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As countries scale up climate action, they face the challenge of expanding renewable power while tackling biodiversity loss. Transitioning away from fossil fuels can reduce climate-related pressure on biodiversity, but brings its own risks. Unless carefully managed, the expansion of renewable power could compromise biodiversity. This report synthesises evidence on biodiversity impacts from renewable power infrastructure, with a focus on solar power, wind power and power lines. It identifies opportunities for mainstreaming biodiversity into power sector planning and policy to deliver better outcomes for nature and the climate. Drawing on good practice insights from across the globe, the report offers governments recommendations to align renewable power expansion with biodiversity goals.
Studies show that cars use significantly more fuel per kilometre than suggested by official test ratings. This publication presents an analysis of the fuel efficiency gap and examines technologies available that could reduce that gap and improve fuel economy. It examines such areas as engine and transmission technologies, hybrid technologies, tyre inflation and technology, lubricants, and fuel-saving driver support devices. Together, these technologies could improve average on-road fuel economy by 10% or more at low or modest cost. Policies that could be used to encourage uptake of these technologies are also identified.
This report offers guidance on how to prepare regions and cities for the transition towards a climate-neutral and circular economy by 2050 and is directed to all policymakers seeking to identify and implement concrete and ambitious transition pathways. It describes how cities, regions, and rural areas can manage the transition in a range of policy domains, including energy supply, conversion, and use, the transformation of mobility systems, and land use practices. It takes stock of discussions between academic and policy experts emanating from a series of high-level expert workshops organised in 2019 by the OECD and the European Commission. Bringing together frontier thinking and practical examples regarding the transition to a climate-neutral economy, the transition to a circular economy, the transition in cities, the transition in rural areas, and financing and scale-up of transition action, this report identifies cross-cutting lessons to support urban, regional, and rural decision makers in managing trade-offs and in promoting, facilitating and enabling environmental and energy transitions.
Renewables are growing rapidly in the electricity systems around the world as countries seek to improve their energy security, meet emission reduction targets and take advantage of cheaper electricity sources. Thanks to successful use of flexibility resources – from stronger grids and interconnections to demand-side measures, affordable storage and dispatchable power supply – many countries have already securely and efficiently integrated significant shares of variable renewables (VRE) in their electricity generation.
As wind and solar continue to grow as a proportion of generation, system level surpluses and periods of lower generation will eventually expand beyond hour-to-hour or daily variations to seasonal timescales. Addressing seasonal variability of renewables means that flexibility resources will be needed to varying extents throughout the year, even on a week-to-week or month-to-month basis.
This report assesses the key bottlenecks within the water-energy-land-food nexus in Korea, and proposes policy recommendations and governance arrangements to future-proof environmental integrity and enhance sustainable growth. The increasing pressure caused by urbanisation, industrialisation, population growth and climate change in Korea has led to more land consumption and augmented water supply, at the expense of the environment and at a high cost for public finance. Korea has engaged with the OECD via a national policy dialogue to explore best practices from the wider international community to better manage the nexus at the river basin scale.
What are the channels for investment in sustainable energy infrastructure by institutional investors (e.g. pension funds, insurance companies and sovereign wealth funds) and what factors influence investment decisions? What key policy levers and risk mitigants can governments use to facilitate these types of investments? What emerging channels (such as green bonds, YieldCos and direct project investment) hold significant promise for scaling up institutional investment?
This report develops a framework that classifies investments according to different types of financing instruments and investment funds, and highlights the risk mitigants and transaction enablers that intermediaries (such as public green investment banks and other public financial institutions) can use to mobilise institutionally held capital. This framework can also be used to identify where investments are or are not flowing, and focus attention on how governments can support the development of potentially promising investment channels and consider policy interventionsthat can make institutional investment in sustainable energy infrastructure more likely.
Materials are the building blocks of society, making up the buildings, infrastructure, equipment and goods that enable businesses and people to carry out their daily activities. Economic development has historically coincided with increasing demand for materials, resulting in growing energy consumption and carbon dioxide (CO2) emissions from materials production. Clean energy transitions must decouple these trends. Material efficiency strategies can contribute to CO2 emissions reduction throughout value chains. Despite being an often overlooked emissions mitigation lever, opportunities for material efficiency exist at each lifecycle stage, from design and fabrication, through use and finally to end of life. Pushing these strategies to their practical yet achievable limits could enable considerable reductions in the demand for several key materials. Conversely, the demand for some materials may moderately increase while delivering favourable emissions benefits at other points in the value chain. As a result, improved material efficiency can reduce some of the deployment needs for other CO2 emissions mitigation options while achieving the same emissions reduction, thus contributing to clean energy transitions. This analysis examines the potential for material efficiency and the resulting energy and emissions impact for key energy-intensive materials: steel, cement and aluminium. It includes deep dives on the buildings construction and vehicles value chains, and outlines key policy and stakeholder actions to improve material efficiency. Important actions include: increasing material use data collection and benchmarking; improving consideration of the life-cycle impact in climate regulations and at the design stage; and promoting repurposing, reuse and recycling at end of product and buildings lifetimes.
