INTERNATIONALENERGYAGENCYENERGYTO
2050
Scenarios for a

FutureAnalysing the interaction between energy and climate change
mitigation issues requires the adoption of a long-term
perspective — looking up to fifty years ahead. The future is, bydefinition unknown and cannot be predicted, particularly overlonger periods. However, strategic planning and politicaldecisions demand that we explore options for the future — andthese are best developed through scenarios (conjectures as towhat might happen in the future based on our past and present
experience of the world and on plausible speculation about how
these trends may further evolve).
This volume introduces different types of scenarios, evaluating
how they can be used to analyse specific aspects of theinteraction between energy and environment over the longer
term. It examines “exploratory scenarios” (based on different
expectations of technical and/or policy developments over the
next 50 years) and “normative scenarios” (based on a set ofdesirable features or “norms” that the future world should
possess). These long-term scenarios complement the IEA’s World
Energy Outlook, which presents a mid-term business-as-usual
scenario with some variants.
The analysis in this volume seeks to stimulate new thinking in thiscritical domain. It contributes to our collective thinking about
how to solve the challenges of climate change in the context ofa more secure and sustainable energy future.

-:HSTCQE=UV^UYV:

ENERGY TO 2050 Scenarios for a Sustainable Future

Sustainable(61 2003 26 1 P1) 92-64-01904-9 €75
2003

ENERGYTO
2050
Scenarios for a
Sustainable

FutureINTERNATIONALENERGYAGENCYENERGYTO
2050
Scenarios for a
Sustainable

Futurepage2-16x23

9/01/03

10:32

Page 1

INTERNATIONAL ENERGY AGENCY
9, rue de la Fédération,
75739 Paris Cedex 15, France

ORGANISATION FORECONOMIC CO-OPERATION
AND DEVELOPMENT

The International Energy Agency (IEA) is anautonomous body which was established in
November 1974 within the framework of theOrganisation for Economic Co-operation andDevelopment (OECD) to implement an international energy programme.

Pursuant to Article 1 of the Convention signed in
Paris on 14th December 1960, and which cameinto force on 30th September 1961, the Organisation
for Economic Co-operation and Development(OECD) shall promote policies designed:

It carries out a comprehensive programme ofenergy co-operation among twenty-six* of theOECD’s thirty Member countries. The basic aimsof the IEA are:• to achieve the highest sustainable economic
growth and employment and a rising standardof living in Member countries, while maintaining
financial stability, and thus to contribute to thedevelopment of the world economy;• to maintain and improve systems for copingwith oil supply disruptions;• to contribute to sound economic expansion in
Member as well as non-member countries in theprocess of economic development; and• to promote rational energy policies in a global
context through co-operative relations with nonmember countries, industry and internationalorganisations;• to contribute to the expansion of world tradeon a multilateral, non-discriminatory basis inaccordance with international obligations.

• to operate a permanent information system on
the international oil market;• to improve the world’s energy supply anddemand structure by developing alternative
energy sources and increasing the efficiency ofenergy use;
• to assist in the integration of environmental andenergy policies.
* IEA Member countries: Australia, Austria,
Belgium, Canada, the Czech Republic, Denmark,Finland, France, Germany, Greece, Hungary, Ireland,
Italy, Japan, the Republic of Korea, Luxembourg,
the Netherlands, New Zealand, Norway, Portugal,
Spain, Sweden, Switzerland, Turkey, the United
Kingdom, the United States. The European
Commission also takes part in the work of the IEA.

The original Member countries of the OECD are
Austria, Belgium, Canada, Denmark, France,
Germany, Greece, Iceland, Ireland, Italy,
Luxembourg, the Netherlands, Norway, Portugal,
Spain, Sweden, Switzerland, Turkey, the United
Kingdom and the United States. The following
countries became Members subsequently
through accession at the dates indicatedhereafter: Japan (28th April 1964), Finland(28th January 1969), Australia (7th June 1971),
New Zealand (29th May 1973), Mexico (18th
May 1994), the Czech Republic (21st December
1995), Hungary (7th May 1996), Poland (22ndNovember 1996), the Republic of Korea (12thDecember 1996) and Slovakia (28th September
2000). The Commission of the European
Communities takes part in the work of the OECD
(Article 13 of the OECD Convention).

© OECD/IEA, 2003
Applications for permission to reproduce or translate all or part of this publication should be made to:
Head of Publications Service, OECD/IEA
2, rue André-Pascal, 75775 Paris Cedex 16, Franceor
9, rue de la Fédération, 75739 Paris Cedex 15, France.

Energy to 2050: Scenarios for a Sustainable Future

FOREWORD
Analysing the intersection between energy and climate change mitigation
issues requires the adoption of a very long-term perspective. Energy
infrastructure takes a very long time to build and has a useful life often
measured in decades. New energy technologies take time to develop andeven longer to reach their maximum market share. Similarly, the impact ofincreasing concentrations of greenhouse gases from human activities
develops over a very long period (from decades to centuries), while policy
responses to climate change threats may only yield effects after
considerable delay. Analysis that seeks to tackle these issues must take asimilarly long term view – looking ahead at least thirty to fifty years.
Unfortunately, analysis of such time frames is an uncertain science. The
future is by definition unknown and cannot be predicted. While over time
horizons of ten years the inertia of the energy/economy system is sostrong as to leave little room for change, over longer periods, the future willalmost certainly look different than the present.
Projections and scenario analysis can help us to understand the factorsthat might affect the future of the energy economy. These include
uncertain future technological developments, economic growth,
government policies and a maze of product introductions and consumer
responses that can, over the long run, fundamentally change how and why
we use energy.
The IEA has conducted considerable work projecting future trends: ourWorld Energy Outlook has long been recognised as the authoritative
source for projections of global energy supply and demand, as well as
future energy investments and carbon dioxide emissions. The World Energy
Outlook contains reference and alternative policy scenarios reflecting thatoutcomes will depend on what new policies are undertaken by
governments. However, the time-horizon of World Energy Outlook
projections focuses on a thirty year time period in which the uncertainty
that could result from unpredictable factors is relatively small. Past thistime horizon, these factors become increasingly important and the way
these long-term projections can be used fundamentally changes.
With this book, the IEA explores a longer time horizon using two types oflong-term scenarios: "exploratory scenarios" and "normative scenarios".
Exploratory scenarios are based on the correct identification of a few
critical uncertainty factors and are designed to explore several plausible
3

Energy to 2050: Scenarios for a Sustainable Future

future configurations of the world, based on different expectations oftechnical and/or policy developments over the near- to medium-term.
Normative scenarios are a developed to evaluate “how” a specific outcome
can be reached. They are designed on the basis of a set of desirable
features (or “norms”) that the future world “should” possess (of course,reflecting a bias of the agent elaborating the scenarios). The exercise thenconsists of tracing backwards a viable path from such an outcome totoday – pointing the way to reaching that desirable future. This type of
scenario is inherently policy oriented and prescriptive, i.e. it assumes thatappropriate policy actions can shape a future in the desired image, and isdesigned to identify the policy actions required. Such work requires
substantial effort because several scenarios (each with its own internallyconsistent and plausible chains of events or storyline) have to be
developed in order to analyse how uncertainty factors play into future
development paths.
The results from these and other such scenarios can help identify robust
strategies to minimize costs of both economic dislocations andenvironmental damage in the development of future energy paths, in turn,assisting in promoting better policy choices in the energy sector. While thescenarios depicted here do not represent a consensus view of the IEA
member countries – and equally, are not likely to come to pass in the
precise way they are outlined, the methodology which supports themprovides a useful tool for IEA country governments to assess and, whenappropriate, consider redirecting their energy and environment policies.

Claude Mandil
Executive Director

4

Energy to 2050: Scenarios for a Sustainable Future

ACKNOWLEDGEMENTS
This work was developed over a period of two years by Maria Rosa Virdis
under the direction and with the strong support of Jonathan Pershing,
Head of the Energy and Environment Division.
Several IEA colleagues provided feedback on earlier drafts of themanuscript, including: Richard Baron, Cédric Philibert, Nicolas Lefèvre,Martina Bosi, Laura Cozzi, Giorgio Simbolotti, Dolf Gielen, Lew Fulton.
Useful comments were also offered by Noé Van Hulst, Marianne Haug,
Fatih Birol and Pierre Lefèvre. William Ramsay provided invaluable
encouragement throughout the process. Maggy Madden gave technicalsupport in organising the 2001 workshop on longer term scenarios, informatting the manuscript and much more.
In addition to the review provided by IEA governments through theStanding Committee on Long-term Cooperation, special thanks go toseveral external reviewers for their extensive comments: Kevin Cliffe and
Ian Hayhow of Natural Resources Canada, Socrates Kypreos of the Paul
Scherrer Institute (CH), Philip Bagnoli and Ken Ruffing of OECD/ENV.
Nebojsa Nakićenović of IIASA provided methodological advice in the earlystages of the project while Keywan Riahi (also at IIASA) supplied data on
the SRES scenarios run with the MESSAGE model; the author claims sole
responsibility for any misuse of their data.
Finally, the special appreciation of the author goes to Loretta Ravera,
Muriel Custodio, Corinne Hayworth and Michael Tingay for their
dedication and creative contribution in making this publication possible.

5Energy to 2050: Scenarios for a Sustainable Future

TABLE OF CONTENTS

1.

Foreword

3

Acknowledgements

5

List of Figures in Text

10

List of Tables in Text

11

Background13

What are Scenarios and why they are Useful?

13

Different Types of Scenario

15

Objectives and Purpose of this Study

16

Outline of Book Contents

17Long Term Energy and Environment Scenarios:
the Literature

19

General Methodological Aspects
Basic Definitions
Developing a Scenario – Key Elements
Taxonomy

Review of Recent Scenario WorkA Critique of Scenarios

25
25
25
29
33
34
38
41
41
44
45
47

Three Exploratory Scenarios to 2050

57

Background
Methodology

57
59

Global Scenarios• Shell’s Scenarios• Stockholm Environment Institute - Global Scenario Group• World Business Council for Sustainable Development• Intergovernmental Panel on Climate Change Scenarios• Millennium ProjectCountry Scenarios• Canada: Energy Technology Futures• The Netherlands: Long-term Outlook for Energy Supply• The United Kingdom Foresight Program – Energy Futures

2.

19
19
20
21

7

Energy to 2050: Scenarios for a Sustainable Future

Three Exploratory Scenarios to 2050
Common Features of the Three Scenarios
Elements that Differentiate the Scenarios

Scenario 1 Clean, but not Sparkling
2000-2025: Riding on Good Intentions• Developed Countries• Developing Countries

65
67
67
72

2025-2035: a Time of Growing Economic Constraints
2035-2050: Pushing Ahead

74
76

Scenario 2 Dynamic but Careless
2003-2015: Abundant Energy Resources• Developed Countries• Developing Countries

78
80
81
82

2015-2030: Supply Security and Environmental Challenges• Security Risks• Environmental Stress

84
84
87

2030-2050: a New Stage of Technological Development

88

Scenario 3 Bright Skies
2003-2025: Lowering the Emissions Curve• Developed Countries• Developing Countries

90
92
92
96

2025-2050: Joining Efforts for Long-term Technology

97

Comments and Implications of the Three Exploratory Scenarios

3.

62
62
64

General Comments
Implications for Policy and for Technology

101
101
102

A Normative Scenario to 2050:
the SD Vision Scenario

111

Background
Normative Characteristics
Climate Change Mitigation
Energy Security and Diversification
Access to Energy

Building a Reference Framework
A Normative Case: the SD Vision Scenario
Regional Implications of the SD Vision Scenario
Policy Implications
8

111
112
112
115
119
120
123
131
135

Energy to 2050: Scenarios for a Sustainable Future

Renewables
Nuclear Power
Fossil Fuel Resources
Fossil Fuel Based Technologies for Power Generation
Energy End Use• The Industrial Sector• The Residential/Commercial Sector• The Transport Sector
Hydrogen and Hydrogen Infrastructure
Carbon Capture and Storage

4.

139
142
144
148
149
150
150
151
153
153

Conclusions

154

Conclusions

157

Building Useful Scenarios
Drawing out Insights: what does the Literature Tell us?
Developing a New Scenario: the Explorative Approach
Moving to Policy Intervention: the SD Vision Scenario
Where do we go from here?

159

Appendix I: Scenarios from the Literature
Reviewed
Global (World) Scenarios

160
162
166
169

171

Canada: Energy Technology Futures
The Netherlands: Long-term Outlook for Energy Supply
The United Kingdom Foresight Program – Energy Futures

171
171
174
179
185
186
190
190
191
194

Appendix II: Scenario Comparisons

197

References

215

Glossary

219

Shell’s Scenarios
Stockholm Environment Institute - Global Scenario GroupWorld Business Council for Sustainable Development
Intergovernmental Panel on Climate Change Scenarios
Millennium ProjectCountry Scenarios

9Energy to 2050: Scenarios for a Sustainable Future

LIST OF FIGURES IN TEXT
Chapter 1
Figure 1.1: Summary Table of GSG Scenarios and Trends
in Some Key Variables
Figure 1.2: Global CO2 Emissions for Six IPCC/SRES
Scenario Groups-Gtc
Figure 1.3: ETF Scenarios in their Planning Space
Figure 1.4: Foresight Scenarios for the United Kingdom

32
37
43
46

Chapter 2
Figure 2.1: Three Exploratory Scenarios
Figure 2.2: Scenario 1
Figure 2.3: Scenario 2
Figure 2.4: Scenario 3
Figure 2.5: Three Exploratory Scenarios: Qualitative
Directions of Change

61
65
79
91
103

Chapter 3
Figure 3.1: Comparing GDP Trajectories
127
Figure 3.2: The A1T Scenario – World Total Primary Energy
127
Figure 3.3: The SD Vision Scenario – World Total Primary Energy 128
Figure 3.4: Comparing Carbon Emissions Trajectories
130
Figure 3.5: SD Vision Scenario – OECD Total Primary Energy
131
Figure 3.6: SD Vision Scenario – REF Total Primary Energy
133
Figure 3.7: SD Vision Scenario – ASIA Total Primary Energy
134
Figure 3.8: SD Vision Scenario – ALM Total Primary Energy
135

Appendix II
Figure A.II.1: Population Projections
Figure A.II.2: GDP Projections
Figure A.II.3: Total Primary Energy Supply Projections
Figure A.II.4: Total Final Energy Consumption
Figure A.II.5: Transport Energy Consumption
Figure A.II.6: CO2 Emissions
10

201
201
202
203
203
206

Energy to 2050: Scenarios for a Sustainable Future

LIST OF TABLES IN TEXT
Chapter 1
Table 1.1: Summary Table of Scenarios Examined
and their Main Characteristics

53

Chapter 2
Table 2.1: Emerging Technologies from 2003 to 2050
in Three Exploratory Scenarios

106

Chapter 3
Table 3.1: SD Vision Scenario – Selected Indicators

137

Table 3.2: Yearly Growth Rates of Total Primary Energy
by Source in the SD Vision Scenario Versus
Historical Data: Period Averages

139

Appendix II
Table A.II.1: IPCC/SRES Marker Scenarios 1990-2020

198

Table A.II.2: Summary Results for the SRES MESSAGE A1B Scenario 199
Table A.II.3: Summary Results for the SRES MESSAGE A1T Scenario 200
Table A.II.4: Selected Indicators for the MESSAGE A1B Scenario

204

Table A.II.5: Selected Indicators for the MESSAGE A1T Scenario

204

Table A.II.6: Selected Indicators for the WEO-2002
Reference Scenario

205

Table A.II.7: Characteristics of the A1T Scenario
with the MESSAGE Model

207

Table A.II.8: Characteristics of the SD Vision Scenario – World

209

Table A.II.9: Characteristics of the SD Vision Scenario – OECD90

210

Table A.II.10: Characteristics of the SD Vision Scenario – REF

211

Table A.II.11: Characteristics of the SD Vision Scenario – ASIA

212

Table A.II.12: Characteristics of the SD Vision Scenario – ALM

213
11

Background

BACKGROUND"When it is urgent is already too late". Talleyrand"Necessity is nothing more than the lack of foresight". H. de Jouvenel (2000)

What are Scenarios and why they are Useful?
Analysing the intersection between energy and issues of climate change
mitigation requires the adoption of a long-term perspective. Energy
infrastructure takes time to build up and has a useful life that for someplants is measured in decades. New energy technologies take time todevelop and even longer to reach their maximum market share. Increasing
concentration of greenhouse gases from human activities affects
ecosystems and global climate over a long period -- from decades tocenturies. Policy responses to the threats of climate change manifest
effects on emissions that can be appreciated after an often considerable
delay. An analysis that seeks to tackle energy and environmental issues
needs to look ahead at least to the next thirty to fifty years.
Such a long-term perspective must come to terms with the concept of
uncertainty and with the limitations of our knowledge. The future isby definition unknown and cannot be predicted. It is not something
predetermined that we simply ignore. How it unfolds is to some extent
determined by the course of actions we decide to take.
For this reason we need to look at the future and its uncertainties in anarticulated fashion, beyond the simple assumption that present trends willcontinue tomorrow. Over time horizons of five to ten years the inertia ofthe energy/economy system is so strong as to leave little room for change,
but over longer periods the future will almost certainly look different.
Basing our long-term strategic decisions on the assumption ofcontinuation of present trends presents risks: what if things do not turn out
to be as expected? That possibility must be taken into account if we wantto have a contingency plan at all. In particular, we need to contemplate
the possibility that some critical variables, the ones that have thepotentially largest impact in the success of our plan, take a different
course. What do we do in that case? And, more generally, what strategy orcourse of action would maximise our chances of success in a wide range ofdifferent situations?
13

Background

Furthermore, even assuming continuation of present trends we are often
obliged to see that those trends may not necessarily lead to desirable
outcomes. Trends may be unsustainable under a number of aspects.
Developing through logical reasoning the final consequences of thosetrends may point to some clear dangers down the road. Should we not thentry to steer clear of those dangers by modifying our trajectory? The
intellectual exercise of looking farther into the future can be extremely
useful to provide early warnings, in time for us to engage the possibility ofactually modifying our behaviour.
These facts lead to two important considerations:■ over the long term a thorough understanding of the main elements ofuncertainty is the basis for any strategic planning;■ over the longer term an additional element of freedom comes into playinasmuch as the future can be shaped by political will.
Usually, the way the future is explored is through scenarios. These, in simple
terms, are conjectures about what could happen in the future based on ourpast and present experience of the world. Hence, to build scenarios, soft or
hard data about past and present trends are a necessary ingredient.
Plausible conjectures about how these trends may further evolve in the future
are the other element. Unless one believes fatalistically that the future ispredetermined, the fact that all scenarios remain inherently speculative innature diminishes neither their role nor their usefulness, which is mainly toassist in decision-making by offering the possibility of identifying problems,
threats and opportunities. By examining an internally consistent and rational
chain of events and trends that may follow from present actions, they allow
a better assessment of alternative policies. For this reason the exploration of
the future is often referred to in the literature as "scenario planning".
This type of exercise can be conducted at different scales and withdifferent time horizons in contexts that range from the trivial day-to-day
planning, to the strategic planning of an enterprise, to longer term plans
for a country’s infrastructure development. At the lower end of the scale
we are used to performing this scenario-development process without
giving it much thought: at the high end, considerable time and resources(both human and equipment) may be required.
While it is clear that scenario work at the scale needed to analyse global
energy and environment futures is likely to require time and intellectual
resources, we should not be satisfied with producing and using only one
type of scenario.

14

Background

Different Types of Scenario
The type of scenario with which we are most familiar is the reference
scenario of the forecasting type, which assumes the continuation ofhistorical trends into the future and that the structure of the systemremains unchanged or responds in predetermined forms.
This type of scenario is often referred to as a "business-as-usual (BAU)
scenario". In consideration of the inertia of many of the systems underinvestigation, a short to mid-term forecast is often viewed as a scenario witha high probability associated to it. But when projected over a longer time
horizon those trends may turn out to be extremely unlikely. The system may
be, for instance, close to a turning point, or display previously undetectedchaotic features. Some of the underlying factors that drive anenergy/environment system (including, for instance, technologicaldevelopment, degree of openness of markets, social structures,
environmental values held by the people, and so on) are much lesspredictable. However, over periods of 30 to 50 years, it is precisely thesefactors that are the most important. And it is in this medium-long-termhorizon (30-50 years out), that many of the critical environmental issues
become most pertinent. For example, climate change and the growth inemissions that lead to global warming have their impact over a period of
100 years – with the near term path only critical in how it affects longerterm, cumulative emissions. Therefore, over the long run it is difficult andrisky to base one’s future strategy uniquely on BAU scenarios and forecasts.
Policy scenarios, designed to analyse the impact of introducing a new policy
in a context that in every other respect reflects the continuation of present
trends, often present many of the same limitations of BAU scenarios.
Exploratory scenarios, on the other hand, are designed to explore several
plausible future configurations of the world. The purpose is of identifying
across those scenarios the most robust strategies from the standpoint of
the subject that undertakes the exploration. From the point of view ofdesigning strategic action, it is often plausible scenarios running counterto conventional wisdom that are the most fruitful.
Identifying factors that affect GHG emissions paths over a 50-year period
would be helpful in making policy choices. Similarly, environmental
implications of new technologies may demonstrate critical pathdependencies over a similar time frame – particularly in the energy sector,
where capital stock turnover of large-scale power plants is usually
measured in terms of 30 or more years. Exploratory scenarios thus can:15

Background■ help scientists and policy analysts to identify the main dimensions anddrivers that shape those future worlds;■ help them to explore and understand the dynamic links among themain drivers and to assess their relative importance (in terms ofpotential impacts) as sources of uncertainty;■ allow a more systematic and full appreciation of the uncertainties thatlie ahead in the energy and environment domain.
Exploring and identifying the uncertainties over such factors becomes
critical in order to formulate "least regret" strategies that, given theuncertainty, produce the fewest drawbacks, if not the greatest benefits.
Those strategies that minimize regrets over different possible outcomes canthen be valid candidates for implementation. The potential implications forpolicy of this type of scenarios are clear. In this case scenarios are used intheir "explorative" mode, for strategic planning purposes.
This type of work, however, requires substantial effort because several
scenarios, and as many internally consistent and plausible chains of eventsor storylines, have to be developed on the basis of the alternative
outcomes of the critical uncertainty factors identified.
To a large extent, agents (individuals, businesses) and societies have thecapacity to shape their own future, and often have the means to
implement their vision. The task then becomes one of identifying thenecessary steps and the roadmap to get there: in the case of energy andthe environment steps refer to policies needed, R&D policy, and so on. In
this second case scenarios are of the "normative" type, and the path totheir implementation is outlined through a "back-casting" process.
Normative scenarios can be designed on the basis of a set of desirable
features (or "norms") that the future world should possess according to
the agent elaborating the scenario. This type of scenario is inherently
policy oriented and prescriptive. That is to say such scenarios assume thatpolicy actions can shape a future in the desired image, and they aredesigned to identify the policy actions required.

Objectives and Purpose of this Study
IEA Member governments have collectively recognised that the future
under a "business-as-usual" scenario is undesirable. The IEA Statement on
Sustainable Development puts it clearly: "Are we on a sustainable path? Not

16

Backgroundunless we make considerable changes." The elements of unsustainability are
unambiguously outlined in the two most recent volumes of the World Energy
Outlook: the WEO 2002 points to a considerable increase in greenhouse gas
emissions – well exceeding the Kyoto targets. WEO 2001 Insights indicatesthat security of supply issues are also a matter for considerable concern;
while fuel resources are more than adequate to cover demand for the next
30 or more years, those resources are concentrated in a limited set ofcountries, many of which are subject to instability. Recognising that asustainable and secure future is unlikely to unfold unless policy intervention
is taken, there is a clear role for additional scenario tools and approaches –covering the longer-term, and looking also at a variety of strategic issues andpolicy actions to bring about desirable outcomes.
The work presented here intends to provide an experimental introduction
to different types of scenarios, in the effort to complement the array ofavailable tools, and to address specific aspects of the analysis of theenergy and environment intersection in the longer term. In this sense
it is both different from – and complementary to – that of the WEO.
Broadening the suite of tools to other types of scenarios is recognised as
an important step to establish a basis for more strategic thinking even for
an organization like the IEA. The objectives pursued are manifold:■ to strengthen the analysis of energy and environment issues over thelong term by aiding in the correct identification of the main drivers ofchange and in understanding the dynamic links among these drivers;■ to clarify the relationship between short-term and longer-term
objectives, and how they change over time under the pressure of longterm trends and factors;■ to ensure greater consistency between long-term policy objectives andpolicies to bring them about, particularly with respect to the planningof the policies and their impact over time.

Outline of Book Contents
Energy and environment scenarios have been developed by a variety ofgroups: for example, the Intergovernmental Panel on Climate Change(IPCC), the International Institute for Applied Systems Analysis (IIASA), theShell company, and others are often cited. Some have been developed as
simple storylines while others have been represented with the aid of aquantitative framework such as a mathematical model. A review of recent
literature on energy and environment scenarios is provided in chapter 1
17

Background

together with a methodological introduction to scenarios and somedefinitions. Two types of scenario are discussed in particular: "exploratory
scenarios" and "normative scenarios". A systematic characterisation of the
scenarios examined in the literature is provided together with a critique, toarrive at the identification of gaps and areas that need further work.
Based on this critique, new scenarios of both types are developed toprovide an illustration of how they can be used - in the context of anintergovernmental agency like the IEA - to broaden our understanding of
the challenges posed by sustainable development in the areas of energy
and the environment.
Chapter 2 describes the methodology followed to build three exploratory
scenarios looking out to 2050 and develops them in the form of narrative
storylines. The stories are fleshed out around a set of key drivers consideredas the areas in which the most relevant uncertainties for theenergy/environment system can be found. As a result three different
images of the world are given and, consistent with those images,
implications are suggested for the energy technologies that are likely toemerge in each of those worlds.
Chapter 3 develops a hypothetical normative case scenario based on a setof desirable characteristics (or "norms") that the future world in 2050
should possess. The criteria used to select these characteristics, and theprocess followed to express these characteristics in metric form (i.e. as
quantitative targets), are illustrated. To help appreciate the scale of thechallenges involved in bringing about such a scenario, a quantitative
framework is provided. To this end, however, rather than simulating this
scenario with the use of a model, an existing scenario has been used andmodified to fit the desired image.
The challenges in implementing any future vision of the world that requires
changing trends are enormous – and implementing the hypotheticalscenario outlined here would be no less difficult. However, the key is notwhether this scenario is "correct" or "most desirable" but rather, what it
tells us about future policy choices. By highlighting the implications forpolicy action, including for technology development, energy and climatechange mitigation, we may better understand how our current actions
affect the future, and work toward a future that is more in keeping withour collective goals.
Finally, the conclusions and implications, including in the domains ofpolicy analysis and strategic planning, as well as implications for further
analysis, are summarised in the final section.
18

1. Long Term Energy and Environment Scenarios: the Literature

LONG TERM ENERGY AND ENVIRONMENTSCENARIOS: THE LITERATURE
This chapter starts with a brief description of the process of scenariobuilding, defines some elements for a taxonomy of scenarios and briefly
discusses the use of models as a tool for scenario representation or testing.
A review of recent work in energy and environment scenarios is thenprovided, covering different approaches and tools. At the end a critique ofthese scenarios is developed, stressing differences and commonalities withrespect to purpose, approach, drivers identified, major risks anduncertainties, and highlighting relevant elements and methodologicalaspects that might serve as a guide in any future construction ofenergy/environment scenarios.

General Methodological Aspects
Basic Definitions
Definitions of scenarios abound in the literature. According to the definition
given by Peter Schwartz in his book "The Art of the Long View" (1991):"Scenarios are a tool for helping us to take a long view in a world of great
uncertainty. The name comes from the theatrical term "scenario" – thescript for a film or play. Scenarios are stories about the way the world mightturn out tomorrow, stories that can help us recognize and adapt tochanging aspects of our present environment. They form a method forarticulating the different pathways that might exist for you tomorrow, andfinding your appropriate movements down each of those possible paths.
Scenario planning is about making choices today with an understanding of
how they might turn out.
In this context the precise definition of "scenario" is: a tool for ordering
one’s perceptions about alternative future environments in which one’s
decision might be played out. Alternatively: a set of organized ways for us
to dream effectively about our own future. Concretely they resemble a set ofstories, either written out or often spoken. However, these stories are built
around carefully constructed "plots" that make the significant elements of
the world scene stand out boldly. This approach is more a disciplined wayof thinking than a formal methodology."
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1. Long Term Energy and Environment Scenarios: the Literature

Scenarios therefore describe hypothetical processes, sequences of events
that could develop over a period of time.
The above definition is in clear contrast with any idea of "prediction", as
the future cannot be predicted with certainty. Furthermore, it is radicallydifferent from the idea of traditional business forecasting, inasmuch as
scenarios present alternative images of the future, rather than merely
projecting the trends of the present. As Ged Davis (1998), of Shell
International puts it:"Many have tried to understand the future purely through prediction, eventhough the record to date is poor. Forecasters extrapolate from the past,
imposing the patterns they see in the past onto the future, and tend toneglect the oft quoted statement that ‘a trend is a trend is a trend until itbends’. And it is the bends that are generally of most interest to us because
it is the bends that carry the most risk or offer the greatest opportunities."
Useful as they are, forecasts present a fundamental danger: they give us theillusion of certainty and leave us ill equipped to understand uncertainty andrisk. In fact one of the most useful characteristics of scenarios is that they
are explicitly designed to explore, and thus integrate, radical departuresfrom trend, breakdowns in the system, technological breakthroughs, major
shifts in human behaviour or changes in institutional rules.
"The end result [of a scenario exercise] is not an accurate picture of
tomorrow, but better decisions about the future." (Schwartz, 1991)
Historically, scenarios started to be developed after World War II, as anintellectual exercise for military strategy purposes, but were soon adopted
by some multinational companies such as Royal-Dutch Shell for strategic
decision making. In the last 15 years they have become more widespread
as a tool to aid in planning and policy decision making by governments
and ministries, in a variety of areas: from research to public health, fromurban planning and transport to energy infrastructure.

Developing a Scenario – Key Elements
A fundamental requirement of scenarios is that they be internally consistent,
logical and plausible constructs of how the future might unfold. Furthermore,scenario building is an inherently interdisciplinary process, because it needs
to take into account the many dimensions of the same problem.
Scenarios need to integrate long-term phenomena (including demographic,
technological or ecosystem trends) with shorter-term phenomena (like20

1. Long Term Energy and Environment Scenarios: the Literature

inflation or spikes in oil prices). And as mentioned earlier, they need totake into account possible departures from trend (De Jouvenel, 2000).
Scenarios should also possess the capability of challenging users’
mental maps, because that is when a true possibility to learn exists(Davis, 1998).
The process of scenario building is a complex analytical exercise. Five main
steps are discernible:■ Define the problem and its horizon or isolate the decision that needs tobe made.
■ Gather information, expert opinion and past data on the system underinvestigation and build a coherent system that includes all relevant
actors and agents, including the factors and links (both quantitativeand qualitative) between them.
■ Identify the key factors that would affect decisions and separate

predetermined or unavoidable factors and trends from those that arehighly uncertain or depend on will.
■ Rank these factors by importance for the success of the focal issue(defined in step 1) or by uncertainty and identify the two or threefactors or trends that are most important and most uncertain. These will
represent the main axes along which scenarios will differ and will becharacterised. Predetermined elements/factors will remain unchanged
in all scenarios.
■ Flesh out the scenarios in the form of consistent narratives or "stories".

The next logical step is to examine the implications of the various scenarios
and translate them into clear strategic choices. Different choices can at thatpoint be tested for robustness/resilience against the scenarios outlined.

Taxonomy
The scenario process outlined above corresponds, strictly speaking, to thatof so-called "exploratory" or "descriptive" scenarios, built for the purposeof exploring a range of outcomes and analyse their implications forstrategic decision-making.
The main value added in exploratory scenarios lies in the fact that they
help prepare for turns of those events that are plausible and entirely
possible without representing a straight-line continuation of past andpresent trends. They are particularly useful in proximity to bifurcations,21

1. Long Term Energy and Environment Scenarios: the Literatureespecially when a hint of such a situation takes shape in present day
phenomena. And they can help enormously to accelerate and calibrate theresponse to new developments (both positive and negative ones).
Scenarios, however, can also be "normative" or "strategic". In this case theperspective is changed: a "desirable" vision of the future, or a goal in the
future, is outlined. What is considered "desirable" clearly depends on thegeneral objectives of the individual or group elaborating the scenario. An
example could be a sustainable scenario characterised by stabilisation of
GHG concentrations at 450 ppm by the end of this century. These objectives
are used as a point of departure from which to travel backward and identify
the conditions that must be fulfilled or measures to be taken at different
stages along the path in order to implement that vision or achieve that goal.
Typically, normative scenarios tend to work in a "back-casting mode".
This represents a critical change of perspective. It provides a usefulmechanism to focus attention on several crucial elements: actions thatmust be taken and conditions that must be created at certain points intime in order to make the scenario achievable. The emphasis is on planningto achieve a certain result rather than on preparedness in responding to
uncertain events. The attitude is more proactive, and policy intervention isa tool of choice.
Building a normative scenario requires rationalisation at the initial stage
in order to define desirable characteristics of the future state of affairs,
and to express them as measurable targets. Furthermore, the exercise
stimulates formulation of critical questions, the recognition of
uncertainties, the identification of bottlenecks and priority areas for policy
action as well as for research and technological development.
While "exploratory" scenarios set the groundwork to describe what could
happen, "normative" scenarios help decide what one could or should do,
and hence are more concerned with action. In practise, normative
scenarios of this type are rarely found in isolation, i.e. without previous
analysis of what the future might bring (De Jouvenel, 2000; Greeuw et al.,2000).
Another common distinction is between "qualitative" and "quantitative"
scenarios. The former are pure narrative stories describing how the future
might unfold or the relationships internal to the system analysed, without
the help of figures. The latter also give a numerical illustration of theevolution of key variables or indicators. Quantitative scenarios are often
represented through the use of a model, but may be also illustrated
through much simpler tools.
221. Long Term Energy and Environment Scenarios: the LiteratureBox 1.1 Models: a Scenario Tool
Mathematical and statistical models can be used as a tool in long-term
scenario analysis. Models and scenarios may be based on many of the sameelements of information, especially with respect to past data and analysis ofa system’s internal relationships.
A model is an abstract representation of a system, described through aseries of causal links and "accounting" identities among its elements. Its
underlying basis is a theory of causal relationship among a set of variables
relevant to the analyst. Theoretical models of these causal relationships aremathematically formalised and then can either be simulated numerically or
estimated from historical empirical data through statistical methods.
Models are frequently used in policy simulations, where they not only permit
analysis of causality and direction of change but also quantify the impactsof policy choices.
In a way a quantitative scenario is created whenever exogenous variables
and parameters are fed into a model. In a restrictive interpretation, "trend
projections" or "forecasts" can be seen as scenarios that assume acontinuation of past and current trends into the future.
Models, however, have limitations. Notably they are deterministic, they havedifficulties in addressing "surprises" and often give only an "incremental
change" view of the future. Models exhibit difficulties representing some ofthe dynamic elements that characterise scenarios. They represent the inertia
of energy systems fairly well, but do a poorer job representing the system inthe longer term when elasticities change. Catastrophic developments,
discontinuities and structural breakdowns are extremely difficult to take into
account. Furthermore, many aspects of human and social behaviour, suchas "values" or "institutional frameworks" can only be poorly represented(through proxy variables) in models.
Some of the limitations of models can in fact be addressed within themodelling approach itself, through the use of different model types, having
different degrees of mathematical complexity and data intensity. However nosingle model is likely to be adequate for the purpose of analysing all aspectsof economic/energy/environment scenarios, especially with a long-term focus.
Rather, scenario exploration could be supported by a suite of models.

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1. Long Term Energy and Environment Scenarios: the Literature

Narrative scenarios can more easily accommodate an interdisciplinary
perspective and the complex interrelationship of a system than canquantitative models. However, policymakers are likely to be moreinterested in scenarios offering quantified, credible representations ofpolicy measures and their impacts, and that say something about the time
path of the system’s response. Since a minimum level of quantification isuseful to test the validity and consistency of the scenario, scenarios areoften simulated with the use of modelling tools.
As a general criterion, however, because any given model can only
represent and analyse a given specific system, the model used to simulatea certain scenario must be a good match for the scenario. The choice ofthe model(s) to quantify a scenario depends on the scenario to beillustrated and on the specific issues or uncertainties that a scenario tries
to illuminate. Therefore, the level of aggregation of the model, and its
analytical focus, must be adapted to the focus and purpose of the scenario.
This criterion applies both to the representation of an exploratory scenario
and to the simulation of a normative scenario.
In order to quantify an exploratory scenario, the storyline and its main
drivers must be "transposed" into a set of characteristic "exogenous
variables" and corresponding values in the chosen model, which is thenrun until it adequately represents the underlying story.
To represent a normative scenario, the desired characteristics of the futureworld can be expressed either as exogenous variables or as targets (often
constraints) for the chosen model, depending on the characteristics
considered. The results of the model runs may provide a time path forrelevant variables as the system adapts to the planned vision, and useful
insights on some of the limits or bottlenecks it is likely to run into on its
way to achieving the targets.
Another type of scenario that is increasingly popular are policy scenarios,
designed to analyse the impact of introducing a new policy in a context
that in every other respect reflects the continuation of present trends.
Scenarios of this type can be considered as a more restrictive subcategory
under the general normative scenario category.
It is important to remember that the main function of scenarios is to help
explore the main uncertainties lying ahead, by making them more explicit.
Model quantification of scenarios by giving a more "precise"representation of a scenario may induce, especially in lay people, the241. Long Term Energy and Environment Scenarios: the Literatureillusion of accuracy, which is counterproductive with respect to the purposeof a scenario exercise.
In the following review, we shall focus on scenarios and deal with models
only when used to quantify a specific scenario.

Review of Recent Scenario WorkIn this review, which does not claim to be exhaustive, we try to characterise
scenarios on the basis of such elements as the purpose (exploratory vs.
normative), the time horizon considered, the construction process and thetype of tools used (qualitative vs. quantitative). The review starts with
global scenarios and then analyses national scenarios, indicating wherever
possible the main drivers and trends identified, and some of thequantitative elements (population and income growth, energy demand,technologies used, GHG emissions, resulting concentrations). In
Appendix I an outline of each scenario is also provided.

Global Scenarios
Shell’s Scenarios
Shell has long-standing experience in developing long-term energy
scenarios as a tool for better business decision making: its first scenariothat dared look out over 50 years was produced in 1995. Scenario
planning started at Shell in the early 1970s, with the work of Pierre Wack,
who was able to present Shell’s board of directors with two scenarios – onetitled "conventional wisdom" and the other titled "oil price crisis
scenario". These were made available only months before the October
1973 oil crisis, thus preparing the company for that abrupt change. The
company’s ability to respond quickly resulted in enhanced profitability –and had the side effect of enshrining scenarios as part of the standardpractice at Shell’s Group Planning division. Over the years, Shell’s planners
have been involved in developing scenarios in collaboration with suchbodies as the World Business Council for Sustainable Development and theIntergovernmental Panel for Climate Change.
In general the Shell scenarios are of the "exploratory" type, designed
around "what if" questions, and written in the form of narratives for
greater ease of communication. Quantitative indicators for such variables
as energy prices, efficiency levels attained by key technologies, or25

1. Long Term Energy and Environment Scenarios: the Literaturetechnology shares in energy supply, are widely employed in thepresentations, although the scenarios are not backed by large-scale
simulations. Since 1995 the Shell scenarios have considered a time horizonof about 50 years into the future; in contrast, earlier Shell scenarios
explored only shorter time frames.
The methodology used at Shell in scenario preparation is a consultative
process that largely follows the steps outlined in the section above, andseeks the direct involvement both of the decision makers and of a large
multidisciplinary team of experts.
The 1995 Long Term Energy Scenarios were based on the assumption of
normal market dynamics but a fast change in the energy system. In bothworlds considered by the two scenarios (named Dematerialisation andSustained Growth) fast technological change fostered by open markets isable to reduce GHG emissions. In the Dematerialisation scenario, energy
efficiency improves at a rate equal to the maximum observed historically,
and technological advances allow spectacular efficiency gains in areas likevehicles and transport. Renewable energy gains a foothold by expandingin niche markets at first and becoming entirely competitive later, while
depletion in some fossil fuels would push up their prices. Nuclear
development is hampered by high cost and public acceptance problems. In
the Sustained Growth scenario, renewables are characterised by very rapid
market penetration, matching the development of oil in the past century,and reaching maximum potential (close to 50% of world primary energy)
by 2050.
The latest of Shell’s scenarios were released in the fall of 2001. They
identify three decisive factors in shaping long-term change: resources,
technology and social priorities. The main questions explored by the new
scenarios revolve around these factors:■ how long will oil and gas resources be able to meet rising demand andwhat will replace oil in transport;■ what will drive market growth and cost reduction of renewables;■ how will a hydrogen infrastructure develop;■ what will social and personal priorities be, and how will they affectenergy choices.
All these can be summarised by an overarching question:"What energy needs, choices and possibilities will shape a global energy
system which halts the rise in human induced carbon dioxide emissions
within the next 50 years – leading to a stabilising of atmospheric carbon
261. Long Term Energy and Environment Scenarios: the Literaturelevels below 550 ppmv – without jeopardising economic development?"(Shell International, 2001).
The question, which has a certain normative flavour, seems all too
appropriate for the scope of our investigation.
Before developing scenarios that provide possible answers to the above
questions, Shell’s analysts considered present trends that are likely tocontinue into the future. These include the continuing – but changing –link between growth in income and growth in energy demand, or between
income growth and attention for the environment; the saturation ofcertain energy needs, and the fact that, due to improving technology,
newly industrialising countries need less energy at the same income level
reached in the past by industrial economies.
Another long-term trend, often decisive for the success of a new fuel ortechnology, is consumers’ willingness to pay a premium for superior
attributes of an energy carrier/product (convenience, cleanliness, efficiency).
This appears to be especially true in industrial countries where consumers
seek energy possessing such characteristics as availability on demand,density, safety, cleanliness, portability, ubiquity and unobtrusiveness. Costand lead-time in energy infrastructure construction, as well as some physicallimits to the expansion of fuel/technology market share, are further elementsin the list of important but quite predetermined factors.
Similarly, population trends, income growth, market liberalization trends,
and energy demand growth are powerful forces in shaping the socioeconomic context for energy, without being fundamental in energy
transitions. Demographic trends are fairly well understood and predictable:
growth to 8.5 billion people by 2050; ageing population profiles, even indeveloping countries, and urbanisation of 80% of world population by theend of the period. Slower income growth (3.5% per year as a world average)
than in the past century would still push growth in energy demand over the
coming 50 years, to probably three times as much as now, but demandsaturation would be in sight. Increasing investment in energy efficiency,
even with present-day or anticipated technologies, could permit global
energy demand growth by 2050 to be only twice as much as today.
Shell’s analysis considers that three factors carry much of the uncertainty– and therefore potential for change in the energy system.
Energy resource scarcity, though a rare occurrence at a global level, is one
factor that might trigger discontinuities in the system within the next
50 years. Although scarcity is excluded for coal over this time frame, costs27

1. Long Term Energy and Environment Scenarios: the Literatureof extraction and use might affect its competitiveness. The peaking of oil
production is approaching but if unconventional sources are included,
scarcity is very unlikely before 2025 and that moment can be pushed
another 15 years down the road by vehicle efficiency measures. New
supply can still be brought in at costs of less than 20$/bbl for at least the
coming decade and the cost of bio fuels should fall below that benchmark
within the coming 20 years, constraining oil prices. Even more uncertainis the future availability of gas, for which scarcity could set in from as earlyas 2025 – to well after 2050. The real issue is timely development of gas
transport infrastructure. Nuclear is likely to remain uncompetitive withrespect to gas for another two decades, even with emission constraints, but
this might change later. Finally, renewable energy resources are potentiallyplentiful but, especially for wind and solar, development is constrained bylack of appropriate energy storage technology, and cost competitivenesswith respect to conventional energy is still not established.
Technology is another area that could bring potentially disruptive surprises.
This is especially true in two areas: solar photovoltaics and hydrogen fuelcells. These two technologies, however, display fundamental weaknesses:
the first needs significant cost reductions and the acquisition of new formsof storage; the second requires a new fuel transport infrastructure. The
uncertainty is whether these two technologies posses sufficiently superior
attributes to induce widespread adoption even at premium prices.
Finally, the third key uncertainty is represented by social and personal
priorities, particularly attitudes towards energy security or self-sufficiency
and attitudes towards the environment. These factors, together withtiming, would play differently with respect to any given energy technology
or resource and may significantly influence the outcome or the type ofsolution with respect to climate change.
Around these three axes, Shell analysts built two new scenarios to explore
two different paths to a sustainable energy system. A sustainable outcome
is consistent with Shell’s professed environmental attitudes; it puts a
normative character to scenarios that would otherwise be of the
exploratory type. While different in focus, both scenarios ultimately
converge on a "sustainable" future.
The two scenarios (called Dynamics as Usual and The Spirit of the ComingAge), described in Appendix I, suggest that by the middle of this century
an affordable and sustainable energy system could indeed be emerging.
They also show some common traits that should be carefully taken into
account in outlining any sensible energy strategy:28

1. Long Term Energy and Environment Scenarios: the Literature■ a role of natural gas as a bridge fuel over the next two decades and theimportance of security in its supply;■ a strong volatility in oil markets;■ a shift towards distributed or decentralised heat and power supply;■ the potential for renewables and the importance of energy storage

technologies (both for power and for hydrogen);■ the difficulty of identifying winning technologies in periods of highinnovation and experimentation.

Stockholm Environment Institute - Global Scenario GroupIn 1995 the Global Scenario Group at the Stockholm Environment Institutein Boston launched a project, which was to run over several years, on
scenarios to explore the problem of transition to sustainability in a global
and long-term perspective.
The team of experts and scientists involved in this work recognised the
manifold dimensions of globalisation (geo-political, cultural, technologic,
economic, biologic, climatic) and the fact that "the world system is at an
uncertain branch point from which a wide range of possible futures could
unfold in the 21st century" (Gallopin et al., 1997). Their aim was to explore
various scenarios of the future and consider their implications. Since thestart of the project the GSG has developed six scenarios outlined in threemajor reports.
"The increasingly interdependent global system we observe today is a way
station in this sweeping process of growth, transformation and expansion.
But a new and ominous feature of the current phase of history is thathuman impacts on the environment have reached global scales. The
contradiction between the growth imperative of the modern world systemand the constraints of a finite planet will be resolved. The critical questionis, how?" (Gallopin et al., 1997)
This first question the GSG tries to address opens the way to a series of
explorative scenarios, describing the range of possible worlds. An
additional qualification to this question follows immediately: how can thecontradiction between continued growth and the constraints of a finite
planet be resolved in a sustainable way? This second question is exploredby at least one normative scenario after a discussion and clarification of
the sustainability notion.
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1. Long Term Energy and Environment Scenarios: the Literature

The scenario building process followed by the GSG starts with acharacterisation of the current state and of the driving forces, providing a
representation of the conditions of the socio-ecological system and the
major factors propelling the system forward. Then the scenario description
requires the identification of critical uncertainties, the resolution of which
will alter the course of events.
The GSG recognises the role of deliberate human actions and choices(influenced by cultural preferences, social visions and psycho-social factors
not entirely understood) in shaping the future. As a complement to driving
forces, the concept of "attractive and repulsive forces" is introduced(Gallopin et al., 1997): these are defined as "forces that can substantiallyredirect beliefs, behaviour, policies and institutions towards some futures
and away from others" (Raskin et al. 1996). As an example of such
attractive and repulsive forces the authors include subjective visions of the
future, which, operating through human awareness, choice and action
become objective forces shaping the evolution of the system.
Finally, these forces shaping the future must include so called"sideswipes": surprises or disasters, such as breakthrough technologies,
wars, extreme natural disasters, pandemics or the breakdown of theclimate systems.
Another important concept that the GSG considers critical in constructing
scenarios is the distinction between slow and fast dynamics operating
within the socio-ecological system. The former are typical of high-levelstructures (governance systems, economic modes of production, culturalpreferences, and most environmental processes), while the lattercharacterise lower subsystem (e.g. responses of individual consumers toprice signals). The tension between the slow process of high-level systems
and the rapid changes of the subsystems may shape some of the criticaluncertainties of the whole. In fact complex systems may become more
vulnerable and brittle to the influence of fast change in the subsystems.
One such case is the growing persuasiveness and speed of global
communications, which accelerate high level processes and generate morepotential surprises (Gallopin et al., 1997).
The GSG associates the unsustainability of the current global trajectorywith three critical trends, which include: environmental degradation
and resource depletion; increasing income disparity; poverty andmarginalisation (Raskin et al., 1998).
30

1. Long Term Energy and Environment Scenarios: the Literature

The drivers that shape the present situation are separated into two
categories: "proximate" drivers and "ultimate" drivers.
■ Ultimate drivers include: values, desires and aspirations; structure of

power; knowledge and understanding; human needs; long-term
ecological processes (Raskin et al., 1998).
■ Among proximate drivers the GSG includes: population size and growth;economic volume and patterns; technological choice; governance;
environmental quality (Raskin et al., 1998).
Ultimate drivers are the factors chosen to give the basic characterisation
to the GSG scenarios, while the proximate drivers are the ones more easilytranslated in illustrative parameters.
As mentioned, the GSG develops six scenarios, categorised within a twotiered hierarchy of classes, based on fundamentally different social visions,and variants, reflecting different possible outcome within each class. The
scenarios are mostly presented as narratives with the aid of a few
indicators; however they are built on an impressive basis of hard data andthe scenarios themselves have been quantified using the PoleStar system(see Kemp-Benedict et al. 2002).
The three classes are called Conventional Worlds, Barbarisation, and Great
Transitions. They are characterised by, respectively, continuity with current
pattern, fundamental but undesirable social change, and favourable socialtransformation.
For each class two variants are defined. Within Conventional Worlds a
Reference scenario is developed around mid-range population and economic
development projections and using typical technological-change
assumptions, while the Policy Reform scenario is characterised by strong,
proactive governance in pursuit of sustainability, greater social equity andenvironmental protection. Both scenarios in this class show a continuity of
institutions and values, rapid growth of the world economy and theconvergence of world regions towards the patterns set by industrial countries.
The Barbarisation scenarios outline a future of deterioration of the social,economic and moral structures of civilisation as markets and policy reforms
become incapable of coping with emerging problems. Its Breakdown
variant features uncontrollable conflict, institutional disintegration andeconomic collapse. The Fortress world scenario is characterised by anauthoritarian response to the threat of breakdown, by which the rich elite
tries to protect itself and its privileges by controlling and repressing an
impoverished majority.
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1. Long Term Energy and Environment Scenarios: the Literature

The Great Transition scenarios examine visionary solutions to the problem
of sustainability, through fundamental changes in values and in socioeconomic arrangements. In these scenarios population levels are stabilised
at moderate levels and materials flows through the economy aredramatically lowered as a result of lower consumerism and use ofenvironmentally friendly technologies. The Eco-communalism scenario
represents a regionalist and localistic vision characterised by small-isbeautiful and autarkic concepts. The New Sustainability Paradigm scenario
shares some of these goals but tries to build a more humane and equitableglobal civilisation rather than retreat into localism.
Figure 1.1 offers a quick reference, for the six scenarios, of the behaviour
over time of six descriptive variables: population growth, economic scale,environmental quality, socio-economic equity, technological change anddegree of social and geopolitical conflict.

