This is driven by the rapid introduction of a price on carbon as a key driver for change in business and consumer habits, and through curbing the expansion of coal for electricity generation. Abundant natural gas has been replacing coal for 10 years now and in Sky that trend continues, supported by rapid growth in renewable energy.
Could the world’s major economies achieve peak carbon emissions by 2040?
In Shell’s latest energy scenario Sky, the planet reaches peak global CO2 emissions in the second half of the 2020s.
In a developed economy like the United States, emissions are already declining, having peaked around 2005. But in a developing country such as India, the story is different.
The average Indian uses about one tenth of the amount of energy an average North American uses. However, the population of India is much larger, and the country is on a rapid growth trajectory with energy use already doubling this century. Coal has emerged a key resource to fuel this growth. Yet even in India, the Sky scenario suggests emissions could peak by 2040, with average energy use per person almost doubling and continuing to grow. So, what happens? How can that economy develop so differently to the economies in North America?
India, and many economies like it, have one big advantage when it comes to reshaping their respective energy systems; the current energy system and infrastructure is still small.
This means that there will be less resistance to adopt new technologies, new practices, and new business models. The reason for this is that there is less pre-existing investment to compete with new energy systems and infrastructure. This change can start in homes, with the most efficient appliances made available as households buy their first refrigerator or first air conditioner. The problem of the old refrigerator finding its way into the garage and running there for extra storage, a practice widely seen in many developed countries, never emerges.
But the story is similar in industry and the power generation sector. New solar capacity is already outpacing new coal capacity in India and in Sky that trend accelerates. Nuclear also deploys at scale in Sky, increasing ten-fold by 2040. As new industrial capacity emerges, it makes use of the most energy efficient technologies available, with advanced new facilities consuming half the energy of some older legacy counterparts in North America.
Even consumer purchasing patterns are different. In the USA vehicle ownership is seen as a given, with some families owning two, three or even four cars. But in India, ride sharing could emerge as the main model, spurred by the widespread adoption of mobile smart phones and IT infrastructure. Electric vehicles could be rapidly adopted, particularly amongst taxi drivers. The country would never see the same amount of oil use as North America, despite a much larger population.
In India, a better life is achieved across the population as new energy services help provide clean water, sanitation, good homes and transportation.
The energy required to make this better life possible is a fraction of the historical energy needs in developed countries for the same outcome.
Such a pathway doesn’t emerge by chance. It requires steering through government policy, international cooperation and adoption of best practice across society. And it could be achieved in India and many other places, at a much lower cost than in developed countries.
Read the Sky publication to see how the goals of the Paris Agreement could be met through a combination of technology, government policy and societal actions.
Could society achieve the goals of the Paris Agreement? What do you think? Share your thoughts on social media tagging @Shell and using #ShellScenarios.
This post is part of Shell scenarios ‘could the world achieve Paris’ series.
The Sky scenario illustrates a technically possible, but challenging pathway for society to achieve the goals of the Paris Agreement.
Discover the Sky scenario through our latest content series, twelve questions addressing key topics found within Sky.
Shell scenarios are not the Shell business plan nor a policy proposal. To find out what Shell is doing to thrive through the energy transition click here.
For over two decades Shell scenario thinking has incorporated the issue of climate change. The Sky scenario joins two previous Shell scenarios, Mountains and Oceans that saw rapid decarbonization but fell short of the goals of the Paris Agreement. To achieve the goals of the Paris Agreement, the Sky scenario relies on a complex combination of mutually reinforcing actions by society, markets and governments. It adopts an approach grounded in current economic and policy development mechanisms, but then progressively becomes ‘goal-driven’ to achieve society’s ambition for net-zero emissions by 2070. At Shell, we hope it’s a helpful contribution to one of the world’s toughest challenges. You can explore all three scenarios at www.shell.com/Scenarios