The nuclear energy sector employs a considerable workforce around the world, and with nuclear power projected to grow in countries with increasing electricity demand, corresponding jobs in the nuclear power sector will also grow. Using the most available macroeconomic model to determine total employment – the “input/output” model – the Nuclear Energy Agency and International Atomic Energy Agency collaborated to measure direct, indirect and induced employment from the nuclear power sector in a national economy. The results indicate that direct employment during site preparation and construction of a single unit 1 000 megawatt-electric advanced light water reactor at any point in time for 10 years is approximately 1 200 professional and construction staff, or about 12 000 labour years. For 50 years of operation, approximately 600 administrative, operation and maintenance, and permanently contracted staff are employed annually, or about 30 000 labour years. For up to 10 years of decommissioning, about 500 people are employed annually, or around 5 000 labour years. Finally, over an approximate period of 40 years, close to 80 employees are managing nuclear waste, totalling around 3 000 labour years. A total of about 50 000 direct labour-years per gigawatt. Direct expenditures on these employees and equipment generate approximately the same number of indirect employment, or about 50 000 labour years; and direct and indirect expenditures generate about the same number of induced employment, or 100 000 labour years. Total employment in the nuclear power sector of a given national economy is therefore roughly 200 000 labour years over the life cycle of a gigawatt of nuclear generating capacity.
Most people support sustainable development without knowing what it is. What exactly are sustainable consumption and sustainable production, and how are these practices identified? This volume reviews the state-of-the-art in measuring sustainable production processes in industry. It includes metrics developed by business, trade unions, academics, NGOs, and the OECD and IEA. These measurement approaches cover the "triple bottom line" (economic, environmental and social dimensions) of industrial sustainability.
In the Same Series
Subsidy Reform and Sustainable Development: Political Economy Aspects
Subsidy Reform and Sustainable Development: Economic, Environmental and Social Aspects
Institutionalising Sustainable Development
Further Reading
Measuring Sustainable Development: Integrated Economic, Environmental and Social Frameworks
Carbon lock-in occurs when high-emission infrastructure or assets continue to be used, despite the possibility of substituting them with low-emission alternatives, thereby delaying or preventing the transition to near-zero or zero-emission alternatives. Transition finance, which focuses on the dynamic transformation and decarbonisation of hard-to-abate sectors, frequently faces the issue of carbon lock-in, particularly in considerations of investment feasibility and eligibility. Despite most transition finance approaches incorporating lock-in avoidance as a core principle, existing transition instruments and approaches put in place varying or limited mechanisms to prevent lock-in.
Building on the OECD Guidance on Transition Finance, this report takes stock of how carbon lock-in risk is addressed in existing transition finance approaches (such as taxonomies, roadmaps, or guidance), financial instruments, and relevant public and private investment frameworks and methodologies. The report provides good practices on the integration of credible mechanisms to prevent carbon lock-in, address greenwashing risks and build confidence in the market. It can inform both public and private actors in the development of transition finance approaches, standards for green, transition and sustainability-linked debt, frameworks for corporate transition plans, or broader climate-related disclosure frameworks.
Despite public calls in many countries for reducing reliance on coal as a primary but high-carbon energy source, global demand continues to escalate. Coal has traditionally been seen as a low-cost and price-stable source of energy, but recently coal prices have increased and become much more volatile. Moreover, while coal is viewed as a very secure energy source, infrastructure bottlenecks and weather-related events can dramatically tighten the market.
This new annual IEA publication, Medium-Term Coal Market Report 2011 , presents a comprehensive analysis of recent trends in coal demand, supply and trade, as well as an IEA outlook for coal market fundamentals for the coming five years. The report places a special focus on trade and infrastructure development in the key exporting countries. Given the existing uncertainties on the production capacity of China to meet its challenging coal demand growth, the book presents two scenarios for coal trade: a high and a low Chinese production outlook. This comparison highlights the massive influence of Chinese behaviour on the international coal trade.
