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

TOKYO (Reuters) - World governments must start a $45 trillion dollar "energy technology revolution" or risk a 130 percent surge in carbon emissions by 2050, the International Energy Agency warned on Friday.

In a report commissioned by Group of Eight leaders three years ago, the IEA also said a goal of halving emissions by 2050 would require that the cost of carbon rise to $200 a ton and possibly as high as $500 a ton. Carbon emissions credit rights now trade in Europe at only around $30 a ton.

Japan is urging leaders of the Group of Eight rich nations to set a global target to halve greenhouse gases by 2050, when they meet at a G8 summit in Toyako, northern Japan, next month. The group's energy ministers meet this weekend in Japan.

The report also said that oil demand would rise by 70 percent if governments continued with current policies -- an increase it said was equivalent to five times Saudi Arabia's production.

"We are very far from sustainable development, despite the widespread recognition of the long-term problem. In fact, CO2 emissions growth has accelerated considerably in recent years," said Nobuo Tanaka, Executive Director of the IEA, the energy watchdog for industrialized nations.

Scientists say that the world must brake and reverse annual increases in greenhouse gas emissions to avoid catastrophic climate change including rising seas and more extreme weather.

Analysts said the IEA's cost estimate of $45 trillion, or about 1.1 percent of global GDP each year from now to 2050, sounded fair.

"Carbon emissions must be cut. Costs of about 1 percent of GDP are not outrageous, so this target is realistic," said Go Hibino, a senior manager at Mizuho Information & Research Institute.

Environment ministers from the G8 urged their leaders last month to set a global target to halve greenhouse gas emissions by 2050.