Energy and climate change topped the agenda at the 2008 G8 Summit in Hokkaido, Japan this summer. The host nation dedicated its Presidency to securing a strong statement from G8 leaders on specific reduction targets for global greenhouse gas (GHG) emissions.

With that goal in mind, the Summit was a great success. In the official G8 Communiqué, leaders agreed to work towards a 50 percent reduction in global greenhouse gas emissions by 2050, the basic target that Japan hoped to secure. And in the strongest language on global warming ever to emerge from the G8, the communiqué reaffirmed the importance of climate change and agreed to work towards an international agreement on greenhouse gas reductions at the UN Conference in Copenhagen slated for December 2009.

But despite these historic agreements, energy remains arguably the most important issue facing the global economy this century. In January, Italy assumes the one-year G8 Presidency and energy will once again form a centerpiece of the Summit next July.

Meeting the world's rapidly growing energy demand in an environmentally sensible way is not a simple issue and there is no silver bullet for solving the world's energy challenges. But, the International Energy Agency's (IEA) report in support of the G8 Plan of Action released for the 2008 Summit and largely endorsed in the communiqué offers a solid roadmap for meeting the G8's ambitious carbon reduction goals.

The key will be an integrated approach that recognizes the ongoing importance of fossil fuels like oil, natural gas and coal while pursuing carbon-free technologies such as nuclear power and renewables more aggressively.

In addition, the G8 clearly recognized the unique challenges and limitations facing the world's emerging market economies; any international energy policy that does not recognize the growing importance of developing markets is doomed to failure.

The Devil in the Details

The focus of most media coverage of the G8 this summer was the agreement on hard targets for greenhouse gas reductions. These targets are a noble goal but if they are to be achieved, G8 nations will need to introduce more specifics on medium-term emission reduction targets. And countries will also need to address the specific mix of technologies that will be needed to meet these targets in an economically sustainable way.

The G8 Plan of Action on Climate Change was inaugurated at the 2005 Gleneagles Summit in the United Kingdom and has held numerous meetings and summits since that time. The Plan of Action also enlisted the help of international organizations, including the International Energy Agency (IEA), in gathering data and statistics. The final reports relating the Gleneagles Plan of Action and the IEA’s specific recommendations were released during this year’s summit. These recommendations represent a meaningful roadmap for achieving greenhouse gas reduction targets.

Energy efficiency was one of the main themes in Prestige Media's official G8 Summit magazine released during the Summit. Efficiency was also emphasized in the IEA's report and at the Summit itself as the cheapest and fastest means of achieving meaningful reductions in carbon dioxide emissions. In fact, according to the IEA's data some energy efficiency policies would actually save companies and governments money.

In the IEA's report, the organization published several different emissions scenarios. The first is basically a business-as-usual scenario; this is a forecast of global carbon-dioxide emissions assuming no changes to the status quo. In this case, emissions would grow from 28 gigatonnes (Gt) in 2005 to press 62 Gt in 2050.

The IEA's second scenario is a stabilization of emissions near the 2005 level; the IEA calls this its ACT scenario. The final scenario is the plan endorsed by the G8, an attempt to cut carbon-dioxide emissions to 14 Gt by 2050, half their 2005 level. This aggressive plan is known as the BLUE scenario.

The IEA estimates that the world can save 8.2 Gt of carbon dioxide emissions annually by 2030 simply through adopting international best practice on energy efficiency. This is an enormous number; the IEA points out that 8.2 Gt is roughly equivalent to double the emissions of Europe in 2005.

As noted in the G8 Summit magazine, one the largest source of energy efficiency gains will come from coal-fired power plants. The IEA also stressed the importance of coal, estimating that by simply closing older, inefficient plants and upgrading existing facilities, the coal-fired power industry could cut emissions by 1.7 Gt per year. And coal prices have soared in recent years; more efficient plants burn less coal to produce the same amount of power, saving operators fuel costs.

Energy efficiency was also a major focus of the technologies on display at the International Media Center exhibition at the G8 this summer. Japanese companies have long been leaders in the production of highly energy efficient appliances.