The Medium-Term Coal Market Report-2012 provides IEA forecasts on coal markets for the coming five years as well as an in-depth analysis of recent developments in global coal demand, supply and trade. The annual report shows that while coal continues to be a growing source of primary energy worldwide, its future is increasingly linked to non-OECD countries, particularly China and India, and to the rise of natural gas.
The international coal market is experiencing dynamic changes. In 2011, China alone accounted for more than three-quarters of incremental coal production, while domestic consumption was more than three times that of global trade. Low gas prices associated with the shale gas revolution caused a marked decrease in coal use in the United States, the world’s second-largest consumer. This led US thermal coal producers to seek other markets, which resulted in an oversupply of coal in Europe and a significant gas-to-coal switch. Meanwhile, China overtook Japan as the largest importer of coal, and Indonesia overtook Australia as the world’s largest exporter on a tonnage basis.
The report examines the pronounced role the Chinese and Indian economies will exert on the international coal trade through 2017. In the report’s Base Case Scenario, China accounts for over half of global consumption from 2014, and India surpasses the United States as the world’s second-largest consumer of coal in 2017. The report also offers a Chinese Slowdown Case, a hypothetical scenario which shows that even if Chinese GDP growth slowed to 4.6% average over the period, the country’s coal consumption would continue to grow.
The Medium-Term Coal Market Report-2013 provides IEA forecasts on coal markets for the coming five years as well as an in-depth analysis of recent developments in global coal demand, supply and trade. This third annual report shows that while coal continues to be a growing source of primary energy worldwide, its future is increasingly tied to developments in non-OECD countries, led by China.
Coal is both the leading fuel source behind the growth of non-OECD countries and the leading source of power generation in OECD countries. Yet the current low prices for coal add a new challenge to the sector, which is facing uncertainty due to increasing environmental legislation and competition from other fuels, like US shale gas or European renewables.
This report examines, among other things, how coal producers will be affected by such low prices, whether the current low prices will boost the fuel’s consumption, if other developing countries will follow in China’s footsteps by increasingly relying on coal to fuel economic growth, and, above all, whether the strong growth of coal in China will continue between now and 2018.
The Medium-Term Coal Market Report 2014 provides IEA forecasts on coal markets for the coming five years as well as an in-depth analysis of recent developments in global coal demand, supply and trade. The fourth annual report shows that, while China will continue to dominate global coal markets between now and the end of the decade, India and Southeast Asia will also drive coal demand growth, although on a smaller scale.
Despite coal’s reputation as an old-fashioned, 19th-century fuel, coal markets today are very dynamic: a variety of qualities are traded, new price indexes have been created for different qualities in different regions and an increasing amount of paper trading is taking place. Meanwhile, physical flows of coal are quite sensitive to demand and price developments – not to mention policy changes throughout the world.
This report examines whether and when China’s efforts to diversify its energy mix – the so-called ABC (anything but coal) policy – will lead to peak demand for coal in the world’s biggest coal market. It also analyses how the current environment of low prices for coal will affect not just demand and investments but also the ability of coal producers to stay in business, and how new regulations in the main importing and exporting countries may affect international trade.
Although it has received less attention than the plunge in oil prices since mid-2014, the drop in coal prices has had a profound impact on global energy markets. Underpinning the weakness in coal prices is the decline in coal consumption in China for the first time this century, while pledges to reduce CO2 emissions made by dozens of countries ahead of the UN climate negotiations in Paris in December 2015 are also providing negative sentiment for coal producers. Partly offsetting the gloom is demand from a few populous emerging economies in Asia – particularly India – and the high odds that coal will remain China’s top energy source for several years to come.
Market players are now wondering if coal prices have hit the bottom, how long producers can survive at these levels and when oversupply will be balanced. Whereas the low prices make coal producers struggle, they prove very attractive for power generators despite increasingly strong environmental policies, growing competitiveness of renewables and declining gas prices.
This year’s edition of the IEA’s Medium-Term Coal Market Report presents, for the first time, a Chinese “Peak Coal” case, which explores the factors that could cause coal use in China to enter a structural decline. It also studies the potential impact of such a peak on supply, prices and trade flows. As in past editions, the report analyses recent trends in coal supply, demand and trade; provides forecasts for the next five years, and gives insights on questions that concern industry and policymakers.
Analysis on coal often tends to be one-sided. But to truly understand the important role that coal plays, for better or worse, in the global energy system, it is critical that we examine both sides of the coin. This means understanding the implications of climate agreements on the future for coal while at the same time coming to terms with what coal is doing – and will continue to do – for energy security and energy access in developing and emerging economies.
