Climate Solutions 2:

A Climate Risk Report

Low-Carbon Re-Industrialisation
A report to WWF International based on the
Climate Risk Industry Sector Technology Allocation
(CRISTAL) Model

Embargoed October 19th GMT 00:01

Climate Risk Pty Ltd provides specialist professional

services to business and government on risk,
opportunity and adaptation to climate change.

www.climaterisk.net Climate Risk

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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Climate Risk Pty Limited (Australia)
Sydney: + 61 2 8243 5767
Brisbane: + 61 7 3040 1621
www.climaterisk.net

Climate Risk Europe Limited

London: + 44 752 506 8331

This report was prepared by:

Dr. Karl Mallon

[email protected]

Dr. Mark Hughes

[email protected]

Sean Kidney
[email protected]

Climate Solutions 2: Low-Carbon

Re-Industrialisation

This report was commissioned by: For WWF International correspondence:

WWF-Australia Dr. Stephan Singer

Level 13, 235 Jones Street Director, Global Energy Policy Program
Ultimo NSW 2007 WWF International
Australia c/o WWF European Policy Office
Tel: + 61 2 9281 5515 168 Avenue de Tervueren
Fax: + 61 2 9281 1060 Brussels 1150
Belgium
Tel: + 32 2 743 8817
ISBN: 978-0-9804343-8-5 [email protected]

Disclaimer:
While every effort has been made to ensure that this document and the sources of information
used here are free of error, the authors: Are not responsible, or liable for, the accuracy, currency and
reliability of any information provided in this publication; Make no express or implied representation of
warranty that any estimate of forecast will be achieved or that any statement as to the future matters
contained in this publication will prove correct; Expressly disclaim any and all liability arising from the
information contained in this report including, without limitation, errors in, or omissions contained in
the information; Except so far as liability under any statute cannot be excluded, accept no responsibility
arising in any way from errors in, or omissions contained in the information; Do not represent that they
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Climate Risk supports a constructive dialogue about the ideas and concepts contained herein.

© Copyright Climate Risk Pty Ltd, 2009

This document is protected by copyright. However, this document (in whole or part) can be redistributed
or reproduced without the prior consent of Climate Risk Pty Ltd provided that full recognition of the
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Climate Risk Team

Dr. Karl Mallon

Dr. Karl Mallon is director of Science and Systems at Climate Risk Pty Ltd. He is
a First Class Honours graduate in Physics and holds a Doctorate in Mechanical
Engineering from the University of Melbourne. Karl has worked in climate
change and energy since 1991, and is the editor and co-author of “Renewable
Energy Policy and Politics: A Handbook for Decision Making”, published by
Earthscan (London). He has worked as a technology and energy policy analyst
for various international government and non-government organisations since
1997. As an invited expert consultant, he participated in the World Bank
Extractive Industries Review. Karl specialises in both climate change mitigation
and adaptation, working closely with global insurers on managing emerging
commercial hazards.

Dr. Mark Hughes

Dr. Mark Hughes heads the Industry and Modelling Section of Climate Risk
Pty Ltd. Mark holds a doctorate in Materials Science from the University of
Cambridge and a First Class Honours degree in Materials Engineering. He
has been awarded research fellowships with Darwin College (University of
Cambridge), the Chevening Technology Enterprise Program (London Business
School and Imperial College), the Oppenheimer Trust and the Commonwealth
Trust. Since 1999, he has been based in the field of energy storage and
the environment, and is author of a range of peer-reviewed publications in
internationally distributed journals. Mark has also worked on commercialisation
and fundraising for new technologies in the energy sector.

Sean Kidney

Sean is the London-based Europe manager for Climate Risk as well as the
strategy and social marketing consultant to the EU’s new European Web Site on
Integration. Sean has 25 years experience as a social change strategist. He has
been an advisor to governments, non-government organisations and pension
funds, particularly in the areas of organisational development, marketing and
communications and political lobbying. Sean has worked extensively with the
Australian pension fund sector on marketing and communications, winning a
dozen Combined Major Superannuation Fund awards. His current focus is on
climate change and the intersection between the interests of long-term capital
and the progress of economic and social evolution.

Climate Risk gratefully acknowledges valuable assistance during the review process from:
External Reviewers – John Mathews, Andrew Raingold, Nick Silver, Jasper Sky, Robert Socolow
and Cynthia Williams.
Internal Reviewers – Greg Bourne, Kim Carstensen, Jean-Philippe Denruyter, Stefan Henningsson,
Martin Hiller, John Nordbo, Rafael Senga, Stephan Singer, Christian Teriete and Paul Toni.

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Foreword

We are poised at a decisive moment in our planet’s history. In a few weeks, the Copenhagen climate
change talks will seek to set the foundation stone for the world’s response to man-made climate change.

The progress of climate change has not paused while our leaders have debated the issues over the past
decades. The clock has continued to tick, inexorably counting down to the moment when, even if we do
act, it may be too late to avoid runaway climate change.

Climate Solutions 2 models this point of no return. It shows that the constraints of our industries,
working in a market economy, leave us with just five years before the speed of transition required puts a
viable solution beyond our reach. No matter how strong our desire for a transformation to a low-carbon
world may be, the ability to make this transformation is restricted by available resources, manpower
and technologies. That is why we only have until 2014 to set the wheels in motion. Beyond this, a “war-
footing” may be the only option remaining, with no guarantee of success.

If we started today, the transformation required to move to a low-carbon world would need to be
greater than any other industrial transformation witnessed in our history, but research shows that it
can be achieved. This report not only indicates the size of the challenge, it shows us how it can be met
and how we can proceed to a clean energy future. It also highlights the extraordinary opportunities for
those investors and countries that move early.

Historically, economic revolutions have always created opportunities for those with the vision to
move early and have left behind those countries and industries that came to the revolution late. The
19th century industrial revolution improved the condition of the poor, made roads and railways
commonplace and profoundly shifted world power. More recently, the IT revolution transformed the
way the world does business and communicates.

The climate change revolution must be a transformation on an even larger scale.

The analysis in this report indicates that, to achieve a low-carbon world the growth of low-carbon
industries will have to be substantial year-on-year, worldwide and persist for at least 40 years to reach
full delivery. Such growth will produce new jobs on a scale rarely seen and many opportunities for
savvy investors to get in at the ground floor on industries that could be taken up around the world.

Even now, the broader benefits of a low-carbon world are clearly apparent. For the first time in our
history there is potential for every country in the world to have secure energy and the modelling shows
that, in the long run, the energy we consume will be cheaper as well as cleaner.

However, for this new and prosperous world to materialise itself, our leaders must act for the good of all.
The Copenhagen climate change conference is a pivotal moment where the future of the entire world is
held in the hands of a few.

This report shows that we need our leaders to come together constructively, to act with unity and
towering ambition but, most important of all, to act now.

James P Leape
Director General, WWF International

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Preface by WWF

The time for action is now. Climate Solutions 2 shows that if we do not start moving towards a low-
carbon world in the next five years then runaway climate change may be inevitable. This report cuts
straight through the equivocating that surrounds the debate on climate change. It offers a powerful
warning about the results of inaction, while pointing the way to extraordinary industrial growth and
cost reductions if we respond quickly to the climate crisis.

According to Climate Solutions 2, if we do not have critical low-carbon industries under accelerated
development by 2014, then we could miss the greenhouse gas targets needed to avoid runaway climate
change. Even if we were to immediately respond to this warning and start growing our low-carbon
energy, industrial and agricultural industries today, they would still have to grow by 24% every year. If
we dare to wait until 2014, the rate of change necessary increases to about 30% every year, pushing the
limits of viable long-term industrial growth.

Historically, sustained long-term growth rates of greater than 20% a year are rare – even in times of
crisis such as during wars – because the speed of industrial change remains largely inflexible and has
always been limited by available resources, labour, skills, capital and equipment. Fortunately, Climate
Solutions 2 shows that this rapid change is still possible if we put in place the policies and resources
required. Substantial savings and prosperity are also associated with creating the new low-carbon
economy.

This report refutes the myth that a rapid change to a low-carbon society will cripple international
treasuries. It shows that the economies of scale created by accelerating into a low-carbon world will
deliver vast savings compared to the business-as-usual approach.

However, this transformation requires more than a carbon price, which, by itself, will not drive the
change that is needed. It also requires investment in “all” low-emissions industries now – large and
small – even if we have to wait two or three decades before these industries become independently
competitive. Governments need to create incentives so these industries are low risk and attractive
for private sector investors. Investors are eagerly awaiting regulatory certainty so they can become
involved in this modern industrial revolution.

The warnings both in this report and throughout the world around us are loud, clear and urgent. The
world’s weather patterns are changing, bringing drought and floods on an unprecedented scale. At
the same time, our oceans grow more acidic. It is increasingly clear that climate change is already
affecting us all. But equally – as Climate Solutions 2 shows – should we have the courage and foresight
to commence building our low-carbon economies now, we can avoid runaway climate change and
positively transform our world for ourselves and the generations to follow.

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Contents
Executive Summary vii

1 Objectives 1

2 Method 5
2.1 Step 1: Establish Threshold of Runaway Climate Change 5
2.2 Step 2: Establish Gross Carbon Budget and Required 2050 Emissions Levels 5
2.3 Step 3: Establish the “Reducible Carbon Budget” (After Irreducible Emissions) 5
2.4 Step 4: Establish the Baseline of Energy and Non-Energy Demand 5
2.5 Step 5: Establish Data for Relevant Industries, Growth and Resources 5
2.6 Step 6: Input Probability Distributions in the Monte Carlo Simulator 6
2.7 Step 7: Energy, Non-Energy and Emissions Scenario Results 6
2.8 Step 8: Costs, Investments and Returns 6
2.9 Step 9: Extension to Minus 80% 7
2.10 Step 10: Limits of Delay 7

3 Introduction to the Climate Risk Industry Sector Technology

Allocation (CRISTAL) Model 9
3.1 Introduction 9
3.2 Key Inputs 11
3.3 Key Features of the Model 12
3.4 Emissions Abatement Sectors 22
3.5 Emissions Abatements Not Considered 23

4 Defining the Climate and Emissions Requirements 27

4.1 From Dangerous to Runaway 27
4.2 The Tipping Elements to Runaway Climate Change 27
4.3 Avoiding Runaway Climate Change 31
4.4 Avoiding 2°C of Warming 32
4.5 The Concept of Overshoot and Return 35
4.6 What 2050 Emissions Level will Avoid 2°C of Warming? 36
4.7 Scenarios 37

5 Scenario A (Minus 63%): Emissions and Energy 41

5.1 Emissions 41
5.2 Final Energy 45
5.3 Non-Energy 48

6 Scenario B (Minus 80%): Emissions and Energy 51

6.1 Emissions 51
6.2 Final Energy 55
6.3 Non-Energy 57

7 Scenario A (Minus 63%): Costs, Investment and Returns 59

7.1 Non-Energy 59
7.2 Efficiency 59
7.3 Renewable Energy Investment 61
7.4 CCS Costs 62

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7.5 Renewable Energy and CCS Combined Costs 63
7.6 Revenue Generation 64
7.7 Investment/Return Profiles 65
7.8 Carbon Price 70
7.9 Investment and Return Ratios 73

8 Scenario B (Minus 80%): Costs, Investment and Returns 75

8.1 Efficiency 75
8.2 Renewable Energy Investment 76
8.3 CCS Costs 77
8.4 Renewable Energy and CCS Combined Costs 78
8.5 Revenue Generation 79
8.6 Investment/Return Profiles 80
8.7 Carbon Price 84
8.8 Investment and Return Ratios 85

9 Industry Thresholds – The Point of No Return 87

9.1 Defining the Industrial Point of No Return 87
9.2 Point of No Return Methodology 87
9.3 Point of No Return Findings 88

10 Discussion of Findings 91
10.1 Finding (i): It is Possible to Avoid Runaway Climate Change 91
10.2 Finding (ii): Low-carbon re-industrialisation must be implemented promptly 92
10.3 Finding (iii): Four critical industrial constraints must be overcome to avoid
runaway climate change 93
10.4 Finding (iv): Low-carbon re-industrialisation provides feasible long-term
returns on costs 99

11 Policy Implications and Opportunities 101

11.1 National and International Targets 101
11.2 A Price on Pollution 101
11.3 Sequential Low-Carbon Industry Development Under Emissions Trading 101
11.4 Non-Economic Barriers to Efficiency 102
11.5 Cost of Retaining Forests 102
11.6 Removal of Perversity 103
11.7 Opportunity Cost to Developing Countries 103
11.8 Enabling Infrastructure 103
11.9 Liquid Fuel Limitations 104

12 References 105
13 Glossary 109
14 Appendix: Model Input Data 113
15 Appendix: Learning Rate Retardation 127
16 Appendix: Sustainable Industry Growth Rates 131
17 Appendix: WWF Definitions of Viable Resource Levels 133

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Executive Summary
Re-Industrialising to a Low- necessary global emissions levels by the
Carbon Economy mid-century.

This report models the ability of In the second scenario, there is a

low-carbon industries to grow and significantly better chance of avoiding
transform within a market economy. warming of 2°C if emissions levels
It finds that runaway climate change are 80% below 1990 levels by 2050.
is almost inevitable without specific However, to achieve this outcome
action to implement low-carbon requires the re-industrialisation
re-industrialisation over the next process to commence immediately with
five years. The point of no return is growth rates of between 24% and 29%
estimated to be 2014. every year until deployment scale has
been achieved. In addition, emissions
Climate Solutions 2 recognises that abatements from the forestry and
every industry has constraints on its energy efficiency sectors must be at
ability to grow caused by limitations of the upper end of what is technically
resources, technology, capital and the possible.
size and skills of its workforce.
The good news is that the resulting
These limits are measurable and make it economies of scale from these low-
possible to calculate, with considerable carbon revolutions will create major
sophistication, the speed required to long-term savings and returns when
re-industrialise the energy and non- compared to the business-as-usual
energy sectors to create a low-carbon trajectory, especially in the energy
economy in time to prevent runaway sectors.
climate change.

Where We Are Now

Climate Solutions 2 accesses historical
data and uses a variety of models to Higher Atmospheric Greenhouse Gas
reach its conclusions. Two scenarios Levels than Expected
have been considered in this report:
The current level of carbon dioxide in
• Emissions cuts of 63% relative to the atmosphere is 386 ppm (parts per
1990 levels; and million) while the total greenhouse
gases are estimated to be 463 ppm
• Emissions cuts of 80% relative to (Tans 2009). This is precariously close
1990 levels. to the approximate 475 ppm upper
limit (for greenhouse gases) that
Under both scenarios, every key current literature predicts makes it
low-carbon resource and industry possible to return to a stable 400 ppm
must be under their maximum rate (Meinshausen 2006). Beyond this
of development by 2014. For the 63% level, runaway climate change grows
reduction scenario, each of these increasingly likely. At present, the rate of
resources and industries must grow increase in atmospheric carbon dioxide
at between 22% and 26% every year has not yet begun to slow and, in fact,
until they reach a scale that provides may be accelerating.
reasonable certainty of achieving the

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The Development of Low-Carbon How to Achieve a Low-Carbon
Industry is Too Slow Economy

This report clearly identifies that the The Industries that will Lead the Way
key constraint to meeting emissions
levels needed to prevent dangerous Clean energy generation, energy
climate change is the speed at which the efficiency, low-carbon agriculture
economy can make the transformation and sustainable forestry must lead
to low-carbon resources, industries and the transformation to a low-carbon
practices. Today, only three out of 20 economy. It is important to note that
industries are moving sufficiently fast solutions that extract and store carbon
enough. from the atmosphere and biosphere,
such as biomass energy production with
There are Less Than Five Years to get carbon capture and storage (CCS), have
Low-Carbon Re-Industrialisation not been used as part of the suite of
Underway resources in this report but are likely to
be required at some stage if constraints
To avoid major economic disruption, on fuels can be resolved.
the report’s modelling indicates that
world governments have a window Rapid Expansion of Clean Industries
that will close between now and 2014.
In that time they must establish fully This report’s modelling shows that to
operational, low-carbon industrial get key industries to a sufficient scale of
architecture. This must drive a low- deployment, from 2010 they will need
carbon re-industrialisation that will be to grow by 22% every year in the minus
faster than any previous economic and 63% scenario and by 24% every year in
industry transformation. the minus 80% scenario to achieve the
necessary cuts on 1990 levels. The scale
Carbon Trading Schemes, Alone, are of this re-industrialisation cannot be
Not a Sufficient Solution underestimated. Every year of delay will
increase the level of growth required
By itself, an emissions trading and increase costs.
scheme will not promote the growth
of important but initially higher-cost Should re-industrialisation be delayed
technologies. A comprehensive plan until 2014, low-carbon industries would
for low-carbon industrial development need to sustain an annual growth rate
is an integral part of the solution. If this of about 29% to have a greater than
window is missed then economically 50% chance of avoiding 2°C of global
disruptive “command-and-control” warming. This upper rate appears to be
style government intervention will be the limit of plausible sustained industrial
necessary to focus industrial production growth, so further delays will tip the
on the climate change challenge. probability in favour of runaway climate
change and its consequences.

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Stable Investment Environments initiatives will require ongoing funding.

Low-carbon re-industrialisation will Since global agreements on emissions

require each government to create and carbon pricing are not yet in place,
a secure, long-term investment this report takes the conservative stance
environment to allow for major of applying no carbon pricing for the
increases in the scale of production and minus 63% or minus 80% scenarios.
installation of low-carbon technologies.
This includes technologies and Tipping Point into Profit
resources that will take two or more
decades to reach commercial viability. Within the period from 2013 to 2049,
the average production cost of each
renewable energy technology around
Investing in a Low-Carbon Economy
the world is forecast to become cheaper
— Costs and Returns
than energy produced from their fossil
Long-Term Investment fuel competition. In countries with high
energy prices, this renewable energy
Transforming to a low-carbon economy cross-over will occur soonest.
will require substantial investment in
resources and infrastructure. Many Returns on Investment
of these investments will eventually
become commercially viable in their Government, industry and institutional
own right. investors can expect to see the benefits
of their investment in transforming
The investment required to cover the the energy sector from 2013. This
additional cost of renewable energy is the point when the first of the
relative to fossil fuel energy is about renewable energy technologies starts
US$6.7 trillion in the minus 63% to outperform the current fossil fuel,
scenario and US$7.0 trillion in the minus business-as-usual model.
80% scenario. If the ongoing costs of
CCS out to 2050 are also included, these The scale of renewable energy savings
costs would be increased by as much as from 2013 to 2050 is expected to be in
US$10 trillion. excess of US$41 trillion for the minus
63% scenario and US$47 trillion for the
The modelling indicates that annual minus 80% scenario.
expenditure will peak at around US$375
billion a year in the minus 63% scenario
Implications for Government,
and US$400 billion a year for the minus
Industry and Investment
80% scenario by 2025 and then start to
decline. With sufficient up-front capital, This report indicates that to avert
energy efficiency measures will be runaway climate change, an
cost-effective immediately or over a international agreement on greenhouse
very short time period. Forest and CCS emissions must be augmented by a

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program to rapidly develop a broad projects. Rapid growth can be just as
suite of low-carbon industries. This hazardous for a company and industry
program must develop all low-carbon as inadequate growth. Therefore, it
energy sectors concurrently – even is important when modelling the
those not initially profitable – and on an growth of low-carbon industries to
unprecedented scale. This means that: establish a plausible upper limit of
growth for companies and industries
• The private sector must be prepared participating in a very rapid low-carbon
for a massive scale-up of the low- re-industrialisation.
carbon sector and not stand in the
way of this transformation. It must This upper limit reflects the point at
deliver cost reductions through which companies are likely to either
economies of scale. fail due to excessive growth or turn
away opportunities in order to maintain
• The investment community must stability.
commit tens of trillions of dollars,
but can be rewarded with secure In this report, 30% annual average
substantial long-term returns. growth is considered to be the upper
limit of sustained industry growth in
• Governments must create a stable a free market. Beyond this limit, the
long-term investment environment delivery of consistent growth is not
that fosters a secure market for all plausible.
low-carbon industries and their
investors. Under a “command and control”
scenario – typically only observed
during times of war – it may be possible
Explanation of Major Findings to achieve annual growth rates slightly
beyond 30% by forcing the reallocation
of resources. However, since most
The Implications of an Upper Limit
renewable energy industries rely on
to Industrial Growth
specialised skills, equipment and
A central axiom of the modelling in this materials, any benefits obtained by such
report is that there are real-world limits forced resource reallocation are likely to
to the rates at which companies and be limited.
their industries can grow. In the energy
sector, growth rates of less than 5% are The 30% upper limit to industry growth
typical. In the new, renewable energy used in this report reveals a very limited
sector, only a few industries have been window of opportunity and, therefore,
able to sustain growth rates above 20% very little margin for policy error.
for long periods. Initially, delays in establishing low-
carbon industries can be compensated
The real-world constraints to industrial by increases in the growth rate.
growth include access to skilled people, However, at some stage these delays
access to resources, access to plant will no longer be able to be recovered
and machinery for manufacturing, by growth rate increases (when they
installation and operation, and access reach their upper limit) and this will
to capital for both manufacturing and inevitably lead to delays in delivering

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 Figure 1: Missing the
target. This schematic
diagram illustrates that
Low-emissions industry scale to meet 2°C target initial delays can be
made up by increased
growth rates. However,
Still possible up to 2014, when the upper limits
Industry scale

as growth rates can to growth are reached,

increase up to a Too late. further delays result in a
maximum of 30% per Impossible shortfall in deployment
to meet in later years.
annum
target as
industry
th th growth
ow w
gr gr
o th
% ow
rates are at
24 % gr
30 % maximum.
30

2010 2014 2018 2050

Time

the low-carbon outcomes (see Figure forestry and agriculture – does not get
1). The consequence of such delays will underway until after 2014, then the
be a failure to meet the cumulative and probability of exceeding 2°C of warming
annual emissions reduction objectives and the risks of runaway climate change
needed to prevent runaway climate occurring will exceed 50%.
change.
For all emissions abatement scenarios
The modelling indicates that it is still examined in this report, it is assumed
possible to achieve emissions levels that there are no major changes in
that are 80% below 1990 levels by 2050. population growth, GDP growth or
Reaching these levels creates a high fundamental lifestyle choices. If such
probability of avoiding global warming activities were curtailed over the long-
of 2°C. To achieve an 80% reduction by term, the low-carbon industry growth
2050 requires immediate low-carbon rate requirements reported here may be
industrial development growth rates eased somewhat.
of 24% every year until large-scale
deployment has been achieved. At the
The Inadequacy of Trading/Carbon
same time, countries must maximise
Price Alone
all plausible emissions abatement
opportunities in the forestry sector and Should the development of low-carbon
boost the adoption of energy efficiency industries be unduly delayed, the
measures. constraints on industrial growth will
create a situation where industrial
This report finds that if production cannot respond to price
re-industrialisation across all low- signals from the market. That is,
carbon sectors – including clean energy, despite an increasing price for carbon,

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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 the industries most able to provide development. Figure 3 shows that even
abatement at those prices will not be for high carbon prices there is still a
sufficiently developed or able to grow cost shortfall for low-carbon energy
fast enough to meet the demand. They generation relative to that of fossil fuels
will be constrained by shortages of skills, that would need to be met by investment
materials and production output. of some kind.

One foreseeable cause of delay is Investment and Returns

the exclusive use of price-based
mechanisms like emissions trading. Changes in energy prices, driven
These mechanisms support the by economies of scale, will be an
development of least-cost industries intrinsic component of low-carbon
first, essentially fostering a sequential re-industrialisation. For example,
industrial development process. currently renewable energy
technologies generally cost more
This report compares a sequential than fossil fuel-based energy and are,
development scenario with a concurrent therefore, priced out of the market.
development scenario. The comparison However, once renewable energy
reveals that for the sequential approach, technologies are driven to larger scales,
emissions levels in 2050 are more than this situation reverses.
double those in the concurrent case
when using the same industry growth Since the fuels for renewable
rates (see Figure 2). technologies (i.e. biomass, wind, sun,
etc.) are obtained at zero or low cost, the
Even if price-based mechanisms like core cost stems from building plants to
emissions trading were accompanied extract that energy. Empirical evidence
by policies that ensured the sequential provides a reliable guide to the decline
development of low-carbon of future costs.
industries, there would still be a need
for investment in the early stages of By contrast, fossil fuel costs are likely

Figure 2: There is a
large difference in the
120 (a) 120 (b) abatement outcomes
Emissions and avoided emissions

for (a) concurrent

Emissions and avoided emissions

100 100
versus (b) sequential
80 80 development of low-
(GtCO2-e/yr)

carbon industries.
(GtCO2-e/yr)

60 60 This figure illustrates

the difference in the
40 40 case of the minus 63%
scenario.
20 20

0 0
2010 2015 2020 2025 2030 2035 2040 2045 2050 2010 2015 2020 2025 2030 2035 2040 2045 2050

Year Year

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 800 No Carbon Price Figure 3: The impact of
$20/tCO2-e in 2010 rising linearly to $50/tCO2-e in 2050 various carbon prices
$20/tCO2-e in 2010 rising linearly to $100/tCO2-e in 2050 on the annual cost of
700 $20/tCO2-e in 2010 rising linearly to $200/tCO2-e in 2050 low-emissions energy
$20/tCO2-e in 2010 rising linearly to $400/tCO2-e in 2050 generation industries
600
relative to fossil fuels in
the minus 63% scenario.
Annual relative cost (billion US$/yr)

Decreasing relative cost with higher carbon price

This annual relative
500 cost approximates the
amount of investment
required for all
400 low-carbon energy
generation industries
(including CCS). This
300
figure shows that even
high carbon prices
200 do not overcome the
interim cost-shortfall
of low-carbon energy
100 generation.

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

to increase in price due to rising This presents a long-term investment

fuel extraction costs and the cost of picture in which short-term price
managing greenhouse gas pollution. support to achieve economies of scale
Climate Solutions 2 assumes that fossil is repaid with long-term returns from
fuel prices will increase by 2% every year the cost savings (see Figure 4). This
but does not include a cost of carbon. type of investment and return profile is
most appropriate for institutional and
In this report, the point at which the first pension fund investments. It may also
renewable energy industries, such as lend itself to the use of “climate bonds”
wind and small hydro power, start to – structured by governments, investors
create net savings is 2013 (assuming and industry specifically to support this
no retardation of learning rates). By process.
2049, all major renewable resources will
be able to provide energy at, or below,
those costs projected in the business-
Conclusions
as-usual scenario. The final resources
projected to cross the viability line are The current trajectory of global
wave and ocean energy generation. greenhouse gas emissions is on course
to trigger tipping elements that are
In many countries with higher energy forecast to unlock runaway climate
prices, the savings will start being change.
realised much earlier.

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 Figure 4: Short-term
price support for
renewable energy
technologies to achieve
Price support investment
economies of scale will
result in long term cost
Return on investment from savings savings.

Cost

fu els
Fossil

Clean te
chnolog
ies

Time

However, a small but rapidly closing • Policy implications: 24 critical low-

window of opportunity remains to carbon resources and industries
prevent this eventuality. This window is will be needed to meet the required
defined by the time needed to develop emissions target. This implies that
and deploy low-carbon industries schemes such as carbon pricing and
at a scale that will prevent a 2°C rise trading – which foster development
in global temperatures. In order to of one technology after another,
proceed through this window of with least-cost technologies being
opportunity, the process of low-carbon activated first – are not sufficient by
re-industrialisation must be at full speed themselves. Instead, international
no later than 2014. policy is required to simultaneously
drive the worldwide ramping up
Beyond 2014, this report finds that there of the full suite of low-carbon
is a “point of no return”, where market- industries and practices identified in
based mechanisms cannot be expected this report.
to meet the abatement requirement. At
this point, the probability of runaway • Opportunities: The good news is
climate change is considerably greater that the resources, technologies
than the probability of keeping the and industries required for the
global average temperature from rising transformation are all available; the
more than 2°C. rates of growth are plausible and
the trillions of dollars of investment
This finding has important policy required are within the capacity of
implications and opportunities. the institutional investment sector.

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Climate Solutions 2: Low-Carbon Re-Industrialisation

1 Objectives

The objectives of the modelling

undertaken in this report are five-fold:

I. Determine whether it is possible to

avoid runaway climate change.

II. Establish the time window

available to commence the
re-industrialisation of low-carbon
industries required to avoid runaway
climate change.

III. Determine the critical industrial

constraints that must be overcome
to provide the necessary emissions
levels that will avoid runaway
climate change.

IV. Compare the costs of low-carbon

re-industrialisation versus the costs
of business-as-usual development.

V. Identify the implications of the

findings for governments, industry
and the private sector.

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 Placement of the Scenarios in terms of Avoiding 2°C of Warming

The minus 63% scenario (Scenario A) has a global 2050 emissions level of
14.7 GtCO2-e per annum (equivalent to 1.6 tCO2-e per person per annum) and
cumulative emissions between 2000 and 2049 of 1664 GtCO2-e.

For the minus 80% scenario (Scenario B), the 2050 emissions requirements are
7.9 GtCO2-e per annum (equivalent to 0.9 tCO2-e per person per annum) and
cumulative emissions between 2000 and 2049 are constrained to 1432 GtCO2-e.

In order to put these figures within the context of the latest estimates of the
emissions levels required to avoid 2°C of warming, Table 1 sets out the scenarios
modelled by Meinshausen’s team (Meinshausen et al. 2009). The scenarios
used in this study are placed within the table, with the associated exceedance
probabilities calculated by interpolation and extrapolation (and marked with an
asterisk). The results are also shown graphically in Figure 5 and Figure 6.

Table 1: Probabilities for avoiding 2°C of warming for a range of annual

emissions in 2050, and cumulative emissions over the first half of the century.
The two scenarios used in this study have been added into the table by
interpolation and extrapolation (and are marked with asterisks).

2°C 2°C
2°C Exceedance
Global Emissions Per Capita Exceedance Exceedance
Probability
in 2050 Emissions Probability Probability
Default
Low High

7.9 (Scenario B) 0.9 4* 13* 29*

10 1.1 6 16 32
14.7 (Scenario A) 1.6 10* 24* 40*
18 2.0 12 29 45
20 2.2 15 32 49
36 3.9 39 64 82
Cumulative 2°C 2°C
2°C Exceedance
Emissions Exceedance Exceedance
Probability
2000–2049 Probability Probability
Default
(CO2-e) Low High

1356 8 20 37
Scenario B 1432 9* 23* 40*
1500 10 26 43
Scenario A 1664 15* 32* 50*
1678 15 33 51
2000 29 50 70

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 Figure 5: Exceedance
probability range for
various 2050 annual
Per capita emissions in 2050 (tCO2-e per year) emissions levels
(Meinshausen et
1.0 2.0 3.0 4.0
90 al. 2009); the minus
63% and minus 80%
80 scenarios used in this
project are included
Scenario A (minus 63%)

70 by interpolation and
Probability of exceeding 2oC

extrapolation. Note
Scenario B (minus 80%)

60 that the x-axis is

provided in both global
50 annual emissions and
per capita emissions
40 assuming a population
of 9.2 billion in 2050.
30

20

10

0
0 5 10 15 20 25 30 35 40

Total emissions in 2050 (GtCO2-e per year)

Figure 6: Exceedance
Scenario A (minus 63%)

80 probability range for

various cumulative
Scenario B (minus 80%)

70 emissions levels in
the half century to
2050 (Meinshausen
Probability of exceeding 2oC

60
et al. 2009); the two
scenarios used in this
50 project are included by
interpolation.
40

30

20

10

0
1000 1200 1400 1600 1800 2000 2200

Cumulative emissions 2000 to 2049 (GtCO2-e)

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 4
Climate Solutions 2: Low-Carbon Re-Industrialisation
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2 Method

2.1 Step 1: Establish Threshold of decreasing the activity or changing

Runaway Climate Change lifestyle (e.g. dietary habits cause
methane emissions from livestock
An emerging scientific consensus finds digestive processes). Once these
that negative feedbacks in the climate “irreducible emissions” are identified
systems will, at some level of warming, and quantified, they are pre-allocated
be surpassed by positive feedbacks. from the gross carbon budget. This
By accelerating climate change, these yields a remaining “reducible carbon
positive feedbacks would cause the budget” for allocation across all sectors
current climate to flip to a different of the economy. The CRISTAL model
climate regime. This step of the report is capable of distributing the reducible
seeks to establish the level of warming carbon budget in any proportion
beyond which a major change in the between various sectors. Where
climate regime is likely to occur. Once possible, the modelling methodology
established, this information can be assumes that all current activities in
used to explore how runaway climate the global economy are maintained
change and its consequences – which through to 2050, consistent with future
are likely to be beyond the adaptive consumption estimates.
capacity of society, economies and the
environment – may be avoided.
2.4 Step 4: Establish the Baseline of
Energy and Non-Energy Demand
2.2 Step 2: Establish Gross Carbon
This step establishes future demand and
Budget and Required 2050
emissions baselines. Future emissions
Emissions Levels
levels will be significantly determined
This step aims to establish, based on by energy and non-energy demand as
current scientific opinion, the carbon they evolve with population, economic
budget consistent with avoiding activity (GDP), wealth and consumption.
warming levels that could lead to This step uses these elements to
runaway climate change (as per step establish demand baselines. These
1). This step includes identifying future baselines can be adjusted to take into
emissions levels that are consistent with account the effects of climate change
this gross carbon and greenhouse gas that may, for example, impinge on
emissions budget. agricultural production and levels of
prosperity.

