Climate consistency of IEA’s Sustainable Development Scenario

This post presents the results of checking the climate consistency of the most ambitious energy transition scenario from the International Energy Agency (IEA).

Energy transition scenarios are meant to inform policy-makers and society about the implications of potential roadmaps for the energy sector. In the context of addressing the climate change challenge, the goal of scenarios should be achieving a targeted level of global warming. Hence, the climate consistency of scenarios should be clearly and transparently reported, but often this is not the case. Moreover, it is common to find ambiguity in climate consistency reporting, with scenarios claiming to adhere to current policy commitments (e.g., Paris Agreement) without properly backing these statements.

Policy agreements themselves often embody a significant ambiguity. It is for instance not clear what does it take to be consistent with the Paris Agreement, so different interpretations are used. Unfortunately, how IPCC has reported available carbon budgets has also contributed to the overall ambiguity, since different numeric values of carbon budgets can be inferred from its publications. Moreover, the fact that global warming is linked to total emissions and not only to energy-related emissions is often by-passed by implicit or explicit assumptions about the evolution of non-energy emissions, for which the proposed energy transition scenarios do not provide any means for mitigation. And on top of all of this we have the significant uncertainty attached to carbon budgets themselves.

The lack of clarity in reporting the climate consistency of energy transition scenarios strongly undermines its value, since chances to trigger the wrong policy or societal response are high.

Carbon budgets (CBs) are an appropriate yardstick to check the climate consistency of transition scenarios. The IPCC compiles the available scientific knowledge on climate change, including carbon budgets. The IPCC periodically produces Assessment Reports (AR) where the available knowledge on climate change is compiled. The fifth AR was released in 2014, and the sixth AR is due for 2021-2022. Climate and earth system models are updated for each AR, and therefore changes in carbon budgets are to be expected. Since climate and earth system models incorporate ever increasing detail about physical mechanisms (including feedbacks), carbon budgets estimates can be expected to reduce in updated ARs.

In 2018 the IPCC released its last publication updating carbon budgets (Special Report on 1.5C – SR1.5C). This publication is still based on model results from the AR5, but introduced several methodological changes to derive carbon budgets, lading to a significant increase of CBs over those presented in AR5. In here  and here we discuss this update in CBs and its implications. One of the effects of this update in CBs is that some of the principal energy transition scenarios that before the SR1.5C were reported to be consistent with a 2C global warming, suddenly were reported to be consistent with 1.5C global warming (without reducing its cumulative emissions).

Comparing the cumulative CO₂ emissions from transition scenarios with the available carbon budgets provides a direct check of its climate consistency.

Energy transition scenarios provide high detail for energy-related CO₂ emissions, and the proposed means to mitigate them. However, CBs make reference to total CO₂ emissions. Therefore, for checking climate consistency total cumulative CO₂ emissions are the metric to be compared with available carbon budgets. This means that energy-related CO₂ emissions need to be complemented with industrial process CO₂ emissions and LUCUCF (land use, land use change and forestry) CO₂ emissions before comparing with the available carbon budgets.

Most energy transition scenarios do not address the details of mitigation in industry-process and LULUCF emissions, but still they make statements about climate consistency. For this purpose, they rely on unclear, non-transparent and unbacked assumptions about mitigation of non-energy related emissions. Often, the implicit mitigation for non-energy related emissions turns out to be far more ambitious than that for energy-related emissions, which is in stark contrast with the absolute lack of mitigation measures that these scenarios propose for non-energy related emissions.

In order to avoid this inconsistency, and in the absence of detailed transition analysis for non-energy related emissions, we propose that the climate consistency of the energy scenario is analyzed by framing it with the range of likely non-energy related emissions consistent with the proposed energy transition scenario. This range of non-energy related cumulative CO₂ emissions can be defined by the two following cases:

•         Business As Usual (BAU) CO₂ emissions from industry-process and LULUCF, consistent with historic values and trends.
•       Mitigation in non-energy related CO₂ emissions that has the same ambition as that deployed in the energy transition scenario for energy-related CO₂ emissions, where ambition is defined by the time-dependent ratio of transition to BAU emissions.

Among the most influential energy transition scenarios during the last decades are those developed by the International Energy Agency (IEA) and reported in its annual World Energy Outlook (WEO). 

