Category: IEA

The last chance COP? Some more carbon budget maths!

dchone November 1, 2021

With world leaders and thousands of delegates and observers meeting in Glasgow for COP26, there is much talk of this being the last chance to save 1.5°C. It wouldn’t be the first time a COP has been described as the last chance we have, but in the case of COP26 and 1.5°C, it is a fair assessment of the situation. It all rests on the available carbon budget which I discussed in a recent post.

In the August 2021 6th Assessment Report from IPCC WGI, the carbon budget analysis for 1.5°C was published, as shown in the table below.

Estimates of historical CO₂ emissions and remaining carbon budgets (Source: IPCC)

In its recent NZE 2050 scenario, the IEA used the mid range figure of 500 Gt from 1.1.2020 as the carbon budget for the analysis, although we should recognise that for a greater degree of certainty of not exceeding 1.5°C a lower number is more desirable. But we are two years on from the baseline of 1.1.2020 with cumulative carbon dioxide emissions since that time of some 80 Gt, so from 1.1.2022 which is now just a few weeks away, the carbon budget for 1.5°C is closer to 400 Gt. This sits against global annual carbon dioxide emissions of over 40 Gt, comprising 33 Gt from fossil fuel use, 3 Gt from the calcination of limestone for cement manufacture and 6 Gt as a result of land use change practices, which includes ongoing deforestation.

So with at most 400 Gt of remaining budget and it diminishing by 1 Gt every 9 days (so 1.5 Gt while COP26 is on), the challenge facing the conference is huge. 2021 (originally 2020 in the Paris Agreement but delayed due to COVID-19) is the year in which countries are asked through the Paris Agreement to reassess their initial Nationally Determined Contributions and to increase ambition in light of the prevailing science. Indeed, that process is well underway and a quick look at the UNFCCC NDC Registry will show many new submissions, with more appearing each day.

A quick analysis of the NDCs reveals that in the 2020s global society is likely to consume much of the remaining carbon budget for 1.5°C, which implies that the temperature goal is breached soon after the decade is over (although it may be some years after that the IPCC and WMO confirm this). Just ten medium to large emitting countries account for some 200 Gt in the 2020s, based on the emissions pathways they have announced through their existing or revised NDCs and assuming that these are delivered. That list includes China, the USA, India, the EU, Australia, the UK, Canada, Korea, Japan and Russia. These ten make up about two thirds of current global energy system emissions. China is the largest, with emissions currently around 10 Gt per year. Their revised NDC was submitted last week and brings forward their peaking of emissions to ‘before 2030’. I have assumed that their emissions plateau now, then being falling in 2027 and drop to 9 Gt per year by 2030.

Most of the countries outside my ten, albeit not all, either have modest current emissions and are therefore likely to see short term increases as development continues, or at best will plateau at their current levels. This includes Brazil, Indonesia and all of the African (1.3 Gt energy emissions in 2019) and Middle East (2.1 Gt energy emissions in 2019) countries. The 10+ Gt per year for nine years that these countries represent is around 100+ Gt, so that takes the total to 300+ Gt. Add to this international aviation and marine bunkers over a decade and another 15-20 Gt of the budget is consumed. The total by 2030 is therefore becoming perilously close to 400 Gt and will certainly exceed the tighter 67% and 83% numbers in the table above. At best the NDCs might see carbon dioxide emissions at around 30 Gt per year by 2030, with a remaining budget of 60-80 Gt going into the 2030s and beyond.

While there is a very strong focus at COP26 on net-zero emissions in 2050, the real challenge for 1.5°C is within this decade. The next round of NDCs won’t be submitted until 2025 if the Paris schedule is maintained, by which time another 160-200 Gt of carbon dioxide could have been emitted based on a global plateau at current levels. This really will be too late to make changes for 1.5°C, so it has to be in 2021 with COP26 acting as the catalyst for change.

Pathways to 1.5°C

dchone June 11, 2021

In 2018 when the IPCC released their Special Report on 1.5°C, they presented four archetype scenarios to help readers understand that there were fundamentally different approaches to limit long term warming to 1.5°C or below. The scenario pathways are shown below and vary significantly in their approach, time horizon and use of sinks.

