The International Energy Agency (IEA) has long been criticized for lowballing the potential for renewable power and overestimating future demand for oil and gas.

Such forecasts matter. After all, the Paris-based organization is made up of 29 OECD countries — including Canada and the United States — and regularly produces publications that help member countries plan and coordinate energy policies.

That’s why it was particularly shocking when the IEA concluded in its latest Energy Technology Perspectives report that almost 75 per cent of the emissions reductions needed for its “2°C Scenario” will come from energy efficiency and renewables.

The real superstar of the report was energy efficiency, which the authors estimated would account for 34 per cent of reductions, resulting in global net-zero emissions by 2060.

“It’s not the sexiest thing,” Pembina Institute analyst Julia-Maria Becker said in an interview. “People aren’t aware of its benefits.”

Triple-paned windows and improved insulations isn’t quite as riveting as, say, a wind farm or geothermal plant.

But according to the IEA, it could be the sector that saves the world from the worst effects of climate change.

Here are five things you need to know about energy efficiency.

1) Energy Efficiency Is Many Things

The key thing to understand about energy efficiency is it’s no one thing.

“Most of the energy efficiency measures are not rocket science. A whole bunch of little stuff is what energy efficiency is,” said Jesse Row, executive director of the Alberta Energy Efficiency Alliance.

The classic example is the LED light bulb, replacing its far less efficient incandescent cousin.

“Building automation” — a means of controlling an entire building’s heating, ventilation and air conditioning (HVAC) via one system — is another type of energy efficiency measure. Or consider the programmable thermostats, hot water pipe wraps and smart power strips.

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2) It’s About More Than Changing Light Bulbs

The kind of “deep” energy efficiency that the IEA is getting at won’t be attained via just switching out light bulbs (although that of course helps).

Rather than simply replacing a single appliance or system, the deep energy approach attempts to integrate a more holistic approach, recognizing that all systems work in tandem and require a complete overhaul to maximize opportunities.

“We can put ourselves in a little trap if we focus too much on picking the low-hanging fruit and end up investing in sub-optimal solutions or making it more challenging to package together a deep energy retrofit for a home or building,” said Bryan Purcell, director of policy and programs at The Atmospheric Fund.

The famous ‘London Gherkin’ has a bulbous design that minimizes surface area. The building uses about half the energy a similar tower conventionally construction would. Photo: Jopa Elleul via Flickr

3) In Canada, It’s About Heating

The measures that will really get Canada to where it needs to be concerns the building envelope, a jargony way of talking about insulating walls, basements and attics, installing thicker windows and making fundamental changes to heating.

That’s because home heating accounted for 63 per cent of residential energy use as of 2013.

“The dominant source of energy use in buildings in Canada is heating,” Purcell says. “Hands down: it’s much larger than anything else. Addressing it is really critical to reaching these kind of deep reductions.”

Purcell says getting to the long-term improvements in energy efficiency will likely require converting homes and buildings from gas-fired furnaces to air-source or ground-source (also known as geoexchange) heat pump for primary heating. When paired with passive solar designs — in which buildings are designed to maximize exposure to the sun and minimize heat loss — such measures can dramatically reduce heating consumption.

Row says that energy efficiency retrofits are always more challenging than starting from scratch.

That’s why he says one of the really exciting things with “new builds” is the opportunity to get to net-zero energy buildings, in which homes and businesses are producing as much (and) more energy that they need via small-scale solar. Eventually, that can lead to net-zero energy communities.

A passive house or passivhaus designed to maximize energy efficiency in Golden, Colorado. Photo: National Renewable Energy Labs via Flickr

4) Carbon Price Revenues Can Help Pay for Big Changes

But here’s the thing. Such investments cost quite a bit of money.

Purcell says Ontario has seen some ambitious commitments as part of their climate change action plan to recycle the cap-and-trade revenues into energy efficiency programs, including incentives and rebates.

Similarly, Alberta will be investing more than $500 million in the next three years into its newly established energy efficiency agency, something which Low says will get the province “from zero to the middle of the pack.”

Just last week, the federal government announced further details on its $2 billion Low Carbon Economy Fund, which will be distributed to provinces for projects including energy efficiency.

But experts agree that governments will have to dole out far more.

“Total spending on energy efficiency is still really an order of magnitude below where we need to drive it,” Purcell says.

Low agrees. “When you look at in the context of the IEA report, middle of the pack isn’t good enough for any of us. We all have to step up our game over the long-term.”

The gradual introduction of carbon pricing will help drive the business case for deeper energy efficiency cases.

5) Regulations Can Drive Change

Then there’s the regulations piece. That includes developing standards for appliances and equipment, new building codes for net-zero buildings and mandatory energy benchmarking, disclosures and audits.

The benefits of such policies go beyond massive emissions reductions.

For one, it cuts down on utility bills. Purcell says it also drives increased employment, both directly in home and building retrofits and indirectly via the usage of money that would otherwise be spent on utility bills. There’s also a lot of potential for health and wellness improvements.

“We spend 90 per cent of our time indoors in Canada so the indoor environment is really critical to our fiscal and mental health,” Purcell says. “A lot of what we can do with energy efficiency in green buildings is driving directly towards improving the air quality, lighting quality and thermal comfort in homes and buildings.”

