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1、APEC Green Finance Report Unlocking the Urban Energy Transition APEC Energy Working Group March 2023 APEC Project:EWG 09 2021S Produced by:APEC Sustainable Energy Center(APSEC)Tianjin University Library of Science Weijin Road 92 Tianjin-Nankai 300072 China(86)22 27 400 847 A http:/ Pacific Economic
2、Cooperation Secretariat 35 Heng Mui Keng Terrace Singapore 119616 Tel:(65)68919 600 Fax:(65)68919 690 Email:infoapec.org Website:www.apec.org Copyright 2023 APEC Secretariat APEC#223-RE-01.3 ISBN:978-981-18-7305-8 4 Foreword APEC Sustainable Energy Center(APSEC)is pleased to present the APEC Green F
3、inance for Urban Energy Transition Report.This report is destined on the one hand to the broader APEC Energy Working Group and its sub-groups,whose targeted readership is composed mainly of non-specialists of finance,on the other hand to urban planners of APEC cities wishing to get new insights abou
4、t the road to carbon neutrality and the way to achieve it.Consequently,the report starts with exposing roadmaps towards carbon neutrality,identifies their financing gap and outlines the frameworks adopted by COP26 and by APEC designed to give guidance for the transition towards carbon neutrality.It
5、then presents the two ways to increase the role of green finance,namely increasing returns and profitability of green investments,and de-risking green investments.Case examples underpin the theoretical arguments.The report then shows how different roles of cities can each contribute to attain local
6、carbon neutrality.The pathway towards carbon neutrality is a pathway towards prosperity,not towards austerity.The number of jobs created is a multiple of the number of jobs lost.But this transformation does not come without an initial investment in the amount of 4%to 5%of global GDP per year,which m
7、ust be mobilized during the present decade.Green finance is needed to breach the financing gap.It should be directed to a greater extent towards less developed economies where the cost of setting up new infrastructures is lower,but risks are higher,which increases the cost of financing.De-risking me
8、chanisms should overcome this obstacle.Cities can act in many ways in favour of carbon neutrality.In their different roles,they can help improving the local investment conditions.This report is the third APEC report produced by APSEC and endorsed by the APEC Energy Working Group(EWG).In 2018,the EWG
9、 endorsed the APEC Sustainable Urban Development Report From Models to Results.In 2021 the EWG endorsed the Integrated Urban Planning Report Combining Disaster Resilience with Sustainability.This series of reports is written with reference to the APEC High-Level Urbanization Forum having taken place
10、 in Ningbo in June 2016.This forum was the first large-scale high-level event under the APEC framework with a focus on urbanization.The Ningbo initiative that started at that occasion affirmed the importance of promoting sound,sustainable and people-oriented urbanization in APEC within the Asia-Paci
11、fic Urbanization Partnership that had been endorsed by APEC Economic Leaders in Beijing in November 2014.APEC Sustainable Energy Center 5 Acknowledgements and Disclaimer This study could not have been completed without numerous experts who provided invaluable contributions.Specifically,we are gratef
12、ul to the following experts and contributors:Experts participating in the 6th APEC Workshop on Sustainable Cities organized by APEC Sustainable Energy Center as online event on 9 December 2021,comprising delegates from China,Indonesia,Japan,Malaysia and the Philippines.The lead author of this report
13、 is DEFILLA Steivan,President Assistant,APEC Sustainable Energy,having authored all sections except the following ones:1.1.2.IRENA World Energy Transitions Outlook:SANCHEZ Walter J.and GORINI Ricardo(IRENA)2.1.2.The Role of ESG for Cities:MAJUMDAR Chitro(RSRL)and SCANDIZZO Sergio(EIB)2.2.8.Public Pr
14、ivate Partnerships(PPP)for Cities:CHEAH Ping Yean(AIIB)2.2.9.Land Value Capture to Finance Transit Oriented Development:CHEAH Ping Yean(AIIB)2.4.1.Green Credit Guarantee Schemes and Similar De-risking Instruments:TAGHIZADEH-HESARY Farhad(Tokai University)2.4.2.Green Finance Instruments of a Commerci
15、al Bank:ZOU Xinju Kate(CCB)2.4.3.Green Bonds for Energy Efficiency:GAO Xiaotong(APEC CNSC Program Joint Operation Center)2.4.4.Insurance Linked Securities and Catastrophe Bonds(“Cat Bonds”):ZHANG John(SwissRe)2.5.1.Asian Development Bank ADB:SHEN Yiyang(IDRC)2.5.2.Asian Infrastructure Investment Ban
16、k AIIB:CHEAH Ping Yean(AIIB)2.5.3.Green Climate Fund GCF:KUCAN Drazen(GCF)3.1.1.City of an APEC Developing Economy Manila:GAIL SATURA-QUINGCO Shiela(MMDA)3.1.2.City with an Industrial Park:CHEAH Ping Yean(AIIB)3.1.3.Medium Town of an APEC Developing Economy Tomohon:ALELO Mareyke(Polytechnic Manado)a
17、nd BANGUN Brury(Tomohon City)Preparation of statistics,graphics,and references:Li Fangfang,APSEC Cover design:JI Yuchen,APSEC 6 Editorial reading:WANG Weilin,APSEC This report does not necessarily reflect the views or policies of the APEC Energy Working Group or individual APEC member economies.This
18、 report is to be interpreted as a scientific and analytic contribution.No APEC economy endorsing this report will be bound by any of its conclusions.The authored contributions of third parties do not necessarily reflect the views of these third parties.We hope that this report will serve as a useful
19、 basis for analytical discussion both within and among APEC member economies for the enhancement of sustainable urban development.7 Purposes,Key Findings and Recommendations Purposes Outline roadmaps towards global carbon neutrality,estimate the corresponding financing gap and mention the UN and APE
20、C political frameworks to address these issues Show how green finance can close the financing gap by improving returns and profitability of green investments and mitigating their risk Describe how cities can catalyse the energy transition by combining green finance with other economic instruments an
21、d use them according to the multiple roles of cities Key Findings Chapter 1 The 2015 Paris Climate Agreement fixes a maximum tolerance level for the admissible global warming to well below 2C with efforts to keep it to 1.5C above pre-industrial levels.The IEA Net Zero by 2050 Roadmap for the Global
22、Energy Sector defines more than 400 milestones to attain the 1.5C goal by 2050.Annual global energy investment should jump from 1%to 4.5%of global GDP in the next few years,which mostly should go to clean energy.The IEA pathway creates six times more jobs than are lost during the transformation,and
23、adds 0.4%additional annual global GDP growth,accumulating by 2050 to an economy of the size of Japan to the globe.The IRENA World Energy Transition Outlook(WETO)2021 also emphasizes the large number of jobs created during the transition.The share of renewable energy in total primary energy supply wo
24、uld rise from 14%in 2018 to 74%in 2050,at an annual growth rate of 1.87%,an eight-fold increase from recent years.Total global energy use would be nearly constant between 2018 and 2050,while economic activity nearly triples by 2050.APSEC calculates that if the post-2010 trend of reducing CO2-intensi
25、ty continues,APEC will be carbon neutral by 2050 and the world by 2057.Carbon neutrality is interpreted to mean gross annual per capita emissions of at least 1tCO2,of which one third are from human physiological activity and two thirds from agricultural livestock.The Kaya identity gives a simple con
26、ceptual framework to monitor the key variables towards carbon neutrality.The bottom line of per capita energy use is determined by Decent Living Standards(DLS)which require 120W per capita in form of food energy and 380W per capita as non-food energy.With a capacity factor of renewable electricity d
27、ropping from today 30%to 20%in the long term,DLS requires installed renewable electricity capacity of 1900W per capita and additional food energy of 120W per capita.These two numbers define a“2000W-Society”.In 2020,installed capacity was at 362W/person at global average,and 561W/person for APEC.Cont
28、inuation of the high growth rates of the period 2008 2020 will double installed capacity by 2030 for both,APEC and the world.APEC will attain the 1900W/person level in 2035,and the world in 2044.The target of 0.7%ODA/GNI and 0.15 to 0.20%of ODA/GNI to least developed economies is but a small fractio
29、n of the 4.5%of the global GDP per year that must go to clean energy.The annual$1 to$1.5 trillion goal per year to finance infrastructures is a multiple too low,and the annual$100 billion goal specifically for clean energy and energy infrastructure is just 2%of the necessary amount.This is too littl
30、e,even when considering that ODA should only be the catalyst or that it should only finance the creation of framework conditions.Through COVID-19,neither renewable capacity additions which attained an all-time high of 36%in 2020,nor the extension of electricity access,nor global internet connectivit
31、y,nor the growth of fixed 8 internet broadband subscriptions were stopped.By the end of the present decade the world might be fully interconnected.COVID-19 has caused a 30%decline in energy trade,increased public debt by more than 15%of global GDP,has seriously affected the education system,has caus
32、ed a drop of FDI flows by more than a third;whereby flows to SDG7(energy)and SDG11(sustainable cities)were more than halved.COP26 has mobilized public pension funds($52 trillion),sovereign wealth funds($9.2 trillion)and insurances($30 trillion)in sufficient order of magnitude to engineer carbon neut
33、rality.It also approved the long-awaited articles on international carbon market mechanisms.In 2021,APEC Leaders have adopted the Aotearoa Plan of Action.Key Findings Chapter 2 Green finance is defined by the flows directed to green economy.Green taxonomies delimitate the green sector from other act
34、ivities.The taxonomy of China(since 2015)includes only activities that are undoubtedly green so that green bonds can be issued.The taxonomy of the EU(since 2019)is based upon technical screening criteria that allow including a wider range of goods or services under certain conditions so that it can
35、deliver sufficient information for mandatory disclosure of enterprises.Since its inception by the UN in 2004,ESG was implemented in form of six Principles of Responsible Investment(PRI).The volume of PRI implementing assets worldwide has grown to more than$120 trillion by 2021,a multiple of the annu
36、al investment gap to attain carbon neutrality.Six major ESG rating agencies show high disagreement in ESG ratings.Contrary to credit rating,underpinned by probability of default,ESG rating lacks a similar underpinning.Separating genuine ESG improvement from greenwashing remains a challenge.ESG could
37、 to some extent be underpinned by SDGs and resilience indicators.Increasing the attractiveness(profitability/risk ratio)of green investments requires either increasing their profitability,or decreasing their risk,or both.Carbon pricing is the instrument of choice to increase green sector profitabili
38、ty by eliminating the greatest market failure the world has ever seen(Stern Report,2007).Yet,incentive carbon taxes have not mushroomed.It has been impossible to design WTO-compatible border taxes to prevent carbon leakage.Furthermore,incentive carbon taxes should be levied in market segments where
39、there are alternatives to fossil fuels.Boulder(Colorado)gives the example of a successful local carbon tax that generates green finance.Compared to subsidies on renewables which amount to 0.5%of global GDP,the world pays four times as high direct fossil fuel subsidies and twenty times as high indire
40、ct fossil subsidies.While APEC Leaders called in 2009 to phase out certain fossil fuel subsidies,IRENA proposed to diminish fossil fuel subsidies by one third,while half of the remaining fossil fuel subsidies($300 billion annually)should be used as source of green finance for clean energy.The least
41、cost option to attain carbon neutrality is the emissions trading system(ETS).ETS or black certificate trading is a high-tech mechanism.It generates green finance to the extent its proceeds flow to green projects.COP26 created new trading mechanisms replacing the earlier Kyoto Protocol ones.Cities re
42、ceiving emissions targets are expected to participate in compliance markets.For all other cities,high integrity voluntary carbon markets become an instrument to contribute towards carbon neutrality.Energy attribute or green certificates allow trading green energy.COP26 has created the possibility to
