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Climate Change Information Sheet 25
New energy technologies and policies

The production and use of energy is the leading source of humanity's greenhouse gas emissions. The combustion of coal, oil, and natural gas accounts for roughly 80% of all carbon dioxide emissions. Extracting and using fossil fuels also emits methane, some carbon dioxide, and large quantities of carbon monoxide and other air pollutants. The industrial sector accounts for 43% of the global CO2 emissions from fossil-fuel combustion, the building sector 31%, transport 22% (and growing rapidly) and agriculture 4%. These energy-related emissions could be significantly reduced through a combination of new technologies and policies.

Leaks and spills during the extraction and transport of fossil fuels can be minimized. New technologies can dramatically cut methane emissions from coalmines and from natural-gas distribution systems. In oil fields where natural gas is flared off or vented because its sale is uneconomic, small on-site power generators can be introduced to make electricity for local use, or the gas can be compressed or converted for use by transport or near-by industries.

Fiscal and tax policies can encourage the early introduction of new technologies. By the year 2100, the entire capital stock of the world's current commercial energy system will be replaced at least twice. Incentives for investing in more cost-effective and energy-efficient technologies could maximize the opportunity this replacement offers for reducing emissions. Taxing emissions or the carbon content of fuels can steer investments toward lower-emissions technologies. At the same time, phasing out existing fossil-fuel subsidies would cut global emissions while supporting national economic development.

The conversion efficiency of electric power plants can be raised. The world-average conversion efficiency of 30% could be more than doubled in the longer term. This could be achieved in part through the transition to combined cycle gas turbines (CCGTs), which are likely to become the largest worldwide provider of new energy capacity between now and 2020. The newest models already boast conversion efficiencies approaching 60%. This is possible because the heat from the burning fuel drives steam turbines while the thermal expansion of the exhaust gases drives gas turbines.

Power-plant emissions can also be reduced by switching to renewable sources. Renewable energy technologies such as wind, solar, and small hydro can cut emissions while distributing electricity more flexibly "off the grid". The use of wind turbines is now growing by over 25% per year. Solar and biomass also continue to grow as costs decline. Total contributions from non-hydro renewable sources are currently below 2% globally, but by 2010 more efficient photovoltaics, off-shore wind farms, ethanol-based biofuels and other low- or zero-emissions fuel sources are expected to penetrate the market.

Industry can further reduce its energy intensity while cutting production costs. This is the only sector where emissions in the richest countries are already declining due to increased efficiency in the use of energy and of materials. But these countries could reduce their industrial CO2 emissions even further simply by replacing existing facilities and processes with the most efficient technological options currently available. If this upgrading of equipment occurred at the time of normal capital stock turnover, it would be a cost-effective way to reduce industrial emissions. At the global level, industrial emissions are projected to grow dramatically as developing countries industrialize; slowing their rate of emissions growth will require that they have access to the most efficient technologies available.

The residential and commercial sectors can adopt more energy-efficient technologies. Emissions from buildings continue to rise because higher demand for building services has outpaced technology improvements. These improvements include new building controls, passive solar design, integrated building design, new chemicals for refrigeration and insulation, and more efficient refrigerators and cooling and heating systems. Further steps could include market-based programmes in which customers or manufacturers receive technical support or financial incentives, mandatory or voluntary energy-efficiency standards, public and private research into more efficient products, and information and training programs.

Governments can remove barriers that slow the spread of low-emissions technologies. The diffusion of new technologies and practices is often blocked by cultural, institutional, legal, informational, financial, and economic barriers. Government policies can help to remove some of the blockages. Information-sharing and product-labeling programmes, for example, can help consumers to recognize the broader consequences of their decisions. Governments can also support carefully targeted research, development, and demonstration projects for technologies that can reduce emissions and improve efficiency. While they will want to avoid trying to pick technology "winners", governments can play a valuable role by lowering the barriers faced by innovators and promoting a balanced national portfolio of energy options and research programmes.

Deep reductions in fossil fuel emissions needed to stabilize greenhouse gas concentrations are possible over the next 50 to 100 years. Technology innovation, energy efficiency, and an emphasis on renewable energy sources will be essential for achieving this goal. Since many different combinations of technologies and policies could be used, this future energy-supply system could be constructed in any number of ways. In the short-term, however, with the global demand for energy certain to rise, actions to reduce emissions must continue to include a heavy emphasis on energy efficiency.

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