Figure 1.1 Summary Table of GSG Scenarios and Trends in Some Key Variables

Scenario
Conventional Worlds
Market Forces
Policy Reform
Barbarisation
Breakdown
Fortress WorldGreat Transitions
Eco-communalism
New Sustainability
Paradigm
Source: Gallopin et al (1997)

32

Population Economy Environment

EquityTechnology Conflict1. Long Term Energy and Environment Scenarios: the Literature

World Business Council for Sustainable Development
In 1997 the World Business Council for Sustainable Development (WBCSD)
launched on behalf of its partner companies an effort to formulate a set ofglobal scenarios to explore possible responses to the challenge ofsustainable development. In particular the underlying question was how
businesses can respond to these challenges (WBCSD, 1997). No less than
34 multinational corporations participated in this project, which was led bya core team of experts from WBCSD, Shell International and the Global
Business Network. The resulting global scenarios were intended to provide
a framework for focused industry or corporate scenarios.
The process of scenario building was conducted following the approach
outlined on page 21. At first, trends that emerged in the last 50 years were
described and the major global threats to the environment and its viability
were identified. These include: loss of crop- and grazing land; depletion oftropical forests; extinction of biological species; rapid population growth;shortage of freshwater resources; over-fishing, habitat destruction andpollution of the marine environment; threats to human health; climatechange related to GHG concentrations in the atmosphere; acid rain and air
pollution; pressure on energy resources. Among the solutions to these
problems is development of technology. However, diffusion of newtechnology is a time- consuming process and our ability to absorb it
depends less on its availability than on our appreciation of its importance,
which slows our capability of taking action against environmental threats.
Another key element in the concept of sustainable development is the ideaof economic prosperity for present and future generations and of social
equity for all, without which misery, war and social conflict can result on aplanetary scale.
From this analysis two key elements of uncertainty emerge, around which
the scenarios are developed:■ what are the critical environmental thresholds and how resilient is theglobal ecosystem?
■ what human social systems can best respond to the challenge ofsustainable development?
Three key driving forces are identified which can be considered as"predetermined" elements that will certainly persist into the future andshape all scenarios:■ social and technological innovations, new economic and social actors;■ population increase;33

1. Long Term Energy and Environment Scenarios: the Literature■ increasing interdependence and interconnectedness, thanks to newcommunication technologies that increase the speed of knowledgetransfer, but unfortunately do not yet raise the speed of problem
solution, due to the growing complexity of governance.
Around these questions and factors three scenarios are developed: the
FROG (first raise our growth) scenario; the GEOpolity scenario; and the Jazz
scenario. They are illustrated in Appendix I.
These scenarios explore the two questions above but develop arounddifferent possible human responses to the challenge of sustainable
development, in other words, around the values and beliefs (or myths) heldby the individuals. Elements of plausibility are abundant: most of theirunderlying trends can be found to be operating at present. Yet it is virtuallycertain that none of them will be entirely true: real life is going to be a mixof them, but understanding how some of those trends might actuallydevelop and work is certainly a good way to prepare for them.

Intergovernmental Panel on Climate Change Scenarios
The Intergovernmental Panel for Climate Changes has periodically
prepared long-term global scenarios focusing on emissions of greenhousegases that can be used for the purpose of assessing climate change, its
impacts, as well as adaptation and mitigation options. The IPCC has
produced such scenarios in 1990, 1992, 1994 (a re-evaluation of 1992
scenarios), and then a Special Report on Emissions Scenarios in 2000. The
1992 scenarios (known as the IS92) were the first to provide estimates forthe full set of greenhouse gases; these estimates were in turn used to drive
global circulation models to develop climate change scenarios.
In 1996 the IPCC decided to develop a new set of scenarios, taking into
account input and perspectives from a wide, interdisciplinary researchcommunity in an innovative "open process", which allowed considerationof different social, economic and technological factors and their impacts
on emission trends. The scenarios, exploring a temporal horizon that
extends to 2100, do not include future policies explicitly to mitigate
climate change and specifically do not assume implementation of the
UNFCCC or of the emissions targets of the Kyoto Protocol.
The process involved:■ an extensive review of the existing scenario literature;34

1. Long Term Energy and Environment Scenarios: the Literature■ the analysis of the main scenario characteristics, their different driving

forces and their relationships;■ the formulation of four main storylines as narrative description of as

many alternative futures;■ the quantification of the storylines through the use of a wide array ofmodels and modelling approaches;■ the review of the resulting emissions scenarios and of their assumptions

through an open consultation process;■ repeated revisions, following this review process, of the scenarios and of

the Special Report before its release in 2000.
As a result of the early stages of the analysis, the team of IPCC experts
identified as the main drivers of future greenhouse gas trajectories factors
like demographic trends, social and economic development and the rateand direction of technological change. Energy demand levels and land use
patterns are directly influenced by these factors.
Based on the results of the literature review and on new data, population
projections were revised downwards with respect to the 1992 scenarios.
Furthermore all scenarios are characterised by growing per-capita incomes,
as a result of gross world product increases of 10- to 26-fold depending on
the case; income differences across world regions are assumed to narrow
down in many of the scenarios described. Technology is considered a key
driver at the same level as population change and economic growth: infact the same assumptions on income and population dynamics can leadto greatly divergent paths in terms of energy demand and environmental
impacts depending on the technology or energy resource assumptions
used. These different assumptions in the SRES scenarios span a wide range
of energy structures and systems. Finally land use patterns and related
assumptions (particularly those related to trends in global forest areas) areof significant importance in these scenarios: although in most of cases
forest areas are assumed to decrease for the first decades, ultimately areversal of this trend is projected (IPCC-WGIII, 2000).
Four storylines were elaborated. Besides excluding consideration ofclimate change policies, these scenarios also excluded outlying (i.e.
extreme with respect to the literature) "surprise" or "disaster" scenarios.
Each of the storylines represents a combination of different demographic,social, economic, technological and environmental developments, and35

1. Long Term Energy and Environment Scenarios: the Literaturedescribes consistently the relationships among those drivers without
expressing judgements or preferences for one scenario versus the others.
The storylines are described in Appendix I. Within those four main
storylines a wider set (or family) of quantified scenarios is developed using
a broader range of values for the main driving forces identified as well as
different modelling approaches: most of the models represent integrated
assessment frameworks. The resulting set of 40 quantified scenarios covers
a wide range of uncertainties on future GHG emissions deriving from:■ Uncertainties

in the parameters expressing the driving forces(demographic, social, economic and technological ones). It is interesting
to note that 13 of these scenarios are devoted to the exploration ofdifferences stemming from different energy technology assumptions.

■ Differences in models’ characteristics and structure.

It is important to note that no probability of occurrence is assigned a priori
to these scenarios.
The four storylines, from which originate four scenario families, assume
distinctly different directions for future developments and end up
diverging in increasingly irreversible ways: together they encompass asignificant portion of the uncertainties implicit in the main driving forces
identified. The four storylines or scenario families are called respectively
A1, A2, B1 and B2 (IPCC-WGIII, 2000). Within the A1 family three scenariogroups are identified, characterising three different developments ofenergy technologies: A1FI is fossil fuel intensive and includes six scenarios
simulated by different models, A1T describes a predominantly non-fossil
fuel case (simulated with three models), and A1B is a balanced case(eight simulations with different models). The families A2, B1 and B2
have six, nine and, respectively eight scenarios.
Within each scenario family two different types of scenarios weredeveloped: scenarios with harmonised assumptions about economic
growth, population trends and final energy use (there are 26 of them) and
scenarios with alternative qualifications of the storyline (14 scenarios) to
explore additional uncertainties. Marker scenarios are, for each storyline,
the scenarios that best illustrate that storyline.
Based on the above assumptions and storylines, the SRES scenarios
quantified through the use of a set of six models, span almost the entire
range of carbon dioxide, other GHG and sulphur emissions found in thecurrent scenario literature. Furthermore the six scenario groups cover arather wide and often overlapping range of emissions, which fan out the36

1. Long Term Energy and Environment Scenarios: the Literature

farther we go into the projected future. It is important to note that similar
GHG emissions trajectories can be produced by very different socioeconomic developments and, conversely, similar developments of thedriving forces considered may result in different future emissions: it is theuncertainty in the future development of key factors that may cause large
swings in future emissions, and which is responsible for the overlapping of
projected emission ranges (IPCC-WGIII, 2000).
The range of cumulative emissions from all sources as quantified by the
SRES scenarios through the year 2100 goes from 770 Giga-tonnes ofcarbon to 2540 GtC. The lower bound is approximately the same as theone estimated for the IS92 scenarios, while the upper bound is higher thanthe maximum range reached by the IS92 scenario (estimated at
2140 GtC). Cumulative emissions are a key element in governing any
stabilisation of concentration, more so than the pattern of change ofemissions from now until the time of stabilisation (IPCC-WGIII, 2000).
Figure 1.2 Global CO2 Emissions for Six IPCC/SRES Scenario Groups-GtC40(a) A13040(b) A2

A1F1 30

20

A2

20
A1B

10

10

A1T
0
1990 2010 2030 2050 2070 2090

01990 2010 2030 2050 2070 2090(c) B1
40

40

30

30

20

20

10

10

(d) B2B2B1
01990 2010 2030 2050 2070 2090

01990 2010 2030 2050 2070 2090

Source: IPCC-WGIII, 2000.

As shown by figure 1.2, some of the SRES scenarios show trend reversals,
turning points as well as crossovers (i.e. cases in which initially emissions arehigher in one scenario but later emissions are higher in another one). In most37

1. Long Term Energy and Environment Scenarios: the Literaturecases of trend reversals, the increasing emissions trend due to income growth,
is more than compensated for by productivity improvements combined withslower population growth (or even decline) (IPCC-WGIII, 2000).

Millennium Project
The Millennium Project of the American Council for the United Nations
University is "a global participatory futures research think-tank of futurists,
scholars, business planners, and policy makers who work for internationalorganizations, governments, corporations, NGOs and universities". The
project is carried out in partnership with the Smithsonian Institution, and
The Futures Group International. It collects, assesses and manages
judgements and analysis about the future and its global challenges fromits network of several hundred participants: this information is used to
produce annual "State of the Future" reports.
As a part of a project started in 1996 a series of global exploratory
scenarios looking out to 2050 were developed and work was started tobuild normative scenarios as well. In this section we will outline themethodology and results followed in the construction of both types ofscenario, as well as the approach followed to quantify the scenarios
through the use of global models (ACUNU, 1998). The scenarios
themselves are described in Appendix I.
The process of developing the scenarios, after a thorough literature survey,
started with a questionnaire sent via e-mail to a certain number ofcorrespondents. The questionnaire presented a list of 18 fundamental
drivers or dimensions that could be used to span the scenarios, and asked
participants to indicate the four most important. The list included suchelements as communications technology (from vibrant to stagnant),
degree of globalisation (from free trade to isolationism), pollution (fromdisastrous to being cured), population growth (from high to low), and soon. (ACUNU, 1998). Among the 35 responses to the questionnaire, thefour highest-ranking drivers or dimensions were:■ degree of globalisation (from free trade to isolationism);■communications technology (from vibrant to stagnant);■ threats to global security and or quality of life (high to low); and■ government participation in society (high involvement to little, orlaissez faire).
Permutations of the extremes of these axes were used to form 16 possible
scenarios. However, not all 16 scenarios were developed: only four were38

1. Long Term Energy and Environment Scenarios: the Literature

considered worthy as the most interesting for further developments as
exploratory scenarios, while two more where selected for development into
possible normative scenarios (ACUNU, 1998).
A characteristic matrix was constructed to provide the essential outline of
the four explorative scenarios’ content. The purpose was to guide the teamin preparing the initial narrative drafts. The matrix listed importantelements in such domains as: demographics and human resources;
environment and biodiversity; technology; governance and conflict;international economics and wealth; and integration. Then from previous
work a checklist of issues (e.g. widening income inequality, increasing
scarcity of fresh water, and so on) was drawn up and the most importantof them (based on collective judgement by the team) elaborated in eachscenario. This was done by trying to imagine what would be theconsequences of those developments or issues in each of the worlds
described. The same was done with a list of promising developments (e.g.
diffusion of biotechnologies or new vaccines, acceleration of trends
towards democracy) (ACUNU, 1998).
The next step was quantification through the use of models. At the
beginning of the project, an informal enquiry was conducted among
selected global modellers, about models and their potential uses inscenarios. Questions asked were: What models would you consider for thisapplication? Specific scenarios and generalised models don’t match. Is itthen necessary to build specialised models to quantify a specialised
scenario? How can we effectively link specialised scenarios into moregeneral global models? Do you know of any global models that are basedon adaptive-agent modelling or on chaos/complexity principles?
Responses to these questions showed that in the history of global model
use in scenarios, early global models produced scenarios based on theirprojections – and there were no global models or studies in which thescenarios came first and produced the assumptions required for the model.
When models are used this way, assumptions must be made about
exogenous variables (such as population growth rate or productivity)(ACUNU, 1998). Choosing these exogenous variables always involves
judgement on the part of the modeller, and values are often based on an
implicit scenario:
Implicit scenario ➞ Exogenous assumptions ➞ Modelling ➞ Scenario
construction based on model runs.
39

1. Long Term Energy and Environment Scenarios: the Literature

Other respondents indicated that a high degree of quantification does notnecessarily equate to accuracy, and that no matter what the model,
simplicity was a desirable characteristic. Some recommended the use ofmodelling approaches that depend on judgements – heuristic modelling –rather than historical statistics for their relationships. A few recommended
presenting outputs of futures studies in the form of dynamic, interactive
computer programs adapted to the needs of decision-makers. Most
stressed the danger that a policymaker, when presented with a scenario inquantified form, may confuse precision with accuracy, while what is in factneeded is to render uncertainty more explicit (ACUNU, 1998).
For these reasons the Millennium project decided to use models to help
assure consistency, but having the scenario drive the model rather thanvice-versa. In this perspective, the explicit scenarios illustrated earlier, wereused to provide the backdrop for the choice of the values for theexogenous variables in the selected model. Therefore, when the model was
run, its output was consistent with the scenario on which the exogenous
variables were based and the model provided quantitative estimates of thevalue of variables that were incorporated in the scenario. Hence:
Lookout panel developments + Scenario axes ➞ Scenario construction➞ Exogenous assumptions ➞ Modelling ➞ Scenario quantification(based on model runs)
The model International Futures (IF), made available by Barry Hughes of
the University of Denver, was selected based on its user-friendliness. In
order to run the model, a matrix was produced in which the columns
consisted of exogenous parameters (or "handles") in the IF model, and therows of specific scenario features. The team members entered judgements
into the cells of this matrix, depicting the effect (in terms of increase or
decrease) of the scenario features on the variables of the IF model.
However, there were many anticipated effects that the model could nothandle, either for lack of parameters or due to its structure (ACUNU, 1998).
This procedure was carried out for each of the scenarios to assign values
to each of the scenario-dependent variables: in some cases the values were
given elements of the scenarios, while in others they were judgmental andselected to be consistent with the spirit of the scenario. Finally, theexplorative scenarios and the model outputs were sent to a selected groupof experienced scenario writers and political experts for comments andrevision. The resulting exploratory scenarios (called Cybertopia; The Rich
Get Richer; A Passive Mean World; and Trading Places) are illustrated inAppendix I.
40

1. Long Term Energy and Environment Scenarios: the Literature

A comparison across these scenarios, carried out through scenario
quantification, shows that by 2050 world population is highest in the
Passive Mean World scenario and lowest in Cybertopia, world GDP ishighest in Cybertopia although Trading places has highest growth
between 2020 and 2040. CO2 concentrations are highest in Cybertopia
and lowest in Mean worlds and atmospheric temperature follows the same
pattern. World literacy is highest in Trading places and lowest in Meanworld (ACUNU, 1998).
Concerning the normative scenarios, the process followed for theirconstruction required the identification of four primary norms from a list of
15 goals circulated among a panel of experts. The four most important
were 1) environmental sustainability; 2) plenty (all people have basic
necessities of life); 3) global ethics (identified and accepted); and 4) peace.
These norms were meant to form the core of the normative scenario, while
the body of the scenario was composed of the actions to address the statedglobal challenges. After a first draft of the scenario, a panel of long-term
normative-oriented experts reviewed it and improved it (ACUNU, 1999).
The Normative World in 2050 is a world that has finally achieved anenvironmentally sustainable global economy, capable of providing nearly
all people with basic necessities and a majority of them with a comfortableliving. The resulting social stability produced relative peace giving leisure
to people to look ahead for the second half of the 21st century. Threedifferent specifications were developed for this scenario depending on
what were thought to be the main forces capable of bringing about sucha future. The three forces were: a) breakthroughs in science andtechnology; b) development of the human potential; and c) political andeconomic policies (ACUNU, 1999).

Country Scenarios
Canada: Energy Technology Futures
In June 1998 Natural Resources Canada (NRCan) started the project"Energy Technology Futures" with the aim of provoking and informing
strategic thoughts among Canadian citizens and with government bodies
about the range of possible futures in energy technologies and systems.
The focus was on technologies that could fundamentally alter the
relationship between economic growth and GHG emissions over the period
from now to 2030-2050. A secondary aim of the project was to improve
NRCan’s long-term planning capabilities (Cliffe, 1999). The project was41

1. Long Term Energy and Environment Scenarios: the Literaturecompleted in the spring of 2000, after a long series of workshops andmeetings with experts from industry, government, business anduniversities, mostly in Canada but also in the U.S. and Europe. From thiswork the ETF team produced four plausible scenarios of what the
Canadian energy technology system could look like 30 to 50 years into the
future, in terms of global context and of how Canada would fit into thatworld. These have been extensively reviewed and refined afterwards.
The scenarios focus on energy sources, energy carriers and energy
technologies rather than policy, regulation or behaviour. They discuss theenergy system that could be used in Canada for the way people live, workand move goods and passengers. Furthermore each scenario provides
estimates of energy demands, fuel mix and GHG emissions.
The scenarios are based on a few common assumptions, mainly concerning
the stability and continuity in some trends and factors:
These are based on the recognition of existing trends in population
dynamics, GDP growth and GHG emissions, and take into account the levelof emissions that should be necessary to meet the Kyoto goals. Other
trends specifically acting in the energy sector and expected to continue
include the increasing electrification of the economy, driven by thegrowing penetration of information technologies; the integration of
distributed energy system; consumer preferences oriented towards electric
power reliability. (Cliffe, 1999).
At the beginning of the project a set of technology perspectives or outlooks
was developed to provide a preliminary inventory of technologies currently
at the conceptual or prototypical stage that could be further developed
and deployed on a large scale in the scenario period. These included
technologies for mobility, drives, process heat, space conditioning,illumination, biotechnologies, alternative and renewable energy; hydrogen;electricity production, electricity transmission and storage, integrated
processes, biotechnologies and GHG capture, disposal and re-use.
The scenarios were developed around three key drivers, selected after
accurate analysis: environmental etiquette i.e. how business and the public
view environmental issues (grey to green); international markets and thedegree of openness and globalisation of the world economy (open or
closed); the rate of change of the innovation system within Canada (rapid
or slow). These three variables defined the axes for the "planning space"in which the scenarios were built as illustrated by figure 1.3.
42

1. Long Term Energy and Environment Scenarios: the Literature

Figure 1.3 ETF Scenarios in their Planning SpaceENVIRONMENTALETIQUETTE
Grasping at Straws

Come Together

Life Goes On
INNOVATIONMARKETSTaking Care of Business

Source: Cliffe, 1999.

With the help of an ad-hoc modelling framework (based on NRCan
InterFuel Substitution Demand Model) these scenarios have been
quantified and translated into rather different levels of primary energy
demand around 2050 and different fuel mixes. Primary energy demand
would total around 16500 Petajoules in "Life goes on" (the closest value
to a Business As Usual forecast), 13500 Pj in "Grasping at straws",
12000 Pj in "Taking care of business" and 10500 Pj in "Come together".
Fuel mix would range between 82% fossil fuels in "Life goes on" to 53%
fossil fuels in "Come together", the rest being supplied by nuclear, hydroand other renewables. Nuclear however plays a role only in "Taking care ofbusiness" and "Come together" worlds, under the pressure of a strong
environmental etiquette, while gas is dominant in the two other scenarios.
Correspondingly, total GHG emissions (including non-energy sources ofemissions) would range from 1125 Mt in "Life goes on" to 325 Mt in"Come together". The transport and power generation sectors would
remain the largest emitters even in the scenario "Come together".
These scenarios raised a number of issues and questions on the role ofspecific technologies such as nuclear (which could experience a strong
comeback according to some scenarios, especially in conjunction withother enabling technologies), GHG capture and disposal, hydrogen, andrenewables. The importance, across the entire spectrum of energy sources,of enabling technologies like semi-conductors, nanotechnologies,43

1. Long Term Energy and Environment Scenarios: the Literaturebiotechnologies and IT, large-scale power storage, and the sensitivityof infrastructure investment and security were particularly stressed bythis project.

The Netherlands: Long-term Outlook for Energy Supply
The Dutch Ministry of Economic Affairs has recently been involved inbuilding and using storyline scenarios in strategic decision-making within
the Dutch government. The intention of the project "Long Term Outlook
for Energy Supply" was to provoke discussion about the Netherlands
energy supply around 2050 (Ministry of Economic Affairs, 2000). Its focus
was on devising a strategy – or set of strategies – for investment decisions,sustainability and research and development, which result in minimum
regrets. In particular, the goal of sustainability strongly contributes to thecharacterisation of the Dutch government’s view of the future. The
scenario approach, requiring the identification of underlying forces thatshape the future and a deeper understanding of uncertainty, proved to bea particularly challenging one to convey to politicians.
The project set out to identify long-term trends affecting the Dutch energy
system and the main drivers for the future, separating as much as possible
certainties and uncertainties. First the main determinants of energy
demand and supply were analysed (population, economic activity level orincome, energy intensity of the system, consumer preference, energy
resources available and their reserves, technologies available).
The analysis showed that at global level demand would increase following
population and income increase: energy efficiency improvements will slow
down growth in demand but not offset it. Sufficient energy supply isavailable to meet this growing demand, but a shortage of easily
recoverable, cheap oil is likely to occur in the first half of the century, andalternatives will have to be found. These will be largely determined bypublic preferences. The energy market will be increasingly dominated byelectricity. The matching of supply and demand will continue to take placesubject to the preconditions of uninterrupted supply, economic
affordability and ecological suitability but the relative weight of thesethree elements will vary depending on the world envisaged and by whether
or not there will be global institutions to establish common preconditions(Ministry of Economic Affairs, 2000).
The preliminary analysis thus revealed that the most important factors of
uncertainty to be taken into account are collective, socio-cultural values, inparticular: Will people measure the achievements of the economic process441. Long Term Energy and Environment Scenarios: the Literature

against short-term monetary gain or against long-term public interest suchas the global environment? Will people recognise the problems together
and leave the solution to global institutions or will they seek solutions on
their own at the local level? These uncertainties turn out to be even more
important than those linked to technologies or GDP growth rates (Ministryof Economic Affairs, 2000).
Consistent with this finding, the storyline scenarios developed for the
Netherlands are built along socio-cultural "axes". In particular they are
identified within the space defined by the institutional dimension ("global
government" vs. "local structures") and by the dimension of values("profits here-and-now" vs. "gains for the world"). In this "space" four
alternative but internally consistent scenarios were defined, characterisedas: (1) isolation, or the fearsome man scenario; (2) small scale ecology – orthe conscious father scenario; (3) great solidarity – or the global citizen
scenario; and (4) free trade – or the consuming individual scenario.
As future outcomes can be influenced by political will, policymakers needto define a set of criteria and priorities drawn from present society’s values
when planning for the future. The scenarios elaborated for the Netherlands
are tested according to criteria of security of supply (including issues
related to geopolitical stability), economic efficiency (in terms of costallocation and equity), and sustainability (in terms of low emissions andefficient resource use). The "Great solidarity" scenario is the one thatmeets most criteria. Based on these criteria and on the commonalities
identified across scenarios, the transition agenda can be defined (including
infrastructures, technologies, etc.) according to a "least regret" strategy.

The United Kingdom Foresight Program – Energy Futures
The United Kingdom Foresight Programme, created under the Office of
Science and Technology at the Department of Trade and Industry has
developed between 1999 and 2001 several energy and environment
scenarios looking out to the next 40 years. The primary objective of the
project has been "the identification and highlighting of key opportunities
and challenges posed by future changes in the supply and demand ofenergy and natural resources and those posed by pressures on theenvironment" (UKDTI, 2000). Furthermore the project intended to develop
a robust view of the research and development activities that would help
secure a strong international position for the UK in the future while
meeting the other demands of society. The need for a longer-term vision
was recognised in light of the challenges of sustainable development and45

1. Long Term Energy and Environment Scenarios: the Literatureof the environment, and also to balance the almost total emphasis on
short-term business issues in today’s energy sector.
A scenario-based process was adopted as it better served the purpose ofidentifying common trends that are relevant across a wide range ofpotential future situations to provide a set of strategies that are robust
against different outcomes. The preliminary analysis highlighted theimportance of several factors in determining these scenarios. These
include: economic growth; industrial structure; fiscal and regulatory
policies; environmental awareness; local and global environmental
policies; energy consumption; energy security; energy cost; preference for
embedded or distributed power; and technological change. The scenarios
are placed in a two-dimensional space determined by two main axes ofgovernance (from globalisation to regionalisation) and social values (fromcommunity values to consumerism). As shown in Figure 1.4, four different
future scenarios are elaborated.

Figure 1.4 Foresight Scenarios for the United Kingdom
Globalisation

World
Markets

GlobalSustainability

Consumerism

Community

Provincial
Enterprise

Local
Stewardship

Regionalisation
Source: Performance and Innovation Unit Energy Review: Energy Scenarios to 2020. September 2001.

46

1. Long Term Energy and Environment Scenarios: the Literature

From this scenario exercise some robust messages are drawn concerningenergy R&D areas that appear to be of crucial importance in a majority ofthe scenarios analysed. These areas include:■ network issues for distributed generation systems;■ developmentof more sustainable power generation technologies,
whether conventional, renewable or nuclear;■ increased efficiency in both generating technologies (including CHP)
and end-use technologies;■ transportation technologies such as fuel cells and associatedinfrastructure;■ biomass and waste utilisation;■ large scale energy storage;■ carbon dioxide sequestration;■ improved fossil fuel extraction (conventional and unconventional);■ regulatory mechanisms to facilitate emission trading, investment inenergy efficiency;■ social science investigation of behavioural issues.
Other recommended areas of investigation, albeit with a reduced R&D
component, were: the creation of future infrastructure or adaptation ofexisting ones; migration of electricity infrastructure (from centralised todisperse); transport fuel migration (replacement of today’s oil based fuelswith new fuels); reconsideration of nuclear power issues in light of theneed to decarbonise the energy base (UKDTI, 2001).

A Critique of Scenarios
Table 1.1 offers a synoptic view of the scenarios according to their main
characteristics: time-scale explored, purpose, type of scenario (narrative or
quantitative), model used to quantify the scenario, main drivers identified.
The sample analysed here includes scenarios that look either at the 2050
or the 2100 horizon. They are mostly narrative scenarios, although a large
number of them have been at least minimally quantified. Among thequantified scenarios, the sample ranges from the IPCC scenarios, each ofwhich has been quantified with three to six different models and in manycases considering variations of the characterising parameters around some
central value, to scenarios quantified with the help of spreadsheet
calculations or simply of indicators.
47

1. Long Term Energy and Environment Scenarios: the Literature

As to the purpose, the majority of scenarios described are explorative; asignificant number of them have been developed for strategic analysis andhence are used to test what strategies would be more robust or more
resilient, with respect to a stated objective, in different worlds. This isclearly the case for the country scenarios examined (Netherlands, Canada
and the United Kingdom), but also holds true for the WBCSD scenarios
which indicate what business attitudes and style would fit best the various
worlds analysed. A few scenarios have a more or less clear normative
content. Sometimes these respond to questions of the type: what possible
worlds could bring about a sustainable future as defined by stabilisationof GHG concentrations in the atmosphere below 550 ppm, or otherindicators (like the Shell 2001 scenarios or the Great Transition scenarios
of SEI-GSG). The most clearly normative scenario is the SEI-GSG Policy
Reform scenario, which sets precise sustainability goals (in terms of income
distribution and environmental pressure target indicators) and theMillennium Project Normative World scenario. As the scenario takes place
in a Conventional World (not substantially different in values and socialorganisation from the one we know), attainment of the goals can only be
pursued by bending the current growth trajectory through a rich array ofpolicy instruments and measures. The Millennium Project’s Normative
World scenario (and its variations) starts from a very clear definition of thenorms but does not quantify objectives and does not indicate specificpolicies for actions to bring about that world: in this regard is more similar
to the SEI-GSG Great Transitions scenarios.
One aspect that deserves more detailed attention is the list of drivers thatare commonly found in these scenarios. An interesting distinction made bysome of the scenario developers is that between ultimate drivers andproximate drivers (SEI-GSG), or between drivers and predeterminedelements (WBCSD) or else between main uncertainties and other drivers(Dutch Ministry of Economic Affairs).
These distinctions seem to hint at some ranking among drivers, between
those that capture the most uncertainty or which have deeper and stronger
implications, and those that are in a way derived by the former. It is theultimate drivers, or the main uncertainties that represent the axes along
which the scenarios are developed.
Interestingly enough, in most cases these drivers refer to the humanelement: they represent "human responses", "socio-cultural values andpriorities", "desires and aspirations", "environmental etiquette", or the"social structure" and "organisation of power". Another category concerns48

1. Long Term Energy and Environment Scenarios: the Literature"resources" and "long-term ecological processes" most of which lie
entirely outside the human domain and control. A third element istechnology, an element typically within the human domain but still highly
dependent on unpredictable and often random factors.
Among the proximate or derived drivers we find elements like population
dynamics, level of economic activity (GDP), technological choice, which arefound more often as exogenous variables in modelled scenarios.
During a seminar on long-term scenarios organised in October 2001 by the
IEA, participants in small group discussions engaged in an attempt todefine a list and a ranking of main drivers. These were then grouped into
clusters. Drivers discussed on that occasion are virtually the same as theones emerging from this literature review. Participants in the 2001 seminarranked technology and technology-related factors highest, followed by abroad cluster that included values, lifestyle, and behavioural elements
particularly of certain actors. Third came income and income distribution,
followed by population. Security issues, investments and shocks were at
the bottom, apparently not being considered particularly critical in shaping
our long-term energy and environmental future. Energy resources andenvironmental constraints were in mid-to-low section of the list; however,
attitudes of the general public towards the environment, as a part of thecluster Values, lifestyles and other behavioural elements, rank very high.
This could indicate that the perceived importance of the environmental
issue might be more important in shaping the future than theenvironmental constraints themselves.
As for the types of worlds described, it is interesting to note that a few
cases recur rather often. Among negative and undesirable scenarios wefind the extreme case of the two Barbarisation scenarios of SEI-GSG, theA2 family of IPCC scenarios, and the Dutch Isolation scenario. These
scenarios are characterised by egoistic values, lack of concern for theenvironment, isolation and closure of markets: they usually end up incollapse of both the environment and of human society. In a similar vein,
although characterised by negative environmental consequences and notsocial collapse, are the A1FI of the IPCC, the evolution of the FROG
scenario of WBCSD the Canadian Life goes on scenario, and the Provincial
Enterprise scenario of the UK.
Among the environmentally benign scenarios we find cases like Ecocommunalism of the SEI-GSG, the B2 family of the IPCC, Grasping at
Straws of Canada, Ecology on a Small Scale of the Netherlands and Local
Stewardship of the UK. All those scenarios are based on strong concern for49

1. Long Term Energy and Environment Scenarios: the Literature

the environment but with a local focus and/or slow technologicalinnovation. But we also find scenarios like the A1T and B1 families of the
IPCC, Jazz of WBCSD, the two Shell scenarios, the New Sustainability
Paradigm of SEI-GSG, the Cybertopia world of the Millennium Project,
the Dutch Great Solidarity scenario and the Canadian Come Together
scenario, which are characterised by strong environmental values coupledwith open markets and rapid technological change. As a result of thisfavourable combination of factors, the environment is often better
protected than in the less market- oriented and less technologicallyinnovative scenarios. Some of these scenarios are very optimistic about thenatural capability of free markets to achieve all these goals without much
regulatory intervention. Others like GEOpolity of WBCSD and Policy
Reform, on the other hand, are scenarios driven by policy intervention
carried out for the public and environmental good by national andsupranational government entities and are characterised by moderate
growth.
The recurrence of some of these images of the future is intriguing. It is notclear how much of this is due to the fact that certain development paths
are clearly visible from our specific point of observation in time or whether
there is some sort of imitation effect among scenario builders.
It is also interesting to note that most of the pessimistic or catastrophic
scenarios are often less fully developed than the more optimistic ones.
This, however, does not reduce the relevance of this type of scenario. There
are at least two ways pessimistic storylines can be used, aside from the factthat forcing us to contemplate catastrophic outcomes may already be ahealthy exercise. First, they help us spot early signs of those trends that
may lead down undesirable paths so that we can start early to address the
problems. Secondly, they help us prepare contingency plans in the eventthat negative situations do materialise. Consider global climate change.
Most scientists believe it is already taking place, although we have a hardtime pinpointing specific weather events and ascribing them to humaninduced climate change. These phenomena become visible over long
periods, but by the time there is certainty of their occurrence it may be toolate for preventative action. In such a case we would be left scrambling to
put in place crisis management and damage control measures. Somecountries are already making plans in that direction, but some of the mostvulnerable ones are too poor even to start making a map of their risks. To
our knowledge, there is very little of that sort of forward thinking, even by
the largest financial institutions.
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1. Long Term Energy and Environment Scenarios: the Literature

One of the most interesting features displayed by some among thesescenarios is the capability of sketching paths over periods of 50 years, inwhich some of the initial conditions are entirely reversed along the way(e.g. open markets and cut-throat competition leading a few decades laterto trade wars and protectionism; reaction to extreme regulation; unbridledeconomic growth leading to environmental disaster and then to economic
collapse). Over long-term horizons it is unlikely for the same trend tocontinue unabated.
A limitation found in most global scenarios, but not in country scenarios,
is lack of explicit discussion of the technologies that might ferry us tosustainable futures (which technologies do we need and how do wedevelop them; where should we concentrate our research efforts andbudgets?). Thus, it is the national scenario exercises carried out by Natural
Resources Canada, by the Dutch Ministry of Economic Affairs and by the
UK Department of Trade and Industry that result in lists of priority
technologies that need to be developed. The usefulness of forward
thinking of this type cannot be overstressed. In recent years, the processesof energy market liberalisation have led many energy companies toconcentrate more on short-term R&D. At the same time governments havetended to get more involved in policies to widen the market for energy
technologies that are more efficient but a bit more expensive or with which
consumers are less familiar. While this is in line with the technology policy
recommendations of the expert community, it is hardly likely to suddenly
generate the "miracle technologies" that would solve our sustainability
equations. In order to have a general sense of what might be appropriate
types of investment in new technology, governments and large enterprises
do not need to pick winners, but would greatly benefit from sometechnological road mapping. Such mapping might be more effective if
facilitated through a process that helped establish where we want to be in
40-50 years or what type of situations we would like to avoid.
Another incompletely sketched aspect of the scenarios examined is that ofbottlenecks in fossil fuel supplies that might well materialise in the coming
decades. Some of the "conflict" or "breakdown" scenarios (like the
WBCSD’s FROG scenario or the SEI-GSG’s Barbarisation scenario)
contemplate worlds where oil or gas supplies become increasingly insecuredue to closing markets and regional conflicts. These scenarios tend tofavour coal as a refuge from energy supply shocks, with predictableenvironmental consequences. Most scenarios agree that there is no
immediate threat of shortage of oil and gas reserves (although thesituation may change for oil in about twenty years). Past experience shows51

1. Long Term Energy and Environment Scenarios: the Literaturethat supply shocks are usually short-lived and the system adjusts to themin a matter of a few years. Yet it is clear that the increasing dependence ofdeveloped and developing countries alike on oil reserves that are
geographically concentrated in relatively unstable areas of the worldpresents risks. Scenarios of long-term instability in these areas would need
to be investigated, and other situations of vulnerability of energy supplies
better assessed. Potential security problems exist for oil- and gas-shipping
lanes, oil and gas pipelines, and nuclear plants with respect, for example,
to terrorist attacks. Other concerns can be associated with long lead times
for infrastructure construction and related financial risk, or to nuclear
proliferation issues.
Finally, it might be noted that those scenarios that actually envisage(either in a normative light or in an explorative context) a sustainable
world or simply one where GHG emission concentration is stabilised at a"safe" level require either technological breakthroughs or truly gigantic
efforts from society in terms of strong political will and/or epochal
changes in consumer preference. In exploratory scenarios this type offactor can be assumed among the drivers while it is in normative scenariosthat they can be fully appreciated. The role of these factors needs to bemade more explicit, and the scale of efforts required for positive change
needs to be better assessed.

52

SEI-GSG
1995-2002

Conventional worlds– Reference
Conventional worlds– Policy reform
Barbarisation– Breakdown
Barbarisation– Fortress world
Great transition
Eco-communalism
Great transition
New sustainability

Spirit of thecoming age

Time horizon: 2000-2050
Shell International
Dynamics as usual(2001)

B2 family

B1 family

A2 family

A1T family

Developer
Scenario name
Global scenarios
Time horizon: 2000-2100
IPCC / SRES
A1FI family
1996-2001
A1B family

Both narrativeand quantified
Both narrativeand quantified
Both narrativeand quantified
Both narrativeand quantified
Both narrativeand quantified
Both narrativeand quantified

Mostly narrative

PoleStar

PoleStar

PoleStar

PoleStar

PoleStar

PoleStar

Each scenario
was simulatedwith 3-6 models:AIM, ASF, IMAGE,MARIA, MESSAGE
MINICAM

Both narrative andquantified
Both narrative andquantified
Both narrative andquantified
Both narrative andquantified
Both narrative andquantified
Both narrative andquantified
Mostly narrative

Model usedType

Table 1.1 Summary Table of Scenarios Examined and their Main Characteristics

Resources;
Technology;
Social priorities
Resources;
Technology;
Social priorities
Ultimate drivers: Values;
Desires & aspirations; Structureof power; Knowledge &understanding; Human needs;
Long-term ecological processes.
Proximate drivers: Population
size and growth; Economic
volume & patterns; Technologicalchoice; Governance;
Environmental quality

Population dynamics;
Economic growth;
Environmental quality;
Equity, Technology;
Globalisation trends

Drivers

Explorative withsome normative
flavour

Explorative

Explorative

Explorative

Normative

Explorative withsome normative
flavour
Explorative withsome normative
flavour
Explorative

Explorative

Explorative

Explorative

Explorative

Explorative

Explorative

Purpose
1. Long Term Energy and Environment Scenarios: the Literature

53

54

Normative World

Trading places

A passive mean world

The rich get richer

Mostly narrative
Mostly narrative

Mostly narrative

Mostly narrative

Both narrativeand quantified
Both narrativeand quantified
Both narrativeand quantified
Both narrativeand quantified
Narrative

Mostly narrative
Mostly narrative

GEOpolity
Jazz

Cybertopia

Type
Mostly narrative

Scenario name
FROG

Country scenarios
Time horizon: 2000-2050
Dutch Ministry ofFree trade
Economic Affairs
Ecology ona small scale
Isolation
Great solidarity

AC-UNU (1996-99)
Millennium Project

Developer
WBCSD(1997-99)

International
futuresInternatio-nal
futuresInternational
futuresInternational
futuresModel used

Main uncertainties: socio-culturalvalues; institutions& social organisations.
Other drivers: economic growth;
technology; sustainability

Norms: Environmental
sustainability; Plenty; Global
ethics; Peace.

Main drivers, “axes” or“dimensions”: Degree of
globalisation; Communications
technology; Threats to global
security and quality of life;
Government participation in society.

Drivers
Human response to challengeof sustainable development;
values and beliefs. Predeterminate
elements: social and technologicalinnovation; population increase;interconnectedness

Table 1.1 Summary Table of Scenarios Examined and their Main Characteristics (continued)

Explorative/strategic
Explorative/strategic

Explorative/strategic

Explorative/strategic

Normative

Explorative

Explorative

Explorative

Explorative

Explorative
Explorative

PurposeExplorative

1. Long Term Energy and Environment Scenarios: the Literature

UK Department of Tradeand Industry- Foresight
ProgramDeveloper
Natural resources
Canada – ETF

Narrative with somequantification
Narrative with somequantification
Narrative with somequantification

Local Stewardship

Provincial enterpriseType
Narrative, somequantification
Narrative with somequantification
Narrative with somequantification
Narrative with somequantification
Narrative with somequantification

Global sustainability

World markets

Taking careof business
Come together

Grasping at straws

Scenario nameLife goes on

Model used

Main drivers: governance (fromglobalisation to regionalisation);social values (from community
to consumerist). Other relevant
factors: economic growth andstructure, fiscal and regulatory
policy, environmental policy,
technological change; energy
consumption, costs and security.

Drivers
Main drivers: Environmental
etiquette; Degree of openness ofinternational markets; Rate oftechnological change

Table 1.1 Summary Table of Scenarios Examined and their Main Characteristics (continued)

Explorative. Usedto define R&D
strategies
Explorative. Usedto define R&D
strategies
Explorative. Usedto define R&D
strategies
Explorative. Usedto define R&D
strategies

Explorative/strategic

Explorative/strategic

Explorative/strategic

PurposeExplorative/strategic

1. Long Term Energy and Environment Scenarios: the Literature55

2. Three Exploratory Scenarios to 2050

THREE EXPLORATORY SCENARIOS TO 2050

Background
Final considerations in the previous chapter suggest that existing
scenarios, while shedding light on a number of critical energy questions,do not adequately address the policy issues that must be confronted. The
scenarios are, for the most part, policy neutral (that is, they do not assume
any specific policies directed at reducing environmental impacts or security
concerns). Furthermore, most posit significant shifts from current trends –but no convincing "story" is provided to enable the user to understandhow to induce such changes. Shifts are manifest as major reversals inpublic perceptions (i.e., consumers around the world suddenly become
ecologically conscious, and seek environmentally benign behaviours evenat relatively high personal cost), or as technology breakthroughs (where
prices for new alternatives decline precipitously – and seemingly bychance). Although there is no shortage of long-term scenarios in theliterature, a number of key uncertainties could usefully be further exploredthrough new scenario work.
However, before we set off to develop new scenarios it is useful to clarify:■ the purpose of the work;■ the relevant questions that we want to address;■ the key uncertainties that deserve further exploration.

The scenario-building process is usually undertaken from a specificviewpoint – either by governments seeking to evaluate specific policy
needs, or by academics or industry experts with personal perspectives.
Hence, to qualify the answer to the above questions, it is important fromthe outset to explain that the point of observation adopted in this work isclearly an IEA perspective. However the IEA, as an organisation made of
26 member countries, does not have a unique perspective to serve as astarting point for its analysis, beyond the definition of its mission and theshared goals of its member countries. It is hence necessary to go back tothese foundations in order to formulate both the underlying issues to beaddressed and the uncertainties that need further attention. For the same
reasons, exploring a family of scenarios rather than single alternatives
appears more appropriate.
57

2. Three Exploratory Scenarios to 2050

The purpose of this work is to explore possible energy futures for energy
and the environment over the coming 50 years. Although theperspective adopted is that of an organisation of industrialised
countries, the scope of the analysis must clearly be global.
The questions and key uncertainties that emerge from previous discussion
are for the most part related to energy security, environmental damage
and technological development:■ Will acknowledged energy resources actually be made available where

and at the time they are needed? Geopolitical risks exist that may cause
disruptions in world supply; sufficient investment to build necessary
infrastructure cannot be taken for granted; mismanagement in energy
system reform may cause local shortages of power or gas. These arequestions that promise to be in our agenda for at least the coming twenty
years, and have both near and longer-term priority for policy action;■ Will continuation of economic growth and satisfaction of our energy

needs cause irreversible damage to the environment and thus
compromise the welfare and safety of present and future
generations? And by way of what conditions can we avoid such an
outcome? The last of these questions summarises the challenge ofsustainable development and is one of the most serious (and perhaps
most overlooked) challenges we face. As with the energy security issue,
the problems (and efforts to mitigate them) will need our attention
starting immediately – and continuing for decades.
Hence, the aim of these scenarios is to stimulate discussion about
environmental sustainability of our energy system, security of supply,and energy technology development.
Scenarios to address these issues can be developed according to twoalternative perspectives:■ We could explore different (but plausible) directions of development inour energy/economic systems and the type of implications they produce
for energy security, climate change and related issues. If in the processsome serious threats (energy supply disruptions, environmental collapse
scenarios, or others) emerge as a result, scenarios can help us prepare forthese events, either to avoid them or to control the damage after the fact;
58

2. Three Exploratory Scenarios to 2050

■ Scenarios can be developed in which specific undesirable events neveroccur – and we can then work backwards to figure out what to do now
to ensure such events never materialise. Constructing such scenarios
requires analysing what technologies might be needed and what
policies might appropriately be implemented to avoid future damage.
In case (a) we would be dealing with exploratory scenarios while in case(b) we would work more on normative scenarios and using a back casting
approach. Although we need to keep in mind the current trends, the initialcondition and the inertia of the system, focusing on a "business as usual"scenario is clearly insufficient if we want to explore our initial questions.
The development of exploratory scenarios will be the subject of thischapter, while the development of a normative scenario will be taken up
in chapter 3.