2.3 Step 3: Establish the “Reducible

Carbon Budget” (After Irreducible 2.5 Step 5: Establish Data for
Emissions) Relevant Industries, Growth and
Resources
Some activities that contribute to
the global economy have associated This step establishes which low-
emissions that cannot be reduced emissions industries and resources
beyond a certain limit without are available to meet baseline demand

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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(see step 4) within the reducible carbon is reflected as probability distributions
budget (see step 3). This step also of the inputs. Generally, triangular
establishes the plausible growth rates distributions are used. The development
of such industries. In this report, low- parameters of a given industry, based
emissions industries are assumed to on the range of possible inputs
include zero-emissions renewable established above, are run repeatedly
energy industries with the addition in a Monte Carlo simulation. This builds
of CCS-equipped fossil fuel energy a picture of the range and probability of
generation. outcomes that intrinsically reflect the
range and probability of the inputs.
The expansion of low-emissions
industries will be based on the global
2.7 Step 7: Energy, Non-Energy and
resource base of low-carbon energy
Emissions Scenario Results
sources (e.g. renewable energy forms
including bioenergy, wind and sun), the Results are presented in terms of
availability of suitable technology to industry development and deployment,
harness these resources and the speed energy sector make-up, non-energy
with which the associated industries can sector make-up and net emissions
be expanded. projections. A key result parameter
focuses on the industrial growth
The relevant industries have rates needed to achieve the required
specific performance and resource emissions levels in 2050. The results
characteristics. These characteristics are also expressed in terms of a “point
indicate both their potential contribution of no return”: the year when the balance
and the viable rates at which they of probabilities indicates industry
may be developed. In some cases, deployment may no longer allow for
where relevant, the performance 2050 emissions levels that would avoid
of other comparable industries is runaway climate change.
considered as well. The various industry
characteristics and fundamental
2.8 Step 8: Costs, Investments and
parameters described herein aim to
Returns
reflect the range of research, forecasts
and expert opinion available from This step calculates the required annual
published sources. and cumulative investment costs for
low-carbon re-industrialisation. This
calculation is based on the difference
2.6 Step 6: Input Probability
between business-as-usual costs for key
Distributions in the Monte Carlo
commodities, such as electricity and
Simulator
fuels, and the cost of the low-carbon
This step allows differences in opinion replacement. The total cost difference
and ranges of data to be included for a given resource is the product
in the model. This differing opinion of the difference in cost for each unit
regarding all data used in the modelling multiplied by the volume of production

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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in a given year. This cost difference
is expressed as a price support
requirement (e.g. as if it were met with
a feed-in tariff or equivalent). It is also
expressed as an investment cost on an
annual and cumulative basis. Industries
that have no costs above business-as-
usual are not considered, i.e. savings
are not calculated for energy efficiency.
However, for those technologies that
require price support, the returns/
savings created by achieving economies
of scale and competitive prices are
presented.

2.9 Step 9: Extension to Minus 80%

This step expands on the minus 63%
scenario developed in the previous
steps by considering the options for
adjusting the commencement of low-
carbon re-industrialisation, the size of
certain emissions abatement sectors
and the growth rates needed to achieve
lower emissions. The minus 80%
scenario tested is for global emissions in
2050 of approximately 7.9 GtCO2-e/yr.

2.10 Step 10: Limits of Delay

This step tests the time frame, or
“window of opportunity”, to initiate
low-carbon re-industrialisation in time
to avoid 2°C of warming. The step
computes the latest year in which full-
scale re-industrialisation can be initiated
and still meet the 2050 emissions target
for each scenario.

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 8
Climate Solutions 2: Low-Carbon Re-Industrialisation
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3 Introduction to the Climate Risk Industry Sector
Technology Allocation (CRISTAL) Model

3.1 Introduction What emerges is an overall picture of

This project uses a computational global future emissions levels, energy
model called the Climate Risk Industry production and low-emissions energy
Sector Technology Allocation (CRISTAL) investment requirements.
model. This model emulates real-world
industrial growth. It identifies the The CRISTAL model is primarily
resources, technologies and services an “industrial model” rather than
available to reduce greenhouse an “economic model”; price and cost
emissions (adopting the Princeton/ have not been used to limit or guide
Socolow abatement “wedges” the uptake of technologies. The model
framework; Pacala & Socolow 2004). works from the point of view of the
The model then uses Monte Carlo emissions outcome being fixed as
methods to combine this information in an input, with the consequences for
order to calculate the industrial growth industrial development being an output.
rates required to achieve the necessary By forcing industries to deliver the
emissions reductions, while satisfying required emissions outcomes (i.e. the
the projected demand for energy and inputs) the plausibility of output growth
other services. rates and other real-world constraints
can be considered. For simplicity, a
Monte Carlo methods are a class of single set of industrial growth rates
algorithms that rely on repeated random has been applied across all low-carbon
sampling to compute their results. They energy generation industries in this
are often used when simulating physical project.
systems. They allow multiple data sets
and ranges of expert opinion to be The basic structure and
used (for example, when analysing the interdependencies of the CRISTAL
national abatement potential of wind or model are shown in Figure 7.
another low-emissions industry).

The outputs of the scenarios from this

CRISTAL model focus on industrial
growth rates. This focus reflects the
potential of these growth rates to
critically constrain delivery of future
emissions levels, by fundamentally
restricting the industry response rate
to economic and government policy
measures. By assessing the capabilities
and rate of change for each industry,
the model provides a picture of its
output and constraints, assembling
these outputs across industries.

9
Climate Solutions 2: Low-Carbon Re-Industrialisation
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 Figure 7: Schematic diagram showing the basic structure of the CRISTAL model.

Scenario Settings
Industry Data
Emissions & Population Consumption
Climate Change Policy
Energy
Impacts Frameworks
Baselines

Carbon Budgets Baseline Resource Implementation

Requirements Timing Industry and
Gross Carbon Resource Options
Budget resource volumes,
Market Dynamics installed capacity,
starting costs,
capacity factor,
Irreducible
Monte Carlo Simulator Learning Rates learning rates
Emissions

Industry Settings
growth dynamics
Net Carbon
Budget BAU Fuel Price
Projections and
Industry 1
Price Risk
Projections
Industry2

Existing
Industry3
Infrastructure
Some are Commitments
Interdependent size, production,
Industry4
commissioned,
••• lifetime,
financing period,
Industrygas emissions intensity

Industryccs

Industrypower management
Scenario Outputs (Histograms)
Industrysynthetic energy carriers • Emissions
• Energy
• Non-energy
Annualised Output and Probability • Industry Allocation
Distribution for Each Industry

Investment & Return Emissions Projection Energy Projection

0.9
250 Fossil with CCS
Fugitive
Solar Power Stations Waste
2.0E+06
Emissions and avoided emissions (GtCO2-e/yr)

0.8 Fo restry
Geothermal LULUC
Repowering Large Hydro A griculture
1.8E+06
200 Industrial Energy Efficiency (No n-M etals) Industrial Energy Efficiency (No n-M etals)
Final Energy Services (GWH/year)

0.7
Small Hydro M etals Energy Efficiency M etals Energy Efficiency
Annual additional costs (billion US$/yr)

Efficient buildings Efficient buildings

1.6E+06
Sea and Ocean Energy Efficient vehicles Efficient vehicles
0.6 Reduced use o f vehicles
Reduced use o f vehicles
Bio-HydroCarbons A viatio n and shipping efficiency 1.4E+06 A viatio n and shipping efficiency
A vo ided A viatio n
150 Wind power B io -Hydro Carbo ns
A vo ided A viatio n
0.5 B io -Hydro Carbo ns
Sea and Ocean Energy 1.2E+06
Building Integrated Solar PV Do mestic So lar Thermal
Sea and Ocean Energy
Do mestic So lar Thermal
B uilding Integrated So lar P V
B uilding Integrated So lar P V
0.4 So lar P o wer Statio ns 1.0E+06 So lar P o wer Statio ns
Geo thermal
Geo thermal
100 Wind po wer
Wind po wer
Small Hydro 8.0E+05
0.3 Small Hydro
Repo wering Large Hydro
Repo wering Large Hydro
Fo ssil with CCS
Existing Large Hydro
Residual Emissio ns 6.0E+05
Fo ssil with CCS
0.2 P lanned Other Fo ssil Fuel P o wer Statio ns
Residual Emissio ns
P lanned Gas P o wer Statio ns
50 P lanned Other Fo ssil Fuel P o wer Statio ns
P lanned Co al P o wer Statio ns 4.0E+05
P lanned Gas P o wer Statio ns
Existing Other Fo ssil Fuel P o wer Statio ns
0.1 P lanned Co al P o wer Statio ns
Existing Gas P o wer Statio ns
2.0E+05 Existing Other Fo ssil Fuel P o wer Statio ns
Existing Co al P o wer Statio ns
Existing Gas P o wer Statio ns
Irreducible Emissio ns
Existing Co al P o wer Statio ns
0 0 0.0E+00
2010 2020 2030 2040 2050 2010 2020 2030 2040 2050 2010 2020 2030 2040 2050

Year Year Year

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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3.2 Key Inputs 2005). Projections for increased
losses and the costs required to adapt
In addition to data on the size, growth, physical infrastructure to cope with
abatement potential and cost of various this will, therefore, have a material
emissions abatement technologies and effect on global GDP. This dynamic
strategies, the model also integrates has been included in the analysis via
important scenario input variables. a climate impact coefficient, to adjust
These variables, which define the GDP such that it reflects the burden of
conditions under which these solutions costs associated with climate change
develop, are described below. impacts and adaptation. In this project,
a 3% climate impact retardation of GDP
3.2.1 Emissions and Energy Baselines by 2050 is used across all scenarios
presented (Stern 2006).
While a variety of global emissions
and final energy baselines have been 3.2.4 Consumption
examined, those most commonly
used in this project are based on the The IPCC baselines contain implicit
Special Report on Emissions Scenarios assumptions that link increased wealth
(SRES) outcomes produced by the with increased physical consumption
Intergovernmental Panel on Climate of energy and other commodities.
Change (IPCC), which examines a variety However, it is plausible that additional
of international development scenarios. wealth in some world regions may
be realised through activities not
3.2.2 Population necessarily directly coupled with
consumption. For example, increased
The population input setting allows wealth could be expressed as increased
the model to consider the effects of leisure time, voluntary work or
population dynamics. In general, the community activity with less added
UN World Population Prospects (2006) consumption. A decoupling factor
forecasts are used. In this project, the is included in the model to reflect a
current world population is taken to fraction of wealth that may not result
be about 6.7 billion today, rising to 9.2 in increased commodity consumption.
billion in 2050. However, for this particular report, the
decoupling factor is not used, i.e. it is
3.2.3 Climate Change Impacts assumed that consumption increases
directly in proportion to economic
Ironically, most modelling for climate growth.
change mitigation activity neglects
the effects of climate change impacts 3.2.5 Policy Frameworks
and adaptation. For example, there is
already strong evidence that climate The CRISTAL model is able to
related natural catastrophes (such accommodate any international policy
as severe hurricanes) are having a frameworks (such as those currently
discernible impact on insured losses being negotiated for a post-2012 climate
(Chemarin & Bourgeon 2007, Ceres treaty) that may impact on future

11
Climate Solutions 2: Low-Carbon Re-Industrialisation
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emissions, energy usage and the cost of generation technology is assumed to
emissions abatement technologies. In continue along its historic learning rate
this project, no policies currently being trajectory.
negotiated are assumed to change the
SRES baselines. The scenarios examined in this report
do not include any carbon price impacts.
However, the potential benefits and
3.3 Key Features of the Model
limitations of a carbon pricing scheme
are briefly discussed in each case. In
3.3.1 All Major Emissions Sectors this report, by utilising the current
costs and rational learning rates (cost
The CRISTAL model includes all major reductions as a function of scale)
emissions sectors, including stationary for each abatement technology, the
energy, industrial processes, transport, CRISTAL model can give an indication
land use and land use change, forestry, of the commodity cost profile for each
waste, fugitive emissions, agricultural low-emissions industry. Using this
emissions and bunker fuels. This allows information, it is possible to determine
a side-by-side comparison of the scale any relative cost shortfall that must be
of different abatement options and accounted for. In this way, the CRISTAL
low-carbon activities, although no model provides a forecast of the amount
preference or order of implementation is of investment (and its timing) that would
implied. be required to achieve the desired
emissions reductions associated with
3.3.2 Resource and Technology Costs each low-emissions technology.

Only emissions abatement technologies 3.3.3 Extending the Pacala-Socolow

that are commercially available, or likely “Wedges” Concept
to be so in the near term, have been
included. The CRISTAL model is able to Considerable modelling has been
look at price shortfalls between included undertaken in the fields of both climate
technologies and business-as-usual, as change and energy. Many models are
well as the impact of carbon prices. constructed in ways that let scenarios
evolve based on key costs, such as
The costs and potential savings of the price of oil or the cost of carbon. A
low-emissions energy generation “wedges” model, developed by Pacala
technologies are expressed relative to and Socolow (2004), is widely regarded
their fossil fuel competition. Since there as an elegant approach to considering
is considerable uncertainty surrounding and presenting the means of achieving
the future costs of fossil fuel energy, this future greenhouse gas emissions levels.
report conservatively assumes that the Such a model provides an excellent
cost of energy generated using fossil starting point for this analysis. It divides
fuels increases at a linear rate of 2% the task of emissions stabilisation over
each year out to 2050. The rate of cost 50 years into a set of seven wedges
decrease for each low-emissions energy (delivered by emissions-avoiding

12
Climate Solutions 2: Low-Carbon Re-Industrialisation
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technologies). Each wedge grows from a probabilities of achieving certain
very small contribution today to a point outcomes or risks of failure.
where it is avoiding the emission of 1
gigatonne of carbon per year by 2054 • Seeks to minimise the replacement
(see Figure 8). Pacala and Socolow point of any stock or system before the
out that many more of these wedges end of its physical or economic life.
are technically available than are
required for the task of stabilising global • Includes energy and emissions
emissions at today’s levels by 2050. contingencies that allow for the
possibility that some solutions may
The CRISTAL model presented here encounter significant barriers to
builds on the Pacala-Socolow wedges development and therefore fail to
model. However, it has been adapted to meet the projections set out in the
provide insight into measures that go model.
beyond the stabilisation of emissions in
2050, to those that achieve reductions 3.3.4 Top-Down and Bottom-Up
in global emissions consistent with
various international targets. In order to The CRISTAL model is structured
do this, the CRISTAL model: to combine top-down and bottom-
up aspects of emissions abatement
• Extends the penetration of analysis. Thus, it approaches
abatement industry deployment to calculations of future emissions cuts
achieve abatements consistent with from both the perspective of the global
plausible future carbon budgets. requirement for energy and abatement
opportunities (top-down) and the
• Simulates real-world industrial perspective of developing options to
growth behaviour by assuming: that meet these needs (bottom-up). This
the growth of any technology will permits the model to capture the best of
follow a typical sigmoid (S-shaped) both approaches in its calculations.
trajectory; that constraints impose a
maximum on the rate of sustainable The starting point for the top-down
growth; and that the ultimate scale aspect of the model is the SRES
depends on estimated resources baselines for energy and emissions
and other specific constraints. through to 2050 (IPCC 2000, Van Vuuren
2008). However, top-down approaches
• Draws on diverse expert opinions can introduce perversities, such as
on the potential size and scale of inflated baselines, which create the
emissions abatement resources and illusion of greater emissions reductions
uses these as inputs. than are possible.

• Employs a probabilistic The bottom-up aspect of the model

approach, using the Monte Carlo builds a set of abatement industries
computational methods so that to meet the projected energy services
the results can be considered as demand, sector by sector. This requires

13
Climate Solutions 2: Low-Carbon Re-Industrialisation
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 16
Figure 8: The Pacala and
Socolow “idealised”
version of future
emissions where
12 allowed emissions are
fixed at 7 GtC/year:
“The stabilisation
Fossil fuel Stabilisation triangle is divided into
triangle seven wedges, each
emissions 8 of which reaches 1
(GtC/y) GtC/year in 2054. With
linear growth, the total
avoided emissions per
4
Continued fossil wedge is 25 GtC and
fuel emissions the total area of the
stabilisation triangle
is 75 GtC. The arrow at
the bottom right of the
0 stabilisation triangle
2000 2010 2020 2030 2040 2050 2060 points downward to
emphasise that fossil
fuel emissions decline
Year substantially below 7
GtC/year after 2054 to
achieve stabilisation at
500 ppm.” (Pacala and
Socolow 2004).

some assumptions about the level and the diversity of opinion. All such ranges
type of consumption – for example, of data are entered into the model as
what proportion of energy is used for a “triangular” probability distribution
transport, homes and industry, and so defined by the lowest, highest and best
forth. This information is used to ensure estimate for any given variable (Figure
that the emissions abatement wedges 9). The project therefore seeks to include
are internally consistent and avoids a broad range of independent sources
the “double counting” of overlapping for any given variable.
abatement opportunities. The model
accomplishes this by considering, within 3.3.6 Modelling Industry Deployment
each sector, the total energy services Behaviour
needed for that sector and then the
role of abatement opportunities. Thus Whereas Pacala and Socolow simplify
the model maintains the best possible the avoided emissions to a wedge shape
internally consistent evolution of energy with linear growth, in actuality any
and emissions. market innovation follows a standard
sigmoid or S-curve, similar to that
3.3.5 Using Ranges of Data shown in Figure 10.

Proponents of any one solution tend Such a profile is underpinned by an

to be optimistic regarding the extent industry that starts from a small base,
of its contribution and the time frame at which point it provides negligible
by which its benefits may be achieved, abatement (though there may be
while others may be more disparaging. considerable investment and growth
Rather than make value judgements, this occurring in this phase). Over time, the
project uses ranges of data that reflect industry starts to make an increasingly

14
Climate Solutions 2: Low-Carbon Re-Industrialisation
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significant contribution (the “ramp- resources diminish or other constraints
up” phase). This growth will approach impinge, the industry’s growth gradually
a plateau of steady development as diminishes (the “ramp-down”). In some
the industry matures (the period of cases, there may be a final stage of
near-linear growth). As the unexploited industry contraction.

Figure 9: Instead
of picking a single
number for important
Probability of occurrence

parameters, input data

are entered into the
model as ranges of
values. The probability
distribution used is
triangular and defined
completely by the
lowest, best and
highest estimates (from
published literature).

Lowest estimate Best estimate Highest estimate

Input value

into decline Figure 10: Emissions

abated as a new
Height is
industry grows.
wedge size
Emissions avoided

Area under the curve is

cumulative emissions
avoided

Year

15
Climate Solutions 2: Low-Carbon Re-Industrialisation
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 3.3.7 A Trapezoid Approximation of because in many cases the relevant
Growth data are not known. For example, it
is hard to estimate the year in which
The S-curve shown in Figure 10 indicates the growth of industrial energy-
the cumulative effect of an installation or efficiency implementation will level-
industry that grows quickly at the start, off (b in Figure 11). Instead, more
reaches a steady state and ultimately easily estimated parameters are used,
contracts. The actual growth phases such as the turnover rate of industrial
might best be described by a bell- equipment, available resources, current
shaped curve. However, in the CRISTAL installed capacity, standard or forced
model, growth is approximated as a growth rates for each of the phases
trapezoid, as shown in Figure 11. Within of development, or the year in which
the CRISTAL model, each emissions commercial roll-out commences.
reduction solution is described in units
most appropriate to the technology Combining these various “known
or resource; for example, the number quantities” in simultaneous equations
of megawatts of turbines installed, or (which will be different for different
million tonnes of oil-equivalent avoided low-carbon industries) allows variables
through increased vehicle efficiency. c, b, p, s, and m to be calculated, and the
shape of the trapezoid and the S-curve
Any climate solution trapezoid can be of cumulative annual contribution
fully defined by the set of variables from each abatement industry to be
that are designated as c, b, p, s and m estimated.
in Figure 11. However, these variables
are not put directly into the model

Maximum annual
Saturation phase Decline phase, if Figure 11: Trapezoid
installation of avoidance
applicable
approximation of
industrial growth.
Any climate solution
Accelerating roll-outs trapezoid can be defined
around the world by the set of variables, c,
b, p, s and m.

Industrial growth
m

Pre roll-out phase,

in very early days

1990 c b p s 2100

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The growth of any industry follows 4. The decline phase, in which the
a typical pattern. It starts small, but total size of the industry starts to
can grow rapidly. It is, of course, easy decrease (i.e. existing installed units
to double in size when an industry is are taken out of service and not
small. But eventually the industry’s size replaced).
stabilises so that it is in equilibrium with
the size of its resource and/or market. Each industry may have a different
industry growth profile depending on
By way of example, the wind industry the relative size of these periods. For
started small and has grown quickly. At all emerging technologies examined in
some stage it will reach a state where this report, these are set at 0–20% for
the industry has harnessed all of the the growth phase (critical development
suitable wind resources, at which period), 20–80% for the stable phase
point the industry will only be of a size and 80–100% for the saturation
required to maintain and replace this phase. Nuclear energy is the only low-
stock of power stations. emissions technology assumed to enter
into the decline phase prior to 2050.
In terms of the trapezoid approximation
of industry growth (see Figure 11), the These settings reflect the concept that
progression of industry development a participating company will want a
can be summarised into the following sufficiently long period of production
phases: from an existing factory to recover the
investment, i.e. an industry will not keep
1. The growth phase (also referred to growing indefinitely or right up to the
as the critical development period), point that a resource is saturated.
in which the industry growth is
accelerating towards the maximum
growth rate (i.e. in each successive
year more units are produced per
annum).

2. The stable phase, in which the

industry growth rate is constant and
the maximum number of new units
(m in Figure 11) are produced each
year.

3. The saturation phase, in which the

industry growth rate decreases and
fewer new units are produced each
year.

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 The Case of Oil: An Empirical Example of Industry Growth Phases

The fossil fuel oil industry is a mature industry with an established industry
growth S-curve, as shown below in Figure 12. The dashed line in this figure
approximates the stable phase of industry growth for the oil industry. The section
prior to this corresponds to the growth phase, also referred to as the critical
development period. Ultimately, if not already, the stable phase of oil industry
development will enter the saturation phase and finally a decline phase.

Figure 12 shows that the critical development period for oil continued until about
20% of the maximum production volume was reached (assuming the oil industry
is currently close to maximum production). Similarly, the modelling used in this
report assumes that the critical development period for all low-carbon energy
generation technologies continues until they have utilised 20% of their total
available resource.

Figure 12: The

historical growth
40
Critical development period profile for oil
Stable phase
production from
35 1900 to 2008
(BP 2009). The
dashed line
(billions of barrels per year)

30
approximates the
25 linear stable phase
Oil production

characterised by
constant growth.
20

15

10

0
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Year

Oil production in this figure includes crude oil, shale oil, oil sands and NGLs (the liquid content of natural gas, where this is
recovered separately). Liquid fuels from other sources, such as biomass and coal derivatives, are not included.

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3.3.8 Form of Outputs and Results emissions from fossil fuels are shown
in black (see Figure 14). Similarly, for
All model results may be expressed as energy wedge diagrams, energy
probability distributions, in the form of a generated or avoided by low-emissions
histogram for a given output parameter technologies and efficiency measures
(see Figure 13). For simplicity, the results are shown in different colours, with
for multiple parameters shown together residual fossil fuel energy (not including
are expressed using the mean output CCS) shown in black (see Figure 15).
over several thousand runs.
Using the energy generation data for
Emissions reductions and outcomes each industry, along with the cost data
are shown in a wedge format, as are described above in Section 3.3.2, it
energy sector changes. In the case of is possible to determine annual and
the emissions wedge diagrams, the cumulative cost data for low- and zero-
emissions abatements from various emissions industries relative to their
industries and sectors are shown in a fossil fuel competition (see Figure 16).
range of colours, whereas any residual

30
Figure 13: An example
distribution of data
25
obtained for a given
output parameter of
20
the model, presented
as a histogram and
15 percentile distribution.
These indicate the
10 range of possible
outcomes, the most
5 likely outcomes and a
probability distribution
0
for any given output.
01

25

49

61

73

85

97

09

21
1

3
3.

3.

3.

3.

3.

3.

3.

3.

3.

4.

4.

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.0
0%

0%
10

20

30

40

50

60

70

80

90

10

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 120 Figure 14: An example
Fugitive emissions output from
Waste
the CRISTAL model.
Emissions and avoided emissions (GtCO2-e/yr)

Land Use, Land Use Change and Forestry

100 A griculture The emissions wedges
Non-Metals Industry Efficiency
show the contribution
M etals Industry Efficiency
Buildings Efficiency of the major sectors of
Vehicles Efficiency emissions abatement
80 Reduced Use o f Vehicles
Shipping Efficiency subtracted from the
Aviation Efficiency A1FI baseline.
A vo ided A viatio n
B io -Hydrocarbo ns
60
Sea and Ocean Energy
Do mestic So lar Thermal
B uilding Integrated So lar P V
So lar P o wer Statio ns
40 Geo thermal
Wind
Small Hydro
Repowering Large Hydro
Large Hydro
20
Nuclear
Fo ssil with CCS
Residual Emissio ns
Irreducible Emissio ns
0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

3.0E+08 Figure 15: An example

energy output from
Non-Metals Industry Efficiency the CRISTAL model.
2.5E+08 Metals Industry Efficiency The energy wedges
Buildings Efficiency
Vehicles Efficiency are expressed in GWh
Reduced Use o f Vehicles of final energy as
Shipping Efficiency
Final energy services (GWh/yr)

Aviation Efficiency
subtracted from the A1FI
2.0E+08
A vo ided A viatio n final energy demand
Bio-Hydrocarbons
projections to 2050.
Sea and Ocean Energy
Do mestic So lar Thermal
1.5E+08 B uilding Integrated So lar P V
So lar P o wer Statio ns
Geo thermal
Wind
Small Hydro
1.0E+08 Repo wering Large Hydro
Large Hydro
Nuclear
Fo ssil with CCS
Residual Fossil Fuels
5.0E+07

0.0E+00
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

20
Climate Solutions 2: Low-Carbon Re-Industrialisation
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 Figure 16: The method for creating the
combined investment cost curves. Note
these show specifically the cost shortfall
between the cost of conventional energy
and the costs of the low-carbon resources.

The absolute cost for each technology is The annual final energy supplied The annual additional cost of the actual
used to determine the additional cost by each technology. energy supplied by each technology
relative to the fossil fuel status quo. relative to the fossil fuel status quo.

30000000
60 120

Annual additional costs (billion US$/yr)

Wind power
50 25000000
Absolute costs (billion US$/yr)

100
Final energy (GWh/yr)

40
Wind power
20000000 80
Wind power
30
15000000 60
20

10000000 40
10

0 5000000 20

-10
0 0
2010 2020 2030 2040 2050 2010 2020 2030 2040 2050 2010 2020 2030 2040 2050

Year Year
Year

35000000
180
890
Annual additional costs (billion US$/yr)

30000000 160
790
Solar Power Stations
Absolute costs (billion US$/yr)

Solar Power Stations

140
690 Solar Power Stations
Final energy (GWh/yr)

25000000
120
590
20000000
490 100

15000000 80
390

290 60
10000000

190 40
5000000
90 20

-10 0 0
2010 2020 2030 2040 2050 2010 2020 2030 2040 2050 2010 2020 2030 2040 2050

Year Year Year

120 180 160

Solar Power Stations
Annual additional costs (billion US$/yr)

Annual additional costs (billion US$/yr)

Annual additional costs (billion US$/yr)

160 Wind power

100 140
Solar Power Stations
140
120
80 120
Wind power
100
100
60 80
80

60
40 60

40 40
20
20 20

0 0 0
2010 2020 2030 2040 2050 2010 2020 2030 2040 2050 2010 2020 2030 2040 2050

Year Year Year

Σ
120
Annual additional costs (billion US$/yr)

600 Fossil with CCS

Annual additional costs (Billion US$/yr)

Solar Power Stations

Geothermal
100
500 Repowering Large Hydro
Small Hydro
80 Sea and Ocean Energy
Wind power 400
Bio-HydroCarbons
Wind power
60 Building Integrated Solar PV
300

40 200

20 100

0 0
2010 2020 2030 2040 2050 2010 2020 2030 2040 2050

Year Year

The combined annual relative costs of

all low-emissions technologies.

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3.4 Emissions Abatement Sectors practices, with the exception of biomass
replacing fossil fuels (since biomass is
The main emissions abatement sectors already considered in the zero- and low-
considered in the CRISTAL model are emissions energy section).
comprised as follows:
3.4.4 Land Use, Land Use Change and
3.4.1 Zero- and Low-Emissions Energy Forestry (LULUCF)

This sector includes heat and electricity The IPCC (2007) approach is used for this
generated using renewable energy category, which considers LULUCF net
technologies and also non-renewable emissions abatements to involve:
low-emissions energy sources, such as
nuclear and CCS. It should be noted that • “maintaining or increasing the
geothermal energy production in this forest area through reduction of
report includes both electricity and heat deforestation and degradation and
generation. See Chapter 14 and Chapter through afforestation/reforestation;
17 for more details on the resource
assumptions for hydroelectricity, bio- • maintaining or increasing the
hydrocarbons, natural gas and nuclear stand-level carbon density (tonnes
energy. of carbon per hectare) through the
reduction of forest degradation and
3.4.2 Energy Efficiency Measures through planting, site preparation,
tree improvement, fertilisation,
This sector includes process and uneven-aged stand management,
equipment improvements in industry or other appropriate silviculture
(divided into metals and non-metals), techniques;
buildings and transport. Avoidance of
emissions within the transport sector • maintaining or increasing the
through the reduced use of vehicles and landscape-level carbon density
the adoption of alternatives to business using forest conservation, longer
travel (such as teleconferencing and forest rotations, fire management,
telework) are also included. and protection against insects; and

In each energy efficiency category, the • increasing off-site carbon stocks

modelled abatement wedge evolves in wood products and enhancing
over time based on the size of the product and fuel substitution using
efficiency reduction opportunity, the forest-derived biomass to substitute
length of the product replacement products with high fossil fuel
lifetimes and the impact of any requirements, and increasing the
regulatory incentives/requirements. use of biomass-derived energy to
substitute fossil fuels.”
3.4.3 Agriculture
Additional information on LULUCF
This category considers the emissions assumptions can be found in Chapter 14
abatement from improved agricultural and Chapter 17.

