The IEA is an intergovernmental organization established under the framework of the Organization for Economic Development and Co-operation. The Paris-based body operates under a Governing Board made up of the energy ministers of the member countries, which include Canada and other leading industrial states.
The IEA publishes an annual report, World Energy Outlook, which is the leading source of data for global oil, natural gas, and coal production. For many years the IEA has prepared baseline projections, also referred to as “business as usual” studies, which have calculated the future demand for crude oil on the assumption that the world’s industrial economies continue to grow based on currently existing energy systems and policies, that is, accepting that our present dependency on oil, coal, and natural gas remains substantially unchanged.
In more recent years, the IEA has also developed a series of alternative scenarios designed to show the lower levels of oil, coal, and natural gas production required to limit warming to 2°C, 1.8°C, and 1.5°C.
Between 2010 and 2017, the IEA published its 2°C scenario, called the “450 Scenario”, which was in that period the most widely known study examining the scale of the reductions in global oil, coal, and natural gas consumption that would be required to keep the rise in average global surface temperature within the 2°C warming limit. The version of the 450 Scenario that was published in late 2015 in World Energy Outlook 2015 (a year before Canada approved the TMX pipeline expansion project) concluded that in order to have a 50-50 chance of limiting warming to 2°C, global oil production would have to start declining by 2020 and be reduced from 90.6 million barrels per day (bpd) – the production level reached in 2014 – down to 74.1 million bpd by 2040, a 20% reduction over 25 years.
The IEA ceased publishing the 450 Scenario in 2017 after it became the subject of broad criticism because a 50% chance of a successful outcome was an obviously unsatisfactory guide for developing safe public policy. The 450 Scenario had also failed to address the much deeper cuts that would be required to meet the new and more challenging 1.5°C goal, which was adopted at the Paris Conference in December 2015.
On November 8, 2019, in its World Energy Outlook 2019 report, the IEA published a new scenario, the “Sustainable Development Scenario”, which replaced the 450 Scenario. It was designed to calculate how much global oil consumption would need to decline to give us a 66% probability of keeping the temperature increase below 1.8°C. The scenario analysis concluded that global oil use would need to be reduced from the 2018 level of 97.7 million bpd down to 87.1 million bpd by 2030 and further decline to 66.9 million bpd by 2040 (10% by 2030 and 31 % by 2040).
The IEA’s “Net-Zero by 2050 Scenario” was published on May 18, 2021. The most important contribution of the IEA’s new study is its candid warning about the immediacy of the need to halt any further expansion of oil production. It concluded that to give the world even a 50-50 chance to keep the heating of the earth to within the 1.5°C threshold, within this decade a 25% reduction in global oil production would be required, down to 72 million bpd by 2030, and that a 50% cut to 44 million bpd must be achieved by 2040.