© OECD/IEA World Energy Outlook 2007: China and India Insights Pawel Olejarnik Research Analyst International Energy Agency

© OECD/IEA Why Focus on China & India? China & India have contributed more than half of the increase in global demand for energy and over 80% for coal since 2000 Increase in World Primary Energy Demand, Imports & Energy-Related CO 2 Emissions in the Reference Scenario, %20%40%60%80%100% Energy demand Oil demand Oil imports CO emissions 2 China India Rest of the world 0%20%40%60%80%100% Coal demand

© OECD/IEA Reference Scenario

© OECD/IEA Reference Scenario: World Primary Energy Demand Global demand grows by more than half over the next quarter of a century, with coal use rising most in absolute terms billion tonnes of oil equivalent billion tonnes of oil equivalent Other renewables Biomass Hydro Nuclear Gas Oil Coal

© OECD/IEA The Emerging Giants of World Energy China & India will contribute more than 40% of the increase in global energy demand to 2030 on current trends 0% 20% 40% 60% 80% 100% Total energy CoalOilNuclearHydroPower sector investments Rest of the world India China Increase in Primary Energy Demand & Investment Between 2005 & 2030 as Share of World Total

© OECD/IEA Global Oil Supply Prospects to 2015 Oil supply/demand balance is set to remain tight In total, 37.5 mb/d of gross capacity additions needed in  13.6 mb/d to meet demand & rest to replace decline in existing fields OPEC & non-OPEC producers have announced plans to add 25 mb/d through to 2015 Thus, a further 12.5 mb/d of gross capacity would need to be added or demand growth curbed Otherwise, a supply crunch cannot be ruled out

© OECD/IEA Proven Natural Gas Reserves Gas reserves are also concentrated – Russia and Iran together account for almost half of global gas reserves World total: 183 tcm as of 1 January 2007 Source: Cedigaz

© OECD/IEA Global CO 2 Emissions and Climate Change Global CO 2 emissions rise to 42 gigatonnes in 2030, 57% above current levels and double the 1990 level billion tonnes 42 Gt 27 Gt +57 %

© OECD/IEA World’s Top Five CO 2 Emitters GtrankGtrankGtrank US China Russia Japan India China becomes the largest emitter in 2007 & India the 3rd largest by 2015

© OECD/IEA China & India in Global CO 2 Emissions Around 60% of the global increase in emissions in comes from China & India Cumulative Energy-Related CO 2 Emissions United States European Union Japan China India billion tonnes

© OECD/IEA CO 2 Emissions from Coal-Fired Power Stations built prior to 2015 in China & India million tonnes of CO 2 Existing power plantsPower plants built in Capacity additions in the next decade will lock-in technology & largely determine emissions through 2050 & beyond

© OECD/IEA Alternative Policy Scenario

© OECD/IEA Increase in Net Oil Imports, New policies reduce global oil demand by 14 mb/d by 2030, cutting sharply the need for imports OECD North America OECD Europe OECD Pacific ChinaIndiaOther Asia mb/d Reference Scenario Alternative Policy Scenario

© OECD/IEA Global Energy-Related CO 2 Emissions Global emissions will increase by 57% in the Reference Scenario, but they level off in the Alternative Policy Scenario billion tonnes (Gt) Reference Scenario 42 Gt Alternative Policy Scenario 34 Gt 19% 27 Gt

© OECD/IEA India’s Local Pollution New policies reduce substantially emissions of SO 2 and NO x – largely from coal-fired power plants, cars & trucks Alternative Policy Scenario million tonnes Reference Scenario SO 2 NO x

© OECD/IEA How to go beyond?

© OECD/IEA CO 2 Emissions Stabilisation Case In line with G-8 appeal in Heiligendamm, by 2030 emissions are reduced to some 23 Gt Gt of CO 2 CCS in industry CCS in power generation Nuclear Renewables Switching from coal to gas End Use electricity efficiency End Use fuel efficiency Reference Scenario 450 Stabilisation Case 27 Gt 42 Gt 23 Gt Energy-Related CO 2 Emissions

© OECD/IEA Public Energy Research and Development Funding in IEA Countries billion dollars (2006) 0% 2% 4% 6% 8% 10% 12% Efficiency Fossil fuels CCS Renewables Nuclear Hydrogen Storage technologies Other Share of energy R&D in total R&D (right axis) Share of public budgets for energy R&D in total R&D fell over 50% in the last two decades

© OECD/IEA Conclusions Global energy system is on an increasingly unsustainable path China and India are engines of global energy demand -- countries putting economic development as top priority Next 10 years are critical Road to Copenhagen – a way out ?

© OECD/IEA World Energy Outlook 2008: Outline New set of energy projections to 2030, using improved WEM & coupled with a general equilibrium economic model In-depth analysis of key topics >Post-2012 climate scenarios >Oil and gas supply prospects >Energy poverty in resource-rich Sub-Saharan Africa Extensive consultation and co-operation >UNFCCC, US EPA, OPEC, oil companies, ADB, World Bank, IMF… Informal workshops in April 2008 First draft ready by 1 August; launch 12 November World Energy Outlook 2008

© OECD/IEA Thank you