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Global Energy and Climate Outlook 2019: Electrification for the low-carbon transition

This edition further analyses global and sectoral pathways towards a deep decarbonisation of the energy system, highlighting the role of electrification as a key option in the transition to a low-greenhouse gas (GHG) economy. The quantitative analysis combines global energy system and macroeconomic modeling, and tests different assumptions on a number of underlying drivers for electrification across all sectors of the economy: transport, buildings and industry.

The 2019 edition of the Global Energy and Climate Outlook (GECO) focuses on the shift towards clean electricity to limit global warming to below 2°C by the end of the century as put forward in the UNFCCC Paris Agreement. The report is a collaborative effort between the European Commission’s Joint Research Centre (JRC), the Chinese National Center for Climate Change Strategy and International Cooperation (NCSC) and Energy Foundation China (EFC).

Furthermore, this report presents a special insight into the role of electricity in regional GHG emission reduction pathways for the European Union and China.

GECO 2019 cover

GECO 2019 - Main report
Outlook on pathways to 2°C with different end-use electrification, focus on EU and China, air pollution benefits, macroeconomic implications of road transport electrification

GECO 2019 - Energy, Greenhouse gas and air pollution emissions balances
A set of 3 projections with an energy-emissions model - using common socio-economic assumptions

 

GECO data visualisation
GECO 2019 - Data visualisation


 

Global emission trends

In order to achieve the ambitious transition to a low carbon economy meeting the 2°C target, global greenhouse gas emissions need to drop to net zero in the second half of the century. GECO 2019 analyzes different pathways towards this temperature target that vary in the level of end-use electrification.

Key mitigation options involve expanding the use of renewables and an increasing role of electricity in the energy we consume in addition to improvements in energy efficiency.

  • Current policies (Reference scenario) lead to temperature increases between 3-4°C at the end of the century.
  • Implementation of Nationally Determined Contributions lead to about 2.8°C; additional policies are needed to increase decarbonisation.
  • In a 2°C scenario, global GHG emissions in 2050 are reduced by 68% compared to their 2018 levels, reaching net-zero emissions around 2080 across all 2°C scenarios with different assumptions on electrification drivers (green shaded zone).
  • For a global mean temperature increase of 1.5°C, global GHG emissions in 2050 are reduced by 84% from the 2018 levels, reaching net-zero emissions around 2060.

Note: Global GHG emissions and global mean temperature change in the GECO2019 scenarios. In global mean temperature change, lines represent median probability and shaded areas represent 25%–75% probability. 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 75% and 66%, respectively.

 

Mitigation options and electrification

Electrification of final energy demand coupled with the decarbonisation of the production of energy carriers (electricity, hydrogen, synthetic fuels) is essential in the transformation ahead. The report identifies key factors that enable electrification and reveals how their evolution over the next decades impacts the role of electricity in climate change mitigation. Future fossil fuel and biomass prices, battery costs, the cost of heat pumps and many other factors are considered and their effect is quantified in the report.

A transition towards a low-carbon economy making use of electrification would require:

  • The decarbonisation of power generation, lowering the carbon intensity of electricity.
  • The shifting of energy carriers in thermal and mobility end-uses from mainly fossil fuels towards electricity and derivative fuels (green hydrogen, e-fuels).
  • The increase in the energy efficiency of end-uses. Electrification can contribute to that.
  • The mobilization of new energy solutions such as demand-side load management, power storage and low-carbon-powered synthetic fuels production.

