The International Energy Agency (IEA) likes to present itself as a climate champion, but it is in fact steering the energy system towards catastrophic levels of warming, writes Greg Muttitt, Senior Advisor at NGO Oil Change International. The IEA is supposed to be an advisory body to its members countries, Muttit notes, but its real masters appear to be the fossil fuel companies.Â
The International Energy Agency (IEA) likes to see itself as a bit of a climate champion. It has often warned, for example, that governments would need to do more to avoid dangerous climate change. In practice though, the IEA is more of a barrier than a helping hand, and the reason is its flagship publication, the World Energy Outlook. The latest instalment was published today.
A powerful tool, wielded irresponsibly
Every year, the WEO maps out the future of energy, focused on a future where governments implement specific policies they have already planned, and no more: the so-called New Policies Scenario. Remarkably, the scenario falls short of even the formal emissions pledges countries have made (known as Nationally Determined Contributions â NDCs â under the Paris Agreements), Instead, the IEA assumes only that âmany countries make progress towards the achievement of their NDCsâ. At best itâs a very selective reading of which policies to include.
Governments and investors routinely look to the WEO when they make decisions, using it as their guide to the future. So power plants, pipelines and other infrastructure get built based on what the IEA says future demand will be. These then lock in oil, gas and coal use and production for 30 to 50 years: once the capital is sunk, alternative sources cannot compete. The result is the creation of the very future the IEA has described: a self-fulfilling prophecy.
The IEA seems not to have noticed the Paris Agreement. Not only does its main New Policies Scenario fail to incorporate individual governmentsâ pledges, its secondary climate scenario does not reflect their collective long-term goals
The WEO also contains two other scenarios, one where governments do not implement their policy plans (the Current Policies Scenario) and another supposedly aligned with governmentsâ long-term goals on climate, energy access and air pollution (the Sustainable Development Scenario, SDS, on which more below).
But these two scenarios are presented as secondary. The vast majority of the WEOâs narrative, data projections and headlines focus on the New Policies Scenario, so unsurprisingly energy decision-makers take that as the prediction of future demand. The WEO is thus a very powerful tool in shaping our energy system.
The IEA is steering the energy system towards catastrophic levels of warming. In earlier editions of the WEO, the IEA estimated that the New Policies Scenario would set the world on course for 3.6°C of warming. These days, the IEA avoids making such estimates. But it falls short of countries emissions pledges, which together set the world on course for warming of between 2.8 and 3.3°C.
As if the Paris Agreement never happened
The IEA seems not to have noticed the Paris Agreement of 2015. Not only does its main New Policies Scenario fail to incorporate individual governmentsâ pledges, its secondary climate scenario does not reflect their collective long-term goals (although that is its stated purpose).
Until this year, that climate-goals scenario was the 450 Scenario, which the IEA defined as âconsistent with a 50% chance of limiting global warming to 2°Câ. When the Scenario was first published in 2009, it reflected the aim of limiting warming to 2°C (which was proposed by the UNFCCC in Copenhagen and formally adopted the following year at CancĂșn).
Since then, new scientific findings indicated that: even at 2°C, vulnerable countries in particular would face severe dangers. This is why the Paris Agreement includes more rigorous goals, of staying well below 2°C, and pursuing efforts to keep it to 1.5°C. 2°C is no longer seen as a goal, but as âan upper limit, a defense line that needs to be stringently defendedâ. Clearly, coin toss odds of avoiding severe dangers would not be a sensible way forward.
The IEA cannot reasonably claim that the Sustainable Development Scenario is aligned with the Paris goals
With that in mind, in March this year the IEA published a new scenario, funded by the German government, that would give a two-in-three chance of keeping warming below 2°C â still  an uncomfortably high level of risk, but arguably reflecting the bare minimum of what the Paris goals entail. We broadly welcomed the step in the right direction, though we had concerns about some of the details.
In todayâs WEO, the 450 Scenario is replaced with a new Sustainable Development Scenario, which adds new goals of delivering universal energy access, and cutting air pollution. This was a clear opportunity to align emissions goals with the Paris Agreement. Itâs an opportunity the IEA passed up.
Change without changing
Having faced criticisms from civil society, and some investors and policymakers, this year the IEA claimed that its new Sustainable Development Scenario was shaped by âan early peak in CO2 emissions and a subsequent rapid decline, consistent with the Paris Agreementâ. It suggested that it was aligned with a temperature rise of  between 1.7 and 1.8°C.
