IOCs’ climate scenarios lack consistency: research

Researchers have found that climate scenarios published by oil companies, outlining pathways to achieve targets under the Paris Agreement, often lack sufficient scope in terms of emissions accounted for, timeframes and data transparency, thus making it harder for investors and policymakers to make informed decisions.

Researchers from universities and academic institutions in Europe, the US and Australia analysed scenarios published by oil companies BP, Shell and Equinor, as well as by the International Energy Agency (IEA), that outline pathways to reach climate targets under the Paris Agreement.

They found that, of the scenarios assessed, only the IEA’s Net Zero 2050 scenario is aligned with the criteria the researchers set out for Paris Agreement consistency in terms of timeframe, scope of emissions and data transparency. The findings were published by Nature Communications this week.

The Paris Agreement, adopted by 196 parties in 2015, sets the goal of nations limiting global warming to “well below” 2°C compared with pre-industrial levels and to “pursue efforts” to limit warming to 1.5°C. According to the United Nations, the earth is already about 1.1°C warmer than it was in the late 1800s, and emissions continue to rise. To limit temperature rises to no more than 1.5°C, emissions will need to be reduced by 45% by 2030, compared with 2010 levels, and net zero emissions will have to be achieved by 2050, according to the UN.

The study identified three key challenges facing the scenarios published by IOCs; the time horizon of the scenarios, the limited scope of greenhouse gas (GHG) and aerosol emissions and a lack of transparency and consistency for example relating to the data used. As for the time horizon, researchers noted that the Paris Agreement requires both near-term (peak warming) and long-term (end-of-century warming) evaluation to assess compatibility with the 1.5-2°C long-term temperature goal (LTTG). However, with the exception of Shell’s Sky 1.5 scenario, the scenarios analysed do not extend beyond 2050.

The second key challenge is that most scenarios focus on CO2 emissions from the energy sector and sometimes from industrial emissions. But to evaluate temperature rises, all GHGs and aerosol emissions must be accounted for, the study said. That includes non-energy CO2, emissions from land use, land use change and forestry, and non-CO2 emissions for example from methane.

It noted that some of the scenarios, including the IEA’s NZE,  include some discussion of these emissions but do not report detailed data, thus preventing a thorough comparison. Shell’s Sky 1.5 scenario is the only scenario assessed which presents detailed trajectories for all major GHGs or presents any data on aerosol precursor emissions, although only SO2 is covered for the latter.

Including all GHG emissions in a scenario up to year 2,100 would help policymakers and investors make more informed decisions, the study said.

“Since normative scenarios relevant to the Paris Agreement and published by institutions such as the IEA and fossil-fuel companies provide important input to policymakers and investors, they should provide a complete pathway to the end of the century for all GHG emissions for all sectors so that temperature assessments can be made,” the study said. “Published institutional pathways that do not actually lead to the LTTG of the Paris Agreement will likely provide a misleading view of the transformations needed for reducing GHG emissions both in the near-term and the long-term.”

As for transparency,  the scenarios, including the IEA’s 2020 Sustainable Development Scenario (SDS), and the BP Net Zero and Rapid scenarios, make references to temperature outcomes that are difficult to trace back to a concrete assessment, researchers said. Secondly, some scenarios present carbon budget constraints, which is the maximum amount of anthropogenic CO2 that can be emitted while still achieving the temperature goals, that vary widely for the same goal; for example, the Equinor Rebalance scenario and the Shell Sky scenarios report carbon budgets larger than 700 GtCO2, but only Shell claims to achieve the 1.5 °C goal.

The researchers said most of the scenarios do not achieve the Paris Agreement LTTG, or do so with substantial interim overshoot which is primarily due to a continued reliance on fossil fuels.

“For example, although the use of coal shows a steep decline in all pathways, it is notable, and of particular importance for policymakers and for investment decision making, that the role of natural gas is less clear, demonstrating a large range of uncertainty in the various pathway categories,” it said.

As for natural gas as a bridging fuel, the study’s results indicate that those scenarios closest to Paris Agreement compatibility also tend to be those with the most rapid decrease in natural gas  in electricity generation, including the IEA’s NZE scenario.

“However, the range of use of natural gas is large, depending on scenario and model, and therefore reflects the uncertainty in the literature as to the bridging role for natural gas in the power sector,” the study said.

It said part of this uncertainty is due to the potential accounted for in some analytical models for significant deployment of fossil-fuel carbon capture and storage.

The study also noted that a claim of 100% renewable energy by 2050 may align with energy sector benchmarks for Paris Agreement-compatibility, but it is not sufficient to guarantee these pathways meet the LTTG unless all GHG emissions are accounted for.

“The trend in the scientific community is towards full data and model transparency, an increasingly important part of the science-policy interface. In the case of claims on pathway compatibility with international climate agreements, this transparency should extend to the data and assumptions required to confirm such statements,” it said.