IEA urges $45 trln "energy revolution" to halve CO2

By Chikafumi Hodo

TOKYO (Reuters) - World governments must quickly start a $45 trillion "energy technology revolution" that could drive up the cost of producing carbon ten-fold, or risk emissions surging by 2050, the West's energy watchdog warned on Friday.

The world would need to build dozens of nuclear power plants a year and bury carbon emitted from dozens more gas and coal plants, plus cutting the carbon intensity of cars, trucks, buses and planes eightfold, to halve emissions by mid-century, the International Energy Agency said in a new report.

Without taking action on government policy, emissions would surge by 130 percent and oil demand would rise by 70 percent by 2050, the IEA said, far beyond the level that many experts believe the world is capable of sustainably producing.

The report, commissioned by the Group of Eight three years ago, lays down the gauntlet for G8 leaders gathering in northern Japan next month, where Tokyo is expected to urge them to agree on a target of chopping greenhouse gases in half by 2050.

"There should be no doubt -- meeting the target of a 50 percent cut in emissions represents a formidable target. We would require immediate policy action and technological transition on an unprecedented scale," Nobuo Tanaka, Executive Director of the IEA, said in a statement.

"It will essentially require a new global energy revolution which would completely transform the way we produce and use energy... We need to act now."

The IEA said halving emissions by 2050 would require "all options up to a cost of $200 per ton of CO2" -- and in the worst case $500 a ton -- giving a rare long-term forecast that suggests a sharp rise from the 27 euro ($42) a ton price for carbon emissions rights trading in Europe.

"You would have to see one of the biggest rises in a commodity price in history to get $500 a ton," said Tom Luckock, a lawyer with international law firm Norton Rose.