Yet it achieved this feat without changing its emissions outlook. As the graph below shows, the claimed temperature target changed, but the emissions didnât.
When Oil Change International spoke to IEA staff on this, they admitted that many of the 1.7 â 1.8°C scenarios depend on extensive, and likely unrealistic, amounts of negative emissions. They said â rightly â that the amount of warming depends also on what happens after 2040. And in theory itâs true that if emissions fell off a cliff after 2040, the Paris goals might be achieved. But the IEA cannot reasonably claim that the Sustainable Development Scenario is aligned with the Paris goals.
The IEA spends much of its resources promoting fossil fuels, through its Clean Coal Centre, its calls for more investment in fossil infrastructure, and today its claim that fossil gas is a clean fuel that can be used during the energy transition
Why does all this matter? It means that we are getting a misleading picture of what climate action requires. Itâs no wonder then that the Australian government has used the 450 Scenario to claim that coal mining is consistent with climate goals (p.151), or the British government to defend Arctic drilling(p.5).
Even decision-makers who consciously pick out the climate scenario as their guide are falling far short of the Paris goals. Governments commonly hold up the IEAâs climate scenario as a marker of ambition, and investors as a marker of risk. By understating the pace of transition that is needed, the Sustainable Development Scenario is downplaying ambition and amplifying risk.
Who really governs the IEA?
Why then does the IEA do this? It is supposed to be an advisory body to its 30 member countries, all of whom signed the Paris Agreement, committing to keep warming well below 2°C, and to pursue efforts to keep it to 1.5°C. The IEA ought to be showing them how with its climate scenario. It ought to be helping them do so by making climate the main focus guiding decision-makers.
The reason is that the IEAâs real masters appear to be the fossil fuel companies. Last week, when ministers of member governments held their two-yearly meeting, they were joined by the IEAâs Energy Business Council, made up of energy companies, 89% of which produce, consume, service, finance, or lobby for fossil fuels.
Thus the IEA spends much of its resources promoting fossil fuels, through its Clean Coal Centre, its calls for more investment in fossil infrastructure, and today its claim that fossil gas is a clean fuel that can be used during the energy transition.
On that latter point, the IEA dedicated an entire WEO Â chapter to making an âenvironmental case for natural gasâ. The centerpiece of the analysis is the idea that the leakage of methane can be reduced to acceptable levels at little to no cost to oil and gas producers. But hereâs the trouble. The analysis is based on a projected increase in gas production and consumption that is so large, emissions targets would be vastly overshot even if all the coal plants in the world were shut down. In other words, to save that much methane would require producing more gas than is safe to burn. The numbers just donât add up.
Last week, we released a short report that explains why the idea of fossil gas as a âbridge fuelâ to the clean energy transition is nonsense â even setting aside emissions from methane leakage.
It is time for member governments to demand the IEA helps, not hinders, their efforts to avert dangerous climate change
Even the IEA data shows that implementing the leakage reductions it advocates for would reduce temperature rise by only 0.07°C, compared to its core pathway for more than 3°C. The most generous thing we can say then is that the IEAâs core solution is hopelessly inadequate, and that is precisely because it is a solution that costs nothing to the fossil fuel companies. At best, the IEA is stuck in the outdated approach of promoting marginal reductions compared to a theoretical business-as-usual scenario, rather than taking seriously the real limits to what can be extracted and burned safely.
Given the IEAâs closeness to the fossil fuel industry, perhaps itâs not surprising that its flagship publication serves more to shelter fossil fuels from climate action. This canât continue. It is time for member governments to demand the IEA helps, not hinders, their efforts to avert dangerous climate change.
Editor’s Note
This article was first published on Oil Change International and is reposted here with permission.
Note that the title of this article was changed after publication.
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Andrew J says
It looks as if the IEA takes Trump’s stand that the Paris agreement is cancelled world wide, that greenies are now banished, that runaway global warming caused by fossil is “hoax”, a “Bring It On” position.
Mike Parr says
A good article. A couple of things are missing (this is not a criticism). First: the IEA has consistently under estimated the growth of renewables – typically by 2 – 3x. For a passable demolition of the IEA and its WEO – Energy Post – Oct 2015 used data from the Energy Watch Group to show that IEA RES forecasts are junk/lies (take your pick). For example: WEO 2010 – PV for 2024 – 180GW ..oops achieved in erm 2015. WEO 2002 – Wind – 2030 achieved in …erm…. 2010. On could go on & on the IEA, getting it wrong wrt RES for 20 years. The concept “pay for performance” is much loved by neo-cons and those of a conservative persuasion. If applied to the IEA – most of the people working there would have lost their jobs some time ago since as energy forecasters they are useless.