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3.4.5 Waste the overall share of energy generated
This area primarily involves improved by fossil fuels decreases as renewable
methane recovery from landfill sites, energy sources take a greater share
with some additional contribution from of energy generation, the amount of
thermal processes for waste-to-energy. energy generated by natural gas initially
continues to increase.
3.4.6 Fugitive
To achieve this outcome, renewable
In accordance with the IPCC (2007) energy preferentially displaces coal-
approach, it is assumed in this sector fired power stations and petroleum-
that waste greenhouse gases emitted based road transport. Simultaneously,
in the production of fossil fuels are natural gas displaces coal from
constrained to their current levels. electricity generation in the short-term.
It is assumed that carbon emissions
3.4.7 Replacing High-Carbon Coal from natural gas energy generation
with Low-Carbon Natural Gas facilities are sequestered within the CCS
wedge as the technology comes on-line.
In the short-term (particularly prior
to the effective operation of CCS), an
3.5 Emissions Abatements Not
increase in the use of natural gas as a
Considered
“transition fuel” can play a significant
part in avoiding the locking in of higher This study does not include many
emissions from coal, thereby buying potential emissions reductions which
more development time for other energy are, at this point in time, difficult to
solutions to grow. While this is more quantify. However, in years to come
applicable in some countries than others, these activities could add further
gas would have to be scaled up in the reductions in the sectors of energy
short-term (where it can enable the use, energy efficiency, land use and
avoidance of coal use), without bringing “irreducible emissions”.
about negative biodiversity impacts.
3.5.1 Lifestyle and Behavioural
If used with CCS technology, the carbon Changes
emissions from natural gas will be
further reduced. In this way, natural gas A full or partial switch of dietary habits
can act as a bridging fuel for important towards less land-consuming, non-
applications, provided that energy meat products is particularly beneficial
security issues can be resolved. for the climate. It is well known that
cattle ranching, in particular, requires
In this report, it has been assumed much more land per unit calorie and
that, within the residual emissions per unit protein produced than legumes
block, natural gas usage follows or cereals. Increased cattle ranching
the business-as-usual production and fodder production in developing
forecasts until all proven reserves are countries requires land clearing,
essentially depleted by 2050. So while often in precious ecosystems and

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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rainforests. Also, ruminants contribute Moderation and smaller scales in daily
substantively to non-CO2 greenhouse life decisions can also contribute to
gas emissions (particularly methane) lifestyle related emissions savings.
during digestion. Furthermore, growing Large emissions savings are possible
fodder for conventional meat production if the growing global “consumer class”
often involves substantial fertiliser use, is able to scale back the unnecessary
releasing the potent greenhouse gas use of products and services. Some
N2O. examples of the type of lifestyle
questions in this area include:
A wider adoption of carbon-efficient
farming techniques (such as low-tillage • Could holidays be taken in
practices and minimising the use of geographically closer regions?
pesticides and fertilisers) could also
provide significant opportunities for • Do office buildings need to be lit up
improved emissions abatements in the the whole night?
agricultural sector. Such actions could
also significantly reduce the overhead • Is an extra-large freezer necessary or
costs incurred by farmers and minimise can a normal refrigerator do the job?
other environmental impacts associated
with the agricultural industry. • Is a large, high fuel consumption car
really required or is a smaller, more
Use of low-carbon and efficient public fuel efficient car sufficient most of
transport for both passengers and the time?
freight is the key component for a
transport modal shift. This requires 3.5.2 Material Efficiency, Recycling
significant investments in overland and Material Change
and urban transport infrastructure,
particularly for rail-based transport.
Many consumer products are
High-speed trains between major cities,
becoming less durable and are
as well as a functioning local “tube”
being replaced earlier. Longer-life
system, will help to replace short to
products and the ability to repair
medium distance flights as well as
them is an integral aspect of material
private car and lorry-based freight travel.
efficiency. This will not only save
energy during manufacturing but
Lifestyle changes around the home are
also the consumption of scarce non-
also a means of achieving significant
energy resources, many of which are
emissions and cost savings. Reducing
associated with production and refining
air-conditioning and allowing for
processes that have a negative impact
warmer room temperatures in
on greenhouse gas emissions and the
summer, as well as scaling down heat
environment in general.
consumption in winter to allow for
cooler rooms will also greatly reduce Increased recyclability at the end of
fossil fuel-based CO2 emissions. a product’s service life can also help
reduce unnecessary greenhouse gas

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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emissions from production, refining and the need for artificial fertiliser use and
landfill. There are also collateral benefits reduce the need for further land clearing.
for the environment and conservation Still, there are many questions about
of limited resources. This is particularly its practicability that have not yet been
true for energy- and carbon-intensive resolved.
products such as aluminium, whose full
recycling saves more than two-thirds of In this report, biomass (in addition to
the energy required to produce primary its present uses) is mainly used as a
aluminium from its ore. substitute for oil-derived products that
are hard to replace with conventional
Many materials currently in use are renewable energy, such as in aviation
sub-optimal for their given purpose. and shipping. Any waste biomass
For example, not all houses need to be from the process of producing these
built with high-emissions cement. Low- necessary bio-hydrocarbons fuels
carbon cement and renewable wood could feasibly be used for biochar. In
offer superior building alternatives this report, it is assumed that heating,
from a greenhouse gas perspective. cooling, electricity production and road
Similarly, biomass-based products, transport will be ultimately fuelled by
mainly from woody materials, can non-biomass renewable energies.
replace carbon-intensive and oil-based
plastics. Not only do wood and other Another potential carbon sink is the
organic materials avoid the emissions use of biomass to generate energy
associated with their fossil fuel in conjunction with CCS. In this way,
alternatives, but they also effectively carbon absorbed from the atmosphere
act as carbon sinks as long as they are by the biomass is not released back into
preserved. the atmosphere when it is converted
into energy. However, the assumptions
3.5.3 Negative Emissions Through used in this report that biomass is a)
Extensive Biomass Use and/or preferentially used in shipping and
Biochar aviation, and b) does not compete
with food production, limits the use of
biomass in this way.
Biochar is a recently discussed pyrolysis
technology for returning biomass to
the environment in a relatively carbon-
stable form. It is hoped that biomass
treated in this way will be able to
contribute to soil quality with minimal
decomposition into greenhouse gases
(i.e. acting as a kind of carbon sink). As
such, it is hoped that the use of biochar
may increase soil fertility and water
availability in degraded lands, alleviate

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4 Defining the Climate and Emissions Requirements

4.1 From Dangerous to Runaway but also to capture the point at which
severe positive feedbacks exceed
This report moves beyond a critical negative feedbacks, i.e. the destabilising
climate turning-point definition that influences exceed the stabilising
entails avoiding “dangerous” climate mechanisms.
change, to one that considers severely
non-linear or “runaway” climate Herein, runaway climate change is taken
change. Working from the standpoint to be “when the climate system is forced
of dangerous climate change has two to cross some threshold, triggering
weaknesses with regard to the goals at a transition to a new state at a rate
hand. determined by the climate system itself
and faster than the cause” (NRC 2002).
Firstly, it may be subjectively interpreted,
depending on where one stands on
4.2 The Tipping Elements to
the globe; indeed the effects of climate
Runaway Climate Change There are tipping
change are already dangerous for many
points in the
societies (e.g. those in which individuals The threshold for runaway climate
climate system,
have lost lives in unprecedented change, sometimes referred to as the
which we are very
extreme weather, or incomes to crop “climate tipping point”, is, in simplified
close to, and if
failure from sustained drought). terms, the threshold beyond which the
we pass them,
self-compounding effects of runaway
the dynamics of
Secondly, dangerous climate change climate change cannot be stopped. On
the system take
may imply a level of manageability, closer examination, the climate tipping
over and carry
in that all people live with a level of point comprises several possible
you to very large
danger, such as from crossing the road tipping elements. These tipping
changes which
or war and conflict. However, what is elements are large-scale components
are out of your
considered important in this project is of the Earth’s system that have a major
control.
the point of fundamental divergence stabilising or de-stabilising effect on
from the manageability of climate- climate dynamics. Either alone or in James Hansen 2008
related risks. combination, the behaviour of these
tipping elements may determine if the
Therefore, this report seeks to identify climate system crosses the threshold
the level of climate change at which the into runaway climate change.
impacts exceed plausible manageability
– the point at which climate change 4.2.1 Feedback Systems
veers “out of control”. This concept is
often inferred by the use of several other A negative feedback is a process that
terms, including “irreversible”, “non- tends to dampen a perturbation – as
linear” and “runaway” climate change. a shock absorber dampens a car from
bouncing when it passes over a bump.
This report uses the term “runaway A climate-related example is the ability
climate change” to encompass aspects of many tree species to absorb more
of irreversibility and non-linearity, carbon dioxide from the atmosphere as

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concentrations of this greenhouse gas process creates a positive feedback that
rise, providing a living “sink” for this amplifies global warming. The loss of
carbon. arctic ice, both seasonal and permanent,
is well documented (NASA 2009). The
A positive feedback, on the other hand, most optimistic view holds that the
is a process that tends to amplify or threshold for this tipping element – i.e.
perpetuate an initial perturbation. A an irreversible loss of polar reflectivity
climatic example is the dynamic – may be very close at hand. However,
whereby rising temperatures increase some researchers suggest this point
the frequency and intensity of wild may already have been passed (Lindsay
fires, leading to significant carbon and Zhang 2005).
dioxide emissions while simultaneously
weakening the ability of forested land to Melting of the Greenland Ice Sheet and
act as a sink for atmospheric carbon. the collapse of the West Antarctic Ice
Sheet would further accelerate positive
The interdependency of various natural feedbacks. These two ice sheets are
and physical systems means that it land-based, and their loss would mean
is very hard to separate one system that greater amounts of solar radiation
from another. Equally, it is difficult for would be absorbed by the land surface
scientists to identify with confidence (rather than the ocean). In addition,
those systems that will operate their loss would lead to significant sea
as negative feedbacks or positive level rise. The Greenland Ice Sheet
feedbacks. However, several reasonably tipping point (the global average surface
certain positive feedback tipping temperature at which it would be certain
elements have been identified that may to completely melt) could be as little as
act as milestones toward the threshold a 1.7°C global increase. The Greenland
of runaway climate change. Some key Ice Sheet’s meltdown could lead to a sea
positive feedback tipping elements are level rise of up to seven metres (Hansen
as follows. et al. 2007a; Hansen et al. 2007b; IPCC
2007). The collapse of the West Antarctic
4.2.2 The Albedo Effect Ice Sheet could potentially be triggered
within this century and could lead to
Albedo refers to the extent that surfaces upward of five metres of sea level rise
reflect radiation from the sun. With (Lenton et al. 2008).
a low-albedo surface, for example,
less radiation is reflected, and more 4.2.3 Terrestrial Carbon Sink
solar radiation is absorbed, thereby Efficiency
contributing to planetary warming.
For example, the loss of high-albedo Large carbon sinks hold major volumes
Arctic sea ice exposes much darker of carbon that would otherwise be
(low-albedo) ocean surfaces that released into the atmosphere. They
absorb more solar radiation than also extract carbon dioxide from the
would otherwise be the case. This atmosphere and fix it into the biosphere.

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Any deterioration in the efficiency of climate change could cause large-scale
global sinks weakens their ability to dieback of this large, global carbon
capture atmospheric carbon. A more reservoir (Lucht et al. 2006).
serious issue is the possibility that such
terrestrial carbon sinks may change 4.2.4 Ocean Sinks
their net behaviour – from carbon sink to
carbon source. It is estimated that roughly 18% (plus or
minus 15%) of the increase in the growth
Several large terrestrial sinks, in of carbon dioxide concentrations in
particular forests (including soils), are recent decades is due to the decreased
being adversely affected by increasing efficiency with which oceans can act as
global temperatures and human sinks. These ocean sinks are becoming
activities that cause vegetation loss less capable of removing atmospheric
and soil disturbance. The resulting carbon dioxide (which is rising as a
release of terrestrial carbon into the result of human activities) due to carbon
atmosphere creates a positive feedback dioxide saturation and warming of the
that intensifies climate change impacts sea surface layers (Canadell et al. 2007).
and further reduces terrestrial sink
performance. Recent reports indicate that ocean sink
efficiencies are deteriorating particularly
One particularly important terrestrial in the Southern Ocean. Scientist Corinne
sink is the Amazon rainforest. Le Quéré and co-workers estimate that
Deforestation of the Amazon leads “the Southern Ocean sink of CO2 has
to local reductions in precipitation, weakened between 1981 and 2004 by
lengthening of the dry season, and 0.08 PgC/yr per decade relative to the
increases in summer temperatures. trend expected from the large increase
This occurs because a large fraction of in atmospheric CO2” (Le Quéré et al.
precipitation in the Amazon Basin is 2007).
recycled by forested ecosystems. In this
way, the loss of forest cover creates a This weakening is attributed to the
positive feedback, causing escalating “observed increase in Southern Ocean
rainforest dieback and carbon release winds resulting from human activities”
in this globally significant carbon sink that have caused climate change and is
(Zeng at al. 1996, Kleidon and Heimann projected to continue in the future. The
2000). greater energy in ocean winds caused by
climate change influences the processes
The Boreal forest system is the largest of mixing and upwelling in the ocean.
terrestrial sink and at risk of dieback This, in turn, causes an increase in the
due to its sensitivity to the interplay of amount of carbon dioxide released from
tree physiology, permafrost and fire. the ocean back into the atmosphere. As
Increased water stress, peak summer a result, the net absorption of carbon
heat, decreased reproduction rates and dioxide from the atmosphere into the
vulnerability to disease and fire under ocean is reduced.

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Since the winds causing the problem lead to the release of methane from
increase as climate change intensifies, the ocean floor, where it lies frozen in
a positive feedback is established, deposits (Mascarelli 2009). Methane
whereby ocean sink deterioration is a very potent greenhouse gas, so
exacerbates climate change effects. the breakdown of these sinks has the
potential to cause severe climate change
As for the consequences, in addition feedbacks. It has been postulated
to the reduced short-term efficiency that the recent jump observed in
of the ocean to act as a carbon dioxide atmospheric methane levels (see Figure
sink, there is also the possibility that, 17) may be related to the triggered
over coming centuries, atmospheric release of these methane deposits
carbon dioxide emissions may stabilise (Rigby et al. 2008).
at higher levels than they would have
otherwise (Le Quéré et al. 2007). 4.2.6 Climate System Changes

4.2.5 Methane Deposits Changes in large climatic system

behaviour – such as monsoonal rainfall
Thawing of permafrost regions due to and the El Niño-Southern Oscillation
global warming releases not only carbon (ENSO) – have the potential to generate
dioxide but also other greenhouse positive feedbacks through similar
gases, such as methane. Similarly, impacts on ocean and terrestrial
increasing ocean temperatures can sink efficiencies to those described

Figure 17: A plot of the

Methane concentration (parts per billion)

1790 Monthly mean

average atmospheric
Annual running mean
concentration of
methane, showing how
it has undergone a large
1780
increase since 2007,
after having remained
stable for the previous
decade (Rigby et al.
1770
2008).

1760

1750

1998 2000 2002 2004 2006 2008

Year

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above. Large-scale changes in climate of these competing effects dominates
conditions can be expected to have a net remains a matter of contention and the
detrimental effect on local ecosystems. subject of further research (Soden and
This is because climatic conditions shift Held 2006, Lin et al. 2002, Lindzen et al.
beyond the natural range of variability to 2001).
which vegetation in these ecosystems
has evolved to optimise growth (i.e. 4.2.8 Non-linearity of Positive
growth that allows for absorption of Feedbacks
carbon dioxide from the atmosphere).
An important point regarding the
Some research predicts that the behaviour of feedback systems is that
amplitude and/or frequency of the they are unlikely to behave in a linear
ENSO will be significantly increased as way. Because these non-linear effects
a result of increased ocean heat uptake are more challenging to communicate,
(Timmermann et al. 1999). Monsoon “society may be lulled into a false sense
behaviour (such as the Indian Summer of security by smooth projections of
The greatest
Monsoon and the Sahara/Sahel and global change”, according to Lenton
threats are tipping
West African Monsoon) appears to be et al. (2008). For this reason, work is
the Arctic sea-ice
more difficult to predict under climate currently underway to develop early
and the Greenland
change, though large-scale changes are warning systems to determine when key
ice sheet, and at
possible (Lenton et al. 2008). positive feedbacks are reaching critical
least five other
thresholds.
elements could
4.2.7 Water Vapour surprise us by
Of the tipping elements described above,
exhibiting a
As the Earth’s atmosphere warms, Lenton et al. (2008) have concluded
nearby tipping
ocean evaporation increases and this that “the greatest threats are tipping
point.
water enters the atmosphere as vapour. the Arctic sea-ice and the Greenland ice
Like other greenhouse gases, water sheet, and at least five other elements
vapour traps heat, further contributing could surprise us by exhibiting a nearby Lenton et al. 2008
to global warming through this positive tipping point”.
feedback loop (Soden and Held 2006).

4.3 Avoiding Runaway Climate

A related impact is the loss of cloud
Change
cover in some regions through the
effects of global warming. Clouds reflect Considerable uncertainty still surrounds
radiation back into space, thus their loss the critical temperature threshold
may provide a positive feedback if land for climate change tipping elements,
or ocean surfaces reflect less radiation. beyond which runaway climate change
However, this theory is still subject to would take hold. NASA climatologist
debate. This is because clouds reflect James Hansen and co-workers
radiation back to Earth, as well as into suggest that 1.7°C above pre-industrial
space, providing both a warming and a temperatures should be regarded as
cooling influence, respectively. Which an appropriate upper limit for human-

31
Climate Solutions 2: Low-Carbon Re-Industrialisation
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induced warming (Hansen et al. 2007a; the threshold to avoid most of the
Hansen et al. 2008; Hansen 2005; Hansen tipping points described above and the
2007). This can be compared with a level triggering of runaway climate change
of warming of over 0.7°C since 1900 (SEG 2007, ICCT 2005, den Elzen et al.
(NCDC 2008, IPCC 2007). Climatologist 2007, European Council 1996, European
Timothy Lenton and his co-workers take Council 2005). For example, more than
a more severe view, arguing that the 100 nations, including the European
threshold for the complete loss of the Union, the world’s largest economic
Arctic summer sea-ice “if not already bloc, are asking for global warming to
passed, may be very close” (Lenton et be limited to below 2°C. In their 2009
al. 2008). summit, the Group of Eight (G8) also
acknowledged that they “recognise the
Other opinions suggest that the broad scientific view that the increase in
threshold temperature for runaway global average temperature above pre-
climate change may be higher. A industrial levels ought not to exceed 2°C”
number of experts, governments and (G8 2009).
organisations have set out positions
regarding dangerous climate change. Recently, the Group of Least Developed
These have been compiled by Macintosh Countries (LDC) and the Alliance Of Beyond this 2°C
and Woldring (2008), who suggest this Small Island States (AOSIS) urged level of warming,
threat is closely linked to feedback the ongoing international climate it is assumed that
triggers: negotiations to conclude with results the risks fall in
consistent with staying below favour of runaway
1.5°C compared to pre-industrial climate change.
“The risks associated with major
temperatures (UNFCCC 2009).
tipping elements have been
extremely influential in the
For this project, a 2°C increase in global
choice of 2ºC and corresponding
average surface temperature is taken
atmospheric concentration targets
to be the upper limit for temperature
as thresholds for DCC [dangerous
increases in industrial modelling.
climate change]. Warming of 2ºC
This recognises expert opinion that
above pre-industrial levels is
suggests this is an optimistic view of
unlikely to be without risk or harm.
the integrity of the climate system.
Several important tipping points
Beyond this 2°C level of warming, it is
may be reached with increases
assumed that the risks fall in favour of
in the global average surface
runaway climate change.
temperature of significantly less
than 2ºC” (Macintosh and Woldring
2008). 4.4 Avoiding 2°C of Warming
Figure 18 indicates that stabilising
Staying well below a 2°C change in greenhouse gas emissions in the long-
global surface temperatures is also term at 450 ppm CO2-e leaves a 54%
broadly accepted as consistent with chance of failing to stabilise global

32
Climate Solutions 2: Low-Carbon Re-Industrialisation
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warming below 2°C, and therefore an conditions very different from those
almost equal chance of exceeding the now existing”.
2°C threshold (Meinshausen 2006).
Preventing a temperature increase Turning to what the 2°C threshold
above 2°C thus implies reduction well represents in terms of emissions, the
below 450 ppm CO2-e. recent work of Meinshausen et al. (2009)
indicates that there is a likelihood of
Current greenhouse gas levels in the 15–51% (with a default likelihood of 33%)
atmosphere are estimated1 at 463 ppm of exceeding a 2°C temperature increase
CO2-e atmospheric concentration (IPCC for cumulative emissions between
2007, Tans 2009). 2000 and 2049 of 1678 GtCO2-e (see
Figure 19). If the cumulative emissions
However, analysis indicates that the in this time period are reduced to 1500
ability of the biosphere and ocean to GtCO2-e, the likelihood of exceeding
absorb greenhouse gases does make a a 2°C temperature increase drops to
long-term stabilisation below 450 ppm 10–43%, with a default likelihood of 26%
CO2-e possible (Meinshausen 2006). (Meinshausen et al. 2009).
Meinshausen’s analysis indicates that a
stabilisation at 400 ppm CO2-e reduces
the chance of exceeding 2°C of warming
to 28%.

More recent developments find that “an

average minimum warming of ≈1.4°C
(with a full range of 0.5–2.8°C) remains
for even the most stringent stabilisation
scenarios,” according to Van Vuuren
et al. (2008). The best-case-scenario in
this work finds an average temperature
increase of 1.4°C over 1990 levels2,
which corresponds to a 1.9°C increase
over pre-industrial levels. This finding
implies that all but the most ambitious
emissions reduction efforts will likely
exceed 2°C above pre-industrial levels.

Van Vuuren et al. (2008) also note that

while the most stringent emissions
reduction scenarios required to avoid
a 2°C temperature change might be
technically feasible, “they clearly
require socio-political and technical

1 The atmospheric concentration of greenhouse gases was calculated using the ratio between the concentration of CO2 (379 ppm)
and all long-lived greenhouse gases (455 ppm) that was used by the IPCC for 2005 in its 4th Assessment Report (IPCC 2007). This
gives a ratio of approximately 1:1.2, which when applied to the 2009 CO2 atmospheric concentration (386 ppm) yields a CO2-e
atmospheric concentration of 463 ppm for 2009.
2 i.e. the average over 1980–2000.

33
Climate Solutions 2: Low-Carbon Re-Industrialisation
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 +7oC
Figure 18: Stabilising
550 450 400 atmospheric
greenhouse gas
+6oC
Temperature above pre-industrial

concentrations in the
9% long-term at 450 ppm
1%
CO2-e leaves a 54%
+5oC chance of exceeding
2°C of global warming
23% 1%
(Meinshausen 2006).
9%
+4 C
o
82%
Risk
54%
Risk 9%

+3oC
33% 23% 28%
Risk
23%
23% 33%
+2oC +2oC
9% 23% 33%

23%
9%
1%
+1oC 9%
1%
1%

+0oC
1900 2000 2100 2200 2300 1900 2000 2100 2200 2300 1900 2000 2100 2200 2300 2400

Year
Scenario A (minus 63%)

80 Figure 19: There is not

a single probability of
avoiding 2°C for a fixed
Scenario B (minus 80%)

70
cumulative emissions
level. Rather, there is
Probability of exceeding 2oC

60 a range of possible
probability outcomes.
This figure shows the
50
exceedance probability
ranges for various
40 cumulative emissions
levels in the half century
30 to 2050 based on the
work of Meinshausen et
al. (2009).
20

10

0
1000 1200 1400 1600 1800 2000 2200

Cumulative emissions 2000 to 2049 (GtCO2-e)

34
Climate Solutions 2: Low-Carbon Re-Industrialisation
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4.5 The Concept of Overshoot and (land and oceans). Analysis also
Return indicates that in the short-term the full
warming potential (radiative forcing)
Using the ratio
4.5.1 Current Atmospheric of greenhouse gases is being reduced
between CO2 and
Greenhouse Gas Concentrations by certain aerosol emissions (some
CO2-e reported by
conventional air pollution, such as
the IPCC (2007)
The amount of carbon dioxide, alone, sulphur dioxide and particles, which
permits us to
in the atmosphere in 2009 stands at have a short- and medium-term cooling
conclude that the
386 ppm CO2 (see Figure 20), having effect on regional climates) released
total concentration
risen 2.28 ppm over the previous mainly from inefficient burning of fossil
of long-lived
year. Using the ratio between CO2 fuels and biomass.
greenhouse gases
and CO2-e reported by the IPCC (2007)
(including carbon
permits us to conclude that the total 4.5.2 Concentration Pathways
dioxide) in the
concentration of long-lived greenhouse
atmosphere has
gases (including carbon dioxide) in the Therefore, although atmospheric
risen from 455
atmosphere has risen from 455 ppm greenhouse gas concentration levels
ppm CO2-e in 2005
CO2-e in 2005 to in excess of 463 ppm are higher than 450 ppm CO2-e now,
to in excess of 463
CO2-e now (IPCC 2007, Tans 2009). researchers suggest there exists
ppm CO2-e now.
a pathway for stabilisation of the
Despite these current greenhouse greenhouse gas concentration at 400
gas concentrations in excess of 463 ppm CO2-e, following a peak at 475 ppm
ppm CO2-e, there is potential for CO2-e (see Figure 21).
their re-absorption by the biosphere

390
Figure 20: Recent
monthly mean
388
atmospheric carbon
dioxide concentrations
386
globally averaged over
Atmospheric CO2 concentration (ppm)

marine surface sites, as

384 reported by the Global
Monitoring Division of
382 NOAA/Earth System
Research Laboratory
(Tans 2009).
380

Orange band represents

378 range of annual variation

376

374

372

370
2004 2005 2006 2007 2008 2009

35
Climate Solutions 2: Low-Carbon Re-Industrialisation
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 5
Figure 21: Some gases
P475-S400 have a warming effect
4
and others have a
550
cooling effect. This
figure shows the net

CO 2 equivalence concentration (ppm)

Radiative forcing (W/m2)

warming effect of
3 475 various greenhouse
gases and aerosols
and their influence
2 400 on radiative forcing.
P475-S400 shows that
emissions peak at
1
475 ppm CO2-e before
stabilising at 400 ppm
CO2-e, the reduction
0 278 being due to the
uptake of atmospheric
carbon by the ocean
-1 and biosphere
(Meinshausen 2006).

-2
1800 1900 2000 2100 2200 2300

Year

Though technically the overshoot and is becoming impaired with increasing Not only is the
return process should be possible, not average global temperatures. “As a current level of
only is the current level of 463 ppm result, meeting climate targets based 463 ppm CO2-e
CO2-e disconcertingly close to the 475 on atmospheric concentration of carbon disconcertingly
ppm CO2-e emissions peak described dioxide will be more difficult, requiring close to the
by Meinshausen (2006), but the rate of a greater reduction in emissions 475 ppm CO2-e
increase in greenhouse gas emissions than would otherwise be necessary,” emissions peak
(see Figure 20) has not slowed – if according to Macintosh and Woldring described by
anything, it is increasing. At the current (2008). Meinshausen
rate of increase in greenhouse gas levels, (2006), but the
the 475 ppm CO2-e peak will be reached rate of increase
4.6 What 2050 Emissions Level will
by 2015. in greenhouse
Avoid 2°C of Warming?
gas emissions
Furthermore, the recent findings The IPCC Fourth Assessment Report has not slowed
described above show decreasing sink Working Group 3 indicates that a – if anything, it
efficiencies and movement toward temperature increase range of 2.0- is increasing. At
tipping element thresholds. These 2.4°C (above pre-industrial levels) is the current rate
findings imply a compromised ability to consistent with global greenhouse gas of increase in
overshoot limits and return greenhouse emissions reductions of 85% to 50% greenhouse gas
gas concentrations to lower levels. That below their levels in the year 2000 (IPCC levels, the 475
is, the ability of the climate system 2007). Global emissions in that year ppm CO2-e peak
to return to lower greenhouse gas (including land use change, forestry will be reached by
levels via processes of re-absorption and bunker fuels) were 44,000 MtCO2-e. 2015.

36
Climate Solutions 2: Low-Carbon Re-Industrialisation
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Thus the 85% and 50% reduction figures James Hansen and his co-workers state
translate into a need to reduce annual that “if humanity wishes to preserve
emissions levels to between 6,650 and a planet similar to that on which
22,170 MtCO2-e. Based on a projected civilisation developed and to which
global population of 9.2 billion in life on Earth is adapted, paleoclimate
2050 (UNPP 2006), these 85% and 50% evidence and ongoing climate change
reductions would be consistent with per suggest that CO2 will need to be reduced
capita annual emissions levels of 0.74 from its current 385 ppm to at most 350
tCO2-e and 2.4 tCO2-e, respectively, in ppm” (Hansen et al. 2008).
2050. Although these figures are based
on probability distributions, staying The most recent work published in
below 400 ppm CO2-e implies per capita Nature by Meinshausen et al. (2009) has
emissions at, or below, the bottom of been used as the basis of the cumulative
this range. and annual emissions settings for 2050
in this report. The paper focuses on the
Baer and Mastrandrea (2006) estimate carbon budget to 2020 and the carbon
that sub-370 ppm concentrations of budget to 2050. Figure 22 summarises
carbon dioxide (not CO2-e) would be the probability of avoiding 2oC of
required by 2100 to keep the chance of warming above pre-industrial levels
exceeding a 2°C increase in average based on cumulative emissions in the
global temperatures to 12–32%. To first half of the century.
achieve this, they estimate that
emissions reductions of about 81% on
4.7 Scenarios
1990 levels would be required by 2050,
with the rate of growth of CO2 emissions
beginning to decline in 2010 and the 4.7.1 Scenario A (Minus 63%):
peak rate of emissions being reached in In Scenario A (minus 63% on 1990 levels)
2013 (Baer and Mastrandrea 2006). This an annual carbon dioxide equivalent
emissions trajectory would involve a emissions level in 2050 of 14.7 GtCO2-e/
peak carbon dioxide concentration of yr has been used. This emissions target
421 ppm CO2 before returning to about is consistent with an interpolated
366 ppm CO2 by 2100. probability of exceeding 2oC of warming
between 10% and 40%, with a default of
Meinshausen (2006) estimates that about 24% (Meinshausen et al. 2009).
stabilisation at 400 ppm CO2-e requires
an emissions cut of 55% from 1990 The associated cumulative emissions
levels by 2050 (Meinshausen 2006). are 1664 GtCO2-e from 2000 to 2049.
Assuming global emissions in 1990 were This cumulative emissions level
42,000 MtCO2-e/yr, a 55% reduction is consistent with an exceedance
would leave annual emissions at probability of about 15–50%, with a 32%
approximately 19,000 MtCO2-e in 2050, default (Meinshausen et al. 2009).
or 2.1 tCO2-e/yr per person.

37
Climate Solutions 2: Low-Carbon Re-Industrialisation
Climate Risk
 100%
Figure 22: Effect of
Very unlikely cumulative CO2 only
90%
emissions in the first
80% half of the century
Unlikely
on the probability of

Probability of staying below 2oC

avoiding a warming of
Probability of exceeding 2oC

70%
2oC above pre-industrial
60%
levels (Meinshausen et
Less likely
than not al. 2009).
50%

More likely
40%
than not

30%

Likely
20%

10%
Very likely

0%
0 500 1000 1500 2000 2500

Cumulative total CO2 emissions 2000-49 (GtCO2)

For ease of thinking about such figures, This scenario equates to a per capita
a useful number to bear in mind is that emissions level of 0.9 tonnes of CO2-e/
based on a population of 9.2 billion yr per person in 2050 (positioning
people in 2050 (UNPP 2006) this scenario this scenario at the lower end of the
equates to a per capita emissions level plausible per capita range determined
of 1.6 tonnes of CO2-e/yr per person from IPCC results). The cumulative
in 2050 (which is the middle of the emissions level for 2000 to 2049 in this
plausible per capita range determined scenario is about 1432 GtCO2-e, which
from IPCC results; 0.74 tCO2-e/yr to 2.4 is approximately consistent with an
tCO2-e/yr). exceedance probability of 9–40% (with a
23% default) when interpolated from the
4.7.2 Scenario B (Minus 80%): data of Meinshausen et al. (2009).

The minus 80% scenario models an The summary emissions data for
annual carbon dioxide equivalent Scenario A and Scenario B are shown
emissions level in 2050 of approximately below in Table 2. The probability
7.9 GtCO2-e/yr. This emissions target is distributions for 2050 annual emissions
below the lowest scenario reported by under each scenario are also given in
Meinshausen et al. (2009) in their recent Figure 23.
work (10 GtCO2-e/yr) and is equivalent to
an extrapolated exceedance probability
range of 4–29%, with a default of 13%.

38
Climate Solutions 2: Low-Carbon Re-Industrialisation
Climate Risk
 Table 2: Summary data for the two main scenarios used in this report.