Methodology
The procedure commonly used to build exploratory scenarios was outlined
in chapter 1. For this specific exercise the same steps were followed. Initial
impetus in the construction of these scenarios came from input provided
by various experts in scenario work gathered at an international seminaron long term scenarios organised in the fall of 2001 by the IEA. On thatoccasion a first attempt was made to identify factors, trends and main
drivers that could have a strong role in shaping the future concerningenergy and environment aspects. The results of that seminar were
integrated into a more systematic analysis, supported by questionnaires
and structured brainstorming sessions carried out within the IEA, that
forms the background to the scenarios themselves.
As a first step, the system under investigation and its boundaries wereidentified. This consists of the energy system (including all elements of thechain from energy production to energy services demand, its technologies
and actors involved) and the energy system context, which comprises the
economic and social environment, as well as at least some interfaces with
the natural environment. Information, expert opinion and past data weregathered on the economy/energy/environment system, identifying within
this system all relevant actors and agents.
Key factors that would affect the system were then identified, clarifying
the links (and feedback) between them and various parts of the system.
59

2. Three Exploratory Scenarios to 2050

This analysis was carried out in a qualitative fashion based on existingknowledge, but whenever possible, causal links were identified much in thesame way as is done in a deterministic model.
Factors and trends that could be considered as "predetermined" or"unavoidable" were distinguished from those that are highly uncertain or
depend on will. Predetermined elements/factors represent those elementsthat remain unchanged in all scenarios and are listed among the common
features of the scenarios developed. Factors that are both uncertain (interms of direction of their development) and have potentially high impact
on the system were identified and ranked through a sort of "Delphi
process" and put in a separate category of "main drivers". This way a listof seven main factors or drivers was isolated, which included (indescending order of importance):■ technology or speed of technological change particularly in the energy

sector (both on the supply side and the demand side);■ attitudes and preferences with respect to the global environment;■ economic growth;■ population growth;■ globalisation and degree of market openness;■ structure of power and Governance;■ global security issues.

For the purpose of this exercise, the two elements topping the list werechosen to represent the main axes along which our scenarios differ and arecharacterised in a sort of spatial representation. In the scenarios developed
hereafter the axis on technological change is seen to vary from fast to
slow; the axis on attitudes and preferences with respect to the global
environment varies from concerned to unconcerned. The remaining
elements are fully taken into account in the scenario narratives and remain
as important forces, but their direction of change is often influenced by thetwo main drivers.
An infinite number of points can be placed on a two-dimensional space,each characterising a different scenario. By focusing on the extreme cases
we have a chance to explore the full range of uncertainties deriving fromthose factors/drivers. It is therefore important to keep in mind that thesescenarios are not built on the basis of considerations of likelihood in theprobabilistic meaning of the word. The scenario methodology demands
60

2. Three Exploratory Scenarios to 2050

that the combinations of factors around which scenarios are built bepossible and allow the exploration of a meaningful case and that the storylines be plausible. The specific combinations of drivers considered thenproduce the scenarios shown in Figure 2.1.
Figure 2.1 Three Exploratory Scenarios
Technological change

Fast

Dynamicbutcareless

Brightskies

Clean butnotsparkling

Slow
Unconcerned

Concerned

Attitudes towards the global
environment

Of the four scenarios illustrated in figure 1 only three were actually fleshedout in the form of consistent narratives or "stories", the one located close
to the origin of the axes was considered to be close to the continuation ofpresent trends.
The three scenarios developed were given names that characterise them
immediately:■ Clean but not sparkling: describes a world of slow technologicalchange, high concern for the global environment;■ Dynamic and careless: describes a world of fast technological change,

low concern for the global environment;■ Bright skies: describes a future of fast technological change, highconcern for the global environment.
These three scenarios are described in section below.

61

2. Three Exploratory Scenarios to 2050

Three Exploratory Scenarios to 2050
Common Features of the Three Scenarios
As mentioned earlier, the three scenarios share some common features,
given by those trends (already apparent in today’s experience and broadly
recognised) that are very likely to continue in the future. They are reported
hereafter with some brief comments by areas of interest.
Population. Growth in world population will continue but is likely to slow
down in the next 50 years. Growth will be concentrated in the developing
countries. Other relevant trends include increasing urbanisation, especiallyin developing countries, leading to an increasing number of mega-cities in
the South. By 2050, around 80% of world population is expected to beliving in urban agglomerations. Population growth might be slightly slower
in scenarios with strong concern for the global environment and fast
technological change.
Income level and growth. Overall income growth is likely to be slower thanin the past century. However economic development will continue
especially in the South, with developing economies growing faster thandeveloped ones. In the process some developing countries may be left
behind. The scenarios developed allow for some variation (higher or lower
growth) with respect to this trend, depending on the assumptions on thetwo main drivers.
The general trend is towards the progressive industrialisation of developing
countries, although the type of industrialisation is not specified here.
Development of the services sector is assumed to be part of the next stage,
which in some cases might take place in an earlier phase of the economic
development curve. Regional distribution of economic activities also varies.
Tertiarisation in industrialised countries will continue, with an increasingrole for the knowledge economy, although this phenomenon will not havethe same intensity everywhere: some industrial countries may fall behindand end-up impoverished as a result.
Energy supply. The only common assumption across the three scenarios isthat there are sufficient fossil energy resources to meet demand in the next
50 years; whether they will actually be extracted depends on the pace anddirection of technological change and on the level of environmental
concern. The matching of supply and demand will continue to take placeat the global level, subject to the preconditions of uninterrupted supply,62

2. Three Exploratory Scenarios to 2050

economic affordability and ecological suitability. However, the relative
weight of these three elements will vary depending on the world
envisaged. In particular, location of the energy resources (both fossil andnon-fossil) may be an important factor. Also, local imbalances on specificenergy markets are possible.
Energy demand. Total primary energy demand will increase in aggregate
terms in all scenarios. The link between growth in income and growthin energy demand will continue but its character changes depending on
the scenario.
Thanks to improving technology, newly industrialising countries will be ina position to use less energy than did the industrial countries at similar
income levels in the past. Whether this potential for lower energy intensity
is fully tapped will depend on other scenario characteristics. Continuationof trends to improve energy intensity at least at the aggregate level islikely. At global level energy efficiency improvements will slow demand
growth but not offset it.
The general trend will be towards convergence in energy end-use patterns
and services between developed and developing countries although theconvergence in energy consumption levels is not necessarily assumed.
The range of energy services demanded in OECD countries (spaceconditioning, mobility, motor drives) will not be greatly altered over the
scenario horizon; changes will be more rapid in developing countries.
The energy market will be increasingly dominated by electricity.
Electrification of the economy in OECD countries will increase further.
Consumer preferences are oriented towards electric power reliability
in OECD countries. Also, consumers seek energy possessing suchcharacteristics as availability on demand, density, safety, cleanliness,portability, ubiquity and unobtrusiveness.
In developing countries, progressive electrification of the economy will takeplace. This trend, along with the effort of bringing electricity to the millions
of people without access to it, will be a major challenge in terms ofinfrastructure development and financing as well as policy. However,urbanisation trends are likely to simplify the task.
Concern for the environment. As a general trend, increased affluence will
generate increasing environmental problems (e.g. waste disposal).
Capacity and interest in addressing these problems will also increase. All
scenarios considered assume continuing concern for local pollution63

2. Three Exploratory Scenarios to 2050

problems and the local environment, especially in developed countries but
increasingly also in developing ones.
Other issues. Increasing interdependence and interconnectedness, thanks
to new communication technologies, can increase the speed of knowledgetransfer to the extent permitted by the degree of market openness
assumed in each scenario. Market liberalisation will continue in generaland in the energy sector in particular. Markets are fairly open in all
scenarios although in some case this feature will be more pronounced thanin others, depending on the direction taken by the two main drivers. As aresult of this assumption, scenarios characterised by strong environmental
concern have also a majority of countries taking action in the climate
mitigation direction.

Elements that Differentiate the Scenarios
The scenarios are differentiated on the bases of two variables: pace oftechnological change and attitudes towards the global environment. With
each variable characterised by a "high" and "low" level, four different
scenarios are derived. Assuming the reference case is technology andenvironmental awareness that proceed along current paths, three
additional cases can be analysed: the high environment, low technology
case (referred to as "Clean but not sparkling"), the high technology but
low environmental case (called "Dynamic but careless"), and the hightechnology and high environment case, referred to as "Bright skies". The
two variables are defined as follows:
Attitudes towards the global environment. As mentioned earlier, allscenarios considered assume continuing concern regarding local pollution
problems. The elements that are scenario-dependent are: the extent towhich attention to global pollution issues such as GHG emissions andrelated climate-change threats is maintained in domestic energy policy inOECD countries; attitudes towards the global environment and theextension to international energy policy. These attitudes vary fromunconcerned to concerned;
Pace of technological change. Technology continues to develop in all
scenarios, and existing technology penetrates the market. However, the speed
by which new technology develops and enters into widespread use varies
across scenarios, from slow to fast. Consistent with the direction of the variable"attitudes towards the global environment" each scenario produces
different results concerning which technologies will emerge more strongly.
64

2. Three Exploratory Scenarios to 2050

SCENARIO 1: Clean, but not Sparkling
Scenario Features
This scenario is characterised by a strong concern for the global
environment by both the public and policymakers but a relatively slow
rate of technological change.
Contrary to a common wisdom for which strong pro–environment policies
would lead to a rapid development of environmental friendly technologies,
a number of other factors could put such an outcome at risk. In this scenario
a combination of pessimistic perceptions about technology and overzealouspolicy intervention do not allow for the full potential of technologicaldevelopment to be released. Furthermore, insufficient investment in R&D or
failure of these research efforts to produce results leads to limited
technological progress. As in this scenario technologies fail to deliver,environmental goals are largely met through induced changes in behaviour,and likely only at rather high costs.
Figure 2.2 Scenario 1
Technological change
Fast

Clean butnotsparkling

Slow
Unconcerned

Concerned

Attitudes towards the global
environment

This scenario, illustrated by figure 2.2 is distinguished by its heightened
concern for the global environment – particularly in connection to climatechange threats arising from increasing GHG emissions from the energy
sector and by acute awareness of the planetary dimension of the problem,
which calls for global co-operative solutions.
65

2. Three Exploratory Scenarios to 2050

A number of existing trends and situations could lead to such a scenario.
Increased awareness of environmental problems could be the result of a
rapid succession of extreme weather events in the developed world(something like the floods in Central Europe of summer 2002 or theunusual heat waves of summer 2003 in Western Europe) and elsewhere,
or of increasing scientific evidence linking growing GHG concentrations in
the atmosphere to global climate change. This change in attitudes could
take place initially in the developed world, and could then spread todeveloping countries and take a strong hold, partly as a result of
increasing wealth and attention to local issues promoting moreenvironmental awareness. A second element is the continuing world
economic growth, which brings with it increases in disposable income –which nations are more willing to spend on environmental protection. A
third element is the structure of economies, which increasingly are
powered by services, and a citizenry that is less willing to accept
environmental excesses of industry as they are less likely to be employedin such industries or see direct economic benefits from industrial activity.
Also, in the early stages of this scenario, nations could be confident ontechnology’s proceeding effectively, and environmental benefits being
attainable at low costs – thus leading them to take on stringent global
environmental commitments. The changes in lifestyle that would bepromoted would succeed in reducing emissions, reinforcing positively acontinued emphasis on environment.
In this scenario the pace of technological change can be characterised, bycomparison, as approximately equivalent to the one envisaged by the WEO
2002 reference scenario to 2030 or slower. The menu of technologies
would be basically the same as in that scenario until 2050, with no new
breakthroughs, although with some improvement of existing technologies.
This slow rate of technological change could be the result of a weakened
faith in technology as an instrument to solve environmental problems,brought about by concentration of public attention on some local
environmental disasters, increased awareness of the risks of dangerous
technologies in terrorists’ hands, or by the food scares in the early years ofthe 21st century. In this scenario such half-hearted support as this fortechnology could result in:■agrowing view that technologies seem to have inherent andunsupportable ancillary costs (e.g., for solar panels, the use of arsenides
in manufacture; for nuclear power, an unacceptable level of radioactive
material; and for electric vehicles a battery disposal problem);662. Three Exploratory Scenarios to 2050

■ less bold research for radically innovative technological solutions toenvironmental problems;■ trends

in R&D spending not much different than in the decade
1990-2000.

Poor choices of R&D investment areas in some cases could add to the
problem. Partly as a result of such attitudes and mistakes, technologicalbreakthroughs might fail to occur in spite of expenditures on research.
Competing technologies may also develop, yet fragmented markets andlack of appropriate government strategies may hinder their market
penetration and widespread use.

2000-2025: Riding on Good Intentions
Developed Countries
At the beginning, in this first scenario, increasing confidence in the science ofclimate, coupled with increasing frequency and severity of climatic impacts
and a level of wealth that allows the environment to be taken as a serious
priority, could cause a dramatic shift in attitudes and preferences held byconsumers and citizens in developed countries. Rising concern for the global
environment would translate in more environmentally friendly behaviour,
increasing demand for goods and services that have a lighter environmental
footprint and energy products with a low or zero carbon content. These
attitudes would spur national governments in developed countries to respondto the demand for more ambitious climate mitigation policies.
The Kyoto Protocol would be followed by new agreements with additionalcountries taking ever more stringent commitments. Developed countries
would provide assistance to developing countries, leading them also to act
to mitigate emissions. For their part, citizens would be more proactive,
demanding that businesses and industry produce more climate friendly
products both in developed countries and elsewhere, and co-operating
actively with local governments, in finding new ways to increase energy
efficiency and reduce GHG emissions.
In the early part of the scenario, with political support from citizens,governments would use the full suite of policy measures to ensure therapid achievement of visible results in emissions reductions. Policies toencourage these changes would include emissions trading, taxes on energy
and energy-related emissions or externalities (like CO2 taxes), imposed
either on fuels use or on energy consumption. Domestically, fiscal
67

2. Three Exploratory Scenarios to 2050

measures, standards and regulations, cap-and-trade mechanisms andvoluntary agreements would be used, as well as international trading inemissions. The emphasis would be on reductions rather than trades,
stemming from recognition of the need to reduce emissions sharply rather
than only to meet fixed targets. Energy saving and significant shifts in fuelmix, and later in the economic activity mix would be a key part of thispolicy attitude. Much of this energy conservation would be achieved
through successful penetration of the most efficient existing technologies
and in the household sector would be the result of changes in behaviour.
Remaining subsidies on coal or other fossil fuels would be progressively
removed, with more targeted support systems taking care of the social
consequences in these sectors (i.e. unemployment). Green pricing schemes forrenewables would be further developed. These policies to induce a shift thefuel mix from fossils to renewables would be complemented by policies toimprove the energy efficiency of the system. Minimum efficiency standards
on domestic appliances, boilers, electric devices, vehicles and so on, would be
adopted. Standards would be supported, where necessary, by financing
measures to accelerate the scrapping of old and inefficient vehicles andequipment, by lowering (and enforcement) of speed limits in highway traffic.
Increasingly, urban centres especially in older cities would be closed down toprivate vehicle traffic, or a system of tolls for the entry of cars set up.
Mass transit infrastructure, not just in large urban agglomerations but also
in mid-sized ones, would be developed to satisfy demand for mobility thatwould otherwise be met by private vehicles. People would choose to walkor ride bicycles whenever possible or to move closer to their centre ofactivity, slowing down urban sprawl and the creation of new suburbs.
Average apartment size would not grow, and new houses would be
actually smaller. Furthermore, some rethinking of conventional cityplanning schemes would take place, especially in newer agglomerations,
to minimise commuting needs. Cities would be more compact. The
possibility of moving people and goods by rail (either aboveground or
underground), or by river barge would be exploited whenever possible.
More stringent fuel efficiency standards for private vehicles would be
introduced and periodically reviewed to tighten them further, thus
accelerating the improvement of vehicle energy performance: this would
apply to both gasoline vehicles and diesel vehicles. Development of hybrid
vehicles would also continue, and their penetration of the automotive
market would gradually increase. Bio-fuels would also be used more
extensively. Gas-powered fuel cells would start being introduced in682. Three Exploratory Scenarios to 2050

commercial vehicles from 2008 but would penetrate the market at a very
slow rate starting from existing gas distribution networks. But at least at
the beginning LPG and methane use would increase in conventional
vehicles and public transport fleets as well. Governments would intervene,
through partnerships with industry, to promote more environmentallyfriendly infrastructure.
Demand in the air transport sector would continue to increase, although,due to the introduction of fuel and CO2 taxes for jet fuel, to the
optimisation of aeroplane size and to the use of lighter construction
materials, fuel efficiency would improve significantly. As a result, growth inenergy demand for this sector would be significantly slower.
With these measures, demand for light oil products would grow much more
slowly in OECD countries, even in the presence of an increased demand formobility. Oil will remain extremely important in transportation, but thehigh taxes and the draconian conservation measures taken in developed
countries will significantly reduce demand growth in those areas, help
prolong the life of existing oil resources and moderate the growth in prices
in the world market.
In Europe, all coal power plants being retired or close to retirement would
be replaced by gas turbine combined cycles, leading to a sharp increase indemand for natural gas. In North America the trend would be similar forcoal plants at the end of their life: but the gas option would be preferred
for new capacity as well. In nearly all OECD countries micro-generation andcogeneration in a distributed fashion would increase significantly.
Very few, new nuclear plants, if any, would be built, due to continuing
attitudes of mistrust by the public towards this technology, and to concern
over the long-term safety of radioactive waste storage, but the life ofexisting plants would be extended as much as safely possible, as ameasure to contain GHG emissions.
In OECD countries, gas will be increasingly used both for power generationand in fuel cells. Increasing the number of fuel cell stacks, attractive
generation capacities can quickly be reached, although the initial
applications will be for distributed generation. However, on this market thecompetition between fuel cells and advanced gas turbines may turn out tobe in favour of the latter. In OECD countries CHP generation would be
used more extensively.
In parallel, public investment programmes to increase the share ofelectricity produced from non-CO2-emitting sources would be undertaken.
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2. Three Exploratory Scenarios to 2050

These programmes would mostly focus on power generation fromrenewable sources. Minimum production targets for these sources would
be adopted. Energy taxes and CO2 taxes would be waived for renewablebased power, thus improving the economics of renewable power
generation. Part of the energy and CO2 tax revenues from conventional
carbon based sources would be recycled to fund small (household orbuilding-size) photovoltaic applications, or, in the countryside, both PV andwind generators. While the technology might not evolve rapidly, the fiscalpressures would allow existing technologies to penetrate the market.
Solar PV technology will improve its conversion efficiency but very slowly.
Wind power, already competitive, will take a considerable share of theelectricity market, exploiting as much as possible all good sites, provided thatconflicts with other land uses do not arise. Commercial biomass use forenergy production will also expand, favoured by improvements inbiotechnologies. Bio-fuels, free from the problems of intermittence thatcharacterise other renewables, will be increasingly used for power generation.
The initial emphasis in this scenario would be on energy efficiency,
conservation and measures on the energy demand side and then on shifts
in the energy supply mix towards renewables and gas.
The price of energy to the final consumer would keep increasing both due
to increased fiscal pressure and to the increased costs of more efficienttechnologies for the system. This would be particularly true for the powersystem due to the need for back-up to protect against the effects ofintermittent generation from renewables. Energy demand in developed
countries as a result would be somewhat reduced with respect to thereference scenario. Also, economic growth would be more modest.
R&D spending by governments would not increase much in magnitudewith respect to the trends that emerged during the last decade of theprevious century (which actually marked a stabilisation at relatively low
levels). Research budgets would be reoriented towards improvement of
non-carbon-emitting technologies (with a focus on renewables and fusion),or towards the higher efficiency of carbon-based ones, and towards socioeconomic research on policies, and approaches to induce behaviouralchange in a more pro-environmental direction. Chance is recognised toplay a role (small or large) in determining the success of R&D efforts. As
one of the assumptions in this scenario is that technological change isslow, efforts spent on basic science and long-term research on innovative
concepts would yield little practical result.
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2. Three Exploratory Scenarios to 2050

Large deployment programmes in renewable generation would set inmotion technology learning in the production of parts and components forrenewable power plants, bringing down costs over time, and improving theefficiency of energy transformation. But this process would be very slow.
Also, investments in R&D to improve the efficiency of renewable
technologies and electricity storage technologies would be made, in orderto deal with the problem of intermittence of power supply thatcharacterises solar PV, wind and other intermittent technologies. However,
the results of this R&D activity in terms of increased transformation
efficiencies of these technologies would not live up to expectations, andrenewable energy technologies, especially for power generation, would
remain unable to supply a sufficiently large share of the market. Fusion
research, meanwhile, would continue, but with limited progress.
In addition, in the first two decades of this scenario, R&D investment ontechnologies such as nuclear and carbon separation and sequestration
would be weak. In a world of heightened concern for long-term
environmental risks this could be itself the result of pro-environmental
attitudes. It could be an essentially political choice based on the fact thatthese technologies either pose serious security problems (long-term safe
storage of radioactive waste or ocean storage of CO2), or are viewed as
temporary solutions (terrestrial CO2 storage), rather than being the resultof an economic choice. In the case of carbon sequestration, some researchwould be still carried out by oil and gas companies as a way to boost
recovery rates from hydrocarbon deposits and the technology would
consolidate. But progress would be much slower for technologies of aquifer
sequestration and even more for ocean sequestration due to concerns
about environmental risk.
The Kyoto targets for the first commitment period would be attained.
OECD countries would then adopt even more stringent emission reduction
goals. With economic growth resumed in Eastern European countries andRussia, very little (if any) hot air would be left for emission trading, which
now would have to be based on actual emissions reductions. To meet the
new goals more policy intervention would be needed.
As a result of the environmental efforts made, environmental quality, andparticularly air quality in large metropolitan areas in developed countries
would improve significantly, reducing the incidence of respiratory diseases,
and reducing water and soil contamination from airborne pollutants.
Marine pollution would decrease too, owing to reduced oil tanker traffic.
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2. Three Exploratory Scenarios to 2050

Developing Countries
As a result of strong leadership and motivation (initially by a small groupof developed countries), and of increasing incomes, environmentallyconscious attitudes would gradually spread to all developed countries andto many of the emerging economies in the developing world. This would
lead to a more proactive stance by governments vis-a-vis environmental
protection including climate change mitigation.
The most dynamic and fast growing among developing countries, alreadyplagued by increasing problems of local environmental pollution, would
start also appreciating the risks of global climate change and show awillingness to participate in efforts to avert them.
Firstly, they would try to deal with the problem of air quality in large urban
agglomeration and in industrial areas. This they would try to do by atightening of air quality and vehicle emission standards and a gradualshift from coal to gas or heating oil for household consumption. Bus andtaxi fleets would be massively switched to LPG and methane. This would
help improve the situation of air quality even in a situation of growing
energy demand.
Cautiously, developing countries would also start accepting the idea totake gradual commitments for GHG emissions growth limitation and later
for reduction, as they climb the economic development ladder. Somecountries would adopt emission control commitments by 2020. This effort
would be fostered by increased willingness by developed countries to help
with technology transfer and financing of GHG emission-reducing projects.
Partnerships would develop and many projects would be carried out in theframework of CDM-type of mechanisms. The availability of financial
resources from developed countries might not be very large, as the latter
would be already investing domestically in non-carbon-emitting
technologies, paying high energy prices, and later experiencing as aconsequence slightly slower economic growth. Resources, however, would
be available and growing, often also as development aid for education andhealth programmes.
Oil demand will keep growing in developing countries, driven by income
growth and by increased appetite for mobility in these societies. In fact,
before the impact of conservation measures and of technology
improvement on oil consumption is felt in those countries, somebottlenecks in oil supply may have emerged. One of them concerns therefining capacity installed to produce light distillates and particularly72

2. Three Exploratory Scenarios to 2050

products that comply with higher environmental standards (low sulphur,etc.). But another bottleneck may be linked to political instability in someof the supplying regions.
Faster growing developing countries like China, India, some countries ofSouth East Asia, would become large importers of natural gas, althoughcoal reserves, where present (e.g. in China and India), would still be used
to satisfy a large part of domestic demand especially for power generation.
In coal-producing countries new generating capacity would still to a great
extent be coal-fired but use cleaner technologies. At the beginning theywould build pulverised coal plants then fluidised bed combustion plants or
supercritical plants with pulverised fuel; later on they will move topressurised-fluidised bed combustion plants, coal gasification andcombined cycles or to ultra-supercritical plants which developing countries
would then start to adapt to their own needs and later improve anddevelop themselves. Gas-based generation would develop in parallel,
showing rapid increases especially in the first 20 years.
As a result of greater emphasis on the local and global environment,
demand for natural gas would grow very rapidly in developing countries as
well, straining existing resources. New gas exploration activities would haveto be undertaken. Huge financial resources would be needed, particularly
to build new gas transportation networks (pipelines and LNG terminals). By
2020 the geopolitics of gas will become as central to world growth as thegeopolitics of oil was in the last 30 years of the previous century. Prices will
have increased considerably even in the absence of conflicts.
China and India will try to assure long-term supply contracts from gas
exporting countries like Iran, Russia and Central Asian Republics, by forging
strategic partnerships with those countries. The reciprocal economic interestin doing so might help stabilise politically the supply areas.
Similarly, in Latin America, although in a situation of economic growth lessdynamic than in Asia, demand for gas will grow rapidly, promoting more
exploration and accelerated construction of pipelines. Prices would go up
following increased demand both in Latin America and in North America.
Africa, the slowest growing area, will remain for some time an exporter ofgas. World wide, the times in which associated gas from oil deposits wasflared will be long gone, both for environmental reasons and for theincreased value of gas.
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Gas will largely play the role of transition fuel while non-carbon
alternatives are developed worldwide. In parallel, non-carbon and low- or
zero-net-carbon technologies will be increasingly adopted and developed.
Some of the largest and most populous developing countries would
pursue, in parallel, the nuclear option, initially with technology supplied bydeveloped countries, but increasing also developing their own design.
Some nuclear plants would be built in China, India, Brazil, South Africa
and a few other countries, although construction programmes would not
be massive.
Renewables like solar PV, wind and biomass, do not see dramatic
technological improvements or cost reductions from accelerated adoption
measures in developed countries. But due to environmental preferences ofdeveloped countries and favourable financing terms offered by them,renewables are pushed through the market and start to expand rather fastin developing countries too, where the renewable resource potential ismuch larger. More conventional renewables, such as hydro, will be also
exploited to close to their maximum potential, even amid increasing
opposition by displaced populations and environmentalists.
Solar PV technology only slowly will improve its conversion efficiency, andthus costs will decrease equally slowly. However, wind power, alreadycompetitive, will take a considerable share of the electric market whereverwind conditions are good and conflicts with other land uses do not arise.
Commercial biomass use for energy production will also expand, favoured
by improvements in agricultural practices and in biotechnologies. Bio fuels,
free from the intermittence problems that characterise other renewables,
will be increasingly used for power generation, but their use will also be
expanded as fuel additives to power vehicles.

2025-2035: a Time of Growing Economic Constraints
Over 25 years, considerable environmental benefits would have beenachieved. In addition, the policies would lead to changes in lifestyles -- withtrends in developed countries towards lifestyles that value education,
leisure, culture and the arts more than the current measures of economic
performance and material wealth. Productive activities would be lessmaterial-intensive and more labour-intensive. Developed countries would
have already completed the transition towards a mostly service economy,
contributing to a significant reduction in energy intensity.
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2. Three Exploratory Scenarios to 2050

While global emissions would be approaching stabilisation, reductions
would not be occurring, and evidence of global climate stresses would keepincreasing. Concurrently, the economic costs of climate mitigation policies
would start to be felt, for the level of technological improvement needed
to bring down or control the costs of further decreases in GHG emissions
would not materialise rapidly enough. Further reductions in per capita
energy consumption in OECD countries would become increasingly
difficult. Higher energy costs would be another cause for sluggish
economic growth, already driven in most of the OECD countries by several
other factors such as ageing of the population, rising social security systemcosts and somewhat more regulated markets. Stresses due to slow
economic growth and relatively high unemployment would increase thedifficulty in maintaining the desired level of development aid spending
and of investment in new but still expensive technologies.
In the meantime, progress with respect to the planned GHG emissions
reduction trajectory would start to slow down in OECD countries.
Insufficient investment in basic R&D and/or a focus on technologies (suchas fusion, or power storage) that over time have been incapable ofmaintaining their promise will have led to a substantial lack of adequate
technological options. By 2025 this would cause a reassessment of someof the technology choices made to achieve environmental goals. At theend of this reflection period, developed countries would emerge with asomewhat more sober view of the possibility of achieving ambitious
environmental goals without using all available technologies.
On the other hand, economic growth in developing countries in the first halfof the new century would have continued. A number of developing
countries would be skipping altogether the heavy industrialisation phase;
however, others would be characterised by a strong industrial sector andstill increasing per capita energy consumption. While continuing to drive
up emissions and environmental pollution, this growth would also bringwith it a growth in environmental concern on the part of a large share of
the population, and the increasing financial wherewithal to startenvironmental protection programmes in those countries. Strong
movements to protect the remaining forests and wildlife species would
develop not just in China, India, Brazil and South Africa, but also inIndonesia, all of Central and Latin America and even in parts of SubSaharan Africa. Besides the creation of an important number of parks andnatural reserves to protect what is left of their natural heritage, this would
lead to an increasingly active role by governments in developing policies todeal with global pollution issues, including marine pollution and, most of75

2. Three Exploratory Scenarios to 2050

all, climate change. The effects of climate change by that time would also
be increasingly felt in developing countries, and the devastation wrought bytropical storms, successive droughts and destructive rains would bringmisery to most vulnerable areas. This would mobilize the energies not justof the intellectual elite, influenced by the new values of the developed
world, but also of ordinary citizens to demand that action be taken. To themany that never had access to luxurious, energy-devouring lifestyles, as longas incomes are able to satisfy basic needs, the accepting of ideas of respect
for the environment may come as a very natural process. Attitudes indeveloping countries towards the environment and the possibilities foraction to prevent climate change would become more positive.

2035-2050: Pushing Ahead
By 2035 most if not all developing countries will have adopted
greenhouse gas emissions control targets. In a number of cases thesewould be explicit emission reduction commitments, in others they would
aim to moderate emissions growth. Their governments would adopt
policies and plans aimed at achieving those targets. Furthermore theproductive activity mix in many cases would not be very energy-intensive,
or would have already evolved towards less energy intensive patterns.
However the technology stock, depending to a large extent on research anddevelopment taking place in developed countries, will not have dramatically
improved in the first 30 years of the century. Many newly developed
countries would depend on an energy infrastructure put in place in the first
15 years of the century, using already tried and tested technology of thetime, but with a perspective of 15-20 years of useful service ahead. This
capital stock could not be scrapped ahead of time, seriously limiting thepossibility of controlling emissions without sacrificing further growth.
New and advanced technologies developed in the rich countries would not
be sufficiently advanced to offer "miracle" solutions for carbon-freeenergy supply. Many renewable technologies would still be unable toprovide energy and power on a large scale. Other fossil fuels-based power
technologies will be reaching maturity but remain very important sourcesof GHG, especially once the efficiency losses of SOx and NOx abatement
equipment are included.
As a result, in order to maintain some of the commitments to reduce GHG
emissions growth, some newly developed and developing countries willreconsider technologies such as nuclear and carbon sequestration thatthey had rejected earlier.
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While a resumption of nuclear programmes may be difficult in many OECD
countries due to the loss of technological capability (nuclear engineers,
skilled workers, manufacturing capabilities), things would be different incountries that had never totally abandoned nuclear production and insome of the developing countries. In the latter, nuclear would remain astrong alternative way to reduce emissions while meeting ever-growing
electricity demand. More favourable economic conditions and growing
concern over climate change would overcome local environmental risks. As
a result, even without a substantial improvement of the technology, it will
be increasingly used. Without repeating the gigantic plant construction
programmes that took place in some OECD countries in the 1970s and1980s, significant nuclear programmes will be started in a number ofdeveloping countries, and will privilege smaller size and safer plants.
Carbon capture and storage technologies would also be reassessed. While
substantial experience would already exist for sequestration inhydrocarbon deposits (and plenty of exhausted ones), some of the otheroptions would be explored, leading to some improvement of thetechnology towards the end of the period. But for some time considerable
resources would have to be invested in carbon separation and capture
research, by far the most costly segment of this process.
Widespread use of most efficient technologies in energy end use, although
not very innovative with respect to present standards, would help
moderate energy demand growth. In many parts of the world the structureof urban agglomerations will have become denser or (for the newest ones)
adopted decentralised patters, easing commuting problems. Public
transport would be preponderant in OECD countries. Efficient diesels,
hybrid vehicles and (to a lesser extent) hydrogen-powered fuel cell vehicles
will help keep oil consumption low.
As a result of a combination of the use of the above technologies (on boththe supply and the demand side) and a continuing shift in behavioural
patterns towards less consumerist lifestyles, by 2040 the global GHGemission curve would be actually starting to bend down. Energy
consumption patterns between developed and developing countries would
be heading towards convergence, but this will also have been achieved ata cost of lower income growth and a substantial reduction of per capita
energy consumption in developed countries, while a moderate increase
would have taken place for developing ones.
772. Three Exploratory Scenarios to 2050

The outlook for 2050 shows a world that is labouring to further reduce
GHG emissions, aiming at stabilising their concentrations but doing so at
the cost of lower economic growth and of relatively important behaviouralchanges – some easy to accept, others perhaps less easy to live with.

SCENARIO 2: Dynamic but Careless
Scenario Features
This scenario is characterised by very dynamic technological change, lowpriority for climate change mitigation and a generalised belief thatsustained growth and rapid progress in technologies will take care of all
problems without need for much policy intervention.
As a corollary, this scenario has more rapid economic growth than the firstone, including more open but less regulated markets. Unhindered economic
growth is the main priority, shared by developed and developing countries
alike. However, not all countries are able to achieve fast growth rates andsome lag behind. Global threats such as climate change take a back seat in
the concerns of both citizens and politicians. Although energy represents a
relatively small share of production inputs or household spending, low energy
prices and security of supply are considered an important condition foreconomic growth.
At the beginning, progress is faster in fossil fuel based technologies, helping
to maintain low prices. In both developed and developing countries local
environmental problems are not ignored but are dealt with at the local level
and consistently with the economic resources of the affected communities orindividually through pollution impact averting behaviour. As a consequenceof these initial conditions, fossil fuel demand grows rapidly, followed by anincrease in GHG emissions. These two factors increase the likelihood ofenergy security of supply crises and worsening environmental conditions. To
deal with security of supply, and in the continuous quest for low energy costs
the system accelerates the development of new technologies. While the firstphase of this scenario is therefore heavily oriented towards fossil fuel-based
technologies, in the second part of the scenario horizon, non-fossil
technologies emerge too.

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2. Three Exploratory Scenarios to 2050

Figure 2.3 Scenario 2
Technological change

Fast

Dynamicbutcareless

Slow
Unconcerned

Concerned

Attitudes towards the global
environment

In this scenario too (see figure 2.3), the Kyoto Protocol goes into effect but
efforts to reduce climate change are not carried forward to a second
commitment period. The short-term costs of action are deemed too high for
additional commitments in the near term, and the various groups whose
vested interests might be affected are much more vocal that those who
might benefit from, say, energy savings, carbon tax revenue recycling or,more directly, climate change mitigation. Cost uncertainties and cost
controversies remain. As a result, the international process is unable toreach agreement on the next steps that satisfies a diminishing interest in
the problem from developed countries or the concerns that any actions
would hinder the economic growth of the developing world.
Both developed and developing countries focus on economic growth. Overall,this scenario has a slightly faster economic growth rate than the Clean but
not Sparkling scenario described above; it also has more open but lessregulated markets. With the emphasis on economic growth and increasing
income, lifestyles become more consumerist, driving up households’ energy
consumption too. However, economic growth is not homogeneous: somecountries grow fast, others lag behind. Income inequality across countries
remains high or increases, creating potential conflicts.
Security is a looming problem, and particularly security of energy supply,
both at the local and at the global level. Governments are less79

2. Three Exploratory Scenarios to 2050

interventionist (they do not intervene at all in matters of global
environmental concern), but still they make significant investments inbasic research. Technology development and pre-commercial R&D aremostly left to business enterprises, which use them to acquire acompetitive edge in the market. Technological change is vibrant in all
sectors. Throughout the period, in the energy sector technological progress
is mostly driven by cost and security of supply considerations; particularly
at the beginning, it is faster in supply side technologies and especially infossil fuel related technologies.

2003-2015: Abundant Energy Resources
Lacking the constraints of carbon-emissions reduction, this scenario isheavily based on fossil fuel sources of energy (coal, oil, and gas). At the
beginning of the scenario period, fossil fuel resources are abundant: oilreserves are estimated to last about thirty years at present day
consumption rates, while gas reserves, by the same criterion, could be
sufficient to satisfy demand at least until 2050. Undiscovered resources
and non-conventional sources of both oil and gas have the potential tomeet future demand for longer periods. Concerning coal, reserves are huge
when measured against the current consumption rate.
Geographic distribution of fossil-fuels resources, however, is more
problematic. While coal reserves are widely dispersed across continents, oiland gas resources are more concentrated geographically, with more thanhalf of proven oil reserves and over a third of gas reserves concentrated in
the Middle East and additional large reserves localised in the former Soviet
Union. The former area is politically troubled and the latter is not felt
entirely secure with respect to their relationship with the OECD countries,
which adds further uncertainty to the large production infrastructure
investment needed to expand their supply potential.
In this scenario the goal of low energy prices, especially for fossil fuels is
pursued in several ways: sustained investment in new exploration,
extraction and processing technologies, increased competition amongproducers, but also increased control of those important energy-producing
areas that remain politically unstable. In this scenario, the initial emphasis
is on the supply side of energy and on supply side technologies. However
technological progress after a while catches-up on the energy demand side
as well.
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Developed Countries
As a general remark, valid both for developed and developing countries, inthe first decades of this scenario, except for those areas where largehydrological resources are still unexploited, new (and replacement) power
generation capacity would be mostly fuelled by coal and gas and(marginally) by oil products. At the beginning, the precise mix of thesesources would be dictated almost exclusively by direct cost considerations:
local availability of resources, market prices of resources, transport cost andplant construction costs.
However, in developed countries the cost of abatement of those air
pollutants that have a local or regional relevance (SO2, NOx, particulate,etc.) have to be taken into account in the power plant costs. This type of
consideration may favour gas over coal-fuelled generation in a significant
number of cases. While global issues are of little concern, populations are
increasingly aware of local health impacts or of such environmental
damage as caused by acid rain and particulates and have come to expectthat these noxious consequences of energy production be brought undercontrol. As CO2 emissions represent little direct health hazard, virtually noeffort is made to control them.
At the beginning, nuclear power is an expensive option, especially whenissues of plant decommissioning and storage of radioactive materials are
fully taken into account. However, continued research funding to address
the cost and the security issue, leads to results that improve the economicsof this technology, spurring the resumption of nuclear programmes in somedeveloped countries later, around 2020.
This scenario privileges centralised options for power generation, as ingeneral they allow for larger economies of scale and lower costs. However
decentralised generation is not excluded a priori if it can compete
effectively on a cost basis, and especially as a tool to address security ofelectric supply in particularly sensitive applications.
In the industrial sector in developed countries gas will maintain a strongrole for all heating and process-heat needs. Use of light oil products willcontinue but decrease. Coal will remain important only in steel andmetallurgical industries. However, increasing interest, in some countries,
will be paid to capture and storage of criteria pollutants from coal burning.
Electricity will take an increasing share in all sectors, as automated andcomputerised processes become the rule.
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Gas demand would grow in the residential/services sector for water andspace heating or for cooking, where its relative cleanliness will make it thefuel of choice. This growth will take place as a result of gas distribution
grids being completed and increasing incomes leading to higher demand
for larger apartment size by households. The increasing number ofhouseholds with only one or two members accentuates the trend. In fact
these two factors and the increasing appetite by individuals andhouseholds for more space, higher levels of comfort, for more electricalequipment and electronic devices will rapidly push up demand for otherenergy carriers, notably electricity in the residential sector. Similar
considerations would apply to the commercial sector.
In the near term, oil products would remain unchallenged as fuels of
choice in the transport sector, with their demand growing very rapidly
world-wide due to increasing demand for mobility.
The trend, particularly for road transport, would not be as fast in OECD
countries as in the rest of the world, with Western Europe showing theslowest growth due to increasing traffic congestion and progressive vehicle
demand saturation. But preferences would remain oriented towards bigger
and faster vehicles (SUVs and luxury cars) although their fuel efficiency
would improve over time. The average household in OECD countries would
own two cars, although congestion and parking difficulties would promote
the use of smaller, more compact and much more efficient (certainly lesspolluting) city cars. Passenger transport by rail would maintain a market
for inter-city travel, in fast trains connecting large metropolitan areas.
Air travel (both for business and for tourism) would keep increasing inOECD countries, as per capita incomes keep increasing. People indeveloped countries take long weekend vacations more often todestinations abroad while increasing the spatial range of their tourist trips.
However, fuel efficiency of the fleets will continue to increase, partly as aresult of improved occupancy rates and partly due to increased aeroplanesize. Freight transport would be still handled mostly by road trucks, andincreasingly by air cargo, often as a result of growing electronic commerce.

Developing Countries
In developing countries economic considerations in deciding the specificfuel/technology mix for power generation will be of paramountimportance. This implies that fossil fuels and conventional fossil fuel-based
technologies will be preferred in most cases. In coal-producing countries,822. Three Exploratory Scenarios to 2050

coal will satisfy a large share not only of power generation but also of
industrial energy needs, all processes requiring heat.
As mentioned above, in this scenario developing countries do not get
involved in the Kyoto Protocol and CO2 emissions reduction is not a
relevant policy objective. Concern for increasing emissions of local
pollutants (SOx, NOx, particulate matter) will increase at a later stage as
average per capita incomes grow. However, in countries with a highhydrological potential, this resource will be obviously exploited, especially
if adequate financing from international lending institutions is available.
While not an interesting option at the beginning of the period due to its
large capital requirements and high system costs, by 2015 nuclear
programs are actively being pursued in those energy resource-poordeveloping countries where income growth and energy demand growth are
more sustained.
Fairly large and geographically concentrated potential demand will be aprecondition for large investments in gas distribution grids to be started indeveloping countries. As soon as these investments are realised, growth ingas demand will be very rapid in the household sector especially in large
cities, increasingly replacing coal or other solid fuels, or heating oil, inorder to mitigate local air pollution problems. And its role will be
increasing in industrial uses as well, especially in areas where the presenceof industrial activities is more concentrated.
Oil products demand in the transport sector will grow very fast due toincreasing affluence and increasing demand for mobility. This demand
would be particularly robust in Eastern and Central European countries,
Russia, Asia, and Latin America.
Developing countries at the beginning would try to catch-up with the sametransport demand patterns and behavioural models of industrialised ones.
In most cases the construction of an important railroad infrastructure (asdone by rich countries in the early days of their industrialisation) would not
be considered interesting, and priority would be given to road infrastructure.
Air travel (both for business and for tourism) would keep increasing in thefastest developing countries as per capita incomes grow. For thosecountries fuel efficiency of the fleets will increase especially in the newest
ones. Poorer countries will continue using older planes and older
technologies. Domestic freight transport would be done mostly by road sotruck transport will experience explosive growth. Air cargo transport ofgoods will also increase.
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2015-2030: Supply Security and Environmental Challenges
As a result world oil demand would grow fast (over 2% per year). By 2015,
tensions on the oil supply side would have become considerably
exacerbated. Initially they would concern sporadic shortages in refinery
capacity in developing countries. But with demand booming, investments
in new capacity in many cases would catch up. Traditionally oil-exporting
countries would, at last, massively enter the refining business but large
refining capacity will also be built in rapidly industrialising countries. In
addition, some delocalisation of refining from developed countries due toincreasing environmental regulations and pollution control costs could
take place.
At those rates of oil demand growth, the rate of resource extraction would
also accelerate. This would not show up immediately in a price increase,because strong demand would sustain robust investment by the oil
industry in new technologies to find and extract oil in increasingly difficult
conditions without dramatically increasing costs. This and fierce
competition among oil companies will prevent prices from increasing forsome time. This process of adjustment in the oil market would take placerather smoothly until 2015. But eventually prices will start to creep up asa result of increasing resource exhaustion. Furthermore the high costproducing areas would yield to those supply areas with lower costs andlarger reserves, determining an increasing import dependence on a few
geographic regions, and increasing supply security issues.
As a result of robust growth in world gas demand (between 2.5 and 3%
per annum), driven particularly by developing countries, and of increasing
resource extraction and transportation costs, gas prices will also increase
gradually. These price signals, if properly transmitted to both producers
and consumers, in turn will drive technological improvements both insupply and demand, ensuring that the price increase is contained. For gas,
competition with coal will be another element of moderation.

Security Risks
However, increasing import dependence from a few important geographic
areas constitutes an inherent security risk, both for oil and for gas,
especially if political stability is not ensured in those areas. Strong
nationalistic feelings would re-emerge in those regions, creating tensions.
Producing countries would start to complain about low resource prices,prevailing until then; uneven distribution of the oil and gas revenues would
add to social tensions. The need for oil and gas pipelines to cross many84

2. Three Exploratory Scenarios to 2050

state borders (often in areas where conflicts simmer) before reaching theirdemand terminals would be a continued source of risk, reflected in the costof financing new infrastructure. Insecurity of shipping lanes in South East
Asia could become an additional source of tension and oil or LNG pricevolatility in the area.
Countries that have become increasingly dependent on imported resources
would develop more and more aggressive policies to secure a steady flowof supply. When conflicts appear, supply side shocks and price spikes willtake place too. This type of event will take place with increasing frequency.
In this scenario, this increasingly tense political and energy market
situation would likely bring along a recrudescence of terrorism and anincreasing preoccupation with security at many levels. As a result airline
traffic growth would suffer from periodic crises, and tourism too would be
affected; the security of industrial installations as well as that of networks(in transport and communications) would be reassessed and at all levels
technologies that improve security would receive additional impetus.
Although not caused by a pressing scarcity problem, these crises will
induce energy-importing countries to reassess their overall security ofsupply strategy. The technology options to reduce energy dependence
would be considered, prompting an acceleration of technological change
in various directions.
One of them would be a rapid improvement of coal gasification andliquefaction technologies, which would allow, through synthesis processes,
the cheaper production of increasing quantities of the preferred energy
carriers without requiring significant changes in end-use technologies. Thismight be the strategy chosen by China and perhaps India as well, although
the US would bring a strong initial contribution to developing thistechnology. Australia and South Africa would also invest (and might
actually become leaders) in coal gasification and liquefaction technology.
Another direction would be rapid development of technologies that allow
the successful exploration and exploitation of increasing quantities of oil
and gas from very deep deposits or from unconventional sources (tarsands, oil shales) in politically more stable areas. Canada could thus
strengthen its energy-exporting role. The idea of exploiting methane
hydrate resources would also receive more attention.
A third approach would be the development of more efficient energy
transformation and end-use technologies. In the era of low energy prices
these technologies had been neglected by consumers and thus had little85

2. Three Exploratory Scenarios to 2050

room to develop, but with increasing or volatile oil and gas prices, theywould be looked at with renewed interest.
Finally, backup systems, as a strategy to increase security in case of supply
interruption, terrorist attacks or system failure would be increasingly
maintained at hand, creating a certain amount of excess capacity insectors like power generation and increasing the diffusion of distributed
generation.
Increased investment in energy efficiency would take place mostly in thosetechnologies that use oil products, or gas or that use electricity in countries
where gas represents a substantial share in the power generation mix.
Pervasive use of information and communication technologies will
increase the scope for energy efficiency improvement in all demand
sectors. Improvement would also concern technologies that produce
electricity from gas. These technologies, therefore, besides power
generation, include the entire transport sector, nearly totally reliant on oil
products, as well as the industrial and residential sector. In particular, theywould include fuel cells powered with both natural gas and other fuels,
especially for transport applications, as they provide greater fuelefficiencies than internal combustion engines. By 2025 fuel cell cars will
represent a significant share of the market for new vehicles in developed
countries. Conventional and hybrid vehicles would also be greatly
improved allowing for spectacular reduction of fuel input perpassenger/Km travelled.
All of these directions of technological improvement could be successfully
pursued in parallel: in fact they would present the same advantage,
namely, improving security of supply through diversification of sources
without requiring significant changes in new infrastructure and end-use
technologies.
At first, with keeping costs down a high priority (and with the continuing
low priority assigned to global climate change), nuclear technologies will
start being reconsidered in those developed countries with high energy
demand, strong dependence on foreign energy and no significant
domestic resources of coal – and even then mostly as a measure to
mitigate energy supply vulnerability. Thus, for example, Italy may movetoward a nuclear approach only after a lengthy period, while Japan andFrance would never discontinue their current nuclear programmes. Later,nuclear plant construction programmes would resume in other developed
countries too. Meanwhile, with continuing high costs, the attention
towards certain renewable technologies like solar PV will remain modest,86

2. Three Exploratory Scenarios to 2050

but investment in the cheapest renewable options (wind, biomass andhydro, where possible) will increase.

