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Governments must make a dramatic shift towards climate-friendly energy policies to avoid global economic disruption, industrialised countries warn.

The International Energy Agency (IEA), which involves 26 governments, says that business as usual could lead to price shocks and sudden interruptions in energy supply, as well as a huge growth in climate-wrecking carbon dioxide emissions.

鈥淭he energy future we are facing today, based on projections of current trends, is dirty, insecure and expensive,鈥� says IEA鈥檚 Executive Director Claude Mandil. 鈥淣ew government policies can create an alternative energy future which is clean, clever and competitive.鈥�

Grim outlook

The IEA, based in Paris, France, was asked by world leaders at the last two G8 summits, at Gleneagles in Scotland and St Petersburg in Russia, to advise on future energy scenarios. In response, it is today publishing World Energy Outlook 2006, which examines how countries can reduce their dependence on imported fossil fuels.

It makes an unprecedented attempt to map out a future in which the rise in global energy demand is slowed, so that by 2030 it will be 10% less than it would be with business as usual. The represents a radical departure from the IEA鈥檚 traditional stance in favour of unrestrained growth.

The shift could be achieved with a major investment in improving the energy efficiency of vehicles, buildings, appliances and industrial motors, the IEA argues, and it would be cost-effective. 鈥淎n additional $1 invested in more efficient electrical equipment and appliances avoids more than $2 in investment in power generation,鈥� says Mandil.

Expansion in renewables

The IEA also recommends a rapid expansion in the use of renewable energy sources, including biofuels for vehicles. It says nuclear power could also make a 鈥渕ajor contribution鈥� to cutting fuel imports and curbing CO₂ emissions, but only if governments 鈥減lay a stronger role in facilitating private investment鈥�.

Under the IEA鈥檚 proposed scenario, by 2030 global emissions of CO₂ would still rise, but be 16% less than with business as usual. But this will require 鈥渟trong policy action鈥� by governments, it says, otherwise energy demand and CO₂ emissions could both increase by more than 50%, threatening 鈥渟evere and irreversible environmental damage鈥�.

Environmental groups applauded the IEA鈥檚 change of heart, but are concerned that it has not gone far enough. 鈥淭his is an important step forward because it acknowledges that business as usual will not prevent global climate chaos,鈥� says Shaun Burnie from Greenpeace International.

鈥淏ut the solutions proposed fall far short of the energy revolution that鈥檚 needed. And nuclear power is a dangerous irrelevance.鈥