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

2. © OECD/IEA - 2007 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, 2000-2006 0%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

3. © OECD/IEA - 2007 Reference Scenario

4. © OECD/IEA - 2007 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 0 2 4 6 8 10 12 14 16 18 198019902000201020202030 billion tonnes of oil equivalent 0 2 4 6 8 10 12 14 16 18 198019902000201020202030 billion tonnes of oil equivalent Other renewables Biomass Hydro Nuclear Gas Oil Coal

5. © OECD/IEA - 2007 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

6. © OECD/IEA - 2007 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 2006-2015  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

7. © OECD/IEA - 2007 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 8.0 7.0 5.8 14.5 57.9 73.9 13.6 2.7

8. © OECD/IEA - 2007 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 10 15 20 25 30 35 40 45 50 198019902000201020202030 billion tonnes 42 Gt 27 Gt +57 %

9. © OECD/IEA - 2007 World’s Top Five CO 2 Emitters 200520152030 GtrankGtrankGtrank US5.816.426.92 China5.128.6111.41 Russia1.531.842.04 Japan1.241.351.25 India1.151.833.33 China becomes the largest emitter in 2007 & India the 3rd largest by 2015

10. © OECD/IEA - 2007 China & India in Global CO 2 Emissions Around 60% of the global increase in emissions in 2005-2030 comes from China & India Cumulative Energy-Related CO 2 Emissions 0100200300400500 United States European Union Japan China India billion tonnes 1900-2005 2006-2030

11. © OECD/IEA - 2007 CO 2 Emissions from Coal-Fired Power Stations built prior to 2015 in China & India 0 1 000 2 000 3 000 4 000 5 000 6 000 200620152030204520602075 million tonnes of CO 2 Existing power plantsPower plants built in 2005-2015 Capacity additions in the next decade will lock-in technology & largely determine emissions through 2050 & beyond

12. © OECD/IEA - 2007 Alternative Policy Scenario

13. © OECD/IEA - 2007 Increase in Net Oil Imports, 2006-2030 New policies reduce global oil demand by 14 mb/d by 2030, cutting sharply the need for imports -2 0 2 4 6 8 10 OECD North America OECD Europe OECD Pacific ChinaIndiaOther Asia mb/d Reference Scenario Alternative Policy Scenario

14. © OECD/IEA - 2007 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 10 15 20 25 30 35 40 45 50 198019902000201020202030 billion tonnes (Gt) Reference Scenario 42 Gt Alternative Policy Scenario 34 Gt 19% 27 Gt

15. © OECD/IEA - 2007 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 0 3 6 9 12 15 18 199019952000200520102015202020252030 million tonnes Reference Scenario SO 2 NO x

16. © OECD/IEA - 2007 How to go beyond?

17. © OECD/IEA - 2007 CO 2 Emissions - 450 Stabilisation Case In line with G-8 appeal in Heiligendamm, by 2030 emissions are reduced to some 23 Gt 10 15 20 25 30 35 40 45 200520102015202020252030 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

18. © OECD/IEA - 2007 Public Energy Research and Development Funding in IEA Countries 0 2 4 6 8 10 12 14 19861991199620012006 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

19. © OECD/IEA - 2007 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 ?

20. © OECD/IEA - 2008 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

21. © OECD/IEA - 2007 Thank you pawel.olejarnik@iea.org www.worldenergyoutlook.org