BloombergNEF

The November 2021 Glasgow Climate Pact reaffirmed the 2015 Paris Agreement with a stronger emphasis on limiting the global average temperature rise to 1.5°C by the end of this century relative to pre-industrial levels. To achieve this, global emissions will have to reach net zero by mid century. This report examines whether the emissions reduction targets set by countries are aligned with achieving this goal. It also examines three scenarios for how the world could eliminate energy emissions.

The global average surface temperature has already risen by an average of 1.1°C.  Based on current trends, we are on track to run out of the emissions budget to stay within 2°C of warming in 2044. As soon as 2028, we will have exhausted the emissions budget to stay within 1.5°C. If all countries’ 2030 emission reduction targets, including conditional targets and long-term decarbonization targets such as China’s goal of carbon neutrality before 2060, are achieved, the world will likely be in line with a rise of 1.8°C by the end of this century.

To achieve global net zero, every sector of the energy economy needs to eliminate emissions completely by mid-century. There can be no free riders. Even the hardest-to-abate sectors will need to adopt carbon-free solutions, only turning to carbon removals where absolutely necessary. In our latest New Energy Outlook, we have constructed three scenarios compliant with net-zero carbon budgets for each sector of the energy economy that achieves the Paris Climate Agreement and satisfies the principle of an orderly transition, with the rate and timing of abatement varying depending on the current emissions trajectory and available abatement options in the near term.

Green Scenario describes a pathway where greater use of clean electricity in the end-use economy is complemented by so called “green hydrogen” produced from water, using electrolyzers powered by wind and PV. Gray Scenario has emissions from fossil fuels abated using post-combustion carbon capture and storage technology, in addition to growth in electricity use and renewable power. Red Scenario deploys smaller, more modular, nuclear to complement wind, solar and battery technology in the power sector, and manufacture so-called red hydrogen with dedicated nuclear power plants.

The decade to 2030 will play a critical role in the pathway to net-zero global emissions by 2050. Around 78% of the abatement this decade is likely to be achieved by the power sector. The availability of economic solutions, such as wind, solar and batteries, means the power sector can cut emissions more quickly than other industries.

Download the full report: Net Zero Transition: from Paris to Glasgow and Beyond