43、 link green and black certificates in a single compliance market.It is now possible set more ambitious goals to reduce CO2 or to increase the renewables share knowing that the costliest measures can be financed by the compliance market.Feed-in tariffs(FIT)are the most rapid way to increase renewable
44、s and hence a powerful source of green finance.Their problem is their 9 success.The too rapid growth of intermittent power sources has been a challenge for electricity grids.FIT used at local level can be an instrument of choice to increase the local renewables share.Power Purchase Agreements(PPA)ar
45、e a generalization of FITs and can be combined with green certificates to increase the renewables share.For liberalized electricity markets,virtual PPA(vPPA)are the appropriate form.Public Private Partnerships(PPPs)are used by cities to fill funding gaps for green investments.Prerequisite for PPPs i
46、s,among others,the existence of a market for green infrastructure projects.Land Value Capture(LVC)is one of the most important instruments to finance Transit Oriented Development(TOD).It is analysed as a source of green finance to the extent that TOD,together with mixed zoning,diminishes energy cons
47、umption of daily commuting.The overview of green financing instruments shows that green bonds,the most popular instrument,experience strong growth.Green loans are bilateral and much less in volume.Green equity is important as it does not create debt and helps in de-risking.Environmental insurance ha
48、s a huge potential but requires a clear legislative basis.Credit guarantees are the indispensable way to de-risk investment flows to developing economies.Credit Risk Guarantee schemes are the instrument of choice to improve the risk-return ratio of investments.Financed by a third party such as a gov
49、ernment agency,they protect the lender against default of the green project owner who pays a guarantee fee similar to an insurance premium.The optimal amount of the guarantee fee should depend on the lender,the borrower and the general economic context.Commercial banks play an important role to deve
50、lop green projects.Their instruments include a combination of green credit,green bonds,green leases,green trusts,green insurance and green wealth management.The example of the Construction Bank of China(CCB)and its activities and instruments is presented in the text.Green bonds have also been used t
51、o finance the energy efficiency renovation of super-tall buildings in China.The example of the Qingdao Haitian Center T2 Tower Building shows how green bonds have helped to overcome the finance gap to install ten new energy-efficient technologies.The increasing role of insurance for financing climat
52、e risks is shown by the example of Insurance Linked Securities and Catastrophe Bonds proposed by SwissRe.With the help of these new types of securities,which emerged after natural catastrophes of the early 1990s,it is possible to transfer tail risks which cannot be supported by a single company to t
53、he financial market which has much bigger capacity.The Asian Development Bank(ADB)is one of the multilateral financial institutions that is active in financing carbon neutrality.It works primarily with governments but has also a strong arm for cooperation with the private sector.ADB is for certain c
54、ases a lender of last resort.ADB uses green finance to provide several categories of benefits to its credit takers.The cooperation takes different forms depending on the partner.ADB has also engaged itself in the Belt and Road initiative.The Asian Infrastructure Investment Bank(AIIB),created in 2016
55、,has at present investments in 168 projects with an approved amount totalling USD 33 billion.Its sustainable energy strategy dates from 2017 and comprises improving energy access and security,energy efficiency,reduction of carbon intensity,management of local and regional pollution,catalysing privat
56、e investment,and promoting regional connectivity.Energy comprises 34%of the banks total financing.A cross-sectoral city strategy was added in 2018.AIIB has set a 50%target of climate financing against its total approved portfolio by 2025 and an earlier deadline of 1 July 2023 for its operations to b
57、e aligned with the goals of Paris Agreement.The Green Climate Fund GCF is the financing instrument of the Paris Climate Agreement.It has developed a strategy for cities attempting a paradigm shift.This is focusing 10 on the relationship between local and central government level,centralization and d
58、ecentralization pressures,how cities can take demand side measures to improve their credit ratings,and supply side measures to mobilize private finance.GCF works with grants,equity,guarantees and concessional loans.De-risking is one of the prime tasks.For cities,there are 8 priority areas.Megacities
59、 need to be retrofitted,whereas small and medium size cities need to decouple new infrastructure from emissions.The Shandong Green Development Fund is an example of the Beijing-Tianjin-Hebei area.The GCF engagement of$1.5 billion will leverage$12 billion private funds,with a catalytic factor of 8,an
60、d bring about emissions peak in 2027 three years ahead of schedule.The International Finance Corporation IFC is the World Banks private sector support mechanism.$33 billion green loans are outstanding,of which$695 million have been granted in fiscal year 2020.The bulk goes to renewable energy.Energy
61、 efficiency,mitigation and more recently,adaptation have been added.In 2019/20 the IFC granted a first-time green loan to Mexico for renewable energy.Green loans to China include loans for solar power,green banking and agribusiness/forestry.Key Findings Chapter 3 The example of Metro Manila of the P
62、hilippines is ranked 7th among the vulnerable urban areas to climate change.A severe problem is the water management during the monsoon months,when around 80%of annual rainfall occurs.The pumping infrastructure is old and not capable to withstand the requirements of recent rainfalls.The entire regio
63、n is vulnerable to flooding with the coastal areas of Metro Manila registering the highest vulnerability.Metro Manila Flood Management Project is designed to resolve the problems caused by foods.It comprises modernization of pumping stations and drainage areas,minimizing solid waste in the waterways
64、,participatory housing and resettlement,and project management and coordination.The first certified climate bond has been issued in the Philippines in 2016 for a geothermal power station.Today,the Philippines is the third largest green bond issuer in ASEAN.China has made important steps towards the
65、reconversion of industrial parks to Eco-Industrial Parks(EIP).In 2021,UNIDO,World Bank and GIZ have released a set of standardised approaches for implementation of EIP.Focus should be on clean energy,wastewater treatment and waste heat.Asian Development Bank invested in its first eco-industrial park
66、(EIP)waste-to-energy project in Shanghai via a$100 million loan.Another project is the Wuzhou Circular Economy Industrial Park located in Longxu,Wuzhou city,Guangxi Zhuang region.In 2020,the World Bank approved an investment of$200 million for the Jiangxi Eco-Industrial Park.The World Bank is also p
67、roviding support to the Fuzhou New Industrial Zone,which will provide co-benefits in terms of GHG emission,pollution and urban flood risk reduction.The problems of a medium-size town are illustrated by Tomohon city,Indonesia.The focus lies on developing mass transportation systems to decrease road c
68、ongestions.An example of a catalytic effect related to urban energy transition is given by Shanghai.A study shows that an energy efficiency and emissions reduction fund plays a catalytic role in enabling coordination and collaboration across different government departments on cross-cutting policy d
69、omains.Looking at the different roles of cities to facilitate the energy transition,the role of policy maker and regulator is essential.Since the adoption of Local Agenda 21 in Rio in 1992,cities have been the focus for shaping and implementing local sustainability.The Global Climate Alliance is now
70、 the forum where more than 11000 cities and other stakeholders communicate their policies and exchange experience.In the past years some cities have started adding carbon neutrality as a distinct objective.13 APEC cities have become members of the Carbon Neutral Cities Alliance(CNCA).In the role of
71、land planners,cities can inspire themselves from the Five Principles of Sustainable Neighbourhood Planning adopted in 2015 by UNHABITAT 11 concretizing key indicators for transit-oriented development(TOD).Waste management and wastewater treatment yield energetic by-products which cities can use.An i
72、mportant role of cities is the one as infrastructure managers.The modern list of infrastructures includes protective natural infrastructures.PPP can generate green finance.Cities are procurers and consumers,and as such are key players to drive the technologies used to produce energy.Cities are also
73、data producers and should collect data for SDG implementation.Energy and climate data at local level are still rare.Recommendations This report outlines roadmaps towards global carbon neutrality,shows how green finance can close the financing gap,and describes how cities can catalyse the energy tran
74、sition according to their multiple roles.Based on this report,the following specific recommendations are made.APEC should set the goal to double the per capita installed renewable electricity capacity by 2030 and reach the 2000W/person threshold in 2035.An agreement with IRENA might be appropriate f
75、or realizing this goal.APEC should consider setting carbon-neutrality as a collective long-term goal to be attained by 2050 for developed economies and by 2060 for developing economies.APEC should consider redefining the principle of phasing out fossil fuel subsidies decided in 2009.APEC should cons
76、ider formulating a principle stating that part of fossil fuel subsidies should be phased out,whereas another part should be redirected towards renewable energies,especially for poor and vulnerable populations.APEC should consider setting up mechanisms to increase both,public and private green invest
77、ment,especially in developing economies.Green investment should comprise more equity than debt.APEC cities should be active in shaping the local regulatory environment so that green equity develops easier on their territory.APEC should explore whether APEC cities can set minimum values for the catal
78、ytic factor of public investment in the green economy in their cities.Specifically,APEC should consider the feasibility of setting up,possibly with the participation of APEC cities,an APEC-wide de-risking guarantee scheme for renewable energy.12 Table of Contents Foreword.4 Acknowledgements and Disc
79、laimer.5 Purposes,Key Findings and Recommendations.7 Table of Contents.12 1.The Narrow Path Towards Carbon Neutrality.14 1.1.Roadmaps towards Carbon Neutrality.15 1.1.1.The IEA Net Zero by 2050 Roadmap for the Global Energy Sector.15 1.1.2.IRENA World Energy Transitions Outlook.22 1.1.3.Key Variable
80、s for Carbon Neutrality Scenarios.34 1.1.4.2000-Watt-Society as Complement to Carbon Neutrality.40 1.2.Financing Gap.44 1.2.1.Financing Gap of the 2015 Addis Ababa Action Agenda(AAAA).44 1.2.2.Key Developments Impacting SDG Financing.48 1.2.3.Impact of COVID-19 on SDG Financing.51 1.3.Political Fram
81、eworks.57 1.3.1.Glasgow COP26.57 1.3.2.APEC Leaders and Ministers Declarations.57 2.The Role of Green Economy and Green Finance.65 2.1.Green Labelling as Basis for the Green Economy.67 2.1.1.The Role of Green Taxonomies.67 2.1.2.The Role of ESG for Cities.71 2.1.3.Selection of Green Technologies for
82、 Urban Carbon Neutrality.77 2.2.Increasing the Returns and Profitability of Green Investments.87 2.2.1.Carbon Pricing to Eliminate Market Failures.87 2.2.2.Carbon Tax.89 2.2.3.Reallocation of Fossil Fuel Subsidies.92 2.2.4.Emission Trading Systems ETS(Black Certificates).95 2.2.5.Energy Attribute(or
83、 Green)Certificates.101 2.2.6.Feed-in Tariffs(FIT).104 2.2.7.Power Purchase Agreements(PPA).108 2.2.8.Public Private Partnerships(PPP)for Cities.111 2.2.9.Land Value Capture to Finance Transit Oriented Development.112 2.3.Overview of Green Financing Instruments.114 13 2.3.1.Green Bonds.114 2.3.2.Gre
84、en Loans.115 2.3.3.Green Equity.115 2.3.4.Environmental Insurance.117 2.3.5.Guarantees Supporting Green Investments.117 2.4.Examples of De-risking Green Investments.118 2.4.1.Green Credit Guarantee Schemes and Similar De-risking Instruments.118 2.4.2.Green Finance Instruments of a Commercial Bank.12
85、3 2.4.3.Green Bonds for Energy Efficiency.131 2.4.4.Insurance Linked Securities and Catastrophe Bonds(“Cat Bonds”).136 2.5.The Role of International Financial Institutions.144 2.5.1.Asian Development Bank ADB.144 2.5.2.Asian Infrastructure Investment Bank AIIB.150 2.5.3.Green Climate Fund GCF.151 2.
