Climate deal to prevent doubling of energy bills

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Climate deal to prevent doubling of energy bills

Post by Linnea » 11-10-2009 06:32 PM

...from Reuters/Paris Tue Nov 10, 2009

PARIS (Reuters) - A climate change deal is needed not just to ward off global warming, but to ensure a shift from increasingly costly fossil fuels that could lead to a doubling of energy bills, the IEA's chief economist said on Tuesday.

In the absence of an agreement, the ratio of energy spending to Gross Domestic Product for the largest consumer countries would double by 2030, Fatih Birol, author of the International Energy Agency's World Energy Outlook (WEO) told Reuters in an interview.

"The world needs to go to the 450 part per million (ppm) target, not only because of climate change but because of growing problems within our energy system and its possible implications again on the economy," Birol said.

He was referring to a target to stabilize the concentration of the most dangerous greenhouse gas emissions in the atmosphere at 450 ppm of carbon dioxide equivalent.

Birol cited as an example the energy bill paid each year by the European Union which would more than double to $500 billion by 2030, up from $160 billion in the last 30 years, he said.

"We think this is very alarming. If you consider that in 2008 when we had the high prices, and I believe it was one of the reasons for the run-up to the financial crisis, the EU's oil and gas import bills to the GDP ratio was 2.3 percent," he said.

Oil prices soared to a record of nearly $150 a barrel in July last year. They then collapsed to less than $33 last December, but have since recovered to around $80.

The price collapse, combined with the credit crisis, choked off investment in new supplies and the Paris-based IEA has repeatedly warned the oil market could surge back, damaging still fragile economic growth.

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