All four scenarios (P1, P2, P3, P4) are based around the same carbon budget, or total cumulative emissions of 420 Gt from 1.1.2018 consistent with providing a 66% chance of limiting warming to 1.5°C. Whether the carbon budget is aligned with 420 Gt (67^th percentile) or 580 Gt (50^th percentile), it represents a very limited amount given that annual CO₂ emissions are in excess of 40 Gt, so these represent 10-15 years of emissions at current levels. Since this IPCC publication, a further 160 Gt will have been emitted by society by the end of 2021, meaning that the budget is reduced to 260 – 420 Gt.

In attempting to align with a very limited carbon budget, the P1 scenario imagines a world of falling overall energy use and a very rapid shift away from fossil fuels. There is no use of geological storage of CO₂ and a modest reliance on natural sinks, although in doing so the world must shift away from net-deforestation by the 2040s. By contrast, the P4 scenario sees increasing demand for energy and as a consequence, a much more difficult decarbonisation journey that involves considerable use of sinks in the second half of the century. Notably, the P4 scenario exceeds the carbon budget by quite some amount with peak emissions to the atmosphere of 900 Gt, before reining in the amount to 200 Gt by 2100. This results in P4 being a so-called overshoot scenario, in that the world exceeds 1.5°C during the century before returning to 1.5°C and below by the end of the century.

All the above might seem a bit academic, but it became very real recently when the IEA released their 1.5°C scenario and some commentators began comparing it to one of the very few other 1.5°C scenarios, notably Sky 1.5 from Shell.

In fact, the two scenarios are at near opposite ends of the P1 to P4 spectrum.

The IEA 1.5°C scenario looks at the period from 2020 to 2050 and presents a proposal for the problem of containing emissions to a 500 Gt carbon budget (the 580 Gt IPCC number less 80 Gt for the years 2018 and 2019). Apart from recognising that the land based system is likely to reduce this budget by a further 40 Gt over the period (i.e. reducing it to 460 Gt), the analysis limits itself to the energy system and the changes that would be required to meet a 460 Gt cumulative emissions constraint within a 30 year time frame. As is the case in similar scenarios, including Sky 1.5, their analysis assumes rapid electrification of final energy (e.g. electric cars instead of gasoline) and makes use of renewables and nuclear power generation to produce the electricity. They introduce hydrogen as an energy carrier, make use of bioenergy and include carbon capture and storage (CCS) where fossil fuel remains in use. For the latter, the IEA deploy CCS directly on facilities that use fossil fuels and indirectly through direct air capture for fossil fuel use in applications such as aviation.

All the above steps are well understood, but even given rapid and stretching deployment rates of all technologies, these steps are unlikely to contain emissions to less than 500 Gt in under thirty years. This is because of the expected increase in overall energy use, a consequence of economic growth, the general rise in population and the shift of billions of people from very low energy use lifestyles to at least modest energy use, a simple outcome of development and the provision of basic services like lighting, clean water, food refrigeration and some mobility.

As such, energy modelers looking at a very constrained time frame of 30 years must make the assumption that energy growth can be contained or even fall, as in the IPCC P1 scenario. This is exactly what the IEA have done to meet the carbon constraint. In the 1.5°C Scenario primary energy demand falls from 612 EJ in 2019 to 543 EJ in 2050, a drop of over 10%. Efficiency will certainly help deliver such an outcome and the use of renewable electricity gives the story a big boost as the thermal losses in power stations vanish, although new losses emerge through the use of transmission and storage. But the big story is the widespread assumption of behavioural change across society to reduce energy demand. The chosen measures include steps such as;

Ride-sharing in all urban car trips
Reducing motorway / freeway speeds to below 100 kph / 60 mph.
Increasing temperatures in air conditioned vehicles and buildings.
Lowering temperatures in heated buildings.
Replacing short flights with high speed rail.
Limiting long haul air travel to 2019 levels.

With low energy demand and high deployment rates of new energy technologies it then becomes possible to resolve the carbon budget within a 30 year time frame.