2050 Annual 2000 to 2049 Cumulative

Scenario Emissions Emissions
(GtCO2-e/yr) (GtCO2-e)

Scenario A (minus 63%) 14.7 1664

Scenario B (minus 80%) 7.9 1432

Per capita emissions in 2050 (tCO2-e/yr per person) Figure 23: This figure
shows two things. The
0.5 1.0 1.5 2.0 2.5 3.0 3.5
25% 90 first is the probability
distributions for each of
Probability distribution (curves)

Scenario A (63% Emissions Reduction) 80 the scenarios modelled

in this report. The
Probability of exceeding 2oC

20% Scenario B (80% Emissions Reduction)

70 second is the position of
of warming (rectangles)

the these distributions

60 with respect to
15% the probability of
50
exceeding 2oC of
warming as reported
40
by Meinshausen et al.
10%
(2009).
30

20
5%
10

0% 0
5 10 15 20 25 30

Total emissions in 2050 (GtCO2-e per year)

39
Climate Solutions 2: Low-Carbon Re-Industrialisation
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 40
Climate Solutions 2: Low-Carbon Re-Industrialisation
Climate Risk
5 Scenario A (Minus 63%): Emissions and Energy

In this analysis, extensive modelling 5.1 Emissions

was performed to consider numerous
scenarios. However, to keep the The results shown in Scenario A were
presentation of the results relevant and calculated using a 2050 greenhouse
succinct, only results pertinent to the gas emissions target of 14.7 GtCO2-e/yr
objectives are presented. With this (1.6 tCO2-e per person). To achieve the
goal in mind, two major scenarios are modelled emissions target for 2050, the
presented: CRISTAL model determined that low-
carbon industries would need to grow at
• Scenario A, equivalent to emissions an average rate of 22% per annum from
levels 63% below 1990 levels by 2010 through the critical development
2050. period, assuming the same start time
and full concurrent development.
• Scenario B, equivalent to emissions
levels 80% below 1990 levels by Similarly, all emissions abatement for
2050. non-energy sectors were assumed to
advance at their maximum possible rate
This section presents the main results of uptake from 2010 onwards. These
for Scenario A, which models the rates are unique to each non-energy
delivery of an emissions outcome of 14.7 sector low-carbon resource.
GtCO2-e/yr (1.6 tCO2-e/yr per person)
in 2050. The cumulative emissions The CRISTAL model forecast for
between 2000 and 2049 for this scenario emissions abatement against the
are 1664 GtCO2-e, which, based on business-as-usual baseline is shown
Meinshausen et al. (2009), is associated in Figure 24 out to 2050 and further
with a probability of exceeding 2oC summarised by abatement sector in
of warming of 15–50%, with a default Figure 25. The sectoral breakdown for
probability of 32%. emissions abatements is shown for
2020, 2030, 2040 and 2050 in Figure 26.
Both scenarios examined in this report
use an emissions baseline from the
IPCC’s SRES A1FI, which is consistent
with the current high levels of emissions
growth.

In this section, emissions, energy and

non-energy industry sector responses
are presented. In the next section, the
modelling results are presented for
costs and returns to the global economy.

41
Climate Solutions 2: Low-Carbon Re-Industrialisation
Climate Risk
Climate Risk
120
Figure 24: CRISTAL model global Fugitive
emissions forecast, showing the Waste
emissions baseline (SRES A1FI) Land Use, Land Use Change and Forestry
and abatements out to 2050 in the
100 minus 63% scenario.
A griculture
Non-Metals Industry Efficiency
M etals Industry Efficiency
Buildings Efficiency
Vehicles Efficiency
80 Reduced Use o f Vehicles
Shipping Efficiency
Aviation Efficiency
A vo ided A viatio n
B io -Hydrocarbo ns
60

Climate Solutions 2: Low-Carbon Re-Industrialisation

Sea and Ocean Energy
Do mestic So lar Thermal
B uilding Integrated So lar P V
So lar P o wer Statio ns
40 Geo thermal
Wind
Small Hydro
Repowering Large Hydro
Large Hydro

Emissions and avoided emissions (GtCO2-e/yr)

20
Nuclear
Fo ssil with CCS
Residual Emissio ns
Irreducible Emissio ns
0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

42
Climate Risk
Figure 25: The
low-carbon
re-industrialisation
process, grouped
120 Fugitive according to energy
generation, energy
Waste efficiency and non-
Land Use, Land Use Change and Forestry energy in the minus
63% scenario.
100 A griculture
Energy Efficiency / Avoidance
Low-Emissions Energy
Fo ssil with CCS
80
Residual Emissio ns
Irreducible Emissio ns

60

Climate Solutions 2: Low-Carbon Re-Industrialisation

40

20

Emissions and avoided emissions (GtCO2-e/yr)

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

43
 Figure 26: The sectoral
composition of
emissions abatement in
each of the years shown
for the minus 63%
scenario.

2020 2030

Fugitive
Fugitive Energy
9% Energy 5% Generation
Waste Generation Waste 36%
5% 25% 3%

LULUCF
LULUCF 13%
18%

Agriculture
10%

Agriculture
12% Energy
Efficiency Energy
31% Efficiency
33%

2040 2050

Fugitive Fugitive
Energy
3%
Waste Generation Waste 3%
2% 45% 1% Energy
Generation
LULUCF
LULUCF 49%
8%
10%

Agriculture
Agriculture 9%
9%

Energy Energy
Efficiency Efficiency
31% 30%

44
Climate Solutions 2: Low-Carbon Re-Industrialisation
Climate Risk
5.2 Final Energy It should be noted that the focus of
bio-hydrocarbon use in the aviation
Assuming that all low-carbon industries and shipping sectors is not based on
grow at 22% per annum from 2010 until these sectors continuing to grow as per
each has harnessed 20% of its resource, business-as-usual. Rather, substantial
the model indicates that all energy- reductions in energy use are assumed
sector energy needs can be generated to take place through efficiency
from zero- or low-emissions sources by (such as decreased ship speeds) and
2050 (Figure 27 and Figure 28). That is, reduced usage (such as the utilisation
no power is generated using fossil fuel of advanced telepresence to avoid
sources without the application of CCS business travel). Transport efficiency
facilities. and the reduced use of aviation and
vehicles are treated as abatement
With regard to the transport sector, it wedges in their own right within the
is important to note that both Scenario energy efficiency grouping.
A and Scenario B assume that energy
demand from the land-based transport In this scenario, by 2050 the amount of
sector is met through grid-connected energy generated by many low-carbon
renewable sources (e.g. providing industries has reached a maximum,
energy for electrical or hydrogen-fuelled given their individual resource
vehicles). This is because, while the limitations (Figure 27). However, in the
modelling indicated that in 2050 there case of solar power stations, building
will be sufficient bio-hydrocarbon integrated solar PV, domestic solar
resources (18000 TWh/yr) to meet thermal, wind and geothermal energy
the modelled needs of aviation (6200 generation, there is room for continued
TWh/yr in Scenario A and 3900 TWh/ expansion beyond 2050.
yr in Scenario B) and shipping (2800
TWh/yr in Scenario A and 2500 TWh/ While CCS energy generation could also
yr in Scenario B), there are insufficient be expanded to accommodate increased
biofuel resources to stretch to the 2050 baseline demand for electricity, the
needs of land-based transport (32500 residual emissions from CCS prove to
TWh/yr in Scenario A and 18000 TWh/yr be a limiting factor. However, industrial
in Scenario B). processes for which there are not low-
carbon alternatives will still require CCS
Since there are alternatives for land- facilities.
based transport – but not for air and
sea, as it stands today – the priority It should be noted that nuclear power
allocation of sustainable biofuels must (fission) is included in the presented
be to the aviation and shipping sectors scenarios based on existing plants and
to achieve the scenario outcomes (see plants currently under construction.
Section 17.3 for more information). The Planned facilities and other expansion
current amount of bio-hydrocarbons are not included (see Section 17.5 for
used in stationary energy (including the further explanation of this assumption).
traditional use of biomass) is assumed Consequently, almost all plants in the
to stay constant at today’s levels. examined scenarios cease operation at
the end of their design lives by 2050.

45
Climate Solutions 2: Low-Carbon Re-Industrialisation
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Climate Risk
3.0E+08
Figure 27: CRISTAL model global
final energy forecast, showing
the final energy baseline (SRES
A1) and the development of low-
Non-Metals Industry Efficiency
emissions industries and other
2.5E+08 emissions reduction measures Metals Industry Efficiency
out to 2050 in the minus 63% Buildings Efficiency
scenario. Vehicles Efficiency
Reduced Use o f Vehicles
Shipping Efficiency
2.0E+08 Aviation Efficiency
A vo ided A viatio n
Bio-Hydrocarbons
Sea and Ocean Energy
Do mestic So lar Thermal
1.5E+08 B uilding Integrated So lar P V
So lar P o wer Statio ns

Climate Solutions 2: Low-Carbon Re-Industrialisation

Geo thermal
Wind
Small Hydro
1.0E+08 Repo wering Large Hydro
Large Hydro

Final energy services (GWh/yr)

Nuclear
Fo ssil with CCS
Residual Fossil Fuels
5.0E+07

0.0E+00
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

46
Climate Risk
Figure 28: Final
3.0E+08 energy
Energy Efficiency / Avoidance
development,
Low-Emissions Energy grouped
according to
Fossil with CCS energy efficiency,
renewable energy
2.5E+08 Residual Fossil Fuels and fossil fuel
use with CCS in
the minus 63%
scenario. Note
that energy
2.0E+08 efficiency strongly
suppressed final
energy demand
growth until the
mid-2030s. It is
plausible that
1.5E+08 future energy
efficiency
technology not

Climate Solutions 2: Low-Carbon Re-Industrialisation

considered in
this report would
maintain such
1.0E+08 suppression even
longer.

Final energy services (GWh/yr)

5.0E+07

0.0E+00
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

47
5.3 Non-Energy

The specific emissions abatement

wedges from non-energy sources are
shown in greater detail below (see
Figure 29). Again, it is assumed that all
emissions abatement strategies in non-
energy sectors are advancing at their
maximum possible rate of uptake from
2010 onwards.

Within the land use, land use change

and forestry (LULUCF) sector, the
opportunities for emissions avoidance
by foregoing deforestation can be
acquired relatively quickly, assuming
international financial compensation
schemes are established in sufficient
time. Such schemes are essential
for the avoidance of deforestation in
developing countries, which would
otherwise suffer an opportunity cost.

Agricultural emissions abatements

develop gradually as improved farming
techniques are adopted, such as low-
tillage practices and improved livestock
diet and waste management practices.

Fugitive emissions decrease as the

intensity of fossil fuel usage decreases
and improved extraction, transportation
and containment techniques are used.
However, if a greater reliance on fossil
fuel usage persists in industry or via the
more prevalent use of CCS, then fugitive
emissions would also increase above
those reported here.

48
Climate Solutions 2: Low-Carbon Re-Industrialisation
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Climate Risk
25 Fugitive Figure 29: CRISTAL
model global non-
Waste energy emissions
Land Use, Land Use Change and Forestry abatement forecast
out to 2050 in the
Agriculture minus 63% scenario.
20

15

Climate Solutions 2: Low-Carbon Re-Industrialisation

10

Emissions and avoided emissions (GtCO2-e/yr)

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

49
 50
Climate Solutions 2: Low-Carbon Re-Industrialisation
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6 Scenario B (Minus 80%): Emissions and Energy

The minus 80% scenario is based on This section presents the main results for
Scenario A in all aspects except for: the minus 80% scenario, which models
the delivery of an emissions outcome
• The speed for industrial growth consistent with a higher probability of
has been changed to 24% annual avoiding runaway climate change than
growth per annum in the critical Scenario A (minus 63%).
development period (until 20% of
resource is harnessed). In this section, emissions, energy and
non-energy industry sector responses
• The emissions abatement obtained are presented. In the next section, the
from the LULUCF segment out to modelling results are presented in light
2050 is expanded by 80%. of cost and investment returns.

• The emissions abatements by

6.1 Emissions
2050 from energy efficiency
and avoidance measures are all The results shown in this report were
increased by 10%. calculated using increased growth rates
compared to Scenario A. To achieve the
It is important to realise that expansion modelled emissions target for 2050, the
of the LULUCF and energy efficiency CRISTAL model determined that low-
abatements in this scenario are crucial carbon industries would need to grow at
to meeting the minus 80% emissions an average rate of 24% per annum from
target in 2050. These expansions move 2010 until deployment scale has been
the abatement levels for these two achieved (20% of resource is harnessed),
areas close to their maximum plausible assuming the same start time and full
levels. However, these changes also concurrent development. Similarly, all
mean that the growth rate required for emissions abatement for non-energy
low-emissions industries is not as high sectors are assumed to advance at their
as would otherwise be the case without maximum possible rate of uptake from
these abatement expansions. 2010 onwards. These uptake rates are
unique to each non-energy sector.
The effect of these changes is that the
emissions level reached in 2050 changes The CRISTAL model forecast for
from 14.7 GtCO2-e/yr to approximately emissions abatement against the SRES
7.9 GtCO2-e/yr, which is about 20% of A1FI baseline is shown in Figure 30
1990 global emissions. In per capita out to 2050 and further summarised
terms, this is a change from 1.6 tCO2-e/yr by abatement sector in Figure 31. The
per capita to approximately 0.9 tCO2-e/yr sectoral breakdown for emissions
per capita. abatements is shown for 2020, 2030,
2040 and 2050 in Figure 32.
The total cumulative emissions between
2000 and 2049 in this scenario are 1432
GtCO2-e, which is consistent with a
probability of exceeding 2oC of warming
of about 9–40%, with a default of 23%.

51
Climate Solutions 2: Low-Carbon Re-Industrialisation
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Climate Risk
120
Figure 30: CRISTAL model global
emissions forecast, showing the Fugitive
emissions baseline (SRES A1FI)
Waste
and abatements out to 2050 in the
minus 80% scenario. Land Use, Land Use Change and Forestry
100 A griculture
Non-Metals Industry Efficiency
M etals Industry Efficiency
Buildings Efficiency
Vehicles Efficiency
80
Reduced Use o f Vehicles
Shipping Efficiency
Aviation Efficiency
A vo ided A viatio n

Climate Solutions 2: Low-Carbon Re-Industrialisation

60 B io -Hydrocarbo ns
Sea and Ocean Energy
Do mestic So lar Thermal
B uilding Integrated So lar P V
So lar P o wer Statio ns
40 Geo thermal
Wind
Small Hydro
Repowering Large Hydro
20 Large Hydro

Emissions and avoided emissions (GtCO2-e/yr)

Nuclear
Fo ssil with CCS
Residual Emissio ns
Irreducible Emissio ns
0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

52
Climate Risk
120 Fugitive
Waste Figure 31: The
Land Use, Land Use Change and Forestry low-carbon
re-industrialisation
A griculture process, grouped
100 according to energy
Energy Efficiency / Avoidance generation, energy
Low-Emissions Energy efficiency and non-
energy in the minus
Fo ssil with CCS 80% scenario.
80 Residual Emissio ns
Irreducible Emissio ns

60

Climate Solutions 2: Low-Carbon Re-Industrialisation

40

20

Emissions and avoided emissions (GtCO2-e/yr)

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

53
 Figure 32: The sectoral
composition of
emissions abatement in
each of the years shown
for the minus 80%
scenario.

2020 2030

Fugitive Energy Energy

Generation Fugitive
7% Generation
23% 5%
Waste 33%
Waste
4%
3%

LULUCF
20%
LULUCF
28%

Energy
Efficiency Agriculture
28% 8% Energy
Agriculture Efficiency
10% 31%

2040 2050

Fugitive Energy
Energy Fugitive Generation
Waste 3%
2% Generation Waste 2% 45%
41% 1%

LULUCF LULUCF
16% 14%

Agriculture
Agriculture 8%
8%

Energy Energy
Efficiency Efficiency
30% 30%

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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Climate Risk
3.0E+08
Figure 33: CRISTAL model global
final energy forecast, showing

6.2 Final Energy

the final energy baseline (SRES
A1) and the development of low- Non-Metals Industry Efficiency
emissions industries and other
2.5E+08 Metals Industry Efficiency
emissions reduction measures
out to 2050 in the minus 80% Buildings Efficiency
scenario. Vehicles Efficiency
Reduced Use o f Vehicles
Shipping Efficiency
2.0E+08 Aviation Efficiency
A vo ided A viatio n
Bio-Hydrocarbons
Sea and Ocean Energy

Climate Solutions 2: Low-Carbon Re-Industrialisation

Do mestic So lar Thermal
1.5E+08 B uilding Integrated So lar P V
So lar P o wer Statio ns
Geo thermal
Wind
Small Hydro
1.0E+08 Repo wering Large Hydro
Large Hydro

Final energy services (GWh/yr)

Nuclear
Fo ssil with CCS
Residual Fossil Fuels
5.0E+07

0.0E+00
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

55
Climate Risk
3.0E+08 Energy Efficiency / Avoidance
Low-Emissions Energy
Fo ssil with CCS
Residual Emissio ns Figure 34: Final
2.5E+08 energy
development,
grouped
according to
energy efficiency,
2.0E+08 renewable energy
and fossil fuel
use with CCS in
the minus 80%
scenario. Note
that energy
1.5E+08 efficiency strongly
suppressed final

Climate Solutions 2: Low-Carbon Re-Industrialisation

energy demand
growth until
the mid-2030s.
It is plausible
1.0E+08 that the future
energy efficiency
technology not

Final energy services (GWh/yr)

considered in
this report would
maintain such
5.0E+07 suppression even
longer.

0.0E+00
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

56
Climate Risk
30 Fugitive
Waste

6.3 Non-Energy
Land Use, Land Use Change and Forestry
A griculture
25 Figure 35: CRISTAL
model global non-
energy emissions
abatement
forecast out to
20 2050 in the minus
80% scenario.

15

Climate Solutions 2: Low-Carbon Re-Industrialisation

10

Emissions and avoided emissions (GtCO2-e/yr)

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

57
 58
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7 Scenario A (Minus 63%): Costs, Investment and
Returns
From a cost perspective, relative values for uses of the land, such as paper
to business-as-usual (i.e. fossil fuel production from forests or grazing cattle
energy generation), the zero- and low- on land cleared of forest. On the other
emissions technologies examined in this hand, in a traded market this terrestrial
report can be divided into the following carbon may reflect the cost of carbon
three categories: emissions permits and be treated as an
offset. The complexity and uncertainty
1. Technologies that are already of such costs put them beyond the
cost neutral or create savings (e.g. scope of this report.
domestic solar hot water).

7.2 Efficiency
2. Technologies that are initially
expensive but go on to create In this report, it is not assumed that
savings as economies of scale are energy efficiency uptake will occur
achieved (e.g. buildings integrated without additional measures that
with solar PV). must be implemented to drive uptake.
However, these measures generally
3. Technologies that will always be present no net costs to the economy
more expensive (e.g. CCS). or create a net benefit. The savings in
avoided fuel use only are presented
For the second two categories, the (see Figure 36 and Figure 37), although
investment required to achieve there may be other financial benefits.
sufficient industry growth to meet the However, many efficiency actions have
emissions abatement and final energy an increased capital cost, which must
targets is presented in this section for be counted against the savings. Since
each technology, on a per annum basis energy efficiency actions are diverse in
and as a cumulative amount. nature and their initial cost, it is beyond
the scope of this report to calculate a
net saving or net present value for the
7.1 Non-Energy
energy efficiency measures. As with
There are avoided emissions and sinks renewable energy, many of the costs
available, for example, in the form associated with energy efficiency will
of terrestrial carbon (i.e. that stored be dramatically reduced through the
in forests or soil). However, their use economies of scale that occur in the
does not, at this stage, appear to create process of implementation.
intrinsic economic returns in the way
that energy efficiency or renewable
energy can over the long-term. In this
sense, terrestrial carbon sequestration
represents a net ongoing cost.

The cost of avoided emissions, at a

minimum, may reflect the cost of other

59
Climate Solutions 2: Low-Carbon Re-Industrialisation
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 14000 Non-Metals Industry Efficiency Figure 36: CRISTAL
Metals Industry Efficiency model forecast of
Buildings Efficiency gross annual energy
12000
Vehicles Efficiency cost savings through
Reduced Use of Vehicles
Annual savings (billion US$/yr)

energy efficiency and

Shipping Efficiency
10000 avoidance measures in
Avoided Aviation
the minus 63% scenario
out to 2050. NB: These
8000 are gross savings and
do not include any costs
that may be involved in
6000
adopting the efficiency
measures.
4000

2000

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

Figure 37: CRISTAL

250000 Non-Metals Industry Efficiency model forecast of
Metals Industry Efficiency gross cumulative
Buildings Efficiency energy cost savings for
Vehicles Efficiency energy efficiency and
200000 Reduced Use of Vehicles avoidance measures in
Shipping Efficiency the minus 63% scenario
Cumulative savings (billion US$/yr)

Avoided Aviation out to 2050. NB: These

are gross savings and
150000 do not include any costs
that may be involved in
adopting the efficiency
measures.
100000

50000

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

60
Climate Solutions 2: Low-Carbon Re-Industrialisation
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7.3 Renewable Energy Investment renewable energy technology compared
to the costs of producing the same
The annual (Figure 38) and cumulative amount of energy using fossil fuels.
(Figure 39) investment in various It should be noted that all of the low-
renewable resources is calculated emissions industries examined (with
based on their historical learning rates the exception of CCS) reach economic
(a measure of the reduction in unit self-sustainability (i.e. require no further
costs as production volume doubles; investment) by 2050. Since averaged
Taylor et al. 2006). Here, the amount global stationary energy prices have
of investment required is taken as been used for the existing fossil fuel
the relative cost of these renewable energy costs (IEA 2006a, IPCC 2007),
energy industries compared to their there will be some regional variation
fossil fuel competition. In this way, the in the year that each industry reaches
relative cost expresses the additional economic self-sufficiency.
cost of producing energy through

400 Solar Power Stations Figure 38: CRISTAL

Geothermal model forecast of the
Repowering Large Hydro
annual relative cost
Annual relative cost (billion US$/yr)

350
Small Hydro
Sea and Ocean Energy of low-emissions
300 Bio-Hydrocarbons industries (not including
Wind CCS) in the minus 63%
Building Integrated Solar PV
250 scenario out to 2050.

200

150

100

50

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

8000 Solar Power Stations

Geothermal Figure 39: CRISTAL
7000
Repowering Large Hydro model forecast of
Small Hydro
cumulative investment
Cumulative relative cost (billion US$/yr)

Sea and Ocean Energy

6000 Building Integrated Solar PV requirements for low-
Bio-Hydrocarbons emissions industries
Wind
5000
(not including CCS) in
the minus 63% scenario
4000
out to 2050.

3000

2000

1000

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

61
Climate Solutions 2: Low-Carbon Re-Industrialisation
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7.4 CCS Costs

The annual and cumulative relative costs

of supporting CCS (i.e. the additional
expenses beyond the usual cost of
fossil fuel energy generation) are shown
below in Figure 40 and Figure 41.

Figure 40: CRISTAL

600 model forecast of the
Fossil with CCS
annual relative cost of
CCS, alone, in the minus
500 63% scenario out to
2050.
Annual relative cost (billion US$/yr)

400

300

200

100

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

Figure 41: CRISTAL

12000
Fossil with CCS model forecast of the
cumulative relative cost
of CCS, alone, in the
10000
minus 63% scenario out
to 2050.
Cumulative relative cost (billion US$/yr)

8000

6000

4000

2000

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

62
Climate Solutions 2: Low-Carbon Re-Industrialisation
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7.5 Renewable Energy and CCS and Figure 43, respectively. It can be
Combined Costs seen that the cumulative expenditure
on renewable energy, alone, is about
Combining all zero- and low-emissions US$6.7 trillion and when combined with
technologies yields the annual and CCS is estimated to total US$16.7 trillion
cumulative costs shown in Figure 42 out to 2050 in the minus 63% scenario.

Figure 42: CRISTAL

model forecast of
600
the combined annual
Fossil with CCS relative costs of
Annual relative cost (billion US$/yr)

Solar Power Stations renewable energy

500
Geothermal
Repowering Large Hydro
technologies and CCS in
Small Hydro the minus 63% scenario
400 Sea and Ocean Energy out to 2050.
Bio-Hydrocarbons
Wind
Building Integrated Solar PV
300

200

100

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

Figure 43: CRISTAL

18000 Fossil with CCS
Solar Power Stations
model forecast of the
Geothermal combined cumulative
16000
Repowering Large Hydro relative costs of
Cumulative relative cost (billion US$/yr)

Small Hydro renewable energy

14000 Sea and Ocean Energy technologies and CCS in
Building Integrated Solar PV
Bio-Hydrocarbons the minus 63% scenario
12000
Wind out to 2050.
10000

8000

6000

4000

2000

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

63
Climate Solutions 2: Low-Carbon Re-Industrialisation
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7.6 Revenue Generation learning rates are not overly retarded
by policy/market instability. CCS, by its
Once the various renewable energy very nature, will always represent an
technologies described in this report additional cost compared to fossil fuel
achieve sufficient economies of scale, use without CCS. The potential revenue
they become a lower cost option advantage derived from zero- and
than the fossil fuel business-as-usual low-emissions technologies (i.e. the
projection. All the zero- and low- cost saving they offer relative to fossil
emissions technologies examined in this fuels) when they are able to generate
report (with the exception of CCS) are lower-cost electricity than the fossil fuel
able to achieve this state of economic competition is shown below in Figure 44
self-sufficiency by 2050 provided and Figure 45.

4500 Solar Power Stations

Figure 44: The forecast
Geothermal
Repowering Large Hydro
annual savings for
4000
Annual relative savings (billion US$/yr)

Small Hydro renewable energy

Sea and Ocean Energy technologies relative
3500
Bio-Hydrocarbons to the projected cost of
Wind
3000 fossil fuel-generated
Building Integrated Solar PV
electricity in the minus
2500 63% scenario.

2000

1500

1000

500

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

45000 Solar Power Stations

Geothermal
Cumulative relative savings (billion US$/yr)

40000 Repowering Large Hydro

Small Hydro Figure 45: The forecast
Sea and Ocean Energy cumulative savings
35000 Building Integrated Solar PV for renewable energy
Bio-Hydrocarbons
Wind
technologies relative
30000
to the projected cost of
fossil fuel-generated
25000
electricity in the minus
63% scenario.
20000

15000

10000

5000

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

64
Climate Solutions 2: Low-Carbon Re-Industrialisation
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7.7 Investment/Return Profiles of coal-fired electricity and fossil
diesel energy increase at a linear rate
The cost curves for each zero- and low- of 2% each year out to 2050. This rate
emissions technology relative to their of annual cost increase is considered
fossil fuel competition (without any conservative given that coal and crude
carbon price) are shown below in Figure oil prices have increased, on average, by
46 to Figure 53. Since the price of energy more than 5% per annum and 25% per
varies considerably between countries, annum, respectively, for the period 1997
a shaded band is shown for the cost to 2007 (these values are even higher if
curves of each energy technology. This the price spikes in 2008 are included; BP
band represents one standard deviation 2009).
to each side of the mean result obtained
from the Monte Carlo simulated spread It should be noted that only a fraction
of likely international costs. of the cost of energy from fossil fuels
is related to the price of the relevant
In all cases, except for CCS, the commodity (e.g. oil, coal or natural gas).
cost curve of the low-emissions The other components of the energy
technology intersects with the fossil costs (e.g. labour and equipment)
fuel competition by 2050 (assuming are not as prone to fluctuations in
there is no retardation of learning). The commodity prices. Therefore, the rise
point of intersection between these two in the cost of fossil fuel energy is not
cost curves represents the year and expected to be quite as high as the rate
energy generation price at which the of increase in the fossil fuel commodity
low-emissions technology reaches a prices.
state of economic competitiveness with
the relevant fossil fuel (i.e. cost parity) That being said, if fossil fuel energy
without requiring further assistance. costs do grow faster than 2% per annum
in future, the economic break-even
The spread of years over which the point for low-carbon technologies will
bands of each zero- and low-emissions occur earlier than is shown in the figures
technology intersect their relevant below.
fossil fuel competition represents the
likely range of years in which different
countries (with different energy prices)
achieve cost convergence. In this way,
cost parity between a given zero- or low-
emissions technology with fossil fuels is
assumed to occur internationally over a
range of years.

Given current uncertainty as to the

future costs of fossil fuel energy, for
simplicity, it is assumed that the cost

65
Climate Solutions 2: Low-Carbon Re-Industrialisation
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 120 Figure 46: A
Wind
comparison of the cost
Coal-fired Electricity
curves for wind energy
100 and coal-fired electricity
generation in the minus
63% scenario.
Unit cost (US$/MWh)

80

60

40

20

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

120 Figure 47: A comparison

Geothermal
Coal-fired Electricity
of the cost curves for
geothermal energy and
coal-fired electricity
100
generation in the minus
63% scenario.
Unit cost (US$/MWh)

80

60

40

20

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

66
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 700 Figure 48: A comparison
Solar Power Stations
Coal-fired Electricity
of the cost curves for
solar power stations
600 and coal-fired electricity
generation in the minus
63% scenario.
Unit cost (US$/MWh)

500

400

300

200

100

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

600 Figure 49: A comparison

Sea and Ocean Energy
Coal-fired Electricity
of the cost curves for
sea and ocean energy
and coal-fired electricity
500
generation in the minus
63% scenario.
Unit cost (US$/MWh)

400

300

200

100

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

67
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 120 Figure 50: A
Small Hydro
Coal-fired Electricity
comparison of the cost
curves for small hydro
and coal-fired electricity
100
generation in the minus
63% scenario.
Unit cost (US$/MWh)

80

60

40

20

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

120 Bio-Hydrocarbons Figure 51: A comparison

Fossil Diesel of the cost curves for
bio-hydrocarbons
100 and fossil diesel in the
minus 63% scenario.
Unit cost (US$/MWh)

80

60

40

20

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

68
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 1200 Figure 52: A comparison
Building Integrated Solar PV
Residential Cost Coal-fired Electricity
of the cost curves for
building integrated
1000 solar PV and the
domestic price of coal-
fired electricity in the
Unit cost (US$/MWh)

800 minus 63% scenario.

600

400

200

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

400 Figure 53: A comparison

Fossil with CCS
Coal-fired Electricity
of the cost curves
for CCS coal-fired
350
electricity generation
and coal-fired electricity
300 generation with no
Unit cost (US$/MWh)

emissions reduction
250 facilities in the minus
63% scenario.
200

150

100

50

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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7.8 Carbon Price fossil fuel energy (assumed to grow
at 2% per annum) would be impacted
As global agreements on emissions by various carbon prices, Figure 54 to
and carbon pricing are not yet in place Figure 56 have been included below.
and the amount and timing of such
agreements remains unclear, the In Figure 54 to Figure 56 it is important
scenarios examined in this report do to note that the 2% per year linear
not include a global carbon price. In increase is only applied to the cost
reality, this is unlikely to be the case, of the fossil fuel energy and not the
with carbon caps and emissions trading carbon price. That is, only the fossil fuel
legislation either in development or component of the unit cost increases by
already in place for many countries. 2% each year and not the carbon price
component of the unit cost.
Consistent with the assumption of a zero
carbon price, the projected business-as- Given the difficulty of predicting the
usual costs for fossil fuel energy shown precise development of carbon prices
in the unit cost diagrams in the section in the next decades, the conservative
above do not include any cost for carbon approach used in this report is helpful in
emissions. To provide an indication of assessing the potentials of renewable,
how these business-as-usual costs for CCS and efficiency technologies.