It will also mean that Canada can preemptively reduce electricity demand and avoid significant investments in infrastructure that may not be required.

The opposite of this has been happening in B.C. where energy efficiency programs have quietly been waylaid to manufacture energy demand for the $9 billion Site C dam.

“These are technologies that are already out there and we just need to make sure we actually take advantage of them,” Becker concludes.

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The shift away from coal and towards renewable sources of energy is slowly beginning to gain traction, two recently-released reports from American and global energy agencies show.

“The biggest story is in the case of renewables,” International Energy Agency executive director, Fatih Birol, told the Guardian as this year's World Energy Outlook was released. “It is no longer a niche. Renewable energy has become a mainstream fuel, as of now.”

Almost half of the new power generation added in 2014 came from wind, solar, wave or tidal energy, the report found, and renewables now represent the world's second largest source of electricity after coal. Coal, whose share of the world's energy mix has been rising since 2000, has peaked, the agency indicated, predicting that within two decades, renewable energy sources will replace coal as the backbone of the world's electricity source.

Domestically, the growth of renewable energy has been especially pronounced in Texas and other states long famous for their drilling and mining histories, data released by the U.S.-based Energy Information Administration shows.

Texas has become the largest wind-power supplier in the country, helping to slash as much carbon from the state's emissions in 2013 as both Vermont and New Hampshire combined produced that year, if Texas had gotten that power through burning an equal mix of coal and natural gas instead of wind.

Still, the transition away from fossil fuels is coming too slowly to prevent catastrophic climate change, the IEA warned.

"There are unmistakeable signs that the much-needed global energy transition is underway," the agency wrote in its report, "but not yet at a pace that leads to a lasting reversal of the trend of rising CO2 emissions."

For the world to have a shot at keeping emissions below the 2 degree of warming threshold, the agency identified five key steps: the least-efficient coal plants must be banned, many fossil fuel subsidies must be ended, infrastructure like buildings and transportation need efficiency improvements, investment in renewable power must rise from $270 billion in 2014 to $400 billion by 2030, and methane leaks from oil and gas companies must be slashed.

The good news? Those measures could be taken at "no net economic cost," the agency concluded.

All told, this year, renewable energy sources represented over 17 percent of the U.S. electrical generating capacity — an unprecedentedly high number, but still far less than fossil fuels.

Remaining dependent on fossil fuels brings economic as well as environmental risks. The IEA warned that while oil prices remain low currently, the cost of a barrel is expected to roughly double over time, and that in some situations, the world's oil industry would be vulnerable to shocks that cause oil prices to spike.

But many policy makers have yet to absorb this message. Despite concerns about the environmental and economic prospects for fossil fuels, the oil, gas, and coal industries continue to benefit from roughly four times the amount of government subsidies as the renewable energy sector, the IEA said.

"[W]e estimate this global subsidy bill [for fossil fuel consumption] at around $490 billion in 2014, although it would have been around $610 billion without reforms enacted since 2009," the agency wrote. "Subsidies to aid the deployment of renewable energy technologies in the power sector were $112 billion in 2014 (plus $23 billion for biofuels)."

Not Just CO2

While energy agencies are primarily focused on carbon emissions, evidence is growing that methane leaks from oil and gas drilling, fracking, pipelines, and other infrastructure pose a grave climate threat that the U.S. government has underestimated.

"Because of the increase in shale gas development over recent years, the total greenhouse gas emissions from fossil fuel use in the USA rose between 2009 and 2013, despite the decrease in carbon dioxide emissions," Prof. Robert Howarth, a scientist whose pioneering work on methane emissions suggests that burning natural gas — which the IEA predicts will be the only fossil fuel to gain market share — may be even worse for the climate than burning coal, wrote in a peer-reviewed paper published in the journal Energy and Emission Control Technologies. 

Methane, especially from shale gas sites, is leaking from the gas industry at a far higher rate than previously believed, Howarth said, writing that while the Environmental Protection Agency estimates that leak rates are just 1.8 percent, those conclusions are based in part on flawed data collection.

The true methane leak rate, Howarth concluded after reviewing the available research, may in fact be more than 10 times that rate in some cases — and on average,12 percent.*

There are some signs that energy experts worldwide are increasingly taking note of the hazards of methane leaks.

"Emissions of methane, a powerful greenhouse gas, along the supply chain will dent the environmental credentials of gas if there is no concerted policy action to tackle these leaks," the IEA noted in its report, though it also labeled the fuel "a good fit for a gradually decarbonising energy system."

But the carbon emissions from burning natural gas are significant as well. In 2013, the U.S. produced roughly 2.17 billion tons of carbon from burning oil and 1.7 billion tons from burning coal — and another 1.4 billion tons came from burning natural gas, the EIA reported, making natural gas responsible for 26.7 percent of America's CO2 pollution.

A Shift to Pure Renewables?

The Obama administration has made its support for an "all of the above" energy strategy that envisions increasing reliance on natural gas in the short term as a "bridge" to the eventual shift to renewable energy.