At the other end of the spectrum is the Sky 1.5 scenario, which tackles the problem of a limited carbon budget in a very different way. Sky 1.5 looks at the period from 2020 to 2100, an 80 year time frame, and starts with an expectation of rising global energy demand, even assuming significant energy efficiency improvements across society. The growth in population and the demand for energy services, including significant new demand from developing countries for basic services, cannot be contained and energy demand rises. This immediately poses a challenge in that rising demand more quickly consumes the available carbon budget at the front end, when alternative energy technologies and sinks have not been deployed.

Sky 1.5 also recognises that for many energy technologies, the 2020s still remain a period of development and limited deployment and even for more mature technologies such as solar and wind, a period of early growth where change on a global scale will remain limited.

The solution to this approach is to accept that, at least in the short term, the carbon budget may be consumed and the temperature it is linked to (1.5°C in this case) potentially surpassed for a period of time. The subsequent rapid deployment of sink capacity, both manmade in the form of air capture with geological storage and natural as reforestation, then offers the possibility of a period of net-negative emissions later in the century, to redress the imbalance and reduce cumulative carbon dioxide emissions and therefore temperature. This is the approach that Sky 1.5 takes, as do the IPCC P3 and P4 scenarios. Sky 1.5 takes this approach out of necessity, in that the scenario reaches a limit on energy technology deployment and does not foresee a fall in energy demand.

The end carbon budget for both the IEA 1.5°C scenario and Sky 1.5 are similar, but the IEA restricts itself to a thirty year time-frame, whereas Sky 1.5 operates over an eighty year time-frame. Sky 1.5 is also remodeled by MIT within their integrated assessment model to give a temperature outcome, rather than simply using the IPCC central estimate for a carbon budget. The two scenarios are attempting to answer the same question, but take very different approaches to doing so. There is no right or wrong here, just different ways of solving a tough problem.

Note: Scenarios don’t describe what will happen, or what should happen, rather they explore what could happen. Scenarios are not predictions, strategies or business plans. Please read the full Disclaimer here.

Chasing electrification

dchone August 31, 2017

One of the important changes that needs to take place in the global energy system as it heads towards much lower emissions is electrification. This is the increasing use of electricity as final energy (i.e. the energy we all use to deliver services) rather than fossil fuels, such as natural gas for cooking and gasoline for mobility. According to the IEA, electricity made up nearly 19% of final energy use in 2015, with the bulk of the 81% that isn’t electricity being oil products, natural gas, coal and biomass. The Shell scenario work on a net zero emissions world indicates that electricity should exceed 50% of final energy use.

Over the course of the last few decades, electrification of final energy has moved relatively slowly, at around 2 percentage points per decade (i.e. it was about 16.5% in 2005 and 14.4% in 1995). This rate of change is far below what is necessary to reach 50+% during the second half of the century – in fact, at the current rate it would take over one and half centuries to get above 50%. Therefore, the rate of electrification of the final energy system has to approximately triple over the coming few years for the Paris goals to be approached. At the same time, overall expansion of the energy system also has to be catered for, which might see a near doubling in final energy demand, even as electrification brings considerable efficiency gains.

Today, global electricity production stands at some 25,000 TWh per annum, representing ~19% of final energy demand. The trends described above indicate electricity production rising to at least 100,000 TWh per annum during the second half of the century, or the addition of ~1,400 TWh of generation per annum from now on. The 3.3 GW Hinkley Point nuclear power station being constructed in the UK operating at full capacity for the entire year would add about 29 TWh. The likely progression probably won’t be linear, so good progress would still require some 800-1100 TWh added each year in the near term. That’s still at least 30 Hinckley Point projects brought on line each year.

This new electricity production shouldn’t contribute additional emissions to the atmosphere, so many will look for it to come from wind and solar. Total global generation from wind and solar was around 1,300 TWh in 2016, but the added generation from 2015 to 2016 was 208 TWh (Source: BP Statistical Review of World Energy) against total added electricity generation of 600 TWh. Total added generation in recent years has average around 500 TWh, well short of the 800-1100 TWh mentioned above.

Additional solar and wind are not yet close to meeting additional generation needs, although both are rising quickly with additional generation more than doubling over the last six years. That would point to somewhere around 2030 when all new generation needs are being met by additional solar and wind being added to the grid in sufficient quantity for both demand and increasing electrification needs. It also means that emissions from electricity generation globally will only fall in the medium term to the extent that natural gas and nuclear can displace coal. Although coal use is now falling in some economies, it is also increasing rapidly in others as new generation capacity is required for development. Vietnam is one such economy, with several new facilities close to approval.