320 Figure 54: The impact of

Coal-fired Electricity a range of carbon prices
300
Coal-fired Electricity (with carbon price of $20/tCO2-e) on the cost of producing
280
Coal-fired Electricity (with carbon price of $40/tCO2-e) coal-fired electricity
260
Coal-fired Electricity (with carbon price of $60/tCO2-e) (IEA/OECD 2005).
240
Coal-fired Electricity (with carbon price of $80/tCO2-e)
Unit cost (US$/MWh)

220 Coal-fired Electricity (with carbon price of $100/tCO2-e)

200 Coal-fired Electricity (with carbon price of $10/tCO2-e linearly rising to $100/tCO2-e)
180
160
140
120
100
80
60
40
20

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

70
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 320 Figure 55: The impact of
300
Fossil Diesel a range of carbon prices
Fossil Diesel (with carbon price of $20/tCO2-e) on the cost of fossil
280
Fossil Diesel (with carbon price of $40/tCO2-e) diesel (IEA 2009).
260
Fossil Diesel (with carbon price of $60/tCO2-e)
240
Fossil Diesel (with carbon price of $80/tCO2-e)
220
Unit cost (US$/MWh)

Fossil Diesel (with carbon price of $100/tCO2-e)

200
Fossil Diesel (with carbon price of $10/tCO2-e linearly rising to $100/tCO2-e)
180
160
140
120
100
80
60

40
20
0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

320 Figure 56: The impact of

300
a range of carbon prices
on the residential cost
280
of coal-fired electricity
260
(IEA 2006a).
240
220
Unit cost (US$/MWh)

200
180
160
140 Residential Electricity
120 Residential Electricity (with carbon price of $20/tCO2-e)
100 Residential Electricity (with carbon price of $40/tCO2-e)
80 Residential Electricity (with carbon price of $60/tCO2-e)
Residential Electricity (with carbon price of $80/tCO2-e)
60
Residential Electricity (with carbon price of $100/tCO2-e)
40
Residential Electricity (with carbon price of $10/tCO2-e linearly rising to $100/tCO2-e)
20
0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

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With the addition of a carbon pricing emissions technologies at the pace
system, these industries will become required to avoid a 2°C increase in
cost-effective sooner. For illustrative temperature. A carbon price
purposes, the effect of various carbon (even a very
prices on the annual relative cost of The reason that a carbon price, alone, high one) will
low-emissions energy is shown below does not overcome the barriers to not eliminate
in Figure 57 (i.e. Figure 42 with various industrial development is that a the annual
carbon prices applied). carbon price (whether a tax, regulation relative cost of
or trading mechanism) necessarily low-emissions
Figure 57 shows that the use of a deploys the lowest cost technology technologies in
global carbon price effectively reduces or activity first and then waits until their early roll-
the relative cost of low-emissions constraints of some nature (such as out stages. This
technologies during their critical supply limitations or changed market means that while
establishment stages. However, it can conditions) emerge before commencing carbon pricing
also be seen that a carbon price (even the deployment of the next lowest cost is an effective
a very high one) will not eliminate the technology or activity. This process of and valuable
annual relative cost of low-emissions sequential deployment creates delays component
technologies in their early roll-out in the implementation of low-emissions of achieving
stages. This means that while carbon technologies. In other words, a global emissions targets,
pricing is an effective and valuable carbon market – even an efficient global it is insufficient
component of achieving emissions market – will not be sufficient, in itself, to on its own to
targets, it is insufficient on its own to deploy technologies and activities at the ensure the timely
ensure the timely deployment of low- scale required and in the time available. deployment of
low-emissions
technologies
at the pace
800 No Carbon Price required to avoid
$20/tCO2-e in 2010 rising linearly to $50/tCO2-e in 2050
$20/tCO2-e in 2010 rising linearly to $100/tCO2-e in 2050 a 2°C increase in
700 $20/tCO2-e in 2010 rising linearly to $200/tCO2-e in 2050
$20/tCO2-e in 2010 rising linearly to $400/tCO2-e in 2050
temperature.
600
Annual relative cost (billion US$/yr)

Decreasing relative cost with higher carbon price

500

400

300
Figure 57: The impact
of a range of carbon
200 prices on the annual
cost of low-emissions
industries relative to
100 fossil fuels in Scenario
A.
0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

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7.9 Investment and Return Ratios similar to those found in energy
performance contracting, whereby
As the preceding section indicates, capital to carry out energy efficiency
the low-emissions resources require upgrades is provided by a third-party
investment during their development company. The capital is then repaid
stages, but then at some point become through savings from reduced energy
lower cost than the business-as-usual expenditure.
energy costs. In effect, savings are
created that can be considered as This picture also parallels the
returns on the initial investments once development of major infrastructure
economies of scale have been achieved. projects such as bridges and roads,
where multi-billion dollar capital outlays
In Scenario A, the required investment are recouped from tolls over subsequent
to support renewable energy industry decades. Such an approach could
development was approximately US$6.7 involve no price disruption to domestic
trillion up until 2050. However, a return consumers in developed or developing
of over US$41 trillion was created over countries.
the period 2013 to 2050, constituting a
significant return on costs over the long- As discussed earlier, this report
term. This ratio between investment and conservatively assumes a 2% increase
return offers an insight into the de-facto in the cost of all fossil fuel-generated
investment and return profile. energy each year. However, if the
rate of increase in fossil fuel energy
However, with such rapid industry costs is slightly higher than this, the
growth, learning rates could become ratio between return and investment
somewhat retarded, with scale not is significantly improved, as shown in
providing price drops as quickly as Figure 59.
predicted (see Chapter 15). Such
outcomes should be avoided, since A similarly conservative stance has
they severely undermine the ratio of been taken in this report by assuming a
investment and return (see Figure 58). carbon price of zero. However, it should
In all scenarios examined in this report, be noted that the ratio between return
a learning rate retardation of 33% has and investment would be considerably
been applied to buildings integrated improved by the implementation of
PV in response to recent trends (see a carbon price. This illustrates the
Chapter 15 for more information). This importance and viability of both an
learning rate retardation takes the very investment strategy for renewable
large historical learning rate of buildings energy technologies as well as robust
integrated PV from 23% down to about carbon pricing policies.
15%.

A healthy ratio of return on investment

could provide investment scenarios

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 70000 Cumulative Relative Costs to 2050
Figure 58: The impact
Cumulative Relative Savings to 2050 of learning rate
retardation on the
Cumulative relative costs/savings (billion US$/yr)

60000 cumulative relative

costs and savings for
the renewable energy
50000 industries currently
requiring support
(minus 63% scenario).
40000

30000

20000

10000

0
0% 10% 20% 30% 40%

Learning rate retardation

160000 Cumulative Relative Savings to 2050 Figure 59: The

Cumulative Relative Costs to 2050
impact of the rate of
increase in fossil fuel
Cumulative costs/savings (billion US$/yr)

140000
energy costs on the
cumulative relative
costs and savings for
120000
the renewable energy
industries currently
100000 requiring support
(minus 63% scenario).

80000

60000

40000

20000

0
0% 2% 4% 6%

Annual fossil fuel energy cost increase

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8 Scenario B (Minus 80%): Costs, Investment and
Returns
8.1 Efficiency that in both scenarios the reported
savings do not take into account any
The gross cost savings from avoided financial outlay required to upgrade
energy use due to various energy to the more efficient measures. Such
efficiency measures are shown below capital outlays are likely to be larger
on an annual (Figure 60) and cumulative in Scenario B to achieve the greater
(Figure 61) basis. The increased savings efficiency gains, thereby offsetting
in this scenario reflects the 10% increase some of the fuel savings advantages
in the energy efficiency measures observed in Scenario B relative to
adopted under Scenario B relative to Scenario A.
Scenario A. However, it should be noted

16000 Non-Metals Industry Efficiency Figure 60: CRISTAL

Metals Industry Efficiency model forecast of
Buildings Efficiency
14000 gross annual energy
Vehicles Efficiency
Reduced Use of Vehicles
cost savings through
Annual savings (billion US$/yr)

12000 Shipping Efficiency energy efficiency and

Avoided Aviation avoidance measures in
10000 the minus 80% scenario
out to 2050. NB: These
8000
are gross savings and
do not include any costs
that may be involved in
6000
adopting the efficiency
measures.
4000

2000

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

300000
Non-Metals Industry Efficiency
Metals Industry Efficiency Figure 61: CRISTAL
Buildings Efficiency model forecast of
250000 Vehicles Efficiency gross cumulative
Reduced Use of Vehicles energy cost savings for
Shipping Efficiency
Cumulative savings (billion US$/yr)

energy efficiency and

Avoided Aviation
200000 avoidance measures in
the minus 80% scenario
out to 2050. NB: These
150000 are gross savings and
do not include any costs
that may be involved in
100000 adopting the efficiency
measures.

50000

0
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Year

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8.2 Renewable Energy Investment obtain the figures below.

The annual and cumulative investment The cumulative relative cost of the
required for zero-emissions renewable renewable energy industries out to
energy industries are shown below in 2050 (by which time they will have all
Figure 62 and Figure 63, respectively. reached cost parity with their fossil fuel
As with the previous scenario, these competition) is US$7.0 trillion. This is
investment requirements represent the slightly higher than the corresponding
cost of renewable energy industries US$6.7 trillion of scenario A. This
relative to that of their fossil fuel is as expected given the increased
competition (i.e. the additional cost industry growth rates (24% per annum
beyond that of fossil fuels for producing as compared to 22% per annum)
the same amount of energy using required to meet the tougher minus 80%
renewable technologies). All set-up and emissions target of Scenario B relative
infrastructure costs have been spread to the minus 63% emissions target of
over their operational lifetime and Scenario A.
factored into the calculations used to

450

Solar Power Stations

400
Geothermal Figure 62: CRISTAL
Annual relative cost (billion US$/yr)

Repowering Large Hydro

350 Small Hydro
model forecast of the
Sea and Ocean Energy annual relative costs
300 Bio-Hydrocarbons of low-emissions
Wind
Building Integrated Solar PV
industries (not including
250
CCS) in the minus 80%
200
scenario out to 2050.

150

100

50

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

8000
Solar Power Stations
Geothermal Figure 63: CRISTAL
7000
Repowering Large Hydro
model forecast of the
Cumulative relative cost (billion US$/yr)

Small Hydro
Sea and Ocean Energy
cumulative relative
6000 Building Integrated Solar PV costs of low-emissions
Bio-Hydrocarbons industries (not including
Wind
5000 CCS) in the minus 80%
scenario out to 2050.
4000

3000

2000

1000

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

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8.3 CCS Costs because the residual emissions of CCS
(between 10% and 40%, depending
The annual and cumulative relative costs on the capture efficiency) make it
of CCS (i.e. those in addition to the usual a less effective energy generation
cost of fossil fuel energy generation) are option in terms of emissions intensity.
shown below in Figure 64 and Figure Consequently, the costs associated
65 for Scenario B. The tighter carbon with CCS in Scenario B (US$3.2 trillion)
budget of Scenario B means that there are considerably lower than those of
is significantly less CCS in the energy Scenario A (US$10 trillion).
supply mix of this scenario. This is

160 Fossil with CCS

Figure 64: CRISTAL
140
model forecast of the
annual relative costs of
CCS, alone, in the minus
Annual relative cost (billion US$/yr)

120
80% scenario out to
2050.
100

80

60

40

20

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

Figure 65: CRISTAL

3500 Fossil with CCS model forecast of the
cumulative relative
3000
costs of CCS, alone, in
the minus 80% scenario
out to 2050.
Cumulative relative cost (billion US$/yr)

2500

2000

1500

1000

500

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

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8.4 Renewable Energy and CCS and CCS combined in the minus 80%
Combined Costs scenario is estimated to be about
US$10.2 trillion out to 2050. Overall,
Combining all zero- and low-emissions this figure is slightly lower than that
technologies for Scenario B yields the of Scenario A (US$16.7 trillion) owing
annual and cumulative costs shown in to the reduced amount of CCS (and
Figure 66 and Figure 67, respectively. the high costs associated with CCS)
It can be seen that the cumulative permitted by the tighter carbon budget
expenditure on renewable energy in Scenario B.

500
Figure 66: CRISTAL
model forecast of
Fossil with CCS
450 Solar Power Stations the combined annual
Annual relative cost (billion US$/yr)

Geothermal relative costs of

400 Repowering Large Hydro renewable energy
Small Hydro
technologies and CCS in
350 Sea and Ocean Energy
Bio-Hydrocarbons
the minus 80% scenario
300 Wind out to 2050.
Building Integrated Solar PV
250

200

150

100

50

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

12000 Fossil with CCS

Solar Power Stations
Geothermal
Figure 67: CRISTAL
Repowering Large Hydro
model forecast of the
Cumulative relative cost (billion US$/yr)

10000 Small Hydro

Sea and Ocean Energy combined cumulative
Building Integrated Solar PV relative costs of
Bio-Hydrocarbons
8000
Wind
renewable energy
technologies and CCS in
the minus 80% scenario
6000 out to 2050.

4000

2000

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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8.5 Revenue Generation competition prior to 2050. The annual
and cumulative relative savings of
After achieving sufficient economies the renewable energy technologies
of scale, the renewable energy examined in this report are shown
technologies described in this report not below in Figure 68 and Figure 69 out to
only achieve cost parity with their fossil 2050 for Scenario B. Consistent with the
fuel competition but subsequently go faster rates of industry growth required
on to offer cost savings relative to the by Scenario B, the cumulative savings
fossil fuel alternatives. As with Scenario from renewable energy industries in
A, all the zero- and low-emissions Scenario B (US$47 trillion out to 2050)
technologies examined in this report are higher than those in the slower
(with the exception of CCS) reach growth Scenario A (US$41 trillion out to
cost parity with their high-emissions 2050).

4500 Solar Power Stations

Geothermal Figure 68: The forecast
4000 Repowering Large Hydro annual income
Annual relative savings (billion US$/yr)

Small Hydro generated by renewable

Sea and Ocean Energy
3500 energy technologies
Bio-Hydrocarbons
Wind relative to the projected
3000
Building Integrated Solar PV cost of fossil fuel-
generated electricity in
2500 the minus 80% scenario.

2000

1500

1000

500

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

50000 Solar Power Stations

Geothermal Figure 69: The forecast
Cumulative relative savings (billion US$/yr)

45000 Repowering Large Hydro cumulative income

Small Hydro
generated by renewable
40000 Sea and Ocean Energy
Building Integrated Solar PV energy technologies
35000 Bio-Hydrocarbons relative to the projected
Wind cost of fossil fuel-
30000 generated electricity in
the minus 80% scenario.
25000

20000

15000

10000

5000

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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8.6 Investment/Return Profiles deviation to either side of the Monte
Carlo simulation mean) are used to
The cost curves for each zero- and low- illustrate the variability in energy prices
emissions technology relative to their between different countries. Again,
fossil fuel competition are shown below the cost curves of all low-emissions
in Figure 70 to Figure 77 for the minus technologies, with the exception of CCS,
80% scenario. As with the minus 63% intersect the fossil fuel competition by
scenario, shaded bands (of one standard 2050.

120
Wind
Figure 70: A comparison
Coal-fired Electricity
of the cost curves
100 for wind energy and
coal-fired electricity
generation in the minus
Unit cost (US$/MWh)

80
80% scenario.

60

40

20

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

120 Figure 71: A comparison

Geothermal
Coal-fired Electricity
of the cost curves for
geothermal energy and
coal-fired electricity
100
generation in the minus
80% scenario.
Unit cost (US$/MWh)

80

60

40

20

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

80
Climate Solutions 2: Low-Carbon Re-Industrialisation
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 800 Figure 72: A comparison
Solar Power Stations
Coal-fired Electricity
of the cost curves for
solar power stations
700
and coal-fired electricity
generation in the minus
600 80% scenario.
Unit cost (US$/MWh)

500

400

300

200

100

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

600
Figure 73: A comparison
Sea and Ocean Energy
of the cost curves for
Coal-fired Electricity
sea and ocean energy
and coal-fired electricity
500
generation in the minus
80% scenario.
Unit cost (US$/MWh)

400

300

200

100

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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 120 Figure 74: A
Small Hydro
Coal-fired Electricity
comparison of the cost
curves for small hydro
and coal-fired electricity
100
generation in the minus
80% scenario.
Unit cost (US$/MWh)

80

60

40

20

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

120 Figure 75: A comparison

Bio-Hydrocarbons
of the cost curves for
Fossil Diesel
bio-hydrocarbons and
fossil diesel in the minus
100
80% scenario.
Unit cost (US$/MWh)

80

60

40

20

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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 1200 Figure 76: A comparison
Building Integrated Solar PV
Residential Cost Coal-fired Electricity
of the cost curves for
building integrated
1000 solar PV and the
domestic price of coal-
fired electricity in the
Unit cost (US$/MWh)

800 minus 80% scenario.

600

400

200

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

400 Figure 77: A comparison

Fossil with CCS
Coal-fired Electricity
of the cost curves
for CCS coal-fired
350
electricity generation
and coal-fired electricity
300 generation with no
Unit cost (US$/MWh)

emissions reduction
250 facilities in the minus
80% scenario.
200

150

100

50

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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8.7 Carbon Price This result further supports the
assertion that while a carbon price
As with the minus 63% scenario, there is an essential element of emissions
is no carbon price applied in the minus reduction policies, it is not on its own
80% results shown above. Figure 78 is an adequate solution. Additional policy
included below to given an indication measures will be required to ensure the
of the effect that various carbon prices timely deployment of low-emissions
would have on the annual relative cost technologies.
of low-emissions energy in the minus
80% scenario. As was found above for The impact of carbon prices on the
Scenario A, the use of a global carbon projected business-as-usual costs for
price effectively reduces the relative fossil fuel energy in Scenario B are the
cost of low-emissions technologies same as for Scenario A (see Figure 54 to
during their critical establishment Figure 56).
stages but does not eliminate it.

700 Figure 78: The impact

No Carbon Price
of a range of carbon
$20/tCO2-e in 2010 rising linearly to $50/tCO2-e in 2050
$20/tCO2-e in 2010 rising linearly to $100/tCO2-e in 2050
prices on the annual
$20/tCO2-e in 2010 rising linearly to $200/tCO2-e in 2050
cost of low-emissions
600
$20/tCO2-e in 2010 rising linearly to $400/tCO2-e in 2050 industries relative to
fossil fuels in Scenario
B.
Annual relative cost (billion US$/yr)

500 Decreasing relative cost with higher carbon price

400

300

200

100

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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8.8 Investment and Return Ratios

Figure 79 illustrates the impact

of learning rate retardation on
the cumulative relative costs and
cumulative relative savings for
renewable energy industries out to 2050.
Comparing this figure for Scenario B
to the same figure for Scenario A (see
Figure 58) reveals an improved ratio
between the return (cumulative relative
savings) and the required investment
(cumulative relative costs) for renewable
energy industries when they grow at the
faster rates found in Scenario B.

It can also be seen in Figure 80 that if

the cost of fossil fuel energy increases
by more than 2% each year the ratio
between return and investment is
increased. The increase in this ratio is
slightly larger than that of the minus
63% scenario.

As previously mentioned, this report

conservatively applies a carbon price
of zero to all scenarios examined in this
report. However, it is anticipated that
carbon pricing will be a crucial aspect of
achieving emissions reductions.

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 80000 Cumulative Relative Costs to 2050
Figure 79: The impact
Cumulative Relative Savings to 2050 of learning rate
retardation on the
Cumulative relative costs/savings (billion US$/yr)

70000
cumulative relative
costs and savings for
60000
the renewable energy
industries currently
requiring support
50000 (minus 80% scenario).

40000

30000

20000

10000

0
0% 10% 20% 30% 40%

Learning rate retardation

160000 Cumulative Relative Savings to 2050

Figure 80: The
Cumulative Relative Costs to 2050 impact of the rate of
increase in fossil fuel
Cumulative costs/savings (billion US$/yr)

140000
energy costs on the
cumulative relative
120000 costs and savings for
the renewable energy
industries currently
100000 requiring support
(minus 80% scenario).

80000

60000

40000

20000

0
0% 2% 4% 6%

Annual fossil fuel energy cost increase

86
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9 Industry Thresholds – The Point of No Return

In this section, the CRISTAL model is The development of low-carbon

used to specifically calculate the time industries are also assumed to adhere
frame available for achieving the future to typical industry growth S-curve
emissions levels required to avoid dynamics (see Chapter 3) to avoid the
runaway climate change. occurrence of stranded assets and
under-utilised capacity.

9.1 Defining the Industrial Point of

This report does not model the
No Return
“command and control” point of no
The calculations presented in this return threshold, which, in theory,
section are not about the response may be slightly later than that of a
of the climate system and the point free market. However, not only is
at which it may slip past the point of the “command and control” scenario
irreversibility. This has been covered in (typically only observed in times of
detail earlier in the report (see Chapter war) considered undesirable, it is also
4) and is deemed to be no more than 2°C difficult to predict its performance in a
of warming above pre-industrial levels. modern, highly specialised economy.
This level is in keeping with the scientific
and political consensus. While the ability to force the allocation
of resources under a “command and
Here, the window available control” scenario may allow for slightly
for establishing low-carbon higher growth rates or atypical S-curve
re-industrialisation is calculated based growth dynamics, the underlying
on the development time and industrial limitations in the economy (such as the
growth rate constraints identified earlier availability of specialised equipment,
in this report. skills and materials) will still apply.

The point of no return is defined as the Therefore, preliminary analysis indicates

latest year for initiating low-carbon that relying on a “command and control”
re-industrialisation. After this point, scenario to extend the point of no return
there is insufficient time to achieve would be unwise. The more prudent
the required emissions targets for response is to ensure an early and
each scenario within the free market comprehensive adoption of low-carbon
constraints used in this report. re-industrialisation within the context of
a free market economy.
The most significant of these free market
constraints is the assumption that long-
9.2 Point of No Return Methodology
term, year-on-year industry growth
rates are unlikely to go beyond 30% due Prior to the initiation of low-carbon
to limitations in the supply of skilled re-industrialisation, low-carbon
labour, specialised equipment, materials industries are assumed to continue
and finance. growing at their current levels. After
reaching the modelled start year for

87
Climate Solutions 2: Low-Carbon Re-Industrialisation
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re-industrialisation, all low-carbon point of no return). The business-as-
industries are assumed to grow at usual emissions baseline used in this
whatever rate is required (not exceeding report is also shown. As noted earlier,
All emissions
30%) to meet the 2050 emissions target. the emissions and energy baselines
abatement
used in this report are based on the
industries and
The point of no return is then taken as SRES A1FI forecast with a 3% climate
sectors need
the latest possible start year for low- change impact adjustment (see Section
to have been
carbon re-industrialisation in which the 3.2.3 for further information).
established and
2050 emissions target can be reached
be growing at
without exceeding industry growth For both scenarios, the latest start
full capacity by
rates of 30%. Results are shown for both year, or the point of no return, is 2014.
2014, at the latest.
the minus 63% scenario and the minus This is the year in which the balance of
This implies that
80% scenario. probability falls in favour of failing to
the policies and
meet the required emissions targets. All
development
It is important to remember that the emissions abatement industries and
mechanisms
minus 80% scenario assumes greater sectors need to have been established
required to
emissions abatements from the LULUCF and be growing at full capacity by
drive these
and energy efficiency sectors relative to 2014, at the latest. This implies that the
industries must
the minus 63% scenario (see Chapter 14 policies and development mechanisms
be formulated
for more details). required to drive these industries must
and agreed upon
be formulated and agreed upon several
several years prior
The point of no return results shown in years prior to 2014. Indeed, this time
to 2014. Indeed,
this chapter are for a 50% likelihood of frame may already be quite challenging.
this time frame
meeting the emissions targets in each
may already be
scenario. This means that for the start Note: The similarity in the point of no
quite challenging.
years described in this chapter there is return for both scenarios is related to
an equal chance of failing to meet the the increased emissions abatements
designated emissions targets as there from LULUCF and energy efficiency in
is of achieving them. Therefore, to the minus 80% scenario. These areas
reduce the likelihood of exceeding 2°C of emissions abatement have been
of warming above pre-industrial levels, boosted to near their upper plausible
low-carbon re-industrialisation should limit, representing a challenge in itself.
be well underway prior to these point of Therefore, the primary difference
no return years. between the minus 63% and minus
80% scenarios is not the start year
per se, but the depth and intensity of
9.3 Point of No Return Findings
emissions abatement efforts that must
The emissions trajectories for various be undertaken.
re-industrialisation start years are
shown below in Figure 81 and Figure 82.
Start years that fail to meet the required
2050 emissions target are shown in red
(i.e. these start years are beyond the

88
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 Figure 81: The point
120 of no return. This
2010 Start in the Minus 63% Scenario figure shows the
2012 Start in the Minus 63% Scenario effect of various
2013 Start in the Minus 63% Scenario re-industrialisation
100
2014 Start in the Minus 63% Scenario start years on the
2015 Start in the Minus 63% Scenario emissions trajectory of
Business-As-Usual Baseline
the minus 63% scenario.
Emissions (GtCO2-e/yr)

80 Trajectories shown in
red are unable to meet
the required emissions
target within the
60
assumed free market
industry constraints.

40

20

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

Figure 82: The point

120 of no return. This
2010 Start in the Minus 80% Scenario figure shows the
2012 Start in the Minus 80% Scenario effect of various
2013 Start in the Minus 80% Scenario re-industrialisation
100
2014 Start in the Minus 80% Scenario start years on the
2015 Start in the Minus 80% Scenario emissions trajectory of
Business-As-Usual Baseline the minus 80% scenario.
Emissions (GtCO2-e/yr)

80 Trajectories shown in
red are unable to meet
the required emissions
target within the
60
assumed free market
industry constraints.

40

20

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

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Climate Solutions 2: Low-Carbon Re-Industrialisation
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 90
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10 Discussion of Findings

The following five objectives were (though some scientists suggest that
identified at the outset of this report: this should be as low as 1.7oC; Hansen
et al. 2007a, Hansen et al. 2008, Hansen
I. Determine whether it is possible to 2005, Hansen 2007).
avoid runaway climate change.
Consistent with avoiding exceeding the
II. Establish the time window 2oC warming threshold, two scenarios
available to commence the are considered:
re-industrialisation of low-carbon
industries required to avoid runaway 1. Scenario A, with emissions
climate change. of 14.7 GtCO2-e in 2050, which
corresponds to a 10–40% (default
III. Determine the critical industrial of 24%) likelihood of exceeding the
constraints that must be overcome 2oC warming threshold according
to provide the necessary emissions to interpolated Meinshausen et al.
levels to avoid runaway climate (2009) data.
change.
2. Scenario B, with emissions of 7.9
IV. Compare the costs of low-carbon GtCO2-e in 2050, which corresponds
re-industrialisation versus the costs to a 4–29% (default of 13%)
of business-as-usual development. likelihood of exceeding the 2oC
warming threshold according to
V. Identify the implications of the extrapolated Meinshausen et al.
findings for governments, industry (2009) data.
and the private sector.
To understand whether these levels of
Here, the findings are examined in light emissions are possible, it was necessary
of the first four objectives, while the to:
next section discusses the fifth objective
relating to policy implications. a) Demonstrate the availability of
low-emissions resources that could
meet the projected demand for
10.1 Finding (i): It is Possible to Avoid
commodities and services;
Runaway Climate Change
The first and paramount objective of b) Demonstrate that emissions levels
this report was to answer the question: can be achieved in 2050 consistent
Is it possible to avoid runaway climate with various probabilities of
change? The review of climate and avoiding 2oC of warming;
emissions research in Chapter 4
indicates that it may, indeed, be possible c) Demonstrate that these industries
to avoid runaway climate change, can be deployed in the time available
provided temperatures are stabilised at up to 2050.
or below 2oC above pre-industrial levels

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Firstly, in response to point (a), the change. The findings of the emissions
modelling indicates that there are abatement scenario presented in
sufficient low-carbon resources and this report assume no delays in
emissions abatement opportunities to the commencement of industrial
meet projected energy and non-energy development of all low-carbon
demands in 2050. industries. Based on this assumption,
low-carbon industries all grow at 22%
Secondly, in response to point (b), the per annum (for the minus 63% scenario)
modelling of associated emissions or 24% per annum (for the minus 80%
from all sectors indicates that, on the scenario) from 2010 until each has
balance of probabilities, the emissions reached a point where it has harnessed
levels as a result of this deployment can 20% of its resource.
fall below that required by 2050 on an
annualised and cumulative basis. As mentioned earlier, this analysis
assumes that the maximum possible
Third, in response to point (c) above, year-on-year growth rate achievable
the modelling demonstrates that the by low-carbon industries in the key
required levels of energy and emissions development stage (i.e. up until 20%
can be met by deploying existing of the resource has been harnessed) is
technologies in an adequate time frame. 30%. While short periods of industry
However, as is discussed in detail below, growth rates of more than 30% may
this assumes a prompt start to low- be possible, it is unlikely that these
carbon re-industrialisation; concurrent higher growth rates could be sustained
growth of all relevant industries; and over the longer term (i.e. over several
average growth rates of at least 22% decades). Such high growth rates
or 24% per year for Scenario A and are typically restricted by industry
Scenario B, respectively (until at least instability and short- to medium-term
20% of each low-carbon resource has limitations of resources, skills, finance
been harnessed). and facilities.

Figure 23 illustrates these outcomes That said, it is worth noting that

with probability distributions for prolonged industry growth rates
emissions levels in 2050 for both the greater than 30% may be possible
scenarios examined. under a “command and control” type
arrangement, as seen in times of war.
However, this type of war-footing
10.2 Finding (ii): Low-carbon
scenario is not considered in this report.
re-industrialisation must be
implemented promptly
To determine the importance of the year
The second objective was to establish in which low-carbon re-industrialisation
the time window available to commence is commenced, the Monte Carlo model
the low-carbon re-industrialisation was run using industrial growth rates
required to avoid runaway climate up to the maximum rate (30% per

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annum), with various commencement be overcome to avoid runaway climate
years for the re-industrialisation change. Four such constraints were
process. This test was run for all found and are discussed in detail in the
commencement years between 2010 following subsections. They are:
and 2015, illustrating the effect of
delays in initiating full low-carbon 1. the maximum industry growth rate
re-industrialisation. As above, the minus constraint;
63% scenario was run with a 2050 per
capita emissions target of 1.6 tCO2-e/yr 2. the non-concurrent development
per person, and the minus 80% scenario constraint;
utilised a 0.9 tCO2-e/yr per person 2050
emissions target. 3. the delayed start constraint; and This modelling of
onset time found
This modelling of onset time found that 4. the incomplete resource that the likelihood of
the likelihood of avoiding a 2°C change development constraint. avoiding a 2°C change
in average global surface temperatures in average global
fell below 50% if global low-carbon 10.3.1 Maximum Industry Growth surface temperatures
re-industrialisation was not underway Rate Constraint fell below 50% if
by 2014 for both scenarios. The start of global low-carbon
2014 represents a practical time limit This report reveals that the defining re-industrialisation
by which ambitious global low-carbon industrial constraint that limits the was not underway by
industry development policies (above ability to avoid runaway climate change 2014.
and beyond agreements on emissions is the real-world upper limits on the
cuts) must be established and fully growth of low-carbon industries.
operational.
This upper limit on viable industrial
If full-scale low-carbon industry growth rates restricts the speed that
development is not in progress by at low-carbon industries can be deployed
least 2014, there will not be enough and grow. Therefore, it defines the
time to permit the full suite of 24 low- minimum time necessary to reach
carbon industries and sectors to develop the required outcomes. This has very
sufficiently. To increase the confidence significant implications for the potential
in avoiding a 2°C change in global to achieve the required emissions,
surface temperature, suitable policies energy and non-energy outcomes in the
must be in place well before 2014. time frame available.

Global emissions display considerable

10.3 Finding (iii): Four critical
inertia. Using sensible industrial
industrial constraints must be
growth constraints that are inherent
overcome to avoid runaway climate
within industries shows that, even
change
with adequate resources and
The third objective was to determine the technologies, the global economy
critical industrial constraints that must cannot transform overnight. To meet

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 the required emissions ranges on time would be required for all low-carbon
and in an orderly manner requires industries, even if a globally unified
adequate investment flows, stable effort was begun on a sufficiently large
development frameworks and an early scale in 2010.
This report
commencement date.
reveals that the
The industry growth rate required
defining industrial
Postponing industry development escalates to about 29% every year if
constraint that
or failing to provide adequate market this cooperative effort is not begun
limits the ability
certainty requires the implementation until 2014. Because it is assumed that
to avoid runaway
of even more rapid changes at a later growth rates cannot be increased
climate change
time. This would result in demand beyond 30%, implementing low-carbon
is the real-world
spikes, supply shortages and ultimately re-industrialisation in the years beyond
upper limits on
high delivery costs from industries 2014 brings a rapidly deteriorating
the growth of low-
characterised by unstable growth. Of likelihood of averting runaway climate
carbon industries.
even greater concern is the fact that the change.
supply of skills, labour, materials and
technology may simply be insufficient, 10.3.2 Non-Concurrent Development
so that even with additional expenditure Constraint
the necessary growth and installation
rates may not be achieved. Various low-carbon industries must
be developed in parallel. The urgent
To realise the high and prolonged levels need to reduce emissions means there
of industry growth required to avoid a is insufficient time for industries to
2°C change in global temperatures will develop one after the other, or indeed
require concerted and urgent global in any way other than with almost
effort on a scale previously unseen. The completely concurrent development.
CRISTAL model indicates that industry
growth rates of 22% every year for the Figure 83 compares Scenario A with a
minus 63% scenario (and 24% for the scenario in which all other parameters
minus 80% scenario) for several decades remain the same, but in which industrial

Figure 83: The

difference in emissions
abatement outcome by
2050 for (a) concurrent
120 (a) 120 (b) and (b) sequential
development of
Emissions and avoided emissions
Emissions and avoided emissions

100 100 emissions abatement

industries. In both
80 80 cases, low-emissions
(GtCO2-e/yr)

industries are assumed

(GtCO2-e/yr)

60 60 to grow at 22% per

annum in accordance
40
40 with the minus 63%
scenario.
20 20

0 0
2010 2015 2020 2025 2030 2035 2040 2045 2050 2010 2015 2020 2025 2030 2035 2040 2045 2050

Year Year

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development of the low-carbon will, on their own, be unable to trigger
resources occurs quasi-sequentially. a prompt start across all low-carbon
This sequential scenario mimics what industries; instead they will foster the
would happen under a pure emissions development of industries one after
trading approach. The result is that the other, with least-cost technologies
the emissions level in 2050 more than coming first.
doubles. Thus the target emissions level
is completely missed. 10.3.3 Delayed Start Constraint

This constraint has major implications If there is a real-world upper limit to

for policies and measures that put “all industrial growth rates, then it follows
the eggs in one basket”. For instance, that there is a point at which the use
to rely on only one system (such as of accelerated growth can no longer
cap-and-trade) is insufficient to meet compensate for implementation delays.
the required targets. Irrespective of the As Figure 84 shows, postponement
perceived costs and carbon prices, the means considerably lower emissions
required actions must be homogenous, reductions are achieved within the
simultaneous, ambitious and fast- necessary time frame because the
acting in all 24 low-carbon sectors in all biggest part of the emissions reduction
countries. Sequential approaches based wedge is pushed out beyond the 2050
solely on perceived cost-effectiveness milestone.

