The faster transition in Below 2° compared with Current Trajectory is driven largely by more rapid decarbonization in emerging economies, and, looking by energy use, by faster emissions reductions in electricity generation and industrial processes. The scenarios can be used to explore which key additional shifts might help the world’s energy system move from its current course to a faster and deeper decarbonization pathway.
Growth in global primary energy is driven by increasing prosperity and rising populations in emerging economies. The scale and persistence of energy growth depends on the rate at which energy efficiency improves.
The carbon intensity of primary energy gradually declines as renewable energy accounts for a growing share of the world’s energy inputs.
Total final consumption of energy – which provides a measure of energy demand at the final point of use – peaks during the outlook, as higher energy demand driven by increasing living standards and rising populations in emerging economies is offset by gains in energy efficiency.
An increasing number of regions and countries move from the ‘energy addition’ phase of the transition to ‘energy substitution’, as low carbon energy rises fast enough to reduce their use of unabated fossil fuels.
Energy addition to energy substitution
At a global level, the energy system is currently in the ‘energy addition’ phase of the energy transition. That means that while low carbon energy use is rising rapidly, it is not rising fast enough to meet the entire growth of total energy demand. The use of unabated fossil fuel is therefore also still increasing.
This ‘energy addition’ phase has occurred in previous structural energy transitions, for example when coal displaced traditional biomass (including wood) as the world’s primary energy source, and later when oil became the dominant source of energy. In both cases the world continued to consume similar or growing amounts of the ‘old’ form of energy, albeit sometimes for new purposes, even as use of the new form of energy surged.
Although the global energy system as a whole is still in this addition phase, that is not the case for many countries and regions. Indeed, around 40% of global energy demand is now accounted for by regions and countries that have already moved into the ‘energy substitution’ phase of the transition. In these parts of the world, low carbon energy is already rising more rapidly than total energy demand, so that unabated fossil fuel use is falling. That is the case, for example, in both the EU and the US.
Rapidly growing deployment of renewables and an acceleration in electrification in the Outlook scenarios mean that more countries and regions move into this ‘energy substitution’ phase of the energy transition over the coming years1.
In Current Trajectory, the share of global primary energy accounted for by countries and regions in the energy substitution phase of the transition rises to more than 60% of total global primary energy by 2050. That is a result of more of the world’s emerging economies moving into the energy substitution phase, as their deployment of renewables accelerates and the electrification of their economies gathers pace, allowing their use of unabated fossil fuel to decline. This includes, for example, China around 2030 and Brazil in the 2040s. That shift happens even more rapidly in Below 2°, so that all regions enter the substitution phase during the outlook period.