Environment: Transforming the energy sector to deliver greener growth


01/12/2011 - Rising global energy demand and the need to drastically cut carbon dioxide (CO2) emissions require a transformation in the way we produce, deliver and consume energy, according to a new joint report from the OECD and IEA.


Green Growth Studies: Energy says governments need to increase energy efficiency and lower the carbon-intensity of the sector. As developed countries renew their energy infrastructure and developing countries build new power plants to meet growing energy demand, the time is right to make crucial choices for the future of the energy sector, the report says.

With the energy sector responsible for the majority of CO2 emissions, green growth policies could halve worldwide energy-related emissions of CO2 by 2050 using a combination of existing and new technologies.

“The decisions made today in the energy sector will be critical to achieving greener growth in the future”—said OECD Secretary-General Angel Gurría—“We have a window of opportunity for establishing a policy framework to enable transformational change in the energy sector. The environmental imperative to reduce CO2 emissions coincides with a looming new investment cycle in power generation in most OECD countries. In the emerging market economies, many power generation facilities are quite recent, but many more will be built in the coming years to meet growing energy demand. We must act together now to create the momentum for fundamental change”.

“We must avoid 'lock-in' of CO2 emissions by ensuring the latest clean technologies are used,” said IEA Executive Director Maria van der Hoeven. “If we do not manage to slow current rates of emissions growth, we will hit the ceiling by 2017, meaning that to keep the global increase in temperature to 2 degrees Celsius, all new infrastructure will have to be zero-emission.”


Energy sector reform will require new investment - some USD 46 trillion before 2050 - to improve energy efficiency, increase carbon capture and storage, deploy more renewable energy, and support new technologies. Investments in low-carbon technologies reached nearly USD 250 billion in 2010, half way to the annual figure required by 2020 of approximately USD 500 billion. 


The key policies identified in the report include:

  • Eliminating fossil fuel subsidies
  • Putting a price on emissions and other environmental liabilities
  • Making sure energy market rules and regulations encourage use of new technologies
  • Radically improving energy efficiency
  • Fostering innovation and green technology policy


The joint OECD-IEA report finds that the transition to a low-carbon energy system is likely to have a positive impact on employment in the energy sector because renewables tend to be more labour-intensive than fossil fuel-based energy. Increased deployment of solar photovoltaic  would yield the largest number of jobs, with strong growth also expected in the energy efficiency, geothermal and solar thermal sectors.

Transforming the energy sector presents substantial opportunities for innovation and economic growth,

which governments can catalyze by creating the enabling policy framework.


The report is available on

For further information, journalists can contact Nathalie Girouard in OECD’s Environment directorate, Tel.:  + 331 (0) 1 45 24 84 82 and Cecilia Tam at the IEA, Tel.: + 331 (0) 1 40 57 67 55.


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