3.4.1 Carbon-free energy and decarbonization

3.4.1.1 Decarbonization trends

Decarbonization denotes the declining average carbon intensity of primary energy over time. Although decarbonization of the world’s energy system is comparatively slow (0.3% per year), the trend has persisted throughout the past two centuries (Nakicenovic, 1996). The overall tendency towards lower carbon intensities is due to the continuous replacement of fuels with high carbon content by those with low carbon content; however, intensities are currently increasing in some developing regions. In short- to medium-term scenarios such a declining tendency for carbon intensity may not be as discernable as across the longer-term literature, e.g. in the World Energy Outlook 2004 (IEA, 2004), the reference scenario to 2030 shows the replacement of gas for other fossil fuels as well as cleaner fuels due to limited growth of nuclear and bioenergy.

Another effect contributing towards reduced carbon intensity of the economy is the declining energy requirements per unit of GDP, or energy intensity of GDP. Globally, energy intensity has been declining more rapidly than carbon intensity of energy (0.9% per year) during the past two centuries (Nakicenovic, 1996). Consequently, carbon intensity of GDP declined globally at about 1.2% per year.

The carbon intensity of energy and energy intensities of GDP were shown in Section 3.2 of this chapter, Figure 3.6, for the full scenario sample in the scenario database compared to the newer (developed after 2001) non-intervention scenarios. As in Sections 3.2 and 3.3, the range of the scenarios in the literature until 2001 is compared with recent projections from scenarios developed after 2001 (Nakicenovic et al., 2005).

The majority of the scenarios in the literature portray a similar and persistent decarbonization trend as observed in the past. In particular, the medians of the scenario sets indicate energy decarbonization rates of about 0.9% (pre-2001 literature median) and 0.6% (post-2001 median) per year, which is a significantly more rapid decrease compared to the historical rates of about 0.3% per year. Decarbonization of GDP is also more rapid (about 2.5% per year for both pre- and post-2001 literature medians) compared with the historical rates of about 1.2% per year. As expected, the intervention and stabilization scenarios have significantly higher decarbonization rates and the post-2001 scenarios include a few with significantly more rapid decarbonization of energy, even extending into the negative range. This means that towards the end of the century these more extreme decarbonization scenarios foresee net carbon removal from the atmosphere, e.g. through carbon capture and storage in conjunction with large amounts of biomass energy. Such developments represent a radical paradigm shift compared to the current and more short-term energy systems, implying significant and radical technological changes.

In contrast, the scenarios that are most intensive in the use of fossil fuels lead to practically no reduction in carbon intensity of energy, while all scenarios portray decarbonization of GDP. For example, the upper boundary of the recent scenarios developed after 2001 depict slightly increasing (about 0.3% per year) carbon intensities of energy (A2 reference scenario, Mori (2003), see Figure 3.8, comparing carbon emissions across scenarios in the literature presented in Section 3.2). Most notably, a few scenarios developed before 2001 follow an opposite path compared to other scenarios: decarbonization of primary energy with decreasing energy efficiency until 2040, followed by rapidly increasing ratios of CO₂ per unit of primary energy after 2040 – in other words, recarbonization. In the long term, these scenarios lie well above the range spanned by the new scenarios, indicating a shift towards more rapid CO₂ intensity improvements in the recent literature (Nakicenovic et al., 2006). In contrast, there are just a very few scenarios in the post-2100 literature that envisage increases in carbon intensity of energy.

The highest rates of decarbonization of energy (up to 2.5% per year for the recent scenarios) are from scenarios that include a complete transition in the energy system away from carbon-intensive fossil fuels. Clearly, the majority of these scenarios are intervention scenarios, although some non-intervention scenarios show drastic reductions in CO₂ intensities due to reasons other than climate policies (e.g. the combination of sustainable development policies and technology push measures to promote renewable hydrogen systems). The relatively fast decarbonization rate of intervention scenarios is also illustrated by the median of the post-2001 intervention scenarios, which depict an average rate of improvement of 1.1% per year over the course of the century, compared to just 0.3% for the non-intervention scenarios. Note, nevertheless, that the modest increase in carbon intensity of energy improvements in the intervention scenarios above the 75^th percentile of the distribution of the recent scenarios. The vast majority of these scenarios represent sensitivity analysis; have climate policies for mitigation of non-CO₂ greenhouse gas emissions (methane emissions policies: Reilly et al., 2006); or have comparatively modest CO₂ reductions measures, such as the implementation of a relatively minor carbon tax of 10 US$/tC (about 2.7 US$/tCO₂) over the course of the century (e.g. Kurosawa, 2004). Although these scenarios are categorized according to our definition as intervention scenarios, they do not necessarily lead to the stabilization of atmospheric CO₂ concentrations.