"INTERNATIONAL
ENERGY
AGENCY
ENERGY TO 2050 Scenarios for a
Future
Sustainable
INTERNATIONAL
ENERGY
AGENCY
ENERGY TO 2050 Scenarios for a
Future
Sustainable
INTERNATIONAL ENERGY AGENCY 9, rue de la Fédération, 75739 Paris Cedex 15, France The International Energy Agency (IEA) is an autonomous body which was established in November 1974 within the framework of the Organisation for Economic Co-operation and Development (OECD) to implement an international energy programme. It carries out a comprehensive programme of energy co-operation among twenty-six* of the OECD’s thirty Member countries. The basic aims of the IEA are: • to maintain and improve systems for coping with oil supply disruptions; • to promote rational energy policies in a global context through co-operative relations with nonmember countries, industry and international organisations; • to operate a permanent information system on the international oil market; • to improve the world’s energy supply and demand structure by developing alternative energy sources and increasing the efficiency of energy use; • to assist in the integration of environmental and energy policies. * IEA Member countries: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, the Republic of Korea, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom, the United States. The European Commission also takes part in the work of the IEA.
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD) shall promote policies designed: • to achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; • to contribute to sound economic expansion in Member as well as non-member countries in the process of economic development; and • to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance with international obligations. The original Member countries of the OECD are Austria, Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries became Members subsequently through accession at the dates indicated hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973), Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland (22nd November 1996), the Republic of Korea (12th December 1996) and Slovakia (28th September 2000). The Commission of the European Communities takes part in the work of the OECD (Article 13 of the OECD Convention).
© OECD/IEA, 2003 Applications for permission to reproduce or translate all or part of this publication should be made to: Head of Publications Service, OECD/IEA 2, rue André-Pascal, 75775 Paris Cedex 16, France or 9, rue de la Fédération, 75739 Paris Cedex 15, France.
Energy to 2050: Scenarios for a Sustainable Future
FOREWORD
Analysing the intersection between energy and climate change mitigation issues requires the adoption of a very long-term perspective. Energy infrastructure takes a very long time to build and has a useful life often measured in decades. New energy technologies take time to develop and even longer to reach their maximum market share. Similarly, the impact of increasing concentrations of greenhouse gases from human activities develops over a very long period (from decades to centuries), while policy responses to climate change threats may only yield effects after considerable delay. Analysis that seeks to tackle these issues must take a similarly long term view – looking ahead at least thirty to fifty years. Unfortunately, analysis of such time frames is an uncertain science. The future is by definition unknown and cannot be predicted. While over time horizons of ten years the inertia of the energy/economy system is so strong as to leave little room for change, over longer periods, the future will almost certainly look different than the present. Projections and scenario analysis can help us to understand the factors that might affect the future of the energy economy. These include uncertain future technological developments, economic growth, government policies and a maze of product introductions and consumer responses that can, over the long run, fundamentally change how and why we use energy. The IEA has conducted considerable work projecting future trends: our World Energy Outlook has long been recognised as the authoritative source for projections of global energy supply and demand, as well as future energy investments and carbon dioxide emissions. The World Energy Outlook contains reference and alternative policy scenarios reflecting that outcomes will depend on what new policies are undertaken by governments. However, the time-horizon of World Energy Outlook projections focuses on a thirty year time period in which the uncertainty that could result from unpredictable factors is relatively small. Past this time horizon, these factors become increasingly important and the way these long-term projections can be used fundamentally changes. With this book, the IEA explores a longer time horizon using two types of long-term scenarios: "exploratory scenarios" and "normative scenarios". Exploratory scenarios are based on the correct identification of a few critical uncertainty factors and are designed to explore several plausible
3
Energy to 2050: Scenarios for a Sustainable Future
future configurations of the world, based on different expectations of technical and/or policy developments over the near- to medium-term. Normative scenarios are a developed to evaluate “how” a specific outcome can be reached. They are designed on the basis of a set of desirable features (or “norms”) that the future world “should” possess (of course, reflecting a bias of the agent elaborating the scenarios). The exercise then consists of tracing backwards a viable path from such an outcome to today – pointing the way to reaching that desirable future. This type of scenario is inherently policy oriented and prescriptive, i.e. it assumes that appropriate policy actions can shape a future in the desired image, and is designed to identify the policy actions required. Such work requires substantial effort because several scenarios (each with its own internally consistent and plausible chains of events or storyline) have to be developed in order to analyse how uncertainty factors play into future development paths. The results from these and other such scenarios can help identify robust strategies to minimize costs of both economic dislocations and environmental damage in the development of future energy paths, in turn, assisting in promoting better policy choices in the energy sector. While the scenarios depicted here do not represent a consensus view of the IEA member countries – and equally, are not likely to come to pass in the precise way they are outlined, the methodology which supports them provides a useful tool for IEA country governments to assess and, when appropriate, consider redirecting their energy and environment policies.