Environmental Stress
Over time, rapidly increasing consumption for fossil fuels will have led not
only to accelerated depletion rates, but also ever increasing levels of GHG
emissions, particularly CO2. The underlying assumptions and drivers of this
scenario make it a "carbonisation" scenario. Due to the continuing strong
use of oil and the dash for coal, energy related CO2 emissions will haveincreased even faster than energy demand, inverting the trend thatprevailed in the last thirty years of the previous century.
Furthermore the environmental impacts of developing the oil, gas and coalindustries at such a magnified scale would be huge. The land and marine
pollution resulting from exploration, extraction and refining activities, notto mention transport of hydrocarbons and coal, would be significant andonly weakly mitigated by improved environmental protection practices andtechnologies. The latter would be mostly available to richer countries, butpoor developing countries endowed with fossil fuel resources mightexperience significant environmental degradation. As they too get rich,they will become more sensitive to local environmental issues and ask forcleaner technology solutions.
Among other reasons for the push towards cleaner technologies would betransport-related air pollution in large cities. Even in developed countries,
air quality in large cities would deteriorate due to the increased use of cars.
Although new generations of vehicles will produce small quantities of veryfine particulate, their presence in urban air will be increasing. Atmosphericozone concentrations would have reached very high levels, especially insummer days, and the presence of volatile organic compounds would
increase. These pollutants would become responsible for an ever risingfrequency of respiratory diseases and of cancers in the population. The
situation in the mega-cities of the developing world would be much worse.
To respond to the local pollution concerns, new technological solutions
would be sought, both in power generation and in the transport sector.
This push will reinforce some of the technological changes prompted by
security of supply crises and strengthen the rationale for specifictechnology solutions.
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2030-2050: a New Stage of Technological Development
In this framework, nuclear power receives a boost almost everywhere, notjust because it can mitigate security of supply issues in the gas market but
also as it represents a technology that allows large-scale power production
without emitting local pollutants. In addition, hydrogen produced throughreforming from hydrogen-rich gases of fossil origin (natural gas, orsynthetic gas) would become an important energy carrier.
As mentioned, hydrogen presents the advantage of being a rather clean
fuel when used in fuel cells to produce electricity or heat: its only byproduct would be water. Air pollution problems in cities could besubstantially mitigated by use of fuel cell powered vehicles and of fuel cell
power plants. Hydrogen could also function as an energy storage medium.
Hydrogen itself could be produced in several ways from fossil sources,
including:■ steam reforming of natural gas;
■ coal gasification; and■ residue or coke gasification.

All three technologies would be already available at competitive prices,
but with high gas demand and gas prices higher than coal’s, the second
option is likely to be cheaper. Thus hydrogen could be produced close tocoal-mines, and likely in large centralised plants.
Furthermore hydrogen could be produced by electrolysis from off-peakelectricity generated in nuclear plants: following a resumption of nuclear
programs in various parts of the world this would also take place, although
not necessarily on a massive scale. In a fast technology development world,
other ways to produce hydrogen, using biological agents (microbes) mightalso be developed. However, efficient ways to concentrate it, to increase
its energy density, and to store it for fairly long periods (days or months)
would be needed. Technological developments in this area would benefit
from research and rapid process in materials science and basic chemistry,
aided by continuous improvement in the knowledge of how livingorganisms manufacture at the molecular level materials possessing special
properties.
The fuel cell technology, especially for mobile applications, would havedeveloped faster after 2015-2020, as a way to improve energy efficiency,88

2. Three Exploratory Scenarios to 2050

but still using on-board reforming of carbon-based fuels. By 2030 thetechnology could use hydrogen produced elsewhere.
As hydrogen production and use is increased, an appropriate distribution
infrastructure would be put in place to deliver the hydrogen in the
consumption markets. However, small scale, decentralised production ofhydrogen (e.g. from gas reforming, which would allow continued use of theexisting gas grid) would in many cases be the preferred solution.
Until 2040 in this scenario there would be no real incentive to promotelarge scale sequestration, as it only results in emissions abatement while
not increasing energy security or economic efficiency as may do renewable,
fuel switching, nuclear or energy efficiency improvements – on thecontrary, the energy cost of capture may even increase the concerns about
energy security. However, CO2 re-injection would be increasingly utilised toincrease oil and gas recovery rates. But increasing use of coal for hydrogenproduction would start posing problems of CO2 emissions, and coal-minestorage technologies would be developed and deployed at some sites.
Over the previous period renewables would have evolved only slowly (thisbeing a scenario that prioritised low cost and did not place any weight onlimiting GHG emissions), mainly for enhancing energy security and energy
access in remote areas. Wind technologies would have survived in the bestsites and in some market niches, but solar PV would not have improved
much. High temperature solar thermal applications for electricity
generation would have slowly developed to reach fairly high conversion
efficiencies and attractive economics. They would be ready for larger scale
adoption.
As a longer-term option, the fusion reactor technology may well move closer
to commercial application under this scenario. In a relatively higher economic
growth, fast technological change scenario, there could be resources forgovernments to invest over long periods in a rather expensive technology suchas fusion. But it is unlikely that the technology would be already at the
prototype stage for commercial power plants production by 2050.
Over time, the drive to improve energy efficiency both in end-use
technologies and in energy transformation initiated after 2025 would
start bearing fruit and the efficiency of the system would be alreadygreatly improved by 2040. Continuing this progress in energy technologies
would also make good economic sense, especially when local
environmental problems were factored in.
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2. Three Exploratory Scenarios to 2050

Development on a large scale of the energy options illustrated above
would lead to an improvement of local air quality in both developed anddeveloping countries and even to a significant slowdown of GHG emissions
growth in developed countries, gradually spreading to developing ones
towards 2050. Over the period, this scenario would produce much higher
emission concentrations than the first one – but may create thetechnological conditions for more rapid reductions beyond 2050.
Adoption of these new technologies would take place as they become
increasingly competitive, and in light of their clear superiority in terms ofcleanliness. In the case of hydrogen this advantage would be coupled withcomparable ease of use with respect to conventional energy carriers.

SCENARIO 3: Bright Skies
Scenario Features
This scenario is characterised by both rapid technological change andstrong concern for the global environment by both the public andpolicymakers.
Other features of this scenario include a (global) GDP growth rate
somewhere in between the first two cases but closer to the second, robust
trade and market liberalisation trends, a narrowing down of income
differences across regions and countries. As a result, overall, energy prices will
be somewhat higher than in the second scenario but lower than in the first.
In this scenario, governments of developed countries agree to deal with thethreat of climate change in a co-ordinated fashion and to take action to slow
down and reverse current trends in GHG emissions. In due time they are
joined in this process by developing countries, who agree to take increasingly
stringent commitments for GHG emission control and reduction.
Domestically, developed country governments set out to design andimplement policies that will, on the one hand, encourage a reduction ofenergy-related GHG emissions and, on the other, channel both government
and private resources towards development of new technologies for climatechange mitigation. These efforts produce a host of positive technologicaloutcomes, which allow the attainment of environmental goals, and alsoenhance energy security while keeping prices relatively low.
90

2. Three Exploratory Scenarios to 2050

Figure 2.4 Scenario 3
Technological change

Bright
skies

Fast

Slow
Unconcerned

Concerned

Attitudes towards the global
environment

In this scenario (figure 2.4) as in the first one, increasing awareness ofglobal climate threats coupled with increasing frequency and severity ofclimate impacts, feed a growing attention to climate change issues by the
public and the governments. Public support for action is fuelled by awidespread view that technology options will keep the cost of mitigation
relatively low, and optimism that ancillary benefits of GHG reduction will
also lead to both enhanced energy security and a strong multi-lateralsystem that promotes trade and reduces conflicts. This attitude has several
implications. At the individual level it translates into more environmentallyfriendly behaviour, increased demand for goods and services that have alighter environmental footprint and energy products with a low or zerocarbon content. At the collective level this attitude spurs national
governments (first in developed countries and subsequently in thedeveloping world) to respond to the demand for more ambitious climatemitigation policies. Businesses take into account these new preferences in
product design and particularly in the type of energy services provided.
Near-term success in both technology development and GHG reduction
reinforce this trend.
In this scenario, governments of developed countries deal with the threatof climate change in a co-ordinated fashion and take action to slow down
and reverse current trends in GHG emissions, so as to stabilise
concentrations at a safe level before the end of the century. They are91

2. Three Exploratory Scenarios to 2050

aware that developing countries will only slowly begin to commit
themselves to emissions reductions, but agree to go ahead with aconcerted effort themselves first. Simultaneously, they pursue throughmultilateral diplomatic processes the goal of substantial participation ofdeveloping countries in the emission control effort. Developing countries
are supported by financial assistance and, in the interest of maximisingindustrialised countries’ technology export markets, through technologytransfer programs and assisted trade agreements. This gradually leads
developing countries to become involved in the process, initially by
accepting rules to control the increase in their GHG emission and later byagreeing to reduce them.
Overall, in this scenario the pressure on fossil fuel energy resources would
be much mitigated with respect to the Dynamic but Careless scenario. Oil
use in the developed world would grow at a much slower rate, thus
dampening potential tensions in the market. Coal use would decrease inindustrial countries both as a share in primary energy and in absolute terms
while it would increase but at a much slower pace in developing ones.
However, the exploitation of gas resources would be probably more intensethan in the Dynamic but Careless scenario, leading to increasing prices.
This scenario would likely have a slightly slower growth rate of global GDP
than the Dynamic but Careless scenario. Growth would be slower at the
beginning in developed countries, due to the increased costs of providing
energy in a more environmentally compatible way. However, as the system
responds and technology advances, the net increase in energy prices may
not be that big. Furthermore, technological innovation by creating
successful new industries and environment-friendly products would foster
new economic growth.

2003-2025: Lowering the Emissions Curve
Developed Countries
Urged by public opinion, alarmed by scientific and media reports thatclimate change is taking place faster than previously predicted, developed
country governments accelerate efforts to mitigate GHG emissions growth.
They start by designing and implementing new domestic policies that will,on one hand, encourage a reduction of energy-related GHG emissions and,on the other, channel both government and private resources towards
development of new technologies for climate change mitigation.
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Governments deliberately use a multi-tiered policy approach, with short-,
mid- and long-term measures, targeting both the energy demand and theenergy supply sides. In the short run, policies aim to reduce energy use
and promote efficiency in both energy demand and supply, thus reducing
emissions. Energy-use reduction and greater efficiency are pursued
through price measures (energy and environmental taxes), through grants
and subsidies for the use of best available technologies, through cap-andtrade mechanisms, through standards and regulations on new generation
plants, new buildings, end-use appliances, vehicles, etc. Some of thosemeasures, like upgrading building codes, would have both short andlonger-term efficiency impacts.
Mid-term measures to reduce emissions would add to short-term ones, andfocus on periodically reviewed and tightened standards, but also on
switching to less carbon-intensive fuels, improvement of existing
technologies through a mix of government-industry partnerships in R&D
and regulation. Mid-term measures having longer-term impacts would
include building infrastructure for mass transit systems, inter-modality,
modification of urban planning rules, or simply improving the electricity,
gas and oil transport and distribution infrastructure.
Both short-run and mid-term measures would see a substantial
participation of businesses and consumer organisations to ensure that themarkets work efficiently to provide goods and services that meet thedesired environmental performance and quality standards.
Longer-term measures would add to efforts in the short and medium run
an aggressive approach on the technology side, boosting long-term
research and development efforts in the direction of substantially reduced
or zero-GHG emission technologies. This technology push would begin by2005 and continue throughout the scenario period, but would only begin
to yield significant results and new technologies that can successfully be
introduced into the market after 2020. Basic research would allow thedevelopment of a large pool of promising options, some of which would
include enabling technologies that vastly improve the performance ofan existing technology, while others would represent entirely newtechnologies. Government spending in basic research and development of
new and improved technologies would increase and partnerships withindustry would be sought throughout the process.
Besides a more widespread adoption by consumers of more parsimonious
consumption patterns with respect to energy products/services, preference
for products that use less material and energy (both in manufacturing and93

2. Three Exploratory Scenarios to 2050

operating) would induce businesses to produce increasingly more efficient
vehicles, appliances, homes and so on at affordable prices. Businesses’
environmental credentials would be continuously scrutinised by consumers
and by pro-environmental interest groups. Consumers would favour energy
products/services that do not generate (or generate fewer) GHG emissions
over GHG-intensive ones, even at somewhat higher prices, thus further
stimulating the market for these.
The mix of fuels in power generation would gradually shift towards fuelswith a lower or zero carbon content (away from coal and towards more gas
and more renewables). However, fossil fuel resources (in particular coaland gas) would still continue to be used for power generation. While theiruse would have significantly improved in terms of efficiency, CO2 emissions
from the power sector would still be increasing at the global level. New
generating capacity would favour technologies with higher conversion
efficiencies, especially for thermal plants. Decentralised power production
would allow a decrease in transmission losses.
In this framework, carbon separation and sequestration technologies
would receive increasing attention. Carbon sequestration could takeadvantage of improvement in geological surveying and exploration
technologies developed in the oil and gas industry and start to be utilisedon an increasing scale; this would apply particularly to re-injection in
exhausted hydrocarbon-bearing formations. Efforts to find new more costeffective approaches to carbon separation would be steeped up.
Nuclear, in the initial stages of this scenario, is not seen as a priority due
to the other environmental risks it presents, but is maintained in the
picture for its carbon emission-reduction potential. Later on, reactor safety,
long-term secure and safe storage of spent fuel and irradiated material
would become the main focus of nuclear research. New and safer reactor
concepts would be explored; in particular reactors that produce lessradioactive waste and that reduce the likelihood of catastrophic accidents.
Sites and technologies for long-term disposal would be further studied.
In the industrial sector, natural gas would be the favourite fuel for heatproduction. Technologies that use industrial waste as fuel or that recovery
waste-heat would be increasingly employed. CHP production would
increase significantly. Electricity demand, although moderated bysignificant increases in the efficiency of both industrial and household
electric appliances, would keep growing.
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In the residential sector CHP would be more broadly used, as well as solar
systems integrated into buildings for water heating or for power
production. More efficient heat pumps would be used for spaceconditioning in buildings, but passive heating and cooling systems andarchitectures would also be developed. Building management systems,
using ICT to monitor and control the energy needs of entire buildings
would become increasingly common.
In the transport sector, part of the mobility needs at urban level would be
increasingly covered by car-pooling and by car-sharing systems, allowing
people to use a car when needed, paying for that limited service plus somemembership fees, but without actually owning the vehicle. In cities thenumber of street lanes dedicated to public vehicles and bicycles would
increase and more people would choose to walk or ride a bike to work. In
many cities the trend towards increased urban sprawl would start to bereversed, and city planning would encourage more compact city
development patterns. Mass transit systems would serve growing shares of
the urban population. The combined effect of these choices would be todecrease car traffic congestion and to increase the overall energy
efficiency of the transport system, on top of the improvements in the fuelefficiency of vehicles. The latter would increase significantly, owing toconcerted efforts in this direction from automakers, fuel producers,
governments and consumers. New vehicles, through various combinationsof electric and combustion engines and of fuel cells would reach muchhigher efficiencies. In freight transport, the trend towards an increase inroad transport would be stopped and then reversed by increased
investment in rail systems and port facilities allowing the movement of
more goods by rail or ship as well as the speed-up of loading/unloadingof goods. A more efficient organisation of trucking services would allow
greater energy efficiency in this sector too. As a result, emissions from thetransport sector would start edging down even at increased activity levels.
By 2020 the cumulative effect of these efforts would lead to a decrease
not only of GHG emissions from the energy sector but also of total primaryenergy demand. They would have the simultaneous benefit of reducing
supply security concerns, particularly with respect to oil. However, gas
demand would grow, at least in the near term.
Institutionally, the Kyoto process continues, initially without the US, which
focuses on a more aggressive technology and R&D effort. Parties to theProtocol take short- and mid-term measures sufficient to meet the Kyoto
goals for 2010. A progressive willingness of developing countries to act, as95

2. Three Exploratory Scenarios to 2050

well as indications that technology can be successfully harnessed to keep
prices down, leads to the negotiation of subsequent international accords
to further reduce emissions.

Developing Countries
Gradually, developing countries would agree to become involved in theprocess. Initial incentives grow from the Kyoto Protocol’s Clean
Development Mechanism, which proves a somewhat cumbersome but
increasingly effective tool to promote the sale by developing countries ofcertified emission reduction credits from both their energy and theagriculture/forestry sectors. Due to the relatively lower cost of emission
reductions in developing countries, important flows of investment in stateof-the-art energy technology and infrastructure would be directed towards
these countries. In addition, economic growth in the developing world iscoupled to an increased appreciation for the environment, and growing
demands from citizens for its protection. The initial focus would be on local
environmental conditions, often to mitigate increasing health problems,
but later the interest would be increasingly global in scope. Finally,
developed countries continue to push this attitude both diplomatically,
and through increasing use of aid that promotes a climate-friendly
development path.
Over time, old and inefficient power plants would be replaced with very
efficient ones, or green-field plants would be built with the best-proventechnology. New gas turbines and gas combined cycle plants would beinstalled. And where only coal is available, supercritical thermal plants,
with efficiencies above 44%, would be built, subsequently followed byadvanced clean coal technologies such as coal gasification and combined
cycles or pressurised-fluidised bed combustion. Hydroelectric dams andwind farms would also be built, often with help from foreign financing
institutions. Small energy projects would target rural needs for electricity
with renewable technology applications (wind, solar PV, biomass-fuelledgeneration). International funding would not be used for new nuclear
power projects, although projects of refurbishment and upgrading (forsafety purposes) of older plants would continue, especially in the former
Soviet Republics. But new nuclear plants would be certainly built by fast
growing countries to meet increasing power demand.
Demand for gas in power generation would increase dramatically, andprices would rise. The expanding market for gas would attract domestic
and international capital for investment in gas pipeline construction, bythen a booming industry. Demand for oil would also increase rapidly,96

2. Three Exploratory Scenarios to 2050

driven by the growth in incomes and in transport service demand, but
it would do so at a somewhat slower pace than in the Dynamic but
Careless scenario.
Combined international financing and domestic resources would be used
for the construction and operation of mass transit systems in the sprawling
mega-cities of the developing world, as well as for railroad construction
and forest conservation projects.
The new markets created for more efficient and cleaner energy
technologies would accelerate technology improvement and learning,
creating global spillovers. New technologies would mature faster in an
expanded market that now includes both developed countries anddeveloping ones. In the latter, technical skills and engineering know-how
will grow, amplifying the capability of absorbing new technologies andthen to adapt and improve them. This will strengthen a virtuous cycle offaster technological progress that will also build on increasing income andeducation levels of the population in developing countries.
In a world of open markets, values, behaviours and products that havebecome fashionable in environmentally conscious developed societies
would spread first to the wealthy and educated elites of the developing
countries, and then reach the middle classes. Consumer durables withimproved environmental standards and performances would spread worldwide following the same route, and increasingly stringent productstandards would be rapidly adopted by developing country manufacturers,
especially as they want to tap the markets of the rich world.
Energy demand, and GHG emissions, in developing countries would
continue to increase as their economies grow and go through more or lessaccelerated industrialisation (some of the small ones may skip a heavy
industrial stage, to move directly to a services/tourism economy).
However, through extensive use of various forms of carbon trading and
CDM mechanisms, emissions would grow much less rapidly.

2025-2050: Joining Efforts for Long-term Technology
With few notable exceptions, the leadership in science and technology willremain in developed countries for the first 20-30 years of this scenario
horizon. Thus, by 2020 these countries would be still leading the effort to
reduce GHG emissions and likely be the only ones taking increasingly
stringent GHG reduction commitments. The responsibility to develop
technologies with very low or zero GHG emissions still rests on their shoulders.
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Increasingly aware of the task at hand, governments of developed
countries launch a broad collaboration effort and join forces fortechnology development: the goal is to provide humankind with a set oftechnology options for carbon-emission-free energy production. This would
be done through international partnerships between public and private
research institutions working both around tried and tested technologies
with significant perspectives to contribute towards the goal, or around aseries of new technology concepts that have emerged in the laboratory.
Desirable technologies would be of two basic types:■ technologies for electricity production having very low or zero carbon

emissions; and■ technologies for transport and mobility having very low or zero carbon

emissions.
Technologies for power production are extremely important due to theincreasing role electricity is expected to play an in the society of the future(at least for the next 100 years). In fact it is highly likely that besides
providing for lighting and powering machines and computers, electricity
use will continue to expand in the transport sector. In a world that wants
to break free of GHG-emitting vehicles, electricity will either be stored inbatteries or produced on board vehicles. The two alternatives could roughly
correspond to electric vehicles powered by batteries or to fuel cell vehicles
powered by hydrogen. Hydrogen could even be an intermediate storage
medium for power.
Growing resources would be devoted to this planetary scale endeavour anda variety of directions of research would be pursued.
Zero GHG emission technologies for power production at the outset would
be largely concentrated on nuclear power and renewables: research anddevelopment in both areas would be continued, although focusing on
entirely different types of problem.
Over the previous 25 years research on reactor safety, safe storage of spent
fuel and irradiated material and new and safer reactor concepts would
have produced their fruits: new reactor designs producing less radioactive
waste and less likely to originate catastrophic accidents. Sites for long-term
disposal would have been found. In the meantime, although slow,
construction of new nuclear plants would not have stopped in OECD
countries (as it would not in some developing ones).
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Over the first 20 years of the scenario, renewable energy use would havegrown, and prices dropped, making them increasingly competitive, partly
thanks to policies that favour them in terms of fiscal advantages. Windtechnologies would have become cheaper thanks to economies of scale,manufacturing volume, better materials and R&D advancement. Solar PV
technologies would also have become cheaper thanks to improvement inthin-films technology, improved conversion efficiencies, and better
integration in building architecture. Improvements in technologies for
power-grid management would also have contributed to their increased
success. High temperature solar-thermal applications for electricity
generation would have evolved to reach fairly high conversion efficiencies
and competitive economics. They would be ready for larger scale adoption.
Power storage technologies would also have improved. On the other hand,
technologies for biomass energy production (direct heat, electricity or
liquid and gaseous fuels) would also have improved, and becomecompetitive. However more aggressive deployment tactics and continued
R&D will stimulate production of power on a scale comparable to that ofconventional thermal plants.
As a longer-term option, electricity from fusion reactor technology would
still be pursued, with progress in special materials suggesting that it could
become commercial after the end of the scenario period.
Carbon separation and sequestration technologies would be alreadycompetitive and ready to be utilised on a large scale. Sequestration in deep
aquifers will be pursued further and the technology improved.
Combinations of these two technologies later would open up perspectives
for large-scale hydrogen production from fossil fuels like oil and gas. They
would also have a role in hydrogen production from coal gasification.
Hydrogen itself would also be produced by electrolysis from off-peakelectricity generated in nuclear plants. But electrolytic hydrogen could also
be produced from renewables (solar PV, solar thermal, and wind) whencheaper solutions are not readily available. In a fast technologicaldevelopment world, other ways to produce hydrogen, using biological agents(microbes) might also be developed. Hydrogen could be produced close to
consumption points, which – particularly important in the early stages of atransition toward hydrogen – would limit the need for long-distance
distribution networks. This would allow for a faster penetration in some nicheapplications (for instance to produce power in stationary fuel cells, both forsmall size applications of apartment or building size, or for larger scale99

2. Three Exploratory Scenarios to 2050

production), without the need for large pipeline infrastructure to be
developed right away. That, however, may well become necessary later.
Technologies for transport that do not emit GHG would be very important
too. By 2020 vehicles powered by carbon-based fuels will have increased
their efficiency significantly, thus decreasing CO2 emissions per unit ofservice delivered. But to allow continued development, a zero-carbon
technology will be needed. The energy vector is most likely to be electricity.
The uncertainty pivots on the question of whether electricity will be supplied
by a battery or produced on board in a fuel cell powered by hydrogen.
For purely electric vehicles research work on electricity storage in on-board
batteries would be necessary to increase the energy density of battery packs,
so as to give electric vehicles an operative range comparable at least to thatof present day gasoline cars. But this type of solution might prove to be very
difficult, requiring some form of on-board generation of electricity.
The fuel cell technology, especially for mobile applications, would havedeveloped faster after 2010, as a way to improve energy efficiency, but stillusing carbon-based fuels. Now that GHG emissions become a serious
concern, the technology could be used with hydrogen as a fuel. As
mentioned, in this case it could work as a form of energy storage and infact be a form of power storage. However, efficient ways to concentrate it,
to increase its energy density, and to store it for fairly long periods (daysor months) would be needed, especially for mobile applications.
As a result of large international research efforts, it is likely that significant
breakthroughs in one or more of these technologies would be made before
the end of the scenario horizon considered, thus providing a long-term
answer to the problem of climate change mitigation without significantly
restricting economic growth and the satisfaction of future demand forenergy services.
Development on a large scale of the options illustrated above could lead firstto further reductions in GHG emissions in developed countries and then to asignificant slowdown and reduction of developing countries emissions by theend of the period. Diffusion of these technologies in developing countries
may follow similar patterns to the ones seen for more conventional
technologies. However by 2050 in this scenario many more countries will
have joined the club of industrialised countries, thus making advanced
technologies more affordable to a larger share of the world population.

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Comments and Implications of
the Three Exploratory Scenarios
General Comments
The three scenarios outlined in this chapter represent three rather extreme
views of the future. This approach was taken on purpose, to cover a wide
range of cases concerning the chosen variables and as a way to clarify
logical chains of events and possible consequences. To some extent, allthree scenarios have elements of plausibility. Thus, talking about the"likelihood" of any particular scenario is not appropriate. In fact, it seems
likely that the future world will be some combination of the three cases –and perhaps other stronger drivers will emerge over time that will pull the
future in entirely different directions. But from our specific point ofobservation (defined by time and by the specific mission of IEA), thisexercise allows us to think about the future in a more systematic way, toidentify potential threats and opportunities lying ahead.
Due to the way exploratory scenarios are usually built (i.e. by assuming thata certain driver, for example, attitudes towards the global environment,
maintains the same thrust without changing direction over a long period oftime), the realism of the story they tell may be limited, at times severely. In
reality, of course, some of these drivers may show varying intensities anddirections over time. Yet scenario construction demands that they remain
steady over the scenario horizon and that a number of other factors develop
over time consistently with the direction of the chosen drivers. While it isclear that complex systems like the ones that form the object of ourinvestigation are not always consistent, scenario consistency is extremely
important because it allows the following of a logical chain of effects andtheir explicit examination, providing useful insights for the planning stage.
Clearly, in the scenario process there is an inescapable element ofoversimplification that must be kept in mind. However, such simplifications
need not detract from the utility of the analysis.
Along similar lines a few other remarks are important. The type of
information about causal links and feedbacks among factors in a system
like the one considered that is often represented in a modelling framework,
is also embedded in the groundwork for scenario construction. In generalscenarios do not contradict undisputed knowledge about social andeconomic systems. However, storyline scenarios are able to take into
account and capture additional elements of these systems: two-way causal
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2. Three Exploratory Scenarios to 2050

links and feedbacks whose existence may be "guessed" by researchers but
not fully proven by empirical analysis; irrational elements in human andsocial behaviour that are often not recognised by standard economic
theory; value systems that influence human choice and behaviour in an
often unpredictable way. These elements must be woven into a scenario insuch a way as to make more compelling a plausible and convincing story,
like additional strokes of colour in a sketchy picture.
But it is important to remember that not all elements in a scenario need
to be entirely accounted for: some of them can be arbitrary and ultimately
decided by the scenario-builder simply because there is no recognised rule
stating that a certain combination of factors should always produce agiven result. Consider the impact of increasing incomes on consumption ofcertain goods like apartment size in scenario 2 and 3. Both scenarios arecharacterised by fairly high income, which should lead to increasing size ofhouses, but while in scenario 2 this is the case, in scenario 3 people’s
preferences go to somewhat more compact houses and cities. What causes
the difference? The influence of environmental values? Policy intervention?
This type of question often puzzles the reader of a scenario, but the answer
remains open.
These scenarios represent only an initial basis for discussion on possible
future worlds. To complete this thinking exercise and extract from it amaximum of insight is also necessary to:■ examine the implications of the various scenarios, for instance withrespect to the goals of the scenario developer. In this case, they can beassessed against the shared goals of the IEA (Energy security, economic
development, environmental sustainability), or with respect to othercriteria such as access to energy (as a part of the definition ofsustainability and security), and speed of transition to a moresustainable world (with respect to the climate threat);■ examine

the broad technology implications of the three cases
considered and identify the technologies that appear most robust acrossscenarios. This could help identify a list of priority technologies to befurther developed.

Implications for Policy and for Technology
Concerning the first point, two of the scenarios illustrated in this chapter
present some obviously undesirable traits.
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2. Three Exploratory Scenarios to 2050

Scenario 1 (Clean but not Sparkling), while taking as its starting point asignificant increase in the currently prevailing attitude of concern towards
the environment, ultimately fails the goal of creating the conditions for longterm sustainability, as technologies that allow the system to decarbonise fastenough without sacrificing economic growth are not developed.
Scenario 2 (Dynamic but Careless) initially poses no environmentally
driven constraint on economic growth, but by increasing demand pressure
on scarce fossil resources, poses substantial risks from the point of view ofglobal security. Furthermore, through acceleration of GHG emission rates,it threatens some of the environmental resources on which economic
growth of future generations depends. However, this is a scenario that
goes a long way towards widening the technology options for a moresustainable future later on.
The third scenario (Bright skies) is the most favourable from the point ofview of meeting the conditions for long-term sustainability, and presents
the lowest risks of the three scenarios from the point of view of security ofsupply and environmental protection.
Figure 2.5 summarises in a qualitative fashion the main characteristics ofthe three exploratory scenarios developed.
Figure 2.5 Three Exploratory Scenarios: Qualitative Directions of Change
Technological Environmental
changeconcern

GrowthSecurity

EmissionsClean but not
sparkling

Dynamic but
careless

Bright skies

All three scenarios indicate for the coming fifty years a substantial growthof gas demand worldwide: the reason is a shift to a less carbon-intensive
fuel mix in scenario 1, diversification and economic considerations for103

2. Three Exploratory Scenarios to 2050

scenario 2 and both environmental and economic reasons for scenario 3. In
all these scenarios gas would be overtaking coal and then oil at some point
during that period. In consideration of such growth in demand, gas prices
would increase unless exploration, extraction and transport costs decrease
fast enough over time. This suggests that finding gas in the quantities
needed and then delivering it to the consumption markets is going to be adaunting task for the coming decades. Oil demand would also increase,although not as fast as gas demand, and not at the same pace in the three
scenarios considered. Even leaving aside the effects of resource depletion,
geopolitical risks associated with the location of known oil deposits arelikely to provoke recurring crises in the oil markets and price spikes.
These scenarios (and particularly the second, Dynamic but careless) remind
us that in worlds heavily reliant on oil and gas resources, problems arisingfrom the actual spatial distribution of these resources have the potential
to disrupt energy markets even when amounts available in the ground are
adequate, and technologies to extract them exist.
All three scenarios assume that developing countries will continue todevelop over the coming fifty years, although at different speeds bothacross scenarios and across countries. In scenario 1 and 3 this would leadto a certain measure of convergence of per capita incomes between OECDand developing countries, while income gaps could actually been
maintained in scenario 2, where some particularly unfortunate areas failto catch-up. Continuing development in non-OECD countries would leadover the period to energy consumption forms and patterns that are
increasingly similar to those of the developed societies, although at
different absolute levels. The idea of non-commercial energy sources would
disappear more or less rapidly depending on the scenario and increasing
shares of the world population would have access to electricity. This
however is a somewhat optimistic choice on our part: in fact, the case ofdiverging income trends and rapidly increasing inequality cannot be ruledout of the picture.
The three stories indicate that for long-term sustainability it is critical toensure robust dynamics in technological improvement but that unlessthere is a fundamental change in values and attitudes towards the global
environment, technology alone cannot be trusted to find the rightsolutions. Supposedly values and attitudes are what give direction totechnological change and, vice versa, the direction of technologicalchange reflects the system of values of a society.
1042. Three Exploratory Scenarios to 2050

Also, these scenarios show that policy can have a role not only in directing
research and technology development towards the attainment of specificsocial objectives but also in favouring (or hampering) successful and rapid
technological change.
However, while designing intelligent policies that increase the chances ofsuccessful technological development is something that can be done bygood policy analysts, implementing the policies requires political will, andthat ultimately depends on social values and priorities: an altogether much
more difficult variable to change.
Concerning technology implications, the three scenarios present clear
differences with respect to the technologies that are more likely to emerge
in each of the three different contexts:■ Scenario 1, besides stressing spartan behaviour on the part of energy

users, concentrates on more energy efficient and cleaner end-use
technologies, on fuel switching and on renewable energy technologies.
It later reconsiders zero carbon-emitting technologies like nuclear;■ Scenario 2 focuses initially on fossil fuel-based technologies but later, inorder to mitigate security of supply concerns develops other alternatives,
like nuclear and hydrogen;■ Scenario 3 develops the entire range of options, choosing both nearterm focus on efficiency and a longer-term focus on zero-carbon-emitting
technologies for medium to large-scale energy production.
A more detailed look at the technology aspects of these story-lines allows
some additional insights to be drawn from our scenario exercise,particularly in view of the consideration of security of energy supply andenvironmental sustainability. Table 2.1 (page 106) summarises the list of
main technologies emerging from each of the three scenarios, broken
down by sub-period (2003-2025 and 2025-2050) and by energy sector(supply and demand).

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2. Three Exploratory Scenarios to 2050

Table 2.1. Emerging Technologies from 2003 to 2050 in Three Exploratory Scenarios
Time horizon
and sector

Clean but
not sparkling

Dynamic but
careless

Bright skies

Energy supply

Energy efficiency
improvement (EEI)
technologies. Gas
turbine plants replacecoal fired plants in
OECD; Cleaner coal
fired plants in manyDCs (pulverised coal,
FBCC, PC supercritical and
PFBC later). Gas-fuelledgeneration in various
forms. Gas transporttechnology Combined
cycle gas turbines, firstin OECD and later DCs.
Pollutant abatement
technologies (SOx, NOx,PM) CHP Micro-generation(gas) Stationary fuel cells
Few new nuclear plants;
life extension and safety inOECD. Power generationfrom renewable sources:
Solar PV, Wind, Biomass
Hydro (mostly in DCs)
Continued R&D on fusion

Oil and gas exploration,
extraction and transporttechnologies. Oil shales
and tar sands treatment
technologies. New power
generation fuelled bycoal and gas: centralised
options Some
decentralised power inOECD Pollutant
abatement technologies(SOx, NOx, PM) Largehydro projects in DCs.
Wind power, wherecompetitive. Nuclear
programmes restart in2015-2020 in DCs andsome OECD countries.
Gas transport technology
gas liquefaction andregasification technology.
Coal liquefaction andgasification technologies.
EEI technologies forenergy transformation
important towards endof period

Rapid energy efficiency
improvement (EEI) in
supply technologies. Low
carbon fuels (gas andrenewables) in power
generation Combined
cycle gas turbines first inOECD and later in DCs
Gas transport technology.
Gas liquefaction and regasification technology.
Cleaner coal in coal-rich
DCs (Pulverised coal, FBCC,
PC supercritical and PFBC).
Pollutant abatement
technologies (SOx, NOx,
PM). CHP Micro-generation(gas) Stationary fuel cells
Few new nuclear plants;
life extension and safety
in OECD; new reactor
concepts explored.
Power generation fromrenewable sources: Solar
PV, Wind Biomass, Hydro(in DCs) Continued R&D
on fusion

Energy demand

EEI and conservation in
all demand sectors;
More efficient
appliances; Fuelefficiency improvementin gasoline and diesel
vehicles. Hybrid vehicles
and fuel cells (gasfuelled) in OECD. Bothin OECD and DCs: Bio
fuels; LPG and methane;
Mass transit systems;
Improved city planning.
Fuel efficiency
improvement (FEI) in
aircraft

In OECD greater
penetration of gas andelectricity in industry
and residential.
Electricity-intensive
lifestyles. Coal remains
important in industrial
end use in DCs.
Transport sector relies
heavily on oil. Bigger
and more powerful cars.
Hybrid vehicles and fuelcells (gas fuelled) cars
for transport in OECD.
EEI becomes important
towards end of period inall demand sectors

EEI and conservation in
all demand sectors. Moreefficient appliances. Lessenergy- and materialintensive manufacturing
processes and services.
Passive heating andcooling technologies &architectures in buildings.
Building management
systems. FEI in conventional
vehicles. Hybrid vehicles
and fuel cell (gas-fuelled)
cars in OECD, later in DCs
too. Both in OECD and
DCs: Bio fuels; LPG andmethane; Mass transit
systems; inter-modality,
improved city planning.
EEI in aircraft

2003-2025

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2. Three Exploratory Scenarios to 2050

Time horizon
and sector

Clean but
not sparkling

Dynamic but
careless

Bright skies

Energy supply

Continued EEI as in theprevious period.
Improvement inrenewable energy
technologies. Continued
focus on gas.
Resumption of nuclear
programmes especiallyin DCs Carbon captureand storage Continued
R&D on fusion

Large-scale resumptionof nuclear programmes
Hydrogen production
technologies (from gas,coal nuclear or
biological agents). Fuelcell power plants
Carbon capture andstorage Continued R&D
on fusion Technologies
for hydrogen transportand long term storage
Some carbon captureand storage
technologies Windpower Solar thermal
develops Fusion getscloser to commercial
stage

Large-scale resumptionof nuclear programmes.
Significant share of
new renewables in
power generation (wind,PV, high temperaturesolar thermal, somebiomass) Hydrogenproduction technologies(from gas, nuclear or
biological agents). R&D
on power storage
technologies Fuel cell
power plants Carbon
capture and storage
ready for large-scale use.
Technologies forhydrogen transport andlong term storage
Fusion gets closer tocommercial stage

Energy demandContinued EEI andconservation in all
demand sectors; Moreefficient appliances;
Greater penetration ofgas and electricity inindustry and residential.
Super-diesels, hybrid
vehicles and fuel cells(hydrogen fuelled) intransport. Both in OECDand DCs: Bio fuels.
Public transportsystems. New city
planning.

Continued EEI andconservation in all
demand sectors inconjunction with wider
use of ICT Fuel cellvehicles in transport
Micro-generation for
direct use of power

Continued EEI andconservation in all
demand sectors inconjunction with wider
use of ICT Hydrogenfuel cell and electricvehicles in transport.
Hydrogen storage
technologies. Bio fuelsin OECD and DCs.
Public transportsystems. New city
planning. Fuel cells for
direct use of power

2025-2050

Table 2.1 helps isolate the technology areas that are common to all three
scenarios. These areas may thus be ripe for policy development. On theenergy supply side these include:■ energy efficiency improvement (EEI) in supply technologies;■ advanced gas technologies in power generation: combined cycle gas

turbines;107

2. Three Exploratory Scenarios to 2050

■ gas transport, storage and liquefaction/re-gasification technologies;■ cleaner coal technologies (Pulverised coal, FBCC, PC supercritical andPFBC);■ CHP;■ micro-generation (gas);■ technologies for criteria pollutant abatement (SOx, NOx, PM);■ stationary fuel cells;■ nuclear technologies; life extension and safety; new reactor concepts;■ power

generation from renewable sources: solar PV, solar thermal(including high temperature); wind; biomass; hydro-power;■ hydrogen production technologies (from coal, gas, nuclear or biologicalagents);■ technologies for hydrogen transport and long-term storage;■ power storage technologies;■ fuel cell power plants;■ carbon capture and storage for large-scale use;
■ fusion.

On the energy demand side they include:■ energy efficiency improvement and conservation in all demand sectors:

more efficient appliances, wider use of ICT to optimise performance;■ fewerenergy- and material-intensive manufacturing processes andservices;■ passive heating and cooling technologies and architectures in buildings;

Building management systems;■ fuel efficiency improvement in conventional vehicles;■ bio fuels;■ LPG and methane;■ hybrid vehicles;108

2. Three Exploratory Scenarios to 2050

■ fuel cell (gas- or hydrogen-fuelled) cars;■ hydrogen storage technologies;■ electric vehicles;■ mass transit systems;■ advanced public transport systems;■ fuel cells for direct use of power.

Development and diffusion of these technologies can contribute either tooverall improvement in the efficiency of energy production and use or to
reduction of GHG emissions, or to both. In some cases, they could also help
mitigate security of supply risks. On this basis their development at
acceptable costs would be desirable.
Some technologies however appear mainly in the Dynamic but carelessscenario. These are:■ oil and gas, extraction and transport technologies;■ oil shales and tar sands treatment technologies;■ enhanced oil recovery technologies;■ coal liquefaction and gasification technologies.

The reason for their appearance only in that scenario is that this scenario
has a strong focus on fossil fuels and limited interest in reducing CO2
emissions. While this second group of technologies would be helpful in
reducing security of supply risks (and that is especially true for coal-basedones), greenhouse gases would be produced in massive amounts shouldsome of them (like coal liquefaction and gasification) become very
competitive and widely used.
These are only initial considerations on issues of technology development.
They will be developed further in the more policy-oriented context of thenext chapter.

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3. A Normative Scenario to 2050: the SD Vision Scenario

A NORMATIVE SCENARIO TO 2050:
THE SD VISION SCENARIO

BackgroundThe scenarios proposed in the previous chapter were built for the purposeof exploring a range of outcomes and analysing their implications forstrategic decision-making. This chapter presents an example of a global"normative" scenario to 2050, the SD Vision scenario (where SD stands
for "Sustainable Development").
In "normative" scenarios the perspective is different from that of
exploratory scenarios: a normative scenario outlines a "desirable" visionof the future or a goal into the future. These goals can be expressed by
specific metrics or quantitative targets to be reached by the end of thetime horizon considered. They are, in turn, used as a point of departure to
identify the conditions that must be fulfilled or the measures to be taken
at different stages along the path to implement that goal or vision.
Typically, normative scenarios tend to work in a "back-casting mode".
While "exploratory" scenarios set the groundwork to describe what could
happen, "normative" scenarios help decide what could or should be donein order to achieve the set targets, and hence are more concerned withaction. In practise, normative scenarios of this type are rarely found inisolation, i.e. without previous analysis, done with the help of exploratory
scenarios, of what the future might bring (De Jouvenel, 2000; Greeuw
et al., 2000).
Readers may not share the vision of the future outlined by this"normative" scenario: neither necessarily do we. Rather, the purpose of
the exercise is to illustrate the process of development of such scenarios
and to stimulate discussion and thinking from different perspectives about
a number of long-term issues that would emerge where energy andenvironment intersect.
Borrowing from a scenario developed at IIASA for the IPCC, a description
and a broad quantitative framework for this SD Vision scenario to 2050
has also been constructed. Based on this structure, this chapter thenproceeds to evaluate some of the policies and technology developmentsthat would be needed to realise that future. The IIASA scenario was chosen111

3. A Normative Scenario to 2050: the SD Vision Scenario

purely for illustrative purposes. While it contains elements reflective of
ongoing work within the IEA, its use in this context is not, in any way, anendorsement of this future.

Normative Characteristics
To define this scenario’s normative characteristics, three main areas are
particularly relevant. These are:■ climate change mitigation;■ energy security and diversification; and■ energy access.

Within these three general objectives, specific characteristics need to be
identified to represent the targets or "norms" to be met by the desired
image of the future; these must then expressed in a parametric fashion.
The process of defining such targets, however, is complex. To build a robust
scenario, targets for 2050 need to be able to stand the test of time, (i.e.
they should not be dependent on contingent situations of today) and theyshould have clear measurable dimensions that help develop prescriptions
for human action. The target development process is described in thefollowing sections of this chapter.

Climate Change Mitigation
With respect to climate change, the main consideration used in the
scenario development is that the global energy/economy system wouldfind itself on a GHG emissions path that does not cause "dangerous
anthropogenic interference with the climate system" (Article 2 of theUnited Nations Framework Convention on Climate Change - 1992).
However, there is still considerable uncertainty as to what emission levels
and rates constitute such "dangerous interference".
Some basic facts help constrain this element of the analysis. The climate
system is controlled by a large number of factors, many of which are beyond
human control. However, since the industrial era began, the increase ofemissions connected to human use of fuels or of land has been progressing
at an unprecedented pace. CO2 and some other greenhouse gases are longlived, i.e. tend to stay for a long time in the atmosphere. When the rate ofemission of CO2 is significantly higher than the rate at which it is absorbed
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3. A Normative Scenario to 2050: the SD Vision Scenario

by the ecosystem, as is the case presently, emissions concentrations
increase. This increase, in turn, leads to temperature changes.
In practice we are unable to pinpoint with satisfactory accuracy the extent
of possible damage stemming from any specific increase in averagetemperatures. Furthermore, inertia in the climate system is such that thechange in temperature will take place only gradually and reach a new
equilibrium level only over hundreds of years. By the time this change
occurs, it will be too late to act to avoid it. The equilibrium temperaturechange over the next 100 years has been estimated by the IPCC (2001a)to lie between 1.4°C and 5.8°C.
Uncertainties make it difficult to estimate the risk. However, we know thathuman activities lead to emissions at a rate substantially higher than the
global ecosystem can absorb. If we want to stabilise emissions at any level,
we need ultimately to reach a point in which net emissions are close to
zero. To get to that point, we will first need to reverse the current trend of
rapidly increasing emissions, especially those stemming from the energy
sector, currently of about 22.6 billion tons per year (if we only consider
CO2, as done in the IEA World Energy Outlook 2002) and increasing at
about 1.1% per year.
The IPCC third Assessment Report computed distinct emissions trajectories
compatible with different stabilisation levels of emissions concentration.
These trajectories have themselves a significant range of variation. If for
instance we assume a target of 550 parts per million volume (ppmv) for
emissions stabilisation by the end of this century, then cumulative carbon
emissions over the 21st century cannot exceed 4033 GtCO2 (in an
optimistic estimate) and global emissions should peak between 2020 and
2030 and start decreasing afterwards. In fact, global emissions would
need to fall below 1990 levels before 2100, and perhaps as early as 2030
(see IPCC TAR Synthesis Report, Table 6.1). If the goal is more ambitious(450 ppmv stabilisation) we need to limit cumulative carbon emissions
over this century to between 1340 and 2680 GtCO2 and start reducing
emissions between 2005 and 2015. Less stringent emissions stabilisation
targets than 550 ppmv would provide more time for adjustment – butcarry larger risks in terms of climate impacts.
Although we know that at some point we will have to reduce global
emissions, the uncertainties that plague every stage of the climate change
cycle make it difficult to gauge more specifically any mitigation strategy1.
1. For more extensive discussions of the difficulty in identifying long-term targets, especially in thecontext of policy action, see J. Pershing and F. Tudela (2003) and C. Philibert et al. (2003).

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3. A Normative Scenario to 2050: the SD Vision Scenario

Only the most aggressive emissions stabilisation strategies seem to berelatively "safe" (assuming there is consensus on the level of safety) but
these carry fairly high economic costs in terms of foregone income growth,because they require an emissions reduction effort that with current
technologies is difficult to achieve. On the other hand, less aggressive
strategies risk simply shifting part of the burden (in terms of negative
impacts of climate disruptions on societies in areas of health and naturalamenities and the ability to create wealth) to future generations.
In developing this normative scenario exercise two alternative types oftarget were initially considered:■ an arbitrary global emissions reduction target with respect to 2000

levels (similar in structure to that proposed by the Kyoto Protocol); and■ a target focusing on decarbonising the energy supply (for this case,calling for a given share of zero carbon sources in total world primaryenergy supply, by the year 2050).
While the first target, if met, would ensure that global emissions would
indeed be reduced, it has not been acceptable either to the US or Australia– nor to date, to any developing countries. The second alternative puts astrong accent on development of non carbon-emitting technology, which
could be a vital precursor to a transition to a non-carbon-based economy,
although not ensuring that emissions will be actually decreasing on a
global level by 2050.
Thus, the second alternative was chosen for this exercise. The selected
target calls for a 60% share of "zero carbon" sources in total world
primary energy supply, by the year 2050. There is necessarily a high levelof arbitrariness in adopting any precise number for such a long-term target.
Earlier analysis (IEA, 2002a) shows, for instance, that the international
community may not be in the position to adopt firmly a very long term
GHG concentration target that should be reached at all costs. On thecontrary, that analysis suggests that one should perhaps aim at "low"concentration levels but make full achievement of this aim conditional
upon the level of real abatement costs - which cannot be known today.
However, setting such an aim within this scenario provides a basis forassessment, and allows for an examination of the types and stringencyof policies that would be required should such a target in fact besought.
Strictly speaking the qualification of "zero carbon source" may only apply
to energy produced from nuclear fission and renewable technologies (and114

3. A Normative Scenario to 2050: the SD Vision Scenario

perhaps, later, to nuclear fusion). However in the discussion that follows,
technologies of capture and storage of CO2 are fully included, andconsidered to reduce emissions by an amount equal to the assumed
storage of CO2 2. It is also important to note that, while carbon
sequestration in agriculture and forestry sinks has been considered byclimate negotiators as an acceptable way to mitigate emissions, thisoption is not discussed here and the analysis focuses on energy issues.