86、5.4.International Finance Corporation IFC.158 3.How Cities Catalyse the Energy Transition.160 3.1.Best Practice Examples of APEC Cities.161 3.1.1.City of an APEC Developing Economy Manila.161 3.1.2.City with an Industrial Park.168 3.1.3.Medium-Size Town of an APEC Developing Economy Tomohon.170 3.1.
87、4.Example of a Catalytic Role of a City-Level Fund:Shanghai.178 3.2.The Different Roles of Cities.180 3.2.1.Cities as Policy Makers and Regulators promoting Carbon Neutrality.180 3.2.2.Cities as Land Planners.187 3.2.3.Cities as Waste Managers.189 3.2.4.Cities as Infrastructure Operators.190 3.2.5.C
88、ities as Partners in Public Private Partnerships(PPP).191 3.2.6.Cities as Procurers and Consumers.192 3.2.7.Cities as Data Producers.195 4.Key Conclusions and Recommendations.203 Annex 1:Lists of APEC Projects.205 Annex 2:List of initiatives of the Climate Ambition Alliance.210 List of Figures.215 L
89、ist of Tables.219 List of References.220 14 1.The Narrow Path Towards Carbon Neutrality The 2015 Paris Climate Agreement fixes a maximum tolerance level for the admissible global warming to well below 2C with efforts to keep it to 1.5C above pre-industrial levels.The IEA Net Zero by 2050 Roadmap for
90、 the Global Energy Sector defines more than 400 milestones to attain the 1.5C goal by 2050.Annual global energy investment should jump from 1%to 4.5%of global GDP in the next few years,which mostly should go to clean energy.The IEA pathway creates six times more jobs than are lost during the transfo
91、rmation,and adds 0.4%additional annual global GDP growth,accumulating by 2050 to an economy of the size of Japan to the globe.The IRENA World Energy Transition Outlook(WETO)2021 also emphasizes the large number of jobs created during the transition.The share of renewable energy in total primary ener
92、gy supply would rise from 14%in 2018 to 74%in 2050,at an annual growth rate of 1.87%,an eight-fold increase from recent years.Total global energy use would be nearly constant between 2018 and 2050,while economic activity nearly triples by 2050.APSEC calculates that if the post-2010 trend of reducing
93、 CO2-intensity continues,APEC will be carbon neutral by 2050 and the world by 2057.Carbon neutrality is interpreted to mean gross annual per capita emissions of at least 1tCO2,of which one third are from human physiological activity and two thirds from agricultural livestock.The Kaya identity gives
94、a simple conceptual framework to monitor the key variables towards carbon neutrality.The bottom line of per capita energy use is determined by Decent Living Standards(DLS)which require 120W per capita in form of food energy and 380W per capita as non-food energy.With a capacity factor of renewable e
95、lectricity dropping from today 30%to 20%in the long term,DLS requires installed renewable electricity capacity of 1900W per capita and additional food energy of 120W per capita.These two numbers define a“2000W-Society”.In 2020,installed capacity was at 362W/person at global average,and 561W/person f
96、or APEC.Continuation of the high growth rates of the period 2008 2020 will double installed capacity by 2030 for both,APEC and the world.APEC will attain the 1900W/person level in 2035,and the world in 2044.The target of 0.7%ODA/GNI and 0.15 to 0.20%of ODA/GNI to least developed economies is but a s
97、mall fraction of the 4.5%of the global GDP per year that must go to clean energy.The annual$1 to$1.5 trillion goal per year to finance infrastructures is a multiple too low,and the annual$100 billion goal specifically for clean energy and energy infrastructure is just 2%of the necessary amount.This
98、is too little,even when considering that ODA should only be the catalyst or that it should only finance the creation of framework conditions.Through COVID-19,neither renewable capacity additions which attained an all-time high of 36%in 2020,nor the extension of electricity access,nor global internet
99、 connectivity,nor the growth of fixed internet broadband subscriptions were stopped.By the end of the present decade the world might be fully interconnected.COVID-19 has caused a 30%decline in energy trade,increased public debt by more than 15%of global GDP,has seriously affected the education syste
100、m,has caused a drop of FDI flows by more than a third;whereby flows to SDG7(energy)and SDG11(sustainable cities)were more than halved.COP26 has mobilized public pension funds($52 trillion),sovereign wealth funds($9.2 trillion)and insurances($30 trillion)in sufficient order of magnitude to engineer c
101、arbon neutrality.It also approved the long-awaited articles on international carbon market mechanisms.In 2021,APEC Leaders have adopted the Aotearoa Plan of Action.15 1.1.Roadmaps towards Carbon Neutrality 1.1.1.The IEA Net Zero by 2050 Roadmap for the Global Energy Sector Carbon neutrality and clim
102、ate neutrality have become widely discussed long term objectives.The COVID-19 pandemic may have accelerated the general awareness that global disasters can happen and need to be addressed.Since the adoption of the UN Climate Convention in 1992,GHG emissions have increased by 60%,creating an ever-lar
103、ger likelihood that climate change causes associated climate disasters.The scientific community has been aware for some time that there is such a thing called cumulative global GHG budget,and that industrial development at the speed it happens now is consuming this budget much more rapidly than this
104、 budget is regenerating itself.The 2015 Paris Climate Agreement neither mentions carbon neutrality nor climate neutrality,but rather uses the approach to set a maximum tolerance level for the admissible global warming,leaving it to policymakers to define how to attain it.The Paris Agreement requires
105、 holding the increase in the global average temperature to well below 2 C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 C above pre-industrial levels1.The IPCC glossary to the IPCC special report on the impacts of global warming of 1.5C2 defines the terms
106、of carbon and GHG neutralities as well as the associated net zero emissions:Carbon neutrality:Condition in which anthropogenic carbon dioxide(CO2)emissions associated with a subject are balanced by anthropogenic CO2 removals.carbon neutrality generally includes emissions and removals within and beyo
107、nd the direct control or territorial responsibility of the reporting entity.Net zero CO2 emissions:At a global scale,the terms carbon neutrality and net zero CO2 emissions are equivalent.At sub-global scales,net zero CO2 emissions is generally applied to missions and removals under direct control or
108、 territorial responsibility of the reporting entity.Greenhouse gas neutrality:Condition in which metric-weighted anthropogenic greenhouse gas(GHG)emissions associated with a subject are balanced by metric-weighted anthropogenic GHG removals.GHG neutrality generally includes emissions and removals wi
109、thin and beyond the direct control or territorial responsibility of the reporting entity.Net zero greenhouse gas emissions:At a global scale,the terms greenhouse gas neutrality and net zero greenhouse gas emissions are equivalent.At sub-global scales,net zero GHG emissions is generally applied to em
110、issions and removals under direct control or territorial responsibility of the reporting entity.For science,the IPCC has extensively addressed this issue in its Special Report on Global Warming of 1.5C(SR15),the first report of the Sixth Assessment Cycle,released in October 20183:In model pathways w
111、ith no or limited overshoot of 1.5C,global net anthropogenic CO2 emissions decline by about 45%from 2010 levels by 2030(4060%interquartile range),reaching net zero around 2050(20452055 interquartile range).For limiting global warming to below 2C(66%probability),CO2,emissions are projected to decline
112、 by about 25%by 2030 in most pathways(1030%interquartile range)and reach net zero around 2070(20652080 interquartile range).Outside the scientific discussion the explicit probability figures are sometimes left out,implying other implicit probabilities.This may give slightly different time ranges as
113、the figure below shows but the sequence in time remains the same.For the 1.5C scenario,carbon 16 neutrality should arrive around 2050 whereas climate neutrality should be realized around 2065.If the 2C scenario is chosen,carbon neutrality should arrive around 2075 and climate neutrality towards the
114、end of the century.In all cases,the focus at present is on limiting CO2 emissions,the biggest contributor to global warming.Figure 1:Global timeline to reach net-zero emissions Source:World Resources Institute4 Note also that carbon neutrality does not include methane and is,therefore,less broad tha
115、n energy related emissions.Both carbon neutrality and climate neutrality designate the net emissions,i.e.,the gross emissions minus the carbon or GHG removal from the atmosphere,respectively.If carbon or other GHG can be removed faster from the atmosphere,the dates stated above can happen earlier.Mo
116、st technical solutions to remove carbon from the atmosphere are still very expensive.Figure 2:Carbon emissions and carbon removal Source:E5 Several important contributions to the analysis of net zero have been elaborated during the year 2021.A noteworthy contribution came from the International Ener
117、gy Agency(IEA).In the Net Zero by 2050 A Roadmap for the Global Energy Sector6,the IEA,in cooperation with the International Monetary Fund(IMF)and the International Institute of Applied Systems Analysis(IIASA)and more than 100 peer-reviewers,for the first time ever sets out a global Net Zero 2050 Ro
118、admap.Deviating from earlier practice,the IEA reports are now available in full online and free of charge,accompanied by all the data and the figures.In earlier reports,the IEA compared a Stated Policies Scenario(STEPS)which basically 17 stabilizes emissions at current levels with a Sustainable Deve
