In an event to deliver its latest World Energy Outlook in Berlin today, the IEA has warned that without "bold" changes, "the world will lock itself into an insecure, inefficient and high-carbon energy system".
The report, which sets out a number of scenarios for the worlds energy future, warns that, "rising fossil-fuel energy use will lead to irreversible and potentially catastrophic climate change."
Forecasting rising CO2 emissions, which will peak in 2020, the report was also highly critical of fossil-fuel subsidies, which amounted to USD409 billion in 2010. These subsidies are forecast to rise to USD600 billion in 2020, or 0.7 percent of global GDP.
Fossil-fuel subsidies "carry large costs", according to the IEA, through encouraging wasteful consumption, increasing energy-price volatility and undermining the competitiveness of renewables.
Renewable energy, argues the IEA, will continue to require subsidies until at least 2020. These are forecast to grow in size from USD66 billion in 2010 to USD250 billion in 2020.
In terms of the global energy mix, the World Energy Outlook forecasts renewables increasing its share from 13 percent today to 18 percent in 2035. This modest forecast juxtaposes sharply to forecasts reported by Bloomberg that solar would produce more than 50 percent of the worlds power by 2060.
While highly critical of fossil-fuel subsidies, the IEA was supportive of subsidies for renewable industries: "when they are well-designed, subsides to renewables and low-carbon energy technologies can bring long-term economic and environmental benefits."