Electrification of the energy system is a critical driver for change, yet progress today is more mixed than many recognize. Although renewable penetration has been significant in recent years, it must make even more rapid progress in the next decade to bring about material change in the time frames that are being contemplated for net-zero emissions (with some expecting such an outcome by 2050 ). The first electricity grid appeared in New York in September 1882, 135 years ago. Although the technology has spread globally and appears ubiquitous, it still requires significant development and expansion. That will certainly happen, but the time-frame in the context of the Paris Agreement appears uncertain.

Scenarios are part of and ongoing process used in Shell for more than 40 years to challenge executives’ perspectives on the future business environment. They are based on plausible assumptions and quantification and are designed to stretch management thinking and even to consider events that may only be remotely possible.

First steps forward for aviation

dchone October 13, 2016

Along with the rush to ratify the Paris Agreement and pass the 55 / 55 criteria for entry into force, last week saw the International Civil Aviation Organisation (ICAO) agree on a global Market Based Measure (MBM) system to begin to manage the emissions of CO2 from international aviation. The most recent IEA assessment for the aviation sector (2014 data) puts emissions at 504 Mt CO2, or 1.5% of global CO2 emissions from energy use. This represents a rise of 95% over 1990 levels versus a 58% rise in CO2 emissions more broadly over the same period. Nevertheless, this indicates a considerable efficiency improvement for aviation, as Revenue Passenger Kilometres (RPK) have nearly tripled in the same period. That same IEA report highlights a recent slowing down in global emissions, but the outlook for aviation does not appear to be following a similar pattern. A September market update from Boeing notes that China alone could order over 6,800 planes to a value of $1 trillion in the next 20 years.

As was the case with the Kyoto Protocol, international aviation emissions are not covered by the Paris Agreement. Rather, the aviation industry has spent the last few years negotiating an industry agreement to manage emissions. While there is an important emphasis on efficiency improvements and the longer term application of synthetic fuels, primarily from biomass, the centrepiece of the approach is an offset system utilising the global carbon markets. Collectively the approach will be known as the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). This is similar to an approach that the IMO were considering for the marine sector in the run-up to COP 15 in Copenhagen, but didn’t implement.

The CORSIA calls for international aviation to address and offset its emissions through the reduction of emissions elsewhere (outside of the international aviation sector), involving the use of “emissions units”. Two main types of emissions units exist: “offset credits” from crediting mechanisms and “allowances” from emissions trading schemes. Offsetting could be through the acquisition and redemption of emissions units, arising from different sources of emission reductions achieved through mechanisms (e.g. UNFCCC’s Clean Development Mechanism), programmes (e.g. REDD+ – reducing emissions from deforestation and forest degradation in developing countries) or projects (e.g. substituting coal-fired stoves with solar cookers). The CORSIA will be implemented in a phased approach throughout the 2020s.

Offsetting of aviation emissions is really the only practical route forward for the industry, although synthetic fuels will likely play an important role in the decades ahead. But the offset strategy and approach needs to look toward a world of net-zero emissions, as required by the Paris Agreement. Recent scenario work by Shell that looks forward at possible pathways to a net-zero emission energy system sees aviation little changed from today, other than in size (expanding from 7 EJ today to 30 EJ by late in the century) and efficiency. While the overall transport scenario sees significant electrification, for aviation the primary fuel remains hydrocarbon based.

By later in the century hydrogen based jets may have appeared, but such a development remains distant with no current line of sight to such an outcome. Although planes have an operational life of about 25 years, a series, such as the Boeing 747 family, can extend for considerably longer. In the case of the 747 development started in the early to mid-1960s and with the order books seemingly drawing to a close on the 747-8 (despite a recent significant order for 747-8 freighters), the last 747 might leave the skies as late as 2050. That’s 85 years. This is because of the huge development costs for new planes, let alone what it might take for a fundamental shift to hydrogen.

While the offset approach envisaged for the 2020s will use the full range of current emissions trading instruments, as emissions fall globally aviation will need to look to a sequestration strategy – i.e. sinks, to use the terminology of the Paris Agreement. ICAO have hinted at this with the inclusion of REDD+ in the portfolio of measures, but a long term reliance on forestry may not be sufficient to meet their needs.

