energy conservation towards net zero essay competition

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UH Energy’s 2023 Critical Issues in Energy Writing Competition Focused on Net-Zero Future

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Contest Open to University Students from the Greater Houston Area

By Rashda Khan 713-743-7587

March 6, 2023

The first step to achieving any goal, including the ambitious pursuit of net-zero emissions by 2050, is to imagine the possibility. University of Houston’s Critical Issues in Energy Writing and Poster Competition, jointly sponsored by the UH Energy Transition Institute and the UH Energy Coalition, is asking Houston-area university students to imagine an answer to “Net Zero by 2050 - What will the world be like in 2050?”

By envisioning the challenges and solutions needed to create a net-zero future, organizers hope the students will inspire themselves and others to work toward making that future a reality.

“The Energy Transition Institute is all about getting students engaged in the future of energy. What better way to start than getting their ideas about life in 2050? Will we be successful in addressing the grand challenge of delivering abundant clean energy for all, while also protecting the planet? How will we do it, and how will life change?” said Joe Powell, founding executive director of ETI. “These students are the upcoming generation of thought leaders and difference makers – we want to hear from them.”

The top five winning entries will receive cash awards totaling $7,000. The deadline for submission of entries is Friday, March 31 at 11:59 p.m. (CST). Essays can be written by individuals, or at the most teams of two.

The Energy Coalition, a student organization working to solidify UH's position internationally as The Energy University, wanted to expand this year’s contest beyond the UH main campus and include undergraduate and graduate students from the broader UH System as well as other local universities serving the Houston community.

"Houston is the Energy Capital of the World so this competition is a very exciting opportunity for area students interested in the energy transition. The ideas presented by students will soon reflect in the industry and highly impact the energy transition,” said Sai Gudapati, vice chair of energy education for the Energy Coalition. “As members of the future workforce, this competition offers a great start to solving problems and meeting industry goals!"

According to the United Nations, to avert the worst impacts of climate change and preserve a livable planet, global temperature increase must be limited to 1.5°C above pre-industrial levels. To achieve this goal, as called for in the Paris Agreement, net emissions of greenhouse gases need to be reduced by 45% by 2030 and reach net zero by 2050. Many governments, corporations and industry associations have therefore announced roadmaps to achieve Net Zero by 2050. It is an ambitious task that must be tackled through commitment and collaboration from all stakeholders.

For more information, including competition guidelines, please visit UH Energy’s Critical Issues in Energy Writing Competition website .

The Energy Coalition is also hosting a virtual information session about the competition on Wednesday, March 8th, from 6:30 – 7 pm. To join the session, please visit here .

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How Energy Efficiency Will Power Net Zero Climate Goals

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IEA (2021), How Energy Efficiency Will Power Net Zero Climate Goals , IEA, Paris https://www.iea.org/commentaries/how-energy-efficiency-will-power-net-zero-climate-goals

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Massive improvements in efficiency are needed to achieve net zero targets.

In the lead-up to COP26, countries around the world are committing to new targets to reach net zero by 2050 or sooner. The energy sector is responsible for three-quarters of global emissions , and transforming it will be critical to tackling the climate crisis. But a “business as usual” approach will do little to achieve change at the scale which is required.

Energy efficiency represents more than 40% of the emissions abatement needed by 2040, according to the IEA Sustainable Development Scenario . Maintaining global growth and supporting development in emerging economies implies a sharp rise in consumption habits. Meeting this need requires a transformation of the existing energy system. Energy efficiency is the “first fuel”: reining in the scale of this unprecedented challenge, supporting net zero energy goals at lower costs, and delivering a wide array of benefits for society.

According to the IEA Efficient World Scenario, currently existing cost-effective technologies are sufficient to double global energy efficiency by 2040. Next-generation solutions, like digitalisation of energy systems and behaviourally informed policy making are opening the door to even further potential for efficiency improvements. To reach climate goals without hindering economic progress, countries need to prioritise transformational energy efficiency strategies across the whole economy. Ambitious targets require a dramatic rethink of the systems and habits that power our economies through innovative policy frameworks, technologies and novel approaches for accelerating progress.

Energy systems are going digital, unlocking a new vision of energy efficiency and transforming the energy landscape.

Digital technologies are transforming the energy landscape and creating a new generation of efficiency solutions. New digital solutions can limit production and distribution losses and accommodate growing shares of variable and distributed renewable energy while increasing grid flexibility. In recent years, energy management systems in buildings have also become smarter, integrating external data sources, like weather conditions, traffic patterns, and more. Using artificial intelligence, these advanced systems can forecast energy demand and improve response capabilities.

The potential benefits of capitalising on these existing digital solutions are significant. IEA analysis estimates that through using the technology already available, we could improve the efficiency of 3070 terrawatt-hours (TWh) – more than 12% – of 2018 global electricity consumption. By 2040 that improvement potential will nearly double, representing about one-quarter of global electricity consumption. Governments can play a key role in scaling the market for these smart devices through standards, regulations, incentives or information sharing.

Digitalisation can be especially beneficial in the world’s rapidly growing cities where dense populations, increasingly high concentrations of electric vehicles, and innovative district energy, heating, and cooling systems can work in sync to optimise demand and consumption for decarbonisation.

Deep renovations to the global building stock are needed to achieve ambitious climate goals, and require innovative policy and funding packages to achieve the necessary scale.

Meeting the goals of the Paris Agreement will require buildings across the globe to improve energy intensity by 30-50% per square metre . There is no silver bullet solution; governments need to rapidly increase the ambition and scale of existing buildings policies, while also employing new policy tools, technologies, and business models.

Comprehensive energy efficiency renovations are key for decarbonisation, potentially improving the energy intensity per square metre by more than 50%. These so-called “deep retrofits” go beyond one-off upgrades to insulation or heating systems, requiring a suite of upgrades to the building envelope, heating and cooling systems and lighting. Some companies are already undertaking this critical work but innovative business models are needed to bring deep retrofits to scale. One innovative company, Energiesprong , performs deep retrofits on entire neighbourhoods at once – an approach that leverages economies of scale to make deep retrofits more cost-effective.

To scale up building efficiency renovations, governments can create net zero or positive energy building codes supported by minimum energy performance standards at point of sale or lease, as well as building performance ratings and disclosure programmes, with careful design and implementation. Performance standards could also be implemented on energy-intensive appliances, such as air conditioning, lighting, and industrial motors. Currently, more than 80 countries employ some form of minimum energy performance standards, but those standards are too low to drive improvements, as they remain below the technological potential that exists. The IEA is working with the Super-Efficient Equipment and Appliances Deployment Initiative and the United Kingdom’s Product Efficiency Call to Action to accelerate change in this sector through international collaboration.

Governments can also prioritise public and social housing upgrades and large scale low-interest loan incentives programmes to support the most vulnerable members of society. Such energy efficiency investments in buildings will have the added benefit for creating jobs in the aftermath of the pandemic, potentially creating around 15 jobs per million dollars invested, the highest jobs per spend value of any energy subsector, according to the recent IEA Special Report on Sustainable Recovery.

Insights on consumer behaviour should underpin policy and programme design to encourage efficiency choices.

Changing consumer behaviour will be critical to the success of ambitious climate goals, with shifts to more efficient transport choices representing the majority of behaviour changes that could support to achieving net zero by 2050. This may include reducing passenger flights for shorter journeys, increased walking and cycling, increased use of ride-sharing and micro-mobility systems, like shared bikes and scooters, and reduced speed on the road. A rapid conversion of the global passenger car fleet to electric vehicles will also contribute significantly to achieving net‑zero goals, not only because they reduce oil demand, but also because they are up to five times more efficient than conventional vehicles.

A range of new policies are needed to support these changes. Economic incentives can make more efficient consumer practices the easy and affordable choice, while regulatory measures combined with outreach and awareness campaigns can progressively eliminate more carbon-intensive options.

Insights from behavioural science should underpin the design and deployment of policy interventions to make them easy to adopt, attractive, and socially acceptable. In the transport sector, more streamlined ticketing systems, accessible platforms for real-time status information, and investments in infrastructure that make public transit more safe, convenient and reliable can help overcome behavioural and perception barriers to encourage hesitant or vulnerable users to take public transit, walk, or cycle more frequently. “Last-mile” solutions such as bike and scooter sharing are revolutionising urban transport systems by improving accessibility and convenience.

Next generation digital technologies can help to scale up efficiency solutions in residential buildings and encourage behaviour changes at home. Solutions like smart meters and thermostats, in-home displays, mobile applications, and web-based portals can provide consumers with real-time feedback on their energy consumption patterns and encourage behaviour change.

Regulations, incentives and information campaigns can bolster energy efficiency and accelerate decarbonisation in the industrial sector.

Industry is another notoriously “hard-to-abate” sector, involving capital-intensive, long-lived assets and complex, energy-intensive processes. Many discussions on decarbonising the industrial sector focus on material efficiency and low-carbon technologies and fuels, like carbon capture and green hydrogen. At the same time, reducing energy intensity is crucial, with an emissions reduction potential estimated between 25-30%, particularly in aluminium, paper and cement manufacturing.

The most effective approaches combine regulations, provision of information and incentives. Minimum energy performance standards for equipment are one of the best approaches to improving industrial energy efficiency. Setting specific targets for efficiency, consumption, or emissions for industrial subsectors is also fundamental. For example, China’s Top 10,000 Programme sets and closely monitors progress towards energy savings targets on more than 10 000 large energy intensive companies. Similarly, India’s Perform, Achieve and Trade scheme incentivises energy reductions through a tradeable energy savings certificate market.

Information campaigns and workshops for capacity building are particularly effective for small and medium-sized enterprises where investment decisions depend on a few individuals who may not be aware of efficiency benefits. Energy audits and digital management systems can also help policy makers and industries identify untapped opportunities and set ambitious and achievable efficiency targets.

Lastly, financial incentives can remove barriers to investments and trigger private capital. Governments can increase the supply of finance for efficiency investments by expanding pre-existing mechanisms and public funds for installing low-carbon technologies. Direct public financing is likely to be particularly important in many sectors in the short term and can be designed to maximise immediate activity and leverage additional private investment. Support for technical and commercial de-risking and agreements with energy service companies could help facilitate direct finance where it is needed and also attract additional private financing.

Energy efficiency is the “first fuel” for achieving high ambition climate goals, improving quality of life and creating jobs.

Energy efficiency is an essential tool for policy makers committing to high-ambition climate goals. The “ first fuel ” can reduce the overall costs of mitigating carbon emissions while advancing social and economic development, enhancing energy security and quality of life, and creating jobs. Governments can take full advantage of the opportunities presented by next-generation energy efficiency to accelerate progress toward net‑zero goals and higher global climate ambition.

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Essay Contest

  Winners of the SeS 2023 ESSAY contest

The Student Energy Summit 2023, in partnership with Cleary Gottlieb , a global law firm at the forefront of legal, regulatory, and policy developments regarding sustainability, is pleased to announce the results of the essay competition focused on Reimagining the Future .

Angga Misbahudin - Indonesia

Angga Misbahudin_SES Essay Contest - Angga Misbahuddin.pdf

Angga Misbahudin, S.IP., is a Master's student in Rural Development Management at Khon Kaen University, Thailand. He is a Co-Founder and researcher of "The Green Future Indonesia," focusing on rural community issues and promoting sustainable development through collaboration. His published research and international conference participation highlight his commitment to community development. Angga empowers rural communities through "Forum Litera," educating underprivileged youth, and digital environmental campaigns in "The Green Future Indonesia."

Sana' Khasawneh - Jamaica

https://drive.google.com/open?id=1F_7hxFJAlo0Eb15guAcyzeJWCKnUkQWh

Sana' Khasawneh is a young global road safety advocate who works as an Advocacy and Campaigns Manager at YOURS. Her academic background is in Architecture and planning; she also pursued her master’s in Road Safety and Sustainable Mobility. She believes that achieving a sustainable future for all begins with prioritizing energy efficiency. She thinks that young researchers need to be systematically involved in the decision-making process and have a say in policies that shape their future.

Manvendra Singh- India

https://drive.google.com/open?id=1SYBYXEnzUw08YtnSgGlQlnEY7i0SVlyX

Manvendra Singh, a B.A.LL.B (HONS.) student at University Five Year Law College, University of Rajasthan, Jaipur (Raj.), is dedicated to the subjects of climate change, renewable energy, digital anti-trust, and the interplay of AI and Law. As the Chief Strategy Officer and Co-founder of Climatability, a pioneering consultancy & management firm, he seamlessly integrates climate change, renewable energy, and sustainable management practices to guide organizations towards an eco-conscious future. He’s also an Administrator at the Indian National Association of Legal Professionals (INALP). His work with INALP strengthens his multifaceted contributions, culminating in his role as a UN rapporteur during COP-27, substantiating his commitment to climate change discourse. His dedication extends to amplifying climate finance and the EU Green Deal, demonstrated by his involvement in submitting carbon border tax reports. Nominated for the Law Society of England & Wales' Annual Roundtable Conference 2023, he eloquently represented India's stance on climate change and sustainability. Manvendra's multifaceted contributions embody his advocacy for a resilient and sustainable world.

About SES 2023 Essay Contest

About the competition.

The Student Energy Summit 2023, in partnership with CLEARY GOTTLIEB launched an essay contest focused on the theme Reimagining the Future with Renewable Energy in December of 2022.

Participants are asked to submit an essay focusing on the theme of Reimagining the Future.

The winner(s) of the essay contest will:

Receive fully-funded participation in the Student Energy Summit 2023 in Abu Dhabi in November 2023,

Be invited to virtually participate in a panel at the Youth Hub at the Abu Dhabi Sustainability Week 2023.

Essay selection criteria:

A selection committee made up of representatives from Student Energy Summit 2023 and CLEARY GOTTLIEB will evaluate the submissions based on the following criteria: 

Relevance to the theme: the essay clearly and creatively represents the theme of Reimagining the Future with Renewable Energy .

