The worldâs scientists estimate we have a decade to reduce global greenhouse gas emissions, prevent dangerous levels of global warming beyond 2Â° Celsius, and avoid the worst impacts of climate change â but thereâs no single silver bullet solution.
As government officials and other policymakers determine how to meet emissions reductions commitments pledged under the Paris Agreement or reach clean energy deployment and decarbonization goals, they need to be able to identify which policies work and how to design those policies.
Itâs a daunting challenge, and each day that passes makes the challenge ahead more difficult, but the technologies, policies, and strategies to meet it exist today: Energy Innovationâs new book Designing Climate Solutions: A Policy Guide for Low-Carbon Energy finds that 10 policies applied to the 20 largest-emitting nations, can meet the 2Â°C target .
Doing The Math On Emissions
The vast majority of GHG emissions come from a handful of countries â nearly 75% of global greenhouse gas emissions are generated by just 20 countries . Energy use (power plants, vehicles, and buildings) or industrial processes (cement or iron and steel manufacturing) is the predominant source of emissions in these countries, so focusing efforts accordingly can drive the fastest emission reductions.
The Paris Agreement, signed in 2015 by 189 countries responsible for nearly 99% of the worldâs GHG emissions, committed each country to reduce emissions over the next 10-30 years. If these targets are met, they would move the emissions curve a third of the way toward the 2Â°C target, and if existing policies and the Paris pledges are extended to 2100 with the same ambition, the emissions curve moves about 80% of the way to a 2Â°C pathway.
Even if the United States withdraws from the Paris Agreement, commitments from remaining countries still cover more than 80% of the worldâs current emissions â without counting pledges from U.S. states, cities, and businesses to meet the Paris goals.
Many policymakers understand the need to reduce GHG emissions, but need data to evaluate available policies. Different policies are best suited for different circumstances, and some policies look good on paper but fail to perform in the real world. Despite this, a practical consensus about successful policy is emerging, and can generally be classified as one of four types, each of which reinforces the others:
- Performance standards improve new equipment and help capture savings that economic signals cannot because of market barriers.
- Economic signals can be highly efficient and encourage the uptake of more efficient equipment driven by performance standards.
- Research & development (R&D) and supporting policies lower the costs of performance standards and economic signals by pushing new technologies to market and lowering the costs of existing technologies by removing deployment market barriers.
A portfolio of policies including these four policy types is the most effective, lowest-cost way to drive down GHG emissions. Properly designed, they reinforce each other through system dynamics that emerge organically.
Reducing Power Sector Emissions
The power sector is responsible for 25% of annual GHG emissions, or about 12 billion tons of CO2 emissions. This is expected to grow to nearly 18.9 billion tons by 2050, comprising roughly 30% of annual GHG emissions in 2050. Without additional policies, the power sector will be responsible for 28% of cumulative emissions through 2050.
The emissions growth is largely caused by increasing amounts of coal and natural gas for power generation. For example, the U.S. Energy Information Administration projects global coal electricity generation will grow from 8.1 terawatt-hours (TWh) in 2010 to 11.1 TWh in 2050, while global natural gas electricity generation will grow from 4.6 TWh in 2010 to 11.1 TWh in 2050.
Reducing power sector emissions involves using low- or zero-carbon technologies to produce power and reduce electricity demand, and the best policies for increasing carbon-free power generation are renewable portfolio standards and feed-in tariffs. Complementary power sector policies encouraging utilities to pursue cleaner options and reduce electricity demand are also important, as are policies that reduce demand by improving the efficiency of energy-consuming products (e.g., appliances). In total, smart power sector policies can contribute at least 21% of the reductions needed to meet the 2Â°C target.
Reducing Transportation Sector Emissions
The transportation sector generates more than 15% of annual GHG emissions, with the most recent data showing about 7.5 billion tons of CO2 emissions in 2014. This number is expected to grow to more than 9 billion tons by 2050, and without additional policies the transportation sector will be responsible for 14% of cumulative emissions through 2050.
Transportationâs emissions growth is largely due to increasing car ownership and freight transport: Passenger travel demand is expected to more than double between 2010 and 2050, and freight transport is expected to increase nearly 60% over the same period. Without action, the vast majority of this demand will be met with petroleum fuels, causing emissions to grow.
Reducing transportation sector emissions requires improving the efficiency of vehicles produced and average efficiency of vehicles sold, increasing the share of electric vehicles sold, and providing alternatives to owning and driving a vehicle through smart urban planning.