Energy Security and Diversification
The issue of energy security and diversification is a particularly thorny one.
It has recently taken centre stage in the energy debate in coincidence withthe recent war in Iraq and with the increasing threat of international
terrorism. In this section, we discuss the issue in a longer-term perspective
and try to define appropriate targets to address energy security over a 50year horizon.
Energy security has many faces. In general, the idea of energy supply
vulnerability is an objective condition that leaves a system exposed to therisk that needed quantities of energy inputs and services fail to reach theintermediate or final users.
Vulnerability is felt more often at a local and national level than at a
global level: even in a much globalised world there have been very few
cases in the past of a threat or an actual supply disruption that acts at thesame time in all areas of the world. A number of threats have beenencountered in recent history:a) dependence on foreign energy sources;b) dependence on sources that are gradually becoming depleted on a
global basis (e.g. dependence on oil and gas);c) dependence on geographic supply areas that are politically unstable(e.g. dependence on Middle eastern oil, risk of disruption in the
production and shipment stage due to armed conflicts);d) dependence on a single technology;e) dependence on a limited numbers of delivery lines (one oil or gas
pipeline);
2. While we are aware of the "energy penalty" that has to be paid to produce a given amount of final
energy from fossil fuels with capture and storage of part of the CO2, for simplicity of discussion andas in the SD Vision scenario we are mostly referring to primary energy supply, we will not explicitly
quantify it.

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3. A Normative Scenario to 2050: the SD Vision Scenariof) market power of energy-exporting countries and its possible use as apolitical weapon;g) market power of energy deliverers (e.g. truck drivers strikes in the caseof gasoline and other liquid fuels delivery);h) risk of market disruptions due to regulatory bottlenecks or mistakes(which may, inter alia, cause insufficient levels of investment ininfrastructure).
Case a) is of little interest per se, especially if we postulate open global
markets over the next 50 years. Case d) could be that of France’s electric
power sector, that depends for more than 70% on nuclear plants. A serious
reactor accident (or, as we have seen recently, a long spell of exceptionally
hot weather combined with a drought) could force closure of a large
number of plants, causing severe power shortages and serious mid- to longterm impacts, not necessarily limited to the country level. Case e) may be alonger-term problem, particularly for gas (as oil can also be transported bytruck or tanker): in particular, the focus of concern are uncertainties about
the speed at which the infrastructure, needed to bring to market the large
quantities of gas that will be demanded in the coming decades, will bebuilt. Case f) is a situation oil consuming countries faced in the 1970s withrespect to OPEC; it might become less important as OPEC recognises its
long-term economic interests. Cases g) and h) represent mostly local
problems with temporary impacts, but could cause costly shortages ofenergy. In sum, cases b) and c) are the most serious cases of vulnerability,
because they have both long-term and global relevance, followed by casesd) and e), which have a shorter term and more local impact.
In the timeframe of climate change, the problem of dependence on energy
sources that are exhaustible is perhaps most significant. Depletion forconventional oil is not contemplated as a serious threat for the coming
thirty years. But we cannot rule out that this might occur within the next
fifty years, should the growth rate of oil demand be high enough. Phasing
in unconventional oil resources would give more time (as well as higher
emission levels), though depletion could still happen within this century. A
similar risk is also manifest for gas if present rates of extraction continue or
increase. In the case of coal, on the other hand, several centuries of supply
remain assuming present extraction patterns. Of course, the concept ofreserves, as the concept of resource base (of which reserves are only a part)is a dynamic one, i.e. it changes over time and, specifically, depends ontechnology and knowledge stock, prices and other economic factors. It also
depends on definitions (conventional oil, non-conventional oil, etc.).
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3. A Normative Scenario to 2050: the SD Vision Scenario

The issue of when production will peak and how long resources will last
ultimately depends not only on the effective resource stock but also on its
recoverability and on the resource production rate (which in turn depends
on population growth, economic activity level, prices and ultimately ontechnology). For conventional oil, most experts agree that at current
production growth rates production peaking could happen relatively soon
between 2010 and 2050 according to different authors (Campbell, 1998;
DOE/EIA, 2000); the WEO (IEA, 2002b) reference demand projections
stand in the middle and suggest it may not happen until after 2030. For
gas, remaining conventional resources are more abundant and, even atcurrent rates of production growth, production peaking should take place
after 2050.
But complete exhaustion for both oil and gas may very well never takeplace. Past experience shows that in human history no "exhaustible
resource" has yet been depleted although individual deposits have been
largely depleted or abandoned. This is certainly true for minerals. Instead,
it is most likely that the oil age will not come to an end because we will
run out of oil, but rather because we will have lost interest in it as a sourceof energy long before. The same is likely to be true for gas. Technology
plays an important role in finding new resources, in improving theirefficiency of extraction, in improving their efficiency of use (which tends tomake a resource last longer) and, most of all, by making possible long-termtransitions to other resources.
Thus, for the longer-term scenarios considered here, the key elements ofenergy security will include both political and technological components.
In order to give some measure of energy security (or insecurity) we need to
identify an indicator of dependence, vulnerability or of diversification anda target value for that parameter by 2050. The choice of such indicators,
however, is narrow and any given alternative may be particularly limited
when applied over a long-term horizon and at a global scale3. Here we
discuss two: the Sterling Index and a composite index of world dependence
on OPEC oil.
The Sterling diversity index was originally developed to describe the levelof diversity in electricity generation systems. It is defined as
DIV = - Σi pi ln pi
Where pi represent the proportion of fuel type i in a generation portfolio4.
3. See for a discussion of measures of oil dependence the paper by J. Kendell (1998).
4. IEA: Towards a Sustainable Energy Future. Paris, 2001. Pp. 90-98.

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3. A Normative Scenario to 2050: the SD Vision Scenario

The index increases as the number of supply sources increases. This index
can probably be applied to other sectors than power generation and todifferent geographic origins of the same fuel. However it makes no
distinction between desirable and undesirable states of the world,
particularly with respect to the cost of diversification.
The index of OPEC oil dependence applies to the global scale of the
problem but represents the vulnerability of the system at a specific point
in time. It is constructed as a composite index of three different
parameters:■ share of OPEC in world oil demand;■ an index of OECD oil stock levels (including strategic stocks) at a given

point in time;■ excess OPEC crude oil production capacity 5.

The latter two elements have opposite signs with respect to the first. These
three elements are given percent weights and the resulting average isexpressed on a scale 0 -100: the higher the value, the more vulnerable is
the world system to oil supply disruptions.
One of the difficulties with this indicator is that it is a composite ofdifferent variables: any value of the indicator could be the result of very
different values of its components and, even setting a target value for theindicator at some specific point(s) in time in the future, an infinite numberof solutions are possible. Furthermore, the relevance of this indicatorremains subject to the hypothesis that some key OPEC countries remain
unstable and would be willing to use oil sales to consuming countries aspolitical weapon. Should they operate on a purely commercial basis ofrevenue maximisation, the problem of security of supply would largely
disappear and consumer countries would be left with the old problem ofresource exhaustion.
For the reasons explained, in this text we have used neither of the two
indicators illustrated and resorted instead to a much simpler criterion. The
basis of our reasoning is the following. In the coming 50 years, the sector
in the global economy that is going to be more seriously dependent on
Middle Eastern oil is the transport sector. That alone, if it keeps growing atcurrent rates, is capable of absorbing all the resources of conventional oil
available until 2050. The trend concerning other uses of oil, particularly
power generation and to a lesser extent heating, is toward a progressive
5. DOE/Energy Information Administration: International Energy Outlook 1994. Washington D.C. July
1994, pages 21-22.

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3. A Normative Scenario to 2050: the SD Vision Scenario

reduction. Therefore, in order to reduce the supply security risks withrespect to oil, we will consider, in the context of the scenario development,using a limit of the oil share in transport demand at the year 2050.
Currently oil represents about 95% of total transport energy demand. A
target of no more than 40% of transport demand being satisfied by oil
products could be stringent though perhaps still achievable. Of course, aswith the climate change goal described above, this is an arbitrary figure –and serves more as a tool to promote analysis than in any way defining anagreed IEA target.

Access to Energy
Access to energy is a powerful indicator of the level of development
attained by a country’s population. The World Bank World Development
Indicators (2003) include, among many others, indicators of per capita
energy production and use, energy efficiency, as well as electricity
production and access to electricity. In developing countries, growth incommercial energy use is closely related to growth in the modern sector of
the economy, in particular industry, motorised transport and urban areas.
Among commercial (i.e. traded) forms of energy, electricity maintains anespecially important role, as its use is closely related both to economic
development and to the industrial and service phase of that development.
It is also strongly related to other aspects of human development ingeneral (like the diffusion of education and health services).
According to the World Energy Outlook 2002 some 1.6 billion people (onequarter of the world population) in the year 2000 had no access toelectricity. So access to electricity is a fundamental concern for a large
proportion of the world’s population that do not have it and at the same time
is a desirable social goal at the global level. Providing such access would help
mitigate world poverty with its long list of dramatic consequences in termsof human misery, and foster global development and economic growth. We
believe therefore that this goal has a rather easy appeal and is much lesscontroversial than those previously specified. As to the specific target, we
could somewhat arbitrarily set it as follows: to give access to electricity by
2050 to at least 95% of the world’s population.
Such a specific target is stringent enough to show the desired direction of
movement, which is universal access to electricity, while acknowledging
the difficulty of providing universal access in full. After all in other sectors,
such as education and literacy, similar goals have not been achieved at100% even in many developed countries.
1193. A Normative Scenario to 2050: the SD Vision Scenario

Building a Reference Framework
Once the targets are defined, however, there is still a very large
combination of scenarios that can meet them. The problem is to outline a
set of desirable characteristics that are mutually consistent, based on what
we know about the relationships among factors and variables in a socioeconomic system.
For framing and building a normative scenario, a quantitative reference isuseful, in particular, figures for global and regional primary energy
demand at the year 2050 and a breakdown of that demand by fuels (fuelmix) that meet certain requirements (the norms). This helps visualise themagnitude of the necessary changes in the energy system and to discuss
some of the policies that would be necessary to meet the targets discussed
earlier. In this sense the quantification serves a purely illustrative purpose.
As building such a reference framework is a time- and resource- intensive
exercise, it was not undertaken for this analysis. Instead, it was possible todraw from the available literature – which provides a vast array of
examples. This exercise uses the quantitative framework provided by the
SRES A1 family of scenarios (IPCC, 2000) described in the box6.

Box 3.1. IPCC Scenarios
In its most recent set of scenarios (released in the Special Report on
Emissions Scenarios, IPCC 2000), the IPCC explored a series of "no climate
policy" cases through the year 2100. The scenario’s main drivers include
demographic trends, social and economic development and the rate anddirection of technological change; these in turn affect energy demand andland use – and consequently emissions of greenhouse gases into theatmosphere. All scenarios are characterised by growing per-capita incomes(with world GDP increasing 10 to 26–fold depending on the case); income
differences across world regions are assumed to narrow in many of the
scenarios described.
The IPCC scenarios are based on four families of storylines, each representing
a combination of different demographic, social, economic, technological and6. We are aware of the fact that the validity of some of the assumptions underlying the IPCC-SRES
scenarios, and particularly the scenarios of the A1 family were recently challenged by I. Castles and
D. Henderson. One of their main objections centred on the use of GDP data measured at Market
Exchange Rates (MER) instead of Purchasing Power Parities (PPP). As the rebuttal written by
Nakicenovic et al. and published in issue 2 of 2003 of Energy and Environment provides somereasonable answers to the issues raised, we stick to our choice of reference framework.

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environmental developments (respectively A1, A2, B1 and B2). The "A"worlds are basically ones where economic and market factors predominate,while the "B" scenarios are worlds with more focus on environment. The "1"worlds are more global in outlook, while the "2" worlds are regionallyfocused. Based on these four families, the more than 40 quantified individual
IPCC scenarios cover a wide range of uncertainties on future GHG emissions.
The A1 story line and scenario family describes a world characterised by very
rapid economic growth, a population trend that peaks around 2050 and
declines afterwards, very rapid introduction of new and more efficienttechnologies through high rates of investment and innovation andinternational mobility of people, ideas and technology. Other relevantcharacteristics are a continuation of globalisation trends; commitment tomarket-based solutions and increasing convergence of development amongworld region, leading to greater interregional equity in income distribution.
Within the A1 family three scenario groups are identified, characterising threedifferent developments of energy technologies. The first (A1FI) is
characterised by emphasis on fossil fuel technologies, leading to worsened
environmental conditions especially with respect to GHG emissions andclimate change risk. The second (A1T) is characterised by development of nonfossil fuel technologies leading to a marked improvement of environmental
conditions (including a reduction of GHG emissions). The third (A1B) is
characterised by a fuel/technology mix that is more balanced across thefossil/non-fossil spectrum, due to uniform improvement rates across technologies,
and results in a moderate improvement of environmental conditions.
For comparative purposes the main characteristics of the six marker
scenarios of IPCC are shown in Table A.II.1 of the Appendix II.
Population growth assumptions in the A1 scenarios are consistent with the(newly released) revised population projections of the United Nations to2050 (2002 Revision of the official United Nations population estimatesand projections). According to this source, total world population by
2050 will equal 8.9 billion, i.e. an increase of 2.6 billion from the current
6.3 billion.
According to the revised UN projections the population of the lessdeveloped regions would grow from 4.9 billion in 2000 to 7.7 billion, while
the population of more developed regions would remain stable around thecurrent level of 1.2 billion. Life expectancy at birth is assumed to rise froma world average of 65 years today to 74 years in 2050. Due to lower
fertility rates population would be ageing faster than previously projectedeven in developing countries.
1213. A Normative Scenario to 2050: the SD Vision Scenario

Globally, people aged > 60 will reach 1.9 billion by 2050 and 80% ofthem will live in developing regions, where they will represent about
19.7% of the population (a figure approximately equal to the current
share of senior citizens in developed countries). International migration is
expected to remain high over the entire period. The difference in world
population projections between the UN estimates and the SRES A1
scenarios might well be explained with an even further decrease in fertility
rates due to the impact of fast income growth in the SRES scenario. On theother hand, a situation of slightly declining population after 2050 as in
the A1 scenario would not be inconsistent with the UN projections.
Income growth assumptions for this scenario family indicate a robust
growth rate of 3.5% per year over the entire period. This assumption, while
perhaps optimistic, is consistent with global trends over the last 30 years
according to IMF data. Furthermore, it offers some scope for a substantial
improvement both of world-wide per capita incomes and for a significant
reduction of the income gap between developed and developing regions(as in fact postulated by this scenario). While this is not a specificrequirement for the SD Vision scenario, it is certainly a desirable
characteristic and is consistent with energy access criteria. It is clear,
however, that, as a result of environmental and energy security targets
imposed on the energy system in our scenario, this rate of GDP growthwould be somewhat lowered.
Concerning energy supply, the main assumption in the A1 scenario familyis that there are sufficient fossil energy resources to meet demand in thenext 50 years. Rapid technical progress increases economically recoverable
resources and increases efficiency (i.e. it reduces the resources needed to
produce a given unit of output).
Within the IPCC A1 scenario family, two scenarios provide particular
relevance for the framing of our analysis: the A1T case, in which rapid
technological change plays in favour of non-fossil fuel energy technologies,
and at the A1B case, in which rapid technological change has a balanced
impact on both fossil and non fossil fuel technologies. Appendix II contains
a discussion of the quantitative features of two specific A1B and A1T
scenarios, quantified with IIASA’s MESSAGE model, for the projection
period 1990-20507. Trends in those two scenarios are also compared to the
IEA’s WEO-2002 reference scenario (which, however, only runs to 2030).

7. As these specific scenarios were quantified using GDP projections on a PPP basis, the objections
raised by Castles and Henderson do not arise.

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The A1B and A1T scenario outlines provide an initial quantitative frameworkfor population, income growth and energy demand projections, on which we
impose our targets or norms. They represent, therefore, a suitable basis forour analysis because of their fast technology and economic dynamics, which
can accommodate dramatic changes like the ones envisioned in ournormative scenario. The A1T case, in particular, shares with our "Brightskies" scenario discussed in the previous chapter its assumptions of rapid
technological change and attitudes towards the environment.

A Normative Case: the SD Vision Scenario
To quantify our SD Vision scenario, we have used as a starting point the
A1T scenario developed by IIASA with the MESSAGE model and available
in electronic form in the Internet SRES-CIESIN website8. The basic data for
the A1T MESSAGE scenario divides the world into four regions:■ OECD90 (which includes Western Europe, North America and Pacific);■ REF – Russia, Eastern Europe and former Soviet Republics;■ ASIA (including Centrally Planned Economies of Asia, Southern Asia andPacific Asia);■ ALM (Middle East, Africa and Latin America).

We have maintained the basic structure of the original model results,
however, the original storyline has been modified. For example, while the
SRES scenarios are not policy driven, our SD Vision scenario requires strong
policy intervention. Thus, the SD Vision scenario outlined here imposes amore stringent requirement regarding the share of zero carbon emitting
sources, slightly lowering the economic growth trend and energy demand
trajectory to fit the outlook of a policy driven scenario.
The assumption of this SD Vision scenario is that there is a strong political
will to achieve the targets, that the general public supports or is persuaded
to support those goals, and that businesses are willing to work toward thatgoal both with policymakers and with consumers. Such support is foundboth in the developed and developing world – the latter responding partly
as a result of increasing incomes. However, achieving these goals has some
8. http://sres.ciesin.org/final_data.html. Some additional detail was provided by IIASA and we
warmly acknowledge the assistance provided Dr. Nakicenovic and Dr. Riahi. We would like to makeclear, however, that the responsibility for any mistakes or misuse of these data in this paper is entirely
ours and does not extend to the modellers of IIASA.

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3. A Normative Scenario to 2050: the SD Vision Scenario

cost in terms of economic growth — and although such costs are in part
offset by other environmental benefits, a slight decrease of the growthtrajectory may result from climate change mitigation efforts.
How slight is this decrease likely to be? An assessment of economy-wide
impacts of CO2 stabilization at various levels was carried out by the IPCC
(2001b, p. 548) with the use of six different models (AIM, ASF, MARIA,
MiniCAM, MESSAGE and World SCAN) by applying various mitigation
policies and measures to the six illustrative scenarios (used as baselines) of
SRES. That analysis has shown that the average GDP reduction withrespect to the baseline in most of the stabilization targets considered(ranging from 450 ppm in the most stringent case to 750 ppm) is under
3%. By 2050 (year at which the GDP reduction reaches a maximum) the
highest percentage reductions (between 3% and 4%) are experienced forstabilization targets of 450 ppm for scenarios of the A1 family. At astabilization target of 550 ppm the average decrease with respect to thebaseline is about 1%. For some scenarios the impact on GDP is evenpositive (i.e. it leads to an increase of GDP). Therefore, based on these
considerations and to be on the conservative side, we are assuming thatby 2050 the world GDP in this SD Vision, scenario could be 5% lower thanin the original A1T scenario.
Of course, while this assumption is backed by various modelling exercises,
it does not necessary solve the question of perception of costs. Various
interest groups may have to bear proportionally higher costs, such astransition costs. Short-term costs will likely remain uncertain andcontroversial, despite the convergence of economic modelling on the longterm. Their distribution will raise, both within and between countries, anumber of social and economic issues. Most developing countries mightrefuse to bear the costs of emission mitigation beyond those actions that
could bring ancillary economic or environmental benefits, in which casethey would initially be supported by the richer countries.
There might be various methods to reduce cost uncertainties andcontroversies, and to deal with these various concerns – from indexing
targets on economic output, price capping mechanisms, use of a wider
Clean Development Mechanism or non-binding target for allowing
developing countries to participate in emissions trading. Policy makers atcountry level could use a wide range of policies and measures to better
deal with domestic concerns, while negotiators could find efficient ways todeal with those of various countries – from coal-rich to oil-exporting
countries. Some costs will remain and be felt – but again the basic
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3. A Normative Scenario to 2050: the SD Vision Scenario

assumption of this SD Vision scenario is that the willingness to address
climate change, enhance security and energy access will prevail.
The combination of policy intervention, and individual progress towards
increased energy efficiency, would also result in a decrease in total energy
demand with respect to the initial reference. In typical modelling
simulations of climate change mitigation policy, a result of this type could
be produced as a result of increasing energy system costs, with the extent
of decline in demand depending on the model used and the otherassumptions of the model. In this case, the decrease in energy demandwith respect to the original A1T case is driven by energy intensity
improvement rates. Using this criterion, primary energy demand in the new
scenario is about 15% lower than in the A1T scenario.
In the discussion that follows, it is important to keep in mind that, while
the original A1T scenario used as a starting point was actually simulated
by IIASA using the MESSAGE model, the SD Vision scenario described inthis section has not been generated by rerunning the same model, but
by simply modifying the original output to fit the desired picture. Thisis also the reason why the SD Vision scenario is only represented in primaryenergy terms and, except for the transport sector, we are unable to provide
figures on final energy demand and its sector breakdown. Given theillustrative purpose of this quantitative description, full modelling of sucha scenario was not felt to be necessary to the development of our thinking.
Of course, to evaluate in a modelling framework the economic costs ofattaining the goals indicated would certainly constitute interesting anduseful work.

Box 3.2. Methodology
For further clarity and transparency, this box illustrates the quantitative
manipulations performed on the original IIASA-MESSAGE results for the
A1T scenario in order to arrive at a quantitative representation of our SD
Vision scenario.
To meet the norms proposed, the following changes were made:The GDP level and overall trajectory was lowered slightly (-5% with respect
to the original projection for 2050) in each of the four world areas. Figure
3.1 shows the two trajectories.
Energy demand (with respect to the original projection) was lowered
separately by world area as much as possible without producing, as a result,125

3. A Normative Scenario to 2050: the SD Vision Scenario

rates of decrease in energy-intensity inconsistent with historical rates.
Analysis carried out previously on historical trends found that only inperiods following price shocks and sustained oil price increases have these
rates of energy intensity decrease been of more than -2% per year. So even
if the SD Vision scenario has sustained policy intervention, this sort of"rule" is not broken for more than two-three years in a row.
The energy demand that results from this process, aggregated to the levelof the four regions, has a trajectory that is about 15% lower than theoriginal one (Figures 3.2 and 3.3). Transport energy demand was lowered by
the same amount.
The percentage shares of the various fuels/energy sources in primary energy
supply, as computed from the original A1T- MESSAGE scenario for each of
the four regions, were modified. The modification consisted in general ofincreasing the shares of non-fossil fuel emitting sources and lowering theshare of fossil fuels, but in some cases exceptions were made for coal, basedon the fact that more coal was likely to be used to produce either synfuels
or hydrogen. The new mix was applied to the previously computed new
regional energy demand to obtain the new energy quantities. The oil shareand the oil demand in the transport sector were determined in a similar way.
Carbon emissions were computed using average emissions factors from theyear 2000 for the various fossil fuels (coal, oil, gas).
Total potential emissions at the year 2050 were computed in the hypothesisthat all energy demand is satisfied by fossil fuel sources. The level ofemissions corresponding to an energy system where 60% of energy demandis satisfied by non-carbon-emitting sources was also computed. The difference
between these and the carbon emissions of the SD Vision scenario represent
the amount of emissions that need to be captured and stored.
That amount was distributed among world regions based on suchconsiderations as presumed CO2 storage capacity (e.g. in oil and gas
deposits, or in coal seams, etc.) and per capita incomes.

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3. A Normative Scenario to 2050: the SD Vision Scenario

Figure 3.1 Comparing GDP Trajectories
200.0

Trillion $ at 1990 prices and ppp

180.0
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
48

45

20

42

20

39

20

36

20

33

20

30

20

27

20

24

20

21

20

18

20

15

20

12

20

09

20

06

20

03

20

20

20

00

0.0
Years
SD Vision

A1T

Source: Elaboration on data from SRES and IIASA.

Figure 3.2 The A1 T Scenario: World Total Primary Energy
1400
1200

EJ

1000
800
600
400
200
1990

2000

2010

2020

2030

2040

2050

Years
Other Renewables

Biomass

Nuclear

Gas

Oil

Coal

Source: Elaboration on data from SRES and IIASA.

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3. A Normative Scenario to 2050: the SD Vision Scenario

Figure 3.3 The SD Vision Scenario: World Total Primary Energy
1200
1000

EJ

800
600
400

0
1990

2000
Other Renewables

2010
Biomass

2020
Years
Nuclear

2030
Gas

2040
Oil

2050

Coal

Source: Elaboration on data from SRES and IIASA.

Before discussing the SD Vision scenario, several comments on the original
A1T scenario are called for. First, as shown in Figure 3.2, it should be notedthat the fuel/technology mix in the original A1T scenario already has agenerous share of zero-carbon sources in its configuration (43%). In fact
this result could be considered rather optimistic in view of the current
technological performance and market penetration of renewables ingeneral, and of the social acceptability of the nuclear technology at
certain penetration rates.
Secondly, in the original A1T scenario, due to the "no new policy"
assumption, the Kyoto protocol does not enter into force, the "carbon
price" remains zero: hence carbon capture and storage technologies are
not developed. The A1T scenario however includes also a number of othertechnologies such as those based on hydrogen from a variety of sources,
coal liquefaction, and production of synfuels.
Finally, the A1T scenario has already a large share of fuels other than oil in
the transport sector, and in fact more than meets the target set for the SD
Vision scenario: only 37.3% of energy demand for transport is satisfied by oil
and in fact, that oil even includes liquefied coal. The other transport fuelsthat can substitute for oil include: electricity; gas; hydrogen from various
sources; liquid synthetic fuels from biomass; alcohols from coal and biomass.
With respect to the A1T scenario, the SD Vision scenario has a further
increased share of these zero carbon sources, based on the assumptionthat proactive policies to achieve the target of 60% zero-carbon sources in128

3. A Normative Scenario to 2050: the SD Vision Scenario

total primary energy supply by 2050 would further boost their share withrespect to a scenario of no policy intervention (as the original A1T). The SD
Vision case, illustrated in Figure 3.3, has about 46% non-fossil fuel sourcesin total primary energy. This relatively small increase in the non-fossil shareof primary energy is largely achieved with a further increase in nuclear andrenewables other than biomass. However, this means pushing nuclear
generation to levels (11.3% of TPES and 114.5 EJ9) that by today’s
standards would be considered hard to accept socially, and perhaps
pushing renewables to achieve market shares (15.7% for biomass and18.9% for other renewables) that today would be considered very
optimistic or very costly.
In order to get to 60% non-carbon emitting sources, it is assumed in the
SD Vision scenario that CO2 capture and storage technologies are able tostore for the very long term almost 26% of the total CO2 emissions fromthe fossil fuels (in primary sources) used in 2050. In this scenario, policies
that favour carbon emissions reduction or control are actively pursued;
hence carbon separation and long term storage are definitely part of thepicture and in fact may allow for some increase in the share of coal used.
This is likely to be felt necessary by a number of countries that might beeither reluctant to develop the nuclear option, to bear the costs of higher
shares of renewable (or deal with intermittence problems) or to give up
abundant and cheap coal resources.
As can be seen from Figure 3.3, the share of gas would grow, reaching
26.4% of TPES, with demand increasing threefold in absolute value withrespect to present levels. On the other hand, the share of oil and coalwould decline to 18% and, respectively, less than 10%. But while for oil
total demand would be still 16% higher than in 2000, for coal it would
already be lower.
Most of the oil consumed (about 73%) would be used in the transport
sector. However, oil would represent 38% of total transport energy
demand, the rest being satisfied by other energy sources (electricity, gas,hydrogen, bio fuels, and synfuels). As mentioned, no improvement wasneeded on the original A1T scenario in this case. In fact, with respect tothat scenario the share of oil in transport demand is slightly higher in the
SD Vision scenario, but overall oil consumption in transport is lower.
9. Note that total primary energy supply in the IIASA A1T scenario, on which the SD Vision scenario isbased, is computed using an accounting convention for nuclear power that is different from the one used
in IEA energy balances. The IIASA considers the electric output of a nuclear plant as being a primaryenergy source (as if it assumed a 100% efficiency of transformation from primary heat into electricity).
The IEA considers that the heat is the primary energy source and then assumes a 33% efficiency. As aresult, the value in primary energy of a kWh of nuclear power produced today according to IIASA’s
methodology is roughly one third of that of the same kWh according to IEA methodology.

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3. A Normative Scenario to 2050: the SD Vision Scenario

In the SD Vision scenario CO2 emissions would peak around 2030 at about
10GtC and then start declining, to return to year 2010 levels by 2050
(Figure 3.4). With respect to the A1T scenario, emissions would peak about adecade earlier and at a lower level. This would make the SD Vision scenario
consistent with a goal of CO2 concentration stabilisation of 550 ppm by theend of the 21st century and with a cumulative emissions profile of rather lessthan 1000 GtC over the century. Table A.II.8 in Appendix II provides moredetail on the SD Vision scenario at the aggregate World level.
Figure 3.4 Comparing Carbon Emissions Trajectories
14.0
12.0

GtC

10.0
8.0
6.0
4.0
2.0
0.0
1990

2000
SD Vision

2010
A1T

2020
2030
2040
Years
SD Vision w/o carbon storage

2050

Source: Elaboration on data from SRES and IIASA.

This scenario therefore has been constructed to broadly satisfy the first two
requirements (or norms) set at the beginning of this exercise. Concerning
the third -- providing access to electricity to at least 95% of the world
population -- the other characteristics of this scenario provide strong
indications that this challenge would also be met. To a large extent, thechallenge comes from the fact that the increase in population projected
over the next 50 years will be concentrated in the developing countries andthat this group includes all the poorest countries in the world. However, theincome growth rates assumed by this scenario for developing countries
should provide sufficient resources to accommodate at least the basic
energy needs of the population of these countries. Also, we can assume
that in developing countries the trend towards increasing urbanisation of
the population will continue. While this process will bring along serious
1303. A Normative Scenario to 2050: the SD Vision Scenario

problems of environmental pollution at the local level, it will make it mucheasier to provide a large portion of the increase in population with accessto the electricity grid. The improvement of renewable energy technologies
and of distributed generation could provide a significant share of theremaining rural population with a local supply of energy without building
expensive transmission infrastructure to bring electricity to remote areas.
Finally, one could argue that if trends to electrification experienced in thelast twenty years (at rates of 70 to 120 million people gaining access toelectricity every year, as estimated by the IEA in the WEO 2002) continue
over the coming 50 years, the target would be largely met by 2050.
However, it is known that the fast electrification trends seen in the last two
decades are largely the results of the gigantic effort -- and strong politicalcommitment made by China in this direction. For these trends to continue
into the next half century and to take hold in the rest of the developingworld, both income (generated by the assumed economic growth) and asimilar political commitment will be needed.

Regional Implications of the SD Vision Scenario
Figure 3.5 and Table A.II.9 in Appendix II provide more detail about the
distribution of total primary energy supply in the SD Vision scenario inOECD countries.
Figure 3.5 SD Vision - OECD: Total Primary Energy

Source: Elaboration on data from SRES and IIASA.

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3. A Normative Scenario to 2050: the SD Vision Scenario

This of course represents an average picture of the energy system incountries spread over three continents plus Oceania; it therefore hides
large differences at the national level. However it provides a clear view ofthe structural modification that present day energy systems (as well as
energy use patterns) in the developed world would need to undergo inorder to meet the challenges posed by this SD Vision scenario.
Total energy demand of the OECD area increases by 31.5% over the period
2000-2050. Of the four macro-regions considered, the OECD area is the
only one that by 2050 would rely on zero carbon-emitting energy sources
for more than 50% of its needs, up from a current level of about 11.7%.
This would imply an almost four-fold increase in energy from biomass, amore than six-fold increase in other renewable energy production and morethan seven-fold increase in nuclear power. On the other hand, coal use
would be 14% of the present level, and oil use would be 46.7% of thecurrent level. All of that oil would be used in the transport sector, where it
would be augmented by synthetic oil from coal liquefaction; in fact, almost
all the coal used would be converted to synfuels for transport. In this mix,
oil products would meet almost 45% of energy demand for transport,
while the rest would come from other sources (gas, hydrogen from various
sources, bio fuels)10. Gas would be the only fossil fuel to see an increasinguse, growing by 72%: most of that used within the OECD region would be
imported. Changes in this region as depicted by this scenario are truly
dramatic.
Concerning the former Soviet Union and Eastern Europe (the REF region),the projected energy demand increase is 69.4% between 2000 and 2050.
Figure 3.6 and Table A.II.10 in Appendix II show a much less dramaticchange in fuel mix than in the OECD case. Once economic growth recovers,
this area, which is expected to grow only marginally in total population,
would start increasing its energy demand.
Reliance on abundant natural gas resources would grow despite increasinggas exports, while oil resources are to a significant extent exported andslowly depleted. Gas is the main basis for the transition to a less carbon
intensive world. However, while its use keeps increasing, its share peaks in2010 at 53% of total primary energy and declines to 45% by 2050. Overtime, increasing amounts of gas would be reformed to produce hydrogen,especially for use in the transport sector.

10. If we exclude synthetic oil, the share of oil in transport energy demand goes down to 40%.

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3. A Normative Scenario to 2050: the SD Vision Scenario

Figure 3.6 SD Vision - REF: Total Primary Energy

Source: Elaboration on data from SRES and IIASA.

Coal resource use would increase again to 2030, and then decrease as
non-carbon alternatives conquer larger shares of the market. However,increasing amounts of coal would be gasified or liquefied.
Nuclear generation would increase thirteen-fold by 2050, expanding its
share more than sevenfold. Biomass energy production would also increasenearly seven-fold, quadrupling its share, while other renewables would
increase their output nine-fold and quintuple their share.
By 2050 only 16% of total energy for transport would come from oil, therest being provided by gas (either directly or stripped of its carbon andtransformed into hydrogen) and coal based fuels, by bio fuels and electricity.
In the rest of Asia, energy demand would grow at a steep rate following
population increase and successful economic expansion (Figure 3.7 andTable A.II.11 in Appendix II). By 2050 energy demand will have increased
247.5% with respect to 2000. This growth until 2030 would rely
significantly on available coal resources, and on increasing oil imports forthe rapidly growing transport sector. After 2030 coal use would start
declining both in share and in absolute terms, and fall to about 17% of
total primary energy. Gas, on the other hand, will keep increasing until
2050 overtaking both oil and coal in terms of share of primary energy.
Oil consumption would only start to decline after 2040, but by 2050,
83% of that oil would be for transport use. Oil would represent133

3. A Normative Scenario to 2050: the SD Vision Scenario

42% of total transport energy demand while the remaining 58% would
come from other sources (electricity, bio fuels, hydrogen from natural gas
or coal).
Figure 3.7 SD Vision - ASIA: Total Primary Energy

Source: Elaboration on data from SRES and IIASA.

Among non-carbon sources, energy production from biomass would
gradually increase from an already strong initial base, reaching about 18%
in 2050. However, while growing in absolute terms, its share would decline
until 2030, as gas or liquid hydrocarbons take an increasing share of
traditional biomass uses. Biomass use starts growing again after 2030,
when more advanced biomass based technologies penetrate the market.
The other renewable sources would grow even faster -- to 24 times theirinitial level and from a 2.7% share to more than 18%. But the mostspectacular growth would be that of nuclear, increasing to 62 times its(low) initial value, to reach an 8% share by 2050.
The last macro-region (ALM) is composed of a heterogeneous group
including Africa, the Middle East and Latin America (figure 3.8 and Table
A.II.12 in Appendix II). This group is expected to almost double its
population over the next 50 years, and to enjoy a sustained economic
growth. This means that energy demand growth would show little signs ofslowing down through 2050, increasing by 344.4% with respect to 2000.
The region would continue to rely significantly on oil and gas, of which it134

3. A Normative Scenario to 2050: the SD Vision Scenario

has abundant resources, but which to a significant extent will still be
exported. Biomass production and other renewable energy production
would represent about 40% of total primary energy by 2050. Nuclear
energy would start making a contribution only after 2020 and provide
another 7.7% of total primary energy by the end of the period. Coal would
maintain a small share.
Figure 3.8 SD Vision - ALM: Total Primary Energy

Source: Elaboration on data from SRES and IIASA.

Regarding the transport sector, 33.6% of its energy demand would becovered by oil (and most of that would be consumed in oil exporting
countries), the rest being supplied by gas and bio fuels or synfuels from coal.
This lower dependence from oil of the transport sector is to some extent
explained by the availability of gas and/or biomass in these countries.

Policy Implications
As mentioned above, by construction this scenario produces a world inwhich energy demand and GHG emissions in 2050 meet the targets set.
There are, of course, numerous alternative scenarios that might also meetthese same goals – and the reader may not share the particular vision that135

3. A Normative Scenario to 2050: the SD Vision Scenario

emerges from this one or agree with any of the specific numbers set forth.
In fact, we are aware of the risks inherent in any quantitative scenario,
which very easily favour a shift of focus away from policy issues andtoward a debate over specific numbers and figures.
The main reason for trying to provide a quantified version of this scenario
is to provide a sense of the scale of some of the energy and environmental
challenges that lie in the future. Such a scenario stimulates a discussion on
the path – even if this is not "it" -- that would have to be undertaken tomeet such goals. With this crucial caveat, we may thus usefully begin tolook at some of the policy implications, i.e. determining what short- andmid-term targets or milestones might be needed and what type of policies
could have to be implemented to achieve them.
A useful point of departure for this is offered by an examination of someindicators for the SD Vision scenario, focusing on the relationship between
energy use, income growth and carbon emissions. As shown by table 3.1,
world energy intensity in the SD Vision scenario decreases at a yearly rateof about 1.5% over the period 2000-2050. This rate is higher than the
average rate computed from IEA historical data for the period 1971-2000,
a value closer to -1.1% per year, and higher than the rate of energy
intensity decrease assumed by the WEO-2002 (about -1%). The rate is notconstant: over the past 30 years, there have been short periods in which
the rate of decrease of energy intensity has been much higher -- up to
2.5%. Between 1990 and 1999 the rate of decrease of energy intensity
has been on average 1.5% per year, and this is during an historical period
without remarkable increases in energy prices or particularly aggressive
efforts to conserve energy (i.e., it migh be considered as "autonomous
energy efficiency improvement"). This suggests that energy-intensity
reductions like the ones envisaged by the SD Vision scenario would takesome political will but that they need not have punitive effects on theeconomy.
On a regional basis, the energy-intensity improvement required by this
scenario would be even more modest for an area like the OECD. This makes
sense for several reasons, including the fact that many OECD countries
already have relatively low energy intensities per unit of GDP compared tomost developing countries, and that the rate of growth of OECD countries
economies is expected to be lower than in developing countries. Per capita
energy consumption would even slightly increase in this scenario for OECD
countries. However, the reduction of per capita carbon emissions is
significant.
1363. A Normative Scenario to 2050: the SD Vision Scenario

Regions like Eastern Europe and the former Soviet Union (REF) still have a lotof room to improve their energy intensity, both by increasing economic growthand by significantly modernising their energy infrastructure. A 2.2% yearlyrate of energy intensity decrease for this area in the SD Vision scenario reflects
this fact, although the area does not reach the energy intensity levels of theOECD. Carbon intensity is slashed dramatically over the period. Per capita
energy and per capita carbon emissions both grow in this area.
Table 3.1 SD Vision Scenario – Selected Indicators
2000

2010

2020

2030

2040

2050 2000-50
Yearly %change

WORLD
9.318
7.974
6.696
5.850 -1.50
Energy intensity 106J/$ - PPP 12.455 11.553
68.007 72.096 79.338 92.440 102.983 116.382 1.08
Per capita energy 109J/cap
Carbon intensity kg/$
206.475 185.722 141.677 112.601 80.527 57.687 -2.52
Per capita carbon t/cap
1.127
1.159
1.206
1.305
1.238
1.148 0.04
OECD90
9.970
7.805
6.824
5.852
5.288 -1.36
Energy intensity 106J/$ - PPP 10.466
Per capita energy 109J/cap 202.176 206.388 208.101 213.649 214.374 226.094 0.22
Carbon intensity kg/$
176.699 159.904 114.446 88.286 60.398 43.832 -2.75
Per capita carbon t/cap
3.413
3.310
3.051
2.764
2.212
1.874 -1.19
REF
9.919
7.993 -2.19
Energy intensity 106J/$ - PPP 24.226 21.990 17.714 13.824
Per capita energy 109J/cap 129.833 130.134 146.031 180.424 201.294 217.909 1.04
Carbon intensity kg/$
433.825 377.717 290.912 214.922 137.479 94.778 -3.00
Per capita carbon t/cap
2.325
2.235
2.398
2.805
2.790
2.584 0.21
ASIA
8.443
Energy intensity 106J/$ - PPP 13.078 12.413 10.044
33.180 41.654 52.416 66.329
Per capita energy 109J/cap
Carbon intensity kg/$
227.204 215.538 169.198 134.408
Per capita carbon t/cap
0.576
0.723
0.883
1.056

6.835
75.73592.152
1.021

ALM
9.830
8.493
Energy intensity of 106J/$ - PPP 13.178 12.340
44.503 48.575 55.851 70.376
Per capita energy 109J/cap
Carbon intensity kg/$
176.561 164.751 125.698 103.751
Per capita carbon t/cap
0.596
0.649
0.714
0.860

7.256
6.111 -1.53
86.440 100.822 1.65
80.140 56.602 -2.25
0.955
0.934 0.90

5.964 -1.56
89.090 2.00
64.825 -2.48
0.968 1.04

Source: author’s computations based on SD Vision scenario output.

137

3. A Normative Scenario to 2050: the SD Vision Scenario

Trends in Asia show an energy-intensity reduction of about 1.56% perannum over the period in the SD Vision scenario and a carbon-intensity
reduction of nearly 2.5% per annum. Income growth plays a major role in
the trends for both indicators, both directly and as a result of thetechnological leapfrogging that could result from this economic growth.
Per capita energy consumption, as expected in increasingly affluent
societies going up the ramp of industrialisation, would increase at a yearlyrate of 2%. Per capita carbon emissions would go up too, but at half thatrate.
As for the rest of the world (Africa, Middle East and Latin America), therate of energy -intensity reduction would match the rate of Asia (1.53%
per annum) in this scenario. Similarly the rate of carbon-intensity reduction
would be about 2.25% per year. While the income growth experienced
by this macro-region would likely be less dramatic than in Asia, theimpact on per capita energy consumption would remain impressive(1.65% increase per annum) and per capita carbon emissions would also
grow.
The SD Vision scenario has to a large extent been built on the assumptionof robust economic growth, especially in developing areas. But this growthis also to some extent a condition for a rapid transition to a more energy
efficient and less carbon-intensive world. In other words, to be able toachieve the targets set for this scenario, energy and environmental policies
must be designed in such a way that the world economy remains vibrant.
These policies, however, must also ensure that technological progress (rather
than intensive resource use) remains at the heart of economic growth.
The picture described by the SD Vision scenario is certainly much lessreliant on carbon -based fuels than the present world. Although it does
contain some significant departures from present trends, it is not a wildly
different world from that which we see today. Thus, for example, we havenot made any explicit hypothesis about revolutionary technologicalbreakthroughs emerging in the coming fifty years that provide a
miraculous solution to global or national problems. Instead, this scenario
contemplates mostly improvements (albeit at times dramatic ones) oftechnologies already existing or at the laboratory stage. Neither have weassumed revolutionary changes in the basic energy services that will be
demanded in the future, although the way they will be satisfied may besignificantly different. In this sense we have described a transitional world
to something that could be very different.
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3. A Normative Scenario to 2050: the SD Vision Scenario

Nevertheless, moving to the world depicted poses some daunting
challenges and has some strong implications in a variety of policy areas
ranging from energy to environmental and R&D policy. The quantitative
framework constructed in the previous section and the data shown in
Table 3.2 below helps us examine more closely some of those challenges.
Table 3.2 Yearly Growth Rates of Total Primary Energy by Source in the SD Vision
Scenario versus Historical Data: Period Averages.
Historical Data*

SD Vision Scenario

Total Primary Demand

19712000

19902000

20002010

20102020

20202030

20302040

20402050

Biomass
Other Renewables
Nuclear
Coal
Oil
Gas

1.74
3.23
11.5
1.70
1.30
3.00

1.5
3.4
2.5
0.7
1.3
2.2

1.40
5.75
3.55
1.10
0.67
3.55

2.70
6.00
4.50
1.37
0.75
2.57

2.90
4.50
8.00
1.41
0.77
2.76

2.50
5.60
7.00
-1.60
0.01
1.77

3.00
4.65
4.00
-2.45
-0.55
1.00

* Sources: IEA WEO 2002; IEA Renewables Information 2003.

Table 3.2 compares yearly growth rates of total primary energy supply bysource in the SD Vision scenario with historical growth rates.
Postulating an increase in the share of non-carbon-based energy resources(which grow from the present 16.5 to almost 46%), in this scenario implies
going from an aggregate production level of 68.5 EJ in 2000 to 465.3 EJ
in 2050, almost a seven-fold increase. Considering that we are dealing
with an aggregate of technologies and resources, rather than with only
one technology/resource, the magnitude of the change is not somethingunheard of in past transitions occurring in comparable time scales(Nakicenovic et al., 1998). Much more extraordinary changes happened
either in the first or in the second half of the 20th century. The challenge,
however, is not a small one and it becomes clearer if we consider the main
components of this non-carbon emitting energy supply.

Renewables
Renewables in 2001 were estimated at 13.5% of total primary energy
supply worldwide (IEA, 2003a), taking into account both commercial andnon-commercial energy sources. Of this share, 80% was supplied bybiomass and waste, 20% by hydro-power and other renewables. However,the situation varied significantly between the regions of the world. While139

3. A Normative Scenario to 2050: the SD Vision Scenario

in OECD countries renewables represented 5.7% of TPES of the area,
they supplied over 50% of TPES in Africa, 33% in Asia and 28% in
Latin America. Also, while in the OECD area most of renewables sources
are used to generate electricity, in the rest of the world most of them areused directly in the residential, commercial and services sector. Despite
this, renewables provide more than 18% of global electricity production
worldwide.
Increasing the share of biomass production in TPES from almost 11% in2000 to 15.7% in 2050, as envisaged by the SD Vision scenario requiresa more than three-fold increase in production. At present the rate ofincrease in world biomass energy supply is only slightly higher than therate of growth of TPES, with production increasing faster in OECD
countries (1.8% per annum). To achieve a share like the one envisaged in
the SD Vision scenario, the rate of growth of global biomass supply overthe coming 50 years must be almost twice as high as the one experienced
in the past 10 years.
Presently about 87% of biomass used in the world for energy production
is used outside OECD countries, and much of that is non-commercial
biomass (IEA, 2003a). This should change in the future, with biomass
becoming more and more a commercial form of energy, especially if
production at the scale projected for 2050 (159 EJ) is to be sustained.
Biomass plantations at this scale would require devoting increasing land
to this use, potentially leading to stronger competition with foodproduction. In addition, marginal land may not be suitable for such crop
systems – particularly a problem in dry areas.
In most areas of the world an increase in biomass production of thatmagnitude and at affordable costs requires significant progress inagricultural and soil improvement techniques; the shift may be theequivalent of another "Green Revolution" such as that in food production
experienced over the past century, and perhaps including the applicationof bioengineering techniques to improve plant yields. In some developing
countries realising this type of change requires providing appropriate
training to farmers, money to buy improved seeds and agricultural
machinery. Biomass production in the oceans may have to be considered,
together with the potential environmental impacts of this production.
Furthermore, a substantial reduction in costs and improvements in theenergy transformation efficiency would be called for if biomass were to
replace oil and gas in the production of liquid and gaseous fuels.
140

3. A Normative Scenario to 2050: the SD Vision Scenario

The progress made in the last two decades in the general field ofbiotechnologies and agro technologies suggests that much can be done inthis area. Energy transformation processes can likely get a helping handfrom these same technologies in the form of specially engineered bacteria
and algae. But more R&D would be needed.
For the other renewable energy sources (hydro, wind, solar PV, solar
thermal, solar concentrating technologies, geothermal, etc.) increasing theshare from 3.6% in 2000 to 18.9% in 2050 requires a thirteen-foldincrease in energy output. This means sustaining, over the coming
50 years, growth rates between 4.5 and 6% per annum, which could be
attained based on historical rates of 3.4% in the years 1990-2000.
The remaining potential for hydropower is very limited in Western Europe
and in arid areas (and increasingly controversial almost anywhere): in
those areas only a small fraction of the required output increase can be
expected to come from new dam projects. On the other hand, the potential
is still very large for hydro-power in North America and in many developing
countries. The rest of the renewable energy supply would have to comefrom wind, from the various solar options and in a few cases fromgeothermal resources. While wind technologies have improved
significantly in the last 15 years and this form of power generation has
grown at a very fast pace in various OECD countries, its potential in those
densely populated areas may not take long to reach saturation. Windpower can grow much more in the developing world. In general, it is fromdeveloping countries that much of the expansion of renewable energy
supply is expected.
However the intermittence of power supply from wind and solar sources
remains a problem. Possible solutions include either additional back-up
capacity (which increases costs) or an improvement of power storage
systems (which is difficult to achieve without substantial research work). In
the case of solar-based power technologies, the efficiency oftransformation of solar radiation into power is still low – although thetransformation into heat to produce either hot water or electricity is muchbetter. To increase significantly their contribution to primary energy supply,
dramatic improvements in conversion efficiencies, or in materials cost
reduction are needed. However, at least in the "sunny belt", solar-thermal
electric power offers solutions to solve the intermittence problem bysimply (and cheaply) storing the heat before it is transformed into
power.
141

3. A Normative Scenario to 2050: the SD Vision Scenario

A fairly established technology – albeit one which would benefit from
improvements in a number of technology areas (especially corrosion
resistant materials) – is geothermal energy. Untapped resources are still
significant in practically all world regions, although closeness ofgeothermal sites to energy demand limits the choices.
Summarising, for renewables achieving the market penetration rates
indicated by the SD Vision scenario would require aggressive policy
intervention. Deployment and market development policies should be
implemented as soon as possible to prepare for the acceleration that shouldtake place, especially for non-biomass renewables, after 2020. Market
deployment could be promoted through economic incentives, feed in tariffs,
renewable portfolio standards and green certificate trading for power fromrenewables, as well as taxation of environmental externalities. In parallel,
public R&D policies would be needed to improve conversion and power orenergy storage technologies, reduce the intermittence problems and lower
the overall cost of these systems. Finally, adequate technology transfer andinvestment policies are required if the potential for renewables development
is to be tapped where it is largest, i.e. in developing countries. However, while
the available portfolio of policies is very wide, these policies would need tobe pursued much more aggressively than they have been so far, and there
would need to be a continuity of price signals to the renewables industry if
the goals are to be reached. A carbon tax increasing over time or, perhaps
more likely, a market for carbon reductions would provide such a signal.
Besides, a carbon price signal could stimulate other technologies too (e.g.
nuclear) and make their economics more attractive. This type of policy effort
would likely emerge first in developed countries, so as to allow significant
technology learning and cost abatement to take place in these technologies
before being introduced at a large scale in developing countries.