Originality and creativity: The content is unique and not derivative of other ideas and presents the theme in an original and compelling way.

hcwriting.com

Energy Conservation Towards Net Zero Article Writing | Best Essay

Energy Conservation Towards Net Zero Article Writing : Today our country India is focusing on development and research to drive innovation in the field of clean and green energy. To promote the electrification, India’s government has launched various initiative to conserve energy including expansion of cgd network, Ujjwal LPG, pursuing a road map for energy conservation towards net zero.

Table of Contents

Energy Conservation Towards Net Zero Article Writing 

Here we have provide Energy Conservation Towards Net Zero Article which is suitable for school and college students. This article is useful for those students who participate in the Energy Conservation Towards Net Zero Article Writing Competition.

Energy Conservation Towards Net Zero : As we move towards a sustainable future, one of the key areas we need to focus on is energy conservation. The world is facing a climate crisis, and we need to take urgent action to reduce our carbon emissions and move towards net zero. Energy conservation is a crucial part of this effort, as it can help us reduce our energy use and carbon footprint.

Energy conservation involves using less energy to achieve the same level of comfort and productivity. This can be achieved in a variety of ways, such as improving building insulation, using energy-efficient appliances, and using renewable energy sources. Here are some ways we can conserve energy and move towards net zero:

1. Improve Building Insulation : Buildings are responsible for a significant amount of energy use and carbon emissions. By improving building insulation, we can reduce the amount of energy needed to heat and cool buildings. This can be achieved by using energy-efficient windows and doors, adding insulation to walls and roofs, and sealing air leaks.

2. Use Energy-Efficient Appliances: Another way to conserve energy is to use energy-efficient appliances. This includes appliances like refrigerators, washing machines, and light bulbs. Energy-efficient appliances use less energy than traditional appliances, which can help reduce your energy bills and carbon footprint.

Read More : Energy Conservation Towards Net Zero Drawing

3. Use Renewable Energy Sources: Renewable energy sources like solar and wind power can provide clean energy without producing carbon emissions. By using renewable energy sources, we can reduce our reliance on fossil fuels and move towards net zero.

4. Implement Energy Management Systems : Energy management systems can help us monitor and control our energy use. This includes systems like smart thermostats and energy monitoring software. By using energy management systems, we can identify areas where we can conserve energy and reduce our energy bills.

Read More : Energy Conservation Towards Net Zero Essay writing

5. Encourage and Educate about Energy Conservation : Education and awareness are key to promoting energy conservation. We need to educate people about the benefits of energy conservation and encourage them to take action. This can be achieved through campaigns, workshops, and educational programs.

Conclusion:

energy conservation is a crucial part of our efforts to move towards net zero. By improving building insulation, using energy-efficient appliances, using renewable energy sources, implementing energy management systems, and educating and encouraging energy conservation, we can reduce our energy use and carbon footprint. We all have a role to play in this effort, and by working together, we can build a more sustainable future.

FAQs on Energy Conservation Towards Net Zero

Q- what is the meaning of energy conservation towards net zero , ans- energy conservation towards net zero or net zero for energy means producing as much clean energy as we consume, resulting in no carbon emissions., q- what does net zero mean example, ans-an example of net zero for energy is a building that produces its own renewable energy and uses energy-efficient measures to reduce its consumption., q- how can you write article on energy conservation towards net zero, ans- it is possible to write an article on net zero for energy with the help of this post. students can take ideas about energy conservation towards net zero from here., leave a comment cancel reply.

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Reaching Net Zero: Three Essays on Energy Conservation in Commercial Real Estate

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Today, the building sector is one of the largest contributors to global emissions, making it a key priority in the race towards net zero. The climate agenda is also beginning to play a major role in driving the value of commercial assets, incentivising businesses that occupy, manage and own real estate to engage in energy conservation. In three papers, this work assesses the effectiveness of a suite of voluntary and regulatory strategies in steering the market towards increased energy efficiency and lower energy demand. The first article explores the effect of the UK’s Minimum Energy Efficiency Standards (MEES) regulation on rental premiums of the London office market. The findings suggest that this policy has led to a significant decline in the rental value of office spaces directly affected by the regulation, as well as units with an energy performance certificate band closest to the compliance threshold. The second article examines the impact of energy management and productivity enhancing measures embedded in a green certification label that assesses sustainable operations and maintenance practices of existing buildings. Using data on four major US markets, the results indicate that while there are energy management features that decrease energy consumption, savings emerging from these measures are more than offset by certain indoor environment features. The third paper analyses the effectiveness of sub-metering in eradicating energy losses due to the split incentive problem by applying data on office buildings from seven US markets. The findings suggest that this feedback technology reduces inefficiencies arising from usage split incentives, while pointing to adverse energy consumption outcomes in contractual agreements where the tenant is responsible for energy payments. Nevertheless, a reduction in the variability of energy consumption and an increase in the rent premium are uncovered for this type of lease arrangement, suggesting that sub-metering may offer significant risk-reduction benefits in the eyes of the tenant.

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• Published: 20 October 2021

Energy systems in scenarios at net-zero CO 2 emissions

• Julianne DeAngelo   ORCID: orcid.org/0000-0001-9801-3288 1 ,
• Inês Azevedo 2 ,
• John Bistline 3 ,
• Leon Clarke 4 ,
• Gunnar Luderer   ORCID: orcid.org/0000-0002-9057-6155 5 ,
• Edward Byers   ORCID: orcid.org/0000-0003-0349-5742 6 &
• Steven J. Davis   ORCID: orcid.org/0000-0002-9338-0844 1 , 7  

Nature Communications volume  12 , Article number:  6096 ( 2021 ) Cite this article

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• Climate-change mitigation
• Energy economics
• Energy policy

Achieving net-zero CO 2 emissions has become the explicitgoal of many climate-energy policies around the world. Although many studies have assessed net-zero emissions pathways, the common features and tradeoffs of energy systems across global scenarios at the point of net-zero CO 2 emissions have not yet been evaluated. Here, we examine the energy systems of 177 net-zero scenarios and discuss their long-term technological and regional characteristics in the context of current energy policies. We find that, on average, renewable energy sources account for 60% of primary energy at net-zero (compared to ∼ 14% today), with slightly less than half of that renewable energy derived from biomass. Meanwhile, electricity makes up approximately half of final energy consumed (compared to ∼ 20% today), highlighting the extent to which solid, liquid, and gaseous fuels remain prevalent in the scenarios even when emissions reach net-zero. Finally, residual emissions and offsetting negative emissions are not evenly distributed across world regions, which may have important implications for negotiations on burden-sharing, human development, and equity.

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Introduction.

Limiting global mean temperature increase to 2 °C or even 1.5 °C relative to the preindustrial era 1 requires that global annual CO 2 emissions are net-zero or net-negative by the end of this century, and perhaps as soon as 2050 2 , 3 , 4 , 5 . In the broader context of climate stabilization, the magnitude of global temperature increase is directly proportional to cumulative CO 2 emissions, such that adding any amount of CO 2 to the atmosphere will increase future amounts of warming 2 , 6 . For these reasons, and because it is a clear and absolute target, achieving net-zero emissions is increasingly a goal of energy and emissions policies around the world 3 , 7 , 8 , 9 , 10 . Central to meeting this goal is a rapid and sweeping transformation of energy systems, including drastic reductions in the use of fossil fuels, substantial improvements in energy and materials efficiency, extensive electrification of energy end uses, and management of carbon 11 , 12 , 13 , 14 , 15 , 16 . Moreover, this transformation of energy systems must be reconciled with both sustainable development goals 17 , 18 and the considerable inertia of existing fossil energy infrastructure 19 .

Given this context, energy analysts are increasingly exploring the challenges and opportunities for net-zero emissions energy systems 20 , including detailed analyses of specific energy services and/or technologies 21 , 22 , 23 , 24 , 25 . A number of recent studies have examined the mitigation pathways of energy systems in integrated assessment model (IAM) scenarios that limit warming to below 1.5 °C 26 , 27 , 28 , 29 , 30 , providing insight about possible transformations of the energy-economy-land system. However, the common features and tradeoffs of such scenarios at the point when global CO 2 emissions reach net-zero have yet to be systematically assessed. These characteristics at the point of net-zero CO 2 can inform policies that might take varying approaches – including potential approaches that are not represented by current scenario pathways – to reach the same goal of net-zero emissions.

Here, we analyze 177 IAM scenarios from the public 1.5 °C Scenario Database (the SR1.5 database) 31 , 32 in which global sources and sinks (including land use and agriculture) reach net-zero CO 2 emissions by 2100 (see Supplementary Table  1 ). Details of our processing and analytic approach are described in the Methods section. In summary, we assess global and regional energy use, energy sources, residual emissions, electrification, and climate policy among the scenarios, finding robust features that span multiple IAMs 33 . For example, renewable sources represent roughly 60% of primary energy at the point when they reach net-zero CO 2 emissions—and often more than half of such renewable energy is provided by biomass. However, it is important to note that the scenario ensemble is not a representative sample that can be used to infer likelihood; individual scenarios are equally plausible given model constraints.

Energy use and timing of net-zero

Figure  1 shows the relationships among global energy and socioeconomic variables in the year of global net-zero emissions, broken out by the level of projected global warming. These categories include overshoot scenarios that return to the specified amount of warming by the end-of-century (see Methods). Among the 177 net-zero scenarios, those that avoid mean end-of-century warming of 1.5 °C (blue points) tend to have lower levels of global energy use (t-statistic = 9.2, p  < 0.001) and less GDP per capita (t-statistic = 8.6, p  < 0.001): of the 77 1.5 °C scenarios, GDP per capita is < $40,000 per person per year in 91% (median $27,914, range $20,103–$58,506) and total final energy use is <500 EJ in 69% (median 439 EJ, range 227–646; Fig.  1a ). In contrast, energy use and GDP per capita are substantially higher in scenarios that achieve net-zero emissions but exceed 1.5 °C (green and orange points): of the 100 2 °C and >2 °C scenarios, GDP per capita is < $40,000 per person per year in only 43% (median $43,642, range $20,299–$116,666) and total final energy use is <500 EJ in 24% (median 580 EJ, range 345–857; Fig.  1a ). Although this may reflect reduced energy use and economic activity in scenarios with the most ambitious mitigation, it is also related to when net-zero emissions occur in these scenarios. Supplementary Fig.  1 supports this idea by showing that warming level is not strongly related to the levels of energy use and GDP ultimately reached in net-zero scenarios. Figure  1b shows that the warmer scenarios achieve net-zero emissions in progressively later years (median for all scenarios = 2064, range 2037–2100), because the additional time for the economy and energy system to grow in these scenarios leads to higher cumulative CO 2 emissions (and therefore higher levels of subsequent warming). Supplementary Figs.  2 and 3 support this idea that more ambitious scenarios achieve lower levels of warming via faster energy system transformations. However, in contrast to the timing of net-zero, the timing of peak emissions is consistent across the scenarios (and essentially immediate): emissions peak in 2017 (range 2014–2027) for 1.5 °C scenarios, in 2019 (range 2011–2029) for 2 °C scenarios, and in 2022 (range 2010–2036) for >2 °C scenarios (Fig.  1b ). Although many scenarios show emissions peaking prior to 2019 (which did not occur), the regional, socio-economic, and technological representations that prevail when these scenarios achieve net-zero emissions may nonetheless provide valuable insights for net-zero emissions policies.

Scenarios that reach net-zero emissions show differences in energy use ( a ), emissions trajectory ( b ), energy sources ( c ), residual emissions ( d ), electrification ( e ), and policy ( f ), particularly with respect to warming levels (blue = <1.5 °C, green = <2.0 °C, orange = >2.0 °C). Points represent individual scenarios, with a frequency of scenarios shown along each axis for each warming level (colors corresponding to warming levels) and for all scenarios (black). Colored dashed lines and values indicate medians for warming groups, with colors corresponding to warming groups. Gray dashed lines indicate reference values for the year shown in gray.

Energy sources

The use and sources of renewable energy in net-zero scenarios vary considerably, with no obvious relationship to the level of warming (Fig.  1c ). Although the median share of primary energy derived from renewable sources (including biomass, solar, wind, hydroelectricity, and geothermal, using the direct equivalent method 34 ) is ∼ 60% regardless of warming level, in some cases it is as little as 25% and reaches 80% in a few others (Fig. 1c ). Similarly, the median share of these renewables that are not biomass is ∼ 55% regardless of warming level, but ranges from 20–89% (Fig. 1c ). Supplementary Fig.  4 further decomposes the sources of primary energy in net-zero scenarios, showing, for example, that the largest share of primary energy from nuclear is 23%, with nuclear more often contributing a small share of energy (median share across all scenarios is 4.8%, range 0–23.4%). Moreover, the share of primary energy from fossil fuels (coal, oil, and natural gas) in net-zero scenarios with and without carbon capture ranges from 3–64%, with a median share across all scenarios of 33% (Supplementary Fig.  4 ). By definition, in net-zero scenarios, any residual emissions to the atmosphere from the use of fossil fuels are offset by negative emissions strategies.

Residual emissions and electrification

The scale of residual emissions, i.e. emissions that are counter-balanced by equivalent carbon sequestration, is important to consider given many feasibility concerns about negative emissions technologies 33 , 35 . Figure  1d shows that the emissions intensity of final energy may remain quite high in net-zero scenarios (e.g., >30 Mt CO2/EJ compared to the current level of ∼ 80 Mt CO2/EJ). This residual emissions intensity is insensitive to the warming level or the energy intensity of the global economy (although lower warming scenarios do tend to have lower energy intensities based on median values by warming group; Fig. 1d ). Given that the points depicted in Fig.  1d are globally net-zero, the residual emissions are entirely offset by negative emissions.