Which brings me on to the suggestion that IEA forecasts with respect to RES (and its prospects/other side of the coin – lack of prospects for coal) are at best “synthetic” or at worst lies. My second point (with respect to things missing from the article) is that it is not clear how the IEA arrives at its RES lies/forecasts. Given it has been getting them very wrong for 20+ years, it would appear that “getting RES wrong” is institutionalised within the IEA – they do it deliberately, knowingly, with a smile on their lips when they present what they know to be junk statistics. They are (and always have been) “Santa’s little helpers” with respect to Father Christmas/the fossil fool industry.
If an organisation broadcast lies for 20 years, it would eventually be ignored as irrelevant, as a waste of space, as in need of bottom up reform. I’d suggest that this point has been reached with the IEA. In turn this raises the question: what if anything do the members intend to do about an agency that is unfit for purpose & has been for 20-odd years.
Paul Bryan says
IEA is not “leading” us anywhere. It is, as best it can in a complex and changing world, telling us where we are going.
It’s a compass, not a GPS guidance system, and definitely not a fortune teller. Let’s not waste our time telling the mirror that we don’t like the looks of our reflection.
*Yeah, I know, mixed metaphor. But the best compasses DO have mirrors on them, so it’s not that bad đ
Helmut Frik says
Problem is, that in respect of renewables, the needle alwys points in a wrong direction as far as IAE is concerned. Since renewables become a more and more important part of the worlds energy supply, this makes the whole outut of IAE more and more to some kind of junk, pulp etc. because with growing installation rates of renewables this error makes also huge differences for the market available for coal, gas, oil, nuclear.
In the (hypothetical) case that solar keeps the same exponential growth for the next 10 years which it did have for many years now, in 20 years all market for coal gas and nuclear is gone worldwide. completely gone.
10 years ago, the same fault would have resulted in a maximum 5% error margin for these markets (coal, gas, nuclear), which is still a acceptable value for a 10/20 years forcast.
This is not the case today any more. Which means that the IEA is producing usless forcasts in all markets it works on as long as they do not find a solution for this.
So maybe closing down the whole entity and start new somewhere else is a reasonable option. Because as it looks like it’s not a problem of a bad algorithm somewhere, it’s the lack of intention to adopt the algorithm to reality.
Mike Parr says
Mr Frik we seem to be in agreement. I see that Siemens is laying off 6,000++ workers in their steam turbine division because… there are no orders (global capacity for large steam turbines – 400/year, global demand 110/yr & falling). IG Metall is going bonkers & questioning the effectiveness of management. Perhaps this management (& GE’s) leant too much credence to IEA WEOs over the years – & now you have a result – in human form. Meanwhile the half wits at the IEA still draw their salaries.
Bert Witkamp says
Unfortunately I recognize a lot of what is being said…I noticed this also at COP21 where scenarios for EVs were presented as revolutionary however they where already outdated and insufficient at that time…
On the suggestion to stop it and start something new, good idea, for REN we already have IRENA (with a membership which is a multiple of IEA’s)
If I remember well, the purpose of IEA was to secure availability of oil (mainly), established after the first oil crisis, this seems no longer to be an issue…
I have the impression that IEA is more acting and being managed as an aggressive consultancy company, getting as much funding as possible (to do what???), perhaps to maintain itself??
Everybody (almost) knows and agrees that its forecast never are correct and consistently underestimating REN growth, EV growth etc; however the problem is that indeed governments still use its data, a safe bet as who can be blamed to use IEA data…??
Mike Parr says
“a safe bet as who can be blamed to use IEA data” – actually I blame them. Alternatives: BNEF does a great job – even the European Commission respects BNEF. Cost of elec in North America from different sources? Lazards – outstandingly good stuff (and have been producing it for years. Pleanty of alternatives out there – govs just need to look around a bit & switch their brains on. Sadly we are in 1970s and 1980s computer territory “nobody ever got fired for buying IBM” (= we bought the best – even if we knew it to be expensive junk) – fast forward – same situation – buying rubbish that has a “reputation”. Siemens did that (re IEA) – that worked out well for 7000 workers in Germany – didn’t it?. Time for the abolition of the IEA – it has past its “sell by” date – get rid of it.