Nuclear PowerThe other component of the non-carbon emitting energy supply is nuclear.
This technology, according to IEA data and following the IEA accounting
convention for energy balances, presently supplies 6.9% of world TPES11 and
17% of world electric power. The shares are higher for OECD countries(respectively 11% and 23%), and much lower for developing countries(respectively 2.4% and 6.1%). Figures are different if we follow theconvention used by IIASA12 in the elaboration of its A1T scenario (which
11. See footnote 9 in this chapter for the differences between the various conventions for accounting
for nuclear output
12. See footnote 9 in this chapter.

142

3. A Normative Scenario to 2050: the SD Vision Scenario

forms the basis of the SD Vision scenario). Using that methodology, the shareof nuclear is equal to about 2% of world TPES, 3.7% of TPES in the OECDand 0.6% of TPES in the developing world. In the discussion that follows it
should be clear that figures use the IIASA convention.
Thus, increasing the share of nuclear power in a growing TPES, as indicatedin the SD Vision scenario (i.e. from 2 to 11.3%, following the latterconvention), would imply a fourteen-fold increase in nuclear energy
production worldwide, a substantial increase by any standard. Table 2 showsthat this would require a rate of growth of nuclear power supply above
3.5% per year over the entire period, and for some decades as high as
8%. These may seem impossibly high compared to the rate of growthexperienced in the decade from 1990 to 2000 (during which it was2.5%), however, looking back to the rate of growth of 11.5% experienced
from 1971 to 2000 these rates seem much less out of reach.
This is not to downplay the extent of the effort required, especially in thecurrent public opinion context for nuclear energy. Thus, in the scenario
described, the resumption of nuclear plant construction would start at amore moderate pace for the two decades from 2020 to 2040. To allow forsuch a growth in nuclear power the biggest problem is that of reducing therisks – and perceived risks -- stemming from nuclear accidents (bothinvoluntary and voluntary, e.g. terrorism), from long-term radioactive waste
storage and from nuclear weapons proliferation. These perceived risks may,in particular, preclude the international community help developing
countries face the high up-front costs of nuclear power – as they currently
prevent nuclear projects in the Clean Development Mechanism of the
Kyoto Protocol.
It may prove difficult for the public in several OECD countries to accept
nuclear plants in the landscape at a scale necessary for this energy source
to achieve a market share of 21% by 2050. This would require a more thanseven-fold increase in output – and an increase approximately of the same
magnitude in power generation capacity. While this would not bring the
average country to the level of France (where nuclear energy currently
represents 42% of TPES), it might be unacceptable in many countries. Even
if objections were overcome by a change in public attitudes, the problem
of long term disposal of radioactive material would remain serious: clearlysuch an ambitious nuclear renaissance plans would require higher levels ofsafety and significantly lower levels of radioactive waste production. New
concepts and new reactor designs would have to be commercially available
no later than 2025 if nuclear energy is to grow to the level envisaged.
143

3. A Normative Scenario to 2050: the SD Vision Scenario

A number of new reactor designs are currently being studied that addresssome of the concerns just mentioned. However a current opinion among
nuclear scientists is that R&D efforts underway on innovative nuclear
reactors receive a fraction of the funding supplied between 1950s and1970 to develop the current generation of nuclear reactors. Nuclear R&D
expenditures today are aimed primarily at maintaining and enhancing theperformance of operating reactors. Assuming that low investment willcontinue, commercial availability for most of the design being developed
could require 10 to 15 years or longer (see IEA/NEA/IAEA, 2002, p. 81).
In a context of increasingly privatised and liberalised markets this type of
trend may well continue, hence government support in the R&D area may
be required again if the goals set in the SD Vision scenario are to beachieved.
The security and safety concerns of the Western world have so far greatly
limited the potential expansion of electricity supply from nuclear
technology in the OECD and brought to a standstill many large
construction programmes started after the first oil price shock in 1973.
Increasing doubts about the peaceful use of new nuclear programmes insome developing countries could lead to a slow-down in such programmes(although international monitoring schemes may alleviate such concerns).
These issues exacerbate the rates of technology transfer, adding to the
problem of the massive investments, and the build-up of an adequate
technological capability that would be required in many developing
countries to achieve by 2050 the output levels envisaged in the SD Vision
scenario. Thus, while a global market share of 11.3% is technically possible,
it might be economically challenging even in a high growth world.

Fossil Fuel Resources
Although the SD Vision scenario posits a decrease in the share of fossil fuelsources in the energy base, this does not imply that fossil fuels are not still
used, or that there is a halt in the improvement of fossil-based
technologies. Quite the opposite; for this scenario to be realised,technology improvement would have to be significant in all areas fromfossil fuel resource extraction to their transformation and in energy end
use. A number of factors support this contention.
As shown by table 3.2, oil demand in this scenario grows at around 0.7%
until 2030 and then stalls and starts declining. This represents a muchslower rate of growth than that experienced even in the past decade,144

3. A Normative Scenario to 2050: the SD Vision Scenario

signalling the need for aggressive policy intervention. In absolute terms, thenet increase between 2000 and 2050 is approximately 18%.
Gas demand growth in this scenario is robust and remains above 2.5% peryear (and above the rate of growth experienced since 1990) until 2030,
likely driving up prices, then starts slowing down until the end of theperiod. In absolute terms gas demand triples over the 50 years considered.
Contrary to the other two fuels, gas demand does not start decreasing in
the 50-year horizon considered. Most of the growth in this demand would
take place in the developing world (particularly Asia, Africa, Middle Eastand Latin America) although it would be significant, in absolutemagnitude, in OECD countries as well.
Coal demand grows very slowly until 2030 (although faster than in the
period between 1990 and 2000) and starts a rapid decline afterwards.
Coal demand picks-up speed between 2010 and 2030 in a period in which
oil and gas prices are likely to be increasing. However coal demand in
2050 reaches a lower absolute level than in 2000.
The cumulated resource use between the year 2000 and 2050 for the SD
Vision scenario would thus be:■ for coal to 6459.4 EJ (equivalent to 154.3 Gtoe);■ for oil to 9131.7 EJ (equivalent to 218.1 Gtoe, or 1603 Bbl);■ for gas to 9203.2 EJ (equivalent to 219.8 Gtoe or 230 Tcm).

These figures must be put in the right context; they must be compared withproven reserves and with the resource base of coal, oil and gas 13. Estimatesof both reserves and resources tend to differ across different data sources
and are constantly revised as new knowledge becomes available: we mustbear in mind that these estimates are not written in stone. However,today’s knowledge of these stocks allows us to draw a few conclusions.
For coal, at the level of resource use indicated by the SD Vision scenario
no shortage can be anticipated. While the resource adequacy could holdfor the foreseeable future, coal depletion in this scenario may well takeplace faster than in a more hydrocarbon-oriented scenario.
13. The term reserves refers to resources that have been discovered and are expected to beeconomically producible; the resource base includes, besides proven reserves, also undiscoveredresources that are believed, with various degrees of confidence, to be available in the ground.
Furthermore for oil and gas the distinction is often made between conventional (produced fromunderground hydrocarbon reservoirs by means of production wells) and unconventional (others, suchas oil shales and oil sands, gas from tight sands and shales, coalbed methane) reserves and resources(IEA, 2001c).

145

3. A Normative Scenario to 2050: the SD Vision Scenario

On the other hand, at consumption rates like the one envisaged by the SD
Vision scenario remaining discovered reserves of conventional oil,estimated at 130.5 Gtoe (IEA, 2001c) would largely be depleted by 2050.
By then the world would be tapping into conventional oil resources that
yet remain undiscovered, as well as drawing significantly from what are
currently considered unconventional resources.
Finally, remaining proven reserves of conventional gas, estimated at 157.6
Gtoe (IEA, 2001c) would be also gone by 2050; under this scenario,
presently undiscovered resources would be under exploitation. Altogether,based on current estimates of the conventional gas resource base, resources
would be sufficient to cover a cumulated demand of the size envisaged by
the SD Vision scenario, but by 2050 nearly one half of this resource would
be depleted– a relatively fast depletion rate for global gas resources.
These considerations bear some important implications for hydrocarbon
resources exploration, extraction and related technologies. For oil the issue
is that easily accessible resources are rapidly being depleted and new
deposits being found are on average smaller and less accessible than those
discovered 50 years ago. The problem is going to get worse and unlessexploration and extraction technologies improve, finding oil and pumping
it out of the ground will become more and more expensive. In this scenario
technological change is more rapid in non-fossil-based technologies but
there is no reason to believe that it will come to a halt in other sectors.
Also, technologies would have to improve if unconventional oil resources
are to be tapped. At present, unconventional oil, especially in North
America, is already commercially produced but technologies to reduce theenergy input per barrel of oil and refined products need still to be improvedin order to reduce associated CO2 emissions.
Likewise, in the case of gas, the rapid expansion of demand envisaged bythis scenario will have to be matched by a similar expansion in supply.
Much of the know-how developed for oil exploration will be useful here,
and more will have to be developed to find new resources and to reachdeposits located deeper in the earth crust, offshore or in extreme climates.
Several other technologies need particular attention if the gas market is todevelop to its full potential. First of all, improved and more resistantmaterials for pipeline transport of gas as well as more effective pipeline
monitoring systems will be needed both to reduce to a minimum the losses
in the system and to maintain its security and safety. Improved
technologies will be also required to transform natural gas (or other gases
like coal bed methane) into liquid hydrocarbons and oil products (gas-to146

3. A Normative Scenario to 2050: the SD Vision Scenario

liquids technology). These technologies will be especially needed to get tomarket large amounts of "stranded gas", i.e. found in very remote or invery unstable areas or in otherwise extreme conditions. While the basis forthese technologies was developed in the early part of the previous century,
lowering the energy input for the process, increasing its yield and lowering
the costs will need further work.
Other important implications of this scenario concern the infrastructure totransport both oil and gas resources, and the geopolitical framework. A
tripling of gas demand requires an expansion of the transport
infrastructure of roughly the same proportion. The speed of developmentof that infrastructure would have to match that experienced in the oil trade
between 1940 and 1980, or more. However, there would be one key
difference: not all gas trade can take place by pipeline, a lot of it will haveto occur via tankers in liquefied form, which poses more problems than oil
tanker traffic. Liquefaction and re-gasification stations will be needed at
supply and demand points.
As demand grows faster in the first half of the period, the timely buildingof the corresponding infrastructure might be complicated, both due to thesignificant construction lead-times involved and the sheer magnitude of
the investments to be mobilised. In addition, the potential safety issues
and environmental problems that this trade could pose are stillinsufficiently appreciated and will need to be addressed with appropriatetechnology and rules. Furthermore, to reach the consumption markets
much of the gas traded today has to cross several country borders and to
pay transit fees. In a relatively calm international political framework thisshould not pose serious problems, but in presence of regional conflicts therisks and difficulties may be significant.
One element that should not be entirely overlooked is the potential, in the
SD Vision scenario, for the creation of new dependence and vulnerability
problems with respect to gas supply. While in terms of fuel mix the shareof gas in TPES does not reach levels attained by oil in the 1970s, and thegeographic distribution of natural gas reserves is not as concentrated aswith oil, half of world gas reserves are located in two countries: Russia andIran. Over time, as more dispersed resources are depleted, a problem ofdependence on gas supplies from these two areas could develop in terms
not very different from present day dependence on Middle Eastern oil.
The problem of dependence on outside sources is potentially serious forresource-poor OECD regions like Western Europe, Japan and the USA.
While this scenario incorporates a strong drive towards diversification of147

3. A Normative Scenario to 2050: the SD Vision Scenariofuel sources, especially away from oil, which would help ease tensions on
oil demand, compared to other scenarios, much of the diversification
would only emerge late in the scenario period. Furthermore the goal of
reducing CO2 emissions would put more stress on the gas market, at least
temporarily. Increased coal use, which could reduce pressure on the oil andgas market, is not envisaged in this scenario, due to the high carbon
dioxide emission connected to it. Gas plays the role of a transition fueltowards a low-carbon-emission world but, as shown by table A.II.8 inAppendix II, for OECD countries vulnerability to supply shocks in the gas
market is highest towards 2025-2030 and in individual countries thiswould be even higher. Gas share in world energy demand peaks in 2040.
A political framework, along with appropriate international institutions toencourage stability, global collaboration and multilateralism could promotesolutions to regional conflicts and could be a critical trait of this scenario.

Fossil Fuel Based Technologies for Power Generation
A significant efficiency improvement in energy transformation and use
processes would be required in order to allow a reduction in the share offossil fuel sources in the energy base while energy service demand
increases. This would be particularly important in fossil-fuelled power
generating technologies, where current average efficiency levels forconventional plants remains below 40%. However, technologies alreadyexist that substantially improve these efficiencies. New gas turbines
already have better performances. Cogeneration has very high overall
efficiencies. Supercritical pulverised coal plants can presently reach 47%
efficiencies and ultra-supercritical plants can do still better. Gas combined
cycles can go beyond 50% efficiencies. Integrated gasification combined
cycles could allow similar performances using coal as a fuel and stationary
fuel cells using hydrogen, natural gas or any gasified fossil fuel would have
performances around 60% and better.
Again, however, increasing the penetration of these technologies in themarket and stimulating further technological improvements would require
substantial policy efforts, as well as sustained growth of the economy.
Some of the policies that favour non-carbon emitting technologies (likeCO2/carbon taxes or ceilings to carbon emissions) would clearly boost thedevelopment and adoption of low or zero carbon technologies and penalise
the least efficient fossil fuel based ones, particularly some of the coal based
technologies (although the latter would have to improve their performance
significantly just to survive). At the beginning much of the reduction in coal148

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use would have to be offset by an increase in gas-fuelled generation. Gas
use in power generation also would increase due to several other factors,
including the diffusion of distributed generation and of co-generation of
power and heat or steam. Distributed generation would grow, especially inthe residential and commercial sector, with a likely expansion in the use ofmini and micro-turbines, as well as Stirling cycles and fuel cells. Whilesignificant gains in efficiency are already possible with today’s advances,
still further improvements would be facilitated through the further
development in a number of enabling technologies and new materials.
Another general trend, including in developing countries, would involve
the tightening of SOx, NOx and particulate abatement standards. This
would erode part of the efficiency improvement even in some of the best
performing coal-fuelled plants, thus reducing their competitiveness. At alater stage the need to separate and capture part of the CO2 emitted byfossil-fuelled plants would further aggravate the problem as these
additional processes have significant energy costs. Hence in the future
producing more electricity from the same amount of fossil fuels (andespecially from coal) may not be simple; in part as a consequence, fossil
fuel use would slowly decline in power generation. Depending on the levelof the implicit or explicit price on carbon or criteria pollutant emission
standards, a reduction in coal use like the one envisaged by the SD Vision
scenario by 2050 would no doubt take place. At the same time,
technological improvement in power generation would be continuously
stimulated, counteracting in part the increase in power generation cost
due to pollution abatement regulation. Furthermore, system cost increases
that could not be offset by technology improvements in power generation
might still be offset by increased efficiency in electricity end-use stimulated
by higher prices.

Energy End Use
Improvement of fossil fuel based technologies would be needed in allenergy end-use sectors: industry, residential, commercial and transport. In
particular, in the latter three, the existing potential for energy efficiency
improvement needs to be aggressively tapped. The considerations
regarding the trends illustrated by table 3.1, concerning the more aggregate
concept of energy intensity, while providing an idea of the efforts
necessary, at the same time confirms the feasibility of attaining the targetsof the SD Vision scenario. Consider by sector what type of measures could
be taken.
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The Industrial Sector
Attention to the bottom line and to the price signals given by the market
puts industry in a better position to react to a changing environment. To
be effective, a successful climate and energy policy in this sector needs tosend steady signals. While standards may play a role in promoting energy
efficiency or reducing polluting emissions, reducing use of carbon based
fuels is probably better done through cap and trade schemes, throughtaxes or through other economic incentives. These, combined with theelimination of harmful subsidies, should induce enough technologicalchange and process innovation to achieve the goals.

The Residential/Commercial Sector
In the residential and commercial sector there is significant scope forenergy efficiency improvement. The efficiency of boilers, heating systems
and of stoves would have to increase further. Greater diffusion of CHP
production, favoured by the recent wave of market liberalisation, in theservices sector would help reduce overall energy requirements. But at least
initially, the already strong economic advantages of CHP would be further
helped by carbon mitigation policies. A substantial share of the residential
and commercial market demand could be covered by highly efficient
stationary fuel cells. More efficient building design and the integration ofsolar heating and PV in buildings could also substantially cut heating andcooling needs otherwise met by fossil fuels. In developing countries, more
effective ways of transforming biomass into energy services, at the mostdecentralised level could reduce traditional biomass use for the sameamount of energy service produced. A good example of possible progressmight be a second generation of "improved stoves". Provided
improvements focus on the combustion conditions as much as the heattransfers (REWDP, 2000), these changes may simultaneously help reducethe detrimental health effects of in-door air pollution and the possible
effects of biomass overuse on deforestation and desertification, finallyreducing the daily workload (mostly for women) to collect the biomass.
Electric and non-electric appliances could be made much more efficienttoo. This type of development would have to be actively pursued throughpolicies such as efficiency standards (both in building codes and for theenergy performance of electric appliances and lighting devices), providing
tax incentives or preferential terms in loans for upgrading the energy
performance of buildings, eliminating perverse subsidies (i.e. those thatencourage energy waste). Norms and standards could be phased in150

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gradually and continuously tightened with the involvement of bothconcerned industries and consumer organisations. Also, even in a world inwhich environmental awareness is already in the mainstream of consumer
attitudes, people should be continuously informed and kept up to date
about the energy consequences of their habits and lifestyles. The directionof change must be clear and sustained over the long term.

The Transport Sector
In the transport sector enormous efficiency improvements can be extracted
even from the internal combustion engine, not to mention continuously
improving diesel engines (IEA, 2001b). Hybrid vehicles (using electric
storage and conventional engines) would also dramatically cut energy
consumption. Fuel cell vehicles, using hydrogen, bio fuels or fossil fuels
would have rather high efficiencies too. The future described in this SD
Vision scenario assumes a continued variety of transport technologies –with a much more diversified fuel mix than seen at present. While later inthe scenario horizon a growing portion of fossil fuels or biomass would betransformed into hydrogen and used in fuel cell powered cars, an important
fraction would be still used as liquid fuels (diesel oil, gasoline, synfuels fromcoal, bio fuels) and used in advanced ICEs, diesel and hybrid vehicles.
For the first two decades of the period considered, increased experimentationby the automotive industries with different engine concepts and different
fuels must be encouraged, so that different approaches can be tried andtested and a clear set of winning technologies can emerge. By 2025, it
should become clear what type(s) of technology and fuel(s) is (are) likely todominate the new transport market – and only at that point it will become
apparent whether a totally new infrastructure will need to be created tosupport that technology or whether adjustments to existing infrastructure
will suffice.
Fuel cell technologies for transport would, at early stages, use carbon-based
fuels either directly (with a reformer) or indirectly (hydrogen). For the latter,efficient ways to concentrate hydrogen, to increase its energy density, andto store it for fairly long periods (days or months) would be needed.
Some of the bottlenecks to the adoption of challenger technologies in thetransport sector are already clear. For example, for electric vehicles, theuncertainty lies in whether electricity will be supplied by batteries or
produced on board in a fuel cell powered by hydrogen. Research work onelectricity storage in on-board batteries would be necessary to increase the151

3. A Normative Scenario to 2050: the SD Vision Scenario

energy density of battery packs, so as to give electric vehicles an operative
range comparable at least to that of present day gasoline cars.
In general, new technologies could be nurtured in niche markets, and thewinner is likely to be determined based on the speed at which costs decline
for that technology and on the comparative simplicity and convenience of
its use. Of course various types of hybrid solutions could emerge. It is also
possible that certain technologies would prove better suited to an urban
environment and others for long-haul intercity transport.
Advanced technology hedging strategies must be accompanied by aparallel strategy for conventional transport technologies. Fuel efficiency
standards would likely be needed everywhere (first in developed countries
and later in developing countries) and periodically tightened to achieve
better performances. Energy taxes (or alternatively externality taxes) could
be used especially on fuels of fossil origin, in combination with efficiency
standards, in order to reduce the rebound effect. But a morecomprehensive approach to the transport sector may also be desirable, as
dependence on oil as a fuel and increasing GHG emissions are only two oftransport-related problems. The health impacts of polluting emissions fromtransport vehicles are very serious and increase with population in urban
environments. Traffic congestion (and parking space limits) increases thetime spent commuting; noise pollution is a growing nuisance and possible
health hazard; occupancy of public spaces by cars restricts other activities.
In urban environments the problem of mobility could be addressed
through appropriate public transport planning and development, which
would reduce the amount of resources used (energy, space, time) and ofpollutants emitted. While system planning is key to finding andintegrating good solutions, new and more efficient public transporttechnologies are needed too, in order to significantly decrease transportenergy needs and polluting emissions. However, a more flexible set ofsolutions to transport services may become available thanks to the
diffusion of information and communication technologies (ICT).
Air transport deserves a separate discussion. This segment of energy
demand has seen the most rapid increase of any part of the transport
sector over the last two decades. Increasing incomes make this form oftransport more accessible for a growing number of people while
simultaneously changes in attitudes and of social standards make long
distance travel for tourism and vacation routine for a wider segment of the
population. Decreasing the energy demands of this form of transport, andthe pollution it originates, without reducing mobility is a challenge that152

3. A Normative Scenario to 2050: the SD Vision Scenario

requires improved load management, much more efficient aircraft
technologies and materials, and ultimately innovative engine design andfuels. Hydrogen could be one such fuel, but certainly it will not be viable
very soon.

Hydrogen and Hydrogen Infrastructure
The issue of hydrogen versus gas distribution will depend on several
elements. One of them, as mentioned earlier, is whether or not an efficienthydrogen storage technology will emerge. Another, at least as critical, andnot only for the transport sector, is whether it will be possible to producehydrogen at lower energy costs than presently achievable. Furthermore,producing hydrogen either from fossil fuels or from renewables and nuclear
may have both energy and environmental costs: producing hydrogen fromhydrocarbons or gasified coal entails large energy losses that are difficult
to reduce with current technology. It also leads to the production of verylarge amounts of CO2, which would then need to be captured and stored,at an additional cost. A successful targeted research agenda could focus
on developing cheaper separation and capture technologies and on
demonstration of safety of long term storage.
Similarly producing hydrogen from water electrolysis using off peak electricity
produced by renewables or nuclear may be costly from the energy point ofview, and if practiced on a large scale would require the use of significant
amounts of water, which may not be readily available everywhere. Other
options, such as natural gas steam-reforming using high-temperature solar or
nuclear heat, are not fully developed yet, though they could drasticallyreduce associated CO2 emissions at a low cost. Other technologies (see IEA,
2003 b, chapter 8) are still at an R&D stage. Certainly a full life-cycle
analysis of these alternatives would be helpful even to decide where to focus
the massive investments required to develop these technologies.

Carbon Capture and Storage
Carbon capture and geological storage, if available on a large scale, would
be an attractive option in the short to medium run, and would definitely
make a transition to a non-carbon-based energy system less painful. It
certainly seems one of the conditions for a full-blown hydrogen economy
in which carbon-based technologies remain in use. For this reason it plays
an important role in the SD Vision scenario. However, issues such asleakage rates from underground reservoirs (ocean storage is not
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considered here) may prevent the use of this technology as a permanent
solution. While underground storage capacity for CO2 in coal seams,
depleted oil and gas reservoirs and deep saline formations is very large, (inthe hundreds or thousands of GtC, IEA/WPFF, 2002), and could
accommodate at least a hundred years of production at current rates, thetechnical potential may be offset by cost: the process of CO2 separationand capture from the various fossil fuels or combustion gas streams may
significantly decrease the overall energy efficiency of a fossil-fuelled power
plant. The problem connected to the use of this technology is that
capturing and storing the carbon has itself an energy cost (energy
penalty), and if the energy is provided by fossil sources, for the sameamount of final energy produced, adding carbon capture andsequestration would lead to more fossil fuels being burned.
More R&D and continued technology improvement would likely reducethese costs – and in some cases, such as enhanced oil recovery (EOR), could
even generate increased profits in oil or gas production. However, for large
scale capture and storage in electricity generation, these costs would not
be negligible, especially when transport costs are added. Furthermore, CO2transport and storage would create some formidable logistic problems, as
fossil fuels are not necessarily used close to their extraction points. The
dispersion of some of these uses complicates the matter further. One
alternative would be to strip the fossil fuels of their carbon during the
production of hydrogen, and to store the carbon at the point of production
while distributing the hydrogen by pipeline. On a global scale, with muchof the oil and gas already being moved across borders through pipeline,
any vision of the future for the coming 50 years seems to be full of promisefor the pipeline industry.

Conclusions
This exercise of constructing a normative scenario for 2050 based on a setof desirable energy and environmental attributes provides a useful tool tofocus attention on actions that must be taken and conditions that must be
created at certain points in time in order to achieve the scenario goals. The
point of departure for this type of work, a vision of the future that is
considered desirable, rather than a future inexorably imposed upon us by
the inertia of the system, represents a critical change of perspective.
1543. A Normative Scenario to 2050: the SD Vision Scenario

While both still preliminary and somewhat arbitrary in terms of goals set,
this analysis has forced us to ask some questions, recognise uncertainties,
and identify bottlenecks and priority areas of research and technologicaldevelopment. At this stage this exercise is intended for demonstration
purposes. A more systematic and more detailed approach could provide afiner set of warnings, policy recommendations and technology development
roadmap than the one produced here. In this perspective the goals shouldbe thoroughly discussed and if possible set in a consensual way.
As this scenario suggests, it is possible to achieve, simultaneously, stringent
goals for energy security, climate mitigation, and energy access, if oursocieties accept the inevitable, but not necessarily huge costs, and address
the socio-economic implications. The policy tools are already available –although they must be applied at levels considerably more stringent thanheretofore. The changes in the fuel mix, while significant, are within therange of shifts seen in the past – although earlier changes have been not
as extensive or as cross-cutting. Current technologies are in many cases
adequate to the task – and where new technologies are needed, they are inmany cases already at the stage of pre-commercial development. But avision of the world like the one outlined by the SD Vision scenario can be
implemented, and while to achieve it will require long-term sustained
efforts, the cost (as indicated by the IPCC work quoted on page 124) neednot be prohibitive. Nevertheless, while long term cost assumptions arebacked by various modelling exercises, it is clear that a high level of
uncertainty remains both over cost levels and their distribution acrosseconomic sectors. Such uncertainties are likely to remain controversial andraise, both within and between countries, a number of social and economic
issues which will need to be addressed.
This scenario has also allowed us to take a closer look at some difficulties
and cross-cutting issues. One critical element is the importance of
maintaining sustained economic growth to facilitate the attainment of thestated goals. Economic growth and technological change interact in acomplex manner, in a sort of virtuous circle that could be essential toadvance in a direction more friendly to the environment. It is therefore
important to simultaneously encourage economic growth and thedevelopment of environmentally benign technologies. To achieve thesegoal policies need to work as much as possible with market forces.
A second conclusion of the scenario is that unless a balanced portfolio ofstrategies is used in pursuing specific goals of energy security,environmental protection or climate change mitigation, some perverse
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effects could result. The scenario analysis clearly outlines a number ofthese risks. For example, there is a clear risk of increasing the world’s
dependence on natural gas – and a concomitant increase in security ofsupply risks with respect to this source – if we seek too rapidly to limit
dependence on oil. Another case is the risk of pursuing climate change
goals through technological paths that lead to a worsening of the
problem. This could happen if, to solve the problem of CO2 emission
reduction in transport or in other sector we resort to massive scalehydrogen production from fossil fuels: hydrogen could well be "anotherexpensive way to burn more coal". As for the case of air pollutant
abatement technologies, carbon capture and sequestration could lead tohigher energy use, and possibly to higher carbon emissions.
Significant undesirable environmental and security impacts for future
generations could also result from massive production of energy from
nuclear fission technologies at a scale like the one envisaged by this
scenario. These risks need to be carefully examined and kept under control
both through technological approaches and political approaches.
Perhaps the only "risk-free" option is efficiency improvements in energy
production and use – which we thus conclude should be promoted as muchas possible, while seeking to limit the rebound effects from efficiency gains.
Ultimately, the use of the normative scenario process lies as much in theissues it requires us to confront as in the precise details that it generates.
Obviously, the future will not look like the one set forth in this discussion:other priorities will intercede, and national conditions and circumstances
will dictate the specifics of the energy policies that may be adopted. But
such a process of iterating around scenarios can provide valuable guidance
as to what we must do – collectively and individually – to achieve policy
goals such as these.

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CONCLUSIONSThis volume has sought to make the case, both through a review of pastpractice and through the development of new scenarios, that an approach
to exploring the future can make important practical use of scenarios. It isclear that the future is not simply something already predetermined that
we must accept blindly; rather, it is open and to a large extent determinedby the course of actions we decide to take. For this reason we need to lookat the future and its uncertainties in an articulated fashion, developing
specific tools to consider both how the future might unfold if we do not act– and how we might like the future to unfold if action were to be taken.
Models of the energy-economic system provide one, very useful tool toundertake this assessment. The IEA’s World Energy Outlook provides aquantitative example of how that work can be carried forward, building on
past trends to describe future outcomes. Unfortunately, in most cases,
such models lose their efficacy when projecting present trends morethan 20-30 years out – and even in this horizon, modelling groups use
story-lines or judgemental parameters to make choices regarding elements
such as technology development and changes in economic growth. Yet
fundamental and undesirable changes in our system can be predicted
if we simply follow Business as Usual or Conventional Wisdom paths. We
need tools to examine both the longer term – running at least to 2050,
and tools to help choose policy paths that avoid such problematic
outcomes.
As demonstrated in chapter 1, one valuable intellectual exercise forlooking into an uncertain future involves the development of "scenarios",
intended as logical and plausible conjectures about how fundamental
drivers will affect global societies, economies, resource use and theenvironment. The literature review shows a multiplicity of scenarios,
conducted at different scales ranging from the national to the global
scale, with different time horizons, and with a focus on different strategic
issues.
Exploratory scenarios help prepare for events that, without representing astraight-line continuation of past trends, are plausible and entirely
possible. They are particularly useful when contemplating potential
bifurcations in fundamental drivers for change, especially when hints ofsuch situations can be found in the present. Exploratory scenarios can help
a lot to accelerate and calibrate the response to new developments (both157

4. Conclusions

positive and negative), as well as providing a strategic framework fortechnology development policy.
In contrast to exploratory scenarios, the exercise of constructing anormative scenario has, as its goal, the evolution of a desirable future,
rather than a future inexorably imposed upon us by the inertia of thesystem. It thus represents a critical change of perspective. It provides auseful mechanism to focus attention on several crucial elements: actions
that must be taken and conditions that must be created at certain points
in time in order to make the scenario possible. The emphasis here is onplanning to achieve a certain result rather than on preparedness in
responding to uncertain events. The basic attitude in this case is a moreproactive one, and policy intervention is a tool of choice.
Building a normative scenario requires the creators to clearly define thedesirable characteristics of their future, and to express this future interms of measurable targets. In the process of developing a scenario,
those creating (and using) it must address critical questions, including
how to recognise and address uncertainties, how to identify bottlenecks
and priority areas for policy action, and how to incorporate elements
such as research and technological development into a plausible
framework.
An effort to construct such a scenario, building on normative elements ofenergy security, climate change mitigation and access to energy services
was undertaken for this work. This effort must be recognised for what it is:
an internally consistent and plausible image of the future that serves toillustrate the process of scenario development, and to outline the kinds ofpolicy choices that such a future might allow. It is intended fordemonstration purposes. A different set of analysts would clearly create a
different future – even faced with the same set of goals. A different andlengthier assessment could also yield a more finely discriminated set of
warnings, policy recommendations and technology development roadmap
than that produced here.
Ultimately, the use of such a scenario process lies as much in the issues it
requires us to confront as in the precise details that it generates. Obviously,
the future will not look exactly like the one envisioned: other priorities
will intercede, and national conditions and circumstances will dictate
the specifics of the energy policies that may be adopted. But such a processof iterating around scenarios can provide valuable guidance as towhat we must do – collectively and individually – to achieve the set
policy goals.
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4. Conclusions

Building Useful Scenarios
The interest and success of any scenario exercise rest on its foundations.
For Business as Usual forecasting the foundation is given by the quality
and accuracy of information on past and present trends. For exploratory
scenarios, clarity in the statement of the problem is perhaps the mostfundamental criterion. A correct elaboration of the central question being
asked is what helps focus on the critical uncertainties for the problem athand, and correctly identifies the factors that have the greatest impact on
the final outcome. Alternative developments in those factors then shape
the scenarios, producing different images of the future. In turn, thosedifferent images of the future help appreciate the breadth of uncertainty
and facilitate a discussion on how to best tailor policies and strategies tobe successful in coping with such future outcomes. However, one point isplain: in any scenario of this sort, success cannot be defined other thanwith respect to the initial question or problem. Scenarios do not stand inisolation from the questions they are built around, and cannot thus betaken out of that context to answer other questions of future policy.
Normative scenarios follow a similar path. However, in this case a strong
foundation requires not only clarity related to the question being asked,
but also clarity and consensus around the broad goals that a successful
outcome would entail. While the importance of both elements is selfevident, it needs not translate into extreme accuracy of values chosen as
measurable targets. Often the measurable targets represent useful proxies
for the more complex concepts that constitute the objectives (e.g. securityof supply, environmental sustainability, and so on). It is the latter that must
be as clear as possible, as they will shape both quantitative and qualitative
aspects of the scenario. The consensus around the objectives is paramountin an approach that relies on policy action and hence on political will tomove towards the goal.
This reminder is important because developing a lucid statement of aproblem and a clear and consensual formulation of objectives are nontrivial tasks: in fact they might be the most difficult undertaking of theentire scenario development exercise. The reason for this is that in the realworld most of the problems we deal with involve a plurality of
stakeholders. While the difficulty of the task is sensibly reduced for
decisions involving ourselves and our immediate entourage, or a small
business enterprise, dealing with sensitive issues like energy, sustainable
development, or climate change mitigation concerns a much broader
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community. The stakeholders include the world’s citizens, theirgovernments, businesses, and NGOs.
For an organisation like the IEA, representing some 26 member countries
and conscious too of the broader implications of its policy
recommendations, the development of any scenario is fraught withdifficulty and potential conflict. For the specific scenario exercises carriedout here the task has been enormously simplified by the existence of a setof shared goals of the IEA member countries, already included in various
carefully worded IEA documents. By basing scenarios on these goals, it ispossible to get a sense of possible areas where member governments might
agree on outcomes. However, the scenarios constructed in the analysis
presented here did not involve the extensive public consultations withmultiple stakeholders that a full, consensual process would do.
Furthermore, the shared goals are quite broad and provide considerable
latitude for interpretation: going to a higher level of specificity may turn out
to be more complicated. As a result, the work in the development of thesescenarios should be regarded exclusively as a demonstration of what might
be done – and not as a statement of what the IEA member governments
would have agreed if such a scenario process were to be undertaken.
One of the conclusions that may thus be drawn relates to how the IEA
might carry out such work in the future. The process of a wider
consultative approach and involvement of experts from all IEA member
countries would be central to such an effort. While likely difficult – andperhaps at times contentious, such an effort would surely bring still further
policy relevant results to a critical area of international discourse.

Drawing out Insights: what does the Literature Tell us?
A substantial body of literature is available reporting on numerous andvaried scenarios in the area of environment and energy. Those consideredin this text look both at the 2050 and the 2100 horizon. They are mostly
narrative scenarios, although a large number of them have been at least
minimally quantified. The majority of scenarios described are of the
explorative type; a significant number of them have been developed forstrategic analysis and hence are used to test what strategies would be
more robust or more resilient, with respect to a stated objective, indifferent worlds. A few scenarios have a normative component.
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4. Conclusions

This subset of the wider scenario literature was included in this analysis forseveral reasons, but primarily because these scenarios included drivers
specifically related to the issues central to the international debate onenergy and environment. Ultimate drivers constitute the main uncertainties
and usually represent the axes along which the scenarios are developed. In
many cases these drivers refer to the human element: they represent"human responses", "socio-cultural values and priorities", "desires andaspirations", "attitudes towards the environment". Another category ofdrivers concerns "resources" and "long-term ecological processes" most ofwhich lie entirely outside the human domain and control. A third
fundamental driver is technology, an element typically within the humandomain but still highly dependent on unpredictable and often random
factors. Among the proximate or derived drivers we have found elements likepopulation dynamics, level of economic activity (GDP), technological choice,which are found more often as exogenous variables in modelled scenarios.
While we have picked these scenarios because of their relationship to theenergy and environment issues we sought to analyse, it is useful to assess
whether, in fact, these drivers do lie at the root of the future evolution ofthese issues. The simple answer is: yes. This insight was confirmed byothers. During a seminar on long-term scenarios organised in October
2001 by the IEA, energy analysts and scenario experts engaged in an
attempt to define a list and a ranking of main drivers for the future ofclimate and energy policy. Drivers discussed on that occasion are almost
the same as those emerging from this literature review with technology
and technology-related factors ranking highest, followed by a cluster that
included values, lifestyle, and behavioural elements particularly of certain
actors. Third was income and income distribution, followed by population.
Scenarios reviewed demonstrate a number of limitations. For example,
most global scenarios failed to explicitly discuss the technologies that are
strategic to our societies and that might ferry us to sustainable futures(which technologies do we need and how do we develop them; whereshould we concentrate our research efforts and budgets?). It is not clearthat such a focus is impossible at the global scale. Thus, it may be possible
to extend the work undertaken by national level scenarios – whichanalysed clusters of priority technologies that need to be developed, andprovided a sort of technological road-map for the future. The usefulness of
forward thinking of this type cannot be overstressed in times of limited
money and a near-term focus of R&D budgets.
Another incompletely sketched aspect of the scenarios examined is that ofbottlenecks in fossil fuel supplies that might well materialise in the coming161

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decades. Some scenarios contemplate worlds where oil or gas supplies
become increasingly insecure due to closing markets and regional conflicts.
These scenarios tend to favour coal as a refuge from energy supply shocks,
with predictable environmental consequences. Most scenarios agree that
there is no immediate threat of shortage of oil and gas reserves (although
the situation may change). Yet it is clear that the increasing dependence
of developed and developing countries alike on oil reserves that are
geographically concentrated in relatively troubled areas of the worldpresents risks.
Additionally, the scenarios analysed are, for the most part, policy-neutral(that is, they do not assume any specific policies directed at reducing
environmental impacts or security concerns). Those that actually envisage(either in a normative light or in an explorative context) a sustainable worldor simply one where GHG emission concentration is stabilised at a "safe"
level, require either technological breakthroughs or truly gigantic efforts
from society in terms of political will and/or epochal changes in consumer
preference. In exploratory scenarios this type of factor can be assumed
among the drivers, but it is only in normative scenarios that they can be fully
appreciated. Again, the lesson seems clear: a mix of approaches, including
explorative and normative scenarios must be part of the policy toolkit.
As for the types of worlds described in exploratory scenarios, both negativeor undesirable scenarios and environmentally benign scenarios are foundin the literature. The outcomes seem to depend mainly on the direction
taken by prevailing values, level of technological innovation, and opennessof markets. The lesson here is also plain: choice in policies – but also thedevelopment of random and uncontrolled events – can have enormous
implications for the overall tenor of our global future. The value ofconsidering the gloomy paths is that we will not be unprepared to meetthose challenges; the advantage of considering the unrealistic options isthat we may isolate the key factors that could help move us in that morewelcoming direction.

Developing a New Scenario: the Explorative Approach
Our review makes clear that existing scenarios, while shedding light on anumber of critical energy questions, did not adequately address the policy
issues that must be confronted and that a number of key uncertainties
could usefully be further explored through new scenario work. For us, thequestions and uncertainties that still seemed inadequately addressed are162

4. Conclusions

for the most part related to energy security, environmental damage andtechnological development. And, from this conclusion emerged the interestin developing new scenarios with the specific purpose of exploring possibleenergy futures for energy and the environment over the coming 50 years.
Given the multiplicity of possible interests and outcomes, it was clear that
exploring a family of scenarios rather than developing a single alternative
would be most appropriate. The scenarios were thus built around two main
drivers that appear as fundamental forces in shaping the future for energy
and environment. These are the speed of technological change especiallyin the energy sector (varying from slow to fast) and the attitudes of people
at large towards the global environment (varying from unconcerned toconcerned), particularly with respect to climate change issues. Creating asimplified matrix of these variables provided four outcomes, although only
three were characterised in much detail (the fourth, low security and low
environmental concern, was dismissed). The resulting three storylines
represented three rather extreme views of the future world, covering a wide
range of cases for the chosen variables. They do provide a way to clarify
logical chains of events and possible consequences. All three scenarios
have elements of plausibility – although, as with any specific scenario, theycannot be said to represent what will occur. In fact, it seems much more
likely that the future world will be some combination of the three cases.
The three scenarios do allows us to think about the future in a systematicway, to identify potential threats and opportunities lying ahead, thus
providing us with useful insights for planning. Clearly, however, there is anelement of oversimplification in the scenario process that must be kept inmind while deriving conclusions.
What conclusions can we draw? With respect to the sustainability of the
futures they portray, two of the scenarios illustrated exhibit some obviously
undesirable traits. In Scenario 1 (Clean but not Sparkling), notwithstanding
attitudes of concern towards the environment, the goal of creating theconditions for long-term sustainability is missed for lack of appropriatetechnologies. In Scenario 2 (Dynamic but careless) increasing demandpressure on scarce fossil resources, poses substantial risks from the point ofview of global security. Furthermore, the environment is threatened
through significant increases in greenhouse gas emissions. However, thedynamic scenario produces a wider array of technology options – andthese, in turn lead to the potential for a more sustainable future later on.
The third scenario (Bright skies) meets the conditions for long-term
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4. Conclusions

sustainability, and presents very low risks from the point of view of securityof supply.
Although for different reasons, all three scenarios indicate that, for the
coming fifty years, we may expect a substantial growth of gas demand
worldwide: gas should be overtaking coal and then oil at some point
during that period. In consideration of such growth in demand, gas prices
would increase unless exploration, extraction and transport costs decrease
fast enough to keep pace over time. This suggests that finding gas in thequantities needed and then delivering it to the consumption markets will
be a challenge for the coming decades. Oil demand would also increase,although not as fast as gas demand, and not at the same pace in the three
scenarios considered. In at least one of the scenarios, geopolitical risks
associated with the location of known oil deposits would provoke recurringcrises in the oil markets and price spikes.
All three scenarios assume continuing economic development over the
coming fifty years in developing countries (although at different speeds),
leading to energy consumption patterns increasingly similar to those of thedeveloped societies. Two scenarios (Clean but not sparkling, and Brightskies) show a certain measure of convergence of average incomes between
OECD and developing countries, while income gaps could actually been
maintained in the Dynamic but careless scenario.
The three stories indicate that for long-term sustainability it is critical toensure robust dynamics in technological improvement but that unlessthere is a fundamental change in values and attitudes towards the global
environment, technology alone cannot be trusted to supply the entirety ofthe solutions. Values and attitudes are what give direction to technologicalchange and, vice versa, the direction of technological change reflects thesystem of values of a society. The scenarios thus show that policy can havea role not only in directing research and technology development towards
the attainment of specific social objectives but also in favouring (orhampering) successful and rapid technological change. However, while
designing intelligent policies that increase the chances of successful
technological development is something that can be done by good policy
analysts, implementing the policies requires political will, and that
ultimately depends on social values and priorities: an altogether much
more difficult variable to change.
Concerning technology, the three scenarios present clear differences withrespect to the technologies that are likely to emerge in these threedifferent contexts:
1644. Conclusions■ the Clean but not sparkling scenario, besides stressing spartan
behaviour on the part of energy users, concentrates on more energyefficient and cleaner end-use technologies, on fuel switching and on
renewable energy technologies. It later reconsiders zero carbon
emitting technologies like nuclear;■ the Dynamic but careless scenario focuses initially on fossil fuel based
technologies but later, in order to mitigate security of supply concerns
develops other alternatives, like nuclear and hydrogen;■ the Bright skies scenario develops the entire range of options early,
choosing both near-term focus on efficiency and a longer-term focus onzero carbon emitting technologies for medium to large-scale energy
production.
A more detailed look at the technological aspects of these story-lines
allows some additional insights to be drawn, particularly related tosecurity of energy supply and environmental sustainability. Certain
technology areas are critical to all three scenarios and thus appear mostrobust in different situations. On the energy supply side these include:■ energy efficiency improvement (EEI) in supply technologies;■ advanced gas technologies in power generation: combined cycle gas
turbines. Gas transport, storage and liquefaction/re-gasification
technologies;■ cleaner coal technologies (Pulverised coal, FBCC, PC supercritical andPFBC). Technologies for criteria pollutants abatement (SOx, NOx, PM);■ combined heat and power production. Micro-generation (gas). Fuel cell
power plants for power or CHP production;■ nuclear technologies; life extension and safety; new reactor concepts;■ power generation from renewable sources: solar PV, high temperaturesolar thermal, wind, biomass, and hydro;■ technologies for hydrogen production (from coal, gas, nuclear or
biological agents), transport and long-term storage;■ power storage technologies;■ carbon capture and storage for large-scale use;
■ fusion.
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4. Conclusions

On the energy demand side robust actions include:■ energy efficiency improvement and conservation in all demand sectors;
more efficient appliances, wider use of ICT to optimise performance;■ low energy- and material-intensive manufacturing processes andservices;■ passive heating and cooling technologies & architectures in buildings.
Building management systems;■ fuel efficiency improvement in conventional vehicles. Bio fuels. LPG andmethane;■ hybrid vehicles. Electric vehicles;■ fuel cell (gas or hydrogen fuelled) cars. Hydrogen storage technologies;■ mass transit systems. Advanced public transport systems;■ fuel cells for direct use of power.
Development and diffusion of these technologies at acceptable costs thus
appear desirable to contribute to overall improvement in the efficiency ofenergy production and use or to the reduction of GHG emissions, or toboth. In some cases, they could also help mitigate security of supply risks.
Some technologies however appear mainly in the Dynamic but carelessscenario owing to its strong focus on fossil fuels and limited interest in
reducing CO2 emissions. These technologies (oil and gas, extraction andtransport technologies; oil shales and tar sands treatment technologies;
enhanced oil recovery technologies; coal liquefaction and gasification
technologies) while helpful in reducing security of supply risks, might resultin faster production of greenhouse gases should they acquire a large
market share.