Complementing the common assertion that everything must be electrified 36 , 37 , the scenario set indicates that reducing final energy use is also an important determinant for achieving 1.5 or 2 °C. Electricity accounts for 35–80% of final energy across the range of net-zero scenarios, but is <70% in most >2 °C scenarios (Fig.  1e ). Even though electrification is a useful mechanism for decarbonization, warmer scenarios tend to exhibit slightly higher levels of electrification at the timing of net-zero: median shares of 1.5 °C, 2 °C and >2 °C scenarios are 46% (range 35–80%), 51% (range 38–77%), and 53% (range 42–67%), respectively, perhaps because they afford greater time for end-uses to transition (Fig.  1e ). This transition-time effect on the amount of electrification is supported by Supplementary Fig.  3 , which shows that scenarios that are later in reaching net-zero tend to compensate with higher amounts of electrification (Supplementary Fig.  3e ). Warming amount is also correlated to both net-zero year ( r  = 0.73, p  < 0.001; Fig.  1b ) and electrification ( r  = 0.27, p  < 0.001) in the Fig.  1 global scenarios, which further supports the idea that warmer scenarios have slightly higher amounts of electrification because they reach net-zero emissions later, thus allowing more time for end-uses to transition and for costs to decline. However, these are subtle distinctions in comparison to the differences in per capita final energy use, where median shares in 1.5 °C, 2 °C and >2 °C scenarios increase from 47 to 63 to 75 GJ per person, respectively. For comparison, in 2019 the average American, EU, and Chinese citizen used approximately 202, 93, and 63 GJ, respectively. Thus, keeping final energy low is clearly important to meet 1.5 °C, while there is more flexibility in the level of electrification that is required.

Negative emissions and policy

The prevailing carbon prices in net-zero scenarios—a proxy for global climate policies—range from zero to > $1000/t CO 2 , yet with no clear relationship to either warming level or the amount of carbon sequestration through bioenergy with carbon capture and storage (BECCS) (Fig.  1f ; note that 16 scenarios with prices > $2000/t CO 2 are not shown). It is important to note that carbon prices in the majority of SR1.5 scenarios are endogenous “shadow” carbon prices that reflect the marginal cost of abatement, and thus do not directly reflect the impact of explicit (exogenous) carbon pricing such as a carbon tax or cap-and-trade system 33 , 38 , 39 . Only 23 of the 177 scenarios we analyze here include exogenous carbon pricing. The relationship between BECCS and carbon price should therefore be interpreted as the impact of marginal abatement cost on BECCS deployment. The lack of a clear relationship between the two does not necessarily mean that marginal abatement cost is inconsequential for the magnitude of negative emissions, but rather indicates that other dynamics relating to technology availability and costs may be the main drivers of BECCS deployment. Additionally, the median amount of carbon sequestration from BECCS increases in 1.5 °C, 2 °C and >2 °C scenarios, from 6.4 (range 0–16.7) to 8.0 (range 0–18.8) to 11.3 (range 3.7-16.4) Gt CO 2 , respectively (Fig.  1f ), indicating that warmer scenarios must rely on greater amounts negative emissions technologies to reach net-zero emissions.

Regional energy use, energy sources, and electrification

Figure  2 shows regional differences in energy and emissions among net-zero scenarios (in the year in which global CO 2 emissions are net-zero). In some cases, these differences are substantial and systematic. For example, Fig.  2a shows that when global emissions are net-zero, total final energy consumption is typically greatest in Asia (blue points) and the OECD and EU countries (e.g., the U.S., U.K., France, Germany, etc.; pink points)—in some cases more than 3 times the energy use in the Middle East and Africa, Latin America, and Eastern Europe (including Russia; yellow, green and purple points, respectively). Regional differences in GDP per capita in the net-zero year are somewhat less dramatic, but projections in the OECD and EU region are often greatest (median of $67,944 per person, range $47,534–$146,341), and projections in the Middle East and Africa are often lowest (median of $18,960 per person, range $6,263–$97,721; Fig.  2a ).

Scenarios that reach net-zero emissions globally ( n  = 172 scenarios with all regions) show regional differences in energy use ( a ), energy sources ( b ), electrification ( c ), and net emissions ( d ). Points represent individual scenarios, with a frequency of scenarios shown along each axis for each region (Asia = blue, Latin America = green, Middle East+Africa = orange, OECD + EU countries = pink, and Eastern Europe+Russia = purple). Colored dashed lines and values indicate medians for each region. Gray dashed lines indicate global reference values for the year shown in gray.

As in the case of globally aggregated energy sources (Fig.  1c ), the share of primary energy derived from renewables and different types of renewables are quite different across scenarios, with relatively little sensitivity to the region (Fig.  2b ). An exception is Latin America (green points), which most scenarios show having both a higher share of primary energy from renewables (median 80%, range 33–98%) and a greater share of those renewables from biomass (median 58%, range 12–83%) than other regions (median shares of renewables 58–67%, and median share of renewables from biomass 35–45%).

Regional variations in electrification are also small (regions’ median shares range from 43–52%), though final energy use per capita varies across regions in a pattern similar to GDP per capita (Fig.  2a and c ; Supplementary Fig.  5 ). Despite lower GDP per capita, energy use per capita in Eastern Europe and Russia is similar to the OECD and EU region (median energy use of 105 and 112 GJ/person, respectively) — considerably greater than in the other three regions, where median energy use ranges from 36–61 GJ/person (Fig.  2c ; note that Eastern Europe and Russia per capita final energy exceeded 200 GJ/person in 2 scenarios that are not shown).

Regional Distribution of Residual and Negative Emissions

Importantly, when global emissions are net-zero, emissions in many scenarios are still net-positive in some regions and (proportionately) net-negative in others. Figure  2d shows the regional balance of per capita residual emissions from energy and industry and per capita negative emissions from BECCS—i.e. net energy system emissions in the region (when points are compared to the dashed black line). These differences in residual (F-statistic = 141.6, p  < 0.001) and negative emissions (F-statistic = 70.7, p  < 0.001) across regions can be at least partially explained by differences in investment: Supplementary Fig.  6 shows that cumulative investment in non-fossil electricity supply up to the global net-zero year is correlated with regional electrification ( r  = 0.55, p  < 0.001), negative emissions from BECCS ( r  = 0.58, p  < 0.001), and residual emissions from energy and industry ( r  = 0.86, p  < 0.001; Supplementary Fig.  6 ). The positive correlation between non-fossil electricity investment and both BECCS and residual emissions is likely due to BECCS primarily being used to offset residual emissions, such that scenarios with high amounts of BECCS also have high amounts of residual emissions at net-zero. Of course, investment is not the only cost-related driver of these regional characteristics, but it does appear to play a significant role in the smaller subset of scenarios that include investment output values. Residual emissions per capita tend to be greater in regions of Eastern Europe and Russia and the OECD and EU, withmedian values of 1.9 (range 0.1–5.2) and 1.8 (range 0.2–4.9) t CO 2 /person, respectively (purple and pink points in Fig.  2d ). However, these regions also have greater per capita negative emissions from BECCS than Asia and the Middle East and Africa regions, such that they are net-negative in nearly as many scenarios (40.1% and 49.4% for Eastern Europe and Russia and OECD+EU, respectively) as they are net-positive (59.9% and 50.6%, respectively). In contrast, Latin America’s energy system is net-negative in 78.1% of the scenarios (green points) and the Middle East and Africa and Asia regions are net-negative in just 14.0% and 19.4%, respectively (orange and blue points). This supports recent research on regional and country-level negative emissions distributions in the context of regional net-zero emissions 40 , 41 and indicates that burden-sharing between currently less-developed regions may not be well-balanced in IAM outputs when global emissions reach net-zero. While there are many different approaches to defining a well-balanced mitigation effort 42 , burden-sharing approaches that consider equity as a key component are vital for meeting sustainable development goals 43 . Analysis of the SR1.5 scenarios in the context of equitable emissions/negative emissions allocation and sustainable development warrants further research.

Figure  3a shows the global distributions of residual and negative emissions in net-zero scenarios, including both those explicitly tied to the energy system (i.e. residual emissions from energy and industrial processes and negative emissions from BECCS) and those related to agriculture and land use (including afforestation and reforestation), which are major sources of negative emissions in many IAMs 44 . The aggregate patterns are striking: in warmer scenarios, net emissions from agriculture and land use tend to be less negative, residual emissions are higher, and these trends must be compensated for by larger negative emissions from BECCS (Fig.  3a ). In net-zero scenarios where warming is >2 °C, negative emissions from BECCS in the net-zero year are on average 10.5 Gt CO 2 , and in no scenario <3.7 Gt (range 3.7–16.4; Fig.  3a ). In contrast, there are some 1.5 °C and <2.0 °C scenarios in which there are no negative emissions from BECCS because more modest residual emissions are balanced by larger negative emissions from land uses (excluding BECCS), such as afforestation (Table  1 ). The negative emissions from BECCS also decrease in more ambitious mitigation scenarios, with mean values of 8.7 (range 0–18.8) Gt CO 2 and 6.7 (range 0–16.7) Gt CO 2 for <2.0 °C and 1.5 °C scenarios, respectively (Fig.  3a ; Table  1 ). Although residual emissions by end-use sector were not available for many of the scenarios we assessed, transportation was the dominant source of residual emissions in the 40 scenarios which report these details, followed by either the industry or residential and commercial sectors (see Supplementary Fig.  7 ).

Residual and negative emissions in net-zero scenarios show global differences across different warming levels ( a ) and regions ( b ). In each case, the boxes show the range from 25 th to 75 th percentiles, whiskers show the 5 th and 95 th percentiles, and the lines and circles within the boxes denote the median and mean values, respectively.

Global averages conceal considerable regional heterogeneity of emissions in a net-zero world. Figure  3b shows that potential negative emissions from land use are largest in Latin America (on average −1.1 Gt CO 2 in the net-zero year, range −4.8 to 1.7 Gt), while Asia is projected to be by far the largest source of residual emissions (on average 3.8 Gt CO 2 in the net-zero year, range 0.3–10.3 Gt). Asia and the OECD and EU regions are also the largest sources of negative emissions from BECCS, with an average of 2.5 (range 0–8.7) and 2.4 (range 0–6.0) Gt negative CO 2 emissions in the net-zero year, respectively; Fig.  3b ).

Relationships between scenario characteristics

Figure  4 compares all 177 net-zero scenarios according to 6 global characteristics in the net-zero year: the share of final energy that is electricity, the share of primary energy derived from renewables, the share of renewable energy that is derived from non-biomass sources, energy conservation (i.e. the inverse of per capita energy demand), the magnitude of negative emissions from BECCS, and net land-use emissions. Each panel in Fig.  4 sorts all the scenarios (rows) according to one of these characteristics (columns), with scenario values shown as z-scores. Pairwise correlation coefficients (r) are also shown at the top of each column to quantitatively compare each set of parameters (Supplementary Fig.  8 ). Plotted this way, for example in (a), it is evident that those scenarios in which electricity accounts for a greater share of final energy also tend to be associated with greater shares of renewable energy ( r  = 0.64, p  < 0.05) and non-biomass renewable energy ( r  = 0.59, p  < 0.05), but less energy conservation (i.e. greater per capita energy use, r  = −0.35, p  < 0.05; Fig.  4a ). Scenarios with greater shares of renewable energy tend to have higher shares of non-biomass renewable energy ( r  = 0.50, p  < 0.05; Fig.  4b ), while scenarios with greater amounts of energy conservation tend to have lower shares of non-biomass renewable energy, and vice versa ( r  = −0.46, p  < 0.05; Fig.  4c and d ). The relationship among these characteristics and the magnitude of negative emissions from BECCS and/or net land-use emissions is less clear, and maybe more dependent on the IAM or specific scenario used in each case. Since the process-based IAMs considered here use cost-effectiveness analysis (CEA) 33 , which minimizes the total mitigation costs of reaching a specified climate goal, all associations between output variables are essentially a reflection of what is cheapest. For example, in a scenario where substantial residual emissions remain at net-zero and are offset by correspondingly large amounts of negative emissions, reducing gross emissions to zero must have been more expensive than continuing to emit and offsetting with negative emissions. The most cost-effective outputs for scenarios are also based on the assumptions of individual models, including the availability and cost of technologies.

Panels show parameter standard deviations for scenarios (rows) sorted by ( a ) electrification, ( b ) renewables share, ( c ) non-biomass renewables share, ( d ) energy conservation, ( e ) negative emissions from BECCS, and ( f ) net land-use emissions. “Electrification” is the share of final energy consumed as electricity. “Renewables” is the share of primary energy supplied by biomass, solar, wind, hydroelectricity, and geothermal. “Non-biomass ren.” is the share of renewable energy sources provided by sources other than biomass. “Energy conservation” here reflects the inverse of final energy per capita, such that warmer colors indicate higher levels of energy consumption. “Negative ems-BECCS” is the total amount of negative emissions from bioenergy with carbon capture and storage. “Net ems-land use” is the net amount of global CO2 emissions related to land use. Mean and standard deviation for parameters are shown below each column, and pairwise correlation coefficients (r) are shown in bold at the top of each column. Black r-values are statistically significant ( p  < 0.05), while red r-values are not.

To further explore this relationship between negative emissions and other parameters, the underlying structure of the IAMs is important to consider: some of the SR1.5 models are partial equilibrium models (e.g., POLES ADVANCE) while others are general equilibrium (e.g. AIM-CGE 2.0 and 2.1) or hybrid models (e.g., MESSAGE-GLOBIOM 1.0) that link the two 31 . Additionally, certain scenarios have conditions that limit the amount or type of negative emissions technology used, such as EMF33_1.5C_limbio, which sets a limit of 100 EJ/year for the amount of bioenergy from BECCS, cellulosic fuels, and hydrogen 31 . Supplementary Fig.  9 shows the scenario ranges for residual emissions, non-biomass renewable energy share, and electrification for each model. These ranges demonstrate how the structure and assumptions of individual models affect the scenario outputs 45 , 46 : for example, GCAM scenarios tend to have systematically higher residual emissions and lower amounts of non-biomass renewable energy and electrification than those of other models (Supplementary Fig.  9 ). Such model differences are visible when comparing individual scenarios, but the output ranges tend to bemore sensitive to the scenario constraints than the models (Supplementary Fig.  10 ).

