Two major projections for the trajectory of global energy use, which assume that temperature increases are stabilized at 1.5 degrees Celsius, make vastly different estimates about future energy consumption.
This week, the US Energy Information Administration released its International Energy Outlook, one of the benchmark long-term energy outlooks that generate headlines each year. In the coming weeks, we’ll be incorporating the International Energy Outlook into our Global Energy Outlook data tool and preparing our annual Global Energy Outlook report for release in the first half of 2022.
But like previous iterations of the International Energy Outlook, the analysis does not include scenarios that are consistent with limiting long-term temperature rise to international targets such as 1.5°C or 2°C above preindustrial levels. So, in this blog post, we’d like to look under the hood of two recent outlooks that tackle such ambitious goals: the International Energy Agency’s (IEA) Net Zero by 2050 report (NZE2050) and Shell’s Sky 1.5 scenario.
As readers may know well, the 2015 Paris Agreement articulated a goal of limiting global warming to “well below 2°C above preindustrial levels and pursuing efforts to limit the temperature increase to 1.5°C.” The 1.5°C target has since become a rallying point, bolstered in part by the findings of a 2018 Intergovernmental Panel on Climate Change (IPCC) special report, which estimated that stabilizing temperatures at 2°C would result in far more damages than 1.5°C. (Scenarios from that report are available on the Global Energy Outlook web tool.)
Responding to this focus on 1.5°C, some long-term energy outlooks are incorporating new scenarios that specifically are designed to hit that target by 2100.
Sketching Out the Scenarios
With Sky 1.5, Shell characterizes the scenario as prioritizing health, including the health of people, the economy, and the environment. A narrative-based scenario that is as much an outlook for the world as it is for energy, the scenario begins by describing a world in which the COVID-19 pandemic and related crises have exposed fundamental weaknesses in some of our most important institutions. But in Sky 1.5, the pandemic is a catalyst for change. The world emerges from these crises with a deeper commitment to environmental protection, a stronger appetite for international cooperation, and a willingness to reform institutions to boost long-term economic growth.
The NZE2050 outlines the energy system changes that are necessary to reach net-zero emissions by 2050 while also assessing the investment and uncertainty associated with that transition. The report builds on existing net-zero pledges from nations around the world and aligns with the UN Sustainable Development Goals for universal energy access and reduced pollution around the world.
To sum up (just in case these pithy sketches of two deeply complex and impressive modeling exercises were too ponderous), both scenarios find a way for the world to come together and stay below 1.5°C through 2100. But that’s just about where their similarities end.
Two Paths Diverged. One Used the Woods.
Although both scenarios center human health and climate stabilization, they diverge in pretty significant ways. Perhaps the most noticeable difference is the trajectory of CO₂ emissions. (Both scenarios include other greenhouse gases, such as methane and nitrous oxide, but for simplicity, we’ll focus on just CO₂.) In the NZE2050 scenario, global emissions from energy and industrial processes (like cement production and steelmaking) reach net zero around 2050, while those emissions in Sky 1.5 don’t get there until about 2070.
So, how can both scenarios hit the 1.5°C target? First, Sky 1.5—like some of the scenarios in the 2018 IPCC Special Report on 1.5°C—is an “overshoot” scenario. Global average temperatures rise temporarily above the target, then decline to stabilize at 1.5°C above preindustrial levels by 2100. The NZE2050 scenario, on the other hand, relies on little to no overshoot.
How does Sky 1.5 reduce temperatures after first going above that 1.5°C target? The answer is negative emissions. Although both scenarios deploy negative emissions at a large scale in the energy and industrial sectors through technologies such as biomass with carbon capture and storage, Sky 1.5 also relies heavily on negative emissions from land use changes such as afforestation and reforestation. The NZE2050 does not include large-scale negative emissions from land use changes, though it does include direct air capture at a large scale (which Sky 1.5 does not).
