11.6 From medium-term to long-term mitigation costs and potentials

We now consider how the sectoral and macroeconomic analyses to 2030 relate to the stabilization-oriented studies of Chapter 3; this leads to a focus on the transitions in the second quarter of the century.

The section concludes by considering wider dimensions of timing and strategy.

11.6.1 Structural trends in the transition

Most studies suggest that GHG mitigation shifts over time from energy efficiency improvements to the decarbonization of supply. This is the clear trend in the global scenarios survey in Chapter 3 (Figure 3.23), and also in the time-path plots of energy against carbon intensity changes in the models in the IMCP studies (Edenhofer et al., 2006b). It is also true of the national long-term studies surveyed in Chapter 3 (Table 3.7); of the detailed sectoral assessments of Chapters 4–10; and the IEA’s ETP study (IEA, 2006a). In the first quarter of this century, the majority of global emission savings are associated with end-use savings in buildings and, to a lesser degree, in industry and transport. Moreover, despite important savings in electricity use in these sectors, economies in mitigation scenarios tend to become more electrified (Edmonds et al., 2006). In the second quarter of this century, the degree of decarbonization of supplies starts to dominate efficiency savings as a result of a mix of strategies including CCS and diverse low-carbon energy sources. In the IEA study, the power sector consists of more than 50% non-fossil generation by 2050, and half of the remainder is made up of coal plants with CCS. The power sector still tends to dominate emission savings by 2030, even at lower carbon prices (see also Table 11.5), but obviously the degree of decarbonization is less.

There are two reasons for these trends. First, there are strong indications in the literature that improvements in energy efficiency with current technologies have greater potential at lower cost (see Chapters 5–7). This is apparent from the sectoral assessments summarized in Table 11.3, where energy efficiency accounts for nearly all the potential available at negative cost (particularly in buildings), and at least as much as the potential available from switching to lower carbon fuels and technologies in energy supply, for costs in the range up to 20 US$/tCO₂ -eq. The second reason is that most models assume some inertia in the capital stock and diffusion of supply-side technologies, but not of many demand-side technologies. This slows down the penetration of low-carbon supply sources even when carbon prices rise enough (or when costs fall sufficiently) to make them economic. Some end-use technologies (such as appliances or vehicles) do have a capital lifetime that is much shorter than major supply-side investments; but there are very important caveats to this, as discussed below.

For the analysis of transitions during the first quarter of this century, then, most of the relevant modelling literature emphasizes, for stabilization between 650 and 550 ppm CO₂-eq (categories III and IV in table 3.5), energy supply and other sectors such as forestry in which mitigation potentials are dominated by long-lifetime, medium-cost options.