Decarbonizing the transportation sector is an important element of any climate strategy, with significant co-benefits such as reduced particulate pollution and lost time due to traffic. Together, smart transportation sector policies can contribute at least 7% of the reductions needed to meet the 2Â°C target.
Reducing Building Sector Emissions
Our buildings are responsible for 8% of annual GHG emissions, or about 4 billion tons of CO2 emissions. This total is expected to grow to between 5-6 gigatons by 2050, and without policy solutions, the building sector will be responsible for 8% of cumulative emissions through 2050.
Buildings and appliances are also significant drivers of electricity demand. For example, buildings are responsible for 54% of global electricity demand, and that share is expected to grow to nearly 60% by 2050. When electricity emissions attributable to the building sector are included, its share of global GHG emissions increases to 20% and grows to 26% by 2050, largely due to a growing building stock filled with more energy-consuming technologies.
Reducing building sector emissions requires improving the efficiency of building equipment (e.g. air conditioning and heating equipment), the thermal efficiency of buildings, and the efficiency of appliances used in buildings. Decarbonizing the building sector and reducing electricity demand are essential emissions reductions strategies, and building codes and appliance standards can achieve at least 5% of the reductions required to meet the 2Â°C target. This can rise to an even higher share later on, because higher efficiency standards take years to reach full effect.
Reducing Industrial Sector Emissions
The industrial sector, including agriculture and waste, is responsible for 38% of annual global GHG emissions, with CO2e emissions of about 19 billion tons. Emissions are expected to grow to more than 42 billion tons by 2050. Without additional policies, this sector will be responsible for 49% of cumulative emissions through 2050. The industrial sector is also responsible for roughly 44% of global electricity demand, although that share is expected to fall to about 36% by 2050.
Industry sector emissions can be broken into two categories: emissions from fossil fuel combustion for energy use and process emissions (released in industrial processes such as cement clinker manufacture and metallurgical coal coking). Non-energy emissions in agriculture and waste also fall under process emissions, and the share of industrial process emissions is significant. At least 10 billion tons of CO2e per year come from industrial processes: about 5.2 billion tons of CO2e per year from agriculture, 1.5 billion tons from waste, and 3.2 billion tons from more traditional manufacturing-related processes.
Reducing industrial sector emissions requires improving industrial production efficiency, thus lowering energy demand, and eliminating industrial process emissions. Heavily decarbonizing the industry sector is essential â industrial energy efficiency improvements can achieve 16% of the necessary reductions to meet the 2Â°C target, and reducing process emissions can achieve at least 10% of the necessary reductions.
The Decarbonization Role of Cross-Sector Policies
In addition to sector-specific policies, cross-sector policies are crucial to decarbonization. Carbon pricing is one of the most important decarbonization policies and operates across multiple sectors, delivering large emission reductions. Similarly, support for R&D is critical to lowering long-run decarbonization costs, and typically targets technological breakthroughs in different economic sectors.
These policies are essential for cost-effective economic decarbonization, and although carbon pricingâs effect is directly related to the price or emission cap used, strong carbon pricing set at the social cost of carbon can achieve 26% of the emission reductions necessary by 2050 to hit the 2Â°C target.
Challenges in making assumptions about R&D achievement and spending make explicitly modeling R&Dâs emissions reduction effect difficult, but R&D breakthroughs lower the costs of meeting the 2Â°C target and reduce the number and strength of policies needed. For example, decades of R&D coupled with strong policies driving deployment mean building new zero-carbon electricity generation like solar and wind turbines is cheaper than running existing fossil fuel generation in many parts of the country. The history of research-based cost declines coupled with well-designed policy shows how R&D fits together with other policy types to drive down costs and accelerate the clean energy transition.
How to Win on Climate
Climate change requires action as soon as possible to limit emissions and avoid exceeding 2Â° C of warming. Policymakers around the world have committed to reducing emissions, laying the foundation for deeper emission cuts that put the world on a trajectory to a lower-carbon future. The key now is in turning these pledges into realityâwith laser-focused, well-designed policy.
We have the technology today to rapidly move to a clean energy system â and the price of that future, without counting environmental benefits, is about the same as a carbon-intensive one. So the challenge is not technical, nor even economic, but rather a matter of enacting the right policies and ensuring they are properly designed and enforced.