The 2019 WEO includes 3 scenarios: Current Policies Scenario (CPS), Stated Policies Scenario (SPS) and Sustainable Development Scenario (SDS). The SDS is by far the more ambitious of the three in climate terms: Cumulative energy-related emissions between 2020 and 2100 from SPS and CPS are about 360% and 500% those of SDS, with SPS and CPS still emitting additional CO₂ after 2100. Here we will address the climate consistency of the SDS scenario (the one with the highest climate ambition).

In the WEO 2019, IEA claims the SDS to be consistent with 1.8C global warming with 66% likelihood, or 1.65C global warming with 50% likelihood. It is worth noting that the reduction of CO₂ energy-related emissions of the SDS from the SPS already includes 9% of Carbon Capture Use and Storage (CCUS). As we will see below, the analysis of the climate consistency of the SDS rather points (at best) to an alignment with a 2C global warming with 50% likelihood (see Fig.1).

As discussed above, the analysis of climate consistency requires evaluating the total cumulative CO₂ emissions and comparing them with the available carbon budgets. The energy-related emissions associated to the SDS are taken from the WEO 2019. Two estimates of industry process CO₂ emissions and LULUCF CO₂ emissions will be used to frame the likely evolution of this sectors in parallel to the implementation of the SDS energy transition roadmap: BAU and similar ambition to the mitigation in the energy-related emissions.

For industry process emissions, starting from the current values, the BAU follows the historic increasing trend with a linear evolution. The other extreme for industry process emissions assumes the same time evolution of mitigation as in energy-related emissions, leading to zero emissions a bit before 2070.

For LULUCF, starting from the average level of emissions from the last couple of decades, the BAU implements the historic increasing trend using a linear evolution up to 2040, when LULUCF are assumed to stabilize and keep constant up to 2100. The other extreme for LULUCF emissions assumes the same time evolution of mitigation as in energy-related emissions, leading to zero emissions a bit before 2070.

Figure-1 presents the results. Carbon budgets as of 2020 for different levels of global warming and likelihoods are presented at the right (yellow bars) and include the uncertainty range recommended by IIPC in the 2018 1.5C Special Report. Cumulative emissions (2020-2100) for the SDS transition scenario are presented at the left for the two cases of industry process emissions and LULUCF emissions: Energy-related emissions from SDS are presented in blue bars (the same for both cases); The bar at the left includes the BAU process industry and LULUCF cumulative emissions, while the bar at the right has industry process and LULUCF emissions with the same mitigation ambition as the energy-related emissions.

As it may be seen, total cumulative emissions are well above the available carbon budgets for 1.5C (67% and 50% likelihoods). The case that considers a similar mitigation ambition for industry process and LULUCF emissions as that for energy-related emissions has total cumulative emissions that fall within the upper uncertainty range of the carbon budget for 2C at 67% likelihood, and close to the median value of the carbon budget for 2C at 50% likelihood. However, if BAU emissions are considered for industry process and LULUCF (which seems more consistent with a transition scenario that does not foresee any measure to mitigate these emissions), the cumulative emissions are almost in the limit of the upper uncertainty range of the 2C at 50% carbon budget, and hence would be likely to lead to a global warming above 2C.

Figure-1: Cumulative emissions of IEA’s SDS (2020-2100) compared with available carbon budgets. Energy-related emissions are those from the SDS. For process and LULUCF emissions two cases are presented: BAU and same ambition as for energy-related emissions.

The analysis herewith presented has focused on the SDS from IEA, concluding that this energy transition scenario, at best would be aligned with 2C global warming, but that it significantly overshoots the 1.5C climate goal. However, this conclusion can be extended to other of the available main energy transition scenarios which also belong to the 800 – 900 GtCO₂ cumulative energy-related emissions climate tier.

Historic GHG emissions have already produced 1.1C of global warming, and its impacts are being felt around the world with increasing intensity year after year. Avoiding climate impacts that can seriously challenge the integrity of our socioeconomic and environmental systems would require limiting global warming to 1.5C, and reaching this goal requires the whole world completing the transition before 2050. Even if we fail to stabilize global warming to 1.5C, the faster we can transition the better for our socio-economic systems. In this context, and taking into account how these influential energy transition scenarios lock-in policies and investments for the following decades, it is difficult to understand why we have not been analyzing more ambitious scenarios since several years ago, so that policy-making can be properly informed.