Claude Mandil Executive Director
4
Energy to 2050: Scenarios for a Sustainable Future
ACKNOWLEDGEMENTS
This work was developed over a period of two years by Maria Rosa Virdis under the direction and with the strong support of Jonathan Pershing, Head of the Energy and Environment Division. Several IEA colleagues provided feedback on earlier drafts of the manuscript, including: Richard Baron, Cédric Philibert, Nicolas Lefèvre, Martina Bosi, Laura Cozzi, Giorgio Simbolotti, Dolf Gielen, Lew Fulton. Useful comments were also offered by Noé Van Hulst, Marianne Haug, Fatih Birol and Pierre Lefèvre. William Ramsay provided invaluable encouragement throughout the process. Maggy Madden gave technical support in organising the 2001 workshop on longer term scenarios, in formatting the manuscript and much more. In addition to the review provided by IEA governments through the Standing Committee on Long-term Cooperation, special thanks go to several external reviewers for their extensive comments: Kevin Cliffe and Ian Hayhow of Natural Resources Canada, Socrates Kypreos of the Paul Scherrer Institute (CH), Philip Bagnoli and Ken Ruffing of OECD/ENV. Nebojsa Naki´enovi´ of IIASA provided methodological advice in the early c c stages of the project while Keywan Riahi (also at IIASA) supplied data on the SRES scenarios run with the MESSAGE model; the author claims sole responsibility for any misuse of their data. Finally, the special appreciation of the author goes to Loretta Ravera, Muriel Custodio, Corinne Hayworth and Michael Tingay for their dedication and creative contribution in making this publication possible.
5
Energy to 2050: Scenarios for a Sustainable Future
TABLE OF CONTENTS
Foreword Acknowledgements List of Figures in Text List of Tables in Text Background
What are Scenarios and why they are Useful? Different Types of Scenario Objectives and Purpose of this Study Outline of Book Contents
3 5 10 11 13
13 15 16 17
1.
Long Term Energy and Environment Scenarios: the Literature
General Methodological Aspects
Basic Definitions Developing a Scenario – Key Elements Taxonomy
19
19 19 20 21 25 25 25 29 33 34 38 41 41 44 45 47
Review of Recent Scenario Work
Global Scenarios • Shell’s Scenarios • Stockholm Environment Institute - Global Scenario Group • World Business Council for Sustainable Development • Intergovernmental Panel on Climate Change Scenarios • Millennium Project Country Scenarios • Canada: Energy Technology Futures • The Netherlands: Long-term Outlook for Energy Supply • The United Kingdom Foresight Program – Energy Futures
A Critique of Scenarios
2.
Three Exploratory Scenarios to 2050
Background Methodology
57
57 59
7
Energy to 2050: Scenarios for a Sustainable Future
Three Exploratory Scenarios to 2050
Common Features of the Three Scenarios Elements that Differentiate the Scenarios
62 62 64 65 67 67 72 74 76 78 80 81 82 84 84 87 88 90 92 92 96 97 101 101 102
Scenario 1 Clean, but not Sparkling
2000-2025: Riding on Good Intentions • Developed Countries • Developing Countries 2025-2035: a Time of Growing Economic Constraints 2035-2050: Pushing Ahead
Scenario 2 Dynamic but Careless
2003-2015: Abundant Energy Resources • Developed Countries • Developing Countries 2015-2030: Supply Security and Environmental Challenges • Security Risks • Environmental Stress 2030-2050: a New Stage of Technological Development
Scenario 3 Bright Skies
2003-2025: Lowering the Emissions Curve • Developed Countries • Developing Countries 2025-2050: Joining Efforts for Long-term Technology
Comments and Implications of the Three Exploratory Scenarios
General Comments Implications for Policy and for Technology
3.
