None of them. The WEO’s overarching aim is to deepen our understanding of the future of energy. It does so by examining the opportunities and risks that lie ahead, and the consequences of different courses of action or inaction. The WEO analyses the choices that will shape our energy use, our environment and our well-being. It is not, and has never been, a forecast of where the energy world will end up. This year’s Outlook explores different pathways out of the Covid-19 crisis, with a particular focus on a pivotal next ten years to 2030. At this hugely consequential moment for the energy sector and for the urgent global response to climate change, the WEO-2020 illustrates the historic nature of the choices, opportunities and pitfalls that will shape where we go from here.
The Stated Policies Scenario (STEPS) is sometimes misrepresented as a forecast of what will happen in the coming decades. This is a misleading characterisation. The aim of the STEPS – which reflects all of today’s announced policy intentions and targets, insofar as they are backed up by detailed measures for their realisation – is to hold up a mirror to current plans and illustrate their consequences. The future outlined in this scenario is still well off track from the aim of a secure and sustainable energy future. But it is not a prediction of what will happen if the world continues with “business as usual,” since today’s policy intentions and targets will inevitably change in the years ahead, and WEO authors do not play a guessing game of trying to anticipate those changes.
The value of the STEPS is how it contrasts with other scenarios, such as the Delayed Recovery Scenario (DRS), a newly introduced one that indicates how the energy sector could develop if the pandemic becomes prolonged and causes lasting damage to economic prospects.
The more important contrast is between the STEPS and the Sustainable Development Scenario, which shows the policies and investment that would put the energy system on track to achieve sustainable energy objectives in full, including the Paris Agreement, energy access and air quality goals.
This year’s WEO features the new Net Zero Emissions by 2050 case (NZE2050), which includes the first detailed IEA modelling of what would be needed in the next ten years to put global CO2 emissions on track for net zero by 2050.
This accusation results from a misunderstanding or mischaracterization of the WEO’s scenarios, as outlined in the answer above. The spectacular growth of wind and especially solar PV over the past two decades has far outstripped many projections made during the period. This is true for the projections included in past editions of the WEO, which were based on the policies that had been put in place or proposed at the time of publication. Significant new policies that were announced subsequently changed the trajectories of wind and solar by generating new demand and investment, thereby helping foster technological advances and cost declines. A good example of this is China, where policies and targets for solar strengthened dramatically after 2007, putting China on a path to becoming a driving force for solar worldwide.
The projections in this year’s WEO reflect the continuing technology advances and cost declines of wind and solar. In the STEPS, renewables meet 80% of the growth in global electricity demand to 2030. Solar is the main driver of growth, becoming the new king of electricity markets worldwide as it sets new records for deployment each year after 2022, followed by onshore and offshore wind. The advance of renewable sources of generation, and of solar in particular, is much stronger in the SDS, where solar generates 13 times as much electricity in 2040 as it did in 2019. Growth is even more rapid in the NZE2050.
The pandemic has erased almost a decade of growth in global oil demand in a single year. There is naturally a lot of debate over what happens next. In the WEO-2020 scenarios, the era of growth in global oil demand comes to an end within ten years, but the shape of the economic recovery is a key uncertainty. In both the STEPS and the DRS, oil demand flattens out in the 2030s. A prolonged economic downturn knocks more than 4 million barrels per day (mb/d) off oil demand in the DRS, compared with the STEPS, keeping it below 100 mb/d.
However, in the absence of the kind of larger shift in policies witnessed in the Sustainable Development Scenario, it is still too early to foresee a rapid decline in global oil demand anytime soon. Rising incomes in emerging market and developing economies create strong underlying demand for mobility in the STEPS and the DRS, offsetting reductions in oil use elsewhere.
Global CO2 emissions in the SDS fall towards net zero by 2070. If emissions were to remain at zero from that point onwards, the SDS would provide a 50% probability of limiting the global average temperature rise to less than 1.65 °C. If negative emissions technologies – such as bioenergy with carbon capture, utilisation and storage (CCUS) or direct air capture – were to be deployed after 2070 in the SDS, the temperature rise in 2100 could be limited to 1.5 °C with a 50% probability. The level of negative emissions required for this would be well below the median level of the 1.5 °C scenarios included in the Special Report on Global Warming of 1.5 °C by the Intergovernmental Panel on Climate Change (IPCC) that was published in late 2018.
Several countries have introduced targets to achieve net-zero emissions by 2050. These targets are included and achieved in the SDS, but increasingly attention is turning to what it would mean for the energy sector globally to reach net-zero emissions by 2050. That is what is examined in the NZE2050 in this year’s WEO. The NZE2050 provides a pathway towards a 50% chance of limiting the global average temperature rise to 1.5 °C without a large level of net negative emissions globally.
Decisions over the next decade will play a critical role in determining the energy and emissions pathway to 2050. For this reason, we examine what the implications of the NZE2050 would be over the period through 2030. Total CO2 emissions would need to fall by around 45% from 2010 levels by 2030, meaning that CO2 emissions from the energy sector and industrial processes would need to be around 20.1 billion tonnes (Gt), or 6.6 Gt lower than in the SDS in 2030. This would require a far-reaching set of actions going above and beyond the already ambitious measures in the SDS. A large number of unparalleled changes across all parts of the energy sector would need to be realised simultaneously, at a time when the world is trying to recover from the Covid-19 pandemic.
Seeking to achieve net-zero emissions by 2050 is a task that would directly impact all members of society, across all regions, and require a singular, unwavering focus from governments, industries and consumers. The magnitude of the changes required are not something that would be within the power of the energy sector alone to deliver. It is for governments and their citizens to decide on the way ahead.
The NZE2050 maps out the incredibly rapid deployment of clean energy technologies, backed up by changes in behaviour by people around the world, that would need to take place over the next ten years to put the world on track for net-zero by 2050. It would require an unprecedented mobilisation of resources worldwide.
When we look at the situation around the world today, that kind of mobilisation is clearly not happening. We are still far from the kinds of energy policies and investments that would put global emissions into a structural decline towards net-zero by 2070, as in the SDS – let alone by 2050. And the more time that goes by, the greater the challenges become.
In the SDS in 2030, around 850 million tonnes (Mt) of CO2 emissions are captured globally through carbon capture, utilisation and storage. In the NZE2050 in 2030, about 1 150 Mt of CO2 emissions are captured globally. This is around the median level of the 1.5 °C scenarios included in the IPCC’s Special Report on Global Warming of 1.5 °C.
In the SDS, around one-third of the CO2 captured is in the power sector, mainly in China and the United States. The remainder is in the transformation and industry sectors, where CCUS is one of the few technology options available today that is able to bring about deep emissions reductions in industrial processes, including in steel and cement production.
A recent special report in the IEA’s Energy Technology Perspectives series looks at the role of CCUS in clean energy transitions, providing details on how CCUS could be scaled up at a sufficient pace to achieve those levels by 2030.