonstratonan eloyent nestent of $8.1bn er year between 2005 an 2030 s requre. Between 2030 an 20 50,coercal nestent of $55.5bn er year s neee.

The nestent costs of pv systes are stll hgh. Ths reresents the ost ortant barrer to pv eloyent.Total pv syste costs were aroun $5.5$6.25/W by the en of 2006 (2005 rces). The iEA roaa estates thatthe nestent cost coul be reuce to $1.9/W n 2030 an $1.1/W by 2050. i n aton, pv electrcty generatoncosts coul be as low as $0.05 er Wh by 2050 n goo solar rraaton regons.

Deloyment athways

pv nees to be coette wth retal electrcty by 20202030. Ths wll requre nstallaton of at least 150 GWcaacty n 2030 an 1150 GW caacty by 2050. Ths s equalent to 6% of total worl electrcty generaton(.e. 2584 TWh).

The iEA BLUE ma Scenaro ensages that 54% of abateent otental of ths technology wll be cature n theOECd countres, whle 46% wll be n eelong countres nclung ina an Chna.

Sustane an effecte ncentes are neee n the next fe to ten years to oercoe the re-coette stageof pv systes an to achee exonental aret growth.

Suffcent ublc an rate R&d funng shoul be guarantee for the eeloent of next-generatonsolar pv technologes.

Technology transfer ssues for, artcularly off-gr, alcaton n eelong countres ust be tacle.

Stanarse solutons shoul be eeloe wth the constructon nustry for the ntegraton of solar pv n bulngs. deeloent of storage technology to oercoe nterttency ssues.

ANNEx



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HEAT pUMpS FACT SHEET


Heat us are ost sutable for use n coolng, sace heatng, hot water an nustral heat. They nclue a werange of roucts that facltate heat exchange between ar, water, sol or beroc an water or bulngs.

Heat us hae been ganng ore aret share n soe OECd countres. For exale, n Sween, about 48% ofall electrcally heate hoes hae heat us. Heatng-only us hae a sgnfcant aret share n a nuber ofcountres, notably Sween, Swtzerlan, the Unte States, Gerany, France, Austra an Canaa.

Heat us are conserably ore exense than bolers (by a factor of about three coare to a gas boler),although runnng costs are uch lower, whch altogether brng sgnfcant econoc benefts to househols. Forexale, electrc heat us can reuce rary energy consuton for heatng by as uch as 50% coare tofossl fuel-fre bolers.

Een though any are aalable on the aret, soe heat u technologes stll face soe techncal barrers,whch hae resulte n lac of confence n the tec hnology, hence, lte eloyent. in orer to cature therfull aret an abateent otental, further eonstraton, eloyent an coercalsaton are neee.

Abatement otential

Heat us can reuce 0.77 GtCO2 n 2050 (1.6% of oerall energy-relate essons reucton).

Inestment need

Between now an 2015, R&d, eonstraton an eloyent nestent of about $9bn er annu s requre(total nestent coerng both ublc an rate sector) to re the technology to full coercal otental.Between now an 2050, coercal nestent of about $96bn er annu s requre to ffuse thetechnology globally.

Deloyment athways

Further Rd&d s essental to roe techncal an econoc erforance of heat us by 2020. Ther

cost-effecteness, energy effcency an carbon footrnt can be roe by 50% between 2020 an 2030. 50 -70%of bulngs n OECd wll nee to be ftte wth heat-ung technologes by 2050.

Half of the essons sangs fro heat us are execte to be cature n eelong countres an the otherhalf n OECd countres.

Further Rd&d s neee to eelo ore energy-effcent, sustanable an cost-effecte heat ung technologes. Actons on olces are requre to ensure all bulng coes roote energy conseraton an effcency easures. most countres shoul hae olces that recognse the benefts of heat us.

ANNEx



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ENERGY EFFICIENCY IN BUILDINGS ANDAppLIANCES FACT SHEET


Energy effcency n bulngs an alances encoasses a arety of roucts an easures such as the bulngeneloe, hot water systes, lghtng an large an sall alances utlse n househols an offces. in eeloe countres, energy effcency olces for ajor alances hae achee gans of 10% to 60%. Slarly,

any new lghtng solutons are so cost-effecte that retrofttng the exstng lghtng systes aes econocsense. Soe lghtng technologes such as LEd are consere to offer hgh otental for further techncalroeents. Gen the ersty of unerlyng technologes, suort s neee at all stages of the nnoatonchan to cature effcency an abateent benefts.

Abatement otential

Energy effcency n bulngs an alances can reuce 1.6 GtCO2eq n 2020 (that s the total abateent otentaln bulngs or about 8% of all abateent otental n 20 20).

its share n essons reucton wll rse to 7 GtCO2 n 2050 (about 15% of oerall energy-relate essons reucton).

Inestment need

Between now an 2050, coercal nestent of about $158bn er annu s requre to ffuse thetechnologes globally.

Deloyment athways

New technologes wll nee to be eeloe an eloye for een hgher energy effcency by 2020. The iEA BLUE ma Scenaro ensages that 53% of abateent otental of ths technology wll be cature n

eelong countres nclung ina an Chna, whle 47% wll be n the OECd countres. manatory nu effcency stanars for ass-rouce alances wll nee to be leente by 2020 n

OECd an worlwe by 2030, wth contnuous tghtenng. internatonal stanars nee to be reewe regularly to

ensure aequate gour. Bulng coes coul request the col countres to eet asse house leels by 2015, an globally fro 2030. polcy wll nee to shft towars Best Aalable Technology (BAT) n lghtng effcency fro 2025. internatonal collaboraton s neee to facltate the ra exchange of BAT n the bulngs sector to ensure ra

utae worlwe. Energy effcency roeent n bulngs an alances ust be ontore. Assung the aret ull olces suggeste aboe are fully leente, technologes wll be alreay coercal

by 2040.

ANNEx



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ELECTRIC AND pLUG-IN HYBRID vEHICLESFACT SHEET


plug-n hybr ehcles cobne the ehcle effcency aantages of hybrsaton wth the oortunty to traelart-te on electrcty roe by the gr. Electrc ehcles, on the other han, o not hae an nternalcobuston engne at all, hence rely on energy storage or battery chargng fro the gr ore than hybrs.

There s currently qute lte roucton of electrc an lug-n ehcles, although car anufacturers arencreasngly nestng n the area. For exale, Toyota has recently launche ts frst fully hybr lug-n car anabout 500 hae been anufacture for sale. To achee the leel of eloyent an coercalsaton neee,further R&d, eonstraton an eloyent suort s requre.

Abatement otential

Electrc an lug-n ehcles can reuce 0.04 GtCO2eq n 2020 (3.6% of abateent otental n transort sector). in 2050, ther share n essons reucton ncreases to 2 GtCO2 (a

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