119、lopment Scenario(SDS)which halves emissions by 2040.Both are clearly less transformative than the Net Zero by 2050 Roadmap.In the 2020 World Energy Outlook(WEO)and the 2020 Energy Technology Perspectives(ETP),the IEA has already made special cases and analysis on 1.5-degree future,to understand mode
120、lling capabilities and data,but did not yield a global 2050 scenario.The reasons for having focused on a more transformative scenario are economic.The Net Zero by 2050 Roadmap will create six times more jobs than will be lost during the transformation and allow for a net global GDP increase of 0.4%p
121、er year up to 2050,adding an economy of the size of Japan to the world by 2050.The Net Zero by 2050 Roadmap is,therefore,a road towards prosperity and not a road towards austerity.But despite being a road towards prosperity,it does not come without policy measures.World energy investment needs to in
122、crease from currently 2 trillion USD to 5 trillion USD annually by 2030,of which 4 trillion USD need to be made to clean energy.New technologies such as advanced battery,hydrogen and direct capture need to be pushed forward and put on the market by 2030,allowing the need for fossil fuels to be reduc
123、ed substantially.For new technologies to be developed,international cooperation is essential.To leave no one behind,special care needs to be taken for fossil fuel dependent regions e.g.,by installing,where feasible,wind or solar farms on closing oil and gas fields.Overall,there is still a narrow pat
124、hway to remain within the 1.5C limit.It is worthwhile to look at this roadmap in greater detail as it is highly relevant to the energy sector.Figure 3:Key milestones in the pathway towards net zero Source:International Energy Agency7-5055402020202520302035204020452050Gt COBuildingsTranspo
125、rtIndustryElectricity and heatOther2045150 Mt low-carbon hydrogen850 GW electrolysers435 Mt low-carbon hydrogen3 000 GW electrolysers4 Gt CO2capturedPhase-out of unabated coal in advanced economies2030Universal energy access60%of global car sales are electric1 020 GW annual solar and wind additionsA
126、ll new buildings are zero-carbon-readyMost new clean technologies in heavy industry demonstrated at scaleAll industrial electric motor sales are best in classNo new ICE car sales2035Overall net-zero emissions electricity in advanced economiesMost appliances and cooling systems sold are best in class
127、50%of heavy truck sales are electric7.6 Gt CO2capturedNo new unabated coal plants approved for development20212025No new sales of fossil fuel boilers2040More than 90%of heavy industrial production is low-emissions2050Almost 70%of electricity generation globally from solar PV and windMore than 85%of
128、buildings are zero-carbon-ready50%of heating demand met by heat pumpsPhase-out of all unabated coal and oil power plantsNet-zero emissions electricity globally50%of fuels used in aviation are low-emissionsAround 90%of existing capacity in heavy industries reaches endof investment cycle50%of existing
129、 buildings retrofitted to zero-carbon-ready levelsNo new oil and gas fields approved for development;no new coal mines or mine extensions18 The roadmap contains more than 400 milestones of which the most important ones are shown in the figure.From today,no need for new fossil fuel supply investments
130、,no need for any unabated new coal fired plants By 2030,all existing market-ready technologies(e.g.,EVs,LED lights,public transportation)are fully rolled out and all prototypes of new technologies(e.g.,advanced battery,hydrogen and direct capture)are market-ready By 2030,all new buildings are zero-c
131、arbon ready By 2035,no new sales of internal combustion engine cars By 2040 the global power system is carbon free in net terms For the net zero emissions pathway,the current decade is the turning point.The most important driver is energy investment.The jump from 2.2 trillion USD(or 2.5%global GDP)t
132、o 5 trillion USD(or 4.5%global GDP)takes place only once,during the present decade,and overall energy investment will then be kept at a comparatively higher level until 2050,but due to economic growth its share in global GDP will fall back to 2.5%by 2050.80%of this investment goes to clean energy by
133、 2030.Most of the investment is spent on electricity generation,networks,and electric end-user equipment.Figure 4:Annual Average Capital Investments(all energy)by sector and by technology area Source:International Energy Agency8 During the current decade,the key technologies will have to leapfrog in
134、 spectacular ways.Capacity addition for solar and wind to multiply by a factor 4,global electric car sales by a factor 18,and energy intensity of GDP to diminish by 4%per year.For comparison,the aspirational APEC energy intensity goal provides for diminishing aggregate energy intensity by 45%from 20
135、05 to 20359,i.e.,a 1.5%linear decrease per year.The corresponding SDG target 7.3 reads10:“By 2030,double the global rate of improvement in energy efficiency”.During the base decade 2000 to 2010 chosen by the monitoring agencies,the improvement was 1.3%per year at global level.A doubling should be 2.
136、6%per year11.Empirical data show an annual improvement of 1.7%per year since 201512.19 Figure 5:Key clean technologies ramp up by 2030 in the net zero pathway Source:International Energy Agency13 The 4%energy intensity improvement of the net zero pathway for 2021 2030 result from the need to catch u
137、p the under-achievement of the years 2015 2021 to attain the original objective set by SDG7.3.Most of the improvement of energy intensity can happen through a few key factors such as switch to electric vehicles for transport,improvements in efficiency across industrial sectors and stringent building
138、 energy codes for both new and existing buildings,including the electrification of space heating in buildings by heat pumps.Looking at the period 2030 2050 and distinguishing pathways of four key sectors electricity,transport,industry and buildings,electricity is expected to be the fastest to decarb
139、onize as it will move from the highest share of CO2 emissions to zero by 2040 and thereafter to negative contribution with direct air capture with carbon capture(DACCS).Other sectors such as bioenergy with carbon capture and storage(BECCS)will be able to show a negative emissions contribution by 203
140、5 already.Both,DACCS and BECCS are ways to capture and permanently store CO2.Transport and industry diminish their emissions along similar pathways.The slowest to decarbonize is the buildings sector due to slow renovation rates.It starts,however,from a relatively lower emissions share than the other
141、 sectors.By 2050 these four sectors should all be carbon neutral.Figure 6:Sector specific pathways of the net zero emissions scenario Source:International Energy Agency14 20 The IEA is not the only international organization having elaborated net zero emission(NZE)scenarios.The IPCC has also made ma
142、ny similar scenarios.Comparing the models of the two organizations for 2050 shows that the IEA NZE uses in general low levels of those technologies which are still in early development stage such as carbon capture,use and storage(CCUS)and energy-related carbon direct removal(CDR)which includes CO2 c
143、aptured through bioenergy with CCUS and direct air capture with CCUS and put into permanent storage.It also uses only 100 EJ of bioenergy in total energy supply(TES),two to three times less than IPCC scenarios.In NZE,energy efficiency manages to lower total final consumption(TFC)to 340 EJ in 2050,co
144、mpared to 410 EJ in 2020,a diminution of 17%in 30 years or about half a percent per year.This is a greater role for energy efficiency than many IPCC scenarios.The IEA NZE also counts more on hydrogen(33 EJ in 2050)compared to most IPCC scenarios.Finally,the IEA NZE counts on wind and solar to provid
145、e for 70%of electricity production in 2050,more than most IPCC scenarios.Figure 7:Comparison between 18 IPCC scenarios and IEA-NZE Source:International Energy Agency15 As part of its sixth assessment report,the IPCC recently published the reports of its three working groups(WG I,II,and III):The Phys
146、ical Science Basis of Climate Change in August 2021(WGI contribution)Impacts,Adaptation and Vulnerability in February 2022(WGII contribution)Mitigation of Climate Change in April 2022(WGIII contribution)Synthesis Report(expected in October 2022)The Mitigation of Climate Change report of April 2022 h
147、as been released almost a year after the IEA Net Zero by 2050 Roadmap.It quotes specific IEA reports up to the 2021 World Energy Outlook published in October 2021 but does not contain any reference to the IEA Net Zero by 2050 Roadmap.Such reference can be found in the methodological Annex III16.21 G
148、iven the critical role of investment and financing,the IEA also released a report on Financing Clean Energy Transitions in Emerging and Developing Economies17.This report describes 50 case studies in economies that make up more than two thirds of the world population and 90%of global emissions but r
149、eceive only 150 billon USD or 20%of global clean energy investment.Yet,emissions reduction cost in these economies is only about half as high and requires only half the investment as in developed economies.Clean energy investment in these economies should be multiplied by a factor seven to reach 1 t
150、rillion USD per year.Figure 8:Annual clean energy investment in emerging and developing economies Source:International Energy Agency18 A problem to be resolved arises from the fact that financing cost in these economies is up to seven times the financing cost in developed economies.The reason for th
151、is gap is the higher interest rates and higher risk premium due to uncertainty that prevails in these economies.Emerging and developing economies trying to diminish the risk premium should create a regulatory environment that improves long-term predictability of their economies and their governance.
