Global Energy Outlook 2021: Significant Policy Change Needed to Achieve Paris Agreement Goals

As COVID-19 continues to ravage parts of the globe and world leaders ramp up the rhetoric on climate action, a new report from Resources for the Future (RFF) finds that current global trends fall well short of the reductions needed to achieve Paris Agreement targets.

Global Energy Outlook 2021, an annual report released by RFF, provides a unique “apples-to-apples" comparison of energy projections by top institutions around the world. In their original forms, these outlooks look very different—but the RFF report standardizes differing aspects to allow for a robust, harmonized analysis of the world’s energy future.

“Emissions will need to decline dramatically in order to keep temperature rise below 2 or 1.5 degrees Celsius—two long-term goals of the Paris Agreement,” RFF President and CEO Richard G. Newell, who coauthored the report, said.  “For this to happen, we’ll need unprecedented action to reduce the carbon intensity of energy we use and increase energy efficiency. There are many policy, technology, and market forces at play that can help reach these goals or pull us further from them.”

Among the key findings of the report:

• Under most business-as-usual and current trend scenarios, aggregate fossil fuel consumption in 2040 will be similar to—and in some projections higher than—2019 levels.
  • Under these scenarios without ambitious climate policies, natural gas use increases by 35–52 percent through 2040.
  • Under these scenarios, coal use declines in the global West but remains roughly flat in the East. Coal use is expected to grow in India by 31–95 percent by 2040.
  • Despite the sharp drop in oil demand in 2020, global oil consumption rebounds and then remains fairly stable without new ambitious climate policies.
    
• Renewable energy and other clean power sources see substantial growth in all scenarios, from business-as-usual to ambitious climate action. 
  • Wind and solar energy are on track to play a central role in the global power sector, with a wide range of uncertainty on the speed of that growth. Global wind power growth ranges from three-fold to twelve-fold, while solar growth ranges from eight-fold to twenty-eight-fold under different scenarios.
  • Through 2040, all outlook scenarios project global electricity use to increase, ranging from 37–104 percent over 2019 levels.
  • The global East is expected to account for between 65–70 percent of solar generation by 2050.
  • Nuclear energy and hydropower use rise under all scenarios, but with wide variation.
    
• Over the past 30 years, the energy intensity of the global economy has declined consistently, reflecting both Improvements in technological efficiency and relatively slow growth in energy-intensive sectors. This trend is likely to continue and will play a key role in limiting future emissions. 
  • Under many ambitious climate scenarios, improvements in energy efficiency lead to lower primary energy demand in 2040 and 2050 than today.
  • Carbon intensity—the amount of carbon dioxide needed to produce a given unit of energy—has remained roughly flat for decades. Under business-as-usual and current trend scenarios, carbon intensity declines over the next three decades but does not approach the rate of decline needed to limit temperature rise to internationally agreed-upon targets.
    
    
    

“At the end of the day, limiting warming requires a swift, sharp break in our emissions trajectory,” coauthor and RFF Fellow Brian Prest said. “Current projections show that we aren’t on track to meet climate goals. Notably, many of the projections we analyzed rely on large-scale carbon capture and storage (CCS) to meet Paris Agreement goals. Deploying CCS technology cost-competitively at scale requires an immense investment worldwide—and it is only one of several options needed to solve the climate problem.”

“Don’t forget that carbon dioxide is not the only source of global emissions,” coauthor and RFF fellow Daniel Raimi added. “Reducing methane emissions from oil and natural gas supply chains will be a critical part of limiting global temperature rise in the short term. There are many pieces to this puzzle, but most of them begin with policy change to ensure consistency and a level playing field.”

The report is accompanied by an update to the interactive Global Energy Outlook data tool. The report will be introduced at noon ET on June 8 during our RFF Live Event, “The Global Energy Outlook: Pathways from Paris.”

For more information, read Global Energy Outlook 2021: Pathways from Paris by RFF President and CEO Richard G. Newell, Fellow Daniel Raimi, Research Analyst Seth Villanueva, and Fellow Brian Prest.