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Understanding WEO Scenarios

The World Energy Outlook (WEO) makes use of a scenario approach to examine future energy trends relying on the WEM. It explores various scenarios, each of which is built on a different set of underlying assumptions about how the energy system might evolve. These scenarios are not predictions – the IEA does not have, and has never had, a single view about what the long-term future might hold. Instead, what the scenarios seek to do is to enable readers to compare different possible versions of the future and the levers and actions that produce them, with the aim of stimulating insights about the future of global energy.

For the World Energy Outlook 2021 (WEO-2021), four scenarios were modelled: the Net Zero Emissions by 2050 Scenario (NZE), the Announced Pledges Scenario (APS), the Stated Policies Scenario (STEPS), and the Sustainable Development Scenario (SDS). The NZE is normative, in that it is designed to achieve specific outcomes – an emissions trajectory consistent with limiting the global temperature rise to 1.5 °C without a temperature overshoot (with a 50% probability), universal access to modern energy services and major improvements in air quality – and shows a pathway to reach it. APS and STEPS are exploratory, in that they define a set of starting conditions, such as policies and targets, and then see where they lead based on model representations of energy systems, including market dynamics and technological progress. The SDS is also normative, mapping out a pathway consistent with the “well below 2 °C” goal of the Paris Agreement, while achieving universal access and improving air quality. In contrast to the 2020 edition of the WEO, we do not vary the assumptions about public health across the scenarios; we assume in each scenario that the pandemic is largely brought under control by the end of 2021 in advanced economies and China, but that this takes longer in many emerging market and developing economies.

Net Zero Emissions by 2050 Scenario Announced Policies Scenario Stated Policies Scenario Sustainable Development Scenario
Definitions A scenario which sets out a narrow but achievable pathway for the global energy sector to achieve net zero CO2 emissions by 2050. It doesn’t rely on emissions reductions from outside the energy sector to achieve its goals. A scenario which assumes that all climate commitments made by governments around the world, including Nationally Determined Contributions (NDCs) and longer-term net zero targets, will be met in full and on time. A scenario which reflects current policy settings based on a sector-by-sector assessment of the specific policies that are in place, as well as those that have been announced by governments around the world. An integrated scenario specifying a pathway aiming at: ensuring universal access to affordable, reliable, sustainable and modern energy services by 2030 (SDG 7); substantially reducing air pollution (SDG 3.9); and taking effective action to combat climate change (SDG 13).
Objectives To show what is needed across the main sectors by various actors, and by when, for the world to achieve net zero energy related and industrial process CO2 emissions by 2050 while meeting other energy-related sustainable development goals. To show how close do current pledges get the world towards the target of limiting global warming to 1.5 °C, it highlights the “ambition gap” that needs to be closed to achieve the goals agreed at Paris in 2015. To provide a benchmark to assess the potential achievements (and limitations) of recent developments in energy and climate policy. To demonstrate a plausible path to concurrently achieve universal energy access, set a path towards meeting the objectives of the Paris Agreement on climate change and significantly reduce air pollution.

The scenarios highlight the importance of government policies in determining the future of the global energy system: decisions made by governments are the main differentiating factor explaining the variations in outcomes across our scenarios. However, we also take into account other elements and influences, notably the economic and demographic context, technology costs and learning, energy prices and affordability, corporate sustainability commitments, and social and behavioural factors. However, while the evolving costs of known technologies are modelled in detail, we do not try and anticipate technology breakthroughs (e.g. nuclear fusion).

An inventory of the key policy assumptions available along with all the underlying data on population, economic growth, resources, technology costs and fossil fuel prices are available in the Macro Drivers and Techno-economic inputs pages.

The projections were generated by a hybrid model that combines components of the IEA’s World Energy Model (WEM), which is used to produce the projections in the annual World Energy Outlook, and the Energy Technology Perspectives (ETP) model. Combining the two models allows us to prepare a unique set of insights on energy markets, investment, technologies and the policies that would be needed for the clean energy transition.

In the NZE and the SDS; there is no trade-off between achieving climate objectives and delivering on energy access and air pollution goals. Good policy design can exploit synergies between the three parallel objectives of the NZE and SDS. Achieving universal access to modern energy only leads to a small increase in CO2 emissions (0.2%), the climate effect of which is more than offset by lower methane emissions due to a reduction in use of traditional biomass cookstoves. Incorporating additional elements of the sustainable development agenda, such as energy and water, or energy and gender, highlight further synergies.