Mitigation drivers and options (GtCO2-eq)

Notes: Drivers of GHG emissions growth and mitigation options and role of electrification in the 2°C-Medium scenario, 2015–2050, World. "Activity": emissions growth due to the growth of population and the economy, and to associated income-based consumption (industrial value added, transport activity, dwelling size, electricity consumption). "AFOLU": Agriculture, Forestry and Other Land Use. "Biomass - Traditional": refers to the phase-out of traditional biomass for reasons other than climate policies, resulting in an energy demand gap that has to be met by other fuels. "HDD": emissions from buildings' space heating prevented by the evolution over time of heating degree-days due to global warming. "CCS": emissions prevented by carbon capture and sequestration. "Fossil fuels switch": refers to shifts from high-carbon content towards lower-carbon content within the fossil fuel mix (generally from coal to natural gas). "Energy & Industry non-CO2": including emissions reductions from fossil fuel extraction and transport directly related to the decrease in the use of fossil fuels in all energy demand sectors. "Synthetic methane", "Synthetic liquids", "Hydrogen", "Biomass - Modern", "Electricity": emissions prevented by the use of these fuels in final demand sectors (emissions for their production distributed in the other options here). "Biomass – Modern": includes liquid biofuels. "Efficiency": structural efficiency and efficiency in the provision of energy services not attributable to the other technological options detailed here.

 

Economic implications

The report also looks into the macro-economic implications of climate change mitigation in general, and pays particular attention to the effects of road transport electrification. Findings clearly illustrate that transport electrification is a valuable option in a 2°C world, as globally aggregated GDP would be 1-3% lower in 2050 if the 2°C target would be met without road transport decarbonisation. The transition from conventional vehicles to electric vehicles drives changes in production structure and maintenance requirements. How these changes impact sectoral employment patterns is also quantified in the report. In 2050, over 4 million workers that would have been active in the manufacturing of conventional vehicles globally are employed in other sectors of the economy, such as EV manufacturing and the sectors related to the bio-economy.

GECO 2019 has been produced in close collaboration with DG CLIMA, with comments from DGs ENER and MOVE.

 


 

Global Energy and Climate Outlook 2018: Sectoral mitigation options toward a low-emissions economy

GECO 2018

The 2018 edition of the GECO series zooms in on the global mitigation options to reach the 2°C and 1.5°C global warming targets as put forward in the Paris Agreement. The GECO 2018 report is published alongside the Commissions's EU Strategy for long-term greenhouse gas reductions. It provides a detailed background on certain modelling results used in the European Commission's in-depth analysis in support of the Commission Communication COM(2018)773 "A Clean Planet for all – A European long-term strategic vision for a prosperous, modern, competitive and climate neutral economy".

Some key takeaways:

  • For total greenhouse gas emissions to peak in 2020 and to put us towards a global growing economy that is decoupled from emissions, immediate action from all countries and sectors of the economy would be needed – with increased energy efficiency, electrification and deployment of low-carbon energy sources.
  • To limit global warming to 1.5°C and below, global net greenhouse gas emissions would have to drop to zero as early as 2065.
  • Achieving the 2°C or the 1.5°C temperature objective would come at a relatively small mitigation cost to the overall global economy.
  • If Carbon Capture and Sequestration (CCS) technologies would not develop, a 2°C pathway would have a similar mitigation trajectory in the first half of the century as a 1.5°C scenario with CCS.
  • If bioenergy combined with CCS were to be used more widely, mitigation to 2°C would be cheaper, however land use impacts would be more substantial, with possible significant trade-offs for biodiversity.

GECO 2018 includes:

  • An outlook of greenhouse gases emissions, how they evolve across scenarios and what mitigation options are undertaken in the 2°C and 1.5°C scenarios, focussing on the 2°C scenario.
  • An outlook of the energy markets in the context of climate mitigation policies, including the evolution of primary energy supply, energy supply by fuel, the power sector and final energy demand, along with the evolution of energy prices and investment needs in broad terms for energy supply (and more specifically for the power sector).
  • Macro-economic implications of climate mitigation strategies.
GECO 2018GECO 2018
GECO 2018 - Energy and GHG balances
A set of 3 projections with an energy-emissions model - using common socio-economic assumptions
GECO 2018 - Macroeconomic balances
A set of 3 projections with a macroeconomic general equilibrium model - including climate policy impact on activity