Moving to Policy Intervention: the SD Vision Scenario
The Clean but not sparkling, Dynamic but careless, and Bright skies
scenarios were built for the purpose of exploring a range of outcomes andanalysing their implications for strategic decision-making. However, it
seems clear that relying solely on luck to reach a desirable long-term
outcome is too uncertain a prospect. In two of these three scenarios, muchof the next 30-50 years looks rather grim. Policy intervention, in which
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4. Conclusions

governments, individuals, companies and civil society seek to be proactive,
may be needed to ameliorate the worst effects – and hopefully to promote
the appearance of a more palatable future.
The development of such a scenario is clearly a step along the path fromunderstanding the future to acting to change it for the better.
The "normative" scenario, called the Sustainable development vision
Scenario, outlines a "desirable" vision of the future expressed by specificcharacteristics or quantitative targets to be reached. Guidance regarding thedrivers in the area of energy and sustainable development are taken (albeit
loosely) from the IEA Shared Goals, again focusing on energy security andclimate change mitigation, but in addition, adding a component related tothe provision of energy services to those currently without access.
To construct the scenario, these three general goals, to be reached by
2050, were translated into specific targets:■ reducing dependence from oil in the transport sector to 40% or less;■ increasing the share of non-carbon emitting sources (including fossil
fuel use with carbon capture and storage) in total primary energy
supply to at least 60%; and■ supplying electricity to at lest 95% of world population.
Borrowing from a scenario developed at the International Institute forApplied Systems Analysis (IIASA) for the Intergovernmental Panel on
Climate Change (IPCC), a description and a broad quantitative framework
for this normative scenario to 2050 was also constructed.
The resulting scenario was used as a point of departure to consider theconditions that must be fulfilled or the measures needed at different
stages along the path to implement these goals, as well as to analyse risks
and difficulties that may arise along the way. This approach represented
a critical change of perspective. The purpose of the exercise was toillustrate, in concrete terms, how to develop such scenarios, and to
stimulate discussion and thinking based on the scenario output about
the long-term issues emerging at the intersection of energy andenvironment.
What can we then say? Perhaps most significantly, the discussion
developed around this scenario argues that it is possible to achieve,
simultaneously, stringent goals for energy security, climate mitigation, andenergy access. Thus such stringent goals need not be only aspirational andunachievable. Rather, with policy intervention, they can be met. The policy167

4. Conclusions

tools are already available – although they must be applied in a much
more aggressive and sustained way than has been the case in the past 15
years. The changes that would be necessary in the fuel mix, while
significant, do not involve quantum leaps and would not be more dramaticthan some we have seen in the past (for instance with the nuclear
programme). In some areas they would be possible with current technology– and where new technologies are needed, they are in many cases alreadyat the stage of pre-commercial development. Although long-term costestimates are prone to a high level of uncertainty, existing analysis showsthat costs need not be high, and might be reduced if ancillary benefits (forexample, of air pollution and human health) are included in the cost
analysis. Uncertainties over cost levels and the distribution of costs acrossthe various economic sectors will likely remain controversial and raise, bothwithin and between countries, a number of social and economic issues.
Future work could aim at more precisely assessing the costs and benefits,
possible distribution and the associated socio-economic impacts ofmeeting these goals.
Analysis of the normative scenario also confirms the importance ofpromoting the development of new technologies – and reinforces themessage built on the results of the exploratory scenario work with regard towhich technologies to promote. Here again the message is simple and clear:
new technologies have to emerge rapidly, and existing technologies must be
further developed to reach the objectives. While specific policy tools were notevaluated during the building of this scenario, other ongoing IEA work does
provide clues as to the policy approaches to promote technology
development and diffusion: higher or better focussed R&D expenditures,
well-structured market incentives and price signals, and more extensive
technological collaboration among countries all form part of the mix.
However, while there are positive messages, all is not rosy. This scenario
also allows us to visualise some difficulties and issues in a more global andintegrated perspective and to identify some critical aspects. Among them,
maintaining sustained economic growth to facilitate the attainment of thestated goals is vital. There is a clear and close link between dynamic
technological progress and attitudes favourable to protection of theenvironment. To encourage at the same time economic growth and thedevelopment of environmentally benign technologies, policies need to work
as much as possible with market forces.
Another element is the need to maintain a balanced portfolio of strategies
in pursuing specific goals of energy security, environmental protection or168

4. Conclusions

climate change mitigation. Unless this is done, we may again fall prey toperverse effects: creating other dependencies on scarce energy resources orresorting to energy technologies that indirectly cause an increase in GHG
emissions or in the creation of more hazardous waste. For example, while
natural gas has the potential to be a transition fuel on the road to a very
low carbon world, the pressure on gas demand could generate other supply
vulnerability problems. Likewise, using coal to produce hydrogen, unlessaccompanied by adequate technologies for carbon capture and storage,
could make hydrogen a very "dirty" fuel. For this reason efficiency
improvements in energy production and use should be promoted as much as
possible, while trying to limit the rebound effects of this added efficiency.
Policy conclusions may be drawn here too. For example, subjecting newtechnologies (even when they are still at a conceptual stage) to acontinuous analysis of their environmental impacts, from a cradle-to-grave
perspective, is extremely important especially if the perspective oftechnology policy is seen together with environmental and energy policy.
Ultimately, the usefulness of the scenario development process lies asmuch in the issues it requires us to confront as in the precise details thatit generates. It is the basis for sensible planning, even when we may haveto change plans later as situations evolve and new information becomes
available. While we can say – with certainty – that the world of 50 years
from now will not look like our scenario, the process of scenario
development can provide valuable guidance as to what we must do –collectively and individually – to achieve policy goals such as a sustainableenergy and environment future.

Where do we go from here?
The process outlined here demonstrates what has been done by others in
the global community seeking to better understand the future through theuse of scenarios, and takes a first step at carrying it forward using IEA
goals as the basis for considering a more favourable outcome. The
exploratory scenarios constructed and reviewed in Chapter 2, as well as
the normative scenario developed in Chapter 3 provide a basis for strategic
discussion. However, to be more fully exploited, we must now ask which
strategy, in each scenario, would likely be successful in reaching theobjectives we seek, and offsetting the worst of the damage. From this, we
can then begin to isolate and hopefully, take policy action to adopt those169

4. Conclusions

strategies, including ones to promote appropriate technologies, that arerobust across all scenarios considered.
Full quantification of scenarios is not, per se, necessary, and can be a costly
exercise (especially because these types of scenario usually come in sets).
Story-line scenarios, even when developed only in qualitative terms, offer
the necessary elements to ground much of the strategic discussion.
Furthermore, quantification risks shifting the focus of discussion to specificnumbers (rather inappropriate considering the speculative nature of thisexercise), preventing the exploration of more critical qualitative aspects.
However, for energy and environment issues like the ones discussed here,
an approximate quantification of such elements as for instance energy
demand and energy service demand, or GHG emissions, might turn out tobe useful, and provide additional policy information. The problem thenbecomes one of finding a suitable model capable of illustrating the storylines already drafted and of finding suitable proxies for whatever
qualitative variables or drivers are considered.
Quantification may be more interesting for a scenario of the normative
type than for exploratory cases. As shown by our exercise, it helps thevisualising at least approximately of some of the magnitudes involved andappreciation of the difficulty of the tasks to achieve the desired outcome.
Depending on the modelling approach used, quantification may provide
useful indications about the economic costs involved in achieving thetargets. Or it may indicate the relative costs and benefits of implementing
alternative policies to achieve the same objective.
But the main utility of the normative scenario is as a planning tool. It
concentrates minds on final objectives, short-, intermediate- and longerterm milestones, necessary steps to facilitate the achievement of each of
those intermediate goals. It may help draft realistic roadmaps fortechnology development and deployment. It encourages forward thinking
and early research for solutions to problems that are likely to emerge down
the road to the desired outcome.
Ultimately, if the international community is to be successful at meeting
the goals of energy security while protecting the global environment andproviding people everywhere with full access to energy services, we willneed to press into service all available tools. The scenario process is one
such tool – and an effective one. However, it remains only a tool. Morecritical – and ultimately, the truly important tool, is the development ofpolitical will to act on conclusions, which will always remain the key to amore sustainable energy future.
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APPENDIX I: SCENARIOS FROM
THE LITERATURE REVIEWEDGlobal (World) Scenarios
Shell’s Scenarios
The first of the 2001 Shell scenarios is called Dynamics as Usual. It is based
essentially on a continuation of past dynamics: demand for cleaner energy,
gradual shift from high to low carbon fuels and towards electricity as energy
carrier. It describes a world shaped by social priorities for clean, secure andultimately sustainable energy, but also of conflicting interests, intensecompetition and a wide array of maturing and emerging technologies, leading
to a highly diversified energy system. This scenario sees, on one hand, rapid
economic growth in major developing countries like China with explosive
growth in energy demand for transport, electricity and related infrastructure,and on the other, little extra increase in energy demand to support economic
growth in OECD countries. Progress in communication and materials
technologies allows a significant decrease in energy and materials intensity ofincome world-wide. Public concerns for health, environmental quality andclimate, though stronger in developed countries, push companies to develop awider range of clean fuel and technology options. Concern for security, on theother hand, stimulates greater energy efficiency, rejuvenating technologies likethe internal combustion engine, with its hybrid variant, and slashing fuelconsumption to one third of present requirements for the same service. Thesedevelopments are able to contain oil price growth until 2015, after which
increasing demand in developing countries strengthens it again. Fuel cellvehicles, as well as stationary applications are introduced but fail to take off.
New power generation is mostly gas-fuelled wherever gas is available: thedash for gas is spurred by the superior economic and environmental
characteristics of the combined-cycle gas turbines, which replace many old
coal-fired plants. Gas gains market share even in China and Latin America,
supported by expansion and integration of gas grids and increased LNG
trade. By 2010 gas overtakes coal and by 2020 challenges oil as thedominant source of primary energy, amid growing unease about supply
security. Nuclear capacity is maintained but loses market shares in theOECD and grows only slightly in developing countries.
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Renewable energy sources experience a boom in the first two decades
especially in OECD countries, pushed by public concern for health, climate,and supply security, as well as government support and green energy
schemes. Yearly growth rates exceed 10% overall for renewables, and 20%
for solar PV and wind. By 2020, about 20% of electricity in many OECD
countries is supplied by renewables. But then their market penetration
reaches a plateau, due to such factors as increasing siting difficulties andenvironmental problems, continuing high costs, lack of progress in power
storage technologies, and stagnant electricity demand in the OECD. In
developing countries renewables start taking off after 2010, but they do
not fully compete with low cost conventional sources or with energy
efficiency measures.
Around 2025 governments face tough choices about energy supply mixes.
No technology/fuel option stands out as a clear winner especially vis-à-vis
increasingly stringent environmental standards. Even new nuclear
generation stalls. Later, renewables make a strong comeback. Growing
scarcity of oil and further advances in biotechnologies bring a smoothtransition to liquid bio fuels for transport, now the focus of much biomass
production. Progress in materials, electrical controls and storage
technologies enable a new generation of renewable technologies, notably
in solar energy, and by 2050 renewables supply one third of world primaryenergy.
The Spirit of the Coming Age describes "a world in which superior waysof meeting energy needs are developed to meet consumer preferences"(Shell International, 2001). This is a scenario of revolutionary rather thanevolutionary developments as in the previous case. However, the revolution
takes place mostly at the fringe of the energy system while maintaining
continuity with established consumer preferences such as that for freedomof mobility, flexibility, convenience, and cleanliness. Fuel cell powered
vehicles respond to all these needs. However the constraint is fuelinfrastructure. Initially uncertainty exists as to the preferred fuel source:
natural gas, methanol, or direct hydrogen. Soon, however the auto industry
develops a new "fuel in a box". The fuel itself can be made from oil, natural
gas or biomass. As soon as a certain energy density threshold is crossed(12 litres of fuel sufficient for 400 Km) and the fuel can be packaged incompact, easy-to-distribute containers, a host of distribution channels(supermarkets, vending machines, and so on) are readily available. This
frees the fuel cell car from the constraint of the distribution network andmakes the construction of dedicated infrastructure unnecessary, whichturns out to be particularly acceptable in developing countries.
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The development and the initial "technology learning" for the fuel celltakes place in stationary applications for power generation, particularly inniche markets where highly reliable power without voltage fluctuations oroutages is needed. This development is favoured by the existence of
natural gas distribution networks. By 2005, as soon as fuel cell systemmanufacturing costs go below $500/kW, a large market for transportapplications starts opening up. By 2025 25% of the OECD vehicle
fleet and 50% of all new cars is powered by fuel cells; the latter
figure is close to 25% for car sales in developing countries. However,development also continues in the residential sector, with the possibility of
producing – and trading surpluses of – electricity and hot water (as a byproduct of fuel cell heat). Both transport and stationary applications offuel cells benefit from advances in materials technologies such as carbon
nano-tubes and later carbon nano-fibres as ultimate hydrogen storage
medium.
To satisfy rapidly growing demand for gas and hydrogen, besides advancesin natural gas exploration and extraction, progress in low-cost andunobtrusive in-situ extraction of methane and hydrogen from coal and oil
shales is necessary. Furthermore, carbon dioxide sequestration becomesfeasible. Availability of these technologies frees many countries (mostnotably China) from dependence on foreign oil. The transition to ahydrogen world is well in progress before oil becomes scarce: in fact as fuelcells start dominating the transport market, oil prices remain weak.
Renewable energy progresses steadily but slowly until 2025. Photovoltaics
enjoy initial successes within rural communities in developing countries.
But urbanisation trends and growing electricity needs play in favour of fuelcells. In industrial countries, notwithstanding initial government support,
renewables cannot bridge the cost competitiveness gap with otherdeveloping technologies.
Progress in fuel cells in various markets steadily increases demand forhydrogen, which is now produced from fossil fuels, with CO2 separated anddisposed of at the source. Carbon sequestration grows to from 0.3 billion
tonnes in 2025 to 3.6 billion tonnes in 2050 (a quarter of emissions)peaking soon after. After 2030 large-scale renewable and nuclear energy
schemes to produce hydrogen by electrolysis become attractive; and while
until then hydrogen is transported mainly in gas grids, a dedicatedinfrastructure becomes necessary.
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Stockholm Environment Institute - Global Scenario GroupThe Reference scenario assumes strong economic growth, mid-range
population and development projections and gradual technologicalchange. In this world economic growth has top priority as largely
unregulated markets expand internationally. In this world there arecountries, groups and businesses which lose out, and others that prosper.
Population growth is uneven and there is increasing migration from poor
to rich areas. The rich get richer, and although some social strata achieveaffluence, poverty persists. In fact income inequality increases.
Environmental quality improves in rich countries and deteriorates in poor
ones. Social conflict intensifies due to migration pressures, competition for
natural resources and environmental deterioration. Other underlying
trends in this scenario are: structural shifts in economic activity fromindustry to services, first in OECD regions, then gradually elsewhere;
increasing dematerialization of industrialised economies; technologicalimprovement gradually leading to more efficient use of energy and water.
Despite these phenomena, pressure on resources and the environment
increases dramatically as the scale of human activity becomesoverwhelming: one indicator is the substantial increase in CO2 emissions.
There are strong indications that this scenario is neither sustainable nor
desirable as environmental pressures exceed the assimilative capacity ofthe system and as social tensions mount. Unfavourable climate alterations
would further complicate matters (Gallopin et al., 1997).
The Policy Reform scenario is still growth-oriented but acknowledges therisks posed by the Reference scenario and assumes a policy response tocounter those threats. These policies would be in particular directed toincrease economic growth, increase distributional equity, foster new andmore efficient technologies and protect the environment. As a result this
scenario would lead to lower levels of social conflict and a healthierenvironment. It is not clear whether this scenario, without fundamental
structural change would offer a plausible pathway to sustainability.
Furthermore it calls for very strong political will to initiate and sustain
massive policy intervention, and this by itself is a daunting challenge(Gallopin et al., 1997).
This scenario is manifestly normative and its development is illustrated at
length in the report "Bending the Curve: Towards Global Sustainability"(Raskin et al., 1998). As it is normative, its development moves from thedefinition of the objective to a vision of the future that satisfies criteria for
global sustainability. The concept of sustainability here is broadly the one
174Appendix I: Scenarios from the Literature Reviewed

adopted by the Brundtland report to the World Commission on
Environment and Development, "Our Common Future", based on the twin
requirements of environmental and social/economic sustainability. This
concept is translated by the GSG team in a series of sustainability goals
that must be globally attained by 2050. These include such environmental
goals as stabilizing the climate within safe ecological limits, reducing theflow of materials through the economy, decreasing toxic waste loads to theenvironment, easing the pressure on freshwater resources and maintaining
the integrity of ecosystems. But they also include social goals like theprovision of basic human needs such as adequate food, clean drinking
water and access to health care and education, reduction of income
inequality and decrease in the level of violence and armed conflict. To
design and test appropriate policies, these goals need to be translated intoquantitative objectives and indicators of progress that set the constraintsof the Policy Reform scenario. Through the "back-casting approach"actions and measures necessary to achieve these goals are laid out foreach individual goal and indicator. Thus the scenario translates into a
series of policies and policy instruments to attain both environmental andsocial goals as well as in the identification of agents and institutions whichmight act for change (Raskin et al., 1998).
The Barbarisation scenarios explore the possibility of a far grimmer world
than that depicted in Conventional Worlds, a situation in which the socioecological system veers towards a state of declining physical amenities
and erosion of the basis of civilisation. These scenarios are explored withthe aim of identifying early warning signs.
The main driving forces in these scenarios include worldwide political andeconomic changes, growing populations, income inequity and persistentpoverty, environmental degradation and technological innovation. In thisworld, uncertainties exist as to the successful transition to market based
economies and to democracy of Russia and Eastern European countries.
National governments lose relevance relative to transnational corporations
and global market forces; disenchantment with development aid causes a
reduction in development assistance to poor countries; absolute poverty
increases and so does the gap between rich and poor and resentment on
the part of the poor. With rapid population growth in poorer regions, ahuge international youth culture emerges, exhibiting similar expectations,consumerist and nihilist attitudes, and frustration at the impossibility of
attaining a "MacWorld" lifestyle. These tensions cause waves of (often
illegal) immigration to rich countries or, in poor ones, to the more
prosperous areas. (Gallopin et al., 1997).
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Unchecked expansion of market economies leads to increased industrial
activity and rising pollution. Environmental conditions worsen everywhere,
especially in poor countries. Increasing urbanisation causes severe stress tolocal environments and to water resources. Scarcity of freshwater induces
conflicts over its allocation. Marine fisheries collapse, causing loss of foodresources to billions of people; climate change harms subsistence farming
especially in poor countries, causing frequent and severe famine. New
diseases emerge and old ones reappear, increasing mortality rates in someareas. Scientific and technical knowledge become an increasingly privatecommodity, widening the gap between rich and poor and slowing progresson fundamental problems (Gallopin et al., 1997).
Then severe social and military conflicts start to emerge and spread,fostered by growing socio-economic inequity and reduced access to natural
resources. Small-scale armed conflicts become common, driven by ethnic or
religious differences and conflicts over resources. Civil order breaks down
encouraging anarchy in many areas, or diverting significant resources in
the name of security and causing a fall in international investment.
Regional fragmentation increases. Incessant conflict, chaos, anduncertainty prevent economic development and technological progress(Gallopin et al., 1997).
The reaction of the remaining institutions to this state of affairs
constitutes the critical uncertainty shaping the two scenarios of the
Barbarisation world. In the Breakdown variant, institutions cannot copewith the rising tide of socio-economic chaos; conditions spiral out ofcontrol, leading to a general disintegration of social cultural and politicalinstitutions, deindustrialisation and the return in many regions to semitribal or feudal social structures. This condition could persist for decades
before social evolution towards civilisation resumes. In the Fortress world
institutional response is sufficiently coherent and forceful to restore someorder, albeit authoritarian. Regional and international actors are able tomuster a sufficiently organised response to protect their interests and tocreate lasting alliances between them. But these are directed to protect theprivileges of the rich and of powerful elites, which retreat to protectedenclaves, leaving outside the fortress a majority of desperately poor,
oppressed and angry people (Gallopin et al., 1997).
In the Great Transitions scenario, global society, rather than descending
into cruelty and chaos evolves to a higher stage. This idealised scenario
implies radical structural change with respect to the historical trajectory,
which could emerge, according to the GSG team, either through a
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fundamental departure from the current path or as response in the wakeof a destructive period of barbarisation. The range of possible Great
Transitions scenarios is large, but two variants are analysed by the GSG inorder to reflect at least part of this variation: Eco-communalism and a New
Sustainability Paradigm.
Eco-communalism portrays a world of semi-isolated and self-reliant
communities, made sustainable by high equity, low economic growth andlow population. This world could emerge either from a New Sustainability
Paradigm world if a strong consensus were to arise for localism, diversity
and autonomy, or as a recovery from a world of Breakdown. In the latter
case, from a situation of reduced population and a rupture of modern
institutions, a network of societies guided by a "small is beautiful"
philosophy and cured from the excesses of aggressiveness of the earlier
Barbaric stage, such a society could emerge.
A New Sustainability Paradigm world, on the other hand, could emerge
from the pull of other, already existing trends, in particular;■ from the strengthening of new social actors such as intergovernmental
global organisations, transnational corporations, and non-governmentalorganisations; and■ from the appearance of new values that might anticipate strong culturaland behavioural changes in the general public (Gallopin et al., 1997).
The path to this new world could emerge from the backdrop of deepening
environmental and social tensions, and develop as follows. Growing
inequality, difficulties in managing migratory flows, and the resentmentthat comes with these tensions, fuel concern by governments, businesses
and the general public about threats of social unrest and conflict. The
conviction grows that over-reliance on profit as an engine for growth has
been environmentally and socially expensive, and that better governanceof all these phenomena is needed. Environmental problems become graver
and a scientific consensus emerges that large-scale shifts in planetaryclimate and ecosystems are indeed possible and even very likely,
reinforcing concerns about sudden catastrophic developments.
Disenchantment with consumerist lifestyles becomes increasingly diffused
prompting, in increasing numbers of people, a new quest for meaning inlife, and fostering values of collective identity and global harmony. The
circulation and diffusion of these ideas, especially among the young, isfacilitated by the expansion of communications networks, by global
meetings, by the coalescence of international political movements. The
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tensions between these movements and the forces of conventional
development start to mount. Some transnational corporations accept thechallenge of a new eco-efficient business ethic, others resist change, but
under popular pressure organised locally, nationally and globally,
governments and corporations begin negotiations around a New Planetary
Deal. Agreements are reached on international mechanisms for the
redistribution of wealth, on population control policies and on
environmental targets (Gallopin et al., 1997).
This change in values leads to a new metropolitan vision, inspiring theredesign of urban neighbourhoods around a more compact and integrated
settlement model; the need for mobility and car use is reduced,
communities become more integrated and secure; "tele-work" becomes
more common; decentralized renewable energy systems increasingly meetthe needs of these communities; production patterns become more self
reliant and local environment is protected. At the international level,
technology transfer and joint sustainable development initiatives lead to a
new era of co-operation between rich and poor regions: the latter start
adapting new technologies to their specific needs and soon innovation
starts also flowing from poor to rich areas. In production, non-market
constraints defined by social, cultural and environmental goals dictate newrules for efficiency of production and allocation. The time horizon foreconomic decisions is lengthened to decades, more in line with ecologicalprocesses. New technologies for sustainability develop (Gallopin et al.,1997).
A variety of policy mechanisms are put in place to achieve programs ofsustainability; the public is kept informed about the effectiveness of thesepolicies through publication of a variety of performance indicators.
Governance takes more decentralized forms and mechanisms are
established for decision making from local to global scales thus leaving
communities with considerable leverage for controlling socio-economicand environmental policy decisions. Local communities have to meetenvironmental standards for GHG emissions and water use. Population
growth slows and stabilizes at a relatively low level. Poverty is eliminatedand GHG emissions are sharply reduced as lifestyles become much lessenergy intensive, and renewable energy systems and efficiency become thenorm. Sustainable agricultural practices are universally adopted. Conflicts
are resolved by negotiation. Economic development continues indefinitely,
driven mostly by non-material production: services, culture, arts, sports andresearch (Gallopin et al., 1997).
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World Business Council for Sustainable Development
The first scenario, aptly named FROG (First Raise Our Growth) describes
a world where economic growth is the main concern, while sustainable
development is considered important but not pressing (WBCSD, 1997).
This is the dominant perspective in the developed and developing world
alike. As a result GNP grows quickly around the world, but this leads totrade tensions and widespread environmental problems. Then nations startturning inward and the world economy goes into deep recession.
The scenario develops as follows (WBCSD, 1999). At first, Asian and Latin
American markets expand rapidly, attracting foreign investment andtechnology transfers. This increases the competitiveness of many of thesecountries, which are then able to mount a commercial threat to firms ofdeveloped countries. The latter respond an increasing trade barrier, which
provokes countervailing measures from the former. Rapid globalisationand liberalization of markets in the early years, together with fasturbanisation processes lead to serious inequity and in turn to social unrest.
Furthermore, although in a number of developed and developing countries
the state of the environment improves due to improved technology and toincome effects leading to complacency, in other areas the environment
deteriorates sharply. By the 2020s rising barriers to trade have slowed
world growth significantly and with it the speed of technologicalinnovation. Rivalry prevails in international relationships, preventing thepossibility of co-operation to any significant degree to addressenvironmental problems. As a result both the human and ecologicalenvironment deteriorate to the point of threatening their survival.
This scenario has clear implications for energy, technology and theenvironment. Coal and other fossil fuels dominate the picture, electricity is
produced in large generating plants and transported long distances, sinceusers in wealthy countries want them kept far away. The emphasis is on
cheap technologies with investments based on short payback periods;
hence nuclear and renewable energy are basically out of the picture, or
confined to small niche markets due to their inability to compete on a pricebasis. As a result CO2 emissions increase rapidly (WBCSD, 1999).
In this scenario, the first decade of the 21st century starts with the collapseof the environmental movement after years of unfulfilled prophecies ofenvironmental disaster, although concern for local environmental
conditions, especially among the middle and upper classes in developed
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economic development is lost and enforcement of the Kyoto Agreementwith its confusing details is allowed to slip into oblivion.
Countries are concerned about securing energy supplies necessary to fuelgrowth. Increasingly, they turn to coal, which is cheap and abundant worldwide and manifests lower geopolitical risk. Environmental legislation
requiring desulphurisation equipment or mining safety and land
reclamation is increasingly superseded. China, concerned about possible
threats to natural gas pipelines that would have to cross politicallyunstable areas, decides against their construction and instead increases
consumption of abundant domestic coal. The fact that its use does not
require expensive or new infrastructure and that technology is readily
available and well tested is perfectly consistent with short-term businessdecisions.
Coal becomes an important energy source even in transport: burned in
distant power plants (often located beyond national borders) andtransformed into electricity it powers electric or hybrid cars that limit local
pollution. Pollution from power generation is thus directly exported topoorer countries just as was pollution from manufacturing at the end of
the 20th century. The use of cars grows in developed and developing
countries alike; development of major transport infrastructure is unable tokeep pace and congestion problems intensify as a result. With people
spending more and more time stuck in the traffic, a market for cars
equipped with entertainment and business devices develops. Longdistance transmission and energy conversion technologies, as well asbattery technologies and mobile generation sources develop in this
scenario, often as backup energy supplies in situations of disruptions(WBCSD, 1999).
Fossil fuels use in general remains high and oil product taxes areprogressively eased. Middle Eastern oil producing countries also do well
but are unable to control the market because of doubts in the reliability
and security of their oil supply. Nuclear power continues its slow decline
especially in some OECD countries due to its costs. There the difficulty ofmaintaining basic technology capabilities makes replacing existing
capacity more difficult. In developing countries not endowed withsignificant coal resources, however, nuclear remains an interesting option
backed by governments and the Japanese nuclear system industry is able
to secure some of those export markets. Renewables (PV, wind, wave, andso on) as well as energy conservation technologies, due to their higher
initial costs are unable to penetrate the market. Large hydro-projects in
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developing countries cannot find the necessary funding due to the highrisk, low-trust financial environment and poor international co-operation.
With the creation of trade blocks, commercial exchanges and economic
growth implode; technological change slows down everywhere, partly as aresult of risk aversion in ageing populations. Social unrest develops within
nations due to increasing income inequality and conflicts, fuelled byvarious kinds of fundamentalism, explode internationally. Only a few
islands of safety survive in a sea of disorder, behind closed and protected
walls: some city states, or wealthy communities, powered by clean
photovoltaics, wind resources or hydrogen when the electricity supplies
from distant coal facilities fail.
The GEOpolity scenario moves from the awareness of a looming
environmental and social crisis particularly widespread in the first two
decades of the 21st century, which leads to the creation of new global
institutions to protect the environment and to preserve society.
In this scenario the prevailing "economic myth" is increasingly viewed as
dangerously narrow, in the face of increasing signs of environmental stressand loss of cultural identity that results in social unrest (WBCSD, 1997).
Traditional government institutions have lost credibility as problem solvers
and multinational corporations are unwilling or unable to address global
problems due to their focus on narrow self-interest, pushing citizens tosearch for new institutional frameworks.
The scenario starts at the beginning of the 21st century with a series of ecoshocks (floods, extraordinary weather events leading to crop destructionand even famine in various parts of the world), which drive home the ideathat global environment is seriously at risk and that something must be
done. As a result of this major shift in public mood a new authority iscreated out of the World Trade Organization and staffed by experts who
had previously been involved in the enforcement of the Kyoto Agreement
or by other technocratic elites from national bureaucracies (WBCSD,
1999).
The new supranational authority is named GEOpolity from "Global
Ecosystem Organization" and immediately takes action to address theenvironmental threats at hand. First and foremost it puts in place rules andmeasures to reduce CO2 emissions: tax increases on coal and oil, cut-backs
in subsidies for high-carbon fossil fuels, support for nuclear energy, natural
gas and renewables, stricter rules for authorising infrastructure with a highimpact on the environment, and so on. Taxes and regulations are seen as
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the quickest approach to shift the world’s fuel mix and are preferred overmore indirect measures.
These measures produce some immediate successes and are particularly
accepted in countries with a tradition of authoritarian leadership or"dirigisme". Funding is granted to desirable projects that provide relatively
large-scale solutions (hydropower, reforestation, wind farms, long-distancegas transport infrastructure, nuclear power stations). Research is promoted
in some key areas (biotechnologies for new fuels production, improved
battery storage, fuel cells, carbon sequestration and wherever ready results
were achievable). Other renewables such as solar PV or wave power, thatstill lag on the learning curve or which do not provide large-scale solutions,and open-ended research receive much less support. Middle Eastern oil
producing countries suffer from the high oil taxation levels, while North
African gas exporting countries fare better (WBCSD, 1999).
The new concept of environmental and social responsibility is at firstwidely accepted even by businesses, in the name of a stable regulatory
framework. Soon they start to actively collaborate in meeting some of themost ambitious infrastructure construction or retrofitting projects for power
plants promoted by the GEOpolity technocrats, in an attempt to appeaseand influence them. Gradually GEOpolity becomes a self-referential
bureaucracy cut-off from the consequences of its actions and by the early2020s the failures of its dirigiste approach become evident. As a result of
being locked in to mediocre technology or ill-chosen resources, costeffective reduction of other environmental gases is overlooked and in the
end CO2 emissions decline too slowly to attain a safe level within theplanned horizon.
GEOpolity responds to public criticism by hardening its command andcontrol measures, but a diminished sense of urgency and a fatigued civic
sense provoke widespread rebellion against its authority. At the end of acouple of years of internal struggles which threaten to destroy entirely thisform of oversight and ecological management, GEOpolity is recreated on
the basis of different objectives: influencing consumer behaviour andreducing waste.
Ways to take advantage of low-cost, energy-efficient solutions are devisedthat make use of innovative financing schemes and decentralised market
mechanisms such as tradable permits, price rebates for energy savings, setaside programs, reforestation incentives, and so on. Popular support
for increasing energy efficiency is mobilised by better-designed
communications campaigns stressing personal participation in the effort
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to respond to environmental problems. As a result very large CO2 emission
reductions are achieved. However many of the indirect methods used toencourage these reductions of CO2 emissions manifest problems andweaknesses; furthermore, energy-saving measures can only take the world
so far, after which creation of new forms of clean energy becomes
necessary, and they start slowly becoming available.
These developments, coupled with the change in lifestyles, increased
education levels and the social improvements that in turn bring slower
population growth, begin to outline a pattern of sustainable growth, albeit
one that is slow, pre-planned and with many choices guided by thegovernment (WBCSD, 1999).
The Jazz scenario, like the music style it recalls, is characterised by thecoexistence of diverse players joining in ad-hoc alliances to produce adesirable outcome: in this specific instance to solve social andenvironmental problems (WBCSD, 1997). It describes a world of social andtechnological innovations and experimentation, with a very dynamic
global market, a wide circulation of information and a high degree oftransparency. A deregulated world in which citizens do not necessarily turnto central governments for the solution of their problems, where
governments have a minimal caretaker role; and in which the economy
progressively advances along the road of dematerialization.
In this new business environment, the energy industry undergoes rapidtransformation into a service industry characterised by entry of newcomers,from diverse market segments, who come attracted by the prospect of
economic gains. Retail store chains, household appliance producers and thelike, start diversifying their product range to cover customised energy
service bundles, or equipment for small scale decentralized power
generation, bringing direct competition to established energy utilities andforcing down energy prices. Some energy companies, especially thoseenjoying large liquidity margins, are able to enter the lucrative market ofbuilding renovation for improved performance; others are able to acquire a
captive market by offering deals on homes as long as heating and coolingsystems remain based on the energy product they sell (electricity, or gas) fora sufficiently long period. Energy Service or Energy Saving Companies scan
the world in search for self-funding projects and attractive profit margins:
old coal fired plants are converted into highly efficient ones, ageing nuclear
plants are being revived through innovative financial deals, housing stock
is retrofitted with insulation. Lucrative markets open up in computerised
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monitoring systems for reducing downtime in power plants or controllingtransmission losses (WBCSD, 1999).
As deregulation continues and energy subsidies are progressively
eliminated, energy companies via their subsidiaries enter the market forenergy systems manufacturing, especially in areas that still offer
interesting margins for technological improvement, as in the case ofrenewables. Advances in biotechnologies are exploited by multinational
corporations to genetically engineer bacteria or algae that transformbiomass into oil.
Small power plants become important because they are easier to fund andprovide a good way to stay close to the market: a useful feature in a
service-centred world. Sales of small gas turbines boom, as do all modular
systems as part of a general trend towards decentralised energy sources.
Fuel cells and their residential applications for small-scale power
generation fit perfectly this trend, in which old style utilities survive merely
as a backup for the remaining power disruption risk (WBCSD, 1999).
This radical shift in industrial paradigm does not take place withoutcasualties: businesses that cannot adjust and ride or anticipate the new
trend do not survive. Competition is ferocious and often carried out
without formal restraint, and those left out develop feelings of resentment.
The focus on profits sacrifices other resources such as people and theenvironment. By the early 2020s a crisis develops and a citizens’
movement calling for the "greening" of the economy sweeps the globe,
using the Internet and other fast communications networks. One initial
result is the creation, of a unitary tax on all activities and transactions thathave an environmental impact (WBCSD, 1999).
However, as authority in a Jazz world is too dispersed and governments
cannot manage the transition to a more sustainable path, the solution
must develop through a voluntary "greening" of the main business actors
and through the stipulation of Consortium Agreements that set out
guidelines on how firms must act on environmental and othersustainability issues. As the Agreements do not constitute legal
obligations, verification of their implementation is left to the joint actionof consumer watchdogs, networks of concerned citizens, and insurance
firms, who could refuse insurance coverage to firms found not incompliance with most respected environmental Agreements. This
monitoring system, largely based on the transparency of the market andon free circulation of information on the environmental performance ofindividual business, leads to the creation of protocols, or Trust Validation
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Systems. These constitute informal trust authorities, neither business nor
governmental nor judicial, which publicise track records of partners andthe criteria used, and the success of which is measured by consumers’
respect and size of membership (WBCSD, 1999).
Within this framework, the new business forms continue their earlier
growth, becoming the accepted way of functioning. Most specialise in theprovision of energy or transport services (e.g. business trips) rather than
goods (cars, for instance), and clients are happy to be relieved of the "doit-yourself" complications. Technology and open trade make small regions
economically viable, and these gradually start separating from larger
nations without recourse to conflicts such as civil wars.
However, these trends do show their downside: short-term focus in researchand development, difficulties in planning ahead and in funding large
infrastructure projects; spot markets in energy commodities making
planning of future prices impossible; weak traditional governments giving
the impression that everybody is left to his own devices and that nobody
is in control, and although the new business style is locally clean, that
nobody is really looking out for global environmental effects. It is a slightly
unsettling world of thousands of opportunities and open-end solutions(WBCSD, 1999).

Intergovernmental Panel on Climate Change Scenarios
The A1 storyline and scenario family describes a world characterised byvery rapid economic growth, a population trend that peaks around 2050
to decline afterwards, and swift introduction of new and more efficienttechnologies (IPCC, 2000). Other relevant characteristics are acontinuation of globalisation trends, and increasing convergence ofdevelopment among world regions, leading to greater interregional equity
in income distribution. The three technology variants of this storyline
concern, as mentioned, alternative directions in energy-technology
developments. The first (A1FI) is characterised by emphasis on fossil fueltechnologies, leading to worsened environmental conditions especiallywith respect to GHG emissions and climate change risk. The second (A1T)
is characterised by development of non-fossil fuel technologies leading toa marked improvement of environmental conditions and a mitigation ofclimate change. The third is characterised by a fuel/technology mix that ismore balanced across the fossil/non-fossil spectrum, due to uniform
improvement rates across technologies, resulting in a moderate
improvement of environmental conditions.
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The A2 storyline and scenario family describes a world characterised by
self-reliance, slower economic growth than in other scenarios, preservationof local identities and values, continuously increasing global populationand therefore much less rapid growth of per-capita income (IPCC, 2000).
With a slowdown of globalisation processes and a lower degree of markets
openness, economic development is primarily oriented to regional markets,
differences in income distribution across regions increase, while
technological change is slower and more fragmented. As a result
environmental conditions deteriorate globally and even more dramaticallyin some local cases.
The B1 storyline describes a world characterised by a population trend
very similar to the one in the A1 scenario, a fairly sustained growth of theworld economy, which is increasingly globalised but driven by the service
and information sectors (IPCC-WGIII, 2000). Consequently important
reductions in materials intensity are achieved and clean and resource
efficient technologies are progressively introduced. The increase in world
GNP coupled with a slowdown and reduction of global population allows
for increased per-capita income and an improvement and convergence ininter-regional equity. The emphasis on global solutions to economic, socialand environmental sustainability coupled with favourable technologicaldevelopments result in dramatic improvement of environmental conditions
even in the absence of specific climate policies and initiatives.
The B2 storyline outlines a future world that emphasises local solutions toeconomic, social and environmental sustainability. Population increases
continuously, although at a slower rate than in the A2 scenario; economic
growth is slower than in other scenarios, and technological change lessrapid, both as a result in part of lower degree of market openness (IPCCWGIII, 2000). The concerns for environmental protection and social equity
that inspire the values in this society are addressed more at the local andregional level, through changes in individuals’ behaviour more than
through improvement of technologies.

Millennium Project
Cybertopia is a scenario of open trade and continuing globalisation, low
government involvement, intensely developed communications and highsecurity. The explosive growth of the Internet accelerates globalisation in
all forms. Cyberspace is the medium of human activity: the majority ofhuman waking hours are spent in cyberspace, either for work, play, leisureor education. The impressive growth in international activity is translated
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in increased support for and responsibilities of such organisations as theUN, the WTO, IMF and others that provide global standards and cooperation for international business. Individuals set their own values anduse global networks to support them. Democracy flourishes. International
partnerships are formed to manage global education, tele-medicine,environmental monitoring (in co-ordination with UNEP). Developing
countries make remarkable progress via tele-education, tele-medicine, andtele-business partnerships. Technology spreads globally, promoting leapfrogging in developing countries. As a result, life expectancy in Africa rises,
increasing population levels despite falling birth rates. The gap between
developed and developing countries narrows. Population growth slows
down globally, following improved literacy, empowerment of women, lower
infant mortality, and better family planning. Unfortunately, unemployment
is still a problem in poor countries and many people are left out of theknowledge economy. In China and India service activities represent over
50% of GDP, diminishing the need for external capital to finance growth.
Cyberspace lowers energy demand in various ways: through an increase inenergy efficiency (virtual experience substitutes for travel, teleconferencing
is more common), through better monitoring of inefficient industries, andthrough a push for renewable energy resources to substitute for fossil fuels.
As a result energy demand doubles in 45 years instead of the 30 years
previously estimated. Environmental monitoring is facilitated; economists
can use databases to establish systems of taxation and credits based on
the use of the "commons". However the environment and biodiversity stillhung in the balance (ACUNU, 1998).
The Rich Get Richer is a world of open trade, low government involvement,
intense communications and low security. In the first part of the period
considered, income inequality grows between rich and poor countries andbetween rich and poor individuals in the same country; after 2025
however, conditions improve even in poor countries. The rich get richer andthe poor get poorer. This evolution is not uniform across countries: among
the poor ones, those with stronger institutional capacity can initiate
reforms, invest in human capital and fight corruption and fare better.
Relatively high population growth compounds the poverty problems. Rich
countries experience a period of rapid growth, as advancements in scienceand technology lead to improvements in productivity in nearly al sectors of
the economy. The forces of globalisation work to their benefit, offering
cheap labour to businesses that invest in poor countries. International
cartels control most of the planet’s natural resources. Governments do not
perform well and in some countries even abdicate their responsibilities in
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such sectors as public health and education; corruption abounds. Then
wars break out, especially among developing countries; uprisings explode,triggered by tensions associated to migrations, water shortages andenvironmental deterioration; meanwhile, rich countries keep prospering.
The turnaround is caused by the recognition by multinational corporations
that growth can continue only if markets develop, which requires thedevelopment of markets in poor areas of the world, and the increasing of
the purchasing power of their populations. As a result corporations
mobilise resources to encourage the real development of poor countries,
through investments in education, micro-credit, environmental remediation
programs, and through higher wages. By 2025 comes also the realisationthat global warming is already a fact, hence corporations see clear
business opportunities in investing in alternative energy systems, althoughdeveloping countries continue to rely on cheaper fossil fuels. By 2030
vigorous action to reduce the rate of GHG emissions has begun,
technologies to improve energy efficiency in transport and other sectors
are rapidly introduced, while new generation nuclear power and hydrogenfuelled systems are being developed. So, by 2050 living conditions have
improved for the general population, and although poverty remains,vigorous capitalism and global trade have fulfilled many of their promises(ACUNU, 1998).
A Passive Mean World. This is a world of isolation and barriers to trade,stagnant communications but high government involvement and highsecurity. Lack of jobs is the main problem, as the rate of population growth
has outpaced the rate of job creation nearly everywhere. Where countries
are able to trade within a major trading block things are not too bad, but
in areas such as Africa labour surplus is a serious problem. Unemployment
and underemployment produce pressures on economic systems andfoster political unrest. The unsatisfactory economic situation pushes
environmental concerns backstage. Developed countries’ economies slow
down due to trade limitations while productivity gains translate into fewer
jobs. Technology development decelerates too, while ageing populations
increase the burden of social security spending on public budgets. Living
standards rise slowly in most places and even drop in others. The
movement towards democracy stagnates. By 2025 things begin to unravel.
The downsizing of expectations leads to vast discontent, and huge distrustof governments. Large companies restructure continuously but many areunable to keep abreast of this fiercely competitive economy. Small
companies survive better and individuals are forced to high mobility tofollow jobs. Then trade wars erupt between the blocs and protectionism is
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intellectual property to restrictive immigration policies. Multilateral free
trade agreements come under intense pressure and trade diminishes. The
US and the European Community close their markets to newly
industrialised countries and jobs continue to disappear. It is a tough world
even for rich countries. Only China and India keep developing at asustained pace, although unevenly. Elsewhere in developing countries
peace and security is rare, while tensions, demagoguery and nationalism
are increasing, military forces are building up and international
institutions lose power. The UN survives through a series ofreorganisations, but is weakened and lacks leadership. Soon regional
conflicts start to develop and the UN cannot cope. Crime and terrorism
grow and the only goods that seem to circulate freely are weapons (bothconventional and unconventional). In this environment people startturning for help towards faith, religion, community, and begin retreating
more and more into closed communities (ACUNU, 1998).
Trading Places. This is a world of open trade, low government involvement,
intense communications but low security. The booming economies of Eastand Southeast Asia (and to a lesser extent Latin America take advantageof this favourable trade environment and China’s GDP keeps growing at
double-digit rates throughout the first part of the new century, to stabilise
at lower rates later. Improved economic development, increased literacy,and empowerment of women brought increased life expectancy almost
everywhere, with only Africa lagging behind. Meanwhile the US andWestern Europe experience sluggish growth and heavy social burdens due
to ageing populations. Privatisation and deregulation offer only partial
relief to strained government budgets; unemployment is low but
underemployment is high. For most people life is hard, compared to thepast but still bearable. Conflicts inevitably emerge between social andeconomic aims while the environment is a low priority. The internationalmonetary system survives but falls into disarray as the dollar becomes lessstable. In contrast the WTO thrives in its role of regulating and keeping
open the flows of international trade. Relocation of industrial plants to therapidly developing markets of East and Southeast Asia and to Latin
America creates a drain of productive resources in the US and Western
Europe. The latter’s leadership in non-manufacturing industry (IT, healthcare, pharmaceuticals) remains but in many other sectors is graduallyeroded: Asia’s economic and political power is increasing, as is its researchand development capacity. By 2025 China is the dominant regional
military power. The environment suffers: fresh water is in short supply inmany regions and atmospheric CO2 increases by 50%. Energy demand
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doubles by 2050. By the turn of the first half of the 21st century theWestern economies manage to rebound, but they have lost their political,
military and economic clout. In brief, the emerging countries haveemerged (ACUNU, 1998).

Country Scenarios
Canada: Energy Technology Futures
Life Goes on is a world of slow innovation, closed markets and grey (rather
than green) environmental etiquette. A world in which developing
countries fail to participate in the FCCC efforts and discussions onenvironmental issues disappear from the international scene. Economic
growth is slow (about 2% per year). Developed and developing
countries alike return to protectionist policies and this restraining ofmarkets fosters slow technological innovation. Developing countries focus
on increasing domestic standards of living. Environmentally, it is a worldthat builds on existing technologies and offers few chances of becoming"greener".
Grasping at straws is a scenario of green environmental etiquette,reasonable economic growth (about 2% per year yet falling over time) andwide-open global markets but a slow pace of innovation. Governments ofdeveloped countries try a hasty response to the climate change issue by
rapidly deploying off-the-shelf technologies, hoping that this provides aquick solution. Some near-term results and both economic and politicaladvantages are achieved. But the focus on deployment and near-term
activities produces little investment along the early stages of theinnovation chain: the lack of commitment on long-term R&D leaves
countries with a limited pool of technologies from which to draw. By 2030
very few innovative technologies are available to address the climatechange issue. It is a light-green world in the near term that turns grey at alater stage.
Taking care of business is a world of rapid innovation, open markets andgrey environmental etiquette: a world driven by economics and profit anddominated by interconnected transnational companies. Capital stock
turnover is fast and economies are strongly independent. Expanded
economic growth (about 4% per year) leads to the overlooking ofincreasing inequity between developed and developing countries and190

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environmental issues. In developing countries rapid population growth andincreasing poverty and environmental pressure lead to social conflict.
However, the issue in international discussion is wealth distribution rather
than the environment: despite lack of attention for the environment,
technological advances do to some degree reduce GHG emissions.
Come together is a world of open markets, rapid innovation and highlevels of environmental etiquette. Consensus prevails among industry,
government and the public on environmental matters and similar views areshared internationally. Multinational companies exert political as well as
economic power and influence government on environmental, trade andmonetary issues. The world is highly interconnected and new technologies
are openly developed, traded and applied in innovative ways across all
sectors. Canada is well placed in this global market and its industries areable to innovate both products and processes. This world is mid-green incolour: reduced GHG emissions realised through technology improvements
are partly offset by expanded industrial activity through continuingworldwide economic growth (Cliffe, 1999).