In addition to renewable and net-zero targets, “electrify everything” has become an explicit policy goal in a growing number of places 47 , particularly regarding heating and cooking in the residential and commercial sectors 48 , 49 and light-duty transportation 50 , 51 . In contrast, in most net-zero scenarios, electricity accounts for less than half (median 48.5%) of final energy (Fig.  1e ), including in the OECD and EU regions (Fig.  2c ). Although electricity makes up a greater fraction of final energy in all net-zero scenarios than it does today ( ∼ 20% today), in some regions and cases electricity remains less than 30% of final energy used (Fig. 2c ). This emphasizes that IAMs project considerable ongoing use of solid, liquid and gaseous fuels in hard-to-electrify sectors (such as construction, agriculture, aviation and shipping) even when emissions are net-zero (Supplementary Fig.  11 ). In this context, lower levels of final energy use per capita is one of the more robust trends of 1.5 °C scenarios. Meanwhile, our finding that electricity is somewhat less prevalent at the net-zero point in scenarios with lower warming may reflect the additional time available for end uses to electrify in less ambitious (higher warming) scenarios (Fig.  1e and b ).

Although the carbon intensity of final energy declines drastically in many net-zero scenarios compared to present ( ∼ 80 Mt CO2/EJ; Fig. 1d ), the absolute quantity of residual emissions remains substantial in many of the scenarios—as often as not >10 Gt CO 2 globally in the net-zero year (Fig.  3 ). This translates into prodigious quantities of negative emissions required, with perhaps proportional social, techno-economic and biophysical challenges 15 , 35 , 52 . But we also find that both the residual emissions and the negative emissions required to offset them are not evenly distributed across world regions (Figs.  2 d and 3b ), which may have important implications for human development and equity 53 . In particular, net-zero scenarios frequently show substantial negative emissions from land use in the Latin America region but the bulk of residual emissions occurring in other regions (Fig.  3b ). Although the magnitude of negative emissions is not strongly related to the composition of the energy system, those scenarios with greater quantities of negative emissions from BECCS seem to also have greater levels of final energy demand and lower shares of non-biomass renewables (e.g., solar, wind, hydro; Fig.  4e ). In contrast, the scenarios with greater negative emissions from land use (e.g., afforestation; represented by orange color in Fig.  4f ) also have higher final energy demand, but have higher shares of non-biomass renewables (Fig.  4f ). This reflects a logical trade-off in the availability of bioenergy and land-based carbon storage and suggests that the balance in IAMs outputs is being influenced by the level of future energy demand. However, it should be noted that prior studies have found that the value of negative emissions from BECCS will be more important than the value of generated electricity 54 , 55 .

Finally, the relationships between energy use, GDP, and likely warming amount show that energy use is often limited in net-zero scenarios, especially for scenarios that limit warming to a greater extent (Fig.  1a ). The median final energy consumption in global net-zero scenarios is 521 (range 227-857) EJ, compared to 418 EJ in 2019 56 . Given that global population is expected to reach nearly 9.5 billion by 2064 (median net-zero year) in SSP2 57 , if per capita energy use remains constant at ∼ 55 GJ/person, total final energy consumption will approach 523 EJ in 2064 – approximately equal to the net-zero scenario level. If instead per capita energy use continues to increase by about 0.16 GJ/person per year, as it did from 1971-2018 on average 56 , 58 , total final energy consumption will approach 588 EJ in 2064 – 67 EJ above the net-zero scenario level. So, in order to limit final energy use to ∼ 521 EJ in the median net-zero year, mean global per-capita energy use would have to remain nearly constant.

The process-based IAMs considered here have proven extraordinarily useful for articulating the overall shape of long-term mitigation pathways at a macro-regional to a global scale, but they are also limited in many ways that might influence our understanding of net-zero on a more detailed level. For example, because IAMs are designed to focus on larger-scale trends, they tend to have lower technological, temporal, and spatial resolutions compared with detailed energy system models 59 , 60 and do not consider the broad range of societal dynamics and political economy factors that can drive national emissions reduction strategies. Their strength in comprehensiveness is therefore balanced by limits to the detail in which they can represent regional or technological details that may be very relevant for actual strategy making, particularly with regard to rapid and disruptive technological change (e.g., management of electricity grids with high penetration of variable renewables, electric cars, greater digitalization, and hydrogen utilization pathways in heavy industry). Some studies have shown that because of this lower spatiotemporal detail, IAMs may be underestimating the role of variable renewables such as solar PV 60 , 61 . Furthermore, in this study we do not explicitly consider the detailed aspects of agriculture, forestry and other land use (AFOLU) sector and non-CO 2 emissions; however, these aspects are accounted for in the IAM frameworks themselves, which consistently include the linkages and tradeoffs between AFOLU and non-CO 2 emissions. The global full-economy representation provided by IAMs in this context makes them important tools in understanding pathways to net-zero greenhouse gas emissions balance as foreseen in Article 4 of the Paris Agreement. For all of these reasons, the net-zero scenarios we analyze here certainly do not reflect many of the details that will characterize net-zero emissions energy systems in the real world, but IAMs nonetheless remain critical bridges between more detailed energy systems models and long-term projections of climate change.

In the time since the SR1.5 database was released, increased efforts have been made to improve the model representation of key technologies, such as carbon-neutral liquid fuels, long-term storage of variable renewable energy, and negative emissions strategies. Given that these results show liquid fuels remaining prevalent and negative emissions strategies becoming increasingly important in the existing net-zero scenarios, such modeling improvements will be important to monitor going forward. The relationship between higher residual emissions and corresponding higher amounts of negative emissions in warmer scenarios points toward reducing residual emissions as a target for policy improvement, since negative emissions strategies are required to offset any amount of residual emissions at net-zero. Reliance on massive amounts of future negative emissions poses a substantial risk, given that there is still considerable uncertainty surrounding the feasibility of negative emissions technologies at such large scales 15 , 35 . Policies that support carbon-neutral fuels and technologies now would in turn reduce future reliance on large quantities of negative emissions to avoid harmful levels of warming. Our findings thus represent an opportunity to assess emerging net-zero emissions policies and energy trends in the context of the longer-term global goal of limiting climate change.

Data source

All of the model scenarios analyzed as part of this study were obtained from the public 1.5 °C Scenario Database (the SR1.5 database), hosted by the International Institute for Applied Systems Analysis (IIASA) through a process facilitated by the Integrated Assessment Modelling Consortium (doi: 10.5281/zenodo.3363345 | url: data.ene.iiasa.ac.at/iamc-1.5c-explorer). The model outputs in the database were generated by the various Integrated Assessment Models (IAMs) listed in Supplementary Table  S1 , and compiled by the Integrated Assessment Modeling Consortium (IAMC) 31 , 32 . The full scenario set was curated as part of the IPCC Special Report of Global Warming of 1.5 °C, Chapter 2 on mitigation pathways and details of the models and scenarios are detailed in the Technical Annex of the Chapter. The processes are described in more detail by Huppmann et al. 31 , 32 . In this paper we use version r2.0 of the all regions dataset. The 177 scenarios we assess here were produced by 7 main models (with 16 individual model variations), and thus are not truly independent of each other since each IAM has its own assumptions built into the model framework.

While an updated scenario database is being developed for the upcoming IPCC Sixth Assessment Report (AR6), our analysis is specifically about the characteristic of the net-zero energy system at the point of net-zero, and not the pathway up to that point. The broader insights of net-zero energy system characteristics gained from our analysis are thus valuable and we expect they won’t differ significantly in subsequent analyses of the next generation of (AR6) scenarios. Moreover, although recent developments in the power sector, e.g. renewables, have been faster than expected, the observed values for 2019–2020 are still within the range of the SR1.5 scenarios. For example, in 2020, approximately 2.9 EJ was generated from solar electricity 62 and the SR1.5 scenario outputs for Secondary Energy|Electricity|Solar in 2020 range from 0.2–6.6 EJ, with a median value of 1.8 EJ and a mean value of 2.4 EJ. For wind energy, approximately 5.9 EJ was generated in 2020 62 , and the SR1.5 scenario outputs for Secondary Energy|Electricity|Wind in 2020 range from 1.0–23.6 EJ, with a median value of 7.4 EJ and a mean value of 6.9 EJ.

IAMs have a long and sometimes controversial history in their efforts to characterize emissions pathways with the aim of mitigating climate change. The IAMs here are primarily what would be considered as complex “process-based” IAMs, as opposed to simpler “cost-benefit” IAMs that primarily simulate climate-economy relationships to estimate the social cost of carbon 63 .

They use a variety of over-arching modelling methods including linear programming, partial- and computable general equilibrium, and recursive-dynamic formulations. The models used tend to represent macro-economic regions, comprising large countries and trading blocs, ranging from a few to tens of regions with inter-regional trade of commodities, such as fuels and biomass. This regional information was aggregated in the IPCC SR1.5 process to a common 5-region definition (as above) to facilitate comparison. Temporal resolution is typically at 5 or 10-year timesteps, which is good for determining the levels of investments required, whilst abstractions need to be made to ensure that reliability of electricity systems remains plausible, such as ensuring that enough flexible reserve is available to meet peak electricity demands.

Scenarios representing climate policy tend to be implemented using carbon budget constraints that limit the cumulative carbon emissions over a period such that warming does not pass the desired level, e,g. 2 °C. Further scenario-related constraints may limit a wide range of parameters, such as technological options and shares, rates of change and diffusion etc.

The IAMs whose scenarios we assess here do not include feedbacks from climate impacts and damages, despite the fact that some studies have shown these could be substantial 64 , 65 . Rather the models are designed to inform mitigation efforts and have relatively simplistic representations of the Earth system 65 . Some IAMs are beginning to include feedbacks between, for example, temperature changes and energy use 66 , and more ambitious efforts are underway that will incorporate human energy, food and water systems into robust Earth system models 67 , 68 .

Filtering and analysis of scenarios

Our analysis includes only scenarios that reach net-zero CO 2 emissions by the end of this century (year 2100). We define the net-zero emissions year for each scenario (i.e., the x-axis in Fig.  1b ) as the first year that net global CO 2 emissions were equal to or less than zero. Because each model produces parameter outputs at 5 or 10 year time steps, we interpolated annual data using second-order polynomials.

We only consider CO 2 and not CH 4 or N 2 O for several reasons. First, many of the current net-zero policy targets are for net-zero CO 2 specifically 7 . Results from this analysis will therefore be relevant to those policies in the context of net-zero CO 2 . Second, entirely eliminating CH 4 or N 2 O emissions will entail the development of new technologies, particularly for removing these gases from the atmosphere 69 , such that there are not yet practicable pathways to net-zero for these gases 7 . Third, N 2 O is primarily related to agriculture, and our analysis is focused on the energy system.

The scenarios are categorized into 6 regions (global and the five world regions defined in the SR1.5 database) and 3 consolidated levels of end-of-century global warming, based on the wider set determined in the IPCC report:

1.5 °C, which includes “below 1.5 °C,” “1.5 °C return with low overshoot,” “1.5 °C return with high overshoot”;

2 °C, which includes “lower 2.0 °C” and “higher 2.0 °C,” and;

>2 °C, which corresponds to the category “above 2.0 °C”. These scenarios have >50% likelihood of exceeding global mean temperature change of 2.0 °C by 2100, with no set upper bound of temperature change.

These global warming outcomes are primarily characterized by the “likely” (>50% chance) of reaching the specified temperature level by 2100. Further sub-categories of “overshoot” scenarios, based on the peak-warming and then return to a stabilization temperature help identify between scenarios that rely on substantial amounts of net-negative emissions.

The output variables for IAMs in the SR1.5 database are not entirely consistent; some models have extensive lists of outputs and regional and sectoral breakdowns, while others have comparatively few outputs and are missing some variables altogether. Our analysis therefore relies only on those IAM scenarios that include all output variables required for our analysis (177 out of 202 total net-zero emissions scenarios from the SR1.5 database; see Supplementary Table  S1 ). Our interest in including as many scenarios as possible had to be balanced against our interest in exploring more detailed geographical and technological characteristics. Our analysis used the following 7 output variables: (1) CO 2 emissions (total net, energy and industrial processes net, AFOLU net), (2) Population, (3) GDP (PPP), (4) Primary energy, direct equivalent (total, fossil, nuclear, solar, wind, hydro, biomass), (5) Carbon Sequestration through BECCS, (6) Carbon price, and (7) Final energy (total and share from electricity). Residual CO 2 emissions were calculated by adding the residual emissions from energy and industrial processes (and, if applicable, the residual AFOLU emissions) to the amount of carbon sequestration from BECCS (since BECCS is used to offset residual emissions) in the net-zero year via the following equations:

If ‘Emissions|CO 2 |Energy and Industrial Processes’ is positive at net-zero:

‘Emissions|CO 2 |Residual Fossil’ = ‘Emissions|CO 2 |Energy and Industrial Processes’ + ‘Carbon Sequestration|CCS|Biomass’

If ‘Emissions|CO 2 |Energy and Industrial Processes’ is negative at net-zero:

‘Emissions|CO 2 |Residual Fossil’ = ‘Emissions|CO 2 |Energy and Industrial Processes’ + ‘Carbon Sequestration|CCS|Biomass’ + ‘Emissions|CO 2 |AFOLU’

All processing and analysis was done in JupyterLab (version 1.2.6). Code is available via GitHub: https://doi.org/10.5281/zenodo.5501623 70

Additional context for policymakers

Around the world, countries and jurisdictions are adopting energy policies that mandate high levels of renewable or zero-carbon electricity in the next few decades 8 , 9 . For example, in the U.S., 14 states (California, Colorado, Hawaii, Maine, Maryland, Massachusetts, Nevada, New Mexico, New Jersey, New York, Oregon, Vermont, Virginia, and Washington) have laws requiring that >50% of electricity come from renewables such as wind, solar and biomass (but often excluding large-scale hydropower). Such goals are consistent with our analysis of net-zero scenarios generated by IAMs; renewables (including hydro) account for >50% of all primary energy in 74% of the net-zero scenarios. However, many places have pledged or mandated 100% renewable electricity and/or 100% net-zero emissions economy-wide by 2050, including the proposed EU Climate Law, and laws or government orders in the U.S. states of Hawaii, New York, Washington and California. Although details of these plans vary, it is noteworthy that very few of the net-zero scenarios reflect these goals at the macro-region level. This is due to the way that sources and sinks, from energy and land-use sectors, and between CO 2 and non-CO 2 sources, are optimized over much larger spatial extents including the influence of inter-regional trade, rather than the aforementioned policies that are enacted at state- and country-level. For example, the share of primary energy derived from renewables in the first year of net-zero or net-negative emissions is <80% in all but 2 of the 177 scenarios (Fig.  1c ). Similarly, emissions in the OECD and EU region remain net-positive in more than half of the net-zero scenarios (pink points in Fig.  2d ). Thus, we advise caution when interpreting these results, to note that the aforementioned zero-carbon energy policies are not necessarily over-ambitious or inconsistent with global and macro-regional IAM scenarios, because other nearby places and regions (e.g., Middle East and Africa), are likely to still be net-positive at the point at which global CO 2 emissions hit net-zero (Fig.  2d ).