Figure 84: Industry

development is limited
30 megatonnes abated
by its ability to grow
1 megatonne over total period to 2050
at stable rates (due
abatement to training, labour
per year availability, materials
and so on). This means
that delays in starting
industrial development
1990 2020 2050 reduce the contribution
an industry can make
over a fixed period. To
Postponed development pushes wedge back, and biggest provide the maximum
part of wedge is pushed beyond the milestone abatement by 2050, all
abatement options need
to be started early, as
delays may make their
contribution too little,
too late.

1990 2020 2050

If delay is excessive, industry becomes “too little, too late”

7.5 megatonnes abated

over period to 2050
(¾ lost to post 2050)

1990 2020 2050

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See Finding (ii) above for further to deepen the trajectory of emissions
discussion on the window of cuts within the period available, i.e.
opportunity available to implement low- by 2050. This means that, although
carbon re-industrialisation. global emissions agreements may seek
deeper cuts, it may not be possible for
10.3.4 Incomplete Resource industries to deliver on these policies.
Development Constraint
Figure 85 illustrates this issue. It shows
The results presented for the low-carbon that to meet abatement targets it is
re-industrialisation scenario show that a much easier to expand a larger number
broad array of low-emissions industries of established industries than to
and resources are necessary to achieve introduce new industries late in the time
the required emissions targets. There frame, especially if greater emissions
is very little resource contingency and abatement is required than initially
there are no dominant resources. This expected. It shows how this approach
means that all low-carbon services avoids the possibility that one or more
and resources must be developed industries would be pushed past viable
simultaneously to achieve emissions growth rates.
levels consistent with avoiding runaway
climate change. 10.3.5 Transport, Thermal Energy and
Fuels Infrastructure
If a smaller range of industries are
developed or if critical transitions in There is an upper limit on the volume of
the energy management and transport global bio-hydrocarbon resources (even
sectors are not made, then within a assuming that all waste hydrocarbon
few years it will no longer be possible from agriculture can be converted

Figure 85: The wedges

on the left are both
4 designed to meet the
same target. The one
3 3 with four industries
under development is
2 2
able to expand more
1 1 easily to meet a more
ambitious target than
2050 2050 the one with three
industries, which would
More abatement required (with fewer options developed)
have to develop new
industries from scratch
late in the piece and
push them to very high
development rates.
4
4
3
3
2
2
1 1

2050 2050
More abatement required

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to liquid or gaseous fuels). This has when using grid-based low-carbon
important implications for a low-carbon electricity, land-based vehicles
transition, particularly in the case of low- are likely to make use of on-board
carbon transport. energy storage systems such as
batteries, hydrogen or compressed
Recent tests by Virgin Airlines air.
have made some progress towards
demonstrating the suitability of biofuels 3. Industrial applications that use high
to larger scale use in commercial energy density fuels, especially
aviation. Similarly, biodiesel and thermal applications, may need to
its variants have been an effective switch over to other energy carriers
alternative for diesel and heavy marine such as electricity or hydrogen.
fuels in shipping for some time. The
specific requirements of these modes Energy infrastructure planning and
of transport for high energy density, transport fuels policy must reflect the
transportable fuel means they will need priority access of aviation and shipping
priority access to the bio-hydrocarbon sectors to biofuels. In addition, this
resources identified in this report. planning must reflect the requisite need
for land-based transport (freight, public
This bioenergy requirement has three and personal) and industrial thermal
important implications: needs to be met from the conversion of
low-carbon electricity.
1. Excluding existing applications of
biomass, the use of any additional 10.3.6 Carbon Capture and Storage
bio-hydrocarbons for anything other
than liquid fuels may be restrictive, A challenge facing CCS concerns
given the lack of suitable alternatives securing investment in a relatively
in some transport applications. high-cost solution that is important in
However, any residual biomass transition, but is ultimately likely to be
from the conversion process to bio- phased out of the energy sector. The
hydrocarbons could potentially be fact that fossil fuel use with CCS will
used for increasing soil carbon (e.g. always be more expensive than using
the creation of biochar). fossil fuels without CCS means that it
will always require additional support.
2. Given the prioritisation of liquid As a result, the role of CCS in energy
bio-hydrocarbon fuels for shipping generation will be undermined as
and aviation (due to the lack of other low-emissions renewable energy
alternatives), the energy needs of options become lower costs in the
land-based transport must be met medium- and long-term.
by other means. The abundance of
grid-connected renewable energy However, while other zero- and low-
sources in the future energy mix emissions technologies are being
makes low-carbon electricity a brought to maturity and widely
viable solution. To increase mobility deployed, coal, oil and gas will continue

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to play a part in the energy supply mix emissions from industry would be
in the short- and medium-term. The higher than those shown in the results
model shows that in order to stay above. In this case, there would be
within the carbon emissions budget it is increased pressure on other emissions
highly beneficial if fossil fuel plants are reduction possibilities for industry (e.g.
equipped with CCS technology as soon improved process efficiency, alternative
as possible. As other lower-emissions production processes or switching
industries (such as wind, geothermal, to lower-emissions materials and
solar power stations and building products) to lower irreducible emissions,
integrated solar PV) continue to expand particularly beyond 2050.
beyond 2050, the market share of fossil
fuel power plants (all operating with CCS However, since CCS is as yet
by this point) appear likely to gradually commercially unproven, the gamble
be reduced and ultimately phased out posed by relying on its performance
due to cost and uncaptured emissions. exposes an even greater risk of failing
to achieve emissions reductions targets,
The importance of CCS for enabling should the industry fail to deliver. The
fossil fuels to have an ongoing role in the dynamics between CCS being seen
transition to a low-emissions economy as a silver bullet and, equally, as a
has major and immediate implications waste of limited resources must be
for the design, planning, and location of carefully managed. The Economist (The
new energy generation plants (and the Economist 2009a, The Economist 2009b)
decommissioning of existing plants). recently noted that there is increasing
This is because the transport of carbon concern that CCS will absorb the
dioxide to distant storage sites would crucial funding necessary to establish
further increase costs. renewable energy facilities that are
more economically viable and key to
While the results make it clear that emissions reductions in the long-term.
to pursue CCS for energy generation
beyond a transition role would be 10.3.7 Terrestrial Carbon
costly from an emissions and economic
standpoint, it should be noted that in Stopping and reversing the
its absence the transition phase would deforestation and degradation of
place intense and prolonged industrial forest land (e.g. for charcoal or grazing
growth rate pressure on the other lower lands), particularly in tropical countries,
emissions industries. emerges as a crucial element of the
scenarios modelled in this report. It
A second aspect of CCS is its application is reasonable to assume that most
to industrial process emissions. From developed countries will cease
a manufacturing and production deforestation and ideally engage in
perspective (e.g. steel and cement), the reforestation as one measure in a
absence of CCS for industrial processes suite of emissions reduction activities.
would likely mean that the irreducible However, there remains the important

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issue of how the economic activity of from renewable and CCS sources. For
deforestation will be compensated in renewable sources, this investment
developing countries. It is unrealistic achieves a return against the business-
to assume that the custodians of these as-usual case, due to the savings
forests seeking to derive income from created as these industries achieve
them will seek to curb their activities economies of scale.
without economic recompense for the
collective good achieved. In the minus 63% scenario, the required
investment to support renewable
The inclusion of carbon sinks within a energy industry development was
carbon trading scheme that includes about US$6.7 trillion for the period up
fossil fuel emissions brings with it to 2050. A return of over US$41 trillion
perversities in which the prevention was created over the period 2013 to
of one activity exacerbates the other. 2050, constituting a significant return on
Instead, the modelling indicates that a costs over the long-term. However, the
minimum amount of carbon will need fast growth rates involved could lead to
to be retained in forest sinks globally, learning rates being retarded somewhat.
and this cannot be traded off against If this were the case, increases in scale
emissions from fossil fuels if the would not provide price drops as quickly
required emissions outcomes are to be as predicted and the ratio of return to
achieved. investment would be eroded, as shown
in Figure 58 and Figure 79.

10.4 Finding (iv): Low-carbon

It is possible to minimise learning
re-industrialisation provides
rate retardation through appropriate
feasible long-term returns on costs
planning and policy implementation. If
The fourth objective aimed to this can be achieved, the ratio between
compare the costs of low-carbon investment and return presents
re-industrialisation with those of a reasonably plausible long-term
business-as-usual development. In investment strategy, where short-term
this report, these costs excluded major price support to achieve economies
infrastructure investment, i.e. costs that of scale may be repaid with long-term
are deemed to have been for changes in returns from the cost savings (as shown
the type of infrastructure. The cost of schematically in Figure 86).
capital stock that provides a short-term
return (e.g. energy-efficient appliances)
is also excluded.

For renewable energy resources and

industries, the results in this report
express the costs required to meet the
shortfall between the price of fossil
fuel-based energy production and that

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 Figure 86: Schematic
cost curve diagram,
showing the required
investment and
resulting revenue
Price support investment from the development
of renewable energy
technologies.
Return on investment from savings

Cost

f uels
Fossil

Clean te
chnolog
ies

Time

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11 Policy Implications and Opportunities

This section sets out a list of policy agreement is required. However, as

challenges that cannot remain this report identifies, the time window
unaddressed if the obstacles to avoiding for agreement is very short indeed,
2°C of warming are to be successfully requiring such an agreement to be
overcome. established as quickly as possible.

In providing these policy insights and The Policy Challenge: To implement

suggestions to decision-makers and an effective and binding international
stakeholders, it should be emphasised agreement within five years that has
that although many of the policy targets consistent with avoiding 2°C
issues put forward here are under of warming. Obviously the UNFCCC
consideration, this is not a menu from provides the basis for addressing this
which only a few pieces can be chosen challenge, providing that the time frame
while the others are set aside. All of the and targets are adequate.
policy challenges identified here must
be addressed.
11.2 A Price on Pollution
The report identifies 24 low-carbon Problem: In most countries there is no
wedges, which are resources, industries constraint or cost to putting greenhouse
and activities that must be developed gas pollution into the atmosphere.
at very high growth rates to achieve
emissions cuts of up to about 80% by The Policy Challenge: Greenhouse
2050 (relative to 1990 levels). The limits gases are a pollution problem and
to reasonable growth rates, resource therefore mitigation requires restraints
size, and risks of unforeseen delays or to be placed on such pollution by
failure, mean that policies must ensure requiring the polluter to pay for the
that all of these low-carbon resources right to pollute, or to face punitive
are developed concurrently, promptly costs for illegal pollution. The leading
and through to 2050. policy solution for establishing a cost
to greenhouse gas pollution is the
implementation of national, regional
11.1 National and International
and international emissions trading
Targets
schemes. Such schemes place a limit on
Problem: Though many low-carbon pollution but allow the market to find the
actions result in a greater degree of appropriate price for the right to emit.
economic efficiency, some represent an
increase in costs compared to business-
11.3 Sequential Low-Carbon
as-usual in the short-term. For some
Industry Development Under
industries and countries, this could
Emissions Trading
represent a competitive disadvantage
unless all countries participate in Problem: A price on carbon, alone, will
emissions reductions, creating a more be too slow to achieve the required
consistent international market. For this outcomes. A price on carbon or market-
reason, a globally binding international based mechanisms from emissions

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trading create a steadily increasing of efficiency may occur too slowly to
price on greenhouse gas emissions. achieve the emissions targets set out in
This price increases as the emissions this report.
constraint tightens and the right to
emit becomes more valuable. The The Policy Challenge: Non-economic
problem is that carbon pricing on its barriers cannot be substantively
own will lead to least cost, low-carbon overcome by economic incentives
resources being developed sequentially, or penalties alone. Therefore, non-
according to cost, while higher cost economic interventions are required
solutions are delayed. The modelling in to accelerate the diffusion of
this report shows that this means that efficiency. The most rapid efficiency
the emissions goals for 2050 will not be improvement possible is to remove
achieved as a result. all inefficient devices and practices
from the market using regulation and
The Policy Challenge: Complementary standards. To accelerate the rate at
measures are required to ensure that which technology and practices are
all critical low-carbon resources are not developed, such standards could be set
left undeveloped or are developed too at an international level to cover multiple
slowly, even those that are of higher countries. Furthermore, regulating
cost. Mechanisms such as feed-in energy markets to require the sale of
tariffs and portfolio standards are energy services would fundamentally
proven means for deploying higher de-couple increasing energy services
cost technology, such as renewable demand from energy production and
energy, and spreading the cost across a escalating emissions.
wide consumer base. Similar schemes
combined with carbon pricing could
11.5 Cost of Retaining Forests
address CCS cost barriers.
Problem: The need to reduce emissions
from land use, land use change and
11.4 Non-Economic Barriers to
forestry is unavoidable, yet may
Efficiency
represent an opportunity cost to the
Problem: Though almost all efficiency countries and land-owners who might
measures result in net savings otherwise undertake actions that
to individuals and business (and generate greater value than they would
therefore the economy), many remain receive from a carbon market.
undeveloped or actively resisted due
to market inertia or vested interests. The Policy Challenge: In order to avoid
The energy market, in particular, is certain deforestation, payments may
universally based on the sale of energy need to be made to the relevant land-
(e.g. kilowatts or litres of fuel) as the owners to compensate for the lost
key commodity rather than the energy income or value. This implies that there
service (e.g. light, heat or transport). is a minimum amount of forest carbon
This means that most utilities have a that must be in existence in order to
disincentive to encourage efficiency. contribute to avoiding 2°C of warming.
Under these conditions, the diffusion This is the responsibility of all people

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and nations – not just the ones that have industrialisation along low-carbon
the largest forests – which presents an pathways will be critical to avoiding a
important international policy challenge. lock-in of high emissions. In the long-
A separate market may need to be term, this report shows that such a
established for forest carbon to manage pathway will lead to lower costs than
the distribution of such costs. business-as-usual.

The Policy Challenge: The challenge is

11.6 Removal of Perversity
to find a way of funding the incremental
Problem: Many markets and tax cost of deploying low-carbon projects in
regimes operate in ways that actively developing countries without diverting
oppose the uptake and diffusion of low- resources from poverty eradication.
carbon solutions. For example, energy The long-term nature of these costs and
companies make money by selling more returns may require the use of long-
power, rather than selling an energy term “Climate Bonds” that can be used
service that would incentivise energy to fund the short- and medium-term cost
efficiency for profitability. In addition, increments for choosing low-carbon
existing energy subsidies in the fossil resources (e.g. feed-in tariffs). In turn,
fuels sector are estimated to be about these can be repaid using the savings
US$300 billion each year globally (UNEP against business-as-usual achieved in
2008). the medium- and long-term.

The Policy Challenge: To dismantle

11.8 Enabling Infrastructure
subsidies and perversities in markets
that are working against low-carbon Problem: Changes of mode, such
uptake without causing economic as increased public transport and
disruption. It may be necessary the switch to electricity-based land
to reform energy markets so that transport, will require major investment
supplying energy by volume is phased in new infrastructure. Similarly,
out and replaced with supplying building in the ability for grids to
integrated energy services – heating, move and manage large volumes of
cooling, lighting, telecommunications renewable energy and accommodate
and so forth. Such reform would thus the capture and storage of CO2 will also
internalise the value of efficiency at the require considerable infrastructure
point of sale. investment. The absence of such
key enabling infrastructure would
prevent or constrain low-carbon
11.7 Opportunity Cost to Developing
re-industrialisation.
Countries
Problem: The costs of some low- The Policy Challenge: To find a
carbon solutions are higher than those mechanism that will successfully allow
that might otherwise be used, which an entity or entities to identify, fund and
presents an allocation of resources that implement an enabling infrastructure at
might detract from poverty eradication. national and regional scales. This will
On the other hand, developing country require that low-carbon infrastructure

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be identified as of strategic national 11.10 Leveraging Investment
and international importance and that
its deployment is coordinated by and Problem: This project has identified
between governments. that the process of low-carbon
re-industrialisation will create long-
term savings against business-as-
11.9 Liquid Fuel Limitations
usual. These savings represent a major
Problem: Though many energy needs investment opportunity but no financial
currently met by fossil fuels can be mechanism currently exists to leverage
replaced by using electricity generated the trillions of dollars required.
with renewable energy, the transport
sector presents a particular challenge. The Policy Challenge: Leveraging
The total resource for biofuels (assuming such an opportunity will require the
no competition with food production) participation of three key players:
will not be sufficient to meet all of the
demand types currently met by oil. At 1. Industry – to rapidly expand
this stage, the two sectors with the production and deployment, and
fewest viable alternatives to a liquid fuel reduce costs through economies of
are the aviation and shipping sectors. scale.

The Policy Challenge: With significant 2. Institutional investors – to finance

avoided aviation and shipping there the industry development until
will be adequate bio-hydrocarbons such a time as cost competitiveness
available from agricultural and forestry is achieved and returns can be
wastes to meet the remaining needs achieved.
of these two sectors, but land-based
transport needs will have to be met 3. Governments – to provide a
through other energy carriers supplied secure investment framework for
from renewable energy. Definitive the investors and industry. This
transport energy policy is required to framework must ensure that they
avoid economic dislocations in these are able to extract a return on
sectors. This may require a set of the investment using the savings
mandatory fuel-use targets to be set created from low-carbon industries
to transition the aviation sector to bio- achieving economies of scale.
kerosene and shipping to biodiesel
supplied from biomass sources that do
not compete with food crops. National
and international targets may also
be established to fully transition the
land-based transport sector to energy
carriers (such as batteries or hydrogen)
supplied by renewable power.

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12 References

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13 Glossary

Abatement – A reduction in greenhouse the primary anthropogenic greenhouse

gas emissions (also see mitigation). gases.

Adaptation – The Intergovernmental CO2-e – Carbon dioxide equivalent: The

Panel on Climate Change (IPCC) defines net effect greenhouse gas emissions
adaptation as an “adjustment in natural are often presented as carbon dioxide
or human systems in response to equivalent, which is a conversion to
actual or expected climatic stimuli or the global warming potential of carbon
their effects, which moderates harm or dioxide over a 100-year period. For
exploits beneficial opportunities” (Metz example, the global warming potential
et al. 2001). for a tonne of methane is 21 times that of
a tonne of carbon dioxide.
Anthropogenic – The result of human
activities. Critical development period – The time
period up until a low-emissions industry
Base-load – Normally refers to a power has harnessed 20% of the available
station that runs constantly (24 hours resource for that particular technology.
per day, 7 days per week), regardless of This is also sometimes referred to as the
energy demand. Due to their slow start- growth phase.
up and shut-down times it is more cost-
effective for them to remain on. Emissions intensity – The emissions
generated per unit of input or output.
BAU – Business-as-usual: Refers to
the emissions or energy trajectory Fossil fuel – A non-renewable source of
associated with undertaking activities energy formed from decayed organic
without any measures to reduce matter millions of years ago. The most
greenhouse gas emissions. Often predominant fossil fuels are coal, oil and
greenhouse gas mitigation policies are gas.
compared to business-as-usual to show
the potential impact of the policy. Fugitive emissions – The emissions that
come from the mining, transportation
Capacity – Maximum rated power of and storage of fossil fuels (but do not
a power station, usually measured in include the emissions from fossil fuel
megawatts (MW). combustion).

Capacity factor – The percentage of GDP – Gross Domestic Product: The

yearly energy generated as a fraction of economic value of a country’s annual
its maximum possible rated output. production of goods and services.

CCS – Carbon capture and storage. Geosequestration – Refers to the

capture and geological (underground)
CO2 – Carbon dioxide, which is one of storage of CO2 emissions.

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GHG – Greenhouse gases: Gases in Mt – Megatonnes: One megatonne is
the atmosphere that adsorb and emit one million (106) tonnes. Greenhouse
infrared radiation, which subsequently gas emissions are often displayed in
lead to global warming. The most megatonnes carbon dioxide equivalent
common anthropogenic greenhouse per annum (MtCO2-e/yr).
gases are carbon dioxide (CO2), methane
(CH4), ozone (O3), nitrous oxide (N2O) and MtCO2-e – Megatonnes carbon
sulphur hexafluoride (SF6). dioxide equivalent: An internationally
recognised measure used to compare
Gt – Gigatonnes: One gigatonne is the emissions of various greenhouse
one billion (109) tonnes. Greenhouse gases. This measure factors in
gas emissions are often displayed in differences in global warming potential
gigatonnes carbon dioxide equivalent and converts them to a carbon dioxide
per annum (GtCO2-e/yr). equivalent. For example, the global
warming potential for a tonne of
GtCO2-e – Gigatonnes carbon dioxide methane over 100 years is 21 times that
equivalent: An internationally of a tonne of carbon dioxide.
recognised measure used to compare
the emissions of various greenhouse Mtoe – One million tonnes of oil
gases. This measure factors in equivalent.
differences in global warming potential
and converts them to a carbon dioxide MWh/yr – Megawatt hours per year: A
equivalent. For example, the global megawatt is one million (106) watts.
warming potential for a tonne of
methane over 100 years is 21 times that Photovoltaic cell – A renewable energy
of a tonne of carbon dioxide. technology that converts sunlight into
electrical energy.
GWh/yr – Gigawatt hours per year: A
gigawatt is one billion (109) watts. Power – Energy transferred per unit
of time. Electrical power is usually
LEI – Low-emissions industry. measured in watts (W), kilowatts (kW),
megawatts (MW) and gigawatts (GW).
LULUCF – Land use, land use change, An appliance drawing 1000 watts (1 kW)
and forestry. for 1 hour is said to have used 1 kilowatt
hour (1 kWh) of electricity.
Mitigation – The Intergovernmental
Panel on Climate Change (IPCC) defines ppm – Parts per million.
mitigation as “an anthropogenic
intervention to reduce the sources or PV – Photovoltaic (solar power).
enhance the sinks of greenhouse gases”
(Metz et al. 2001). Renewable energy – Energy that
comes from natural processes and
MRET – Mandatory Renewable Energy is replenished in human time frames
Target. or cannot be exhausted (sources

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of renewable energy include wind,
biomass, solar radiation, geothermal
energy, wave and tidal power).

Runaway climate change – When the

climate system is forced to cross some
threshold, triggering a transition to a
new state at a rate determined by the
climate system itself and faster than the
cause (NRC 2002).

TWh/yr – Terawatt hours per year: A

terawatt is one million, million (1012)
watts.

Wind farms – A collection of wind

turbines that connect to common
substations to feed into the main
electrical grid.

Wind turbine – A renewable energy

technology that converts air currents
into mechanical energy, which is then
used to generate electrical energy.

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14 Appendix: Model Input Data

Since the CRISTAL model makes use conservative. For example, the resource
of Monte Carlo methods, most input constraints that have been applied
data used in the model is built up from to reflect possible technical limits to
a range of possible values. Generally, uptake for geothermal energy, solar
the range of values used for each power stations, and sea and ocean
model input was obtained from widely energy for 2050 may have actually been
accepted literature sources available to removed by that time, in which case the
the general public. The tables shown available resource could be significantly
below list some of the key input ranges larger.
used in the CRISTAL model.
Figure 87 to Figure 89 show the data
It should be noted that the estimates used to build the Monte Carlo ranges for
of renewable energy resource are fossil fuel energy prices.

Table 3: Monte Carlo data ranges used to determine the maximum

emissions abatement relative to business-as-usual (BAU) for various
sectors by 2050 in the minus 63% scenario.

Sector Emissions Abatement Units

Low Best High
Avoided Aviation 30 35 40 % Reduction on BAU
Aviation Efficiency 20 42 60 % Reduction on BAU
Shipping Efficiency 25 50 75 % Reduction on BAU
Reduced Use of Vehicles 15 40 50 % Reduction on BAU
Vehicles Efficiency 20 30 50 % Reduction on BAU
Buildings Efficiency 28 50 72 % Reduction on BAU
Metals Industrial Energy Efficiency 35 40 50 % Reduction on BAU
Non-Metals Industrial Energy Efficiency 20 35 50 % Reduction on BAU
Agriculture 7.95 8.31 8.67 GtCO2-e/yr
LULUCF 1.3 7.55 13.8 GtCO2-e/yr
Waste 1.45 1.53 1.62 GtCO2-e/yr
Fugitive 2.5 2.5 2.5 GtCO2-e/yr

Sources: Stern 2006, IPCC 2007, IMO 2009

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 Table 4: Monte Carlo data ranges used to determine the maximum
emissions abatement relative to business-as-usual (BAU) for various
sectors by 2050 in the minus 80% scenario.

Sector Emissions Abatement Units

Low Best High
Avoided Aviation 33 38.5 44 % Reduction on BAU
Aviation Efficiency 22 46.2 66 % Reduction on BAU
Shipping Efficiency 25 50 75 % Reduction on BAU
Reduced Use of Vehicles 16.5 44 55 % Reduction on BAU
Vehicles Efficiency 22 33 55 % Reduction on BAU
Buildings Efficiency 30.8 55 79.2 % Reduction on BAU
Metals Industrial Energy Efficiency 38.5 44 55 % Reduction on BAU
Non-Metals Industrial Energy Efficiency 22 38.5 55 % Reduction on BAU
Agriculture 7.95 8.31 8.67 GtCO2-e/yr
LULUCF 2.34 13.59 24.84 GtCO2-e/yr
Waste 1.45 1.53 1.62 GtCO2-e/yr
Fugitive 2.5 2.5 2.5 GtCO2-e/yr

Sources: Stern 2006, IPCC 2007, IMO 2009

Table 5: Monte Carlo data ranges used for determining the maximum
resource for various energy generation technologies by 2050 for all
scenarios.

Sector Maximum Resource by 2050 Units

Low Best High
New Large Hydro 4020 5073 5073 TWh
Small Hydro 556 556 556 TWh
Wind Power 28666 97733 166800 TWh
Geothermal 2522 8330 36734 TWh
Solar Power Stations 13900 29190 44480 TWh
Sea and Ocean Energy 2000 3000 4000 TWh
Building Integrated PV 8642 21606 54014 TWh
Domestic Solar Thermal 12089 18133 70518 TWh
Bio-Hydrocarbons 7098 15001 29586 TWh
Nuclear 1466 3124 5186 TWh
Fossil Fuels with CCS 0.28 0.38 0.43 tCO2 /MWh captured

Sources: IPCC 2007, IEA 2008, Nowak et al. 2002

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 Table 6: Current installed capacity and capacity factor ranges for various
low-emissions energy technologies used in all scenarios.

Sector Current Capacity Capacity Factor

(GW) Low Best High
Large Hydro 860.0 0.34 0.45 0.55
Small Hydro 85.0 0.50 0.60 0.70
Wind Power 121.0 0.40 0.50 0.60
Geothermal 10.0 0.40 0.73 0.80
Solar Power Stations 0.5 0.12 0.20 0.28
Sea and Ocean Energy 0.3 0.20 0.35 0.45
Building Integrated PV 13.0 0.10 0.16 0.20
Domestic Solar Thermal 145.0 0.10 0.20 0.25
Bio-Hydrocarbons 32.4 0.35 0.45 0.50
Nuclear 372 0.60 0.70 0.80
Fossil Fuels with CCS 0.0 0.50 0.55 0.70

Sources: REN21 2009, IEA 2008, IPCC 2007

Table 7: Monte Carlo data ranges for historical learning rates (the
fraction by which the unit cost is reduced for a doubling of production
volume) and current unit costs for various low-emissions energy
generation technologies used in all scenarios.

Sector Historical Learning Current Cost (US$/MWh)

Rate Low Best High
Large Hydro 0.01 30 35 40
Small Hydro 0.05 40 55 70
Wind Power 0.1 40 65 90
Geothermal 0.08 40 55 70
Solar Power Stations 0.18 120 150 180
Sea and Ocean Energy 0.15 80 100 400
Building Integrated PV 0.153 200 500 800
Domestic Solar Thermal -0.043 20 65 200
Bio-Hydrocarbons 0.15 50 80 120
Nuclear 0.058 10 75 120
Fossil Fuels with CCS
0.2 20 90 150
(additional cost)

Sources: REN21 2008, IPCC 2007, IPCC 2005, IEA 2000, EIA 2009, Kouvaritakis 2000, Taylor et al. 2006

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Table 8: Simulation mean result for the annual emissions abatements of
low-carbon energy generation in the minus 63% scenario (GtCO2-e/yr).

Fossil Solar Building Domestic Sea and

Residual Large Repowering Small Geo- Bio-
Year with Nuclear Wind Power Integrated Solar Ocean
Emissions Hydro Large Hydro Hydro thermal Hydrocarbons
CCS Stations Solar PV Thermal Energy

2010 48.19 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.03
2011 48.67 0.00 0.00 0.01 0.00 0.00 0.01 0.00 0.00 0.01 0.01 0.00 0.04
2012 48.69 0.01 0.01 0.05 0.00 0.02 0.05 0.01 0.02 0.02 0.03 0.00 0.05
2013 48.18 0.03 0.02 0.10 0.00 0.04 0.11 0.03 0.04 0.05 0.07 0.01 0.07
2014 47.84 0.06 0.03 0.15 0.01 0.06 0.20 0.05 0.06 0.09 0.13 0.01 0.11
2015 47.27 0.09 0.04 0.20 0.01 0.07 0.31 0.08 0.10 0.14 0.20 0.01 0.15
2016 46.12 0.13 0.06 0.25 0.01 0.09 0.45 0.11 0.15 0.20 0.29 0.02 0.20
2017 45.02 0.18 0.07 0.29 0.02 0.11 0.61 0.16 0.20 0.27 0.40 0.03 0.26
2018 43.83 0.23 0.09 0.32 0.02 0.13 0.80 0.20 0.26 0.36 0.52 0.04 0.33
2019 42.57 0.30 0.10 0.33 0.02 0.13 1.01 0.26 0.33 0.45 0.66 0.05 0.41
2020 41.45 0.37 0.12 0.33 0.03 0.13 1.25 0.32 0.40 0.56 0.81 0.06 0.50
2021 40.25 0.44 0.13 0.33 0.03 0.13 1.51 0.38 0.49 0.68 0.98 0.07 0.60
2022 38.98 0.53 0.14 0.33 0.03 0.13 1.80 0.46 0.58 0.81 1.17 0.08 0.71
2023 37.85 0.62 0.15 0.33 0.03 0.13 2.11 0.54 0.68 0.95 1.37 0.10 0.82
2024 36.47 0.72 0.16 0.33 0.03 0.13 2.45 0.62 0.79 1.10 1.59 0.11 0.95
2025 35.27 0.82 0.17 0.33 0.03 0.13 2.80 0.71 0.91 1.26 1.83 0.13 1.08
2026 33.87 0.94 0.17 0.33 0.03 0.13 3.15 0.81 1.03 1.43 2.07 0.15 1.23
2027 32.49 1.06 0.17 0.33 0.03 0.13 3.51 0.92 1.17 1.62 2.31 0.16 1.38
2028 31.33 1.19 0.16 0.33 0.03 0.13 3.86 1.03 1.31 1.81 2.56 0.18 1.55
2029 29.98 1.32 0.15 0.33 0.03 0.13 4.22 1.15 1.46 2.02 2.80 0.20 1.72
2030 28.85 1.47 0.14 0.33 0.03 0.13 4.57 1.27 1.62 2.24 3.04 0.23 1.90
2031 27.52 1.62 0.12 0.33 0.03 0.13 4.93 1.40 1.78 2.47 3.29 0.25 2.09
2032 26.61 1.77 0.10 0.33 0.03 0.13 5.28 1.54 1.96 2.71 3.53 0.27 2.28
2033 25.51 1.94 0.08 0.33 0.03 0.13 5.63 1.68 2.14 2.96 3.78 0.30 2.47
2034 24.41 2.11 0.06 0.33 0.03 0.13 5.99 1.83 2.33 3.22 4.02 0.33 2.67
2035 23.32 2.29 0.04 0.33 0.03 0.13 6.34 1.98 2.52 3.50 4.26 0.35 2.86
2036 22.22 2.48 0.03 0.33 0.03 0.13 6.70 2.15 2.73 3.77 4.51 0.38 3.05
2037 21.34 2.67 0.02 0.33 0.03 0.13 7.05 2.31 2.95 4.05 4.75 0.41 3.25
2038 20.26 2.87 0.01 0.33 0.03 0.13 7.41 2.49 3.17 4.33 4.99 0.44 3.44
2039 19.20 3.07 0.00 0.33 0.03 0.13 7.74 2.66 3.40 4.62 5.24 0.48 3.63
2040 18.21 3.27 0.00 0.33 0.03 0.13 8.03 2.84 3.64 4.90 5.48 0.51 3.82
2041 17.33 3.47 0.00 0.33 0.03 0.13 8.24 3.03 3.88 5.18 5.69 0.54 4.02
2042 16.80 3.68 0.00 0.33 0.03 0.13 8.38 3.21 4.14 5.46 5.85 0.58 4.21
2043 16.20 3.88 0.00 0.33 0.03 0.13 8.44 3.40 4.40 5.74 5.95 0.61 4.40
2044 15.71 4.08 0.00 0.33 0.03 0.13 8.46 3.58 4.67 6.02 6.01 0.65 4.59
2045 15.30 4.28 0.00 0.33 0.03 0.13 8.46 3.77 4.95 6.30 6.02 0.68 4.78
2046 14.92 4.49 0.00 0.33 0.03 0.13 8.46 3.95 5.23 6.59 6.02 0.72 4.96
2047 14.83 4.69 0.00 0.33 0.03 0.13 8.46 4.14 5.52 6.87 6.02 0.75 5.12
2048 14.46 4.89 0.00 0.33 0.02 0.13 8.46 4.33 5.80 7.15 6.02 0.79 5.24
2049 14.60 5.09 0.00 0.33 0.02 0.13 8.46 4.51 6.09 7.43 6.02 0.82 5.32
2050 14.63 5.30 0.00 0.33 0.02 0.13 8.46 4.70 6.38 7.70 6.02 0.86 5.37

116
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Climate Risk
Table 9: Simulation mean result for the annual emissions abatements of
all non-energy generation sectors in the minus 63% scenario (GtCO2-e/yr).