GECO data visualisation
GECO 2018 Data visualisation [superceded by newer GECO version]


Action from all world regions and in all sectors of the economy contributes to reaching the 2°C and 1.5°C global warming targets. Both scenarios require additional effort compared to current trends (reference) and emission reduction pledges made under the Paris Agreement (Nationally Determined Contributions, NDCs). For the 2°C scenario, total global emissions in 2050 would be cut by half compared to their 1990 level. A stronger climate objective of 1.5°C would result in accelerated mitigation efforts in the 2020-2040 decades in particular. The GECO 2018 scenarios reach net zero greenhouse gas emissions in the second half of the century, meaning that use of negative emission technologies and land use change would offset remaining emissions. For the 2°C target net zero GHG emissions would be reached around 2080, while a scenario consistent with the 1.5°C target would bring the net zero date 15 years forward to the year 2065. 

Global GHG emissions

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Global average temperature change (with median probability)

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  • The Reference includes climate and energy policies that are already implemented today;
  • The NDC (Nationally Determined Contributions) scenario incorporates the pledges made by countries in the run-up to the Paris Agreement, extended beyond 2030 by assuming the same decarbonisation rate as implied by the NDCs for the 2020-2030 period, but gradually broadening the geographical coverage to the global level;
  • The 2°C and the 1.5°C scenario aim for a pathway of greenhouse gas emissions that is likely to limit global warming to 2°C and 1.5°C, respectively, the targets stipulated and agreed upon in the Paris Agreement.

How can the world speed up the decorrelation of GHG emissions and economic growth, from a GHG intensity decrease of roughly 2% per year historically (1990-2016) to over 6% per year (2015-2050) to reach the 2°C objective? Key mitigation options over 2015-2050 for the 2°C scenario include ramping up the use of renewable energy sources (27%), reduction of non-CO2 emissions (20%, about a third of which are due to the decrease in fossil fuel demand in all demand sectors), improved energy efficiency (17%), electrification in final energy demand (10%) and land use (10%). Globally and by 2050, electrification exceeds one third of total final energy consumption and the share of renewables in power generation exceeds 70%.

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The findings of the report furthermore illustrate that reaching climate targets comes at only limited costs, while bringing important co-benefits for air quality. All scenarios show similar energy supply-related expenditure on the aggregate level, but its composition shifts from fossil fuels towards the power sector with decarbonisation, and from operational costs to infrastructure. The transition away from fossil fuels would not only reduce carbon emissions, but would also bring down to levels of air pollutant emissions, enabling progress on related UN Sustainable Development Goals for climate action, clean energy and good health.

GECO 2018 shows that the cost for the transition to limit global warming would not jeopardise a sustained and continued economic growth. Although the current emissions and energy consumption trends are not on track to meet neither the 2°C nor the 1.5°C targets, striving for higher ambition levels than the (NDCs) can be done at relatively low costs. While GDP and consumption are expected to decline relative to the NDC scenario in 2050, investment will increase to build the capital stock required for a low emission economy.

GECO2018 mitigation costs

The GECO analysis indicates that the additional cost of moving from an NDC scenario to 2°C or the 1.5°C are 0.4% and 1.3% of global GDP in 2050, respectively. This compares to a global economic growth of 128% between 2020 and 2050. The comparison of the economic impacts across regions between the NDC and the 2°C scenarios indicates that long-term decarbonisation goes hand in hand with high per capita consumption growth rates in fast-growing low and middle income countries. Fossil fuel industry output and investment in the 2°C scenario will decline (about 40% in 2050 compared to the NDC scenario, to levels lower than those observed in 2015) and about 20 million jobs in the global fossil fuel industry would shift to cleaner sectors of the economy relative to the NDC scenario.