Data availability

All of the model scenarios analyzed as part of this study were obtained from the public 1.5 °C Scenario Database (the SR1.5 database), hosted by the International Institute for Applied Systems Analysis (IIASA) through a process facilitated by the Integrated Assessment Modelling Consortium ( https://doi.org/10.5281/zenodo.3363345 | url: data.ene.iiasa.ac.at/iamc-1.5c-explorer ).

Code availability

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Acknowledgements

The authors are grateful to Jinhyuk E. Kim for help in pre-processing scenario data. J.D. and S.J.D. acknowledge support from the U.S. National Science Foundation (INFEWS grant EAR 1639318). U.S. National Science Foundation (INFEWS grant EAR 1639318).

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Potsdam Institute for Climate Impact Research, Potsdam, Germany

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S.J.D. and J.D. conceived the study. J.D. performed the analyses, with support from G.L., E.B., J.B. and S.J.D. J.D. and S.J.D. led the writing with input from I.A., J.B., G.L., E.B. and L.C.

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Energy Conservation Essay for Students and Children

500 words energy conservation essay.

Energy conservation refers to the efforts made to reduce the consumption of energy. The energy on Earth is not in unlimited supply. Furthermore, energy can take plenty of time to regenerate. This certainly makes it essential to conserve energy. Most noteworthy, energy conservation is achievable either by using energy more efficiently or by reducing the amount of service usage.

Importance of Energy Conservation

First of all, energy conservation plays an important role in saving non-renewable energy resources. Furthermore, non-renewable energy sources take many centuries to regenerate. Moreover, humans consume energy at a faster rate than it can be produced. Therefore, energy conservation would lead to the preservation of these precious non-renewable sources of energy.

Energy conservation will reduce the expenses related to fossil fuels. Fossil fuels are very expensive to mine. Therefore, consumers are required to pay higher prices for goods and services. Energy conservation would certainly reduce the amount of fossil fuel being mined. This, in turn, would reduce the costs of consumers.

Consequently, energy conservation would strengthen the economy as consumers will have more disposable income to spend on goods and services.

Energy conservation is good for scientific research. This is because; energy conservation gives researchers plenty of time to conduct researches.

Therefore, these researchers will have more time to come up with various energy solutions and alternatives. Humans must ensure to have fossil fuels as long as possible. This would give me enough time to finding practical solutions.

Get the huge list of more than 500 Essay Topics and Ideas

Another important reason for energy conservation is environmental protection. This is because various energy sources are significantly harmful to the environment. Furthermore, the burning of fossil fuels considerably pollutes the atmosphere. Moreover, nuclear energy creates dangerous nuclear waste. Hence, energy conservation will lead to environmental protection.

Energy conservation would also result in the good health of humans. Furthermore, the pollution released due to energy sources is harmful to the human body. The air pollution due to fossil fuels can cause various respiratory problems. Energy sources can pollute water which could cause several harmful diseases in humans. Nuclear waste can cause cancer and other deadly problems in the human body.

Measures to Conserve Energy

Energy taxation is a good measure from the government to conserve energy. Furthermore, several countries apply energy or a carbon tax on energy users. This tax would certainly put pressure on energy users to reduce their energy consumption. Moreover, carbon tax forces energy users to shift to other energy sources that are less harmful.

Building design plays a big role in energy conservation. An excellent way to conserve energy is by performing an energy audit in buildings. Energy audit refers to inspection and analysis of energy use in a building. Most noteworthy, the aim of the energy audit is to appropriately reduce energy input.

Another important way of energy conservation is by using energy-efficient products. Energy-efficient products are those that use lesser energy than their normal counterparts. One prominent example can be using an energy-efficient bulb rather than an incandescent light bulb.

In conclusion, energy conservation must be among the utmost priorities of humanity. Mahatma Gandhi was absolutely right when he said, “the earth provides enough to satisfy every man’s needs but not every man’s greed”. This statement pretty much sums up the importance of energy conservation. Immediate implementation of energy conservation measures is certainly of paramount importance.

FAQs on Energy Conservation

Q1 state one way in which energy conservation is important.

A1 One way in which energy conservation is important is that it leads to the preservation of fossil fuels.

Q2 Why energy taxation is a good measure to conserve energy?

A2 Energy taxation is certainly a good measure to conserve energy. This is because energy taxation puts financial pressure on energy users to reduce their energy consumption.

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Why the Shift from Fossil Fuels to Renewable Energy Is More Complex Than It Seems

Global energy consumption is clearly dominated by fossil fuels, which account for approximately 84% of all energy use today. Despite this, there is a significant shift underway towards renewable energy sources. Renewables are contributing more and more to global electricity generation with each passing year, marking a decisive trend towards more sustainable energy practices.

This shift is driven by urgent environmental concerns, technological advancements making renewables more cost-effective, and international policy frameworks aimed at reducing carbon emissions. If we want to better understand this complex energy transition, we need to examine both the longstanding reliance on fossil fuels and the burgeoning role of renewable resources more closely. Let’s take a look.

Advantages of Renewable Energy

Renewable energy sources have surged in adoption and efficiency. This change is mostly driven by significant technological advancements, supportive policies, and growing environmental awareness. Solar and wind energy are leading the renewable sector. They have seen cost reductions of over 85% and 55% respectively over the past decade, making them increasingly competitive with traditional energy sources.

Environmental benefits are also substantial. Renewables emit far fewer greenhouse gases and pollutants compared to fossil fuels. Government incentives and international agreements, such as the Paris Climate Accord, further propel the growth of renewables by providing financial support and regulatory frameworks designed to reduce carbon footprints.

The Persistent Reliance on Fossil Fuels

Despite global shifts towards renewable energy, the world remains heavily reliant on fossil fuels due to several key factors, including entrenched infrastructure, superior energy density, economic vested interests, and reliable supply characteristics. Fossil fuels (including coal, oil, and natural gas) still account for about 84% of the world’s energy consumption.

The infrastructure built over decades, from power plants to supply chains, is optimized for these energy sources, making a rapid transition quite complex and costly. Industries such as aviation, shipping, and power generation heavily rely on fossil fuels due to their high energy density and ease of transport. For instance, gas turbine controls are finely tuned to optimize performance and efficiency, making them a preferred choice for many power plants worldwide.

Regions and nations with abundant fossil fuel reserves depend significantly on oil and gas revenues economically. This amounted to approximately $2.4 trillion globally in 2019. Fossil fuels provide a stable, continuous energy output, and this is a crucial factor for industrial applications and baseline power generation, where renewables like solar and wind face intermittency challenges.

Challenges Facing Renewable Energy Adoption

While the benefits of renewable energy are clear, there are still several significant challenges that hinder its broader adoption. The intermittent nature of sources like solar and wind requires sophisticated energy storage solutions, which are currently limited and expensive. The global energy storage market, although growing rapidly, must expand substantially to adequately support renewables. It’s expected to exceed $500 billion by 2030.

Geographical limitations also play a big role. Not all regions are equally suited for every type of renewable energy, and this requires diverse and sometimes costly infrastructure adaptations. The initial capital cost for establishing renewable energy facilities (like solar farms and wind turbines) remains quite high. This is a significant barrier for many economies, especially in the developing world. Scaling renewable energy to meet global energy demands also poses another layer of complexity, as it requires integration into existing power grids and regulatory systems, which are often structured around traditional energy sources. 

Economic and Political Considerations

The speed and path of the shift from fossil fuels to renewable energy sources are greatly impacted by political factors. Fossil fuel industries benefit from substantial subsidies estimated at $5.9 trillion in 2020 globally, which include direct funding and indirect support such as tax breaks and healthcare costs for mining-related diseases.

These subsidies distort energy markets and can delay investments in renewable energy infrastructure. Politically, fossil fuel companies wield considerable influence, with the oil and gas sector spending approximately $125 million on lobbying the US government in 2020 alone. This political clout can shape energy policies and regulatory frameworks, often in favor of maintaining the status quo.

Energy security and the economic interests of oil-rich countries also play a significant role in energy decisions, complicating the shift towards renewable energy. To counterbalance these forces, nations and international bodies are increasingly prioritizing green policies, such as the European Green Deal, which aims to make Europe climate neutral by 2050.

The Future of Energy

Technological innovation and shifting consumer preferences are driving a more rapid adoption of renewable energy sources. Forecasts suggest that by 2050, renewables could supply 85% of global electricity, largely due to advancements in technologies like battery storage, which are expected to decrease in cost by 52% by 2030.

Innovative technologies such as green hydrogen and advanced nuclear reactors are emerging as solutions to address the limitations of solar and wind energy’s intermittency. International climate goals, including the aim to reach net-zero emissions by the middle of the century as outlined in the Paris Agreement, are accelerating shifts in energy policy and investment away from fossil fuels.

This transition is also fueled by increased consumer and corporate demand for sustainable and clean energy sources, as seen in the rise of green bonds and sustainable investing, which reached $2 trillion in global assets under management in 2020.

Why does the world continue to rely so heavily on fossil fuels despite the clear benefits of renewable energy? The answer lies in the complex interplay of entrenched infrastructure, economic interests, and political power, coupled with the technical and logistical challenges of a complete shift to renewables. Fossil fuels still provide about 84% of the world’s energy, and this is a testament to their deep-rooted presence in our global economy.

The trajectory is changing however, with renewable energy sources expected to provide up to 85% of global electricity by 2050 due to rapid technological advancements and shifting policies. While the transition to renewables is underway, it requires balanced, strategic measures that consider both the enduring role of fossil fuels and the imperative of sustainable development.

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An affordable, reliable, competitive path to net zero

At a glance

• Though there has been meaningful momentum, the world is not on track to achieve the goal enshrined in the Paris Agreement of limiting warming to well below 2°C or ideally 1.5°C. To meet that goal, countries and companies have committed to reaching net-zero emissions of CO 2 and reducing emissions of other greenhouse gases. But there has not been enough progress. The share of primary energy produced by renewable sources, for example, has risen slowly, from 8 percent in 2010 to 12 percent in 2021. If emissions stay on their current trajectory, estimates from various sources suggest, net zero would not arrive even by the end of the century.
• A successful net-zero transition will require achieving not one objective but four interdependent ones: emissions reduction, affordability, reliability, and industrial competitiveness. A poorly executed transition could make energy, materials, and other products less affordable, compromising economic empowerment. It could also make the supply of energy and materials less secure and resilient, and it could render some countries and companies less competitive. If that happened, progress toward net zero itself could stall.
• Our research has found practical ways to address those objectives simultaneously. Seven principles can help stakeholders successfully navigate the next phase of the transition. For example, deploying lower-cost solutions and driving down the cost of more expensive ones could bolster affordability. Managing existing and emerging energy systems in parallel could make access to energy more reliable. Seeking opportunities by using comparative advantage as a guide could help countries bolster their competitiveness.
• Following those principles could substantially improve the world’s current trajectory. We examined the potential implications of applying two principles: deploying more lower-cost solutions and using R&D and other measures to double the expected rate of cost declines. Our illustrative analyses found that doing so could substantially improve the current trajectory of emissions and help limit warming to what the Paris Agreement envisions. Capital spending on low-emissions technologies would potentially be one and a half to two times as large as it is now—as opposed to about three times, as might be the case if the two principles were applied less extensively.
• Embracing a change of mindset can help the world move closer to net zero. In addition to global commitments to reach net zero in the future, stakeholders should commit to making more and more progress every year and doing so in a way that addresses all four objectives.

Today, the world is undertaking the net-zero transition, an ambitious effort to reach net-zero emissions of CO 2 and reduce emissions of other greenhouse gases (GHGs). The goal of the transition is outlined in the Paris Agreement adopted at the United Nations in 2015: to limit global warming above preindustrial levels to well below 2.0°C, and ideally to 1.5°C. Doing so would reduce the odds of initiating the most catastrophic impacts of climate change. 1 See Global warming of 1.5°C , Intergovernmental Panel on Climate Change (IPCC), 2018. According to the Intergovernmental Panel on Climate Change (IPCC), limiting warming to 1.5°C would require reducing GHG emissions by 43 percent between 2019 and 2030 and cutting net emissions of CO 2 to zero by around 2050. 2 Climate change 2022: Mitigation of climate change , IPCC, 2022.

But the effort to meet the goals of the Paris Agreement is not currently on track, as a recent report from the United Nations shows. 3 See Technical dialogue of the first global stocktake: Synthesis report by the co-facilitators on the technical dialogue , United Nations Framework Convention on Climate Change, September 2023. Many public and private actors, aspiring to meet those goals, are working to usher in the transition’s next phase, one in which more capital flows toward the transition and the deployment of necessary technologies expands substantially.

Often, the transition is envisioned as a single great challenge: reducing emissions from energy, materials, and land use and other systems. In practice, it consists of four objectives: emissions reduction, affordability, reliability, and industrial competitiveness. 4 Affordability is a particularly important priority. Recent research from the McKinsey Global Institute (MGI) has found that 4.7 billion people are not yet economically empowered—that is, they cannot meet essential needs and begin to achieve financial security. For details, including more about that definition of economic empowerment, see From poverty to empowerment: Raising the bar for sustainable and inclusive growth , McKinsey Global Institute, September 2023. If achieving the first of those objectives risks compromising the other three, momentum toward net zero could be derailed. In this report, we outline principles that can guide stakeholders in addressing all four objectives simultaneously—and even help accelerate the progress of the transition. 5 This research focuses on the net-zero transition. Adaptation to climate change is another important part of the climate agenda. The subject is outside the scope of this report but will be explored in upcoming research by MGI.

