LONDON—Governments need to do more to increase energy efficiency and boost green technologies to avoid a spike in oil prices as China drives a 36 percent spike in world energy demand through 2035, a global watchdog warned Tuesday.
The International Energy Agency said that oil supplies will be pushed near their peak over the coming decades, endangering government pledges to limit the increase in global temperatures to 2 degrees Celsius.
The Paris-based IEA -- the energy arm of the Organization for Economic Cooperation and Development, a grouping of the world's richest nations -- said that global energy consumption will reach 16.7 billion metric tons of oil equivalent by 2035.
China's demand will jump 75 percent, accounting for more than a third of that surge in energy use, the IEA predicted in its annual World Energy Outlook.
"It is hard to overestimate the growing importance of China in global energy," IEA Executive Director Nobuo Tanaka told reporters in London. "How the country responds to the threats to global energy security and climate posed by rising fossil fuel use will have far-reaching consequences for the rest of the world."
But other countries will also have a major impact on the way that world energy demand and supply shapes up over the coming decades, Tanaka said.
"Recent events have cast a veil of uncertainty over our energy future," Tanaka said. "We need to use energy more efficiently and we need to wean ourselves off fossil fuels by adopting technologies that use a much smaller carbon footprint."
Tanaka said the Copenhagen Accord on tackling global warming and an agreement among G-20 countries to phase out subsidies are positive steps but more needs to be done to use energy more efficiently.
Nations meeting in Copenhagen last December pledged varying reductions to their carbon emissions by 2020 -- ranging from 17 percent for countries including the United States and Canada to 45 percent for China.
The agency lowered its 2035 estimate for oil use by 6 million barrels a day to 99 million barrels -- up from 84 million barrels last year, because of government pledges to curtail carbon emissions under the Copenhagen Accord.
Its assumption that government policy commitments will be met also led to a slowing in annualized energy demand to an average of 1.2 percent from 2008 to 2035, from 2 percent over the previous 27 years.
But it remains doubtful of some of those promises.
"Whether or not these countries fulfill their targets is a big question," said IEA Chief Economist Fatih Birol. "We consider Copenhagen to be a failure ... some of the pledges are very vague."
The IEA report predicted that oil prices could soar as high as $135 a barrel and are expected to average $113 a barrel by 2035, compared to an average of $60 in 2009, as higher prices are needed to bring demand into balance with supply.
The Organization of Petroleum Exporting Countries will account for 50 percent of the worlds oil supply by 2035 as production from outside the group falters, the IEA said.
OPEC, which already pumps around 40 percent of the world's oil, last week forecast that world energy demand will rise by 40 percent in the next three decades even as the appetite for oil shrinks because some of the need will be met by other sources.
In its annual World Outlook, the 12-nation oil producers' bloc forecast that world oil demand will grow to a daily 105.5 million barrels in 2030, an increase of 21 million barrels a day over last year.
It added that crude's role in fueling the world will fall "over time," although it will still be over 30 percent by 2040. It suggests renewables and natural gas could become increasing alternatives.
But the report added that fossil fuels overall will remain dominant, satisfying 80 percent of energy needs.
The IEA -- a policy adviser to 28 member countries, mostly industrialized oil consumers -- said the use of renewable energy is expected to expand rapidly to 2035 but the rate of growth depends on the intensity of government policies aimed at reducing greenhouse gas emissions and diversifying the energy supply mix.
It said that investment of $5.7 trillion is needed over 2010-2035 to produce electricity, while biofuels need another $335 billion.
The IEA also forecast that consumption of natural gas will increase 44 percent to 4.5 trillion cubic meters in 2035, from 3.1 trillion cubic meters in 2008, according to the agency.