In the post-COVID period, the opportunity window to address structural change should be used to increase transition rates and bring us into more climate-ambitious transition roadmaps.   

GDP is a wicked compass to guide our socio-economic system: Additional COVID-19 evidence

Fears to economic consequences from COVID-19 have delayed (or prevented altogether) effective response to the pandemic in many countries, with a significant death toll impact, and are now hasting a risky return to ‘normality’ (breaking confinement measures) against the advice of health experts. In several global North countries, we have witnessed the naked nasty reality of statements putting GDP before people’s life, accepting to sacrifice our elders just to maintain GDP growth for a bit longer.

Our economic system has become production growth-dependent, and our whole social system seems to be guided by one single compass: GDP growth. When GDP stops growing, our economic system collapses, and our societies suffer. By itself, this is a very clear sign of weakness (moreover considering the fallacy of eternal GDP growth) and lack of resilience. We certainly do not have appropriate socio-economic structures to navigate collective crisis, and we should better take advantage of the lessons from the COVID-19 crisis to improve before we have to face bigger crisis already in the pipeline (e.g., climate change).

Because of the time lags between the initial wave of the COVID-19 crisis in different countries, it is still rather soon to have the full picture. Indeed, the crisis is just taking off in the US (Figure-2) and it may still be incipient in many parts of the global South. But data up to date (Figure-1) already hints what could be a significant positive correlation between COVID-19 deaths per million people and GDP per capita. This could still become more of a U-curve if the COVID-19 crisis hits strong in the global South. However, if this happens it will be (at least in part) due to weakened health systems in these countries, for which the structural adjustment policies dictated by global North controlled institutions during the last decades have an important responsibility. And since these are (at least in theory) impositions done in the name of promoting GDP growth in the global South, the main conclusion would still hold:

It seems we are using the wrong compass (GDP growth) to guide the evolution of our socio-economic systems. Blindly following it takes us far away from prosperity, at least when facing a collective crisis. Focusing our whole socio-economic system on serving GDP growth leaves us without resilience and capability to navigate shocks without high impacts.  

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Figure-2: Evolution of confirmed COVID-19 deaths per million people in selected countries (January 31  to April 11^th, 2020)

We already knew that the ‘developed’ and ‘developing’ counties narrative becomes a fallacy as soon as we evaluate the state of development in a holistic two-dimensional space (‘achieved social thresholds’ and ‘biophysical boundaries transgressed’): we all live in developing countries. Indeed, Figure-3 shows how there is no country in the D-quadrant, the region where the needs of all are met within the means of the planet, where developed countries would lay (https://goodlife.leeds.ac.uk/).

Figure-3: Countries' performance in terms of achieved social thresholds and biophysical boundaries transgressed

The mainstream neoliberal argument during the last decades has been that there is a significant positive correlation between the ‘social thresholds achieved’ and GDP growth. This is certainly the case for some prosperity indicators, such as child mortality (Figure-4) and maternal mortality (Figure-5).

However, the beneficial effect of GDP on many prosperity indicators, while being important for low income countries, saturates or even becomes negative as high GDPs per capita are reached, which invalidates the use of GDP growth as the only compass to guide the evolution towards prosperity. This can be appreciated, among other, in life expectancy (Figure-6), self-reported life satisfaction (Figure-7), human development index (Figure-8), share of children in employment (Figure-9) and death rate from indoor air pollution (Figure-10).

Other indicators present a high dispersion with GDP, like Human Rights Score (Figure-11), perform the worst at middle GDPs, like outdoor air pollution death rates (Figure-12), or even deteriorate as GDP increases, like gender wage gap (Figure-13) and the share of low-pay earners who are female (Figure-14).

Therefore, we should stop using GDP growth as the only or main compass to guide the evolution of the socio-economic system. The momentum provided by the evidence disclosed during the COVID-19 crisis (about the lack of resilience and extreme socio-economic weakness that results from blindly using the GDP growth compass) should be used to change course and adopt a compass that guides us towards inclusive prosperity, while redesigning socio-economic structures so that they have the needed resilience.

