MercoPress. South Atlantic News Agency

Energy efficiency cooperation agreement signed in Rome

Countries accounting for 80% of energy supply and demand worldwide, including Brazil and Mexico, signed Sunday in Rome, in the framework of the G8 Energy summit, an international partnership energy efficiency cooperation agreement, IPEEC.

The text was signed by Canada, France, Russia, United Kingdom, United States, Japan, Italy, Germany, Brazil, Mexico, South Korea, China and the European Union. The accord will be later accompanied by a memorandum endorsed by the International Energy Agency.

“The agreement is essential to address the economic crisis and to combat climate change. Investments in energy efficiency are in fact, realizable immediately and can have a great impact against recession and should help reduce energy imports and contamination”, said Italian Economic Development minister Claudio Scajola.

IPEEC “represents an important reply to the questions of G8 responsibility and commitment” added Scajola who pointed out that the deal was “open to all countries and will become a privileged platform to share countries’ experiences in energy affairs.

Italy, which currently holds the G8's rotating presidency, hosted the two-day meeting that began Sunday in the run-up to the annual summit of G8 leaders in July.

The economic crisis has seen oil demand plummet and prices along with it, falling from a record 147.50 dollars per barrel in July to 32.40 in December. It has since risen gradually above the 60-dollar-per-barrel mark.

Electricity demand is expected to diminish by 3.5% this year “for the first time since World War II,” said International Energy Agency (IEA) executive director Nobuo Tanaka. Investment in oil-linked projects has also been hit, with an IEA report presented in Rome predicting a 21% drop in oil and gas exploration and production compared to 2008.

“There is some concern when the demand comes back we may have a supply crunch at mid-term,” said Tanaka. “Investment in the upstream is very, very important to avoid this crunch.”

Addressing the ministers on Sunday, the head of the Italian energy group Eni called for stabilising oil prices, pinning a “reasonable” price between 60 and 70 dollars per barrel.

“The persistence of high uncertainties related to oil price up to 150 USD per barrel or down to 30 USD might upset the entire energy system, blocking investments both in traditional and in alternative sources” including nuclear and renewables, said Roberto Poli.

IEA numbers also suggest the economic crisis has taken a toll on efforts to combat climate change, with investment in renewable energy expected to tumble 38% this year.

That is precisely the opposite of what is needed, according to the IEA, whose report says renewable energy investments must be multiplied by six and energy efficiency spending quadrupled in the face of climate change.

The International Partnership for Energy Efficiency Cooperation was launched in 2008 under Japan's G8 presidency. The G8 includes Britain, Canada, France, Germany, Italy, Japan, Russia and the United States. The 23 countries invited to the meeting, including the 15 emerging and oil-producing nations, account for 80 percent of energy supply and demand worldwide.