There has been meaningful momentum toward net zero

The world has made headway in reducing emissions. Today, net-zero commitments have been made by more than 8,000 companies and by countries representing 90 percent of global GDP; also, 150 countries have pledged to reduce methane emissions. 6 “Race to zero campaign,” United Nations Framework Convention on Climate Change, 2023; “Data explorer,” Net Zero Tracker, 2023; “Global methane pledge: From moment to momentum,” US Department of State, November 2022. Climate policy and legislation have become increasingly ambitious. And calls are growing to keep the transition from disproportionately affecting the developing world and vulnerable communities. 7 For example, see “UNCTAD urges channelling net-zero finance to support the energy transition in developing economies,” United Nations Conference on Trade and Development, October 17, 2023.

The good news is not limited to commitments and laws; solid, measurable progress is being made as well. Innovation has made many new technologies more viable. For example, solar power and wind power account for more than 10 percent of electricity generation and 75 percent of new electricity-generating capacity. 8 “Growth in renewables achieved despite energy crisis,” International Renewable Energy Agency, March 2023; and “Renewables,” International Energy Agency, July 2023. Electric vehicles (EVs) make up about 15 percent of new vehicle sales, and the range of the average EV has increased nearly three times during the past decade. 9 “Electric vehicles,” International Energy Agency, July 2023; and Global EV outlook 2022 , International Energy Agency, May 2022. Large-scale plants are being built for such newer technologies as low-emissions steel production and carbon capture, utilization, and storage (CCUS). Businesses are starting to reallocate resources from high-emissions to low-emissions products. 10 Rob Bland, Anna Granskog, and Tomas Nauclér, “ Accelerating toward net zero: The green business building opportunity ,” McKinsey & Company, June 2022. Climate-related venture capital investments reached $70 billion in 2022, almost double the 2021 amount. 11 “Defying gravity, 2022 climate tech VC funding totals $70.1B, up 89% on 2021,” HolonIQ, January 3, 2023. The global financial sector is strengthening its response to climate change; annual global investment in transition technologies has doubled, from $660 billion in 2015 to more than $1 trillion today. 12 Global landscape of renewable energy finance 2023 , International Renewable Energy Agency and Climate Policy Initiative, 2023. And new market instruments, such as advance market commitments, are emerging to spur innovation. 13 For example, Frontier Climate has already helped put in place prepurchase agreements for CO 2 removals that will, once the technologies are developed, remove more than 200,000 tons of CO 2 emissions.

Nevertheless, the world is not on track to reach net zero by 2050

Despite all that good news, numerous estimates, including a recent one from the United Nations, show that emissions are not on track to reach net zero emissions of CO 2 by 2050—which, most estimates suggest, would be needed to limit warming to 1.5°C. 14 Technical dialogue of the first global stocktake: Synthesis report by the co-facilitators on the technical dialogue , United Nations Framework Convention on Climate Change, September 2023. The IPCC has found that to limit global warming to 1.5°C with no or limited overshoot (with a greater than 50 percent probability), GHG emissions would have to be reduced by 43 percent by 2030 and carbon dioxide emissions by about 100 percent by 2050 in relation to modeled 2019 emissions levels. (Each of those values is the median of the estimates in various scenarios.) See Climate change 2022: Mitigation of climate change , IPCC, 2022. We examined 23 “current policy” scenarios from the IPCC, McKinsey’s Global energy perspective 2023 , the Network for Greening the Financial System (NGFS), and the International Energy Agency (IEA). 15 See “AR6 Scenario Explorer and Database hosted by IIASA,” International Institute for Applied Systems Analysis, 2022; Global energy perspective 2023 , McKinsey & Company, October 2023; NGFS climate scenarios for central banks and supervisors—Phase IV , Network for Greening the Financial System, November 2023; and World energy outlook 2023 , International Energy Agency, October 2023. In none of the scenarios do global emissions of CO 2 reach net zero, even by the end of the century (Exhibit 1). In the IPCC scenarios, the median level of warming by the end of the century is 2.9°C, and in the more recent McKinsey, NGFS, and IEA scenarios, it is 2.3°C, 2.8°C, and 2.4°C, respectively. 16 The IPCC scenarios represent policies as of 2020. The McKinsey, NGFS, and IEA scenarios represent more recent policies. Other research by the IPCC, reporting the median of warming outcomes in 29 scenarios, has found that warming by the end of the century could reach 3.2°C above preindustrial levels. See Climate change 2023 synthesis report , IPCC, 2023.

One reason the net-zero transition has been slower than hoped is its unprecedented complexity. It calls for transforming not only energy systems but also materials, land use, and other systems—in short, the global economy—and doing so in a coordinated and integrated way (Exhibit 2). 17 See The net-zero transition: What it would cost, what it could bring , McKinsey Global Institute, January 2022. To successfully meet the global goals enshrined in the Paris Agreement will require a vast increase in total capital spent each year, from $5.7 trillion spent on low- and high-emissions technologies today to as much as $9.2 trillion, on average, spent over the next three decades. 18 Even after expected increases in spending resulting from current policies and income growth are accounted for, the necessary increase in total high- and low-emissions spending would be large at $1 trillion. The $9.2 trillion estimate is based on a net-zero scenario from the Network for Greening the Financial System (NGFS) that limits warming by 2100 to 1.5°C above preindustrial levels. In quantifying investment, we include what is typically considered investment in national accounts, such as investment in solar and wind power capacity, as well as some spending on what are typically considered consumer durables, such as electric vehicles. The investment numbers take into consideration energy, materials, and land use systems that account for roughly 85 percent of overall CO 2 emissions today. These estimates are higher than others in the literature because we have included spending on high-emissions technologies, agriculture, and other land use and have also taken an expansive view of the spending required in end-use sectors. Our analysis distinguishes high-emissions assets and technologies from low-emissions ones. Low-emissions assets emit relatively low amounts of GHGs but are not necessarily carbon neutral. Examples of low-emissions assets are solar and wind farms and electric vehicles. In some cases, we also include enabling infrastructure, such as the transmission and distribution infrastructure needed for renewable power or the charging infrastructure needed for electric vehicles. Examples of high-emissions assets are fossil fuel–based power and vehicles with internal combustion engines. In the NGFS’s scenario, some spending on high-emissions assets continues, particularly in the early years of the transition. For more details, see The net-zero transition: What it would cost, what it could bring , McKinsey Global Institute, January 2022. During that period, the low-emissions part of that spending would need to grow from approximately $1.5 trillion per year now to about $7.0 trillion, on average. 19 Recent research from MGI estimated the spending needed on low-emissions technologies at $55 trillion cumulatively from 2021 to 2030, an increase of $41 trillion over the amount that would result if spending in 2020 took place in every year from 2021 through 2030. The $55 trillion estimate works out to $5.5 trillion annually, on average, and that $5.5 trillion estimate differs from the $7.0 trillion cited here because it covers a different period and applies in a scenario of high GDP growth. For further details, see From poverty to empowerment: Raising the bar for sustainable and inclusive growth , McKinsey Global Institute, September 2023.

Image description:

A donut-style pie chart plots the sector share of global annual carbon dioxide equivalent emissions in 2019. Energy and materials systems account for 76%, including industry, power, transportation, and buildings. Land-use and other systems make up the remaining 24%, including agriculture, forestry and other land use, and waste.

End of image description.

The problem is not just the scale of spending on low-emissions technologies but also what it would fund. Our past research has found that partly because many low-emissions technologies will not be cost competitive by 2030 under current policy frameworks, only 50 percent of the capital spending on those technologies needed by then to eventually achieve net zero could occur without additional societal commitment. 20 From poverty to empowerment: Raising the bar for sustainable and inclusive growth , McKinsey Global Institute, September 2023. That 50 percent includes both a continuation of today’s spending levels and increased spending likely under current policy frameworks. Examples of such commitment include new public spending (which may be difficult) and additional policy measures, such as carbon prices.

Furthermore, the transition would rebuild in about three decades efficient systems that took centuries to build, carrying out a massive physical transformation. Consider that most proposed pathways to net zero envision making the power system three times larger than it is now and electrifying many end uses of energy, such as transportation and heating. Yet even though solar power, wind power, and other renewable sources of energy are becoming much more common, the share of primary energy that they produce has risen only slowly, from 8 percent in 2010 to 12 percent in 2021. 21 “International,” US Energy Information Administration, 2023. Primary energy refers to the total amount of energy that is available in natural resources before any conversion or transformation takes place. The percentage contributions that different energy sources make to total primary energy may be different from the percentage contributions that those sources make to energy consumed by end users because different uses lead to different amounts of conversion loss.

Finally, the transition would require actions to be taken now in exchange for benefits—in particular, avoided physical damage from climate change—that would mostly appear in future decades. 22 Other potential benefits include improved air quality, water quality, and biodiversity. See “Costs and benefits of a net-zero target for the UK,” in Net zero: The UK’s contribution to stopping global warming , Committee on Climate Change, May 2019. And the costs of those actions, in terms of spending and transformation today, would not be borne evenly by all stakeholders.

A poorly executed transition could compromise affordability, reliability, and competitiveness—and slow progress toward net zero

The net-zero transition is too often regarded as a singular problem. In fact, it is four connected challenges (Exhibit 3). Reducing emissions of GHGs is indeed at the heart of the transition. 23 This report focuses on net zero, but other sustainability objectives exist, such as improving the quality of air and water and managing nature-related risks. Similarly, the report does not consider adaptation actions to manage rising physical risks posed by climate change, which is another important part of the climate agenda. But if the transition is poorly executed, it could compromise three other important objectives: affordability, reliability, and industrial competitiveness. Those objectives enhance economic well-being on their own; moreover, compromising them would make the emissions reductions themselves less likely to endure. 24 Other researchers have also highlighted potential tensions between the transition and other objectives, such as addressing climate change, affordability, availability, security, equity, environmental justice, and employment. See, for instance, World energy trilemma index 2022 , World Energy Council, 2022; Haiying Liu et al., “Roles of trilemma in the world energy sector and transition towards sustainable energy: A study of economic growth and the environment,” Energy Policy , volume 170, November 2022; and A. G. Olabi, “Energy quadrilemma and the future of renewable energy,” Energy , volume 108, August 2016.

A diagram shows four equally sized illustrations, with arrows connecting each one to all of the others, representing the four interdependent objectives of a successful net-zero transition discussed in the text of the article: emissions reduction, affordability, industrial competitiveness, and reliability.

That outcome is not inevitable. If the net-zero transition is managed well, there are many ways in which it could further affordability, reliability, and industrial competitiveness over time. The most obvious is that the world would have to spend less on adapting to climate change and withstanding the damage it causes. 25 The Network for Greening the Financial System estimates that global GDP in 2100 could be up to 18 percent lower in a scenario in which current policies continue than in a baseline in which there were no physical risks from climate change or risks posed by the transition. It also estimates that in a scenario in which warming was 1.5°C above preindustrial levels, GDP in 2100 would be 3 percent lower than in that baseline. See NGFS scenarios for central banks and supervisors , Network for Greening the Financial System, September 2022. That analysis leads to two conclusions. First, over time, the transition will lead to higher GDP than in a scenario with high physical risks. Second, the transition will lead to slightly lower GDP than in the baseline scenario. See Climate change 2022: Mitigation of climate change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change , IPCC, 2022. Also, provided that cost declines continue at expected rates and that manufacturing capacity is scaled up effectively, more and more low-emissions technologies could soon become cost competitive with traditional technologies in various markets on a total-cost-of-ownership basis. 26 See, for example, The future of heat pumps , International Energy Agency, December 2022. Technologies’ relative cost-competitiveness also depends on other factors, such as how energy prices and interest rates evolve. Energy security could benefit as well in some ways, because the transition could lead to more domestic generation of electricity (for example, from solar and wind) and less dependence on imported energy. And there will be many opportunities to compete to provide materials, manufactured goods, and services—indeed, whole new industries—for the transition.

But it is nevertheless the case that a poorly executed transition could impair affordability, reliability, and industrial competitiveness. Start with affordability. As previous work by McKinsey has pointed out, both the net-zero transition and economic empowerment are urgent and simultaneous goals. 27 From poverty to empowerment: Raising the bar for sustainable and inclusive growth , McKinsey Global Institute, September 2023. But there are several ways that the net-zero transition, if not executed well, could make energy, materials, and other products less affordable than traditional alternatives. 28 This discussion does not account for any role that a carbon price might play. Even though wind and solar generate electricity more cheaply than fossil fuels do, they will require additional spending as their share in the overall generation mix rises—for storage; other “firming capacity,” which is electricity that can be used at times when solar and wind are not providing enough energy; and grid infrastructure. If the costs of technologies, such as batteries, do not decline as expected, or if grids are not designed thoughtfully, the delivered cost of electricity could rise. For materials, decarbonizing the production of steel, aluminum, and cement could increase production costs by 15 percent or more by 2050. 29 Making net-zero steel possible , Mission Possible Partnership, September 2022; Making net-zero aluminum possible , Mission Possible Partnership, April 2023; Mission Possible sectoral focus: Cement , Energy Transitions Commission, January 2019. If costs of energy and other products were to rise, economic growth could suffer, posing a particular problem for developing countries. 30 In this report, we use the term “developing countries” to mean those that the World Bank classifies as low- or middle-income. And as we mentioned above, the scale of spending needed for the transition could stretch public finances. 31 See also From poverty to empowerment: Raising the bar for sustainable and inclusive growth , McKinsey Global Institute, September 2023.

