Comparing the three sensitivities

Comparing the three sensitivities

Comparing the three sensitivities with Current Trajectory and Below 2° highlights three notable observations.

Weak energy efficiency gains

The most striking is the importance of energy efficiency in influencing the speed of the energy transition. Even though Weak energy efficiency assumes that the recent weakness in efficiency gains persists for only around five years longer than in Current Trajectory, this leads to a marked deterioration in the outlook for carbon emissions. A key factor driving this impact is the recognition that fossil fuels, rather than renewables and other forms of low carbon energy, will tend to be most affected by cyclical fluctuations in efficiency gains.

This greater cyclicality of fossil fuels is also important when interpreting the pace of the energy transition over the past five years or so, during which efficiency gains have been historically weak.

If energy efficiency had increased in line with its previous historical average over this period, and the growth of non-fossil fuels had been unchanged, with the weaker growth in total final energy consumption by fossil fuels, then the cumulative growth in both oil and natural gas over this period would have been reduced by more than two-thirds. And carbon emissions would have been broadly flat, rather than rising by around 3%.

Geopolitical fragmentation

Second, the net impact of the Increased geopolitical fragmentation scenario on the overall pace of the energy transition relative to Current Trajectory is relatively small, despite the sizeable adjustments made to various aspects of the scenario.

That partly reflects that different elements of increasing geopolitical fragmentation – at least as modelled in this sensitivity – have offsetting impacts on the mix of fossil and non-fossil fuels.

However, the impact of increased fragmentation on individual countries is likely to be more pronounced, depending on the structure of their energy systems. Moreover, these differing responses could lead to greater disparities across energy pathways, as countries pursue energy strategies determined more greatly by self-reliance and energy security, rather than by the more common goal of decarbonization.

Delayed transition

Third, the Delayed Below 2° sensitivity, which roughly approximates the latest point at which the world can decarbonize in an orderly way and remain within a 2°C carbon budget, is relatively close to Below 2°. This reflects that the remaining period during which the world can continue along its current pathway and still achieve a 2°C carbon budget without resorting to costly and disruptive measures is relatively short.

The three sensitivities – just like the two main scenarios – are highly simplified and stylised. As such, they should be used to help understand some of the broad ways in which different uncertainties and issues may impact the energy system, rather than to provide a comprehensive or detailed estimation.