The impact of Covid-19 causes carbon emissions from energy to fall sharply in the near-term. Although emissions subsequently pick up as the global economy recovers, the level of carbon emissions in Rapid and Net Zero do not return to their pre-pandemic levels.
Carbon emissions from energy use in Rapid fall by around 70% by 2050 to a little over 9 Gt CO2. This fall in emissions is broadly in the middle of the range of ‘well below 2-degree’ scenarios contained in the 2019 IPCC Report. See IPCC scenarios for details on the construction of the IPCC scenario ranges.
In Net Zero, carbon emissions fall by over 95% from their 2018 levels to around 1.5 Gt CO2 by 2050. The initial pace of decline is slower than the range of IPCC ‘below 1.5-degree’ scenarios, but by the second half the Outlook the emissions pathway in Net Zero is close to the middle of the IPCC range.
The carbon emissions remaining in 2050 in Net Zero could be reduced further by either additional changes in the energy system or using negative emission technologies (NETs). Alternatively, the emissions could be offset by increased deployment of natural climate solutions (NCS) (see Net Zero). This will partly depend on the costs of NETs and of abating GHGs emitted from outside the energy system, neither of which are explicitly considered in this Outlook.
The extent of the decline in carbon emissions from energy use in BAU is far more limited. Emissions peak around the mid-2020s and decline only gradually, falling to around 10% below 2018 levels by 2050.
The composition of the carbon emissions remaining in 2050 in Rapid provide a sense of the hardest-to-abate emissions. The largest source of emissions is the transport sector, which accounts for around a third of the remaining emissions, with the industrial and power sectors each accounting for around a quarter.
The transport and industrial sectors account for the majority of the remaining emissions in Net Zero in 2050. These emissions are partially offset by net negative emissions from the power sector, stemming from the use of biomass combined with CCUS (BECCS), which reduce net carbon emissions by around 1.5 Gt CO2 by 2050.
The reduction in carbon emissions in Rapid and Net Zero reflect a combination of increased switching to low carbon fuels, greater gains in energy efficiency, and growing use of carbon capture technologies (CCUS).
The most important factor accounting for the reduction in carbon emissions in Rapid, relative to the BAU emissions pathway, is the additional degree of switching to low carbon fuels, which accounts for around 45% of the difference by 2050. This is driven by significant reductions in the use of coal, especially in developing Asia, with much of this replace by faster penetration of renewable energy and, to a lesser extent, gas.
The rest of the difference between the carbon pathways in Rapid and BAU reflects stronger gains in energy efficiency and greater use of CCUS. By 2050, CCUS is used to capture and store around 4 Gt CO2 of potential emissions in Rapid, with around three quarters of the captured emissions emanating from the industrial and power sectors and the remainder from the production of blue hydrogen.
The additional reductions in carbon emissions in Net Zero relative to Rapid are enabled partly by changes in the behaviour and preferences of companies and households, with increased focus on using energy more efficiently, greater switching to zero or low carbon fuels and adjusting their consumption patterns towards lower-energy activities. These changing societal preferences accentuate the impact of government low carbon policies.
The largest factor contributing to the greater declines in carbon emissions in Net Zero relative to Rapid is the further switching away from fossil fuels into zero-carbon energy sources, especially renewable energy.
There are also contributions from faster gains in energy efficiency and greater use of CCUS. By 2050, the amount of carbon captured and stored in Net Zero is around 5.5 Gt CO2, with the majority employed in the production of blue hydrogen and the power sector.
Rapid and Net Zero assume that government and society begin to change policy and behaviour relatively quickly, such that carbon emissions from energy use start to fall over the next few years. But it is possible that there is an extended delay before these types of changes take place, with an increasing likelihood of a sharp tightening in climate policies the longer the world remains on an unsustainable path.
This possibility is explored in an alternative Delayed and Disorderly scenario in which the global energy system is assumed to move in line with BAU until 2030, after which sufficient policies and actions are undertaken to limit cumulative carbon emissions over the Outlook (2018-2050) to be the same as in Rapid.
Delayed and Disorderly is highly stylized – the nature of any delayed transition path will depend on the factors triggering the eventual change and the response of government and society. The scenario is predicated on the assumption that there are costs to delaying action. In particular, it assumes that it is not possible to make greater progress in energy efficiency or fuel switching by 2050 than is achieved in Rapid. As such, for illustrative purposes, it assumes that from 2030 onwards the:
Given these constraints on the speed and extent to which energy efficiency and fuel switching can improve, any further actions necessary to achieve the cumulative emissions target are assumed to take the form of energy ‘rationing’, that is, policies that stop or restrict various energy-using outputs or activities.
For simplicity, Delayed and Disorderly assumes that the required energy rationing is imposed proportionately across the main sectors of the economy, with the degree of rationing increasing at a constant rate over the Outlook.
Delaying the start of the decisive shift to a low carbon energy system until 2030 significantly increases the scale of the challenge relative to Rapid: carbon emissions start from a higher level and there is less time to make the adjustments.
This delay leads to significant economic cost and disorder in Delayed and Disorderly.
Achieving the same improvements in energy efficiency and the fuel mix as in Rapid in two-thirds of the time is likely to require a significant diversion of investment from other productive activities and lead to the premature scrapping of productive assets.
More significantly, the implied scale of energy rationing necessary to achieve the reduction in carbon is equivalent to around a quarter of the energy consumption between 2030 and 2050 in Rapid.
Assuming this rationing is imposed proportionately across the main sectors of the economy, it is roughly equivalent to:
Although not modelled explicitly, this rationing is likely to have a significant impact on economic activity and levels of well-being.
The transition to low carbon energy system in Rapid and Net Zero leads to a fundamental restructuring of the global energy system.
These changes are led by the declining importance of fossil fuels: oil, natural gas and coal. The use of hydrocarbons in both Rapid and Net Zero peak in the next few years, falling by around 50% and 70% respectively by 2050. Within that, the combined use of oil and natural gas falls by around a third and two-thirds in Rapid and Net Zero respectively.
These traditional forms of energy are replaced to a large extent by low carbon energy carriers in the form of electricity and, to a lesser extent, hydrogen. By 2050, electricity accounts for around 50% of final consumption (excluding the non-combusted use of fuels) in Rapid and around 60% in Net Zero. This greater recourse to electricity is complemented by the increasing use of hydrogen, which is used for activities that are harder or more costly to electrify. By 2050, hydrogen accounts for around 7% of final energy consumption in Rapid and 16% in Net Zero.
The shift away from traditional hydrocarbons also leads to an increasing role for bioenergy. Bioenergy takes various forms including liquid biofuels used largely in transport; biomethane which can be used as a direct substitute for natural gas across all sectors of the economy; and biomass used predominantly in the power sector. By 2050, bioenergy accounts for around 7% of primary energy in Rapid and almost 10% in Net Zero.
The uncertainties surrounding the eventual nature of the global energy system in a net-zero world is considered in Net Zero.