A poorly executed transition could also compromise the reliable supply of energy and the resiliency of energy systems, and it could affect the inputs needed for the transition itself. For example, when solar and wind power are low—such as at night or on windless days—poorly designed energy systems might not provide regions with enough storage, firming capacity, or other ways to meet demand reliably. Also, the transition will require many physical inputs: materials and manufactured goods, water, land, infrastructure, and labor. If the transition is not well executed, especially in the near term, the supply of those inputs could be insufficient for what is needed, leading to shortages and slowing the growth of new energy systems. Past McKinsey research has found that shortages of many minerals used in making EV batteries, wind turbines, and other low-emissions technologies could begin before 2030, caused by rapidly growing demand from the transition and the long time it takes to bring new mines on line (five to 15 years, in some cases). 32 Patricia Bingoto, Michel Foucart, Maria Gusakova, Thomas Hundertmark, and Michel Van Hoey, The net-zero materials transition: Implications for global supply chains , McKinsey & Company, July 2023. The shortages could also have price implications; research estimates that if they are not addressed, the price of nickel, cobalt, and lithium could increase by several hundred percent from 2020 levels in a net-zero scenario over the next decade. 33 Nico Valckx, Andrea Pescatori, and Lukas Boer, “Metals may become the new oil in net-zero emissions scenario,” VoxEU, November 5, 2021. Furthermore, the supply of raw materials is often concentrated, creating potential risk from supply chain disruptions. Three countries or fewer account for the extraction of 80 percent or more of several critical minerals. Refining is often even more concentrated. 34 Mineral commodity summaries 2023 , US Geological Survey, January 2023. And long approval times can slow deployment; in the United States, the typical electrical power project requesting connection to the grid took an average of five years in 2022. 35 Joseph Rand et al., “Queued up: Characteristics of power plants seeking transmission interconnection as of the end of 2022,” Lawrence Berkeley National Laboratory, April 2023.

For individual countries and companies, the transition could also threaten competitiveness if it is not well conceived. Of course, affordability and competitiveness are tightly interlinked; for example, if one country’s emissions-reduction initiatives pushed up production costs, its products could become less competitive in global markets. 36 Researchers have examined the impact of environmental regulation on competitiveness as measured by such factors as trade, industry location, and productivity. They find that such measures have led to statistically significant adverse impacts, but small ones. They add, however, that more research is needed to understand why the impacts have been small, and they conjecture that one reason might be that environmental policy has been strategically set to limit the impact on competitiveness. See Antoine Dechezleprêtre and Misato Sato, “The impacts of environmental regulations on competitiveness,” Review of Environmental Economics and Policy , volume 11, number 2, summer 2017. Some countries or regions could be especially vulnerable to the effects of rising production costs. Asia, for example, is where much of the world’s manufacturing takes place, so if production there became more expensive, it might be disproportionately affected. 37 For more details, see Asia on the cusp of a new era , McKinsey Global Institute, September 2023. But there are other ways that competitiveness could be harmed. During the transition, some legacy industries and natural endowments could lose relevance, affecting jobs and communities. 38 Our past research has shown that job losses during the net-zero transition would be concentrated in certain sectors and regions. For instance, more than 10 percent of jobs in 44 US counties are in fossil fuel extraction and refining, fossil fuel–based power, and automotive manufacturing. For further details, see The net-zero transition: What it would cost, what it could bring , McKinsey Global Institute, January 2022. Without robust planning, workers may find it hard to move to new jobs and build new skills. And as many countries adopt assertive industrial policy for climate technologies, they run the risk, if they do not design that policy carefully, of affecting businesses’ incentives to innovate and produce efficiently, hurting productivity.

Affordability, reliability, and industrial competitiveness are independently important objectives. But if the transition risks compromising them, a separate problem could result: a derailing of momentum toward net zero (Exhibit 4). Affordability may be the most important objective in that respect. Citizens may be less willing to embrace the transition if energy becomes less affordable. Some consumers and companies may not want to switch to low-emissions products if they are unfamiliar or more expensive. Conversely, the more cost competitive the technologies needed for net zero become in relation to traditional, established alternatives, the easier it will be to fund and build them. But reliability and competitiveness matter too. If the transition were to challenge the secure supply of energy and materials, or the availability of jobs and economic opportunity, it could be harder to sustain momentum toward net zero.

A pair of flow-chart diagrams repeats the four illustrations from the previous exhibit depicting the four interdependent objectives. The first diagram starts with emissions reduction and depicts that objective introducing compromising effects on the other three objectives. Arrows flow out from those three, then merge into a single arrow that circles back around to the beginning, representing derailed momentum for emissions reduction. The second diagram is set up in the same way, except with emissions reduction introducing complementary effects on the other objectives. And the arrow that circles back to the beginning represents boosted momentum for emissions reduction.

If, however, emissions can be reduced while affordability, reliability, and industrial competitiveness are advanced, the transition’s momentum could be boosted. For example, if more low-emissions technologies become cost competitive, capital will be likelier to flow to them. And if investing in the transition creates more opportunities for countries and companies to compete, they could be more likely to embrace the transition. A successful net-zero transition will therefore require achieving not one objective but four interdependent ones.

A well-managed transition would follow seven principles

How can the world reduce emissions in line with the Paris Agreement and do so while maintaining—and potentially improving—affordability, reliability, and industrial competitiveness? To start answering that question, we have identified seven principles that describe how decision-makers should approach this next phase of the net-zero transition (Exhibit 5).

A diagram arranges the seven principles into a circle. The first three are about allocating spending effectively: Create incentives to deploy lower-cost solutions; drive down costs of expensive solutions; and build effective financial mechanisms to drive capital where it is needed. The next two are about redesigning physical and energy systems: Anticipate and remove bottlenecks for materials, land, infrastructure, and labor; and revamp energy markets and planning approaches for an electrified world. And the last two are about navigating risks and oppotunities: Manage existing and emerging energy systems in parallel; and compete for opportunities created by the transition, using comparative advantage as a guide.

The first three of those principles show how the world can undertake actions now to reduce the spending needed for a given amount of abatement and thus make the transition more affordable. The next two show how to redesign physical and financial systems in ways that can protect affordability and reliability over time. And the last two show how preparing for risks and opportunities can further all three objectives.

The principles do not provide one-size-fits-all answers to all the questions that stakeholders will confront. Rather, they provide a framework that can guide stakeholders as they navigate the next phase of the transition.

Allocating spending effectively

Our first three principles involve ways to allocate spending on the net-zero transition as effectively as possible. Deploying inexpensive solutions now would result in faster abatement of GHG emissions now. Driving down the cost of expensive solutions would make them ready to deploy when the time comes. And building effective financial mechanisms would help move capital where it is needed to fund the transition.

Later in this report, we describe an experiment that we performed to explore the possible results of applying the first two principles. Doing so, we find, might be able to improve the world’s current emissions trajectory and help limit warming to what the Paris Agreement envisions. Capital spending on low-emissions technologies would potentially be one and a half to two times as large as it is now—as opposed to about three times, as might be the case if the two principles were applied less extensively. Such an approach may therefore warrant closer examination and more exploration.

Principle 1: Create incentives to deploy lower-cost solutions. The world currently emits about 55 metric gigatons of CO 2 e per year, a quantity that will keep growing if action is not taken. 39 See Emissions gap report 2023: Broken record , United Nations Environment Programme, November 2023, and Emissions gap report 2022: The closing window—Climate crisis calls for rapid transformation of societies , United Nations Environment Programme, October 2022. CO 2 e, or carbon dioxide equivalent, includes not only carbon dioxide but also other GHGs. CO 2 e is calculated with a measure called global warming potential, which indicates how much energy the emissions of one ton of a GHG will absorb in relation to the emissions of one ton of CO 2 over a given period—in this case, 100 years. The IPCC estimates that by 2030, solutions that are relatively cheap—that is, costing less than $20 per metric ton of CO 2 e abated—could potentially be abating as much as 19 metric gigatons per year (Exhibit 6). 40 The 19-metric-gigaton calculation is based on estimates from the IPCC. Cost is defined as the net lifetime discounted monetary cost of the solution (including both capital and operating costs) relative to the cost of the technology that is the traditional alternative to the solution. The IPCC acknowledges uncertainty associated with the magnitude of abatement potential; it also notes that abatement potentials are assessed independently for each solution, so they are not necessarily additive.

A bar chart plots the potential contribution to net carbon dioxide equivalent reduction in 2030 for 15 different solutions. Listed first are solar power; carbon dioxide abatement in agriculture and land use; and wind power, each of which could abate more than 3 gigatons for less than $20 per metric ton. Listed next are solutions that could each abate 1–3 gigatons for that cost: transportation efficiency and modal shift; non-carbon dioxide abatement in waste and industry; methane abatement in coal, oil, and gas operations; energy efficiency in buildings; and energy efficiency, materials efficiency, enhanced recycling in industry. The rest could abate less that 1 gigaton for that cost: other low-emissions power capacity (such as nuclear and geothermal); nitrous oxide and methane abatement in agriculture and land use; biofuels; building electrification and other decarbonization measures; industrial electrification; carbon capture in power and industry; and electric vehicles.

Investment in some of those solutions has begun to flow in recent years. One example is solar and wind power, whose initial deployment can often be carried out without further spending on expanding grids or building storage capacity. 41 The marginal abatement costs shown in Exhibit 6 for wind and solar power are based on levelized costs only and do not include system integration costs, such as battery costs and costs associated with transmission and distribution. But investment in lower-cost solutions remains lower than what is needed over the next decade to be consistent with a 1.5°C trajectory.

Stakeholders have a wide range of such solutions to consider. For example, implementing energy-efficiency measures and shifting behavior to reduce rates of energy consumption—by using energy-efficient appliances, making changes to industrial processes to minimize the use of energy and materials, improving efficiency in transportation, increasing the occupancy of passenger vehicles, and taking other measures—collectively have the potential to abate 4.8 metric gigatons of CO 2 e. 42 These assessments of abatement potential may not consider the “rebound effect” of energy efficiency, in which consumers use more energy, not less, as technology becomes more efficient. Estimates of rebound effects vary significantly, but the literature agrees that they are probably well below 100 percent, so that improving energy efficiency still leads to overall savings in energy. See Kenneth Gillingham, David Rapson, and Gernot Wagner, “The rebound effect and energy efficiency policy,” Review of Environmental Economics and Policy , volume 10, number 1, winter 2016; and Paul E. Brockway et al., “Energy efficiency and economy-wide rebound effects: A review of the evidence and its implications,” Renewable and Sustainable Energy Reviews , volume 141, May 2021. Also, empirical evidence suggests that realized cost savings may be substantially lower than modeled ones for specific energy-efficiency programs, particularly those related to retrofitting homes. So stakeholders seeking to improve energy efficiency should carefully assess which measures will actually result in savings. See Meredith Fowlie, Michael Greenstone, and Catherine D. Wolfram, “Do energy efficiency investments deliver? Evidence from the Weatherization Assistance Program,” Becker Friedman Institute for Economics, working paper number 2621817, January 2018. Reducing GHGs other than CO 2 , particularly methane, in such activities as coal mining, oil and natural gas operations, and solid waste operations could abate about 3.0 metric gigatons. Addressing emissions of CO 2 , nitrous oxide, and methane from agriculture and land use—for example, by halting deforestation and improving forest management—could abate 3.7 metric gigatons. 43 A partial list of more detailed lower-cost solutions includes replacing low-efficiency lighting with high-efficiency lighting, improving the efficiency of kilns in cement production, installing smart energy and gas monitoring systems, flooding abandoned mines to trap methane, capturing landfill gas to use for power, optimizing fertilizer application, and improving rice cultivation practices.

Some lower-cost solutions are “transition” solutions—that is, temporary ones that do not completely eliminate emissions but help reduce them at relatively low cost until alternatives become viable over time. Transition solutions being discussed by decision-makers include shifting from coal to gas to generate electricity, increasing the share of scrap steel used in existing steelmaking processes, and using hybrid heating systems that have both an electric heat pump and a gas furnace to heat homes. 44 See Deborah Gordon et al., “Evaluating net life-cycle greenhouse gas emissions intensities from gas and coal at varying methane leakage rates,” Environmental Research Letters , volume 18, number 8, July 2023; Jamie Brick, Dumitru Dediu, and Jesse Noffsinger, “ The role of natural gas in the move to cleaner, more reliable power ,” McKinsey & Company, September 2023; Ajitesh Anand, Toralf Hagenbruch, Anoop Muppalla, and Benedikt Zeumer, “ Tackling the challenge of decarbonizing steelmaking ,” McKinsey & Company, May 2021; and Gustav Bolin, Ann Hewitt, Blake Houghton, Charlie Jersey, and Evan Polymeneas, “ Building decarbonization: How electric heat pumps could help reduce emissions today and going forward ,” McKinsey & Company, July 2022. A “coal-to-gas” shift for generating electricity could involve either replacing existing coal-fired plants with gas-fired ones or prioritizing gas when building new fossil fuel–powered plants. Most transition scenarios anticipate a larger role for gas power in the future because it could provide future firming capacity; it has the potential to cut CO 2 emissions in half (provided that emissions associated with the production of gas are also reduced); and it could eventually be retrofitted with carbon capture and storage or hydrogen to further reduce emissions (provided that innovation brings those technologies to maturity). Such solutions could offer a pragmatic way forward. They nonetheless will need to be carefully implemented: stakeholders have to make lifetime assessments of their emissions and costs (including the risk of stranded assets) and of the emissions and costs of low-emissions alternatives, to make sure that the transition solutions would truly help reduce emissions, maintain affordability, and not increase long-term costs. 45 For example, some researchers suggest that the benefits of a coal-to-gas shift may be overstated because methane emissions from gas operations may be understated. Others suggest that a shift would lock large shares of fossil fuel capacity into the future energy grid. See Stefan Schwietzke et al., “Upward revision of global fossil fuel methane emissions based on isotope database,” Nature , volume 538, October 2016; and Robert W. Howarth, “A bridge to nowhere: Methane emissions and the greenhouse gas footprint of natural gas,” Energy Science and Engineering , volume 2, number 2, June 2014.

