The world’s thirst for oil will continue to grow over the next two decades, with climate-damaging emissions climbing until at least 2040, the global energy watchdog has warned, pointing the finger at the growing appetite for gas-guzzling cars.
Growing demand for SUVs in the US, China, Europe and elsewhere could negate all the environmental benefits of the increased use of electric cars, the International Energy Agency (IEA) says. Because of their size, SUVs are harder to electrify than smaller vehicles.
The IEA’s annual global industry forecast also cited mounting demand for plastic, increasing plane travel and the upcoming population boom in cities across Africa and Asia as key contributing factors in increasing demand for oil.
This year’s World Energy Outlook, used as guidance by oil companies and governments, was released on Wednesday. The watchdog had already revealed some of its findings ahead of publication, warning that a “grand coalition” of governments and investors was needed to end the upward march of record energy emissions rising beyond 2040.
This year’s forecast took a stronger than usual stand on climate change, amid growing pressure from young activists like Greta Thunberg and others for tougher action on emissions.
It celebrates a growing boom in solar and wind power, and urges governments to work together on changing the way we fuel our lives. And it singles out gas-guzzling SUVs for criticism.
SUVs “were the second biggest reason for global emissions growth in last 10 years, after the power sector and more than all the industrial sectors put together”, IEA director Fatih Birol told reporters in Paris on Wednesday.
Energy-intensive SUVs and pickup trucks account for about two-thirds of car sales in the US and only about a third in the EU, though they are steadily growing in demand in Europe, according to industry reports. Worldwide, about 42% of cars sold last year were SUVs, Birol said.
The World Energy Outlook, which focuses on forecasting energy needs over the next 20 years, is increasingly important to governments because of its relevance to climate policy.
Environmental advocates said the IEA still was not doing enough to encourage renewable energy. Oil Change International notably criticised the IEA’s “over-reliance” on natural gas as a replacement for coal, saying that would lead to “climate chaos” because gas too contributes to emissions.
The report comes as Venice struggles with floods hitting their second-highest level this week, inundating St. Mark’s basilica and grounding gondolas, which the city’s mayor has blamed on climate change.
The IEA said that almost 20% of the growth in last year’s global energy use was “due to hotter summers pushing up demand for cooling and cold snaps leading to higher heating needs”.
Based on current emissions promises by governments, the IEA forecast a global oil demand of 106.4 million barrels a day in 2040, up from 96.9 million last year. Global oil demand is due to slow in the 2030s and coal use to shrink slightly. Emissions will continue to rise, if more slowly than today, and will not peak before 2040.
The US is central to whatever happens next. US consumers and businesses were a leading source of growing oil demand last year, the IEA said. Also, the US will account for 85% of the increase in global oil production by 2030, thanks to the shale boom.
Asked about president Donald Trump’s decision to pull out of the 2015 Paris climate accord, Birol said: “As a global issue, it’s important to have concerted efforts to address climate change.”
The report lays out a more ambitious forecast if governments are to meet the goals in the 2015 UN climate accord. That would require a big boost in wind and solar power, the IEA said, and a push for energy efficiency, which has slowed in recent years.
The more ambitious scenario would also require work on new coal plants in Asia to capture their emissions, or closing them early.
All that would lead to a big drop in oil demand — with repercussions for oil-producing countries that depend heavily on hydrocarbon income.
The report came as Thunberg announced she will return to Europe soon from North America on a catamaran that leaves nearly no carbon footprint, part of effort to call global attention to individuals’ impact on climate change.
While the IEA said such movements and individual decisions by companies and investors “can make a major difference,” it insisted that “governments must take the lead ... the greatest capacity to shape our energy destiny lies with governments.”