152、Figure 9:Indicative cost of capital by economy Source:International Energy Agency19 Concerning the structure of finance,more than three quarters of finance for clean energy originates from the private sector and only one quarter from the public sector.For traditional energy the share of private fina
153、nce is less than 60%.Also,clean energy relies for more than half its finance needs on debt,whereas equity provides less than half its finance.For traditional energy,the share of equity is greater than the share of debt.These two figures show that to enhance clean energy investment,the public sector
154、could engage more than it currently does,22 and that it could provide more equity than current equity levels.Cities and municipalities as lowest public sector level could possibly play a key role to change this.Figure 10:Capital origin and structure of the energy and clean energy sectors Source:Inte
155、rnational Energy Agency20 Structural change is marking the pathway towards net zero.This can best be seen by the relative decrease of the oil or fossil energy sector and the corresponding rise of a cleantech sector comprising industrial activities that are related to renewable electricity and fuel c
156、ells.Electricity storage will be a dominant part of the cleantech sector.Figure 11:The decline of fossil industry and the rise of the cleantech industry Source:International Energy Agency21 1.1.2.IRENA World Energy Transitions Outlook Authored by Walter J.Sanchez and Ricardo Gorini,IRENA IRENAs Worl
157、d Energy Transition Outlook(WETO,2021)22 describes a transformation of the energy sector aligned with the climate ambition to limit global average temperature increase by the end of the present century to 1.5C.The WETO(2021)outlines a set of energy transition trends.It considers the core drivers of
158、an energy transition by outlining CO2 emission pathways.This approach underlines technology avenues and measures that are prone to achieve emission mitigation goals between today towards 2050.This is inherently linked to(re-)allocation of investments and creating new ones to construct a green techno
159、logical landscape able to accomplish an energy transition that is sustainable,just and inclusive.23 Full decarbonisation of the energy sector as in the 1.5C Scenario is challenging,yet feasible with massive ramp-up of efforts on multiple fronts.Two core lines of action can be highlighted in the anal
160、yses from a technical perspective.First,the analysis indicates that electrification and energy efficiency to be the main decarbonisation drivers,mainly enabled by renewables,green hydrogen and sustainable biomass.By 2050,renewable energy can supply 74%of the total global energy demand and along with
161、 energy efficiency contribute to over 90%of the solutions to CO2 emissions reduction that is needed to achieve an energy system in line with the 1.5C Scenario.Secondly,in the 1.5C Scenario,the rate of energy intensity improvement needs to increase nearly two and a half times from historical average
162、of 1.2%to 2.9%per year.This implies the deployment of energy efficiency technologies and measures such as more efficient boilers,air conditions,motors,appliances and even changes in customers behaviour.The combination of renewable energy and electrification makes up to 1 pp per year followed by impr
163、ovement of technical efficiency in the energy sector which can contribute about 0.65 pp per year of the improvement and the remaining improvements can be achieved from structural and behavioural changes including circular economy practices.This double axis of the energy transition is not an easy tas
164、k to accomplish,but not impossible.The twofold tenet of the WETO(2021)underlines that the energy transition relies heavily on the deployment of renewables and efficiency,which require investment and policymaking along with its implementation.This will not only generate gains in terms of clean and su
165、stainable energy patterns,but it will trigger a net of socioeconomic benefits in terms of job creation by around 20 million additional direct and indirect jobs in 2050 in the renewable energy,energy efficiency and grid enhancement and flexibility sector.Of the 20 million for the 1.5C Scenario,solar
166、jobs represent the largest share:77%are PV,15%solar water heaters(SWHs)and 8%concentrating solar power.Solar PV is the single-largest source of jobs in renewables.Bioenergy comprising all forms of biomass is the second-largest contributor given its high labour intensity for biofuels supply.By 2050 b
167、ioenergy employs 14 million people in the 1.5C Scenario.Wind turbine blades are labour intensive to manufacture,but other parts of turbines are less so.Installation resembles the labour intensity of other large construction heavy infrastructure works.In the 1.5C Scenario 5.6 million jobs are created
168、 by the wind industry.Hydropower is one of the oldest renewable energy sources and has grown much less in recent years than other renewables such as wind and solar.Altogether,jobs in hydropower are expected to remain stable at around 3.5 million across the transition.That having been said,to assure
169、a climate safe 1.5C future along with its socioeconomic benefits,requires a financial muscle to lift technological expectations into palpable solutions.According to WETO(2021)an estimated additional energy system investment of USD 33 trillion needs to be settled in place on top of what has been plan
170、ned over next 30 years.This investment in the energy transition not only reduces climate risks and harms,but it reduces externalities from lower air pollution.The overall benefit of the energy transition is valued at between 2 USD to 5.5 USD saved for every additional 1 USD spent.Taking these figure
171、s into consideration,the question is,if the current line of action at global and regional levels is on track to accomplish the transformational quest that is necessary to harvest the benefits and gains of the energy transition.The WETO(2021)highlights that investment in energy transition technologie
172、s have reached an all-time high-level investment of USD 524 billion.However,these efforts need to be put into perspective.Among the energy transition technologies,renewable energy technologies dominated these investment flows,24 though their share decreased over time from almost 90%in 2005-2009 to 7
173、0%in 2016-2020 as other energy transition technologies attracted increasing volumes of capital.In addition,investments in energy efficiency averaged just above USD 250 billion during 2014-2019(IEA,2020a)23.Despite a predominant fossil fuel-based energy sector,the current momentum in the renewable en
174、ergy sector is noteworthy,as it has been largely noted that costs of renewable energy have continued to decline.Increasingly,solar PV and wind are the cheapest sources of green and clean electricity in many markets.Among newly commissioned projects,the global weighted average levelized cost of energ
175、y(LCOE)of utility-scale solar PV fell by 85%between 2010 and 2020,from USD 0.381/kilowatt hour(kWh)to USD 0.057/kWh for electricity from onshore wind cost have fallen by 56%,from USD 0.089/kWh to USD 0.039/kWh24.IRENA analysis estimates that by 2030,renewables technologies currently in commercial us
176、e will be cost-competitive with fossil-fuels in many parts of the world,and even undercut them significantly in many cases.The decade 2010 to 2020 saw renewable power generation becoming the default economic choice for new capacity.In that period,the competitiveness of solar(concentrating solar powe
177、r,utility scale solar photovoltaic)and offshore wind all joined onshore wind in the same range of costs as for new capacity fired by fossil fuels,calculated without financial support.The trend is not only one of renewables competing with fossil fuels,but significantly undercutting them,when new elec
178、tricity generation capacity is required.(IRENA,June 2021).Figure 12:Renewables are increasingly the lowest-cost sources of electricity in many markets Source:IRENA According to the narrative of the WETO(2021)a climate safe future in 1.5C Scenario will need to heavily invest in renewable energy techn
179、ologies and energy efficiency to decarbonise current energy systems.To comprehend the scope of such a task,the main technology avenues need to be further understood in order to be able to earmark the main components where investments are necessary to achieve a 1.5C Scenario.Technology avenues in the
180、 energy transition The WETO(2021)outlines that renewables,along with electrification and energy efficiency,are the main pillars of the energy transition.This predicament of the global energy transition features the synergy of two important actions in the energy sector:(1)the increasing use of low-co
181、st renewable power technologies and(2)the wider adoption of electricity to power end-25 use applications in transport and heat.These two options together with energy efficiency and savings create a scope of action that is straightforward:technologies and solutions that foment electrification and eff
182、iciency have an advantage position in the energy transition.Figure 13:Renewables,efficiency and electrification dominate energy transition Source:IRENA Electrification allows for the use of carbon-free electricity in place of fossil fuels in end-use applications,and significantly improves the overal
183、l efficiency of energy service supply.Electric vehicles,for instance,are more efficient than internal combustion engines.For instance,hydropower,solar or wind generation,as well,is more efficient than fossil fuel,even natural gas generation.And within this rationale,it is also important that reducti
184、ons in energy intensity are accelerated.According to WETO(2021)the evolution of emissions phaseouts of coal and oil is achievable,if electrification with green and clean technologies and measures are deployed and implemented in the energy sector.The share of renewable energy in total primary energy
185、supply would rise from 14%in 2018 to 74%in 2050.This is equivalent to an average annual growth rate of 1.87%,an eight-fold increase from recent years.At the same time the fossil fuel share would drop from 86%in 2018 to 26%by 2050 and total global energy use would be nearly constant between 2018 and
186、2050 while economic activity nearly triples.Figure 14:Phaseouts of carbon emissions from coal and oil,2021-2050 Source:IRENA 26 The combination of the large-scale adoption of renewable energy technologies with high levels of electrification result in the largest increase in the rate of energy intens
187、ity improvement.Just under 18%of the improvement(0.3 pp per year)comes from the use of renewable energy technologies such as solar,wind and hydro to supply energy for electricity and heat,as well as a shift from traditional uses of bioenergy to modern forms of renewable energy.The largest improvemen
188、t,making up over 40%(0.7 pp per year),comes from electrification,such as electric vehicles in road transport and heat pumps for heating and cooling applications.In total,the combination of renewable energy and electrification makes up almost 60%of the improvement needed to achieve the scenarios ener
189、gy intensity goal.It is relevant to notice that an important contribution will also come from structural and behavioural changes providing almost 10%of the needed efficiency improvement(0.15 pp per year).The narrative of the WETO(2021)adds to the predicament of electrification and efficiency another
190、 key element:to foment the application of the principles of a circular economy.This will play an increasingly important role in forthcoming decades,not only furthering reductions in energy consumption,but increasing the efficiency of resource use,as well as improvements in material efficiency in ind
191、ustry due to innovations.The WETO(2021)is clear on what path to follow for a sustainable,just and inclusive energy transition.As it can be depicted in the breakdown of this future scenario(see figure below),by 2050,electricity will become by far the most important energy carrier.Under the 1.5C Scena
192、rio,direct electricity consumption in end-use sectors(excluding the electricity needs for green hydrogen production)would more than double compared to 2018,reaching close to 50000TWh by 2050.Transport and hydrogen production will emerge as significant new electricity markets.In addition,around 20770
193、TWh would be needed to produce green hydrogen by 2050.The direct electrification share of final energy consumption,which includes direct-use of electricity but excludes indirect-uses such as e-fuels,will exceed 50%by 2050.The use of green hydrogen and green-hydrogen-based carriers,such as ammonia an
194、d methanol,as fuels,can reach 7%in 2050 from negligible levels today25.In total,direct and indirect electrification would reach 58%of final demand.Figure 15:Breakdown of total final energy consumption(TFEC)by energy carrier in 2018 and 2050(EJ)in the 1.5C Scenario Source:IRENA(June 2021)27 Note:The
195、figures above include only energy consumption,excluding non-energy uses.For electricity use,25%in 2018 and 90%in 2050 are sourced from renewable sources;for district heating,these shares are 9%and 90%,respectively;for hydrogen(direct use and e-fuels),the renewable energy shares(i.e.,green hydrogen)w
196、ould reach 66%by 2050.The category“Hydrogen(direct use and e-fuels)”accounts for total hydrogen consumption(green and blue)and other e-fuels(e-ammonia and e-methanol).Electricity(direct)includes all sources of generation:renewable,nuclear and fossil fuel based.1.5-S=1.5C Scenario;EJ=exajoule.The hig
197、h expectation of utilizing green electricity to decarbonize the energy sector brings into attention that the transport sector will require a dramatic change.In the share of electricity in final energy consumption would rise from 1%in 2018 to 49%by 2050.Technological progress,notably the evolution of
198、 batteries,has greatly improved the economic case for electric vehicles in recent years,and the scope of application is quickly expanding to a broader set of road vehicle segments and types of services.If ongoing cost reduction trends consolidate,by 2050 the bulk of global road transport services co
199、uld be delivered cost-effectively with electric technology.In IRENAs 1.5C Scenario,electric vehicles account for more than 80%of all road transport activity by 2050 (88%of the technology mix in light-duty vehicles and 70%in heavy-duty vehicles).The stock of electric cars would rise from 10 million t
200、oday to over 1 780 million by 2050;the stock of electric trucks would rise to 28 million by 2050.Another notable conjunction in the electrification of end-use sector is expressed within industry activities.The direct electrification share in industry would rise from 28%in 2018 to 35%by 2050.Already
201、many electricity-intensive industries such as aluminium smelters are linked with generation assets that offer cheap electricity from hydropower,and this is likely to increase in the coming years.For low-temperature industrial heat needs,heat pump installations would increase to 80 million by 2050.El
202、ectricity is already the single-largest energy carrier in the buildings sector,making up 32%in 2018,and this share will rise to 73%in 2050 in the 1.5C Scenario.This is equivalent to 21300 terawatt hours by 2050,a doubling of electricity demand in the sector compared to the 2018 level.Driving this in
203、crease is not just the wider adoption of electric appliances,but significant electrification of heat,growth in cooling demand and electric cooking.In addition,heat pumps are a key and efficient technology and will grow eight-fold to over 290 million units installed by 2050 compared to 38 million uni
204、ts in place today.Accordingly,the double axis of electrification and efficiency in the energy transition has two relevant sectors that generate a set of challenges and opportunities.Both transport and industry,will be two of the main sectors that will be decisive in order to achieve the results need
