Integrated Assessment Modelling and Scenarios (including the new NGFS scenarios)
OeNB Summer School 2020 – Webinar
The economics of climate change (for central bank economists) 24 August, 2020
Keywan Riahi
International Institute for Applied Systems Analysis (IIASA) Technische Universität Graz
University of Amsterdam
Outline
• Integrated Assessment Models & Related Scenarios
• Insights from the IPCC Synthesis (SR1.5)
• NGFS Pathways
2
Remaining carbon budget assessment
Remaining carbon budget assessment
Remaining carbon budget assessment
The remaining carbon budget is very tight
• 580 GtCO2 left (50% chance of 1.5°C) 420 GtCO2 left (66% chance of 1.5°C)
+- 250 GtCO2 depends on what is done on non-CO2 +- 400 GtCO2 geophysical uncertainty
• Currently, 42 +- 3 GtCO2/yr annually
• 200 GtCO2 budget differences are about 5 year of current emissions and imply roughly a 10 year
variation in the mid-century timing of reaching net zero CO2 emissions.
Joeri Rogelj - CLA Chapter 2 – IPCC SR1.5
1950 1975 2000 2025 2050 2075 2100
GHG emissions (GtCO2e)
-20 0 20 40 60 80 100
2°C
Staying below 2˚C requires a deep and rapid transformation
early peak
rapid decarbonisation electrification, efficiency(!) zero-C power sector
negative emissions in some scenarios
net zero GHG emissions ~ 2070
Source: CD-LINKS, McCollum et al, 2018
NDCs
country pledges since Paris Agreement
1950 1975 2000 2025 2050 2075 2100
GHG emissions (GtCO2e)
-20 0 20 40 60 80 100
2°C 1.5°C
1.5˚C requires further acceleration and an even deeper transformation
Earlier and more negative emissions compared to 2°C
Net zero GHG emissions
~ 2050
Source: CD-LINKS, McCollum et al, 2018
NDCs
country pledges since Paris Agreement
NDC 2.0 °C 1.5 °C 0
20 40 60
GHG Emissions [GtCO2e]
The Emissions GAP by 2050
2015 emissions
41 GtCO
2e
51 GtCO
2e
Source: CD-LINKS, McCollum et al, 2018
Process-based Integrated Assessment Models (IAMs)
Temperature, RF
Exogenous Assumptions
Population Labor Productivity
Technology Policy
Livestock Crops & Forests Electric & Refining Primary Energy Supply
Economic Activity Commodity Prices Prices, Taxes, e.g. CO2
Outputs of IAMs
Resources
CO2, GHGs, aerosols, OGs
External Data Economy
Energy
Agriculture
& Land Use
Water
Climate Atmosphere
Oceans
Carbon Cycle The Model
Highly non-linear, strategic models designed to consider global climate forcing and climate impacts at decadal time scales and regional disaggregation ranging from dozens to hundreds
Source: Jae Edmonds
Process-based Integrated Assessment Models (IAMs)
Temperature, RF
Exogenous Assumptions
Population Labor Productivity
Technology Policy
Livestock Crops & Forests Electric & Refining Primary Energy Supply
Economic Activity Commodity Prices Prices, Taxes, e.g. CO2
Outputs of IAMs
Resources
CO2, GHGs, aerosols, OGs
External Data Economy
Energy
Agriculture
& Land Use
Water
Climate Atmosphere
Oceans
Carbon Cycle The Model
Highly non-linear, strategic models designed to consider global climate forcing and climate impacts at decadal time scales and regional disaggregation ranging from dozens to hundreds
Source: Jae Edmonds
IAMs are used to test the response of the system to different policies or other system constraints.
Scenarios by IAMs are thus no predictions of what will happen. They rather provide answers to “what if” questions.
Typical question: What needs to be done in order to achieve a climate goal and how much does it cost?
