Scenario for a Climate-Stable Future
If the world emits no more than 790 Gigatons (Gt) of carbon over the remainder of this century, there is a good chance the average global surface temperature by 2100 won’t reach 2°C above the pre-industrial average. So concludes a recent analysis by the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA). Our current trajectory takes us as high as 6°C, and even current national pledges under the Paris accord will result in cumulative emissions of 1,260 Gt by as soon as 2050. We must do better.
The good news is that, if we do, global GDP will grow by a cumulative $19 trillion through 2050, and the renewable energy sector (including energy efficiency) will create some six million new jobs — not counting those in other economic sectors and more than offsetting fossil fuel job losses. With externalities like air pollution included, overall benefits will be two to six times greater than the system-wide cost of the whole transition, in which energy-related carbon emissions peak before 2020 and, by 2050, fall more than 70% from today’s levels. Meanwhile fossil fuel use is halved and low-carbon energy supply triples to cover 70% of worldwide primary energy demand.
The scenario calls for an average annual investment, through 2050, of $3.5 trillion in demand-side low-carbon technologies – like electric vehicles, advanced heating systems and building energy improvements– almost double the $1.8 trillion invested in 2015. These investments will only amount to 0.3% of global GDP, as low carbon investment increases tenfold, supply-side investments stay level, and declining fossil fuel investments are offset by increased renewable energy investments, for a net positive impact on employment.
Under a well managed energy transition, wind and solar will become the largest sources of electricity by 2030, with 95% low-carbon electricity by 2050. Seven of 10 new cars will be electric, buildings 90-95% more efficient and carbon emissions by industry 80% lower than today, Coal and oil use will decline globally, with natural gas remaining a transition fuel for difficult-to-manage sectors, like heating and transportation.
Stranded assets — like idled coal-fired plants — will increase to $320 billion, but will be more than offset by gains in other parts of the economy. However, delaying the transition by a decade would more than triple stranded costs to over $1.3 trillion. Inefficient buildings, still being built today, will still rely on fossil fuels in 2050, unless they are renovated, stranding around $5 trillion in construction invesstment. Delaying the transition of the energy sector to 2030, while fossil fuel investments continue, would double the stranded asset risk.
Subsidies to fossil fuels, and a carbon price that fails to account for the true cost of burning them, distort the markets. The energy transition will require steady, long-term price signals to encourage timely adoption of low-carbon technologies, minimize stranded assets, and ensure that the energy needs of the poorest members of society are addressed.
We have the technology and the know-how. We need to muster our personal commitment to do our part — and the political will.