205、ed in a 1.5C Scenario.Flexibility in the power system A cornerstone in the tenet of electrification of the energy sector implies that higher rates of variable renewable energy integrated in the energy systems,then a wider set of responses are needed to couple with flexibility.By 2050,73%of the insta
206、lled capacity and 63%of all electricity generation would come from variable resources(solar PV and wind),up from 15%of installed capacity and 7%of electricity generation in 2018.Such a level could be manageable with current technologies leveraged by further innovations beyond technologies extending
207、to market design,regulations and system operation measures.For instance,thirty flexibility options were identified by IRENA as part of its innovation tool that may be combined into comprehensive solutions,taking into account the specifics of economy-wide and regional power systems26.28 On a technolo
208、gy level,both long-and short-term storage will be important for adding flexibility.The production of a very large volume of hydrogen from renewable power in combination with hydrogen storage can help provide long-term seasonal flexibility.Flexibility will also be provided through additional measures
209、,including power grid expansion and operational measures,demand-side flexibility solutions,power-to-heat and other sector coupling options27.Smart solutions,such as smart charging of electric vehicles,can greatly facilitate the integration of VRE by leveraging storage capacity and the flexibility po
210、tential of the demand side28.The role of hydrogen is vital As global economies aim to become carbon neutral,competitive hydrogen and synthetic fuels derived from hydrogen,such as ammonia,methanol and kerosene,will offer an emission mitigation solution to industry and transport sectors,which are hard
211、 to decarbonise through direct electrification.Hydrogen can help to achieve carbon neutrality in energy-intensive,hard-to-decarbonise sectors like steel,chemicals,long-haul transport,shipping and aviation.It can also play fundamental roles in balancing renewable electricity supply and demand by abso
212、rbing short term variations as well as acting as an option for long-term storage to help balance renewable variability across seasons.The 1.5C Scenario,green and blue hydrogen production grows from negligible levels today to over 74 exajoules(EJ)in 2050.In this context,hydrogen needs to be low carbo
213、n from the outset and ultimately green,that is,produced by electrolysis of water using renewable electricity.Green hydrogen currently costs between two and three times more than blue hydrogen,which is produced using fossil fuels in combination with carbon,capture and storage(CCS).Falling renewable p
214、ower costs and improving electrolyser technologies could make green hydrogen cost competitive by 203029.Sustainable bioenergy in the energy transition Bioenergy including solid biomass,biogas and biomethane,and liquid biofuels,makes up a large share of renewable energy use today and will remain a si
215、gnificant source of fuel,both in industry and transport.Bioenergy in total would represent 25%of total primary energy supply by 2050 in the 1.5C Scenario.Such a level translated to the need of just over 150 EJ of biomass primary supply,a three-fold increase compared to 2018 levels.Although the estim
216、ate is at the higher end of the sustainable biomass supply potential estimated by IRENA and other institutions for 2050(IRENA,2014,IRENA,2021,2016a,2016b;Faaij,2018,see references at the end of this section),such a level can in principle be supplied sustainably without causing negative land-use chan
217、ges.However,a major challenge is to scale up biomass production to those levels,while avoiding adverse environmental or social consequences.To ensure that biomass supply is environmentally,socially and economically sustainable,it is pivotal to deploy globally robust policy frameworks for regulation,
218、certification and monitoring,and responsible sourcing practices by industry actors.On application side,bioenergy will be needed across the energy to provide heat in industrial processes and feedstock in the petrochemical industry to produce chemicals and plastics,cooking and space and water heating
219、in buildings and fuels for transport,especially in the aviation sector.In the light of sustainable development goals of increasing access to clean cooking fuels,traditional uses of bioenergy(representing around one-quarter of energy demand in 2018,much of it unsustainably sourced and inefficiently u
220、sed)will be replaced with a combination of 29 modern biomass cook stoves,biogas and electric stoves.Additionally,the use of biomass coupled with CCS in the power sector and some industrial sectors will be critical in delivering much needed negative emissions to achieve the carbon neutrality goal.Car
221、bon capture and sequestration and BECCS While much can be achieved by electrification and efficiency to decarbonize the future in a 1.5C Scenario,some emissions remain in 2050 from fossil fuel use and industrial processes.There will thus be a need for both CCS technologies and also CO2 removal(CDR)m
222、easures and technologies that,combined with long-term storage,can remove CO2 from the atmosphere,resulting in negative emissions.In the 1.5C Scenario,the role of CCS is limited,targeting process emissions from cement,iron and steel,hydrogen and chemical production,with a limited deployment for waste
223、 incinerators.Together the use of CCS and CCU in industry and CCS for fossil-fuel-based hydrogen production expand from 0.04 Gt/year of captured CO2 today,accounting 24 commercial fossil-fuel-based CCS and CCU facilities in operation globally,to 3.4 Gt/year of CO2 in 2050.CDR measures and technologi
224、es include nature-based measures such as reforestation as well as BECCS,direct carbon capture and storage(DACCS)and some other approaches that are currently experimental.In the 1.5C Scenario,the use of BECCS in power,co-generation plants and some industrial processes such as cement,chemicals and pul
225、p mills,would require rapid scaleup leading to 4.7 Gt/year of CO2 captured and stored per annum in 2050,compared to less than 0.002 Gt/year of CO2 captured in 2020 from three operational commercial plants.For the latest update on this subject see IRENAs report-Reaching Zero with Renewables Capturing
226、 Carbon(IRENA,October 2021).This Technical Paper explores the status and potential of carbon capture and storage(CCS),carbon capture and utilisation(CCU)and carbon dioxide removal(CDR)technologies and their roles alongside renewables in the deep decarbonisation of energy systems.The paper summarises
227、 the status of these technologies in terms of current deployment and costs,potential future roles,and the challenges and prospects for scaling-up their use in the context of the 1.5C climate change goal and achieving net-zero emissions by 2050.From technology avenues to the investment arena In the W
228、ETO(2021)is crystal clear that a palate of technologies,measures and solutions are needed to ensure a sustainable energy transition.This brings into question the gap between research,development and deployment of this technological matrix,which can be vast depending on which technology or solution i
229、s outlined.A climate-safe future calls for the scale-up of investment from the currently planned USD 98 trillion between 2021 and 2050 under the Planned Energy Scenario(PES)to USD 131 trillion under the 1.5C Scenario(see figure below).This represents an incremental increase of 34%in investments from
230、 the planned investments until 2050.This investment in the 1.5C Scenario will yield a cumulative payback of at least USD 61 trillion by 2050.Hence,the overall balance from the energy transition is positive,with benefits greatly exceeding costs.The 1.5C Scenario demands an additional investment of US
231、D 1.1 trillion per year over the PES,plus the redirection of investments from fossil fuels towards energy transition technologies i.e.,renewables,energy efficiency and electrification of heat and transport.This makes up to more than 80%of the total energy sector investments,namely,USD 116 trillion i
232、n cumulative terms to 2050 or in annual terms of USD 3.8 trillion per year.30 On average,over the next three decades the investment needed for the energy transition represents only about 5%of global gross domestic product(GDP)in 2019.This is within the current capacity of global financial markets,wh
233、ich reached a volume of some USD 200 trillion in 2019(World Bank,2019;SIFMA,2020,see references at the end of this section).Figure 16:Total investment by technology:PES and 1.5C Scenario(2021-2050)Source:IRENA(June 2021)High upfront investments are critical mainly to enable the accelerated deploymen
234、t of key renewable energy technologies in the power sector;a massive scaling up of electrification of transport modes and heating applications,along with an expansion of accommodative infrastructure;and large-scale green hydrogen projects.In order to understand the investment implications of the tec
235、hnological avenues highlighted in the WETO(2021),Table below depicts a breakdown of the investment that is needed,by comparing historical annual investments per year in relation to the 1.5C Scenario.31 Table 1:Annual average investments in power and end uses,historical(2017-2019)and needed to meet 1
236、.5C Scenario(USD billion/year)Source:IRENA,June 2021 Note:Power generation capacity:Deployment of renewable technologies for power generation.Grids and flexibility:Transmission and distribution networks,smart meters,pumped hydropower,decentralised and utility-scale stationary battery storage(coupled
237、 mainly with decentralised PV systems)and hydrogen for seasonal storage.Renewables direct uses and district heat:Renewables in direct end-use and district heat applications(e.g.,solar thermal,modern bioenergy).Energy efficiency in industry:Improving process efficiency,demand-side management solution
238、s,highly efficient energy and motor systems,and improved waste processes.Energy efficiency in transport:All passenger and freight transport modes,notably road,rail,aviation and shipping.Key efficiency measures include light-weight materials,low friction designs,aerodynamic improvements,among others.
239、Vehicle stock investments are excluded.Energy efficiency in buildings:Improving building thermal envelopes(insulation,windows,doors,etc.),deploying efficient lighting and appliances,equipping smart homes with advanced control equipment,replacing less efficient buildings with energy efficient buildin
240、gs.Hydrogen electrolyser and infrastructure:Electrolyser capacity(alkaline and polymer electrolyte membrane)for the production of green hydrogen and infrastructure for the transport of hydrogen.Bio-and hydrogen-based ammonia and methanol:Production of ammonia and methanol from biomass and hydrogen f
241、eedstocks.Carbon removals:CCS deployment,mainly for process emissions in industry and blue hydrogen production.BECCS deployment in cement and power and cogeneration plants.Circular economy:Material and chemicals recycling and bio-based alternative products(e.g.,bioplastics).BECCS=bioenergy with CCS;
242、CCS=carbon capture and storage;CSP=concentrated solar power.In the power sector,accelerated investment of USD 1.7 billion per year would account for 44%of the total required energy transition investment over the period to 2050.Investments would be directed towards additional renewable power generati
243、on capacity,grid extension and grid flexibility measures ranging from better renewable power generation forecasting to integrated demand-side flexibility and stationary battery storage,or so-called Power to X.32 Transport investments would rise to USD 375 billion per year counting for 10%of the tota
244、l transition-related investment.This excludes the incremental costs of electric vehicles.When it comes to hydrogen,Investments in electrolysers,hydrogen supply infrastructure and renewables-based hydrogen feedstocks for chemical production would exceed USD 161 billion per year on average through 205
245、0.Bioenergy investments would rise to USD 226 billion per year(6%of total transition-related investment),most of it to increase the biofuels supply.The average annual investment needed in the buildings sector will count for USD 1.09 trillion per year.This investment is dominated by energy efficiency
246、 investment counting for USD 0.96 trillion per year and the remainder investment going for heat pumps and uses of other renewables,largely solar thermal.Current government strategies already envisage significant investment in the energy sector counting for USD 98 trillion by 2050.Collectively referr
247、ed in the WETO(2021)as the Planned Energy Scenario(PES),this scenario imply a near doubling of annual energy investment,which in 2019 amounted to USD 2.1 trillion.Substantial funds will flow towards modernization of ailing infrastructure and meeting growing energy demand.However,the breakdown of fin
248、ancing for technology under the 1.5C Scenario differs greatly from current plans in PES.Namely,USD 24 trillion of planned investments will have to be redirected from fossil fuels to energy transition technologies between now and 2050.Funding structures in the 1.5C Scenario are markedly different in
249、terms of capital sources,public and private,and types of capital,equity and debt.In 2019,USD 1.6 trillion in energy assets were financed by private sources,accounting for 80%of total energy sector investment.That share would grow dramatically under the 1.5C Scenario.The share of debt capital needs t
250、o increase from 44%in 2019 to 57%in 2050,almost 20%more than under the PES.Conclusion A net zero carbon future by 2050 might be perceived as a daunting challenge.Much of todays energy infrastructure and capital stock would need to be replaced in the next three decades to translate this vision into a
251、 reality.The world needs to capitalize by taking immediate,collaborative and concrete actions to meet the challenge of climate change.IRENAs analysis condensed in the WETO(2021)indicates that such a transformational quest is feasible.Achieving it will require a massive effort that highlight several
252、fronts that require attention when it comes to link the aims and goals of technological solutions and measures within current investment capacities and opportunities.These core features can be outlined as it follows:1.The rate of decline in energy intensity must move from the 1.2%recorded in recent
253、years to 3%.Here,renewable power,electrification and circular economy principles have key roles to play,as do conventional energy efficiency technologies.2.Annual growth in renewable energys share in the globes primary energy production needs to accelerate eight-fold from its share in recent years.3
254、.Renewable power generation capacity must grow from over 2 800 GW today to 27 500 GW by 2050,or 840 GW per year and a fourfold increase in the annual capacity additions recorded in recent years.4.Electric vehicle sales must grow from 4%of all vehicle sales today to 100%,with the stock of electric ve
255、hicles growing from 7 million in 2020 to 1.8 billion in 2050.5.Hydrogen demand must increase from 120 Mt to 614 Mt in 2050,a fivefold increase.The share of clean hydrogen in overall demand needs to grow from 2%to 100%.Two-33 thirds of demand would be met by green hydrogen;one-third by blue.Meeting t
256、hat goal will require the addition of 160 GW of electrolysers each year between now and 2050,from the 2020 base of 0.3 GW of installed capacity.6.The total primary supply of biomass needed to achieve net zero emissions by 2050 would be just over 150 EJ,a near tripling of primary biomass use in 2018.