At the Chatham House Climate Conference held in London very recently, the subject of carbon dioxide sinks was on the agenda. The speakers noted that sinks would be an important part of the portfolio of actions to reach net-zero emissions. Within the sinks, there is a portfolio of approaches as well, with the likely outcome that all will have to be used. This includes direct CCS in conjunction with fossil fuel use, but also a variety of atmospheric carbon dioxide removal technologies (see below).

Coming back to the task confronting ICAO, one speaker at the Chatham House Conference noted that the journey to net-zero emissions cannot rely solely on soil carbon and reforestation approaches. This is simply because we cannot hope to get the biosphere back to the state it was in 200+ years ago and yet go forward with a population reaching 10 billion people and the pressures that will put on the expansion of our agricultural system. Hence the argument for a portfolio approach to CCS.

As ICAO moves forward they will also have to consider a portfolio approach. Current carbon trading instruments will work for now, but they also need to consider early investment in nascent technologies such as BECCS (bio-energy with CCS) and DACCS (direct air capture with geological storage). While industrial CCS has emerged as a scalable technology, offshoots such as DACCS operate at pilot scale. Given sufficient attention from ICAO, these could be at a demonstration level in the 2020s, with the goal of scalability by 2030.

“The New Lens Scenarios” and “A Better Life with a Healthy Planet” are part of an ongoing process – scenario-building – used in Shell for more than 40 years to challenge executives’ perspectives on the future business environment. We base them on plausible assumptions and quantification, and they are designed to stretch management thinking and even to consider events that may only be remotely possible. Scenarios, therefore, are not intended to be predictions of likely future events or outcomes, and investors should not rely on them when making an investment decision with regard to Royal Dutch Shell plc securities.

It is important to note that Shell’s existing portfolio has been decades in development. While we believe our portfolio is resilient under a wide range of outlooks, including the IEA’s 450 scenario, it includes assets across a spectrum of energy intensities including some with above –average intensity. While we seek to enhance our operations’ average energy intensity through both the development of new projects and divestments, we have no immediate plans to move to a net-zero emissions portfolio over our investment horizon of 10-20 years.

After the INDCs, is 2°C possible?

dchone October 16, 2015

The last few weeks have seen a flood of Intended Nationally Determined Contributions (INDC) arrive at the UNFCCC offices in Bonn, presumably to be included in the assessment of progress promised by the UNFCCC Secretariat for release well before the Paris COP21.

There are now some 150 submissions and assessing them in aggregate requires some thinking about methodology. For starters, the temperature rise we will eventually see is driven by cumulative emissions over time (with a climate sensitivity of about 2°C per trillion tonnes of carbon – or 3.7 trillion tonnes CO2), not emissions in the period from 2020 to 2025 or 2030 which is the point at which most of the INDCs end. In fact, 2025 or 2030 represent more of a starting point than an end point for many countries. Nevertheless, in reading the INDCs, the proposals put forward by many countries give some clues as to where they might be going.

For Europe, the USA and many developed economies, the decline in emissions is already underway or at least getting started, with most having already said that by mid-century reductions of 70-80% vs. the early part of the century should be possible. But many emerging economies are also giving signs as to their long term intentions. For example, the South Africa INDC proposes a Peak-Plateau-Decline strategy, which sees a peak around 2020-2025, plateau for a decade and then a decline. Similarly, China has clearly signalled a peak in emissions around 2030, although with development at a very different stage in India, such a peak date has yet to be transmitted by that government.