 


 

Global Energy and Climate Outlook 2017: How climate policies improve air quality

GECO 2017 - Main reportGECO 2017 - GHG and energy balances

GECO data visualisation
GECO 2017 Data visualisation [superceded by newer GECO version]

Explore the story interactively
Explore the story interactively

GECO2017 has been produced in close collaboration with EC DG CLIMA.

GECO2017 shows that achieving the climate change mitigation target of staying below 2°C temperature rise is possible technically – thanks to an acceleration of decarbonisation trends, an increased electrification of final demand and large changes in the primary energy mix that include a phase out of coal and a reduction of oil and gas – and is consistent with economic growth. It yields co-benefits via improved air quality – including avoided deaths, reduction of respiratory diseases and agricultural productivity improvement – that largely offset the cost of climate change mitigation. These co-benefits arise without extra investment costs and are additional to the benefits of avoiding global warming and its impact on the economy.

GECO2017 examines the evolution of the world energy system and of greenhouse gas emissions to 2050 under several energy and climate policy configurations, using recent policy announcements and energy and economic data, aiming at contributing to the international discussions and to the preparations for the future global stock-taking exercises. Several economy-energy scenarios to 2050 were developed:

  • a Reference scenario, which mostly takes into account all adopted policies for the 2020 time horizon;
  • a Below 2°C scenario that aims at respecting the long-term 2°C target with a high probability, implying very rapid action in line with the recommendations of the IPCC AR5 report;
  • an INDC scenario that assumes the full implementation of the 2025-2030 country objectives submitted throughout 2015 or updated since.

The study includes:

  • An outlook of greenhouse gases emissions, how they evolve across scenarios and what mitigation options are undertaken in each scenario.
  • An outlook of the energy markets in the context of climate mitigation policies, including the evolution of primary energy supply, energy supply by fuel, the power sector and final energy demand, along with the evolution of energy prices and investment needs in broad terms for energy supply (and more specifically for the power sector).
  • Macro-economic implications of climate mitigation strategies.

GHG emissions, World, and average annual growth rates for GHG emissions intensity of the economy (left); global average temperature change (right) 

Although the countries' pledges under the Paris Agreement (INDCs) initiate a break with historical GHG trends, reaching the below 2°C target demands a decorrelation of emissions from economic growth by an acceleration of decarbonisation trends from 2020 onwards (energy intensity decrease 5.8% per year on average over 2015-2050 vs. -1.7% per year in 1900-2010), an increased electrification of final demand (35% in 2050 vs. 18% in 2015) and large changes in the primary energy mix (phase out of coal, reduction of oil and gas after 2030; fossil fuels 46% and low carbon including CCS 59% in 2050, vs. 81% and 19% in 2015, respectively).

In addition, GECO2017 explores the synergies between climate policy and air pollution controls to provide opportunities towards a more sustainable future for all. The study shows that mitigating climate change is possible technically, consistent with economic growth, and yields co-benefits via improved air quality that largely offset the cost of climate change mitigation. Co-benefits include avoided deaths, reduction of respiratory diseases and agricultural productivity improvement.

These co-benefits arise without extra investment costs and are additional to the benefits of avoiding global warming and its impact on the economy. They take place in all regions, varying with the ambition level of climate policies and the initial energy mix, and are strongly linked to the reduction of fossil fuel use; they occur locally and in a shorter time frame, providing strong complementary incentives for policymakers to move ahead on ambitious climate action.

Comparison of mitigation cost and air quality co-benefits in 2030 

The Paris Agreement is estimated to avoid approximately 100,000 air pollution-related deaths annually by 2030 on a global level, of which more than half in China alone. Reaching a GHG trajectory compatible with temperature increases well below 2°C could save roughly 1.5 million lives annually by 2050. In addition to avoided deaths, it also reduces the number of air pollution-related cases of illnesses such as asthma and bronchitis by 15-40% annually by 2050 and raises crop yields by 2.5-6.6%.

