World Energy Outlook 2016

image of World Energy Outlook 2016

The landmark Paris Agreement on climate change will transform the global energy system for decades to come.

The latest World Energy Outlook offers the most comprehensive analysis of what this transformation of the energy sector might look like, thanks to its energy projections to 2040. It reviews the key opportunities and challenges ahead for renewable energy, the central pillar of the low- carbon energy transition, as well as the critical role for energy efficiency.

WEO-2016 examines how a post-Paris world redefines the idea of energy security, particularly in the power sector, the frontline in the fight against climate change. The report explores how oil, natural gas and coal are adjusting to today’s market conditions and assesses the risks that lie ahead, from under-investment in essential supply to stranded assets.

WEO-2016 looks at individual country pledges and examines how   close – or far – nations are from reaching their goals. It outlines a course that would limit the rise in global temperature to below 2 °C and also plots possible pathways for meeting even more ambitious goals.

This year, WEO-2016 also devotes a special chapter to the critical interplay between water and energy, with an emphasis on the stress points that arise as the linkages between these two sectors intensify.



Executive Summary

International Energy Agency

The Paris Agreement on climate change, which entered into force in November 2016, is at its heart an agreement about energy. Transformative change in the energy sector, the source of at least two-thirds of greenhouse-gas emissions, is essential to reach the objectives of the Agreement. The changes already underway in the energy sector, demonstrating the promise and potential of low-carbon energy, in turn lend credibility to meaningful action on climate change. Growth in energy-related CO2 emissions stalled completely in 2015. This was mainly due to a 1.8% improvement in the energy intensity of the global economy, a trend bolstered by gains in energy efficiency, as well as the expanded use of cleaner energy sources worldwide, mostly renewables. An increasing slice of the roughly $1.8 trillion of investment each year in the energy sector has been attracted to clean energy, at a time when investment in upstream oil and gas has fallen sharply. The value of fossil-fuel consumption subsidies dropped in 2015 to $325 billion, from almost $500 billion the previous year, reflecting lower fossil-fuel prices but also a subsidy reform process that has gathered momentum in several countries.


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