Figure 1 illustrates sector-specific trends in CO₂ emissions: energy and process emissions from both the NZE2050 and Sky 1.5, along with land use emissions from Sky 1.5. While the NZE2050 projects emissions reductions beginning almost immediately, the Sky 1.5 scenario sees emissions from energy and industry growing through 2030 and then beginning to drop. Emissions from energy and industry in Sky 1.5 are 2.7 million metric tons higher in 2030 than 2020, but emissions from land use are almost 5 million metric tons lower. After 2030, energy and industrial emissions begin to decline rapidly, while land use changes help soak up CO₂, reducing the atmospheric concentrations that ultimately lead to higher temperatures.
Figure 1. Net Carbon Dioxide Emissions in Two 1.5°C Climate Scenarios, as Estimated by the International Energy Agency (IEA) and Shell
To better understand emissions from the energy and industrial sectors, let’s look at the primary energy mix under each scenario. Figure 2 illustrates the mix in the year 2040 for both the NZE2050 and Sky 1.5 scenarios, along with projections from the IEA’s World Energy Outlook 2020—the Sustainable Development Scenario and Stated Policies Scenario—which make very different assumptions about policy and technology
Figure 2. Global Primary Energy Demand in 2020 and Scenarios for 2040
Notes: IEA=International Energy Agency, SDS=Sustainable Development Scenario, STEPS=Stated Policies Scenario, Btu=British thermal units. Scenarios are ordered by fossil fuel demand, from lowest to highest.
In the NZE2050 scenario, global energy demand in 2040 is slightly below 2020 levels, despite substantial population and economic growth, highlighting the importance of energy efficiency in achieving ambitious climate goals. Compared with the IEA’s Sustainable Development Scenario (SDS in Figure 2), which was published in 2020 and is roughly consistent with a 2°C temperature target, the NZE2050 sees considerably lower uses of all fossil fuels and a dramatic expansion of wind and solar.
The Sky 1.5 scenario, on the other hand, shows much higher overall energy demand and levels of fossil fuels and is broadly comparable to the IEA’s 2020 Stated Policies Scenario (STEPS in Figure 2), which is built around current and planned government policies. In Sky 1.5, global coal use is only 16 percent lower compared to 2020, while oil and natural gas are 4 and 11 percent higher, respectively. Wind, solar, and nuclear also grow rapidly in Sky 1.5—but, as we’ve pointed out before, we’ll need more than just the addition of clean energy sources to achieve a real energy transition.
Let’s Have Some Fundamentals
The headline results described above typically garner the most attention from the media when new energy outlooks are published. But to understand the factors driving those headline findings, we need to start at the roots of global energy demand: population and economic growth. To round out the picture, we can add energy consumption per capita and CO₂ emissions per unit of energy consumption. Together, these four elements are known as the Kaya Identity, a very handy way of discerning the drivers of long-term energy demand and emissions (Table 1).
Table 1. Kaya Identity Components in Two 1.5°C Climate Scenarios, as Estimated by the International Energy Agency (IEA) and Shell
When it comes to population and economic growth, the two scenarios are just about identical and show a steady upward march. But in the NZE2050 scenario, per capita energy consumption is about one-third lower than in Sky 1.5. And since coal, oil, and natural gas continue to play major roles through mid-century in Sky 1.5, CO₂ emissions per unit of energy are more than triple the NZE2050 scenario in 2040.
The Bottom Line
These two scenarios project monumental, though different, shifts in the global energy system and—for Sky 1.5—in global land use. Some observers (including us!) will look at both and wonder whether it’s possible, in our fractious and fragmented world, to deploy renewables; energy efficiency; nuclear power; carbon capture, utilization, and storage; direct air capture; land use change; and other technologies at the scale and speed envisioned in these two scenarios.
We don’t pretend to know the answers, but we do know one thing: if we are to prevent the worst impacts of climate change, major transformations in our energy system are needed—and fast. Can we achieve these system changes while at the same time addressing health disparities, energy poverty, and environmental injustices? We don’t know—but we sure hope the answer is yes.