The transition to a low-carbon economy leads to a more efficient energy system that relies less on fuel combustion; this plays a major role in improving air quality, reducing both outdoor and household air pollution. In countries where reducing health impacts of air pollution is an urgent issue, low-carbon measures that reduce the overall quantity of fossil fuels being used – including energy efficiency measures on the demand side, and a shift to renewables on the supply side – are an important part of an action plan to tackle those health-related impacts.

To achieve the temperature goal, the Paris Agreement calls for emissions to peak as soon as possible and reduce rapidly thereafter, leading to a balance between anthropogenic emissions by sources and removals by sinks (i.e. net zero emissions) in by the year 2050. These conditions are all met in the NZE.

The Paris Agreement is also clear that climate change mitigation objectives should be fulfilled in the context of sustainable development and efforts to eradicate poverty. The NZE and SDS explicitly support these broader development efforts (in contrast to most other decarbonisation scenarios), in particular through its energy access and cleaner air dimensions.

In the NZE and SDS, strong policy support and international co-operation are an integral part of national and international recovery plans, and this enables a ramping up of progress on expanding access programmes to achieve universal access to electricity and clean cooking by 2030, despite the near-term slowdown caused by the health crisis and economic downturn. Achieving universal access by 2030 requires a $43 billion of annual investment, making full use of decentralised solutions. Achieving universal access will transform the lives of hundreds of millions, and reduce the severe health impacts of indoor air pollution, overwhelmingly caused by smoke from cooking.

Population without access to clean cooking in the Stated Policies and Net Zero by 2050 scenarios, 2000-2030

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Population without access to electricity in the Stated Policies and Net Zero by 2050 scenarios, 2000-2030

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Over 90% of the world’s population breathe polluted air on a daily basis, leading to more than 5 million premature deaths a year. Air pollution also leads to multiple serious diseases, placing an extra burden on healthcare systems currently struggling to deal with the Covid-19 pandemic. Almost 3 million premature deaths a year are caused by breathing polluted air from outdoor sources (ambient air pollution), and around 2.5 million are the result of breathing polluted air from household sources (household air pollution), due mainly to the traditional use of biomass for heating and cooking.

While the STEPS and APS see rising numbers of premature deaths during the next decade, the NZE leads to dramatic reductions. By 2030 there are 1.9 million fewer premature deaths from household air pollution per year than in 2020, and around 250 000 fewer premature deaths from ambient air pollution. The number of people exposed to the highest concentrations of PM2.5 halves compared to both the STEPS and the APS, while at the same time the number of people exposed to concentrations lower than 10 µg/m3 – the threshold below which there is no identifiable impact on increased mortality – increases by around 40%  

Share of population exposed to various PM2.5 concentrations and premature deaths from ambient air pollution by scenario

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The World Energy Outlook introduced a detailed energy transition scenario in 2009 – then called the 450 Scenario. The scenario got its name from 450 parts per million (ppm), the CO2 concentration that was seen at that time to be consistent with a 50% likelihood of keeping average global temperature rise below 2 °C (assuming that net zero emissions were reached in 2100).

Since then the global goalposts have shifted, technological progress has been uneven, and emissions have continued to grow. The NZE look very different from the 450 Scenario proposed in the WEO-2009, for three main reasons:

  • A tougher starting point. Energy-related CO2 emissions in 2020 reached of 34 gigatonnes (Gt) – about 3.4 Gt above the level what was set out in the 450 Scenario for 2020. Not only does this mean that emissions in the NZE must fall to a greater extent than in the 450 Scenario, but there is also a larger carbon-intensive capital stock that must be managed.
  • Higher ambition. The 450 Scenario was compatible with reaching net zero CO2 emissions towards the end of the century whereas the NZE aims to achieve net zero energy-related and industrial processes CO2 emissions by 2050. The emissions trajectory of NZE, combined with the higher starting point, means that emissions decline by 1 140 million tonnes (Mt) annually on average over 30 years compared with a 400 Mt average annual decline in the 450 Scenario. In addition, the NZE also aims at minimising methane emissions from the energy sector.
  • Uneven technological progress. The NZE relies much more on solar and wind in the power sector, and less on carbon capture, utilisation and storage (CCUS) and nuclear than the 450 Scenario. For example, in 2030 in the 450 Scenario from the WEO-2009, nuclear power and CCUS generated around 7 100 TWh of electricity while wind and solar PV generated 3 600 TWh. In the NZE, these figures are reversed with nuclear and CCUS generating 4 200 TWh in 2030, and wind and solar PV generating 15 000 TWh.