Published on November 10th, 2010 | by Zachary Shahan2
Oil Price Escalation on the Way Due to Lack of Climate Action?
Sadly, much more than concern for future generations or concern for other creatures on the planet, a slight reduction in the amount of money in people’s wallets (or the number of new gadgets or clothes they can buy) may be the biggest driver of environmentally-responsible behavioral change. Well, it looks like this driving factor may be on the move.
In its annual World Energy Outlook report, the International Energy Agency warned yesterday that the failure last year to create a meaningful climate agreement in Copenhagen and weak implementation of the general goals that were agreed upon is likely to result in considerable oil price escalations.
One of the most important conclusions from the report is that under a business-as-usual model, global energy demand will increase 36% by 2035. Of course, most of the projected increase (93%) is from expected growth in the developing world, and 36% of it (odd coincidence) is due to expected growth in China.
With modern society still quite reliant (over-reliant, some might say..) on oil, the report predicted that oil prices will almost double by 2035, increasing to about $113 per barrel (in 2009 dollars) by 2035.
As we all know by now, China is leading the way on clean energy in many respects. It is pumping hundreds of billions of dollars into clean energy, including some humongous solar and wind energy projects.
But the country, like others around the world, also gives plenty of subsidies to fossil fuels. And until that is addressed, fossil fuel use will dramatically increase in the fast-growing country as well.
The clear message is that unless we get off fossil fuels fast, we are going to get hit with major energy price increases in the years to come.
And one of the best ways to get off fossil fuels fast is to cut the subsidies.
“The IEA delivers a blunt message ahead of Cancun that cleaning up our energy systems now is cheaper than delay,” UK energy and climate change secretary Chris Huhne bluntly said. “We need to go further and faster in getting ourselves off the oil hook – and on to clean green growth. Greater energy independence – with more renewables, clean coal and nuclear – is the best way to protect our consumers and our country from energy shocks to come.”
Photo Credit: B. Tse via flickr (CC license)