The energy sector must play a critical role if efforts to reduce emissions are to succeed, the IEA said.
World greenhouse-gas emissions from energy production and use are double the level of all other sources combined, meaning that action to combat climate change must come first and foremost from the energy sector, the agency said.
However, a peak in global energy-related emissions is possible by as soon as 2020, at no economic cost, and using only proven technologies and policies, if governments implement five policy measures, the IEA said.
These measures are: increased energy efficiency in industry, building and transport sectors; reduced use of the lest-efficient coal-fired power plans, with a ban on their construction; increased investment in renewable energy technologies in the power sector from $270 billion in 2014 to $400 billion in 2030; a gradual phasing out of fossil fuel subsidies to end users by 2030; and reduced methane emissions in oil and gas production, the report said.
"The world is at a critical juncture in its efforts to combat climate change, with momentum building towards the 21st UN Conference of the Parties (COP21) in Paris in December 2015," the agency said in its statement.
There are signs that growth in the global economy is starting to "decouple" from energy-related emissions, the IEA said. The global economy grew by around 3% in 2014 but energy-related carbon dioxide (CO2) emissions stayed flat: "the first time in at least 40 years that such an outcome has occurred outside economic crisis," the IEA said.
Governments have been asked to submit Intended Nationally Determined Contributions (INDCs) before COP21, and countries accounting for around two-thirds of global energy-related emissions have either done so or signalled their planned content, the IEA said.
Post-COP21, a five-year revision plan is needed to ensure targets are on track and potentially make more ambitious plans.
"Both the situation ands the solutions are evolving rapidly," the IEA said. "The world’s shrinking carbon budget means that any delay in taking action can be costly, while the pace of energy sector innovation means that a five-year review would allow national targets to keep up with events and help build investor confidence," it said.
The agency also recommended a long-term greenhouse gas emissions target, to help meet the goal of keeping the increase in long-term average global temperatures to below 2 degrees Celsius, the IEA said
Finally, there is a need for a tracking process in the energy sector to identify any countries that are "struggling with implementation", the IEA said.
"Any climate agreement reached at COP21 must have the energy sector at its core or risk being judged a failure," said IEA chief economist Fatih Birol. "Climate pledges submitted for COP21 are an important first step to meeting our climate goal, and our report shows that they will have a material impact on future energy trends."
IEA executive director Maria van der Hoeven said: "As IEA analysis has repeatedly shown that the cost and difficulty of mitigating greenhouse-gas emissions increases every year, time is of the essence. It is clear that the energy sector must play a critical role if efforts to reduce emissions are to succeed. While we see growing consensus among countries that it is time to act, we must ensure that the steps taken are adequate and that the commitments made are kept."
In May, Gérard Mestrallet, chief executive of power company Engie told the Financial Times that European energy companies are increasingly investing in renewables rather than coal and gas.
Coal and gas power generation is uneconomic for European suppliers, Mestrallet said.
"The choice we have made is very clear. We have stopped investing — and so did the others by the way — in thermal power generation in Europe and we are investing in renewables," he told the newspaper.