The Netherlands: Long-term Outlook for Energy Supply
Free Trade is a world with a thriving economy, competitive markets, close
economic co-operation but no willingness to resolve jointly the drawbacksof economic growth. Fuels like uranium, coal, gas, biomass and heavy oil
are cheap, and low energy prices make conservation uninteresting andrender non-competitive the more expensive renewables. Technology is
aimed at increasing productivity rather than improving the environment.
CO2 concentrations are high but not seen as a priority concern. The
Netherlands in this world specialises in trade and services, while
manufacturing has relocated elsewhere largely as a consequence of thestrong pro-environment positions taken earlier by the Dutch government.
Mobility of people and goods is high and transport infrastructure isdeveloped along spatial corridors. Environmental quality is poor andquality of life mediocre for Dutch citizens, but this is considered a price to
pay for prosperity. In the energy domain, primary demand has declined
due to the shrinking of the industry and its replacement by service
activities, and electricity (mostly imported) accounts for almost 50% of
final energy demand. Dutch gas reserves are exhausted. Energy supply inthe world market is abundant and prices of energy carriers are nearly
equal: price differentials are due to different infrastructure and equipment
needs. For reasons of competitiveness plant- scale economies are exploited
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to the maximum and countries have by now specialised in different energy
products: electricity production is a European affair. The use of coal isunhampered by environmental concerns and inefficient power plants are
exploited to the end of their physical life. In view of the already existinggas-distribution infrastructure, coal gasification is an option for the
Netherlands. Other natural gas is imported and used in combined heatand power generation. Furthermore, the depleted gas deposits areconverted to become Europe’s gas storage facilities. Nuclear energy andsolar PV are not sufficiently competitive while biomass is cheap andabundant and wind power from offshore parks has become an export
product. Transport is still dominated by (improved) combustion engines
and large private cars since oil products are still relatively cheap. In
residential spaces cheap electricity favours the use of heat pumps but gas
heating is also used.
Ecology on a small scale is a world where non-material values and theenvironment are appreciated. Economic growth has slowed and with itenvironmental deterioration. IT reduces the need for physical mobility.
Although there is awareness of global problems, solutions are sought
locally. International organizations like the UN and WTO or the European
institutions are mistrusted. Technology development reflects dominantvalues of high quality and small scale. Clean technology and autonomous
energy systems are popular. In the Netherlands, government isdecentralised, production is on a small scale, people live in small
communities and have little need for mobility. Concern about social issues
is felt as a strong personal commitment. Environmental quality is highly
valued and in the energy domain leads to small autonomous systems,
mostly based on renewables. Recycling is profitable. Due to the attention
put on efficiency, energy demand is only slightly higher than in 2000, at
2000 Pj; slightly less than half of final demand is for electricity. There is no
public support for large-scale infrastructure and indigenous gas is mostly
used domestically or serves as emergency stock. Gas flows other thanbiogas are decarbonised as much as possible and delivered to small-scaleinstallations (fuel cells, small CHP). Biomass is processed locally or
regionally, mostly in rural areas. Renewable energy (solar PV, wind) isvalued also in the perspective of self-sufficiency. Nuclear plants have beenclosed and there is little interest for clean coal. Storage of energy ishandled locally and for mobility, besides the bicycle, preference goes tohybrid cars or public transport.
Isolation is a world directed by short-term monetary gain, with little or nointernational co-operation and restricted trade, which takes place mostly
192

Appendix I: Scenarios from the Literature Reviewed

within blocks. Like other trading blocks Europe pursues self-sufficiency infood, raw materials and energy. China and the US pursue isolationist
courses. This leads to overall slower growth and limited technologicalimprovement. In the Netherlands the central government remains strong
but is weak with respect to the business sector and does not impose
restrictions upon it. Nationalism, family and self-interest are dominantvalues. The environment is not important while health is. The main ports
lose importance due to restricted trade. Energy self-sufficiency is important
everywhere. Energy demand in the Netherlands is around 3000 Pj; onethird of final demand is for electricity. The country relies on its own gas; oilis relatively expensive due to cartel power but its consumption is restricted
as much as possible. Nuclear and renewables are attractive options but
while wind and solar are frequently used, the Netherlands does not venture
into building its own nuclear plants, preferring to buy power. Clean coaltechnologies are used as a compromise between environmental and selfreliance concerns. Biomass (mainly agricultural wastes) is used locally andbiomass for energy production competes for land with food production.
Large- and small-scale CHP is diffused. Mobility has declined, as has
tourism. Cars are smaller and fuel-efficient, and gas-powered fuel cells havetaken off. Railroads and inland waterways account for a substantial shareof goods transport.
Great solidarity is a world where the solution to global problems (likehunger, poverty, resource scarcity and climate) is handed over to powerfulglobal institutions like the UN, or the WTO. Co-operation fosters economic
growth, environmental awareness and optimism about progress leading torapid technological development. Large multinational corporations cooperate with supranational institutions for the improvement of theenvironment and of working conditions. European co-operation isbroadened and deepened and some countries including the Netherlands
start forming federations. The Netherlands is very prosperous and able toexert leadership in Europe on clean technologies and development aid: its
industries specialise in eco- and energy-efficiency, and the chemicalindustry is strong. Citizens are wealthy, mobile and used to luxury andcomfort but display eco-awareness in their lifestyles. Energy demand,
despite efficiency, life cycle management and recycling, is enormous at
4500 Pj, but owing to a flourishing trade in emission rights the country
can afford this energy intensity. International agreements allow the
optimisation of energy production, transport and use and the Netherlands
profits from its placement in the international grids. The country’s gas
reserves are long gone but the distribution infrastructure continues to be193

Appendix I: Scenarios from the Literature Reviewed

used for other gaseous fuels while depleted gas fields are used for CO2
storage. Energy supply is both centralised and decentralised and newenergy technologies thrive. In particular renewables are used wherever
possible and renewable sources imported where convenient. Biomass isused both for energy and as feedstock in the chemical industry. Nuclear
energy is available and safe. Mobility is high, and to reduce CO2 emissions
is often on electrically powered large-scale public systems for transport
between large European agglomerations (TGV, Magnetic Levitation trains)or on highly sophisticated urban systems. Fuel-cell cars powered withhydrogen stored in nanotubes are standard. About one half of thetransport of goods takes place by rail or on inland waterways. Each ofthese scenarios, as we have seen, has different implications for the
Netherlands in terms of energy demand, structure of the energy system,and technologies. When exploring different scenarios, common elements
are the ones to which attention should be paid because robust strategies
can be built on them. Common elements in the above scenarios point to a
few reasonable certainties. These include: the increasing importance ofelectricity consumption in all scenarios; the continued importance of theexisting gas infrastructure; the robustness of the wind power option and toa large extent of biomass options; the relevance in most scenarios of theNetherlands as an energy distribution centre; the critical importance in allcases of energy storage technologies. A rather uncertain element, on theother hand, is the fuel choice for traffic growth.

The United Kingdom Foresight Program – Energy Futures
World Markets is a scenario characterised by emphasis on private
consumption and highly developed and integrated world trading systems.
Consumption levels and mobility are high while sustainable development
goals are marginalized, being regarded as international political concerns.
Similarly concern for inequality and social exclusion is weak, while social
tensions are on the rise. The role of governments in economic
management, regulation of utilities and energy markets is kept to aminimum and provision of public service is reduced in order to keep taxes
low. Large firms dominate global markets. The economic structure moves
towards the service industry, while traditional manufacturing migrates
towards the developing world. Global standards and best practices fortechnologies emerge and are quickly adopted in many sectors. Fossil fuels,
particularly natural gas dominate the energy markets and, due to thedecline of traditional oil production, by 2020 exploitation of nonconventional oil and tar sands begins. Fuel demand for transport keeps
194

Appendix I: Scenarios from the Literature Reviewed

increasing. Electric power demand grows, and new investments are
generally in modular distributed power systems. Low energy prices
discourage conservation and energy efficiency except on an economic
efficiency basis. Renewable energy sources do not take off and the revivalof nuclear power does not materialise due to their costs. Households get
smaller but dwellings get larger and equipped with more appliances asincomes grow. Mobility of the workforce increases. Gated communities
develop to insulate the wealthy from the disadvantaged (UKDTI, 2000).
Provincial Enterprise is a world of consumerist values emphasising theshort term, coupled with policymaking systems that assert national andregional concerns and priorities. Market values remain dominant but
markets are mostly national or regional due to protectionism. Sustainability
as a political objective nearly disappears. Growth is sluggish in the UK(1.5% per year) but stronger globally (4% per year). Constraints to growth
include capital and resource shortages. Fossil fuel supply is plentiful andthere is a tendency to preserve or protect national fuel resources. Energy
prices are for this reason higher than in the previous scenario. Howeverenergy efficiency is limited, due to lack of capital and low environmental
priorities. Renewables do not develop. The high cost of housing counters
the trend towards smaller households; and lower incomes discourageownership and excessive use of appliances (UKDTI, 2000).
Global Sustainability is a world in which social and environmental values
are taken into account in economic decisions, and in which environmental
problems are dealt with through strong collective action and global
institutions. There is greater co-operation between national andinternational levels of governance; global economic, social andenvironmental agreements are negotiated providing a framework for
global trade consistent with international equity and sustainable
development goals. Access to education is widespread. Working hours
decline and the labour force is highly mobile. Global markets for training,education and tourism decrease cultural distances. The greening ofbusiness is pervasive with adoption of best available technologies. Somedeveloping countries experience high growth rates, helped by highinvestment levels and low interest rates worldwide. Household formationis reduced due to more collectivist values and controls on new housingdevelopment. Dwelling size grows less than could be expected andconstruction codes stress high efficiency and environmental performance.
Similarly the number and range of appliances in homes grows but energy
consumption is limited by high efficiency standards. Reductions inresidential energy use are limited, despite the diffusion of green attitudes
195Appendix I: Scenarios from the Literature Reviewed

among consumers. Natural gas is the dominant energy source until 2010,
but afterwards renewables gain a large market share. Zero-emission fossil
fuel options such as large-scale carbon sequestration begin to play a majorrole in the UK after 2010. Solar power takes up a large market share after2020. Nuclear power sees a revival and hydrogen becomes a significant
energy carrier by 2030, following construction of production, storage anddistribution infrastructure. Gas micro-turbines and fuel cells for small
domestic generation are popular and lead the way to later use ofhydrogen. Diffusion of distributed generation fosters development ofinnovative technologies for the control, transmission and storage of power.
Energy suppliers move towards the provision of integrated services,enhancing the uptake of energy-efficient measures. Energy prices to thefinal consumer, however, are high due to the large investment in expensive
new technology (UKDTI, 2000).
Local Stewardship is a world where strong national and regional
governance allows social and ecological values to play an important rolein the development of markets and behaviour. Political systems aretransparent, participatory and inclusive at a more local level, withextensive provision of public services such as health and education. Local
cultural identities are revived as are family values. The flow of culture,people, capital and goods across economic and political boundaries
however is constrained, and international economic and politicalinstitutions are mistrusted except for mediation between countries.
Households get larger and life in small communities is preferred to life inlarge cities, but the need to preserve agricultural land leads to morecompact urban development, with small houses. Consumers are oriented
towards a green purchasing etiquette and utilities emphasise sustainability
and service provision. Household consumption declines slightly and total
domestic energy consumption falls by 1.5% per year. Concerning fuels theemphasis is on local energy sources, whether fossil or non-fossil. A wide
range of renewable technologies is exploited but energy production issmall scale. Combined heat and power production flourishes. Coal is used
but under strict environmental controls. Small scale nuclear becomes
acceptable on grounds of self-reliance. Green pricing is widely practised
and favoured by consumers, while high-energy prices lead to large-scale
adoption of efficiency measures. Overall energy demand falls and becomesless carbon intensive (UKDTI, 2000).

196

Appendix II: Scenario Comparisons

APPENDIX II: SCENARIO COMPARISONSThis Appendix discusses two scenarios within the IPCC A1 scenario family
that provide particular relevance for framing our analysis: the A1T case, inwhich rapid technological change plays in favour of non-fossil fuel energy
technologies, and at the A1B case, in which rapid technological change
has a balanced impact on both fossil and non-fossil-fuel technologies. For
comparative purposes the main characteristics of the six marker scenarios
of IPCC are shown in Table A.II.1. Tables A.II.2 and A.II.3 provide at a
glance some of the quantitative features of two specific A1B and A1T
scenarios, quantified with IIASA’s MESSAGE model, for the projection
period 1990-20501.
Figures A.II.1 to A.II.6 provide a graphical representation of the main
trends of these scenarios, and compare them with IEA’s WEO-2002
reference scenario (which, however, only runs to 2030). The A1B and A1T
scenario outlines provide an initial quantitative framework for population,
income growth and energy demand projections, on which we impose ourtargets or norms to obtain the SD Vision scenario.
The characteristics of the SD Vision scenario are illustrated in tables A.II.8
to A.II.12.

1. The spreadsheets containing the summary results for these two scenarios have been obtained fromthe SRES/CIESIN website http://sres.ciesin.org/final_data.html. However additional details on thetransport sector have been obtained directly from Keywan Riahi and Neibosa Nakicenovic at IIASA, towhom go our thanks.

197

198

0.0

Source: http://sres.ciesin.org/final_data.html

Cumulative CO2 Emissions GtC

Primary Energy EJ
Coal
93
Oil
143
Gas
73
Nuclear6
Biomass
50
Other Renewables
10
Total
376
Primary Energy%
Coal
25
Oil
38
Gas
19
Nuclear2
Biomass
13
Other Renewables
3
Total
100
Cumulative Resources Use, ZJ
Coal
0.1
Oil
0.1
Gas
0.1
91
128
71
7
46
8
352
26
37
20
2
13
2
100
0.0
0.0
0.0
0.0

88
131
70
24
0
24
336
26
39
21
7
0
7
100
0.1
0.1
0.1
0.0

0.0

0.0
0.0
0.0

29
43
23
3
0
3
100

92
134
71
8
0
8
313

0.0

0.0
0.0
0.0

28
35
17
2
1
17
100

105
129
62
8
3
61
368

0.0

0.0
0.0
0.0

26
37
20
2
13
2
100

91
128
71
7
46
8
352

14.6
10.4
12.7

33
20
28
10
4
6
100
8.1
11.3
9.7

10
21
27
9
15
18
100
9.5
13.9
8.7

30
23
28
6
7
4
100

119 294
250 228324 275
115 62183 71
222 421213 971

8.5
11.6
7.5

21
28
21
13
12
6
100

167
228
173
105
95
46
813

5.7
12.0
8.6

10
26
34
5
12
12
100

86
227
297
48
105
107
869
29
12
28
11
6
14
100
15.9 37.9
20.8 29.6
42.2 40.9

4
6
26
3
17
44
100

11.7
20.8
25.0

1
4
10
6
18
61
100

46.8
17.2
24.6

53
0
19
14
9
5
100

84 60725904
125 24877
0
576 578 196 331
78 233 114 234
376 123 370 162
987 284 1239 86
2226 2073 2021 1717

13.2
19.6
14.7

8
19
20
32
13
7
100

44
99
103
165
67
36
514

12.6
19.5
26.9

22
4
25
10
23
16
100

300
52
336
142
315
212
1357

730.6 820.9 623.1 728.6 599.0 554.5 1492.12182.3 1061.3 1855.3 975.9 1156.7

9.1
12.7
13.9

14
16
35
9
14
12
100

186 475
214 283
465 398
123 137
193
52
167
86
1347 1431

1990
2050
2100
A1-B A1-FI A1-T A2
B1
B2 A1-B A1-FI A1-T A2
B1
B2 A1-B A1-FI A1-T A2
B1
B2
Population, Million
5262 5293 5262 5282 5280 5262 8704 8703 8704 11296 8708 9367 7056 7137 7056 15068 7047 10414
GNP/GDP (mer) Trillion US$ 20.9 20.7 20.9 20.1 21.0 20.9 181.3 164.0 187.1 81.6 135.6 109.5 528.5 525.0 550.0 242.8 328.4 234.9
GNP/GDP (ppp) Trillion(1990 prices)na
263971 26na
18615569 114
na
535
46598 232

Table A.II.1 IPCC/SRES Marker Scenarios 1990-2020
Appendix II: Scenario ComparisonsAppendix II: Scenario Comparisons

Table A.II.2 Summary Results for the SRES MESSAGE A1B Scenario
MESSAGE A1B Scenario - World
Population - Million
GNP/GDP (mer) Trillion US$
GNP/GDP (ppp) Trillion(1990 prices)

1990
5262
20.9
26

2000
6117
26.7
33

2010
6888
37.9
47

2020
7617
56.5
67

2030
8182
89.1
97

2040
8531
135.2
139

2050
8704
181.3
181

Final Energy EJ
Non-commercial
SolidsLiquids
Gas
Electricity
Others
Total

38
42
111
41
35
8
275

28
58
125
48
47
10
316

22
59
160
67
70
20
398

16
67
204
85
107
38
517

10
73
254
104
164
58
662

7
70
303
135
232
84
830

5
48
357
164
311
122
1005

Primary Energy - EJ
Coal
Oil
Gas
NuclearBiomass
Other Renewables

91
128
71
7
46
8

105
155
85
9
47
13

120
172
128
12
63
29

157
198
178
19
87
52

194
225
250
34
120
78

227
250
320
55
155
134

210
281
378
84
204
240

Total

352

415

524

689

901

1141

1397

Cumulative Resources Use - ZJ
Coal
Oil
Gas

0.0
0.0
0.0

0.9
1.4
0.7

2.0
3.0
1.6

3.2
4.7
2.9

4.8
6.7
4.7

6.7
8.9
7.1

9.0
11.4
10.3

0.0

75.3

162.0

262.8 383.6

Cumulative CO2Emissions - GtC

528.0 688.0

Carbon Sequestration - GtCLand Use – Million ha Total

12949 12949 12949 12949 12949 12949 12949

Anthropogenic Emissions(standardized)
Fossil Fuel CO2 - GtC
Other CO2 - GtC

5.99
1.11

6.90
1.07

8.31
1.04

10.56
0.26

13.21
0.12

15.51
0.05

TOTAL CO2 - GTC

7.10

7.97

9.36

10.81

13.33

15.56 16.45

16.47
-0.02

Source: http://sres.ciesin.org/final_data.html

199

Appendix II: Scenario Comparisons

Table A.II.3 Summary Results for the SRES MESSAGE A1T Scenario
MESSAGE- A1T Scenario - World
Population - Million
GNP/GDP (mer) Trillion US$
GNP/GDP (ppp) Trillion(1990 prices)

1990
5262
20.9
26

2000 2010
6117 6888
26.8 36.8
33
46

2020
7617
57.0
67

2030
8182
91.3
99

2040
8531
135.4
139

2050
8704
187.1
186

Final Energy - EJ
Non-commercial
SolidsLiquids
Gas
Electricity
Others
Total

38
42
111
41
35
8
275

25
60
125
48
48
12
317

20
66
157
66
66
18
393

16
71
193
83
100
33
495

10
72
246
107
153
48
634

7
46
300
135
209
61
757

5
31
344
155
275
83
893

Primary Energy - EJ
Coal
Oil
Gas
NuclearBiomass
Other Renewables

91
128
71
7
46
8

106
155
87
8
46
15

125
172
124
11
55
25

151
193
166
17
75
48

180
223
231
40
104
73

153
241
288
78
137
122

119
250
324
115
183
222

Total

352

416

513

649

850

1018

1213

Cumulative Resources Use - ZJ
Coal
Oil
Gas

0.0
0.0
0.0

0.9
1.4
0.8

2.0
3.0
1.6

3.2
4.7
2.9

4.7
6.6
4.5

6.5
8.9
6.8

8.1
11.3
9.7

Cumulative CO2 Emissions - GtC

0.0

75.3

162.1

260.3

373.4 498.6

623.1

Carbon Sequestration GtCLand Use – Million ha Total

12949 12949 12949 12949 12949 12949 12949

Anthropogenic Emissions(standardized)
Fossil Fuel CO2 - GtC
Other CO2 - GtC

5.99
1.11

6.90
1.07

8.33
1.04

10.00
0.26

12.26 12.60
0.12
0.05

12.29
-0.02

Total CO2 - GtC

7.10

7.97

9.38

10.26

12.38 12.65

12.26

Source: http://sres.ciesin.org/final_data.html

200Appendix II: Scenario Comparisons

Figure A.II.1 Population Projections

2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
2044
2046
2048
2050

Million10000.0
9000.08000.07000.06000.05000.04000.03000.02000.01000.00.0

Years
A1B, A1T

WEO

Source: Elaboration on data from SRES and IEA’s WEO - 2002.

Figure A.II.1 shows the population projections for scenarios A1B and A1T
and those for the WEO till 2030. The WEO projections are very close to theA1 case, so as to make the two curves hard to distinguish (the two lines
almost coincide).

200.0
180.0
160.0
140.0

120.0
100.0
80.0
60.0
40.0
20.0
0.0
200
0
200
2
200
4
200
6
200
8
201
0
201
2
201
4
201
6
201
8
202
0
202
2
202
4
202
6
202
8
203
0
203
2
203
4
203
6
203
8
204
0
204
2
204
4
204
6
204
8
205
0

Trillion $ at 1990 prices and ppp

Figure A.II.2 GDP Projections

A1B

Years
A1T

Source: Elaboration on data from SRES.

Figure A.II.2 shows the GDP projections for the A1B and A1T scenario in
US$ at 1990 prices and PPP: as the WEO projections are in US dollars at
1995 and PPP, the two series were not readily comparable. However, theWEO projects a slower growth rate for the period 2000-2030 (3.2% in the201

Appendix II: Scenario Comparisons

first decade, 3% in the second and 2.7% in the third) than any of the othertwo. The A1B scenario grows at over 3.5% until 2040 and then slows
down to around 2.7%; the A1T scenario has a slightly slower growth in
the first period but continues growing at 2.9% in the last decadeconsidered. Average per capita incomes in the WEO case grow about 77%
from 2000 to 2030, while in the A1B and A1T scenario they grow 117%and respectively 120% over the same period. Clearly, these average
global values hide very different growth rates at a regional level: in
scenario A1B OECD’s GDP grows to 2.6 times its 2000 value, Annex 1
countries GDP grew to three times its initial value and the non-Annex 1
countries GDP grew by 9.3 times! In scenario A1T the performances are a
bit higher for all areas. As a result of this strong economic growth, theincome gap between developed and developing countries is reduced
considerably.
Total primary energy supply and total final consumption trends are shownin Figures A.II.3 and A.II.4. The two SRES scenarios clearly show a muchhigher trajectory, with a more rapid growth than the WEO scenario. Total
primary energy demand in the A1B scenario increases in aggregate terms
at a rate between 2 and 2.7% over the 1990-2050 period while the A1T
scenario has growth rates between 1.7 and 2.7% (the lower rates aretowards the last decade). The high growth in per capita incomes, especiallyin the developing world that characterizes these two scenarios is the main
driver behind this robust growth in demand. Scenario A1T, however, has alower growth than its A1B companion, and shows a clear divergence fromthat after 2030.

1600.01400.01200.01000.0
800.0
600.0
400.0
200.0
0.0
20
00
20
02
20
04
20
0
20 6
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
20
34
20
36
20
38
20
40
20
42
20
4
20 4
46
20
48
20
50

EJ

Figure A.II.3 Total Primary Energy Supply Projections

Time
A1B

A1T

Source: Elaboration on data from SRES and IEA’s WEO - 2002.

202

WEO

Appendix II: Scenario Comparisons

Figure A.II.4 Total Final Energy Consumption
1200.01000.0

EJ

800.0
600.0
400.0
200.0
20
00
20
02
20
04
20
0
20 6
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
20
34
20
36
20
38
20
40
20
42
20
44
20
46
20
48
20
50

0.0

A1B

Years
A1T

WEO

Source: Elaboration on data from SRES and IEA’s WEO - 2002.

Figure A.II.5 shows total final energy for the transport sector in the three
scenarios. Again, the two SRES scenarios have a higher trajectory than the
WEO, largely due to a faster expanding demand for transport services by
the developing countries. In this case, however, consumption grows fasterin the A1T case, especially after 2040, due to its higher GDP rate of growth.

450.0
400.0
350.0
300.0
250.0
200.0
150.0
100.0
50.0
0.0
20
00
20
02
20
04
20
0
20 6
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
20
34
20
36
20
38
20
40
20
42
20
4
20 4
46
20
48
20
50

EJ

Figure A.II.5 Transport Energy Consumption

A1B

Years
A1T

WEO

Source: Elaboration on data from SRES and IEA’s WEO - 2002.

Energy intensity of GDP falls in all three scenarios (see Tables A.II.4, A.II.5,
A.II.6). The link between growth in income and growth in energy demand
continues but, due to improving technology, newly industrialising countries
will be in a position to use less energy than industrial countries did forsimilar income levels in the past. The trend is towards progressive203

Appendix II: Scenario Comparisonsindustrialisation of developing countries and rapid structural changes.
Development of the services sector is strong in the A1B and A1T scenarios.
Also, in general, capital turnover rate is high.
Table A.II.4 Selected Indicators for the MESSAGE A1B Scenario
Variable (unit of measure)
Per capita income ratio (Annex-I/
Non-annex-I countries) – mer
Per capita income ratio (Annex-I/
Non-annex-I countries) - ppp
Per capita income, overall(103 US$/year at 1990 prices) - mer
Per capita income, overall(103 US$/yr- 1990 prices) - ppp
Energy intensity of GDP(106 J/US$) – mer
Energy intensity of GDP(106 J/US$) – ppp
Per capita energy (109 J)
Share of zero-carbon in primary energy (%)
Share of fossil fuels in transport (%)

1990
16.15

2000
14.19

2010
9.54

2020
6.44

2030
4.30

2040
3.20

2050
2.77

5.71

5.33

4.46

3.79

3.07

2.55

2.35

3.97

4.37

5.50

7.42

10.88

15.85

20.83

4.89

5.44

6.83

8.74

11.81

16.28

20.80

16.82

15.53

13.81

12.21

10.11

8.44

7.70

13.65

12.46

11.12

10.36

9.32

8.21

7.71

66.80
17.52
97

67.84
16.63
91

76.00
19.79
81

90.51
22.80
74

110.1025.72
63133.72 160.45
30.20 37.74
57
52

Source: Values computed from SRES data. http://sres.ciesin.org/final_data.html

Table A.II.5 Selected Indicators for the MESSAGE A1T Scenario
Variable (unit of measure)
Per capita income ratio (Annex-I/
Non-annex-I countries) - mer
Per capita income ratio (Annex-I/
Non-annex-I countries) -ppp
Per capita income, overall(103 US$/yr) - mer
Per capita income, overall(103 US$/yr) - ppp
Energy intensity of GDP(106 J/US$) - mer
Energy intensity of GDP(106 J/US$) - ppp
Per capita energy (109 J) *Share of zero-carbon in primaryenergy (%)
Share of oil products in transport (%)

1990
16.15

2000
14.16

2010
10.29

2020
6.21

2030
4.24

2040
3.32

2050
2.75

5.71

5.33

4.63

3.69

3.05

2.64

2.34

3.97

4.38

5.34

7.48

11.16

15.87

21.50

4.89

5.46

6.64

8.83

12.06

16.29

21.42

16.82

15.52

13.94

11.39

9.31

7.52

6.48

13.65

12.45

11.22

9.66

8.61

7.33

6.51

66.80
17.52

68.01
16.47

74.49
17.93

85.24
21.41

103.94 119.38 139.40
25.38 33.09 42.87

96

89

82

72

Source: Values computed from SRES data. http://sres.ciesin.org/final_data.html

204

60

48

37

Appendix II: Scenario Comparisons

Table A.II.6 Selected Indicators for the WEO-2002 Reference Scenario
Variable (unit of measure)GDP (109 US$ at 1995 prices and ppp)
Population – million
Per capita income, (103 US$/yr) – ppp
Energy intensity of GDP (106 J/US$) - ppp
Per capita energy (109 J) *Share of zero-carbon in primary energy (%)
Share of oil products in transport (%)

1990
30865
5226
5.91
10.59
62.56
11.19
95.4

2000
41609
6023
6.91
9.10
62.89
12.59
95.2

2010
57174
6778
8.43
8.05
67.86
12.44
95.4

2020
76883
7518
10.23
7.08
72.45
11.59
95.6

2030
100160
8196
12.22
6.31
77.10
11.21
95.8

Source: Values computed from WEO-2002 data.

On energy intensity of GDP, the two SRES scenarios start diverging: for A1B
this index falls to 74.8% of its 2000 value in 2030 and to 61.9% in 2050;
for A1T the index falls more rapidly, to 69.1% by 2030 and to 52.2% by
2050. Energy intensity of income in the A1T scenario declines at anannual rate of 1.6% over the period, which is on the high end of thespectrum for rates historically attained. This decline would be slower in thefirst part of the period (-1.3%) and more rapid in the second part (-1.85%).
Energy intensity of GDP in the WEO shows a dynamic not too different
from that of A1T: by 2030, energy intensity is reduced to 69.3% of its
2000 value.
Per capita energy increases dramatically with respect to 2000 in the A1B
scenario: 62.2% by 2030 and 136.5% (more than double) by 2050. The
growth with respect to 2000 is slower for the A1T scenario: 52.8% by2030 and 104.7% by 2050. In the WEO case, the increase is much slower:
22.6% by 2030.
Figure A.II.6 shows CO2 emissions from fossil fuels burning in the threecases. Again, the WEO trajectory is the lowest of the three, due to thelower GDP growth assumptions. By 2030, the WEO reference world willcontinue along a linear trend, emits about 10.4 Gigatons of Carbon
equivalent, while the A1T world emits 12.26 GtC and the A1B world emits
13.2 GtC. After 2030, the divergence between the A1B and the A1T
scenario is clearer: while in the first case, emissions continue growing,
although at a decreasing pace, in the A1T scenario clearly peak around2045 and start bending down. The difference between the two is due tothe different technology mix developed in the two cases. Scenario A1T
develops more successfully non-carbon based energy technologies on the
supply side, which tends to mitigate further energy supply shortages.
Scenario A1B develops both carbon-based and non-carbon-based
technologies, which compete in the marketplace.
205

Appendix II: Scenario Comparisons

18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
20
34
20
36
20
38
20
40
20
42
20
4
20 4
46
20
48
20
50

GtC

Figure A.II.6 CO2 Emissions

Years
A1B

A1T

WEO

Source: Elaboration on data from SRES and IEA’s WEO - 2002.

As can be seen from Tables A.II.4 and A.II.5, the share of zero carbon
technologies in primary energy is almost the same by 2030 for both theA1B and the A1T scenario, at a little over 25%, while in the case of the
WEO this share is much lower (11.2%). In the latter case, it is even worsewith respect to the year 2000 level. The A1B scenario then attains by
2050 a 37.7% share, while the A1T reaches a 42.9% level.
If we look at the share of fossil fuel products in transport energy demand,in the A1B scenario this share declines gradually to about 43% by 2050,
while in the A1T scenario it falls dramatically to 37%. On the other hand,in the WEO case the share of oil products in transport remains at about
95.5% throughout the period to 2030, the rest being mostly gas andelectricity.
The A1B and A1T scenarios therefore represent a suitable basis for ouranalysis because of their fast technology and economic dynamic, which
can accommodate dramatic changes like the ones envisioned in our SD
Vision scenario. The A1T case seems particularly interesting as it alreadyenvisages a 43% share by 2050, although not as a policy target but as aresult of other drivers, like technological change and strong environmental
values held by the general population. Table A.II.7 describes the fuel mix
characteristics of this scenario (as represented by IIASA’s MESSAGE model)
with some regional detail.
Tables A.II.8 to A.II.12 show in more detail the characteristics of the SD
Vision scenario, at the global and regional level.
206

Appendix II: Scenario Comparisons

Table A.II.7 Characteristics of the A1T Scenario with the MESSAGE Model
World
1990

2000

2010

2020

2030

2040

2050

Primary Energy - % shares
Coal
Oil
Gas
NuclearBiomass
Other renewables
Totalof which zero-carbon

25.92 25.38 24.38 23.18 21.18 15.01 9.82
36.50 37.26 33.52 29.79 26.25 23.64 20.62
20.06 20.89 24.17 25.63 27.20 28.25 26.69
2.08
1.97
2.20
2.59
4.64
7.69
9.48
13.09 10.94 10.78 11.50 12.17 13.45 15.12
2.36
3.56
4.95
7.32
8.56
11.95 18.27
100.00 100.00 100.00 100.00 100.00 100.00 100.00
17.52 16.47 17.93 21.41 25.38 33.09 42.87

Oil as a % of total transport energy
Oil for transport in total oil %

95.86
49.86

88.83 82.46
51.88 59.03
OECD90

71.78
61.50

60.47
65.53

47.57
64.25

37.30
61.81

1990

2000

2010

2020

2030

2040

2050

Primary Energy - % shares
Coal
Oil
Gas
NuclearBiomass
Other renewables
Totalof which zero-carbon

23.9
45.4
20.7
3.7
3.5
2.8
100.0
10.0

19.4
44.8
24.2
3.7
4.6
3.4
100.0
11.7

17.7
39.9
28.2
4.0
5.4
4.9
100.0
14.2

14.7
33.4
32.4
4.4
7.9
7.1
100.0
19.5

10.9
27.4
34.5
9.3
9.3
8.6
100.0
27.2

4.7
23.0
32.9
18.0
10.1
11.3
100.0
39.4

1.6
17.9
29.6
21.9
12.0
17.1
100.0
51.0

Oil as a % of total transport energy
Oil for transport in total oil %

98.0
56.4

92.2
57.8

88.7
70.5

74.5
80.9

62.1
89.5

53.6
98.4

46.2
107.2

1990

2000

2010

2020

2030

2040

2050

Primary Energy - % shares
Coal
Oil
Gas
NuclearBiomass
Other renewables
Totalof which zero-carbon

26.7
29.3
38.4
1.4
2.6
1.6
100.0
5.6

25.2
26.8
42.1
1.5
2.0
2.4
100.0
5.9

18.9
22.8
52.8
1.3
1.4
2.9
100.0
5.6

20.5
21.6
48.8
1.4
2.0
5.7
100.0
9.1

20.3
17.8
47.3
4.3
3.3
6.9
100.0
14.6

16.9
15.0
46.7
9.1
4.7
7.6
100.0
21.4

10.6
11.4
49.2
9.6
7.2
12.1
100.0
28.9

Oil as a % of total transport energy
Oil for transport in total oil %

82.2
31.2

63.3
37.9

55.3
41.4

44.4
38.9

33.3
41.6

19.9
34.4

14.4
39.8

REF

207

Appendix II: Scenario Comparisons

Table A.II.7 (continued)
ASIA
1990

2000

2010

2020

2030

2040

2050

Primary Energy - % shares
Coal
Oil
Gas
NuclearBiomass
Other renewables
Totalof which zero-carbon

40.5
20.8
3.8
0.4
33.0
1.5
100.0
34.9

47.1
24.0
4.9
0.5
20.8
2.7
100.0
23.9

44.7
24.3
8.9
1.1
17.0
4.0
100.0
22.0

41.6
23.9
12.1
1.7
14.2
6.5
100.0
22.4

37.8
23.5
14.7
2.6
13.5
8.0
100.0
24.0

26.5
23.7
19.2
3.9
15.2
11.4
100.0
30.6

16.8
21.9
20.9
5.7
17.8
16.8
100.0
40.3

Oil as a % of total transport energy
Oil for transport in total oil %

93.5
39.2

82.4
50.3

79.6
53.5

69.8
65.2

53.0
64.4

40.0
63.1

1990

90.1
44.3
ALM
2000

2010

2020

2030

2040

2050

Primary Energy - % shares
Coal
Oil
Gas
NuclearBiomass
Other renewables
Totalof which zero-carbon

9.5
41.5
16.4
0.2
28.9
3.4
100.0
32.6

7.2
46.2
20.4
0.1
19.7
6.4
100.0
26.2

7.9
41.6
24.4
0.9
17.3
7.9
100.0
26.1

6.9
37.9
26.8
1.7
16.9
9.8
100.0
28.4

7.5
32.5
30.3
2.8
16.8
10.0
100.0
29.7

7.8
26.8
30.4
3.9
16.6
14.6
100.0
35.0

6.7
23.2
25.9
5.8
16.0
22.4
100.0
44.2

Oil as a % of total transport energy
Oil for transport in total oil %

98.9
53.4

90.8
48.9

77.0
50.0

67.6
49.5

55.5
49.3

41.6
46.2

31.6
40.0

Source: Elaboration on data from IIASA.

208

Appendix II: Scenario Comparisons

Table A.II. 8 Characteristics of the SD Vision Scenario
World
1990

2000

2010

2020

2030

2040

2050

Population (million)

5262

6117

6888

7617

8182

8531

8704

GNP/GDP (ppp) trillion (1990 prices)

26

33.4

43.0

64.9

94.9

131.2

173.2

Coal

91.10

105.6

118.3

135.6

153.5

128.0

99.3

Oil

128.3

155.0

165.8

178.5

193.0

191.4

181.3

Gas

70.5

86.9

123.2

157.3

206.9

244.2

267.1

Nuclear

7.3

8.2

11.4

18.1

39.1

75.3

114.5

Biomass

46

45.5

52.8

69.3

92.3

117.5

159.0

Other renewables

8.3

14.8

25.1

45.6

71.6

122.1

191.8

Total

351.5

416.0

496.6

604.3

756.3

878.5 1013.0

Primary Energy – EJ

Energy for transport – EJ

66.7

90.5

119.7

155.8

217.7

277.7

344.4

Oil – EJ

64.0

80.4

98.4

111.3

130.6

131.2

132.4

1990

2000

2010

2020

2030

2040

2050

Coal

25.9

25.4

23.8

22.4

20.3

14.6

9.8

Oil

36.5

37.3

33.4

29.5

25.5

21.8

17.9

Gas

20.1

20.9

24.8

26.0

27.4

27.8

26.4

Nuclear

2.1

2.0

2.3

3.0

5.2

8.6

11.3

Biomass

13.1

10.9

10.6

11.5

12.2

13.4

15.7

Other renewables

2.4

3.6

5.1

7.5

9.5

13.9

18.9

Total

100.0

100.0

100.0

100.0

100.0

100.0

100.0

of which zero-carbon

17.5

16.5

18.0

22.0

26.8

35.8

45.9

Transport share of primary energy %

19.0

21.8

24.1

25.8

28.8

31.6

34.0

Oil as a % of total transport energy

95.9

88.8

82.2

71.4

60.0

47.2

38.4

Oil for transport in total oil %

49.9

51.9

59.4

62.4

67.7

68.6

73.0

Emissions from fossil fuels GtC

5.78

6.90

7.98

9.19

10.68

10.57

9.99

Carbon storage GtC

0.00

0.01

0.03

0.27

0.79

1.65

2.58

Primary Energy - % shares

Source: Elaboration on data from IIASA.

209

Appendix II: Scenario Comparisons

Table A.II.9 Characteristics of the SD Vision Scenario
OECD90
1990

2000

2010

2020

2030

2040

2050

Population (million)

859

919

965

1007

1043

1069

1081

GNP/GDP (ppp) trillion (1990 prices)

14

17.8

20.0

26.8

32.7

39.2

46.2

Primary Energy – EJ
Coal
Oil
Gas
NuclearBiomass
Other renewables
Total

38.0
72.1
32.9
5.9
5.6
4.4
158.9

36.0
83.2
44.9
6.8
8.6
6.3
185.8

33.6
78.5
58.2
7.9
10.7
10.3
199.2

29.9
68.9
68.0
10.3
17.1
15.4
209.6

24.2
58.9
76.9
21.9
20.6
20.3
222.8

11.9
49.2
75.4
39.0
24.4
29.3
229.2

5.0
38.9
77.1
51.0
31.7
40.6
244.4

Energy for transport – EJ
Oil – EJ

41.5
40.7

52.2
48.1

63.2
55.8

76.0
56.2

88.1
54.2

90.9
47.8

96.8
43.3

1990

2000

2010

2020

2030

2040

2050

Primary Energy - % shares
Coal
Oil
Gas
NuclearBiomass
Other renewables
Totalof which zero-carbon

23.9
45.4
20.7
3.7
3.5
2.8
100.0
10.0

19.4
44.8
24.2
3.7
4.6
3.4
100.0
11.7

16.9
39.4
29.2
4.0
5.4
5.2
100.0
14.5

14.2
32.9
32.4
4.9
8.2
7.3
100.0
20.5

10.9
26.4
34.5
9.8
9.3
9.1
100.0
28.2

5.2
21.5
32.9
17.0
10.6
12.8
100.0
40.4

2.1
15.9
31.6
20.9
13.0
16.6
100.0
50.5

Transport share of primary energy %Oil as a % of total transport energy
Oil for transport in total oil %

26.1
98.0
56.4

28.1
92.2
57.8

31.8
88.2
71.0

36.3
74.0
81.6

39.5
61.6
92.1

39.7
52.6
97.2

39.6
44.7
111.1

Emissions from fossil fuels GtC
Carbon storage GtC

2.80
0.00

3.14
0.01

3.19
0.03

3.07
0.12

2.88
0.26

2.37
0.43

2.03
0.55

Source: Elaboration on data from IIASA.

210

Appendix II: Scenario Comparisons

Table A.II.10 Characteristics of the SD Vision Scenario
REF
1990

2000

2010

2020

2030

2040

2050

Population (million)

413

419

427

433

435

433

423

GNP/GDP (ppp) trillion (1990 prices)

2.6

2.2

2.5

3.6

5.7

8.8

11.5

Primary Energy - EJ
Coal
Oil
Gas
NuclearBiomass
Other renewables
Total

18.6
20.4
26.7
1.0
1.8
1.1
69.6

13.7
14.6
22.9
0.8
1.1
1.3
54.4

10.5
12.7
29.3
0.7
0.8
1.6
55.6

12.3
13.3
30.9
1.2
1.6
3.9
63.2

15.5
13.6
36.9
3.6
3.0
5.8
78.5

14.3
12.2
39.9
8.4
4.5
7.9
87.2

10.2
10.0
41.9
10.7
7.3
12.0
92.2

Energy for transport - EJ
Oil - EJ

7.8
6.4

8.7
5.5

9.5
5.2

12.0
5.2

17.5
5.5

22.6
4.5

29.0
4.8

1990

2000

2010

2020

2030

2040

2050

Primary Energy - % shares
Coal
Oil
Gas
NuclearBiomass
Other renewables
Totalof which zero-carbon

26.7
29.3
38.4
1.4
2.6
1.6
100.0
5.6

25.2
26.8
42.1
1.5
2.0
2.4
100.0
5.9

18.9
22.8
52.8
1.3
1.4
2.9
100.0
5.6

19.5
21.1
48.8
1.9
2.5
6.2
100.0
10.6

19.8
17.3
47.1
4.6
3.8
7.4
100.0
15.8

16.4
14.0
45.7
9.6
5.2
9.1
100.0
23.9

11.1
10.9
45.4
11.6
8.0
13.1
100.0
32.6

Transport share of primary energy %Oil as a % of total transport energy
Oil for transport in total oil %

11.1
82.2
31.2

16.0
63.3
37.9

17.1
55.3
41.4

18.9
43.9
39.3

22.2
31.3
40.2

25.9
19.9
36.9

31.5
16.4
47.4

Emissions from fossil fuels GtC
Carbon storage GtC

1.3
0.00

1.0
0.00

1.0
0.00

1.0
0.03

1.2
0.07

1.2
0.14

1.1
0.28

Source: Elaboration on data from IIASA.

211

Appendix II: Scenario Comparisons

Table A.II.11 Characteristics of the SD Vision Scenario
ASIA
1990

2000

2010

2020

2030

2040

2050

Population (million)

2798

3261

3620

3937

4147

4238

4220

GNP/GDP (ppp) trillion (1990 prices)

5.3

8.3

12.1

20.5

32.6

47.0

63.0

Primary Energy - EJ
Coal
Oil
Gas
NuclearBiomass
Other renewables
Total

29.8
15.3
2.8
0.3
24.3
1.1
73.6

51.0
26.0
5.3
0.5
22.5
2.9
108.2

67.1
36.7
13.5
1.9
25.6
6.0
150.8

84.8
48.9
24.9
4.4
29.4
13.9
206.4

101.1
63.0
39.4
8.5
38.4
24.7
275.1

84.7
67.8
58.1
17.4
48.7
44.4
321.0

67.1
65.6
74.8
30.9
68.7
68.9
376.0

Energy for transport - EJ
Oil - EJ

6.41
6.00

12.78
11.51

22.38
18.45

33.18
26.42

60.35
42.12

92.43 130.20
49.01 54.65

1990

2000

2010

2020

2030

2040

2050

Primary Energy - % shares
Coal
Oil
Gas
NuclearBiomass
Other renewables
Totalof which zero-carbon

40.5
20.8
3.8
0.4
33.0
1.5
100.0
34.9

47.1
24.0
4.9
0.5
20.8
2.7
100.0
23.9

44.5
24.3
8.9
1.3
17.0
4.0
100.0
22.2

41.1
23.7
12.1
2.1
14.2
6.8
100.0
23.1

36.8
22.9
14.3
3.1
14.0
9.0
100.0
26.0

26.5
21.2
18.2
5.4
15.2
13.9
100.5
34.6

17.8
17.4
19.9
8.2
18.3
18.3
100.0
44.8

Transport share of primary energy %Oil as a % of total transport energy
Oil for transport in total oil %

8.7
93.5
39.2

11.8
90.1
44.3

14.8
82.4
50.3

16.1
79.6
54.0

21.9
69.8
66.9

28.8
53.0
72.3

34.6
42.0
83.3

Emissions from fossil fuels GtC
Carbon storage GtC

1.10
0.00

1.88
0.00

2.62
0.00

3.48
0.07

4.38
0.31

4.33
0.65

4.09
1.02

Source: Elaboration on data from IIASA.

212

Appendix II: Scenario Comparisons

Table A.II.12 Characteristics of the SD Vision Scenario
ALM
1990

2000

2010

2020

2030

2040

2050

Population (million)

1192

1519

1875

2241

2557

2791

2980

GNP/GDP (ppp) trillion (1990 prices)

3.8

5.1

7.4

12.7

21.2

33.2

49.2

Primary Energy - EJ
Coal
Oil
Gas
NuclearBiomass
Other renewables
Total

4.7
20.5
8.1
0.1
14.3
1.7
49.4

4.9
31.2
13.8
0.1
13.3
4.3
67.6

7.2
37.9
22.2
0.9
15.7
7.2
91.1

8.6
47.4
33.5
2.2
21.1
12.3
125.2

12.6
57.5
53.7
5.1
30.3
20.8
180.0

17.0
62.2
70.9
10.6
39.9
40.6
241.3

17.0
66.7
73.3
21.9
51.2
70.3
300.4

Energy for transport - EJ
Oil - EJ

11.1
11.0

16.8
15.3

24.6
18.9

34.7
23.5

51.8
28.8

71.8
29.9

88.4
29.7

1990

2000

2010

2020

2030

2040

2050

Primary Energy - % shares
Coal
Oil
Gas
NuclearBiomass
Other renewables
Totalof which zero-carbon

9.5
41.5
16.4
0.2
28.9
3.4
100.0
32.6

7.2
46.2
20.4
0.1
19.7
6.4
100.0
26.2

7.9
41.6
24.4
0.9
17.3
7.9
100.0
26.1

6.9
37.9
26.8
1.7
16.9
9.8
100.0
28.4

7.0
32.0
29.8
2.8
16.8
11.5
100.0
31.2

7.1
25.8
29.4
4.4
16.6
16.8
100.0
37.8

5.7
22.2
24.4
7.3
17.0
23.4
100.0
47.7

Transport share of primary energy %Oil as a % of total transport energy
Oil for transport in total oil %

22.4
98.9
53.4

24.9
90.8
48.9

27.0
77.0
50.0

27.7
67.6
49.5

28.8
55.5
50.0

29.8
41.6
48.0

29.4
33.6
44.5

Emissions from fossil fuels GtC
Carbon storage GtC

0.62
0.00

0.91
0.00

1.22
0.00

1.60
0.05

2.20
0.15

2.66
0.43

2.78
0.72

Source: Elaboration on data from IIASA.

213

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218

Glossary

GLOSSARY
Abbreviations and acronyms
ACUNU: American Council for the United Nations University
ALM:
Africa, Latin America and Middle East
ASIA:
Asia, except Middle EastCap:
per capita
CO2:carbon dioxide
CDM:
Clean Development Mechanisms
GHG:
green-house gases
GSG:
Global Scenario GroupIIASA:
International Institute for Applied Systems Analysis
IPCC:
Intergovernmental Panel on Climate ChangeNOx:nitrogen oxides
Ppm:
parts per million
Ppmv:
parts per million volume
PPP:
purchasing power parities
REF:
Russia, Eastern Europe and Former Soviet republics
R&D:
Research and Development
SD:
Sustainable development
SEI:
Stockholm Environment InstituteSOx:sulphur oxides
SRES :
Special Report on Emissions Scenarios
TPES :
total primary energy supply
UKDTI : United Kingdom Department of Trade and Industry
UNFCCC: United Nations Framework Convention on Climate Change
WBCSD: World Business Council for Sustainable Development
WGIII:
Working Group 3 of the IPCC
Units of measure
Bbl :
EJ:
GtC:
Gtoe:
J:
Mer:
Mtoe:
Tcm:

billion barrels of oil
exa-Joule or 1018 Joules
Giga (109) tonnes of carbon
Giga (109) tonnes of oil equivalentJoulemarket exchange rates
million tonnes of oil equivalent
trillion cubic meters219

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