But even without subsidies, there are already some markets where renewable energy remains competitive against fossil fuels, even as oil and gas prices have nose-dived this year.

In Houston, TX a newly built solar plant is expected to provide electricity for an average of 4.8 cents per kilowatt hour for 20 years.  That's roughly half a cent more than Houston's fossil-fuel based power plants in today's over-supplied market — but two cents per hour cheaper than the 5-year average cost of conventional fuels, highlighting the unpredictability of the market for those fuels.

And wind power in that state has become so abundant that the New York Times is reporting it is literally too cheap to meter at night.

Meanwhile, keeping oil and gas flowing is expected to become increasingly costly. The IEA estimates that “just to compensate for declining production at existing fields and to keep future output flat at today’s levels,” the oil industry will require $630 billion in investments.

And building new pipelines to deliver oil and gas from areas like shale drilling regions adds to the expected costs.

“Keeping these project costs under control (contrary to numerous recent examples of overruns) will be vital to the future competitive positioning of gas,” the IEA said.

Crunching numbers like these has some environmentalists targeting a near-term transition away from all fossil fuels, not just oil and coal.

“The impossible is becoming possible. The global breakthrough of renewable energy has happened much faster than anticipated,” Emily Rochon, global energy strategist at Greenpeace International, told EcoWatch. “We believe that with the right level of policy support, the world can deliver 100 percent renewable energy for all by 2050.”  

*Ed note: This sentence was clarified following a reader's suggestion.

Photo Credit: Arial view of a solar farm under construction in the UK, via Shutterstock  

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The B.C. government’s claim that LNG exports offer the “greatest single step British Columbia can take to fight climate change” is inaccurate in the absence of stronger global climate policies according to a new report released today by the Pembina Institute and the Pacific Institute for Climate Solutions.

Natural gas does have a role to play in a world that avoids two degrees Celsius in global warming, but only if strong emissions reduction policies are put in place in the jurisdictions that produce and consume the gas, says the report, LNG and Climate Change: The Global Context authored by Matt Horne and Josha MacNab.

“Natural gas is often described as a bridge fuel. The question is, how long should that bridge be?” says MacNab, B.C. regional director for the Pembina Institute, a national non-profit focused on transitioning Canada to a clean energy future.

“Our research suggests it must be very short if we’re going to be able to get off the bridge in time to avoid the worst impacts of climate change.”

If strong climate policies were put in place to avoid reaching more than two degrees of warming, the burning of natural gas would peak by 2030 and drop below current levels by mid century, according to the report.

Under that scenario, energy efficiency, renewables and nuclear would increase significantly while the use of fossil fuels drops.

“It’s climate policy that will determine coal use, not the availability of natural gas,” MacNab says. “It’s not simply a question of LNG and coal swapping out for each other.”

The B.C. government’s claim, which was made during the February 2014 throne speech, is premised on two assumptions.

The first is that natural gas is cleaner than coal. On that point, MacNab said that in most cases natural gas is 10 to 40 per cent cleaner than coal assuming that methane is safely managed. However, the Pembina Institute report also notes that there “remains material uncertainty” about the life cycle emissions of natural gas that requires additional research.

The second assumption the B.C. government makes is that LNG will replace coal.

“In a world with weak climate policy, natural gas will not reduce coal use,” says Horne, B.C. associate regional director for the Pembina Institute. “Without a global push for low carbon energy sources and efficiency, LNG will likely worsen rather than ease global warming.”

The institute’s findings are in line with a report published last week in Nature, which found that cheap abundant natural gas will actually delay any efforts to reduce carbon emissions.

B.C. Needs to Put Emissions Reduction Policies Before LNG Strategy

To draw its conclusions, the Pembina Institute report compares the role of natural gas under two different scenarios: one in which global warming is limited to two degrees Celsius and one that stays on the business as usual path. The comparison yields two very different roles for natural gas — either as part of an energy mix that helps avoid dangerous climate change or as part of an energy mix that accelerates the world down the path to dangerous climate change.

“Instead of leading with LNG and natural gas strategies, jurisdictions — B.C. included — need to lead with emissions reduction policies,” the report says.

To avoid more than two degrees of warming and keep atmospheric concentrations of greenhouse gases below 450 parts per million, the International Energy Agency says policies need to include economy-wide carbon pricing, the phase out of fossil fuel subsidies, emissions standards on power plants and a renewable transportation fuel standard.

The Pembina Institute makes three recommendations to the B.C. government to increase the chances that B.C.’s LNG industry can be part of the solution, rather than part of the problem, including applying an evidence-based approach in assessing energy exports, strengthening domestic efforts to reduce emissions from natural gas and LNG development and playing a more proactive role on climate change and methane management globally.

If strong climate change policy was enacted on a global level, natural gas use would peak by 2030 — just 15 years from now. What does that mean in terms of B.C.’s plans to build an LNG industry?

“We would encourage the B.C. government to be thinking about that in terms of the long-term sustainability of the industry,” MacNab says. “B.C. ought to be careful in hitching its economic wagon to a resource that will decline in a carbon-constrained world."

Photo: Christy Clark at LNG Canada announcement via Province of British Columbia on Flickr

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