According to the World Energy Outlook, which is the annual publication of the International Energy Agency (IEA), the world will need to spend an additional $10.5 trillion in the next two decades on energy efficiency and low-carbon energy to avoid runaway climate change.

The 2009 edition came out just ahead of the UN climate conference in Copenhagen in December, where the global community is to negotiate a successor to the Kyoto Protocol. Although the financial crisis is expected to reduce global energy use this year, the upward trend will soon resume if governments continue business as usual, the agency predicted that energy demand will increase by 1.5% each year up to 2030.

The report says fossil fuels will remain the main energy source globally, as three quarters of new energy demand is expected to be met by these polluting sources. Over half of the increase will take place in China and India, reflecting a shift of energy politics towards Asia, the report outlined.

The IEA estimates that the world has enough energy resources to cover the projected demand increase well beyond 2030 but this would come at a high cost for the environment and energy security. To avoid these high costs, the IEA proposes a portfolio of measures, including cap-and-trade systems, sectoral agreements for transport and industry, and national action.

For more information about the IEA’s World Energy Outlook, please click here.