Christophe McGlade

Exploring national decarbonization pathways and global energy trade flows: a multi-scale analysis

The role of fossils fuels in national economies will change radically over the next 40 years under a strong climate regime. However, capturing this changing role through national-based analyses is challenging due to the global nature of fossil fuel demand and resulting trade patterns. This article sets out the limitations of existing national-scale decarbonization analyses in adequately capturing global conditions and explores how the introduction of a global modelling framework could provide vital insights, particularly for those countries that are dependent on fossil fuel exports or imports. The article shows that fossil fuel use will significantly decline by 2050, although gas will have an important transition role. This leaves large fossil fuel exporters exposed, the extent of which is determined by mitigation action in different regions and especially by the pathways adopted by the larger Asian economies. We find that global-scale models provide critical insights that complement the more detailed national analyses and should play a stronger role in informing deep decarbonization pathways (DDPs). They also provide an important basis for exploring key uncertainties around technology uptake, mitigation rates and how this plays out in the demand for fossil fuels. However, use of global models also calls for improved representation of country specifics in global models, which can oversimplify national economic and political realities. Using both model scales provides important insights that are complementary but that can challenge the other’s orthodoxy. However, neither can replace the other’s strengths. Policy relevance: In recent years, how global fossil fuel markets will evolve under different climate regimes has been subject to much debate and analysis. This debate includes whether investments in fossil fuel production still make sense or will be exposed in the future to liabilities associated with high carbon prices. This is important for governments who need to develop coherent policy in relation to fossil fuel sectors and their role as drivers of economic growth and in providing for domestic energy needs. This article argues that national analyses need to be fully cognizant of the global-scale transition, which can be informed by using a multi-scale modelling approach.

Divestment prevails over the green paradox when anticipating strong future climate policies

Fossil fuel market dynamics will have a significant impact on the effectiveness of climate policies1. Both fossil fuel owners and investors in fossil fuel infrastructure are sensitive to climate policies that threaten their natural resource endowments and production capacities2–4, which will consequently affect their near-term behaviour. Although weak in near-term policy commitments5,6, the Paris Agreement on climate7 signalled strong ambitions in climate change stabilization. Many studies emphasize that the 2 °C target can still be achieved even if strong climate policies are delayed until 20308–10. However, sudden implementation will have severe consequences for fossil fuel markets and beyond and these studies ignore the anticipation effects of owners and investors. Here we use two energy–economy models to study the collective influence of the two central but opposing anticipation arguments, the green paradox11 and the divestment effect12, which have, to date, been discussed only separately. For a wide range of future climate policies, we find that anticipation effects, on balance, reduce CO2 emissions during the implementation lag. This is because of strong divestment in coal power plants starting ten years ahead of policy implementation. The green paradox effect is identified, but is small under reasonable assumptions.Fossil fuel market response to future climate policies could result in divestment in anticipation, or accelerated extraction—the green paradox. This study projects reduced emissions due to anticipation effects prior to policy implementation.

Decarbonizing the EU Energy System

The Paris Agreement of December 2015 under the United Nations Framework Convention on Climate Change (UNFCCC) was a historically significant landmark agreement that covers almost all of the world’s emissions. In line with scientific findings, the EU’s objective (in the context of necessary reductions by developed countries as a group) is to reduce greenhouse gas emissions by 80%–95% by 2050 compared to 1990. This calls for a deep, rapid transformation of the energy system and an assessment of the role of policy instruments such as carbon pricing for this transition. The challenge of decarbonization is also set against the context of a limited carbon budget and the concept of “unburnable carbon,” which has implications not only for Europe but for the globe.

Interpreting Reserves - Moving from Reserves to URR

Interpreting reserves: moving from reserves to URR. Given the conservative nature of reserve estimates, the resulting reserve growth over time, and other associated issues, the ultimately recoverable resource (URR) is a more useful resource classification when assessing future petroleum resource availability. This abstract describes some of the findings of a systematic review of the evidence surrounding resource and reserve estimates for both conventional oil and unconventional gas. This review includes discussion of the methodological approaches that can be used, the difficulties associated with these methodologies and the particular issues associated with estimating unconventional resources. It finds that the most robust estimates are likely to arise from a combination of methodological approaches.