Projections for energy investment

The International Energy Agency has also estimated the future financial investment in global energy that will be necessary between 2005 and 2050 under their Reference or Baseline Scenario and the additional investment required to achieve the ACT and the BLUE Map energy scenarios.7

The total cumulative energy investment needs for the Reference scenario over this period is estimated to be about $US250 trillion (million million) or about 6% of cumulative world GDP over the period. By far the largest proportion of this relates to investments that consumers make in capital equipment that consumes energy, from vehicles to light bulbs to steel plants. In fact because of very large investment in vehicles, transport alone accounts for 84% of the total investment. For the enviromentally driven scenarios over this period, the additional investment needs are estimated as $US17 trillion for the ACT scenario and $US45 trillion for the BLUE Map scenario or increases of 7% and 18% respectively over the Reference scenario. For the BLUE Map scenario, this is just over 1% of cumulative world GDP - a figure similar to that quoted in Chapter 9 for the likely mitigation cost of stabilising CO2e at 450 ppm.

The IEA also point out that, compared with the Reference scenario, the ACT and BLUE Map scenarios will result in significant fuel savings over the period 2005 to 2050, amounting to about $US35 trillion and $US50 trillion respectively. These are substantially larger than the additional investment needs mentioned in the last paragraph and the differences are not wiped out even if significant levels of discount are applied in working them out (see Chapter 9, page 279 for a discussion of discounting).

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