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GECO 2020

Global Energy and Climate Outlook 2020: A New Normal beyond Covid-19

The Global Energy and Climate Outlook (GECO) analyses global and sectoral pathways towards a deep decarbonisation of the energy system, to limit global warming to below 2°C by the end of the century as put forward in the UNFCCC Paris Agreement. The quantitative analysis combines global energy system and macroeconomic modelling.

This year’s report presents a special insight into the impact of the Covid-19 outbreak on the energy sector, with a special focus on the transport sector, and how the pandemic can hinder or enable the transition to a low-greenhouse gas (GHG) economy.

The transport sector has suffered the greatest slump in mobility demand in recent history during the lockdown period. This report explores the impacts of transport activity trends that may persist in the future from the structural changes induced by the Covid-19 pandemic, as well as of policy initiatives that may be adopted as enabling measures for low-carbon transport. While greenhouse gas emissions in this “New Normal” differ significantly compared to previous projections, the emissions gap towards a 2°C pathway is closed only by some 35%, thereby stressing the need of more ambitious collective action to maintaining global temperature change to well below 2°C.

GECO 2020 reportGECO 2020 cover

GECO 2020 - Main report
Outlook on pathways including the impact of Covid-19, behaviour changes on transport and policies focused on a low-carbon recovery; global New Normal, 2°C and 1.5°C scenarios

 

 

GECO 2020 - Energy, Greenhouse gas and air pollution emissions balances
A set of 3 projections with an energy-emissions model - using common socio-economic assumptions

 

GECO 2020 - Macro-economic Baseline
Economic Multi-Regional Input-Output tables

 

GECO data visualisation
GECO 2020 - Data visualisation


Scenarios presented in the GECO 2020 report

The Covid-19 pandemic has accelerated certain underlying trends in investment patterns, behaviour change, technological adoption and policy action that push the global energy system into a “New Normal” compared to a Baseline situation without Covid-19. GECO 2020 analyses different pathways that vary according to changes in mobility patterns after Covid-19 and country-level adopted policies for the “New Normal” scenario.

  • Base_noC19 is a hypothetical projection without the inclusion of Covid-19 effects (no-Covid Baseline). Current policies lead to temperature increases between 3-4°C at the end of the century.
  • New Normal is but one possible pathway of future post-Covid development, it differs from the Base_noC19 scenario in three groups of modelled parameters: 
    • macroeconomic parameters (global GDP is 6.3% below Baseline in 2030) (Base_C19); 
    • transport and mobility changes; mainly reflecting trends accelerated by the pandemic such as faster digitalization (teleworking, videoconferencing), behaviour changes (shift to soft mobility, shared mobility) and shortening of supply chains (Base_C19+TC);
    • energy-climate policies that could be reinforced post-pandemic (notably, supporting the adoption of electro-mobility and a moratorium on new inefficient coal power plant construction).
  • The 2°C and 1.5°C scenarios were designed with a probability not to exceed their temperature change at the end of the century of 66% and 50%, respectively. In order to achieve the ambitious transition to a low carbon economy meeting the well below 2°C target, global greenhouse gas emissions need to drop to net zero early in the second half of the century. For the 2°C/1.5°C scenarios, a global carbon price is implemented.
  • NDC is the Nationally Determined Contributions scenario from GECO 2019.
Figure: Global GHG emissions and global mean temperature increase

GECO 2020 Global GHG emissions and global mean temperature increase

Note: Base_noC19 is a hypothetical projection without the inclusion of Covid-19 effects. New Normal is but one possible pathway of future post-Covid development, it differs from the Base_noC19 scenario in three groups of modelled parameters: macroeconomic parameters; transport changes; and new policies. The 2°C and 1.5°C scenarios were designed with a probability not to exceed their temperature change at the end of the century of 66% and 50%, respectively. NDC is the NDC scenario from GECO 2019.

The New Normal scenario narrows the emissions gap from Baseline to 2°C by about 35% in 2030, close to the global emissions reductions expected in an NDC scenario (50% of the gap). Despite the considerable shift in emissions compared to the no-Covid Baseline, the New Normal scenario is still far from reaching the emissions mitigation required to limit temperature change to 2°C or 1.5°C.

Focus on the transport sector

In road transport, the market for electric vehicles is projected to experience a sustained strong growth over the next decade, of about 65% per year over 2020-2030. Electric vehicles (plug-in hybrids and full battery electric) are projected to reach 34% market share in the sales of light duty vehicles in 2030 and 16% in the fleet (some 3% and 1% for heavy duty vehicles, respectively).

In aviation and maritime, technological solutions such as electric aircraft, liquid synthetic fuels and hydrogen are expected to make an impact only beyond 2030; by 2030, revised activity projections and energy efficiency measures are the main drivers behind New Normal emissions projections.

The effects of the Covid-19 pandemic on transport emissions are more pronounced than on total emissions. Emissions in the New Normal scenario are closer to the 2°C level than the Base_noC19 level in 2030. Indeed, thanks to the pandemic, deployment of energy efficient and low-carbon technologies and changes in behaviour, emissions are projected to never exceed their historical high of 2019. In 2030, New Normal emissions for total transport are 14% below those in the no-Covid-19 Baseline, thus covering 80% of the gap from the no-Covid-19 Baseline to 2°C.

Figure: Global CO2 emissions of transport (including international aviation and maritime)

GECO 2020 Global CO2 emissions of transport (including international aviation and maritime)

Source: POLES-JRC

In the no-Covid Base_noC19 scenario, global average passenger mobility per capita by mode of transport is projected to have strong and sustained growth, with private cars and aviation making up the largest contributions to the growth for 2015-2030. In the New Normal scenario, the growth is much less pronounced, with only aviation and, to a lesser degree, rail marking some increase. The stronger climate policies in the 2°C scenario also impact mobility, notably limiting the growth in aviation and modal shift from private to public land-based transport modes.

Figure: Global passenger mobility by mode: road (private cars, left) and aviation (right)

GECO 2020 Global passenger mobility in road transport, private cars, and in aviation

Source: POLES-JRC

Macro-economic background

The COVID-19 crisis has had severe economic implications that reflect on the composition of economic activity. These changes could have implications for other policies, and should therefore be considered when assessing the impact of policy reforms. Some of the POLES-JRC modelling work done in the context of this report feeds into the effort to construct a broader, economy-wide and sector-specific global outlook. By pulling together data and projections from a variety of additional sources, we build a time series of input-output tables that may serve as a useful benchmark or counterfactual when assessing e.g. international climate policy pledges. The resulting dataset will be available for download as a complement to the report.

About

The "Global Energy and Climate Outlook" is an annual publication of the JRC, produced in collaboration with DG CLIMA.

Based on quantified assessment by the JRC's internal energy-economics teams, GECO provides a global picture of energy markets as they transform over the next decades, under the simultaneous interactions of economic development, technological innovation and climate policies.

GECO brings together decades-long expertise in the fields of energy production, energy trade, technological development and energy system transformation, GHG emissions mitigation strategies, economic development and data analysis.

The analysis produced benefits from quality knowledge in current developments of the energy markets, and makes use of up-to-date underlying information and of continuously improved modelling tools.

The analysis uses several JRC models in a framework where economic welfare is maximised while tackling climate change: the world energy system model POLES-JRC is used for energy sector and greenhouse gases emissions forecasting, and the CGE model JRC-GEM-E3 is used for assessing the economic impacts of the scenarios developed.

The models are developed internally at JRC, and benefit from interactions with several teams of researchers.