Nevertheless, with some bold and perhaps optimistic assumptions, it is possible to assess the cumulative efforts and see where we might be by the end of the century or into the early part of next century. In doing this I used the following methodology;

Use an 80/20 approach, i.e. assess the INDCs of the top 15-20 emitters and make an assumption about the rest of the world. My list includes USA, China, India, Europe, Brazil, Indonesia, South Africa, Canada, Mexico, Russia, Japan, Australia, Korea, Thailand, Taiwan, Iran and Saudi Arabia. In current terms, this represents 85% of global energy system CO2 emissions.
For the rest of the world (ROW), assume that emissions double by 2040 and plateau, before declining slowly throughout the second half of the century.
For most countries, assume that emissions are near zero by 2100, with global energy emissions nearing 5 billion tonnes. The majority of this is in ROW, but with India and China still at about 1 billion tonnes per annum each, effectively residual coal use.
Cement use rises to about 5 billion tonnes per annum by mid-century, with abatement via CCS not happening until the second half of the century. One tonne of cement produces about half a tonne of process CO2 from the calcination of fossil limestone.
Land use CO2 emissions have been assessed by many organisations, but I have used numbers from Oxford University’s trillionthtonne.org spreadsheet, which currently puts it at some 1.4 billion tonnes per annum of carbon (i.e. ~5 billion tonnes CO2). Given the INDC of Brazil and its optimism in managing deforestation, I have assumed that this declines throughout the century, but still remains marginally net positive in 2100.
I have not included short lived climate forcers such as methane. These contribute more to the rate of temperature rise than the eventual outcome, provided of course that by the time we get to the end of the century they have been successfully managed.
Cumulative emissions currently stand at 600 billion tonnes carbon according to trillionthtonne.org.

The end result of all of this are the charts below, the first being global CO2 emissions on an annual basis and the one below that being cumulative emissions over time. The all important cumulative emissions top out just below 1.4 trillion tonnes carbon.

The trillionth tonne point, or the equivalent of 2°C, is passed around 2050, some 11 years later than the current end-2038 date indicated on the Oxford University website. My end point is the equivalent of about 2.8°C, well below 4+°C, but not where it needs to be. The curve has to flatten much faster than current INDCs will deliver, yet as emissions accumulate, the time to do so is ticking away.

Even with a five year review period built into the Paris agreement, can the outcome in 2030 or 2035 really be significantly different to this outlook? Will countries that have set out their stall through to 2030 actually change this part way through or even before they have started along said pathway? One indication that they might comes from China, where a number of institutions believe that national emissions could peak well before 2030. However, the problem with accumulation is that history is your enemy as much as the future might be. Even as emissions are sharply reduced, the legacy remains.

Nevertheless, we shouldn’t feel hopeless about such an outcome. Last week I was at the 38^th Forum of the MIT Joint Program on the Policy and Science of Global Change and I was reminded again during one of the presentations of their Level 1 to Level 4 mitigation outcomes which I wrote about in my first book, 2°C Will Be Harder than we Think. These are shown below.

Taking no mitigation action at all results in a potential temperature distribution with a tail that stretches out past 7°C, albeit with a low probability. However, we can’t entertain even a low probability of such an outcome, so some level of mitigation must take place. While Level 1 remains the goal (note however that the MIT 2°C is not above pre-industrial, but relative to 1981-2000), MIT have shown that lesser outcomes remove the long tail and contain the climate issue to some extent. The INDC analysis I have presented is similar to Level 2 mitigation, which means the Paris process could deliver a very substantial reduction in global risk even if it doesn’t equate to 2°C. More appreciation of and discussion around this risk management approach is required, rather than the obsession with 2°C or global catastrophe that many currently present.

Of course, extraordinary follow through will be required. Each and every country needs to deliver on their INDC, many of which are dependent on very significant financial assistance. I looked at this recently for Kenya and India. Further, the UNFCCC process needs its own follow through to ensure that global emissions do trend towards zero throughout the century, which remains a very tall order.

Four demands for Paris

dchone June 22, 2015

The call was very clear, here were “four demands” for Paris COP21 being presented to a group in London. But the surprise was the presenter; not a climate focussed NGO or an activist campaigning for change, but Fatih Birol, Chief Economist for the International Energy Agency. He was in an optimistic mood, despite the previous two weeks of ADP negotiations in Bonn that saw almost nothing happen. He opened the presentation by saying “This time it will work” (i.e. Paris, vs. Copenhagen and all the other false starts).

On June 15th Mr Birol launched the World Energy Outlook Special Report: Energy and Climate Change. The IEA usually launch a special supplement to their annual World Energy Outlook (WEO) and this one was the second to focus on the climate challenge and the policy changes required for the world to be on a 2°C emissions pathway. It was also something of a shot over the bow for the Paris COP21 process which had just completed another two weeks of negotiations in Bonn, but with little to show for the effort. Mr Birol is a master of such presentations and this one was memorable. He focussed almost entirely on the short term, although the publication itself looks forward to 2030 for the most part. With regards to the energy system, short term usually means 5 years or so, but in this case short term really meant December but with the resulting actions being very relevant for the period 2016-2020.