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Climate emergency in the COVID-19 wake

COVID-19, and the sanitary crisis it has triggered, has put a halt on many fronts. Even the economy, understood as the ‘holy’ consumption-driven activity to produce ever increasing corporate profits, has been suddenly halted. Under this ‘shock’-like mental framework it is easy to give-in to the thought that other processes that were underway will also halt and wait for us to recover business as usual (BAU). With climate change this would be a fatal mistake. We should instead use all the lessons offered by the COVID-19 crisis to intensify action to address the climate emergency, since failure to do so will bring about deeper crisis for which we now have the evidence that our BAU socio-economic structures are poorly prepared.

The COVID-19 crisis is offering us many lessons about how our societies face collective challenges, including: the need of strong social networks and how these have been undervalued and dismantled during the last decades; the thin line between responsible and authoritarian governments which are ready to take any chance to step over social values and human rights; how the burden of collective response is often enforced on people, without enough care for the required economic support linked to a redistribution of the available resources; the importance of public buy-in and education to trigger collaborative behaviors; the power of solidarity; the wickedness deeply rooted in some dominating power groups, which explicitly advocate for sacrificing our elders for the sake of saving what they wrongly call ‘the economy’ (in terms of climate change the young generations are the ones that will be called to be sacrificed for today’s corporate profit).

From the COVID-19 crisis we can also learn about the structural drivers behind collective crisis, the value of diversified economies with strong domestic supply chains in all fronts (and not only industrial), where social value lies and how it has been systematically undervalued during the last decades.

This crisis also evidences how growth dependency has become a structural critical disease of our economic system: It seems fundamentally wrong to put all our socio-economic system to service corporate profit, in such a way that when this material growth (measured by monetized output irrespective of its social value) fails, all our socio-economic structure collapses. Resilience is missing.

Last but not least, this crisis also offers important lessons about the uttermost relevance of early action following scientific knowledge, and about the extremely high rates of change that can be deployed once there is a collective understanding of the urgency of change. These insights directly speak to the ongoing climate crisis.

Let’s come back to the emergency of the climate crisis and how important it is that we find our way to an appropriate collective management of this challenge.

What emerges after COVID-19 depends on today’s choices and on how many and how deep we internalize the lessons that the COVID-19 crisis offered us.

In the post-COVID period three frameworks are possible:

• Coming back to a reinforced fossil fuel BAU (FF-BAU), including nuclear and CCS resurgence.
• Recovering what we could already call the Renewables BAU (RE-BAU), pushing for renewables and efficiency to gradually take-up the role of conventional energy technologies without major structural changes in our socio-economic system.
• Addressing structural changes (SC) in our socio-economic system, in such a way that besides having an energy system based on renewables and efficiency, wider systemic resilience is developed.

The implications for the energy transition and effective climate action of the post-COVID framework will be very important: FF-BAU will lead to decades of delay; RE-BAU would bring us back to the pre-COVID framework that already involves a significant delay compared to the climate imperative; SC would provide room for significantly speeding up the transition.

Strategic movements can already be seen pushing ahead these frameworks, with pressures for bailouts to fossil fuel industries and regulatory rollbacks (both financial and environmental) already finding their way through proposed ‘stimulus’ measures all around the globe.

The dominating thinking (and certainly policy-making) today seems to be longing for a fast return to BAU. However, this might not be the best thing to do, considering the deep links between BAU and the origin of structural crisis like COVID-19 or climate change.

Even recovering the pre-COVID push for renewables and avoiding going back to a reinforced FF-BAU does not seem to suffice anymore on light of the accumulated delay and the evidence provided by the COVID-19 crisis about the weakness of our socio-economic system to navigate these collective challenges.

COVID-19 reveals once more the strong link between carbon emissions and economic activity as we understand it today (and as pursued during the last decades). The huge impact expected from the pandemic to current economic activity will probably mean that carbon emissions fall in 2020 for the first time since the Great Recession of 2008. But this is an undesirable, unsustainable and non-lasting way to reduce emissions; emissions rebounded sharply after 2009.

