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GECO 2018

Global Energy and Climate Outlook 2018: Sectoral mitigation options toward a low-emissions economy

Key takeaways

  • For total greenhouse gas emissions to peak in 2020 and to put us towards a global growing economy that is decoupled from emissions, immediate action from all countries and sectors of the economy would be needed – with increased energy efficiency, electrification and deployment of low-carbon energy sources.
  • To limit global warming to 1.5°C and below, global net greenhouse gas emissions would have to drop to zero as early as 2065.
  • Achieving the 2°C or the 1.5°C temperature objective would come at a relatively small mitigation cost to the overall global economy.
  • If Carbon Capture and Sequestration (CCS) technologies would not develop, a 2°C pathway would have a similar mitigation trajectory in the first half of the century as a 1.5°C scenario with CCS.
  • If bioenergy combined with CCS were to be used more widely, mitigation to 2°C would be cheaper, however land use impacts would be more substantial, with possible significant trade-offs for biodiversity.

Global GHG emissions and global average temperature change

Scenarios assessed in this report:

  • The Reference includes climate and energy policies that are already implemented today;
  • The NDC (Nationally Determined Contributions) scenario incorporates the pledges made by countries in the run-up to the Paris Agreement, extended beyond 2030 by assuming the same decarbonisation rate as implied by the NDCs for the 2020-2030 period, but gradually broadening the geographical coverage to the global level;
  • The 2°C and the 1.5°C scenario aim for a pathway of greenhouse gas emissions that is likely to limit global warming to 2°C and 1.5°C, respectively, the targets stipulated and agreed upon in the Paris Agreement.

Action from all world regions and in all sectors of the economy contributes to reaching the 2°C and 1.5°C global warming targets. Both scenarios require additional effort compared to current trends (reference) and emission reduction pledges made under the Paris Agreement (Nationally Determined Contributions, NDCs).

For the 2°C scenario, total global emissions in 2050 would be cut by half compared to their 1990 level. A stronger climate objective of 1.5°C would result in accelerated mitigation efforts in the 2020-2040 decades in particular. The GECO 2018 scenarios reach net zero greenhouse gas emissions in the second half of the century, meaning that use of negative emission technologies and land use change would offset remaining emissions. For the 2°C target net zero GHG emissions would be reached around 2080, while a scenario consistent with the 1.5°C target would bring the net zero date 15 years forward to the year 2065.

Global GHG emissions and global average temperature change in GECO 2018


Source: POLES-JRC 2018; MAGICC online

Note: The NDC scenario assumes that the global average rate of decarbonisation implied by the NDCs in 2020–2030 is maintained over 2030–2050.

Mitigation options

How can the world speed up the decorrelation of GHG emissions and economic growth, from a GHG intensity decrease of roughly 2% per year historically (1990-2016) to over 6% per year (2015-2050) to reach the 2°C objective? Key mitigation options over 2015-2050 for the 2°C scenario include ramping up the use of renewable energy sources (27%), reduction of non-CO2 emissions (20%, about a third of which are due to the decrease in fossil fuel demand in all demand sectors), improved energy efficiency (17%), electrification in final energy demand (10%) and land use (10%). Globally and by 2050, electrification exceeds one third of total final energy consumption and the share of renewables in power generation exceeds 70%.

Mitigation options by sector in GECO 2018


Source: POLES-JRC 2018.

Notes: “AFOLU”: Agriculture, Forestry and Other Land Use. “Activity”: emissions growth due to the growth of population and the economy, and to associated income-based consumption (industrial value added, transport traffic, dwelling size, electricity consumption). “Traditional biomass”: refers to the phase-out of traditional biomass for reasons other than climate, resulting in an energy demand gap that has to be met by other fuels. “HDD”: emissions prevented by the evolution in time of heating degree-days due to global warming. “CCS”: emissions prevented by carbon capture and sequestration. “Fossil fuels switch”: refers to shifts from high-carbon content towards lower-carbon content within the fossil fuel mix (generally from coal to natural gas) and towards synthetic methane. “Non-CO2”: includes emissions from agriculture, industry and other sources (including the reductions from fossil fuel extraction and transport directly related to the decrease in the use of fossil fuels in all energy demand sectors). “Hydrogen”, “Biomass”, “Electrification”: emissions prevented by the use of these fuels in final demand sectors (emissions for their production distributed in the other options here).

Limited costs and important co-benefits for air quality

The findings of the report furthermore illustrate that reaching climate targets comes at only limited costs, while bringing important co-benefits for air quality. All scenarios show similar energy supply-related expenditure on the aggregate level, but its composition shifts from fossil fuels towards the power sector with decarbonisation, and from operational costs to infrastructure. The transition away from fossil fuels would not only reduce carbon emissions but would also bring down to levels of air pollutant emissions, enabling progress on related UN Sustainable Development Goals for climate action, clean energy and good health.

GECO 2018 shows that the cost for the transition to limit global warming would not jeopardise a sustained and continued economic growth. Although the current emissions and energy consumption trends are not on track to meet neither the 2°C nor the 1.5°C targets, striving for higher ambition levels than the (NDCs) can be done at relatively low costs. While GDP and consumption are expected to decline relative to the NDC scenario in 2050, investment will increase to build the capital stock required for a low emission economy.


GECO2018 mitigation costs

Source: JRC-GEM-E3 2018.

The GECO analysis indicates that the additional cost of moving from an NDC scenario to 2°C or the 1.5°C are 0.4% and 1.3% of global GDP in 2050, respectively. This compares to a global economic growth of 128% between 2020 and 2050. The comparison of the economic impacts across regions between the NDC and the 2°C scenarios indicates that long-term decarbonisation goes hand in hand with high per capita consumption growth rates in fast-growing low- and middle-income countries. Fossil fuel industry output and investment in the 2°C scenario will decline (about 40% in 2050 compared to the NDC scenario, to levels lower than those observed in 2015) and about 20 million jobs in the global fossil fuel industry would shift to cleaner sectors of the economy relative to the NDC scenario.