Growing pressures – Shell Climate Change

The task of getting to net-zero emissions by 2050 has become the rallying cry behind COP 26 and considerable diplomatic effort is now being applied to the push to get countries to sign up to such an outcome. But plans and outcomes aren’t always aligned, however plans often set the scene for outcomes that at least align with the intention.

Thinking back even a decade, the concept of net-zero emissions barely registered in the political consciousness. In the Copenhagen Accord of 2009, there is only mention of ‘deep cuts in global emissions are required according to science, and as documented by the IPCC Fourth Assessment Report with a view to reduce global emissions so as . . . . ‘ and in the IPCC 4AR, while some of the scenarios show emissions falling to zero late in the second half of the century, this wasn’t a key message for policymakers. Rather, the key message in 2007 in relation to mitigation in the long term, i.e. after 2030, was;

• In order to stabilize the concentration of GHGs in the atmosphere, emissions would need to peak and decline thereafter. The lower the stabilization level, the more quickly this peak and decline would need to occur. Mitigation efforts over the next two to three decades will have a large impact on opportunities to achieve lower stabilization levels.

By the time the IPCC Special Report on 1.5°C (SR15) appeared in 2018, the key mitigation message was very different.

• Reaching and sustaining net zero global anthropogenic CO₂ emissions and declining net non-CO₂ radiative forcing would halt anthropogenic global warming on multi-decadal time scales. The maximum temperature reached is then determined by cumulative net global anthropogenic CO₂ emissions up to the time of net zero CO₂ emissions and the level of non-CO₂ radiative forcing in the decades prior to the time that maximum temperatures are reached.

Moreover, a timeline to 2050 was proposed in SR15 for reaching net-zero emissions.

The history for this change is a separate discussion, but it perhaps started with the simple recognition that climate change is a stock problem and that the stock will only stop growing (and therefore stop the problem getting worse) when the flow into the atmosphere is the same as the flow out, i.e. net-zero. The science community has always known this, but the concept has taken some time to register more widely. I first discussed this in a blog post and made mention of net-zero emissions in 2009.

Today, with society having done little to arrest the flow of carbon dioxide into the atmosphere, the timing for net zero has been brought forward from late in the century to around 2050, based simply on the relationship between temperature and cumulative emissions, or stock. Both companies and policymakers are now focused on the actions required for net zero as 2050 is, in many cases, within their long term planning horizon window for major capital investment.There is growing pressure on all parties to do something, which leads to the declarations of net-zero emissions goals from many countries, with presumably many more to come.

The effort required to achieve an outcome of net-zero emissions by 2050 will be extraordinary, which might raise the question of why countries are being so ambitious (apart from the fact that it is necessary). One answer is perhaps because now, versus just a few years ago, we are heading there anyway; it is just a question of when the goal is reached.

One of the key observations that emerges from the recently released Shell Energy Transformation Scenarios is that within the course of about a century all three scenarios (namely Waves, Islands and Sky 1.5) reach net-zero emissions. In Sky 1.5 is it in in the late 2050s, in Waves around 2100 and Islands perhaps the 2120s (by extrapolation as the Shell World Energy Model doesn’t extend past 2100). The recognition of net-zero emissions as a possible inevitable outcome has been on my mind for some time now and I felt that it needed further analysis. To that end, Shell supported a project by the MIT Joint Program on the Science and Policy of Global Change to look at the implications of where the energy transition is taking society.

The analysis MIT did recognises that there is now a cascade of growing pressures operating in society, starting with the physical reality of a rising average surface temperature. While political trends, such as populism or leaning to the left or right, tend to come and go over time and social norms shift around as the decades pass, the temperature trend is essentially a monotonic increasing function. As such, the influence it has on our consciousness will only grow over time.  The cascade can be simplified as follows;

• Climate changes;
  • Global surface temperature continues to rise, and impacts become more apparent.
  • Sea level keeps rising with visible consequences.
• Concern rises;
  • Voter pressure on cities, states and countries to develop ‘green’ policies.
  • Shareholders pushing companies to take on net-zero emission goals and targets.
• Local and national governments pursue (piecemeal) interventions;
  • Ongoing actions under the UNFCC under the banner of the Paris Agreement and the emergence of net-zero emissions (NZE) as a framing concept.
  • Incentives and mandates drive down the cost of new energy technologies and lead to further uptake.
  • Large established NZE policy frameworks continue to operate (e.g. EU, California) and some new NZE policy frameworks emerge (e.g. China by 2060).
• Technology marches on;
  • Renewable energy access becomes cheaper.
  • Developments in physics, chemistry and materials sciences (e.g. PV, storage).
  • Rapid and broadening digitalization of society.
• Markets rule;
  • Financial markets distance themselves from fossil fuel investments, but particularly coal, and climate-related financial disclosures bring increasing transparency.
  • Demands by businesses and consumers for lower carbon footprint products and some preparedness to pay for this.
  • Development of markets to support low-carbon investment (e.g. nature-based solutions).
  • Alternatives to coal, oil and gas becoming increasingly competitive.

While each of these will undoubtedly vary over time, their ongoing combined effect gives rise to a scenario of continuous change and transition. The resultant MIT ‘Growing Pressures’ scenario is built on a series of simple premises; for example, if by 2050 the push-back by financial markets in combination with the falling cost of renewables means that new coal fired power station development ceases globally, then by about 2100 at the latest coal fired generation of electricity will have ceased (because the power stations built up to 2050 would have been largely decommissioned by then). An overview of the premises is shown below, set against the Growing Pressures emissions trajectory.

The premises are not meant to be the fast pace changes needed to limit warming to 1.5°C, but an assessment of events that are now seemingly locked into our collective energy system future as a result of the growing pressures. This then establishes a new baseline from which to think about mitigation actions and to assess the progress that is being  made towards a better outcome.

With net-zero emissions looking more like an inevitable outcome than an aspiration, the framing of the climate issue may also change. Looking at the IPCC 5^th Assessment Report, readers were presented with a series of impact risk tables that gave the impression of a binary outcome, i.e. society could take action and limit warming to 2°C or accept the consequences of 4°C of warming.

But the Growing Pressures scenario limits warming to around 2.8°C (central estimate), effectively eliminating the IPCC central outcome of 4°C. In less than a decade the framing of the climate issue has moved from being somewhat unbounded in terms of temperature rise, to one that is bounded between central estimates of 1.5°C and 2.8°C. Both the Shell Waves and Islands scenarios fall within this range and of course Sky 1.5 is at the low end of the range (i.e. 1.5°C).

This finding is not an argument for just letting events play out; 2.8°C would have serious consequences in terms of adaptation. Rather, the finding illustrates that change is underway and highlights the steps needed to accelerate that change. It also strengthens the hand of policymakers as they encourage adoption of a net-zero emissions goal by as many countries as possible.

Returning to this analysis in a decade hence might see the boundaries contract further. Scenarios that continue historical trends of unfettered fossil fuel use no longer seem relevant when a shift toward a low-carbon society is already under way. The task in front of society is now about the pace of change, not whether change can happen.

You can read the MIT report here.

Note: Scenarios don’t describe what will happen, or what should happen, rather they explore what could happen. Scenarios are not predictions, strategies or business plans. Please read the full Disclaimer here.

Featured image courtesy of the UK Met Office.