The 2020 edition of the International Energy Agency’s World Energy Outlook was launched today, a report which is widely regarded as the most authoritative source on the outlook for the global energy system, widely read by policymakers, industry figures and researchers (and for full disclosure, I was a proud WEO team member from 2015-2018).
The report contains a number of core scenarios every year – the Stated Policies Scenario (what would happen if all policy commitments were enacted fully?) and the Sustainable Development Scenario (how can the global energy system reach the goals of the Paris Agreement, while meeting other sustainable development goals?) and typically a number of other scenarios, or “cases”, are used to explore other critical issues. This year, for the first time, the Outlook explored the question of what near-term changes are needed in the next decade to reach a target of a global net-zero emissions energy system 2050 – called the NZE2050 case.
When asked at the report launch why the Outlook included the NZE2050 case this year, Fatih Birol, IEA Executive Director, replied that it was to show that this “net-zero by 2050 target” is “technically not impossible” – but we need to go into these commitments with open eyes, laying out in numbers what is needed from behaviour change, from policy, from investment, and from technologies and fuels. The report spells out these stark details.
What insights can be drawn for Ireland, whose government published the draft Climate Bill last week, which will commit Ireland to reaching a net-zero emissions target by 2050?
Before getting into the mitigation levers, a comparison in levels of ambition in terms of annual emissions reductions. The Programme for Government sets out target of reducing emissions by 7% annually between now and 2030, around double the level of ambition for energy-related emissions reductions spelled out in the Climate Action Plan. The Outlook in the NZE2050 case spells out emissions reductions of 5% between 2020 and 2050, compared with a 2% annual reductions in the Sustainable Development Scenario. While the Outlook does not spell out differences in efforts required per country, it stands to reason that Ireland should decarbonise faster than the global average given our high per-capita carbon footprint and high per-capita income. This means that Ireland will need to go above and beyond the mitigation efforts achieved in the NZE2050 case, discussed below.
We have nearly become immune to word “unprecedented” in 2020, but the word very much applies to the scale of the challenge required to moving from the Sustainable Development Scenario world – which already requires an unprecedented scale of change – to the Net-Zero by 2050 world. Similarly, in Ireland, moving from the Climate Action Plan to halving emissions in a decade will require policymakers to shift attention and efforts towards a different (but additional) set of mitigation solutions, namely end-use energy use (heat and transport) and behaviour change, while pushing the main decarbonisation options from the Sustainable Development Scenario and Climate Action Plan to even greater levels.
Firstly, all our activities will need to rely on far less primary energy. The NZE2050 case sees global primary energy demand falling to the levels seen in 2006, fuelling double the amount economic activity.
Behaviour change accounts for nearly a third of the additional savings in the NZE2030 case in 2030, on top of those achieved in the Sustainable Development Scenario. Eleven separate measures are considered. Space heating demand behaviour – namely lowering internal temperatures - can deliver very large savings until the housing stock is retrofitted for energy efficiency and low-carbon heat options. Shifts in transport mobility behaviour are also significant – while the most impactful measure in the Outlook is reducing short-haul flights in favour of low-carbon options like rail, this is not an option for Ireland, an island, where there is relatively limited domestic aviation and rail is not feasible for international travel. A raft of other behaviour change measures are very relevant, however. These include (in decreasing order of impact) slower driving, eco-driving, ride sharing, modal shifts to walking and cycling for shorter journeys and working from home. Some mobility measures are already a key pillar of the Programme for Government, but Ireland can certainly benefit from looking at a wider range of options, particularly reducing speed limits.
Primary energy savings are also achieved in the NZE2050 scenario by pushing efficiency as much as possible. For example, half the housing stock in advanced economies like Ireland are retrofitted by 2030 in the scenario. In contrast, the current Climate Action Plan aims to deeply retrofit 30% of the housing stock, or 500,000 of the 1.7 million households by 2030 - is it possible to increase this ambition, and also to target the most energy-intensive houses first? The most efficient appliances available are also pushed as far as possible in the Outlook.
In the transport sector, the NZE2050 case sees over 50% of passenger cars sold being electric in 2030 (up from 2.5% now), while the Climate Action Plan targets full electric car sales in 2030. Is this target achievable - and if not, what other measures can we fall back on? Heat in industry also increasingly comes from low carbon fuels like hydrogen in NZE2050 - Ireland will need to look beyond electrification to deliver emissions reductions.
While decarbonising electricity supply is a key pillar of nearly every decarbonisation strategy, including in the NZE2050 case, Ireland already has a very significant renewable electricity target for 2030, and it will be challenging to push more emissions savings from additional renewables.
What the Outlook shows is that there are no short cuts – only profound changes can deliver this sustainable energy future. A net-zero energy system requires careful long-term and integrated planning. All this will need dialogue with citizens to ensure public buy-in, and carefully targeting supports to ensure energy is affordable to vulnerable households. It will also need a boost in technology innovation and research – many of the mitigation solutions required to meet the target are not yet commercially available. For example, battery manufacturing capacity would need to double every year to support the electric revolution, and hydrogen could become a key part of the energy system, especially beyond 2030. However, the research and capacity needs to be built now.
Why a scenario approach? There is never a single storyline to the future – there is no one “projection” – because the actions taken by policymakers and industry have a huge bearing on the future. The purpose of this scenario approach is to “hold a mirror” to decision-makers to show them the consequences of policies and targets – and I think that the IEA’s new net-zero case is very illuminating in this regard.