A Normative Scenario to 2050: the SD Vision Scenario
Background Normative Characteristics
Climate Change Mitigation Energy Security and Diversification Access to Energy
111
111 112 112 115 119 120 123 131 135
Building a Reference Framework A Normative Case: the SD Vision Scenario Regional Implications of the SD Vision Scenario Policy Implications
8
Energy to 2050: Scenarios for a Sustainable Future
Renewables Nuclear Power Fossil Fuel Resources Fossil Fuel Based Technologies for Power Generation Energy End Use • The Industrial Sector • The Residential/Commercial Sector • The Transport Sector Hydrogen and Hydrogen Infrastructure Carbon Capture and Storage
139 142 144 148 149 150 150 151 153 153 154
Conclusions
4.
Conclusions
Building Useful Scenarios Drawing out Insights: what does the Literature Tell us? Developing a New Scenario: the Explorative Approach Moving to Policy Intervention: the SD Vision Scenario Where do we go from here?
157
159 160 162 166 169
Appendix I: Scenarios from the Literature Reviewed
Global (World) Scenarios
Shell’s Scenarios Stockholm Environment Institute - Global Scenario Group World Business Council for Sustainable Development Intergovernmental Panel on Climate Change Scenarios Millennium Project
171
171 171 174 179 185 186 190 190 191 194
Country Scenarios
Canada: Energy Technology Futures The Netherlands: Long-term Outlook for Energy Supply The United Kingdom Foresight Program – Energy Futures
Appendix II: Scenario Comparisons
197
References Glossary
215 219
9
Energy to 2050: Scenarios for a Sustainable Future
LIST OF FIGURES IN TEXT
Chapter 1
Figure 1.1: Summary Table of GSG Scenarios and Trends in Some Key Variables Figure 1.2: Global CO2 Emissions for Six IPCC/SRES Scenario Groups-Gtc Figure 1.3: ETF Scenarios in their Planning Space Figure 1.4: Foresight Scenarios for the United Kingdom 32 37 43 46
Chapter 2
Figure 2.1: Three Exploratory Scenarios Figure 2.2: Scenario 1 Figure 2.3: Scenario 2 Figure 2.4: Scenario 3 Figure 2.5: Three Exploratory Scenarios: Qualitative Directions of Change 61 65 79 91 103
Chapter 3
Figure 3.1: Comparing GDP Trajectories Figure 3.2: The A1T Scenario – World Total Primary Energy Figure 3.3: The SD Vision Scenario – World Total Primary Energy Figure 3.4: Comparing Carbon Emissions Trajectories Figure 3.5: SD Vision Scenario – OECD Total Primary Energy Figure 3.6: SD Vision Scenario – REF Total Primary Energy Figure 3.7: SD Vision Scenario – ASIA Total Primary Energy Figure 3.8: SD Vision Scenario – ALM Total Primary Energy 127 127 128 130 131 133 134 135
Appendix II
Figure A.II.1: Population Projections Figure A.II.2: GDP Projections Figure A.II.3: Total Primary Energy Supply Projections Figure A.II.4: Total Final Energy Consumption Figure A.II.5: Transport Energy Consumption Figure A.II.6: CO2 Emissions
10
201 201 202 203 203 206
Energy to 2050: Scenarios for a Sustainable Future
LIST OF TABLES IN TEXT
Chapter 1
Table 1.1: Summary Table of Scenarios Examined and their Main Characteristics 53
Chapter 2
Table 2.1: Emerging Technologies from 2003 to 2050 in Three Exploratory Scenarios 106
Chapter 3
Table 3.1: SD Vision Scenario – Selected Indicators Table 3.2: Yearly Growth Rates of Total Primary Energy by Source in the SD Vision Scenario Versus Historical Data: Period Averages 137
139
Appendix II
Table A.II.1: IPCC/SRES Marker Scenarios 1990-2020 198
Table A.II.2: Summary Results for the SRES MESSAGE A1B Scenario 199 Table A.II.3: Summary Results for the SRES MESSAGE A1T Scenario 200 Table A.II.4: Selected Indicators for the MESSAGE A1B Scenario Table A.II.5: Selected Indicators for the MESSAGE A1T Scenario Table A.II.6: Selected Indicators for the WEO-2002 Reference Scenario Table A.II.7: Characteristics of the A1T Scenario with the MESSAGE Model Table A.II.8: Characteristics of the SD Vision Scenario – World Table A.II.9: Characteristics of the SD Vision Scenario – OECD90 Table A.II.10: Characteristics of the SD Vision Scenario – REF Table A.II.11: Characteristics of the SD Vision Scenario – ASIA Table A.II.12: Characteristics of the SD Vision Scenario – ALM 204 204 205 207 209 210 211 212 213
11
Background
BACKGROUND
"When it is urgent is already too late". Talleyrand "Necessity is nothing more than the lack of foresight". H. de Jouvenel (2000)
What are Scenarios and why they are Useful?