257、Based on a detailed assessment of the potential supply of sustainable biomass,this appears feasible.7.Carbon capture and storage must grow from 0.04 Gt captured in 2020 to 7-8 Gt in 2050,with BECCS accounting for half for the total amount captured and stored.8.Investment in the energy transition wil
258、l need to increase up to 34%from planned levels.This implies USD 131 trillion over the period to 2050 under the 1.5C Scenario.This investment in the 1.5C Scenario will yield a cumulative payback of at least USD 61 trillion by 2050.9.A holistic global policy framework is necessary to guide climate ac
259、tion under the 1.5C Scenario.Climate policies,including fiscal policy aligned with climate objectives,represent an important component of such a framework.A diverse portfolio of measures and instruments focused on enabling and supporting the transition must be integrated into a wider and transparent
260、 policy strategy that accounts for the fact that policies introduce strong links and feedback between energy,economic and social systems.References World Energy Transitions Outlook.IRENA,June 202130 Innovation Outlook Renewable Methanol.IRENA,January 202131 Reaching Zero with Renewables Carbon captu
261、ring.IRENA,October 202132 Green Hydrogen Cost Reduction Scaling up Electrolysers to meet 1.5C Climate Goal.IRENA,December 202033 Renewable Power Generation Costs in 2020.IRENA,June 202134 Power System Flexibility for the Energy Transition.IRENA,November 201835 Innovation Outlook:Smart charging for e
262、lectric.IRENA,May 201936 Reaching Zero with Renewables:Biojet Fuels.IRENA,July 202137 World Bank(2019a),“GDP(current,US$)”,World Bank,Washington D.C.38.SIFMA(2020),Capital Markets Fact Book 2020,Securities Industry and Financial Markets Association39 Global bioenergy supply and demand projections:A
263、working paper for REmap 2030,working paper.IRENA(2014)40 Unlocking Renewable Energy Investment:The role of risk mitigation and structured Finance.IRENA(2016a)41 Renewable Energy Benefits:Measuring the Economics,IRENA(2016b)42 Securing sustainable resource availability of biomass for energy applicati
264、ons in Europe;review of recent literature.Faaij(2018),University of Groningen,Groningen43.34 1.1.3.Key Variables for Carbon Neutrality Scenarios Urban planning of the future should facilitate cities and municipalities developing on the Race to Zero pathway.The race to zero means satisfying two contr
265、adicting objectives:on the one hand,diminishing global CO2-emissions as quickly as possible,while on the other hand keeping GDP steadily increasing.Even though this is altogether a complex process,its essential aspects can be summarized in a simple way by using just few key data series:population,CO
266、2-emissions,GDP,energy,and renewable energy.Four of these series are being used in the Kaya identity named after his developer,the Japanese energy economist Yoichi Kaya44.The Kaya identity states that Emissions=population x(emissions/energy)x(energy/GDP)x(GDP/capita)By dividing the equation by popul
267、ation,the second equation below can be found.?=?Basic relationship:emissions,population,GDP?=?disaggregating emissions/GDP?=?showing per capita energy use Disaggregating energy into its renewable and non-renewable parts?=?Figure 17:Equations derived from the Kaya identity Source:APSEC The key indica
268、tor for measuring progress between contradictory objectives such as emissions and GDP is the emissions intensity of GDP(emissions/GDP).For this reason,the first formula above puts this indicator to evidence.The easiest way to keep population within all these formulae is to use per capita data throug
269、hout the formulae,that is per capita emissions on the left,and per capita GDP or per capita energy on the right.The table is self-explanatory about the mathematical transformations.Emissions intensity of the world as well as in the APEC region have diminished over the past decades.Since the financia
270、l crisis in 2009,the diminution has been faster at global average as well as in the APEC region.During the period 1990 2009,global emissions intensity has diminished linearly by 4.6 tCO2/million USD PPP 2017 per year,and by 7.2 tCO2/million USD PPP 2017 per year in the decade 2010 2020.APEC emission
271、s intensity diminished linearly by 5.1 tCO2/million USD PPP 2017 per year in the period 1990 2009 and 35 by 10.5 tCO2/million USD PPP 2017 per year in the period 2010 2020.In APEC,the linear diminution in the second period was more than double of the linear diminution of the first period.If the tren
272、d since 2010 continues,APEC will be carbon neutral in 2050,and the world in 2057.Figure 18:Emissions intensity of APEC and world compared Source:APSEC,based on StatsAPEC data The second formula in the figure about the Kaya identity above shows the relative role of increased decarbonization of energy
273、(emissions/energy)and increased energy efficiency(energy/GDP)during the race to zero.The third formula shows per capita energy use.The fourth formula shows how evidencing the role of renewable energy is possible at the end by separating energy into two parts,renewable and other energy.Renewable ener
274、gy is the dominant contributor to de-carbonize energy,i.e.,diminish the emissions/energy ratio.These few data series allow characterizing the possible pathways by their mix of carbon-free energy and energy efficiency as will be shown further down.Before going into these details,it is necessary to gi
275、ve some further explanations about a carbon neutral society.It will be argued here that a carbon neutral society is in reality a“1t CO2-society”,meaning a society which emits at least 1 ton CO2 per capita per year which is the floor level of gross per capita CO2 emissions.Addressing climate change i
276、mplies making global emissions inventories of all possible GHG sources.If this inventory comprises all anthropogenic CO2 emissions,this includes at least three different sources:1)emissions caused by fossil energy technologies(comprising all combustion engines and combustion devices),2)emissions cau
277、sed by agricultural livestock,and 3)emissions caused by human metabolism.This report defines a carbon neutral society 36 as a society having the same biological components as today,but whose energy technologies are all CO2 neutral.The biological components are essentially human beings and agricultur
278、al livestock.The“1t-CO2-society”therefore allows CO2 emissions originating from human physiological activity and those originating from agricultural livestock.CO2 emission from human physiological activity can be estimated by direct measurement of energetic activity and multiplied by the relevant CO
279、2 coefficients.The figure below is taken from a life cycle assessment of the average Spanish diet published in 2010.It states the average annual per capita emission from food ingestion in Spain as 276kg CO2,222kg water,and 90g CH4(methane),whereby 242 kg of physiological oxygen is being consumed per
280、 capita every year.These figures are not necessarily representative of the global average.Food energy supply worldwide varies from the simple to the double depending on the culture and development level.Furthermore,average global food energy supply has increased by 33%between 1961 and 2019,reaching
281、2920kcal/day/person45 of which some 17%are wasted46.Physiological per capita CO2 emissions would show the same pattern.Figure 19:Environmental annual per capita balance of food Source:Ivan Muoz and others(2010)47 The Global Warming Potential(GWP)of methane is much higher than the one of CO2 and shou
282、ld,therefore,not be automatically neglected.At the time of its emission,the GWP of methane is 120 times as high as the GWP of CO2.As methane is disappearing from the atmosphere due to interactions with other gases,it has an average lifetime in the atmosphere of about 12 years48,which is much shorter
283、 than the one of CO2 which stays in the atmosphere during hundreds of years.For this reason,the Accumulated Global Warming Potential(AGWP)of CO2 steadily increases with time whereas the AGWP of methane flattens after about 40 to 50 years.After 100 years,the AGWP of methane is around 23 times as high
284、 as the one of CO2.This factor(23)is most often cited when Global Warming Potential(GWP)of methane is compared with GWP of CO2.37 Figure 20:Global Warming Potential and Accumulated Global Warming Potential Source:IPCC WG1 AR5 Chapter 08 Radioactive forcing 49 An estimate of the CO2 emissions of live
285、stock can be taken from the Global Livestock Environmental Assessment Model(GLEAM)of the FAO,available in several languages.GLEAM 2.0(2017)includes an assessment of greenhouse gas emissions.Global livestock emissions amount to 7608 Mt CO2-eq in total(see fig below).The figure also shows the mitigati
286、on potential,whereby producers in each system,region and agroecological zone were to apply the practices of the 10th percentile of producers with the lowest emissions intensities,while maintaining constant output and without making changes to farming systems.In that scenario,the global livestock emi
287、ssions would be lowered from 7608 Mt CO2-eq(or about 950kg CO2 per capita)to 5075 Mt CO2-eq(or about 630kg CO2eq per capita).Figure 21:CO2-eq and mitigation potential of global livestock sector Source:FAO GLEAM 2.050 In sum,the GHG per capita emissions of agricultural livestock and human metabolism
288、can be said to be at least 1t CO2 per year,of which less than one third is from human metabolism and more than two thirds from agricultural livestock.With present global population of 8 billion,present global CO2 emissions amounts to 8Gt CO2 per year which compares to the pre-industrial(1750)level o
289、f around 9.5Gt CO2 per year51.As global population is likely to peak around the 10 billion level,a comparable emission level would presumably be sufficiently low to be absorbable by land and oceans.At present,global GHG emissions are around 50Gt per year,of which three quarters(37Gt)are CO2,17%metha
290、ne,6.2%nitrous oxide and 2.1%fluor gases52.Absorption by land and oceans depends on the cumulative emissions stored in the atmosphere.The scale on the figure below indicates the cumulative CO2 emissions since 1850.38 The grey area shows the proportion of CO2 stored in the atmosphere.The scenarios ar
291、e differentiated by their respective radiative forcing measured in W/m2.As an example,SSP5-8.5 means radiative forcing of 8.5W/m2.In this example,the anthropogenic radiative forcing of 8.5W/m2 is added to the 324W/m2 of non-man-made or natural radiation coming from the atmosphere to the earth surfac
292、e53 and causing mean atmospheric temperature to rise above the pre-industrial average level of 15C.Due to the century-long life of CO2 in the atmosphere,limiting emissions to 1t CO2 per capita by 2050 might be sufficient to stabilize the average global temperature at 16.5C,but not to bring it back t
293、o the earlier level.Figure 22:Proportion of CO2 emissions taken up by land and ocean carbon sinks Source:IPCC 6th Assessment Report(AR6 WG1),August 202154 The equations presented further above are now used to state decarbonization objectives.At present,annual global per capita CO2 emissions are just
294、 under 5t.Achieving carbon neutrality means diminishing CO2 emissions by a factor 5.At the same time,GDP per capita PPP is expected to grow as BAU,i.e.,by 1.75%per year,doubling by approximately 2060.The scenario below provides for a high contribution of decarbonization(emissions/energy)decreasing f
295、ivefold,combined with a relatively low contribution(2fold decrease)of energy intensity(energy/GDP).Energy per capita would result in roughly the same level as today.With a 5fold decarbonization of energy(emissions/energy),this scenario is one of rapid development of renewable energy.Figure 23:Exampl
