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For the first time in the past 40 years, a growth in the global economy did not translate into growing carbon emissions. Instead, in an encouraging sign in the war against climate change, emissions stayed flat in 2014 despite an uptick in the world's economy, the International Energy Agency said in a special report published ahead of a key climate meeting in Paris later this year.
Renewable energy sources accounted for nearly half of all new power generation capacity in 2014, led by growth in China, the United States, Japan, and Germany, with investment remaining strong at $270 billion and costs continuing to fall, the agency said.
However, not everything is so rosy.
The agency said current proposals submitted by nations outlining their plans to cut emissions would not be sufficient to keep global temperature rise to within 2 degree Celsius (3.6 Fahrenheit) above pre-industrial levels. If countries do not agree to more ambitious strategies for reducing greenhouse gas emissions, the world would be on path to experience an average temperature increase of around 2.6C by 2100 and 3.5C after 2200, the report said.
"A transformation of the world's energy system must become a uniting vision if the 2C climate goal is to be achieved," the IEA said. "The world must quickly learn to live within its means if this generation is to pass it on to the next with a clear conscience."
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The Paris meeting is aimed at finding an agreement between all countries to come up with an unified plan to combat climate change and cap global temperature rise to 2C. While several governments have already submitted their pledges for emission reductions, called Intended Nationally Determined Contributions (INDCs) in UN jargon, many big emitters like China, India, and Brazil have not yet announced their reduction goals, dampening efforts to analyze if current pledges are any good. Nevertheless, several initial analyses have already found they may prove to be inadequate, including a recent prediction by the non-profit Climate Analytics that said current pledges will only delay reaching a 2C rise by two years.
"This IEA report should be a wake-up call to leaders who were planning to come to Paris to maintain the status quo," Jake Schmidt, a director at environmental group Natural Resources Defense Council, told VICE News.
In order to send a clear message of political determination to stay below the 2C climate limit, the IEA proposed adopting an aggressive strategy that can result in global emissions reaching a peak by as early as 2020, and then falling off. The strategy, which the agency called the Bridge Scenario in its report, would rely on increasing energy efficiency in the industrial, building, and transport sectors; reducing use of the least-efficient coal power plants and banning their construction; increasing investment in renewable technologies to $400 billion in 2030 from $270 billion in 2014; a gradual phase-out of fossil-fuel subsidies by 2030; and reducing methane emissions in oil and gas production.
"When looking at the negotiations, we need to look at the INDCs as they are the concrete commitments, but we also need to look at the full package that come out of the talks … The IEA report gives more weight to those who will be arguing that we need to put in place a process to help countries keep coming back to the table and making more important commitments," Taryn Fransen, who leads an independent climate policy-tracking coalition at the research organization World Resources Institute, told VICE News.
Coming down strongly on fossil-fuel subsidies offered by governments, the IEA said they damage the competitiveness of low-carbon technologies, thereby hindering investment in renewables and enhancing reliance on fossil fuels. "Where energy suppliers suffer financial losses because of under-pricing, subsidies can create a vicious cycle of under-investment, poor maintenance, and under-supply" the agency said.
According to preliminary data, current fossil-fuel subsidies amount to a financial incentive of about $115 for every ton of carbon dioxide emitted, the IEA said. Globally, fossil-fuel subsidies amount to around four-times the value of subsidies to renewable energy.
While the plunging oil prices since mid-2014 have added momentum to efforts to phase out subsidies and countries like India, Indonesia, and Malaysia have already seized the opportunity, the IEA recommends using the opportunity to abolish subsidies — or increase energy taxes. Such a measure might seem ambitious, but that is exactly what experts think the world requires.
"The IEA's report shows the Paris talks won't get us all the way to the two degree target — but they do offer a chance to create a 'virtuous circle' of increasing ambition over time," Fred Krupp, President of Environmental Defense Fund, said in a statement. "The test for Paris is not whether it locks in two degrees, but whether it lays the foundation for the greater ambition the world needs in the years and decades to come."
Follow Esha Dey on Twitter: @deyesha