Process-based IAMs are different from the aggregate macroeconomic “cost- benefit IAMs” that assess the social cost of carbon (DICE, PAGE, FUND, etc…)
There are only a hand full of institutions around the world that maintain fully integrated
capabilities
Model Home Institution
Asia Integrated ModelAIM
National Institutes for Environmental Studies, Tsukuba Japan
Global Change Assessment ModelGCAM
Joint Global Change Research Institute, PNNL, College Park, MD
Integrated Global System ModelIGSM
Joint Program, MIT, Cambridge, MA
IMAGE
The Integrated Model to Assess the Global Environment
PBL Netherlands Environmental Assessment Agency, Bildhoven, The
Netherlands
MESSAGE
Model for Energy Supply Strategy Alternatives and their General Environmental Impact
International Institute for Applied Systems Analysis; Laxenburg, Austria
REMIND
Regionalized Model of Investments and Technological Development
Potsdam Institute for Climate Impacts Research; Potsdam, Germany
These models are very different from the aggregate “cost-benefit IAMs” that are used for assessing the social cost of carbon (DICE, PAGE, FUND, etc…)
Source: Jae Edmonds
“Shared socioeconomic pathways”
(SSPs) allows the community to
systematically explore uncertainties
• Shared socioeconomic pathways (SSPs) explore two dimensions:
challenges to mitigation and challenges to adaptation with 5 reference—i.e. no- climate policy—scenarios.
• Different populations
• Different economic development
• Different technologies
• Different institutions
• Each is a possible pathway to explore implications of long-term climate goals (eg, limiting
temperature or GHG concentrations) Sustainability Fossil-fueled
Development Regional Rivalry
Inequality Middle
of the Road
6000 7000 8000 9000 10000 11000 12000 13000
SSP1 SSP2 SSP3 SSP4 SSP5
Population
Global Driver Assumptions
Lutz & KC, 2014 Jiang & O’Neill Urbanization
0 20 40 60 80 100 120 140 160
2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
GDP per capits ($/cap -PPP) SSP5
SSP3 SSP2 SSP4 SSP1
OECD, PIK, IIASA GDP per capita
Reference SSP (IAM) Scenarios
(no climate policy beyond those in place today)
• Six IA modeling teams
• Five SSPs
• One representative Marker Scenario for each SSP
• For each SSP there are multiple IAM runs
depicting uncertainty ranges
1850 1900 1950 2000 2050 2100
EJ
0 500 1000 1500 2000 2500
Other renewables Nuclear Gas Oil Coal Biomass
1850 1900 1950 2000 2050 2100
EJ
0 500 1000 1500 2000 2500
Other renewables Nuclear Gas Oil Coal Biomass
SSP1(Sustainability) SSP4
(Inequality)
Other renewables Nuclear
Gas Oil Coal Biomass
Other renewables Nuclear
Gas Oil Coal Biomass
Transition away from coal/oil Low demand
High share of poor with low emissions Low/intermediate demand
Technology available to the “elite”
IMAGE GCAM
Energy – SSP Reference Cases
Two marker scenarios where mitigation is relatively easy
1850 1900 1950 2000 2050 2100
EJ
0 500 1000 1500 2000 2500
Other renewables Nuclear Gas Oil Coal Biomass
1850 1900 1950 2000 2050 2100
EJ
0 500 1000 1500 2000 2500
Other renewables Nuclear Gas Oil Coal Biomass
SSP3(Regional rivalry)
Other renewables Nuclear
Gas Oil Coal Biomass
SSP5(Fossil-fueled development)
Other renewables Nuclear
Gas Oil Coal Biomass
REMIND-MAGPIE AIM
Coal-intensive development Very high demand
Fossil-intensive High poverty
Slow technological change Strong fragmentation
Energy – SSP Reference Cases
Two marker scenarios where mitigation is relatively difficult
1850 1900 1950 2000 2050 2100
EJ
0 500 1000 1500 2000 2500
Other renewables Nuclear Gas Oil Coal Biomass
SSP2(Middle of the road)
Other renewables Nuclear
Gas Oil Coal Biomass
Balanced Technology Intermediate demand MESSAGE-GLOBIOM
Energy – SSP Reference Cases
A central marker scenario with intermediate mitigation challenge
1850 1900 1950 2000
2050
2100
EJ
0 500 1000 1500 2000 2500
Other renewables Nuclear Gas Oil Coal Biomass
1850 1900 1950 2000 2050 2100
EJ
0 500 1000 1500 2000 2500
Other renewables Nuclear Gas Oil Coal