296、e 1 of global scenario:rapid decarbonization and slow energy intensity Source:APSEC 39 In the second example,if energy intensity(energy/GDP)improvement speed is doubled compared to the base period and reaches 2.7%p.a.as postulated by SDG 7.3,this will result in a stronger contribution of energy inte
297、nsity(diminish 4fold)by 2060.The two objectives of diminishing emissions per capita and increasing GDP per capita can now be attained even if decarbonization of energy is quite slower(2.5fold decrease).In this scenario,energy per capita will diminish by half by mid-century.Figure 24:Example 2 of glo
298、bal scenario:medium decarbonization and double energy intensity Source:APSEC In a third scenario,decarbonization of energy is even slower(around 1%p.a.),corresponding to the speed in the base period 1970 2000 and decreasing only 2fold by mid-century,then energy intensity improvement must be very hig
299、h(diminish 5fold)to still attain both goals,the emission per capita and the GDP per capita.Note that in this scenario,energy per capita will diminish 2.5fold by 2060,due to the very strong role of energy efficiency.Figure 25:Example 3 of global scenario:slow decarbonization and very high energy inte
300、nsity Source:APSEC These three scenarios show that the faster the decarbonization(i.e.,the greater the role of renewables),the less important the required contribution by energy efficiency to attain carbon neutrality.Conversely,the slower renewables grow,the higher is the required contribution of en
301、ergy efficiency to attain carbon neutrality.In the real world,energy efficiency is likely to diminish faster than above scenario 1(dividing by 2 by 2060)but slower than above scenario 2(dividing by 4 by 2060),requiring decarbonization of energy to take place at a factor between division by 5 and div
302、ision by 2.5 by 2060.40 1.1.4.2000-Watt-Society as Complement to Carbon Neutrality The question arises in this context of how much energy per capita would be necessary for,or at least compatible with,maintaining carbon neutrality(i.e.,the 1t CO2-society)over the long term.The above-described scenari
303、o-tool concentrates on the interplay between emissions per capita and GDP per capita.Energy per capita is somewhere in between.For 2019,the IEA55(Key World Energy Statistics 2021)indicates 79.1 GJ/capita/year for total global per capita energy supply(2019 data).The total final energy consumption(TFC
304、)is 417.973EJ or 54.5GJ/capita/year.These two figures convert to approximately 2500W and 1730W for per capita primary and final energy,respectively.To describe the necessary per capita energy consumption in a long term in a global perspective,recent literature56 created the concept of decent living
305、standard(DLS)and calculated the minimum energy requirement for DLS.The DLS is defined in a bottom-up approach identifying eight different dimensions(nutrition,shelter,hygiene,clothing,healthcare,education,communication,mobility)and for each dimension a certain number of services(e.g.,for the first d
306、imension:food,cooking appliances,cold storage),for which activity levels are determined and the associated energy consumption calculated.The calculations consider climatic and cultural differences but are independent of GDP.The result is given in the figure below,differentiating between global minim
307、um,global mean,and global maximum of 13.0,15.3,and 18.4 GJ/capita/year,respectively.The three values of 13.0,15.3 and 18.4 GJ/capita/year can be converted to 412,485 or 585J/s/capita,or 412,485 or 585W per capita,respectively.The minimum energy level for DLS can be averaged to 500W per capita.This i
308、ndicates the long-term bottom level of energy efficiency.The colours in the figure below show the breakdown into different services.Food(dark green)and vehicles(orange)are the biggest components.The right-hand figure shows where todays world is compared to the DLS which is indicated by the narrow gr
309、een line.Figure 26:Final energy for a Decent Living Standard(DLS)Source:Millward-Hopkins and others57 Thus,the per capita energy requirement for DLS is about 5 times lower than todays global per capita total energy supply(TES),or 3.5 times lower than todays global per capita total final energy consu
310、mption(TFC).Note that the DLS should normally be compared to TFC rather than to TES.This comparison shows that even the third scenario above with five-fold energy intensity improvement and two-and-a-half-fold energy per capita diminution by 2060 is still far 41 away from diminishing energy per capit
311、a by a factor 3.5 by 2060,which would be the DLS bottom level.The per capita energy requirement for DLS can also be cross-checked with todays global per capita food energy supply(2939.54kcal/day/person)58 equalling 142W/capita which are available at the end of the food supply chain,of which 17%59 is
312、 wasted at the end of the food supply chain,leaving about 120W/capita(or 3.8GJ/year/capita or 2500kcal/day/capita)as effective food energy consumption today.Food energy consumption is shown dark green in the above DLS figure.In other words,DLS as regards food energy consumption is practically the sa
313、me as todays food energy consumption net of the waste at the end of the food supply chain.It is now interesting to analyse to what extent renewable energy can contribute to satisfy the energy requirements of DLS.For this analysis,it is assumed that all non-food energy of DLS,that is all the energy e
314、xcept the dark green bars in the left figure above should be supplied by renewable energy.The non-food energy requirement of DLS is calculated by deducting 120W per capita from 412,485 or 585W per capita,giving 292,365 or 465W per capita,respectively,rounded to 380W per capita.An SDG indicator that
315、can be used to track this is 7.b.1,Installed renewable energy-generating capacity for developing economies(in watts per capita).According to the metadata for this indicator60,it is to be understood as renewable electricity.Translating the installed capacity to the effective renewables production req
316、uires knowledge of the capacity factor of each technology.Capacity factors can be calculated for each technology based on available statistics.The figure below shows that in 2020,the capacity factor was highest for geothermal electricity(75%,left hand scale),while for offshore wind energy it was 33%
317、,for total renewable electricity 30%,for onshore wind 24%,for concentrated solar power 23%,and for photovoltaic 13%.Figure 27:Capacity factors for renewable electricity Source:APSEC based on IRENA data61 A long-term development in which wind and solar would play a stronger role would probably bring
318、down the total average capacity factor of renewable energy to around 20%.To generate 380W per capita in the long term,the installed renewable electricity-generating capacity would 42 therefore have to be around five times higher,that is 1900W per capita.This allows specifying the earlier concept of
319、the 2000W-(or 2kW)-Society62 as a society in which all non-food energy requirements of a Decent Living Standard(DLS)are satisfied by renewable electricity.With a capacity factor of 20%,installed renewable electricity capacity will be 1900W per capita,to which the net food requirement of 120W per cap
320、ita is being added.The 2000-Watt Smart Cities Association63 started promoting the concept of 2000W-Society at urban level.The situation of installed renewable electricity capacity for the developing world is described in the SDG7 tracking report for 2022.It gives a differentiated picture,depending o
321、n regions.While Eastern and South-Eastern Asia and Latin America and the Caribbean have relatively higher installed capacities,the rest of the developing world lags well behind(see figure below)64,where CAGR stands for calculated annual growth rate.Figure 28:Growth in renewable electricity capacity
322、per capita by technology across regions Source:Tracking SDG7 Report65 At global average,the installed renewable electricity capacity was at 362W/person in 2020,showing 7%annual growth rates and a peak growth rate as high as 9.5%in 2020,possibly as a reaction to the pandemic.If growth rates of the pe
323、riod 2008 2020 continue up to 2030,the world will more than double the capacity of installed renewable electricity by 2030 and attain 718W/capita.If the same growth rate continues thereafter,the 1900W/capita threshold will be attained in 2044.By 2050,the world would attain 2900W/capita of installed
324、renewable capacity.Figure 29:Installed renewable electricity capacity,world Source:APSEC,based upon IRENA data 43 For APEC economies,the installed renewable energy capacity is shown in the figure below.The average per capita installed capacity in 2020 was at 561W/person.At present,only Canada has re
325、newable installed capacity above the 1900W/person threshold.Figure 30:Installed per capita renewable electricity capacity in APEC,2020 Source:APSEC,based upon IRENA data Growth rates between 2005 and 2020 averaged 8.7%with a peak in the COVID19-year 2020 of 13.8%.If growth rates of the period 2005 2
326、020 continue until 2030,APEC will more than double the installed renewable energy capacity and attain 1293W/capita.The 1900W/capita threshold will be attained in 2035,and by 2050 the installed capacity will attain 7300W/capita.Figure 31:Installed per capita renewable electricity capacity in APEC,202
327、0 Source:APSEC,based upon IRENA data The preceding sections have outlined some of the material components of carbon neutrality.The following sections will now have a closer look at the financing gap that needs to be closed to attain carbon neutrality.44 1.2.Financing Gap 1.2.1.Financing Gap of the 2
328、015 Addis Ababa Action Agenda(AAAA)The UN 2030 Agenda for Sustainable Development was adopted in 2015 by the UN General Assembly and includes two parts:the Sustainable Development Goals and the 2015 Addis Ababa Action Agenda(AAAA),its financing arm.The substantive and formal link between the SDGs an
329、d their financing arm was a novelty,designed to ensure that SDGs could get funding for implementation.The 2015 Addis Ababa conference was the Third International Conference on Financing for Development(FfD3).Before that,FfD1 was held in Monterrey,Mexico,in 2002,adopting the so-called Monterrey Conse
330、nsus which reaffirmed the goal originally set in 1970 that Official Development Aid(ODA)should reach 0.7%of Gross National Income(GNI),an aggregate that is very similar to the GDP(see figure below).Besides that,Monterrey structured international financial cooperation by stressing actions within all
331、its essential six elements:Improving the domestic taxation systems of the developing world Mobilising foreign direct investment(FDI)from the private sector Using trade as source for financing development Enhancing technical cooperation Addressing external debt by debt reduction and debt rescheduling
332、 Addressing systemic questions and follow up These points have been reiterated in the Doha Declaration adopted at the Second International Conference on Financing for Development(FfD2)held in Doha in 2008.The Third International Conference on Financing for Development(FfD3)held in Addis Ababa in 201
333、5 reiterated the main points of earlier conferences and established a link to the SDGs which became the main substantive targets to be financed through international cooperation,and added a seventh action area:Science,technology,innovation,and capacity building Substantively,the AAAA affirms many SDGs,often by paraphrasing and repeating them.Only few paragraphs of the AAAA state concrete figures.T