Analysing the intersection between energy and issues of climate change mitigation requires the adoption of a long-term perspective. Energy infrastructure takes time to build up and has a useful life that for some plants is measured in decades. New energy technologies take time to develop and even longer to reach their maximum market share. Increasing concentration of greenhouse gases from human activities affects ecosystems and global climate over a long period -- from decades to centuries. Policy responses to the threats of climate change manifest effects on emissions that can be appreciated after an often considerable delay. An analysis that seeks to tackle energy and environmental issues needs to look ahead at least to the next thirty to fifty years. Such a long-term perspective must come to terms with the concept of uncertainty and with the limitations of our knowledge. The future is by definition unknown and cannot be predicted. It is not something predetermined that we simply ignore. How it unfolds is to some extent determined by the course of actions we decide to take. For this reason we need to look at the future and its uncertainties in an articulated fashion, beyond the simple assumption that present trends will continue tomorrow. Over time horizons of five to ten years the inertia of the energy/economy system is so strong as to leave little room for change, but over longer periods the future will almost certainly look different. Basing our long-term strategic decisions on the assumption of continuation of present trends presents risks: what if things do not turn out to be as expected? That possibility must be taken into account if we want to have a contingency plan at all. In particular, we need to contemplate the possibility that some critical variables, the ones that have the potentially largest impact in the success of our plan, take a different course. What do we do in that case? And, more generally, what strategy or course of action would maximise our chances of success in a wide range of different situations?
13
Background
Furthermore, even assuming continuation of present trends we are often obliged to see that those trends may not necessarily lead to desirable outcomes. Trends may be unsustainable under a number of aspects. Developing through logical reasoning the final consequences of those trends may point to some clear dangers down the road. Should we not then try to steer clear of those dangers by modifying our trajectory? The intellectual exercise of looking farther into the future can be extremely useful to provide early warnings, in time for us to engage the possibility of actually modifying our behaviour. These facts lead to two important considerations: over the long term a thorough understanding of the main elements of uncertainty is the basis for any strategic planning; ■ over the longer term an additional element of freedom comes into play inasmuch as the future can be shaped by political will.
■
Usually, the way the future is explored is through scenarios. These, in simple terms, are conjectures about what could happen in the future based on our past and present experience of the world. Hence, to build scenarios, soft or hard data about past and present trends are a necessary ingredient. Plausible conjectures about how these trends may further evolve in the future are the other element. Unless one believes fatalistically that the future is predetermined, the fact that all scenarios remain inherently speculative in nature diminishes neither their role nor their usefulness, which is mainly to assist in decision-making by offering the possibility of identifying problems, threats and opportunities. By examining an internally consistent and rational chain of events and trends that may follow from present actions, they allow a better assessment of alternative policies. For this reason the exploration of the future is often referred to in the literature as "scenario planning". This type of exercise can be conducted at different scales and with different time horizons in contexts that range from the trivial day-to-day planning, to the strategic planning of an enterprise, to longer term plans for a country’s infrast..."
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