Biomass SSP1
(Sustainability)
SSP4(Inequality)
Other renewables Nuclear
Gas Oil Coal Biomass
Other renewables Nuclear
Gas Oil Coal Biomass
1850 1900 1950 2000 2050 2100
EJ
0 500 1000 1500 2000 2500
Other renewables Nuclear Gas Oil Coal Biomass
1850 1900 1950 2000 2050 2100
EJ
0 500 1000 1500 2000 2500
Other renewables Nuclear Gas Oil Coal Biomass
SSP3(Regional rivalry)
Other renewables Nuclear
Gas Oil Coal Biomass
SSP5(Fossil-fueled growth)
Other renewables Nuclear
Gas Oil Coal Biomass
1850 1900 1950 2000 2050 2100
EJ
0 500 1000 1500 2000 2500
Other renewables Nuclear Gas Oil Coal Biomass
SSP2(Middle of the road)
Other renewables Nuclear
Gas Oil Coal Biomass
Energy – SSP Reference Cases
8.5
6.0 4.5 2.6
World CO 2 Emissions
(SSP Reference scenarios and RCPs)
2000 2020 2040 2060 2080 2100
-20 0 20 40 60 80 100 120 140
SSP1 SSP2SSP3
SSP4 SSP5
RCPs
CO2 (MtCO2)
IAM range
SSP marker
Fossil fuels and Industry
SSP/RCP combinations based on reference IAM scenarios
Forcinglevel (W/m2 )
8.5
6.0 4.5
2.6
SSP1 SSP4 SSP2
Shared Socio-economic Pathways
SSP3 SSP5
6.4 - 7.2 W/m2 >8 W/m2 5 – 5.8 W/m2 5.5 – 6.2 W/m2
Climate Policy Scenarios
6.8 - 8 W/m2
Increasing challenges to mitigation
Riahi et al., Glob Env Change 42: 153-168, 2017
Socio-economic assumptions impact carbon prices as much as climate targets
Shared Socio-economic Pathways (SSPs)
Below 2°C 1.5°C
Systems transitions
• Limiting warming to 1.5°C would require rapid, far- reaching changes on an unprecedented scale:
Deep emissions cuts in all sectors A range of technologies
Behavioural changes Increase investment in low carbon options
Peter Essick / Aurora Photos
Joeri Rogelj - CLA Chapter 2 – IPCC SR1.5
Systems transitions - general trends
I. Improve energy efficiency
Limiting final energy demand in 2050 to +20 to -10% rel. to 2010 levels
II. Decarbonize the power sector
(carbon-intensity of electricity about 0 or negative in 2050)
III. Electrify energy end use
(mobility, buildings, industry)
IV. Replace residual fossil fuels with low-carbon options
(e.g. gas for heating, petrol for driving with bio-based fuels)
• Different roles for different type of fuels
Peter Essick / Aurora Photos
Joeri Rogelj - CLA Chapter 2 – IPCC SR1.5
Energy system transitions – 1.5C Global primary energy
SR1.5 Chap. 2 Fig. 2.15
• Rapid reductions of fossil fuels: coal the most, gas the least
• Limited amount of fossil CCS (predominantly gas)
• Solar, wind, bionenergy with CCS gain the most
Electricity system transitions 1.5C Full decarbonisation by mid-century
SR1.5 Chap. 2 Fig. 2.16
• Gas supplies 3-11% of electricity (depend. CCS)
• Coal is phased out as source for electricity (0-2%)
• Renewables supply 70-85% of electricity
Demand-side innovation &
decarbonization
CO2 emissions from industry in 2050:
• 75-90% reduced from 2010 levels
Share of low-emission final energy in transport:
• 35-65% in 2050
Gerhard Zwerger-Schoner / Aurora Photos
Compared to 50-80% for 2°C
Compared to 25-45% for 2°C
Keywan Riahi – LA, Chapter 5 – IPCC SR1.5
Keywan Riahi - LA Chapter 5 – IPCC SR1.5
Globale Investments
Average Annual Energy Investments 2016 bis 2050
Efficiency Renewables T&D, Storage Nuclear & CCS
Fossiler Exraction Fossil Power
1.5°C in comparison to Baseline
investmentdisinvestment
~820 billion US$
(0.8% of GDP)
Source: Chapter 2,4 and 5
Low-Carbon Investment
Shares
1.5C zero-carbon / renewables share ~80%
1.5C and 2C imply zero investment into
coal-based electricity globally (except some small CCS investments)
McCollum et al, 2018, Nature Energy
Regional Investments (1.5 vs 2C)
2015-2050, compared to baseline
Most of the investments in Asia due to growth & decarbonization
OECD second, focus on capacity replacement
McCollum et al, 2018, Nature Energy
1.5°C Scenario Explorer
The underlying data is available on-line and hosted by IIASA
Visit the Scenario Explorer at https://data.ene.iiasa.ac.at/iamc-1.5c-explorer
Huppmann, Kriegler, Krey, Riahi, Rogelj, Rose, Weyant et al, 2018