By Michael Johnston, founder of ETF Database.

The International Energy Agency (IEA), an energy adviser to rich nations such as the U.S., released its highly-anticipated World Energy Outlook on Tuesday, singling out potential climate change initiatives as a major driver of oil consumption and prices in coming decades.

If a major agreement to cut greenhouse gas emissions is signed and implemented in coming years, global crude oil demand could increase by only four million barrels per day by 2030.

The increase from current consumption levels of about 85 million barrels to 89 million barrels represents a relatively small bump that could help keep prices lower. "A climate-change agreement would help propel industries and consumers toward using energy more efficiently and incentivize the auto industry to develop electric vehicles and other nonoil technologies," writes Spencer Swartz for The Wall Street Journal.

But that prediction comes with a big "if." The Kyoto Protocol, a UN treaty aimed at combating global warming, is set to expire in 2012, and delegates from nearly 200 countries will be meeting in Copenhagen in December with the goal of devising a successor agreement.

There is significant skepticism about the ability of developed and emerging economies to agree on the sharing of burdens associated with reducing greenhouse gas emissions. Without a new climate change agreement in place, the IEA estimates that global oil consumption will rise to 105 million barrels per day by 2030. This implies that the presence of a comprehensive emission reduction plan could result in a 15% decrease in global oil demand.

The IEA also released predictions for oil prices in coming years: Crude is expected to cost $100 per barrel by 2020 and $115 per barrel by 2030, reflecting annual price increases of between 2% to 3%, roughly in line with inflation.

ETF Plays on Oil

Any news regarding the future direction of oil prices will have an impact on exchange-traded products such as the United States Oil Fund ETF ( USO) and the iPath S&P GSCI Crude Oil Total Return Index ETN ( OIL).

But there are several other ETFs that could be interesting investment plays depending on which scenario outlined by the IEA plays out:

Emerging Global Dow Jones Emerging Markets Energy Titans Index Fund ( EEO): According to the IEA, emerging markets such as China and Brazil are expected to account for the vast majority of increases in global oil demand going forward. As these developing economies continue to expand, they will also continue to develop a tremendous need for fuel and natural resources.

SPDR S&P Oil & Gas Exploration & Production ETF ( XOP): The IEA report notes that global drilling investment is expected to decline by nearly 20% (or $90 billion) in 2009, due primarily to delays and cancellations on major projects in Canada. Continued exploration is necessary to prevent a long-term spike in prices, a trend that could give a boost to companies engaged in development of future oil supplies.

PowerShares WilderHill Clean Energy Portfolio ( PBW): Among the main beneficiaries of a global agreement on climate change would be alternative energy producers. PBW invests in stocks of companies engaged in green and renewable sources of energy, including several solar energy firms.
Michael Johnston is the senior analyst and founder of ETF Database, a Web-based investment resource providing actionable ETF investment ideas and an ETF Screener for investors analyzing potential ETF investments. Johnston oversees ETF Database's free ETF Newsletter, one of the most popular sources for news and commentary focusing exclusively on the exchange-traded fund industry. Johnston also maintains and develops content for ETFdb Pro, a line of analyst reports and model portfolios designed to help investors utilize ETFs to meet their investment goals.

Johnston has completed the Chartered Financial Analyst (CFA) program, and obtained his bachelor's degree in finance from the University of Notre Dame. Prior to founding ETF Database, Michael worked in a private client service group performing valuations of companies operating in a wide range of industries.