Land Use,
Reduced Metals Non-Metals
Avoided Shipping Vehicle Buildings Land Use
Year Use of Industry Industry Agriculture Waste Fugitive
Aviation Efficiency Efficiency Efficiency Change and
Vehicles Efficiency Efficiency
Forestry

2010 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2011 0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.22 0.38 0.09 0.17
2012 0.11 0.01 0.01 0.02 0.00 0.02 0.01 0.45 0.75 0.19 0.34
2013 0.30 0.02 0.03 0.09 0.01 0.05 0.04 0.67 1.13 0.28 0.51
2014 0.55 0.03 0.05 0.22 0.02 0.10 0.07 0.89 1.50 0.37 0.68
2015 0.81 0.05 0.09 0.40 0.05 0.16 0.12 1.11 1.87 0.47 0.85
2016 1.06 0.08 0.13 0.64 0.09 0.25 0.19 1.34 2.22 0.56 1.02
2017 1.27 0.12 0.19 0.92 0.15 0.35 0.26 1.56 2.57 0.66 1.19
2018 1.44 0.15 0.25 1.22 0.22 0.46 0.35 1.78 2.91 0.75 1.36
2019 1.56 0.20 0.32 1.53 0.31 0.59 0.44 2.00 3.23 0.84 1.53
2020 1.64 0.24 0.40 1.84 0.41 0.73 0.55 2.23 3.55 0.94 1.70
2021 1.68 0.29 0.50 2.15 0.54 0.87 0.66 2.45 3.85 1.03 1.87
2022 1.69 0.33 0.60 2.45 0.67 1.03 0.77 2.67 4.15 1.12 2.03
2023 1.70 0.37 0.71 2.75 0.83 1.18 0.89 2.90 4.43 1.20 2.17
2024 1.70 0.42 0.82 3.03 1.00 1.35 1.02 3.12 4.69 1.26 2.29
2025 1.70 0.46 0.95 3.29 1.19 1.51 1.14 3.34 4.95 1.31 2.38
2026 1.70 0.51 1.09 3.52 1.39 1.67 1.26 3.56 5.20 1.35 2.44
2027 1.70 0.55 1.24 3.72 1.60 1.84 1.39 3.79 5.43 1.36 2.47
2028 1.70 0.60 1.39 3.89 1.83 2.00 1.51 4.01 5.65 1.37 2.49
2029 1.70 0.64 1.55 4.02 2.07 2.16 1.63 4.23 5.86 1.38 2.50
2030 1.70 0.68 1.71 4.13 2.32 2.31 1.75 4.45 6.06 1.38 2.50
2031 1.70 0.72 1.87 4.20 2.57 2.46 1.86 4.68 6.24 1.38 2.50
2032 1.70 0.76 2.03 4.25 2.82 2.61 1.98 4.90 6.41 1.38 2.50
2033 1.70 0.79 2.19 4.29 3.07 2.75 2.08 5.12 6.57 1.38 2.50
2034 1.70 0.82 2.35 4.31 3.33 2.89 2.19 5.35 6.72 1.38 2.50
2035 1.70 0.84 2.51 4.32 3.58 3.02 2.29 5.57 6.85 1.38 2.50
2036 1.70 0.85 2.67 4.33 3.84 3.15 2.39 5.79 6.97 1.38 2.50
2037 1.70 0.87 2.83 4.33 4.09 3.27 2.48 6.01 7.08 1.38 2.50
2038 1.70 0.87 2.99 4.33 4.35 3.39 2.57 6.24 7.17 1.38 2.50
2039 1.70 0.88 3.15 4.33 4.60 3.50 2.66 6.46 7.25 1.38 2.50
2040 1.70 0.88 3.31 4.33 4.86 3.60 2.74 6.68 7.31 1.38 2.50
2041 1.70 0.89 3.47 4.33 5.11 3.70 2.81 6.90 7.37 1.38 2.50
2042 1.70 0.89 3.63 4.33 5.36 3.79 2.88 7.13 7.41 1.38 2.50
2043 1.70 0.89 3.79 4.33 5.62 3.88 2.95 7.35 7.44 1.38 2.50
2044 1.70 0.89 3.95 4.33 5.87 3.96 3.01 7.57 7.47 1.38 2.50
2045 1.70 0.89 4.11 4.33 6.13 4.04 3.07 7.80 7.48 1.38 2.50
2046 1.70 0.89 4.27 4.33 6.38 4.10 3.12 8.01 7.49 1.38 2.50
2047 1.70 0.89 4.43 4.33 6.63 4.17 3.17 8.18 7.50 1.38 2.50
2048 1.70 0.89 4.59 4.33 6.88 4.23 3.22 8.27 7.50 1.38 2.50
2049 1.70 0.89 4.75 4.33 7.13 4.28 3.26 8.30 7.50 1.38 2.50
2050 1.70 0.89 4.91 4.33 7.37 4.33 3.29 8.31 7.50 1.38 2.50

117
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Climate Risk
 Table 10: Simulation mean result for annual energy production from
low-carbon industries in the minus 63% scenario (GWh/yr).

Residual
Solar Building Domestic Sea and
Fossil Fossil Large Repowering Small Geo- Bio-
Year Nuclear Wind Power Integrated Solar Ocean
Fuels with with CCS Hydro Large Hydro Hydro thermal Hydrocarbons
Stations Solar PV Thermal Energy
no CCS

2010 9.48E+07 5107 2324791 3591009 0 531392 485764 60870 1840 31846 294414 2333 10395322

2011 9.80E+07 24032 2329659 3636272 481 546383 527684 71540 15408 50654 321685 4235 10411032

2012 1.00E+08 80808 2346580 3767704 3359 591347 653444 103548 56112 107078 403497 9943 10458159

2013 1.01E+08 175435 2373832 3937364 9549 654651 863043 156895 123952 201117 539851 19457 10536706

2014 1.02E+08 307912 2409787 4107754 18787 718397 1156483 231581 218928 332772 730747 32776 10646671

2015 1.01E+08 478240 2452125 4276974 30051 782143 1533763 327605 341041 502043 976184 49900 10788055

2016 1.00E+08 686419 2498325 4436805 42161 845889 1994883 444969 490289 708930 1276163 70830 10960857

2017 9.86E+07 932448 2545689 4572680 54399 909527 2539842 583671 666673 953433 1630684 95566 11165078

2018 9.66E+07 1216329 2592053 4664340 66295 962062 3168642 743712 870194 1235551 2039747 124106 11400717

2019 9.43E+07 1538059 2636402 4695644 77400 980789 3881282 925091 1100850 1555285 2503351 156453 11667775

2020 9.18E+07 1897641 2678101 4697409 87310 982118 4677761 1127810 1358643 1912634 3021496 192604 11966251

2021 8.92E+07 2295073 2716370 4697409 95722 982118 5558081 1351867 1643571 2307600 3594183 232561 12296146

2022 8.62E+07 2730356 2750392 4697409 102407 982118 6522240 1597263 1955636 2740181 4221412 276324 12657460

2023 8.29E+07 3203489 2778762 4697409 107288 982118 7570186 1863998 2294837 3210378 4903183 323891 13050192

2024 7.93E+07 3714474 2799718 4697409 110456 982118 8697731 2152072 2661173 3718191 5639495 375265 13474343

2025 7.54E+07 4263308 2811093 4697409 112132 982118 9876754 2461484 3054646 4263619 6430349 430444 13929913

2026 7.14E+07 4849994 2811184 4697409 112616 982118 11068050 2792235 3475255 4846664 7248474 489428 14416901

2027 6.72E+07 5474530 2797494 4697409 112249 982118 12259800 3144325 3923000 5467324 8066598 552217 14935307

2028 6.29E+07 6136917 2768192 4697409 111315 982118 13451550 3517754 4397881 6125599 8884723 618812 15485125

2029 5.85E+07 6837155 2722432 4697409 110028 982118 14643300 3912522 4899898 6821491 9702848 689213 16065932

2030 5.41E+07 7575243 2659534 4697409 108541 982118 15835050 4328628 5429051 7554998 10520972 763419 16675279

2031 5.00E+07 8351182 2579810 4697409 106962 982118 17026799 4766066 5985340 8326118 11339097 841430 17306269

2032 4.60E+07 9164972 2484667 4697409 105370 982118 18218549 5224797 6568765 9134817 12157222 923247 17949311

2033 4.19E+07 10016612 2379209 4697409 103798 982118 19410299 5704732 7179327 9980684 12975346 1008869 18596231

2034 3.78E+07 10906101 2272718 4697409 102249 982118 20602049 6205680 7817024 10861713 13793471 1098297 19243374

2035 3.36E+07 11833232 2171300 4697409 100725 982118 21793799 6727292 8481857 11772327 14611596 1191530 19890517

2036 2.94E+07 12796079 2075011 4697409 99223 982118 22985549 7268938 9173827 12703161 15429721 1288568 20537659

2037 2.52E+07 13789564 1983572 4697409 97744 982118 24177215 7829549 9892932 13644220 16247845 1389412 21184802

2038 2.10E+07 14805638 1896715 4697409 96288 982118 25362805 8407612 10639174 14588662 17065970 1494061 21831945

2039 1.68E+07 15835147 1814192 4697409 94853 982118 26492620 9001043 11412552 15533839 17884095 1602504 22479087

2040 1.28E+07 16870728 1735767 4697409 93441 982118 27454604 9607097 12213065 16479100 18696523 1714568 23126230

2041 1.00E+07 17908349 1661218 4697409 92050 982118 28170722 10222493 13040714 17424363 19397877 1829570 23773373

2042 7.68E+06 18946271 1590336 4697409 90680 982118 28628485 10843833 13895470 18369626 19926381 1946273 24420516

2043 5.77E+06 19984196 1522924 4697409 89331 982118 28846916 11467995 14777115 19314889 20281937 2063620 25067611

2044 4.21E+06 21022121 1458797 4697409 88002 982118 28904387 12093005 15684731 20260152 20464641 2181117 25712945

2045 2.86E+06 22060046 1397778 4697409 86693 982118 28909239 12718137 16615800 21205415 20497107 2298629 26347602

2046 1.61E+06 23097972 1339703 4697409 85404 982118 28909251 13343251 17565233 22150667 20497108 2416141 26946157

2047 4.52E+05 24135897 1284416 4697409 84135 982118 28909251 13968207 18525892 23095821 20497108 2533653 27470213

2048 0 25173822 1231770 4697409 82885 982118 28909251 14592670 19491171 24039649 20497108 2651165 27883859

2049 0 26211746 1181627 4697409 81654 982118 28909251 15215915 20457697 24975395 20497108 2768677 28168934

2050 0 27249267 1133855 4697409 80442 982118 28909251 15836511 21424374 25881676 20497108 2886189 28334175

118
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Climate Risk
 Table 11: Simulation mean result for annual energy savings and avoidance
from non-energy generation activities in the minus 63% scenario (GWh/yr).

Reduced Metals Non-Metals

Avoided Shipping Vehicle Buildings
Year Use of Industry Industry
Aviation Efficiency Efficiency Efficiency
Vehicles Efficiency Efficiency

2010 0 0 0 0 0 0 0
2011 54568 2800 4582 5129 316 8593 6263
2012 375181 19225 31324 77986 4987 58659 43461
2013 1020603 54426 88526 309020 25147 165624 123362
2014 1858005 108806 176815 732615 74558 330584 246821
2015 2733384 182364 296191 1349567 164502 553502 413808
2016 3553995 275102 446653 2143854 302706 833491 623762
2017 4269445 386969 628203 3074513 493756 1167281 874347
2018 4843374 516700 840839 4084217 739210 1549914 1162035
2019 5252470 659377 1084562 5123829 1039175 1975448 1482456
2020 5503508 808079 1359372 6169253 1393651 2437266 1830860
2021 5632389 958280 1665269 7210741 1802637 2929044 2202489
2022 5687045 1108630 2002252 8236388 2266135 3444613 2592758
2023 5704882 1258983 2370323 9228815 2784140 3978220 2996908
2024 5708629 1409335 2769480 10168063 3356595 4523134 3409907
2025 5708979 1559688 3199724 11035010 3982993 5073416 3827189
2026 5708983 1710033 3661055 11813085 4661615 5624239 4244964
2027 5708983 1860155 4153323 12489839 5388282 6171458 4660314
2028 5708983 2009103 4673194 13056748 6156243 6711801 5070989
2029 5708983 2154952 5207950 13512214 6957144 7242960 5474963
2030 5708983 2295163 5745691 13861603 7781958 7762977 5870759
2031 5708983 2426569 6283542 14115955 8622051 8270320 6257203
2032 5708983 2545782 6821393 14290739 9470731 8763568 6633361
2033 5708983 2650090 7359244 14403339 10323471 9241477 6998377
2034 5708983 2737968 7897095 14470974 11177769 9702976 7351495
2035 5708983 2809180 8434946 14508205 12032517 10147424 7692096
2036 5708983 2864586 8972797 14526149 12887353 10574211 8019552
2037 5708983 2905777 9510648 14533199 13742197 10982588 8333510
2038 5708983 2934775 10048498 14535556 14597041 11371915 8633612
2039 5708983 2954028 10586349 14536126 15451885 11741966 8919363
2040 5708983 2966041 11124200 14536203 16306728 12092855 9190370
2041 5708983 2972991 11662051 14536204 17161572 12424520 9446432
2042 5708983 2976629 12199902 14536204 18016393 12736852 9687130
2043 5708983 2978256 12737753 14536204 18871112 13029401 9912147
2044 5708983 2978837 13275604 14536204 19725323 13301801 10121562
2045 5708983 2978965 13813455 14536204 20578349 13554034 10315558
2046 5708983 2978977 14351305 14536204 21429092 13786706 10494279
2047 5708983 2978977 14889156 14536204 22275710 14000530 10658035
2048 5708983 2978977 15427007 14536204 23115580 14196294 10807251
2049 5708983 2978977 15964858 14536204 23945449 14374702 10942432
2050 5708983 2978977 16502709 14536204 24761460 14536455 11064305

119
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Climate Risk
Table 12: Simulation mean result for the annual emissions abatements of
low-carbon energy generation in the minus 80% scenario (GtCO2-e/yr).

Fossil Solar Building Domestic Sea and

Residual Large Repowering Small Geo- Bio-
Year with Nuclear Wind Power Integrated Solar Ocean
Emissions Hydro Large Hydro Hydro thermal Hydrocarbons
CCS Stations Solar PV Thermal Energy

2010 48.19 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.03
2011 48.36 0.00 0.00 0.01 0.00 0.00 0.01 0.00 0.00 0.01 0.01 0.00 0.04
2012 48.04 0.01 0.01 0.06 0.00 0.02 0.06 0.01 0.02 0.03 0.04 0.00 0.05
2013 47.18 0.01 0.02 0.11 0.00 0.04 0.13 0.03 0.04 0.06 0.08 0.01 0.08
2014 46.46 0.02 0.03 0.16 0.01 0.06 0.23 0.06 0.08 0.10 0.14 0.01 0.12
2015 45.52 0.04 0.05 0.21 0.01 0.08 0.36 0.09 0.12 0.16 0.22 0.02 0.17
2016 43.97 0.05 0.06 0.26 0.01 0.10 0.52 0.13 0.17 0.24 0.32 0.02 0.23
2017 42.49 0.07 0.08 0.30 0.02 0.12 0.70 0.18 0.23 0.32 0.44 0.03 0.30
2018 40.90 0.09 0.09 0.32 0.02 0.13 0.92 0.24 0.31 0.42 0.57 0.04 0.38
2019 39.26 0.12 0.11 0.33 0.02 0.13 1.16 0.30 0.39 0.53 0.73 0.05 0.48
2020 37.75 0.14 0.12 0.33 0.03 0.13 1.44 0.37 0.48 0.65 0.90 0.07 0.58
2021 36.16 0.17 0.14 0.33 0.03 0.13 1.74 0.45 0.58 0.79 1.08 0.08 0.69
2022 34.50 0.21 0.15 0.33 0.03 0.13 2.07 0.53 0.69 0.94 1.29 0.10 0.82
2023 32.99 0.24 0.16 0.33 0.03 0.13 2.43 0.63 0.81 1.10 1.51 0.11 0.96
2024 31.23 0.28 0.17 0.33 0.03 0.13 2.81 0.73 0.94 1.28 1.76 0.13 1.10
2025 29.67 0.32 0.17 0.33 0.03 0.13 3.19 0.83 1.07 1.47 2.02 0.15 1.26
2026 27.93 0.37 0.17 0.33 0.03 0.13 3.58 0.95 1.22 1.67 2.28 0.17 1.43
2027 26.21 0.42 0.17 0.33 0.03 0.13 3.96 1.07 1.38 1.89 2.55 0.19 1.61
2028 24.72 0.47 0.16 0.33 0.03 0.13 4.35 1.20 1.55 2.12 2.82 0.22 1.80
2029 23.06 0.52 0.15 0.33 0.03 0.13 4.73 1.34 1.72 2.36 3.09 0.24 2.01
2030 21.62 0.57 0.13 0.33 0.03 0.13 5.12 1.48 1.91 2.61 3.36 0.27 2.21
2031 20.00 0.63 0.11 0.33 0.03 0.13 5.50 1.64 2.11 2.88 3.63 0.29 2.42
2032 18.82 0.68 0.08 0.33 0.03 0.13 5.89 1.80 2.31 3.16 3.90 0.32 2.64
2033 17.46 0.74 0.06 0.33 0.03 0.13 6.28 1.96 2.53 3.45 4.17 0.35 2.85
2034 16.12 0.79 0.04 0.33 0.03 0.13 6.66 2.14 2.75 3.75 4.43 0.38 3.06
2035 14.80 0.85 0.03 0.33 0.03 0.13 7.05 2.32 2.98 4.06 4.70 0.41 3.27
2036 13.51 0.90 0.02 0.33 0.03 0.13 7.43 2.50 3.23 4.36 4.97 0.45 3.48
2037 12.47 0.96 0.01 0.33 0.03 0.13 7.80 2.69 3.48 4.67 5.24 0.48 3.69
2038 11.32 1.01 0.00 0.33 0.03 0.13 8.11 2.89 3.74 4.97 5.51 0.52 3.90
2039 10.30 1.07 0.00 0.33 0.03 0.13 8.33 3.09 4.02 5.28 5.77 0.56 4.11
2040 9.46 1.12 0.00 0.33 0.03 0.13 8.46 3.29 4.30 5.58 5.99 0.60 4.32
2041 8.80 1.18 0.00 0.33 0.03 0.13 8.51 3.49 4.59 5.89 6.14 0.63 4.54
2042 8.45 1.23 0.00 0.33 0.03 0.13 8.52 3.69 4.89 6.19 6.23 0.67 4.75
2043 8.03 1.28 0.00 0.33 0.03 0.13 8.52 3.90 5.20 6.50 6.26 0.71 4.95
2044 7.67 1.33 0.00 0.33 0.03 0.13 8.52 4.10 5.51 6.81 6.26 0.75 5.13
2045 7.39 1.36 0.00 0.33 0.03 0.13 8.52 4.30 5.82 7.11 6.26 0.79 5.28
2046 7.18 1.39 0.00 0.33 0.03 0.13 8.52 4.50 6.14 7.41 6.26 0.82 5.38
2047 7.27 1.40 0.00 0.33 0.02 0.13 8.52 4.70 6.45 7.71 6.26 0.86 5.44
2048 7.15 1.41 0.00 0.33 0.02 0.13 8.52 4.90 6.77 7.98 6.26 0.90 5.46
2049 7.50 1.41 0.00 0.33 0.02 0.13 8.52 5.10 7.08 8.20 6.26 0.94 5.47
2050 7.78 1.41 0.00 0.33 0.02 0.13 8.52 5.28 7.40 8.36 6.26 0.98 5.47

120
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Climate Risk
Table 13: Simulation mean result for the annual emissions abatements of
all non-energy generation sectors in the minus 80% scenario (GtCO2-e/yr).

Non- Land Use,

Reduced Metals
Avoided Shipping Vehicle Buildings Metals Land Use
Year Use of Industry Agriculture Waste Fugitive
Aviation Efficiency Efficiency Efficiency Industry Change and
Vehicles Efficiency
Efficiency Forestry

2010 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2011 0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.22 0.68 0.09 0.17
2012 0.13 0.01 0.01 0.02 0.00 0.02 0.01 0.45 1.36 0.19 0.34
2013 0.34 0.02 0.03 0.10 0.01 0.05 0.04 0.67 2.04 0.28 0.51
2014 0.61 0.03 0.06 0.23 0.03 0.10 0.08 0.89 2.71 0.37 0.68
2015 0.90 0.05 0.10 0.42 0.05 0.17 0.14 1.11 3.37 0.47 0.85
2016 1.17 0.08 0.15 0.67 0.10 0.26 0.21 1.34 4.01 0.56 1.02
2017 1.41 0.12 0.21 0.96 0.16 0.37 0.29 1.56 4.64 0.65 1.19
2018 1.59 0.15 0.28 1.27 0.24 0.49 0.39 1.78 5.25 0.75 1.36
2019 1.72 0.20 0.36 1.59 0.34 0.63 0.49 2.01 5.85 0.84 1.53
2020 1.80 0.24 0.45 1.92 0.45 0.77 0.61 2.23 6.43 0.94 1.70
2021 1.84 0.29 0.55 2.24 0.59 0.93 0.73 2.45 6.98 1.03 1.87
2022 1.86 0.33 0.66 2.56 0.74 1.10 0.86 2.68 7.51 1.12 2.03
2023 1.87 0.38 0.78 2.87 0.91 1.27 0.99 2.90 8.02 1.19 2.18
2024 1.87 0.42 0.91 3.16 1.09 1.45 1.13 3.12 8.51 1.26 2.29
2025 1.87 0.47 1.05 3.42 1.30 1.62 1.27 3.34 8.98 1.31 2.39
2026 1.87 0.51 1.20 3.66 1.52 1.80 1.40 3.57 9.42 1.35 2.44
2027 1.87 0.56 1.36 3.87 1.76 1.98 1.54 3.79 9.84 1.36 2.48
2028 1.87 0.60 1.54 4.04 2.01 2.16 1.68 4.01 10.24 1.37 2.49
2029 1.87 0.64 1.71 4.18 2.27 2.33 1.81 4.24 10.61 1.38 2.50
2030 1.87 0.69 1.89 4.28 2.54 2.50 1.94 4.46 10.96 1.38 2.50
2031 1.87 0.72 2.07 4.36 2.81 2.66 2.07 4.68 11.29 1.38 2.50
2032 1.87 0.76 2.24 4.41 3.09 2.83 2.19 4.90 11.59 1.38 2.50
2033 1.87 0.79 2.42 4.45 3.37 2.98 2.31 5.13 11.88 1.38 2.50
2034 1.87 0.82 2.60 4.47 3.64 3.14 2.42 5.35 12.14 1.38 2.50
2035 1.87 0.84 2.77 4.48 3.92 3.28 2.53 5.57 12.38 1.38 2.50
2036 1.87 0.86 2.95 4.48 4.20 3.43 2.64 5.80 12.59 1.38 2.50
2037 1.87 0.87 3.13 4.49 4.48 3.56 2.74 6.02 12.78 1.38 2.50
2038 1.87 0.88 3.30 4.49 4.76 3.69 2.84 6.24 12.95 1.38 2.50
2039 1.87 0.88 3.48 4.49 5.04 3.82 2.93 6.47 13.09 1.38 2.50
2040 1.87 0.89 3.66 4.49 5.32 3.93 3.02 6.69 13.21 1.38 2.50
2041 1.87 0.89 3.83 4.49 5.60 4.05 3.10 6.91 13.31 1.38 2.50
2042 1.87 0.89 4.01 4.49 5.88 4.15 3.18 7.13 13.38 1.38 2.50
2043 1.87 0.89 4.19 4.49 6.15 4.25 3.25 7.36 13.44 1.38 2.50
2044 1.87 0.89 4.36 4.49 6.43 4.34 3.32 7.58 13.49 1.38 2.50
2045 1.87 0.89 4.54 4.49 6.71 4.43 3.38 7.80 13.52 1.38 2.50
2046 1.87 0.89 4.72 4.49 6.99 4.50 3.44 8.02 13.54 1.38 2.50
2047 1.87 0.89 4.89 4.49 7.27 4.58 3.49 8.19 13.55 1.38 2.50
2048 1.87 0.89 5.07 4.49 7.54 4.64 3.54 8.28 13.56 1.38 2.50
2049 1.87 0.89 5.25 4.49 7.81 4.70 3.58 8.31 13.56 1.38 2.50
2050 1.87 0.89 5.42 4.49 8.08 4.76 3.62 8.31 13.56 1.38 2.50

121
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Table 14: Simulation mean result for annual energy production from low-
carbon industries in the minus 80% scenario (GWh/yr).

Residual
Fossil Fossil Solar Building Domestic Sea and
Large Repowering Small Geo- Bio-
Year Fuels with Nuclear Wind Power Integrated Solar Ocean
Hydro Large Hydro Hydro thermal Hydrocarbons
with no CCS Stations Solar PV Thermal Energy
CCS

2010 9.48E+07 5113 2321828 3603448 0 530974 484065 60880 1839 31869 293532 2338 10395322

2011 9.79E+07 12554 2327147 3650919 501 546670 532297 73340 17874 53805 323617 4568 10413697

2012 1.00E+08 34876 2345536 3788456 3411 593744 676992 110719 65977 119614 413871 11258 10468823

2013 1.01E+08 72080 2375182 3963624 9609 659130 918151 173017 146149 229295 564295 22407 10560698

2014 1.01E+08 124165 2414360 4139292 18827 724839 1255774 260235 258390 382848 774888 38017 10689324

2015 1.01E+08 191132 2460475 4313494 30069 790547 1689860 372371 402699 580274 1045651 58086 10854699

2016 9.92E+07 272980 2510230 4476532 42151 856256 2220410 509427 579078 821572 1376583 82616 11056825

2017 9.72E+07 369710 2560604 4610664 54337 921523 2847423 671403 787525 1106743 1767685 111605 11295701

2018 9.49E+07 481322 2609941 4690939 66205 969772 3570900 858297 1028042 1435785 2218956 145054 11571327

2019 9.23E+07 607815 2657263 4710891 77329 982264 4390841 1070111 1300627 1808701 2730396 182963 11883703

2020 8.94E+07 749189 2701693 4711148 87300 982630 5307245 1306844 1605280 2225488 3302006 225331 12232830

2021 8.64E+07 905445 2742168 4711148 95764 982630 6320113 1568497 1942003 2686148 3933786 272160 12618707

2022 8.31E+07 1076582 2777457 4711148 102473 982630 7429440 1855068 2310795 3190681 4625735 323448 13041333

2023 7.94E+07 1262601 2805957 4711148 107355 982630 8633216 2166559 2711655 3739085 5377853 379197 13500710

2024 7.54E+07 1463502 2825705 4711148 110493 982630 9906840 2502970 3144584 4331363 6190141 439405 13996837

2025 7.11E+07 1679284 2833914 4711148 112116 982630 11200726 2864299 3609582 4967512 7062599 504073 14529714

2026 6.66E+07 1909947 2826945 4711148 112545 982630 12495538 3250548 4106649 5647534 7965141 573201 15099342

2027 6.20E+07 2155344 2802003 4711148 112137 982630 13790349 3661716 4635785 6371428 8867683 646789 15705706

2028 5.74E+07 2414338 2757816 4711148 111173 982630 15085161 4097804 5196989 7139195 9770225 724836 16348147

2029 5.26E+07 2684215 2694142 4711148 109868 982630 16379972 4558808 5790262 7950834 10672768 807344 17022872

2030 4.79E+07 2961237 2613106 4711148 108367 982630 17674784 5044716 6415605 8806339 11575310 894311 17720190

2031 4.35E+07 3241807 2517554 4711148 106785 982630 18969595 5555480 7073016 9705578 12477852 985738 18427832

2032 3.92E+07 3523612 2412871 4711148 105189 982630 20264407 6090962 7762495 10647348 13380394 1081625 19137143

2033 3.49E+07 3805646 2309054 4711148 103614 982630 21559219 6650819 8484044 11626632 14282936 1181972 19846461

2034 3.05E+07 4087687 2210222 4711148 102062 982630 22854030 7234299 9237661 12632938 15185478 1286779 20555779

2035 2.62E+07 4369728 2116137 4711148 100534 982630 24148822 7840131 10023348 13653591 16088021 1396046 21265098

2036 2.19E+07 4651768 2026556 4711148 99030 982630 25439411 8466440 10841103 14678966 16990563 1509772 21974416

2037 1.77E+07 4933809 1941244 4711148 97548 982630 26674721 9110583 11690927 15705217 17893105 1627942 22683734

2038 1.36E+07 5215849 1859983 4711148 96089 982630 27716145 9769202 12572819 16731540 18795647 1750319 23393052

2039 9.88E+06 5497890 1782565 4711148 94653 982630 28463569 10438324 13486779 17757865 19680856 1875930 24102370

2040 6.64E+06 5779890 1708792 4711148 93238 982630 28904473 11113461 14432762 18784189 20399998 2003182 24811688

2041 4.79E+06 6060598 1638480 4711148 91845 982630 29077479 11790915 15410357 19810514 20909347 2130921 25520763

2042 3.33E+06 6334184 1571452 4711148 90473 982630 29106261 12468878 16417821 20836839 21208901 2258730 26225219

2043 2.15E+06 6589144 1507542 4711148 89122 982630 29106990 13146885 17450377 21863163 21303178 2386539 26906031

2044 1.20E+06 6809924 1446593 4711148 87791 982630 29106990 13824814 18499877 22889444 21304050 2514349 27520177

2045 4.35E+05 6982255 1388456 4711148 86481 982630 29106990 14502426 19557311 23914949 21304050 2642159 28015523

2046 4.35E+05 7100183 1332989 4711148 85190 982630 29106990 15179057 20616945 24933490 21304050 2769969 28357820

2047 4.35E+05 7168732 1280059 4711148 83919 982630 29106990 15853016 21676923 25920098 21304050 2897778 28552600

2048 4.35E+05 7200899 1229540 4711148 82668 982630 29106990 16520564 22736922 26822041 21304050 3025588 28633695

2049 5.15E+04 7212319 1181312 4711148 81435 982630 29106990 17175228 23796921 27573688 21304050 3153398 28651622

2050 6.68E+05 7214912 1135261 4711148 80222 982630 29106990 17807379 24856920 28125142 21304050 3281208 28652230

122
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 Table 15: Simulation mean result for annual energy savings and avoidance
from non-energy generation activities in the minus 80% scenario (GWh/yr).

