Tracking net zero

To track the evolution of technology we identify a number of indicators within the four categories we outlined, which are relatively timely and sensible for using in scenario mapping. The key criteria we use to determine this are:

• S-curve progress - is this technology in development or deployment?
• Does necessary infrastructure exist and which stage is it at?
• Is there enough policy momentum to support this technology at different stages of development and deployment, both on a national level and globally?

This is of course a highly subjective exercise, due to enormous uncertainty and various other caveats.

Changes in the energy mix are key to all climate change scenarios. We thus rely on NGFS projections for setting scenario thresholds for key sources of renewable energy - solar and wind. As Chart 2 illustrates, this trajectory is much shallower in the Current Policies scenario (Hot House World), with the share of renewables in primary energy only rising to 20% and the share in total electricity generation rising to 70% by 2050.

Our sector analysts view the renewables trajectory under the Net Zero 2050 scenario as realistic, but the assumption for nuclear energy is disputable. Not regarded as a renewable source of energy by NGFS, the nuclear share in total energy generation is assumed to fall by 2030.

Notably, as Chart 2 illustrates, “Delayed Transition” (which is one of the NGFS scenarios within the “Disorderly Transition” quadrant) is largely indistinguishable from the Current Policies scenario until 2030, after which the share of renewables rises steeply but does not converge to the Net Zero 2050 path. Such nonlinear regime shifts would complicate the tracking. This is an important general point to bear in mind for mapping transition enablers to climate scenarios in the next few years.

EV sales data is timely and easily available from a number of sources so we can use it as a key indicator in this category. NGFS scenarios, however, do not provide EV series as inputs so we use the corresponding IEA scenarios for setting the thresholds (Chart 3).

Our sector analysts believe that the Net Zero 2050 trajectory for EVs, where the share of vehicles sold reaches 60% over the next decade, is realistic (Chart 3). The recent upward shift in projections has been driven by China and its phasing out of internal combustion engine vehicles.

As EV battery storage capacity projections are inevitably intertwined with EV sales projections, we use this as the main indicator to track in this category. But battery storage capacity, important for uses beyond vehicles such as in housing and industry, is also useful to track as this is a key component of transition. Technological advances here will have to be quick to keep pace with the demands of the transition.

For building efficiency the IEA provides projections of both energy consumption from buildings and floor area under the corresponding Net Zero 2050 and Current Policies. This allows us to calculate energy consumption per unit of floor area. Under the Net Zero 2050 scenario, building energy efficiency is assumed to improve by 36% by 2030 and 62% by 2050 which is very ambitious given the current building energy efficiency requirements. While this is close enough to the Net Zero 2050 scenario, such ambitious targets are not common among other big emitters, meaning a step-change in related policies is required to put the world on track for large efficiency improvements in both residential and non-residential sectors.

Tracking the energy consumption mix in buildings, including heat pumps for example, would be another useful way for gauging progress on this front. As Chart 4 shows, we need to see a huge shift towards electricity and renewables as the main sources of building energy consumption by 2030. At this point, we are likely heading for a “Disorderly Transition” scenario on this metric.

Out of all the technologies we propose to track, hydrogen tends to cause the most debate. The two main points of contention are around the different measures that climate scenario providers use to project hydrogen usage and around the hydrogen share projections themselves and whether hydrogen is essential to the transition.