By 2030, global air quality co-benefits more than compensate the cost of climate change mitigation policies. This finding is particularly strong for highly polluted fast-growing low income countries relying on coal, and less so for regions with a strong economic dependence on fossil fuel exports (higher mitigation costs) or for countries whose mitigation policy relies heavily on land use measures (lower co-benefits).


GECO2016 has been produced in close collaboration with EC DG CLIMA.

GECO 2016 Global Energy and Climate Outlook: Road from Paris

GECO 2016 - Main report GECO 2016 - GHG and energy balances

GECO 2016 - Policies considered

GECO2016 examines the evolution of the world energy system and of greenhouse gas emissions to 2050 under several energy and climate policy configurations. Taking into account the outcome of the UNFCCC COP21 and using recent energy and economic data, this report aims at contributing to the international discussions and to the preparations for the future global stock-taking exercises.

It presents an analysis of several low-emission development pathways, achievable through the aggregate effect of national policies or through globally coordinated action, illustrating some of the economic challenges and opportunities for specific energy markets, sectors and technologies.

The report includes:

Several scenarios: economy-energy scenarios to 2050 developed for this report, with a description of key macro assumptions on population and GDP growth and the scenario-specific policies considered. Four scenarios are considered in this report:

  • a Reference scenario, which mostly takes into account all adopted policies for the 2020 time horizon;
  • a 2°C scenario that aims at respecting the long-term 2°C target with a high probability, implying very rapid action in line with the recommendations of the IPCC AR5 report;
  • an INDC scenario that assumes the full implementation of the 2025-2030 country objectives submitted throughout 2015.
  • Outlook of greenhouse gases emissions, how they evolve across scenarios and what mitigation options are undertaken in each scenario.
  • Outlook of the energy markets in the context of climate mitigation policies, including the evolution of primary energy supply, energy supply by fuel, the power sector and final energy demand. It also looks at the future evolution of energy prices and investment needs in broad terms for energy supply and more specifically for the power sector.
  • Specific case studies that were developed as thematic variants to the central scenarios. It describes in particular a sustained low oil price and a phase-out of fossil fuel subsidies.
  • Macro-economic implications of climate mitigation strategies.

World GHG emissions in the GECO2016 scenarios and average annual growth rates for GHG emissions intensity of the economy

Notes: the average yearly evolution of emission intensity of GDP is given for each scenario; total GHG emissions excluding LULUCF sinks.


GECO2015 has been authored in close collaboration with DG CLIMA.

GECO2015 Global Energy and Climate Outlook. Road to Paris. Assessment of Low Emission Levels under World Action Integrating National Contributions

This report presents the modelling work quoted in the EC communication "The Paris Protocol - a blueprint for tackling global climate change beyond 2020 - in the EU's Energy Union package. It examines the effects of a Baseline scenario where current trends continue beyond 2020, and of a Global Mitigation scenario in line with keeping global warming below 2ºC. The analysis uses the POLES and GEM-E3 models in a framework where economic welfare is maximised while tackling climate change. In the Baseline, emissions trigger +3.5ºC global warming. In the Global Mitigation scenario, all regions realise domestic emission cuts to stay below 2ºC, with various profiles in 2020-2050 depending on their national characteristics.

A significant transformation of the energy systems and non-energy measures enable regions at all levels of income to move to a low-emission growth pathway. Sectors linked (directly or indirectly) to carbon-intensive processes adjust their investments to be competitive in a low-emission environment.

A significant number of regions draw economic benefits from shifting their expenditures on fossil energy imports to investments. GDP growth rates are marginally affected in most regions by global efforts to reduce emissions. Crucially, high growth rates are maintained in fast-growing low-income regions. Economic costs are reduced further when countries use emission permit auction revenues for other tax reductions. Delaying actions to stay below 2ºC add large economic costs.

GECO 2015 - Main report GECO 2015 - GHG and energy balances
GECO 2015 - Main reportGECO 2015 - GHG and energy balances