Reduced Metals Non-Metals

Avoided Shipping Vehicle Buildings
Year Use of Industry Industry
Aviation Efficiency Efficiency Efficiency
Vehicles Efficiency Efficiency

2010 0 0 0 0 0 0 0
2011 63132 2791 5070 5741 347 9154 7112
2012 421270 19145 34668 82789 5837 61940 48630
2013 1135932 54339 97884 325372 28833 175107 137888
2014 2060263 108784 195400 769942 83998 349979 275918
2015 3026460 182478 327217 1416978 182977 586532 462663
2016 3934351 275422 493334 2248232 334386 883968 697280
2017 4723282 387553 693752 3220225 543386 1239268 977273
2018 5348011 517558 928471 4272733 811925 1647265 1298225
2019 5787671 660643 1197491 5356633 1140156 2102265 1655157
2020 6056553 809879 1500811 6446486 1528080 2597927 2042624
2021 6195209 960630 1838433 7531038 1975695 3127647 2455522
2022 6253781 1111519 2210354 8596970 2483003 3684892 2888465
2023 6272575 1262411 2616577 9625859 3050003 4262730 3336057
2024 6276656 1413302 3057100 10597179 3676655 4854122 3793197
2025 6277097 1564193 3531924 11492031 4362445 5452560 4255107
2026 6277107 1715073 4041049 12294166 5105381 6052256 4717422
2027 6277107 1865677 4584331 12990021 5901190 6648927 5176637
2028 6277107 2015004 5158059 13571280 6742585 7239082 5630020
2029 6277107 2161292 5748330 14036431 7619960 7820042 6075365
2030 6277107 2301975 6341982 14391243 8523014 8389950 6510953
2031 6277107 2433912 6935767 14648028 9442589 8947523 6935638
2032 6277107 2553715 7529553 14823571 10371674 9491464 7348473
2033 6277107 2658571 8123338 14936200 11305367 10020282 7748478
2034 6277107 2747055 8717123 15003902 12241001 10532797 8134984
2035 6277107 2818850 9310908 15041219 13177344 11028090 8507484
2036 6277107 2874663 9904694 15059299 14113850 11505273 8865374
2037 6277107 2916096 10498479 15066662 15050367 11963502 9208022
2038 6277107 2945279 11092264 15068917 15986884 12401979 9534781
2039 6277107 2964602 11686049 15069278 16923401 12819633 9845210
2040 6277107 2976550 12279834 15069297 17859918 13215815 10139078
2041 6277107 2983410 12873620 15069297 18796435 13590373 10416426
2042 6277107 2986964 13467405 15069297 19732944 13943022 10677235
2043 6277107 2988503 14061190 15069297 20669363 14273372 10921257
2044 6277107 2989001 14654975 15069297 21605448 14581080 11148315
2045 6277107 2989103 15248760 15069297 22540460 14866233 11358507
2046 6277107 2989113 15842546 15069297 23472994 15129133 11552152
2047 6277107 2989113 16436331 15069297 24400965 15370250 11729667
2048 6277107 2989113 17030116 15069297 25321581 15590272 11891673
2049 6277107 2989113 17623901 15069297 26231429 15790138 12038837
2050 6277107 2989113 18217687 15069297 27126643 15970897 12171878

123
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Climate Risk
0.35
Figure 87: End-user
price of electricity for
0.3 households in various
IEA countries (IEA
2006a).
0.25

0.2

0.15

0.1

Climate Solutions 2: Low-Carbon Re-Industrialisation

0.05

Electricity cost for households (US$/kWh)

0
lia tria p ei lic ark nd ce ny ce ar y n d a ly an re a rg ico d s nd a y nd ga l lic y s
ain and ke om te
ts ra us Ta i pu b nm inla Fra n r ma re e ng rela It Jap Ko bo u ex rlan eala o rw ola rtu p ub Sp er l Tur gd Sta
A e F G I m N P Po e n
Au s Re De Ge Hu xe
M he Z
kR it z Ki ed
i ne ch u Net ew Sw ed n it
h z e L N ova it U
C C Sl Un

124
Climate Risk
70 Fuel Figure 88: Coal-fired
Operation and Maintenance electricity generation
60 costs for various IEA
Investment countries (IEA/OECD
2005).

50

40

30

Climate Solutions 2: Low-Carbon Re-Industrialisation

US$/MWh
20

10

0
-C 1 2 1 2 3 4 1 2 1 2 3 -C C1 C2 C C 1 2
N A-C A-C C1 C2 C3 C4 -C -C C1 C2 C C C C -C -C C C C N R- R- R- U- F-C F-C
CA US US Z E- ZE- ZE- ZE- NK FIN RA- RA- EU- EU- EU- EU- VK VK UR- UR- UR-
C C C C D F F D D D D S S T T T JP KO KO BG RO ZA ZA

125
 2.5 Europe Figure 89: End-user
prices for fossil-diesel
Japan in various world regions
North America (IEA 2009).

2
US dollars/litre

1.5

0.5

0
January 06

April 06

July 06

October 06

January 07

April 07

July 07

October 07

January 08

April 08

July 08

October 08

January 09

126
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15 Appendix: Learning Rate Retardation

For most emissions abatement related to increases in materials and

solutions, the price of the technology or labour costs that were not overcome
commodity decreases as the production by the modest technical improvements
volume increases (i.e. a positive over the same period (Taylor et al. 2006).
learning rate; Taylor et al. 2006, IEA
2000). However, in some cases, there When examining the effect of relatively
can be a zero reduction in price or even moderate learning rate retardations
an increase in prices with increased in the minus 63% scenario (see Figure
production (i.e. a negative learning 91 to Figure 95), it can be seen that the
rate). This scenario has been a serious cumulative cost of renewable energy
concern for some renewable energy technologies out to 2050 jumps from
technologies, such as wind, building US$6.7 trillion for no learning rate
integrated photovoltaics (PV) and retardation, to US$63.3 trillion for
domestic solar thermal energy (Navaro 40% learning rate retardation (or from
2008, Taylor et al. 2006). US$16.7 trillion to US$79.9 trillion when
the ongoing costs of CCS are included).
From the 1970s to the early 2000s, It is worth noting that learning rate
wind energy and photovoltaic energy retardations in excess of 40% are quite
both exhibited positive learning possible (as evidenced by the greater
rates. However, more recently these than 100% learning rate retardations
technologies have suffered price shown above for PV modules).
increases due to supply shortages.
For example, photovoltaics have
experienced manufacturing and
materials constraints consistent with
supply shortage. Figure 90 illustrates
the resultant rise in the photovoltaic
module price as production increased.

Similarly, supply shortages and

commodity prices have impacted on
the wind industry where “the price of
offshore turbines rose 48 percent to
2.23 million euros (US$3.45 million)
per megawatt in the past three years
[and] land-based rotors cost 1.38
million euros per megawatt after rising
74 percent in the same period” (BTM
Consult 2008).

In the case of domestic solar thermal,

the increase in the unit cost with
increased production is thought to be

127
Climate Solutions 2: Low-Carbon Re-Industrialisation
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 100 Figure 90: Persistent
Historical prices silicon shortages and
high demand have
caused prices of PV
modules to rise in
Module price (2006US$/W)

recent years, even

1980 as production has
increased (Navaro
2008).

10

2006
2004 present: Strong demand
coupled with silicon supply
shortage leading to price
increases

1
1 10 100 1000 10 000 100 000

Cumulative production (MW)

Figure 91: Cumulative

18000 Fossil with CCS relative cost of low-
Solar Power Stations emissions technologies
Geothermal out to 2050 with no
16000
Repowering Large Hydro learning rate retardation
Cumulative relative cost (billion US$/yr)

Small Hydro
14000
in the minus 63%
Sea and Ocean Energy
scenario.
Building Integrated Solar PV
Bio-Hydrocarbons
12000
Wind

10000

8000

6000

4000

2000

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

128
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 Figure 92: Cumulative
30000 Fossil with CCS relative cost of low-
Solar Power Stations emissions technologies
Geothermal out to 2050 for a 10%
Cumulative relative cost (billion US$/yr)

25000
Repowering Large Hydro learning rate retardation
Small Hydro in the minus 63%
Sea and Ocean Energy scenario.
Building Integrated Solar PV
20000 Bio-Hydrocarbons
Wind

15000

10000

5000

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

Figure 93: Cumulative

45000 Fossil with CCS relative cost of low-
Solar Power Stations emissions technologies
Geothermal out to 2050 for a 20%
40000
Cumulative relative cost (billion US$/yr)

Repowering Large Hydro learning rate retardation

Small Hydro
in the minus 63%
35000 Sea and Ocean Energy
scenario.
Building Integrated Solar PV
Bio-Hydrocarbons
30000
Wind

25000

20000

15000

10000

5000

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

129
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 Figure 94: Cumulative
70000 Fossil with CCS relative cost of low-
Solar Power Stations emissions technologies
Geothermal out to 2050 for a 30%
Cumulative relative cost (billion US$/yr)

60000 Repowering Large Hydro learning rate retardation

Small Hydro
in the minus 63%
Sea and Ocean Energy
scenario.
Building Integrated Solar PV
50000
Bio-Hydrocarbons
Wind

40000

30000

20000

10000

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

Figure 95: Cumulative

90000 Fossil with CCS relative cost of low-
Solar Power Stations emissions technologies
Geothermal out to 2050 for a 40%
80000
Cumulative relative cost (billion US$/yr)

Repowering Large Hydro learning rate retardation

Small Hydro
in the minus 63%
70000 Sea and Ocean Energy
scenario.
Building Integrated Solar PV
Bio-Hydrocarbons
60000
Wind

50000

40000

30000

20000

10000

0
2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

130
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16 Appendix: Sustainable Industry Growth Rates

Limitations in manufacturing capacity, high industry growth rates are

resource development, labour and skills maintained, the process of equilibration
generally restrict the stable expansion will continue to be hampered as
of new industries. While exceptions incremental supply increases are quickly
may exist in the short-term, consistent outstripped by demand.
annual growth rates higher than a
certain threshold start to result in supply It is important to note that growth rates
dislocations that cause temporary price higher than 30% are possible under a
increases. In this report, this threshold “command and control” scenario, as
is assumed to occur at sustained annual has been observed historically during
growth rates of 30% (as described in times of war. However, any potential
Chapter 15). This leads to retardation increase in annual growth rates
in the expected learning rates of these achieved by forcing the reallocation of
industries as increases in production resources under such a scenario would
volumes do not achieve the previously still be limited by the finite nature of the
obtained price reduction. Even if the underlying resources in the economy.
price increases caused by supply Given the undesirable nature of such
shortages could be tolerated, industrial an outcome, this scenario has not been
limitations in the materials, labour and considered in this report.
skills required to expand production
mean that growth rates higher than 30%
are generally physically unsustainable
over the long-term.

As illustrated in Figure 96, the three

industries operating at average
annual growth rates greater than 25%
(solar PV, biodiesel and wind) have all
recently experienced supply limited
price increases and hence learning rate
retardations (Navaro 2008, BTM Consult
2008). This phenomenon is manifested
via component shortages within the
wind and photovoltaic industries, and
demand-related increases in the cost
of grain and oil feedstock for biodiesel.
Where the ultimate resource can be
expanded (this may not be the case for
biodiesel feedstock that competes with
food), short-term supply dislocations
will generally be corrected over time
and commensurate price reductions
achieved. However, where excessively

131
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 Photovoltaics Figure 96: Average
annual growth rates
Biodiesel (annual production)
of renewable energy
Wind power capacity from 2002 to
2006 (REN21 2008).
Geothermal heating

Solar hot water/heating

Ethanol (annual production)

Small hydropower

Large hydropower
Biomass power

Geothermal power

Biomass heating

0 10 20 30 40 50 60 70

Percent

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17 Appendix: WWF Definitions of Viable Resource Levels

As an organisational expert in increase carbon sequestration. However,

conservation of the natural environment, the positive impact of increasing forest
WWF has provided this project with cover is far outweighed by the negative
access to expertise and analysis on impact of deforestation (IPCC 2000) on
the degree of exploitation of natural atmospheric carbon dioxide, let alone
resources to replace fossil fuel use wider ecosystem impacts. So, while
that is compatible with the ongoing restoring forest cover is of benefit, the
environmental integrity of those primary opportunity for emissions
resources. The analysis shown in this abatement is in reduced deforestation4.
chapter was first presented in Climate
Solutions 1 and has been reproduced 17.1.2 Challenges
and updated here3. The findings of this
analysis have been used to define the • The causes of deforestation are
resource levels for environmentally wide-ranging and vary from country
sensitive resources in this report. to country. They include agricultural
expansion, cattle ranching,
17.1 Deforestation infrastructure development and
logging. These activities are driven
by both population pressures and
17.1.1 Significance
increased levels of local and foreign
Deforestation is responsible not only consumption. They are further
for significant ecosystem and species exacerbated by poor governance
loss but, also importantly, for about 20% and inadequate land-use planning.
of global greenhouse gas emissions. Governments and a wide range of
Ten countries account for 87% of market factors must be effectively
global deforestation, with Brazil and influenced to reduce these threats.
Indonesia, alone, accounting for 54% of
deforestation emissions. • The current data provided by
national governments is not globally
In general, tropical forests tend consistent. Establishing accurate
to experience the greatest rate of data and, in particular, agreeing on
deforestation. It is estimated that new globally consistent definitions
tropic forests hold over 210 GtC in their of deforestation and degradation at
vegetation and almost 500 GtC in their a forest biome level, is essential.
soils (which is often released when land-
use changes). • Bioenergy is potentially CO2 neutral.
However, the expansion of palm
Rates of deforestation have remained oil and tropical crops, such as
constant over the past two decades and sugarcane, for biofuel production
without significant, concerted action could become a significant driver
these could result in emissions of 10 Gt of deforestation. Bioenergy
of carbon dioxide per year for 50–100 developments must therefore be
years. Forests also absorb carbon appropriately regulated to prevent
dioxide, so increasing forest cover can further deforestation.

3 The contributions of the following authors are gratefully acknowledged: Jean-Philippe Denruyter (Bioenergy); Gary Kendall &
Paul Gamblin (Natural Gas); Richard Mott (Nuclear Energy); Jamie Pittock (Hydroelectricity) and Duncan Pollard (Deforestation).
4 The sustainable use of forests, while protecting and maintaining their overall structure and ecosystem functions, is not in
question.

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17.1.3 Rate of Change Achievable minus 80% scenario (Scenario B), the
It is plausible to halve the current rate range used for LULUCF is 2.3 to 24.8
of deforestation by 2015 and achieve GtCO2-e/yr, with a best estimate of 13.6
a zero rate by 2020. This would lead to GtCO2-e/yr.
cumulative emissions reductions of 55
Gt carbon dioxide by 2020 and 155 Gt
17.2 Hydroelectricity
by 2030. In contrast, to halve the rate
of deforestation by 2020, and achieve
a zero rate by 2030, would result in 17.2.1 Significance
cumulative emissions reductions of 27 This brief covers three related
Gt carbon dioxide by 2020 and 105 Gt by technologies with a proposed capacity
2030 – a significantly lower benefit. of +400 GW: repowering old hydro
dams (+30 GW proposed) and installing
Halting land clearance is a far more new small (+100 GW) and medium
effective intervention than planting and large hydro projects (+270 GW).
trees. Reforestation with fast-growing Hydroelectricity currently provides
trees at the rate of three million hectares nearly 20% of the world’s electricity. At
per year (equal to current rates) would particular sites, hydroelectricity can
result in a cumulative absorption of only provide low-greenhouse gas emissions
approximately 10 Gt carbon dioxide by electricity that is particularly useful for
2020. meeting peak loads.

The IPCC (2007) reports that “bottom- 17.2.2 Challenges

up regional studies show that forestry
mitigation options have the economic Issues that arise or constraints that
potential at costs up to US$100/tCO2-e to should apply to its widespread
contribute 1.3-4.2 GtCO2-e/yr (average deployment:
2.7 GtCO2-e/yr) in 2030. About 50% can
be achieved at a cost under US$20/ • Dams destroy the ecology of river
tCO2-e (around 1.6 GtCO2-e/yr) with large systems by changing the volume,
differences between regions. Global quality and timing of water flows
top-down models predict far higher downstream, and by blocking the
mitigation potentials of 13.8 GtCO2-e/ movement of wildlife, nutrients
yr in 2030 at carbon prices less than or and sediments. Less than 40% of
equal to US$100/tCO2-e”. the world’s longest rivers remain
free-flowing and there are over
These IPCC (2007) findings are used as 1,400 large dams planned or under
the basis for emissions abatements construction (e.g. 105 in the Yangtze
from LULUCF by 2050 in this report. The River basin ecoregion and 162 in
minus 63% scenario (Scenario A) uses northern India).
a Monte Carlo data range of 1.3 to 13.8
GtCO2-e/yr for LULUCF by 2050, with a • Dams have enormous social impacts,
best estimate of 7.6 GtCO2-e/yr. For the with 40–80 million people displaced

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 so far. Large dam proposals at many New dam proposals are controversial.
sites have been opposed by local Based on impacts in countries with
people. different degrees of hydropower
development, WWF estimates that
• Undeveloped (but not necessarily it may be possible to develop 30% of
low-impact or sustainable) the economically feasible hydropower
hydropower capacity is unevenly capacity in most river basins or nations
distributed: 60% in Asia, 17% in without unacceptable impacts, in
Africa and 13% in South America. accordance with the World Commission
Small hydropower is mostly used in on Dams guidelines5.
decentralised systems.
Around 770 GW has been installed
17.2.3 Development/Deployment out of a global economically feasible
Potential large hydropower capacity of 2,270
GW. Around 170 GW are currently under
Repowering old hydropower dams construction and 445 GW are planned
– retrofitting them with modern over 30–40 years, including many dams
equipment that can produce more with unacceptable environmental
power – is generally benign and can be impacts. WWF estimates that of the
an opportunity to reduce the original 445 GW, 250 GW of large hydropower
environmental impacts. While the sites could be developed with relatively
total contribution is relatively small low impacts. Using a similar process, a
(+30 GW), the repowering of dams can further 20 GW of medium hydropower
happen quickly and form the basis potential has also been identified.
for a broader dialogue between civil
society and financiers, industry and
17.3 Bioenergy
governments. This 30 GW contribution
estimate is based on the numbers of 20+ Biomass is the totality of plants in the
year-old hydropower-only dams on the terrestrial and marine biosphere that
International Committee on Large Dams’ use carbon dioxide, water and solar
register and assuming a conservative energy to produce organic material. It
10% increased production between now also includes animals and agents of
(~20 GW) and 2025 (+10 GW), based decomposition – such as bacteria and
on a mixture of light, medium and full fungi – whose activity releases carbon
upgrading opportunities. dioxide into the atmosphere. Bioenergy
can be derived from biomass in the
Small, low-impact, financially feasible form of liquid biofuels (processed
hydropower potential is estimated at usually from energy-rich crops), wastes
190 GW globally, with 47 GW developed (including renewable municipal waste),
so far. WWF estimates that a realistic solid biomass (wood, charcoal and other
development level is around 100 GW biomass material) or gases (derived
over 50 years, continuing the current 2 from biomass decomposition).
GW/yr growth rate.

5 WWF advocates social and environmental safeguards that are based on the guidelines of the World Commission on Dams
(2000): http://www.dams.org/

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17.3.1 Significance must be selected on the basis of the
Globally, biomass currently provides most efficient carbon (soil and air)
around 46 EJ of bioenergy. This and energy balance, from production
share is estimated to be about 10% of through to processing and use. This
global primary energy supply, though is not always achieved. For example,
the volume of traditional biomass energy-intensive fertiliser input
consumed in developing countries is increases emissions of nitrous oxide
uncertain (IPCC 2007). Applications (N2O), a highly potent greenhouse gas,
vary widely, from traditional biomass and intensive cropping may contribute
use (such as cooking on open fires) in to the release of soil-bound carbon
the poorest countries to highly efficient dioxide. Some conventional crops,
electricity and heat production or such as sugarcane or woody biomass,
transport fuels. About 110 EJ to 250 EJ can provide net benefits if sustainably
produced from biomass would remove produced and processed, and are
about 8–19 Gt carbon per year from the already available for use as bioenergy.
atmosphere if it is used to displace fossil However, future investments and
fuels. However, this assumes the same research should be oriented towards
efficiency for all biomass and that it is ligno-cellulosic or other crops that offer
all produced sustainably and replanted better options to reduce carbon dioxide
so as to be carbon neutral. Since much emissions, as well as a reduced impact
biomass is used less efficiently, the on the environment.
actual savings would be lower.
Bioenergy developments must ensure
17.3.2 Issues and Constraints positive natural resource use and
careful land-use planning
Uncontrolled development of bioenergy
crops can have dramatic impacts on Permanent grasslands, natural forests,
humans and the environment. What, natural floodplains, wetlands and
where and how the raw materials peatlands, important habitats for
are produced and processed will threatened species and other high
define whether bioenergy projects conservation value areas (HCVA),
are environmentally and socially must not be converted into intensive
sustainable on all fronts. WWF believes forest or farmland, even if to produce
that key principles and criteria6 that must a potential environmental good,
be taken into account for sustainable such as a bioenergy crop. Biomass
bioenergy production and use include production requires agricultural and
the following: forestry management techniques
that can guarantee the integrity and/
Bioenergy must deliver greenhouse or improvement of soil and water
gas and carbon life-cycle benefits over resources, avoiding water and soil
conventional fuels pollution, the depletion of soil carbon
and the over-extraction of water
Energy crops to be used for bioenergy resources for irrigation.

6 These principles and criteria, established by WWF, are subject to further definition and are not meant to be exhaustive.

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Competition for land use and social 17.3.3 Development/Deployment
impacts Potential

The unplanned, opportunistic In this report it is assumed that about

development of bioenergies could lead 110 EJ (low estimate) to 250 EJ (high
to damaging land-use competition in estimate) bioenergy can be produced
some regions. This may compromise globally without any competition with
a range of key environmental needs food production by 2050. These figures
(floodplains, forest cover and high are in agreement with estimates by the
nature value lands), reduce access to IPCC (2007) and the most conservative
land for poorer or start-up farmers and bioenergy scenario results for bottom-
create competition with food and fibre up bioenergy modelling (Smeets et al.
production. Many of the bioenergy 2004). The potential for an even greater
commodities currently used are also bioenergy resource in 2050 is illustrated
food and feed crops. The interest in by the alternative scenario results
bioenergy has already led to price produced by Smeets et al. (see Figure
increases for several crops, which 97) under the assumption that there is
can challenge the capacity of poor “no deforestation, no competition for
farming communities to afford these land between bioenergy production
commodities for their own needs. and food production and protection of
biodiversity and nature conservation”

Figure 97: Total

bioenergy production
potential in 2050 for
scenarios 1 to 4 of the
study by Smeets et
al. (2004). Results are
expressed in EJ/yr.
The four bars refer to
scenario 1 (the left bar)
through to scenario 4
(the right bar).

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(Smeets et al. 2004). However, this For such an outcome to occur, it is
report adopts a position at the most critical that:
conservative end of these estimations,
in line with the IPCC stance (IPCC 2007). 1. Gas replaces only coal use.

2. The use of gas does not slow

17.4 Natural Gas Replacement for
or hinder renewable energy
Coal
development in the same markets.

17.4.1 Gas and Climate Change Targets 3. Gas power facilities are
As a source of energy, natural gas has either converted to CCS or
a carbon footprint about half that of decommissioned as lower
coal (EIA 1998). Currently, coal supplies emissions sources become available.
26% of the world’s primary energy,
yet contributes over 40% of global 17.4.2 Issues and Constraints
greenhouse gas emissions (IEA 2008).
In the power sector, the International Renewable Energy Overlap
Energy Agency (IEA) projects that coal
consumption will almost double by In some cases, market conditions that
2030, with China and India accounting price carbon will tend to favour gas
for about 65% of this increase (IEA (which is a competitive energy supply
2008). Whatever the exact figure, it is in most markets) over renewables,
clear that coal use will increase hugely which would need a higher carbon
if alternative sources of energy are not price to compete directly with gas.
made commercially available. This competition between two low-
emissions supply sources is highly
Natural gas may be part of the inefficient and counter-productive in the
medium-term solution. Some modern longer term.
conventional power plants can be
easily modified to switch fuel sources, Competing Uses
delivering immediate carbon dioxide
savings when gas is substituted for To deliver maximum carbon dioxide
coal. Furthermore, modern Combined abatement potential, the world’s finite
Cycle Gas Turbine (CCGT) installations natural gas resources would need to
emit only 40% of the carbon dioxide be deployed to avoid coal emissions
produced by a conventional coal-fired where possible. Competing uses, such
power station (IPCC 2001). as extraction of oil from tar sands, have
serious negative consequences for the
Therefore, displacing coal with natural climate and should be avoided.
gas in the power sector can reduce
short- and medium-term emissions, Shrinking Sources of Supply
buying time for the deployment of truly
sustainable zero-emissions solutions Gas resources have been available in
and reducing the overall atmospheric many areas and are often close to the
loading from greenhouse gas pollution markets that use them, such as North
from coal. Sea gas in Europe. However, as these

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reserves are used up, the focus moves gas, unless other compelling reasons or
to the remaining large gas reserves in incentives prevail.
areas remote from current and future
high-growth energy demands. The Similarly, European nations may try to
global leader, by volume proven, is avoid dependence on piped gas from
Russia (47.57 trillion cu m), followed by Russia, whose political relations with
Iran (26.62 trillion cu m) and Qatar (25.77 transit countries (such as the Ukraine)
trillion cu m). European production is are strained. The emergence of resource
now in severe decline, with increasing nationalism also challenges capital
dependency upon Russian supplies. flows, so that global energy companies
This raises challenges for transportation become loath to risk having stranded
and energy security. assets. This may slow the development
of reserves in many markets and shift
Energy Security the focus away from gas.

In the coming decades, most new power 17.4.3 Rate of Development/

generation will be installed in rapidly Deployment
developing Asian economies such as
China and India, which have generous In 2008, an estimated 63 years of proven
coal deposits but limited gas. In addition, natural gas reserves remained globally,
liquid natural gas receiving ports, based on current consumption (BP
storage capacity and transmission 2008). However, the predicted increase
infrastructure are very limited. With in natural gas consumption (such as the
energy security a political priority, Energy Information Administration’s
these countries will naturally favour the forecasts; see Figure 98) indicates that
development of coal-fired power over these proven resources are likely to be
increasing their reliance on imported consumed much faster.

200
History Projections Figure 98: World natural
gas consumption
history and forecast
150
1980–2030 (EIA 2007,
EIA 2008b).
Trillion cubic feet

Total

100

Non-OECD

50
OECD

0
1980 1990 2005 2020 2030

Year

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Extrapolating the EIA forecast for order to maximise carbon dioxide
natural gas consumption out to 2050 savings while avoiding CH4 leakage
reveals that the current proven reserves emissions and wider environmental
of natural gas (about 6,186 trillion impacts;
cubic feet; Figure 99) are expected
to be exhausted by 2048. This is a • Investments in natural gas
conservative estimate, since it does not infrastructure are most important
take into account unproven natural gas in the short-term – whether pipeline
contributions to the available natural or liquid natural gas – to reduce
gas resource. the take-up of coal, allow source
diversification and alleviate security
The finite reserves of natural gas mean of supply concerns;
that switching from coal to gas for
power generation must be viewed as • For imported gas to compete with
a temporary measure that reduces domestic coal, the full external costs
short- and medium-term emissions, of coal use must be internalised,
yet is consistent with possible CCS in together with a strengthening
the longer term and the overall carbon of carbon markets and/or other
budget of 63% or 80% emissions cuts on fiscal mechanisms that provide
1990 levels by 2050. compelling economic incentives for
fuel switching. Developing country
17.4.4 Essential Key Measures for markets will need to ensure that
These Expectations to be Realised such measures do not cut across
development goals.
• The world’s limited natural gas
resources must be used wisely in

10000 Europe
Figure 99: World natural
Central/South America gas resources by
North America geographic region for
8000
2008–2025 (USGS 2000,
Trillion cubic feet

Asia
OGJ 2007, EIA 2008a).
6186 Africa
6000 Eurasia
Middle East
4133

4000

2347

2000

Proven reserves Undiscovered Reserve growth

natural gas

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17.5 Nuclear Energy countries, claims that nuclear is a low-
or no-carbon fuel form the basis for
17.5.1 Significance promoting a new generation of reactors.

Nuclear fission, the conventional means While nuclear energy is unquestionably

for generating nuclear power, remains low-carbon, the real debate is
among the most controversial and whether other concerns over safety,
contested sources of energy. In the security, proliferation of weapons,
past 50 years, nuclear energy has risen public acceptability and particularly
to generate 16% of global electricity cost mitigate in favour of pursuing
(roughly 6.5% of world primary energy alternative technologies for controlling
consumption) from nearly 450 reactors carbon emissions, and what the trade-
in 30 countries, including Europe, Asia, offs among those options may be.
and the United States (IPCC 2007). The
International Energy Agency recently WWF has long opposed nuclear power
projected nuclear capacity to increase to on environmental grounds (see Caring
about 433 GW by the year 2030 in their for the Earth: A Strategy for Sustainable
business-as-usual scenario, compared Living, 1991).
to 372 GW today (IEA 2008).
17.5.2 Challenges
However, within OECD Europe, a decline
of net nuclear capacity is projected by Briefly summarising the analysis, the
2030 in the business-as-usual scenario chief environmental concern is that
(IEA 2008). In China, growth in nuclear nuclear energy generates radioactive
capacity from the current 6 GW to 31–50 wastes that stay dangerous for up to
GW nuclear capacity is predicted by 25,000 years and must be contained
2030 (IEA 2006b). But nuclear may still and actively managed. Related safety
only contribute 3–6% of all electricity concerns include radiotoxic emissions
generated in China by 2030. Similarly, in from fuel mining and processing,
India, nuclear-positive estimates project transport, routine releases during use,
future nuclear to cover less than 10% of the prospect of leaks during accidents
all electricity needs in that country by and potential attacks on facilities.
2030 (IEA 2006b). In order to save 1Gt of
carbon emissions, displacing 770 GW of One of the biggest challenges in using
fossil fuel energy, approximately 1,200 nuclear power to address climate
new reactors of conventional capacity change will be the issue of weapons
would need to be built. proliferation. If nuclear power were to
be used to displace fossil fuels around
Public and political support for nuclear the world, it would mean building
energy, which in many western nuclear reactors in many countries that
countries has waned in recent years, is do not currently have nuclear power
seeing some resurgence as concerns or weapons. Many of these countries
over climate change and energy supply are not politically stable or free from
security intensify. In many OECD conflict.

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Given that fuel and waste from nuclear and insurance. In direct terms, nuclear
reactors can be used to make weapons, has received high, if not the highest rate
a massive expansion in nuclear power of subsidy of all fuels within many OECD
would expose a major risk for weapons countries. Between 1947 and 1999 in the
capability and proliferation. This is USA, alone, nuclear received US$145
reinforced by the fact that regulators billion – or 96% of all energy subsidies.
already have limited ability to monitor This compares with subsidies for solar of
and regulate the use and movement of US$4.5 billion and wind US$1.2 billion
nuclear fuel and waste materials. between 1975 and 1999 (REPP 2000). In
the former EU-15, nuclear subsidies still
Implementing nuclear power also faces amount to US$2 billion per year (EEA
obstacles relating both to the long 2004).
build-time and regulatory delays that
have led to construction blow-outs of Future costs – decommissioning and
up to 20 years. For instance, since 2000, the management of wastes – are not
China, Russia and the Ukraine have factored into the current pricing for
announced plans to build 32, 40 and 12 nuclear and appear likely to increase
reactors, respectively, by 2020. Of this substantially over time. The cost of any
total of 84 reactors, only 19 had started accidents will be large, but borne by
construction by 2009 (WNA 2009). governments (in the USA, about US$600
Build-time overruns have been common billion for a single major accident). One
and although improved nuclear study suggested that a successful
designs could speed implementation, terrorist attack on a reactor near New
unanticipated problems or delays seem York could cause up to US$2 trillion
equally possible. In the United States, 51 damage, in addition to 44,000 short-
repeated shutdowns of nuclear power term and 500,000 long-term deaths (UCS
plants for a year or longer led to power 2004).
shortages and increased costs.
In conclusion, this report does not
Implementation will also be affected include the expansion of nuclear power
by new concerns over terrorism and and shows that meeting the required
geopolitical stability. The significant emissions outcomes is not dependent
deployment of nuclear power in on the inclusion of nuclear power.
developing countries would require
regulatory infrastructure, capacity-
building and the development of
supporting industry.

Economically, nuclear energy is

difficult to cost for a number of
reasons. Historically, it has been heavily
subsidised through direct government
support and by limitations on liability

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