Mr Birol outlined four key pillars (as they are referred to in the publication) for COP21, but restated them as “demands”. They are;

Emissions must peak by 2020. The IEA believes that this can be achieved with a near term focus on five measures;
1. Energy Efficiency.
2. High efficiency coal, both in new building and removing some existing facilities. IEA proposed a ban on building sub-critical coal.
3. An even bigger push on renewable energy, with an increase in investment from $270 billion in 2014 to $400 billion in 2030.
4. Oil and gas industry to reduce upstream methane emissions.
5. Phasing out fossil-fuel subsidies to end-users by 2030.
Implement a five year review process for NDCs (Nationally Determined Contributions) so that they can be rapidly adjusted to changing circumstances. I discussed the risk of a slow review process when MIT released a report on the possible COP21 outcome.
Turn the global 2°C goal into clear emission reduction targets, both longer term and consistent shorter term goals.
Track the transition – i.e. track the delivery of NDCs and transparently show how the global emissions pathway is developing as a result.

Interestingly Mr. Birol didn’t mention carbon pricing once, at least not until a question came up asking why he hadn’t mentioned carbon pricing – “Is carbon pricing no longer an important goal, you didn’t mention it?” asked a curious member of those assembled at the Foreign Office. He said yes it was, but given his focus was on Paris and that he saw little chance of a global approach on carbon pricing being agreed in that time-span, he didn’t mention it! I think this represents a major oversight on the part of the IEA although there is at least some discussion on carbon pricing in the publication. While it is true that a globally harmonised approach to carbon pricing won’t be in place in the near term, I would argue that an essential 5th pillar (or 5th demand) for Paris is recognition of the importance of carbon pricing and creation of the necessary space for linking of heterogeneous systems to take place. This looks like the fastest route towards a globally relevant price.

Mr. Birol didn’t mention CCS either, which is perhaps more understandable given the 5 year focus of much of the publication. However, Chapter 4 within the publication deals extensively with CCS and the IEA highlights the importance of CCS in their 450 ppm scenario through the chart below.

Finally, there was some discussion around the climate statement made by the G7 the week before and their commitment out to 2100. Looking at the statement released by the G7, they said;

“. . . . .we emphasize that deep cuts in global greenhouse gas emissions are required with a decarbonisation of the global economy over the course of this century. Accordingly, as a common vision for a global goal of greenhouse gas emissions reductions we support sharing with all parties to the UNFCCC the upper end of the latest IPCC recommendation of 40 to 70 % reductions by 2050 compared to 2010 recognizing that this challenge can only be met by a global response.”

My reading of this is that the G7 are recognizing the need to be at or nearing global net zero emissions by 2100. However, this isn’t how the statement has been reported, with several commentators, media outlets and even one of the presenters alongside Fatih Birol interpreting this as an agreement to be fossil fuel free by 2100. These are two very different outcomes for the energy system; the first one potentially feasible and the second being rather unlikely. Both the Shell Oceans and Mountains New Lens Scenarios illustrate how a net zero emissions world can potentially evolve, with extensive use of CCS making room for continued use of fossil fuels in various applications. The core driver here will be the economics of the energy system and the competitiveness of fossil fuels and alternatives across the full spectrum of needs. It is already clear that alternative energy sources such as solar PV will be very competitive and could well account for a significant proportion of global electricity provision. Equally, there are areas where fossil fuels will be very difficult to displace; I gave one such example in a case study I posted recently on aviation. Energy demand in certain sectors may well be met by fossil fuels for all of this century, either with direct use of CCS to deal with the emissions or, as illustrated in the IPCC 5th Assessment Report, offset by bio-energy and CCS (BECCS) elsewhere. Unfortunately the nuances of this issue didn’t make it into the IEA presentation.

That’s it from me for a couple of weeks or so. I am heading north on the National Geographic Explorer to see the Arctic wilderness of Svalbard and Greenland.