This means taking a close look at those emerging economies, specifically in South and Southeast Asia. For example, given China’s dominance in coal markets, the main problem for the coal industry is adjusting to how Chinese demand and imports will evolve in the future. In India, already the second largest coal consumer in the world, coal use is expected to grow. Will this trigger imports? Viet Nam, a net exporter until 2014, is building coal power plants at a fast pace. How much coal will they need to import? Where will that coal come from?
Meanwhile, despite an increase in the price of natural gas price in the United States, coal consumption continues to drop. Is this decline inevitable? The last coal plants closed in Belgium and Scotland in 2016 while other European nations have announced the end of coal generation. Is coal going to disappear forever from Europe? At the same time, banks and funds are turning away from coal financing. Will this bring a halt to construction of new coal power plants?
The Medium-Term Coal Market Report 2016 addresses these questions and more, providing insight into the drivers of coal demand, supply and trade through 2021.
With ample recoverable resources, natural gas seems destined for a bright future. It nevertheless faces many challenges to increase its share in the primary energy mix, including insufficient upstream development, inadequate pricing structure, competition from other fuels, and geopolitical issues.
The IEA Medium-Term Gas Market Report 2012 reviews how gas markets managed the challenges of 2011, from the consequences of the Fukushima incident to the unrest in the Middle East and North Africa to a further deteriorating economy. It gives detailed gas supply, demand and trade forecasts up to 2017, by region as well as for key countries, while investigating many of today’s crucial questions:
-Will regional gas markets diverge further or will the shale gas revolution spread worldwide?
-Will North America become a significant LNG exporter?
-Can China meet its goal of doubling gas consumption in four years?
-Will natural gas replace nuclear energy in key OECD member countries?
-Can gas finally overtake coal in the US power sector?
-Can a spot price emerge in Asia?
Amid a fragile economy and widely diverging regional gas prices, the report provides an in-depth look at future changes in trade patterns as markets absorb a second wave of LNG supply. The Medium-Term Gas Market Report tests the upper limit of gas demand in the United States, analyses European gas consumption’s struggle to recover, and assesses the potential of new suppliers.
The IEA Medium-Term Gas Market Report 2013 reviews how gas markets managed the challenges of 2012. It gives detailed gas supply, demand and trade forecasts up to 2018, by region as well as for key countries, while investigating many of today’s crucial questions.
The IEA Medium-Term Gas Market Report 2014 gives a detailed analysis of demand, supply and trade developments as well as infrastructure investments to meet the 2.2% annual growth in gas demand expected through 2019. It investigates the important changes that will transform the industry: rising regional disparities between gas-hungry regions such as China and the Middle East against weakening growth in the Former Soviet Union (FSU) and Europe; competition between FSU supplies and LNG from the United States and Australia, notably in Europe and Asia; the shift towards net imports in non-OECD Asia and Latin America; and uncertainty over whether Europe can ease its dependency on Russian gas. Besides enhanced coverage of gas in the power sector, this year’s report features special focuses on the potential of gas in maritime transport; the competition between oil and gas to meet fast-growing power consumption in the Middle East; the implications of Iran’s possible return to the international gas scene; and the interplay of natural gas liquids and natural gas in the United States.
Global natural gas demand remained weak in 2014, falling well below its ten-year average. High prices for gas in the past two years undermined its competitiveness, bringing to light a harsh reality: in a world of cheap coal and falling costs for renewables, gas has laboured to compete. Although Asia has been regarded as an engine of future gas demand growth, the fuel has struggled to expand its share of the market in many parts of the region. This has raised questions over the viability of gas as an attractive strategic option across Asia.
The context for gas markets is changing rapidly, however. Falling oil prices have resulted in much lower gas prices in many parts of the word. As a result, gas demand is enjoying the tailwind of substantial price drops while the upstream sector is suffering amid large capital expenditure cuts. The interaction of these opposing effects on gas markets is examined in the IEA Medium-Term Gas Market Report 2015, which provides a detailed analysis of global demand, supply and trade developments through 2020. The impact on global gas markets of Russia’s strategic shift in its gas export policy and the rising tide of liquefied natural gas supplies are given careful consideration. Two special insights also feature in this report. The first analyses the progress Europe has made in strengthening its gas infrastructure since 2010 and the major bottlenecks that still remain in enhancing the security of supply in the region. The second takes a close look at reforms to the gas and electricity sector in Mexico, investigating their impacts on North American gas markets.