If economic stimulus programs and bailing out policies are linked to climate goals (RE-BAU), and if people and institutions get used to telecommuting (and perhaps other behavioral changes than can be internalized through the COVID-19 crisis, like reduced flying), the COVID-19 crisis could also deliver some longer-term climate benefits along the RE-BAU roadmap. But if the pre-COVID socio-economic structures are kept unchanged, climate benefits are likely to be small compared to the size of the challenge.

A crisis like COVID-19, with its heap of lessons offered and the halt in the BAU inertia that produces, opens a window of opportunity for rethinking old structures from scratch. What just few weeks ago was difficult to be opened for discussion, now can be explored. And there is also an increased appetite to address these discussions now. However, the window of opportunity can be small due to the different competing forces.

But how tight is the situation regarding the climate crisis and why do we need to address it without further delay, channeling all the lessons learned during the COVID-19 crisis to double down on climate ambition?

Figure-1 presents the remaining carbon budgets as of January 2020, i.e. the cumulative amount of CO2 that can be emitted since January 2020 in order to stabilize global warming at 1.5C or 2C with different likelihoods. The presented carbon budgets are taken from the 2018 IPCC Special Report on 1.5C, updated to 2020, expressed in terms of near surface temperature, and including the effect of 2019 updates in sea surface temperature measurement databases. These carbon budgets also include the conservative estimate of earth system feedbacks reported in the 2018 IPCC Special Report on 1.5C. The presented uncertainty ranges are the ones recommended in 2018 IPCC Special Report on 1.5C, but is worth noting that uncertainties can be significantly higher.

Given the huge socio-economic impacts that we can expect if global warming goes beyond 1.5C (as documented in the 2018 IPCC Special Report on 1.5C), the collective social goal should really be to stay below 1.5C global warming with the maximum likelihood. Hence, from the carbon budgets presented in Figure-1 we should be aiming at the carbon budget for 1.5C global warming with a 67% likelihood, which is as meager as 110 GtCO2 (emissions during last decade have been about 40 GtCO2/year, every year!).

The most ambitious transition scenarios from the two main international agencies dealing with the energy transition, the IEA Sustainable Development Scenario (WEO, 2019) and IRENA's REmap scenario (GET, 2019), belong to the same climate tier, with cumulative energy-related emissions until completing the transition of around 850 GtCO2. Other CO2 emissions from industrial processes and LULUCF should be added to energy-related emissions before checking consistency with climate goals by comparing with available carbon budgets. In any case, comparing these energy-related cumulative emissions with the carbon budgets for 1.5C (110 GtCO2 for 67% likelihood, and 270 GtCO2 for 50% likelihood) provides a clear indication of how short the RE-BAU falls from climate requirements. 


Figure-1: Remaining carbon budgets, as of January 2020, for limiting global warming to 1.5C with 67% and 50% likelihood and to 2C with 67% likelihood.

How fast should we transition to be aligned with the remaining carbon budgets?

If for simplicity sake we consider a linear transition to decarbonize our economy, Figure-2 presents historic CO2 emissions and a transition pathway consistent with a given climate goal (stabilize global warming to a certain value with a given likelihood of success). The carbon budget linked to the climate goal is the yellow area under the transition pathway (cumulative emissions from 2020 onward have to match the carbon budget for alignment with any specific climate goal).

Figure-2: Historic CO2 emissions and linear transition pathway consistent with a given climate goal, with indication of the associated carbon budget and how it relates with the evolution of annual emissions.

When we apply this kind of linear transition pathway to the remaining carbon budgets for stabilizing global warming at 1.5C with 67% and 50% likelihoods, we get the results presented in Figure-3: Full decarbonization should be reached within 5 years (67% likelihood of staying under 1.5C global warming) or a bit more than 12 years (50% likelihood of staying under 1.5C global warming). This is an extreme emergency!

Figure-3: Linear transition pathways consistent with the 1.5C carbon budgets with 67% and 50% likelihood.

The subtle difference between the climate crisis and the COVID-19 crisis is that in the case of climate change the human suffering is yet not as visible to all, because of the associated time lags and the distance of current impacts from the global North. But once the climate change impacts on human life fully materialize it will make COVID-19 look negligible at its side. So, we better emerge from the COVID-19 crisis with all lessons learned and a disruptive approach to address climate change.