RT @SPGCIPetchems: Our #SPWPC Panel on Energy Transition 'The Increasing Interaction between Chemicals, Refining and Agri' Is well underway…
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Customer LoginsVice President, Climate and Sustainability, IHS Markit.
A global sense of urgency around the impacts of climate change reflects the record-breaking series of disasters around the world over the past two years. As some 75% of global greenhouse gas (GHG) emissions come from the use of energy, the pressure for action is squarely on changing the future fuel mix - and quickly.
Four sets of key actors in policy, regulation and investment continue to ramp up pressure for change:
But targets are only words until they turn into actions. Change is already here, and more is coming. But how quickly can a global economic infrastructure with 80% of primary energy needs currently met by fossil fuels (oil, coal and natural gas) shift to lower carbon sources?
To answer this question and provide companies with more than one potential future, IHS Markit outlines three forward-looking energy outlooks to 2050 built bottom-up by our country and sector experts. In addition, we outline two net zero cases that start from the predetermined goal of reaching a pathway to net zero global GHG emissions by 2050 and work backwards.
Scenarios and net zero assumptions
Each of the integrated outlooks embodies different economic, geopolitical, climate policy, costs and technology assumptions that are plausible.
A bridge to net zero
Net zero cases are fundamentally different from forward-looking scenarios that project outcomes based on articulated and plausible assumptions. Our net zero cases, conversely, begin with a predetermined outcome of reaching global net zero GHG emissions by 2050 and "backcast" to the present.
Unlike some outside analyses, we do not believe that the massive energy and industrial infrastructure of today can change overnight. Instead, we construct a "bridge" from our faster transformation scenario, Green Rules, to the net zero cases. We assume that even very strict and global climate-related policies put into effect in the next few years could not start to impact emissions until around 2027. This emissions "overshoot" creates the need to compensate in later years to reach the final goal of net zero.
We outline two different cases which reflect both the uncertainty around the long-term scale of carbon capture and the differences of opinion among policy makers over the use of an "enabler" of hydrocarbons.
Emissions and energy outcomes differ widely by scenario and case
Each of the three scenarios and two net zero cases has different implications for primary and final energy demand, and for global GHG emissions and temperature paths going forward. None of the scenarios gets close to net zero by 2050. The net zero cases, which by definition reach their goal, must continue to produce negative emissions for decades after mid-century in order to reach the Paris Agreement target of limiting global average temperature rise to 1.5⁰C by 2100.
Learn more about our Energy and Climate Scenarios research.
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Susan Farrell, Vice President on the Climate and Sustainability team, heads the IHS Markit Energy and Climate Scenarios, which project five different integrated trajectories for oil, gas, coal, wind, solar, nuclear, and other energy sources out to 2050 at a global and key country level.
Posted on 28 July 2021
This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.
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