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IEA Reports Grim Prediction For World Energy Costs, Climate Change

Electric lines extend over the hills of Owen County, near Owenton, Kentucky, July 22, 2011.

The International Energy Agency says the world could face "viciously" higher prices and greater risk of climate change unless there are major changes in the way nations, companies and consumers use energy.

Wednesday's IEA report predicts that energy demand will grow 40 percent by 2035, which could push the price of a barrel of oil above $200.

The authors say the Middle East is the only place where oil production is likely to expand sharply to meet this demand, but that will not happen without significant investment in infrastructure.

The report also notes that Japan's recent natural disasters raised questions about the safety and future of nuclear power. The authors warn that further cuts in atomic energy would complicate efforts to meet energy demand without increasing carbon output linked to climate change.

The report predicts a modest decrease in the percentage of energy that comes from fossil fuels and modest gains for renewables over the next few decades.

The IEA calls for cutting the hundreds of billions of dollars that currently subsidize fossil fuels and doing far more to encourage growth of renewable energy sources.

Some information for this report was provided by AP, AFP and Reuters.