Deploying lower-cost solutions would have four key benefits. First, it would allow any given amount of capital spent on low-emissions technologies to have a large impact on abatement. Second, it would make progress in reducing emissions while other solutions were scaled up and came down in cost. 46 For example, it will take time to fully scale up low-emissions sources of electricity. In the meantime, lower-cost solutions like improving energy efficiency can reduce demand for energy and therefore reduce emissions. Third, many of these measures, such as those improving energy efficiency, are cheaper than traditional alternatives over their lifetimes; implementing them could thus improve overall affordability. Fourth, some of the solutions would reduce methane emissions—which are highly potent in the near term—and could make a major contribution to reducing warming over the next ten to 20 years. 47 In some instances, however, it may be appropriate to also focus on higher-cost solutions in the near term. One example, as we discuss in principle 2, is when deploying them would reduce costs via the learning that happens as companies start to build and deploy a product or via economies of scale. A second example is when they have particularly large adjustment costs, including costs and time associated with developing supply chains or building the necessary skills in the workforce; in those cases, deploying the solutions early and incrementally over time can help minimize the adjustment costs and remove bottlenecks. These ideas are similar to those we describe in principle 4. See Adrien Vogt-Schilb, Guy Meunier, and Stéphane Hallegatte, “When starting with the most expensive option makes sense: Optimal timing, cost and sectoral allocation of abatement investment,” Journal of Environmental Economics and Management , volume 88, March 2018. As we stated above, deploying lower-cost solutions can in fact go hand in hand with these other measures and allow for simultaneous, targeted efforts to drive down costs of expensive solutions and remove bottlenecks.

Therefore, as stakeholders consider scaling up future spending for the next phase of the transition, they should ask themselves what opportunities exist to accelerate the deployment of lower-cost solutions. Various obstacles stand in the way, however. Some of the solutions would need to be executed at an enormous scale to have a meaningful impact on emissions; improving energy efficiency in millions of homes is a good example. Others call for changes to daily routines or lifestyles, such as altering modes of travel. Still others, particularly the transition solutions, may be perceived as temporary fixes and therefore ineffective.

But providing incentives can help. Changing building standards for new construction can lead to gains in energy efficiency, as can setting fuel-efficiency standards for vehicles. 48 M. Tyler et al., Impacts of model building energy codes—Interim update , Pacific Northwest National Laboratory, July 2021; and Antonio M. Bento et al., “Estimating the costs and benefits of fuel-economy standards,” Environmental and Energy Policy and the Economy , volume 1, 2020. Offering rebates or tax incentives to people or sectors can reduce the amount of energy they use. Preserving forests by providing financial incentives to protect them or by designating and enforcing protected areas can help prevent deforestation. And in addition to incentives, many solutions would need financing, as we discuss in principle 3.

Principle 2: Drive down costs of expensive solutions. At the same time, many of the technologies that the world needs to reach net zero are not yet cost competitive. The IPCC estimates that by 2030, more than 20 metric gigatons of GHGs could cost more than $20 per metric ton to abate, and 14 metric gigatons could cost more than $50 per metric ton. 49 Climate change 2023 synthesis report , IPCC, 2023.

Another way to think about the cost of technologies is to consider their maturity, because immature technologies are by definition not yet fully viable and therefore not cost competitive. Various analyses suggest that 10 to 20 percent of the emissions reductions needed by 2050 could come from technologies that are already commercially mature (Exhibit 7). 50 The stages mentioned in this discussion (the concept, prototype, and demonstration stages, the early market stage, and commercial maturity) are groupings based on technology readiness levels (TRLs) from the International Energy Agency. The ranges mentioned (for example, the 10 to 20 percent of emissions reductions that could come from commercially mature technologies) are based on several analyses, including the International Energy Agency’s Net Zero Emissions by 2050 Scenario and forthcoming McKinsey research. See Net zero roadmap: A global pathway to keep the 1.5°C goal in reach , International Energy Agency, September 2023. The shares of technologies at various stages of maturity could differ in different parts of the world because of technologies’ different cost profiles, local adoption rates, and other factors. We excluded behavioral change (which has a small contribution to emissions reduction) from the IEA’s analysis and rounded the resulting shares to the nearest 5 percent. Though TRLs can be an effective framework for understanding the maturity of individual technologies, they do not consider other factors relevant to commercialization. Such factors include, for example, the technology’s potential to perform as well as traditional alternatives in a range of uses, the maturity of the supply chain and other inputs needed for the technology, and the maturity of supporting systems that the technology would depend on (such as batteries for full-scale intermittent renewable energy generation). Most of the lower-cost solutions described in principle 1 are either in the commercially mature category or are not technological (for example, altering modes of travel). A few exceptions are in the early market stage but close to commercial maturity. But at the other end of the maturity spectrum, 35 to 45 percent could come from technologies that are still in the concept, prototype, or demonstration stage. Examples of technologies in those stages include lithium-air batteries, hydrogen aviation, and small modular nuclear reactors, respectively. In some cases, technologies need to overcome fundamental scientific or engineering challenges. In others, they would need to grow much cheaper to become cost competitive with traditional technologies.

A stacked bar chart breaks down the share of carbon dioxide emissions reductions from technologies needed to reach net zero by 2050. Technologies in the concept, prototype or demonstration stage account for 35–45% of the emissions reduction, technologies in the early market stage account for about 45%, and commercially mature technologies account for 10–20%. A second chart plots the evolution of one representative technology, solar photovoltaic modules, through each of those thee stages. A sequence of circles is arranged from left to right in a timeline, starting in 1975 with a large circle representing the technology's $106 cost per watt. The circles shrink steadily, to $30 in 1980 and $5 in 2000, with color coding signaling a shift from the demonstration stage to the early market stage in the early 2000s. The circles continue shrinking to 20 cents in 2020, when another color-coding change signals the beginning of a shift to commercial maturity.

The remaining 40 to 50 percent of the emissions reductions needed by 2050 are expected to come from technologies that are currently in the early market stage (for example, lithium-ion energy storage, onshore wind power, and passenger battery EVs). 51 What we call the early market stage corresponds to the IEA’s TRLs 9 and 10. TRL 9, “commercial operation in relevant environment,” refers to technologies that are commercially available but need improvement to stay competitive, such as hydrogen fuel cell electric vehicles and alkaline water electrolyzers. TRL 10, “integration needed at scale,” refers to technologies that are commercial and competitive but need further integration efforts, such as air-source heat pumps and lithium-ion batteries for energy storage. Some technologies that have reached commercial maturity in some locations are still in the early market stage in others. See ETP clean energy technology guide , International Energy Agency, September 2023. These technologies have been proven to work and are commercially available, but they may not yet be fully scaled up or cost competitive with traditional technologies. They may also face integration challenges or unresolved technological difficulties in specific uses.

Improving the maturity of technologies and bringing their costs down will need three mutually reinforcing mechanisms: first, R&D; second, “learning-by-doing” (the learning that happens as companies that are starting to build and deploy a product enhance its technological performance, improve manufacturing processes, build supply chains, and develop appropriate business models); and third, the economies of scale that emerge when deployment becomes widespread. 52 Other factors can also drive changes in technology costs over time. For example, the cost of silicon, an important driver of the cost of solar photovoltaic modules, declined between 1980 and 2001 because of developments in the semiconductor industry. See Goksin Kavlak et al., “Evaluating the causes of cost reduction in photovoltaic modules,” Energy Policy , volume 123, December 2018.

Those three mechanisms often work together to drive down costs. In the early stages, R&D is a major factor. As technologies start to grow, learning-by-doing can play a larger role and also provide real-world feedback to guide additional R&D efforts. In later stages, economies of scale begin playing a greater role as increasing the size of production plants spreads fixed costs over more produced units (though in later stages, too, R&D and learning-by-doing can still improve technologies and drive down costs). From 1980 to 2001, R&D and learning-by-doing accounted for as much as 65 percent of the cost decline of solar panels, economies of scale for 20 percent, and other factors for the remainder. From 2001 to 2012, R&D and learning-by-doing represented 50 percent of the cost decline, and economies of scale accounted for about 45 percent. 53 Between 1980 and 2001, economies of scale accounted for 20 percent of cost declines for solar photovoltaic modules, while other factors accounted for 15 percent. Between 2001 and 2012, R&D, learning-by-doing, and other factors represented 43, 7, and 5 percent of cost declines for solar photovoltaic modules, respectively. The impact of learning-by-doing on its own was relatively small. Market-stimulating policies played a significant role in driving costs down by unlocking private R&D, economies of scale, and learning-by-doing; these together contributed an estimated 60 percent of the cost decline for solar photovoltaic modules between 1980 and 2012. See Goksin Kavlak et al., “Evaluating the causes of cost reduction in photovoltaic modules,” Energy Policy , volume 123, December 2018.

Various measures can help improve the viability of technologies and reduce their cost. The public sector can play a key role by convening stakeholders in various sectors, collaborating with them to establish cross-sector decarbonization road maps, directly funding R&D, or providing incentives or subsidies for companies to engage in it. In the energy sector, investing more in R&D is surely warranted; as a share of GDP, it has remained flat since the early 1990s and is 60 percent lower than it was at its historical peak. 54 World energy investment 2022 , International Energy Agency, 2022. That calculation is of investment in 31 IEA member countries, and it includes R&D in energy efficiency, fossil fuels, CCUS, renewable energy, nuclear fission and fusion, hydrogen and fuel cells, other power and storage technologies, and other technologies.

For technologies that show promise, a broader approach may be called for, one in which market-stimulating mechanisms, as well as actions by venture capital firms and other organizations, provide incentives for private R&D and for early deployment. Those measures can push the private sector to build new businesses and scale up technologies. 55 There is some debate about whether governments, in trying to lower the cost of low-emissions technologies, should focus on R&D or on driving deployment. As we discussed above, the importance of the two in lowering costs varies depending on the stage of the technology. For technologies in earlier stages, direct incentives for R&D may matter more; for those in later stages, R&D, learning-by-doing, and economies of scale can all play a role and reinforce one another. There is a related debate about how much to focus on improving technologies and how much to focus on deploying existing technologies (for example, through adoption subsidies or through enacting a carbon tax on high-emitting assets). Research suggests that the two agendas need to work in parallel. For example, adoption subsidies can help increase the use of low-emissions technologies, but over time they will be expensive unless the cost and performance of those technologies improve. And carbon taxes tend to be most effective when viable and cost-competitive low-emissions technologies already exist; in such cases, the taxes discourage the use of high-emissions technologies and encourage a switch to the low-emissions ones. See Daron Acemoglu et al., “The environment and directed technical change,” American Economic Review , volume 102, number 1, February 2012. One way to do so is to guarantee future demand in order to encourage companies to develop and scale up new technologies. Another approach would establish innovation clusters or hubs where academic researchers, venture capital firms, and companies could work together to develop and scale up technologies.

Even commercially mature technologies may need help if they are still seen as risky or if moving to them from older technologies causes consumers to incur switching costs. One way to accelerate their deployment is to drive financial flows to them; see our next principle for more.

In implementing all these measures, it will be important to encourage collaboration among sectors in different countries. Such collaboration brings a broader pool of talent and ideas to bear on problems and promotes the wide applicability of technologies. One example is the Renewable Energy Technology Action Platform, a collaboration between India and the United States that aims to enable knowledge sharing about green hydrogen, wind energy, long-duration energy storage, and other emerging technologies. 56 “Renewable energy technology action platform under US–India strategic clean energy partnership,” Ministry of New and Renewable Energy, Government of India, August 2023.

For companies looking to systematically drive down costs, a crucial step is setting ambitious goals that can help focus their attention and efforts. Consider Tesla’s master plan, which has set an ambitious agenda to reduce battery costs by 56 percent between 2020 and 2025. 57 “Battery day presentation,” Tesla, September 2020. And society and industry need to be focused on reducing the cost not just of individual technologies but of entire systems.

Principle 3: Build effective financial mechanisms to drive capital where it is needed. Financial markets and institutions are key actors in effectively allocating capital. They do so by channeling money efficiently from providers of capital to investments. But those markets and institutions face two challenges in facilitating a capital reallocation as large and complex as the net-zero transition.

First, low-emissions technologies are still nascent in some sectors and not yet cost competitive in others, and their risk-return profiles differ from those of traditional alternatives. Providers of capital may therefore have a hard time evaluating their viability and risk and may be hesitant to lend to them or invest in them. Second, consumers and companies may have a limited appetite to move to these new technologies, which can affect demand for climate finance.

Innovation, as we noted earlier, can play an important role by ensuring that low-emissions alternatives continue to become cost competitive. But a number of additional solutions could help accelerate the necessary reallocation of capital. Those solutions would reduce the risk of investments, better match capital providers with the investment needs that are most suitable for them, or unlock demand for climate finance.

One of the solutions is developing and scaling up voluntary carbon markets in the near term. They would need to be large, transparent, verifiable, and environmentally robust. 58 Voluntary carbon markets would include markets for avoidance credits (for example, to prevent forests from being cut down) and for removal credits (for example, for planting forests or direct air capture). For further details, see Final report , Taskforce on Scaling Voluntary Carbon Markets, January 2021. If designed well, they could particularly encourage the flow of capital to developing countries and to measures that could otherwise be hard to finance, such as avoiding deforestation. Another possible solution is mandatory markets and carbon prices. This approach would require companies to pay for their emissions and give them an incentive to invest in projects that reduce emissions. 59 One way carbon prices can be implemented is in the form of a carbon tax on emitting parts of the economy. Estimates suggest that the application of such a tax could result in increased prices of energy and other products for end consumers, creating affordability concerns. However, the extent of the affordability impact for consumers depends on the magnitude of the carbon tax applied and on how the revenue generated from the tax, if any, is recycled back into the economy. See Fiscal monitor: How to mitigate climate change , International Monetary Fund, October 2019. Moreover, as we discussed earlier, using R&D and other measures to develop and drive down the costs of low-emissions technologies can work hand in hand with carbon taxes and reduce challenges to affordability.

Another opportunity is expanding and revamping existing sources of capital, such as project finance. In developed markets, environmental, social, and governance indexes, climate indexes, green bonds, and sustainability-linked loans have also gained popularity. However, concerns are growing that these instruments are not working well. Improving the functioning of such instruments—for example, by crafting better standards or formulating better ways of verifying that the standards are actually met—can help increase their effectiveness.

Entirely new asset classes and funds could be built as well. Industrial venture capital funds, which tend to play an active role in a technology’s early stages, and growth infrastructure funds, which can be instrumental in bringing a mature technology to scale, could be developed to drive capital to climate solutions. Special-purpose vehicles, which manage financial resources for a clearly defined purpose and period, could help companies continue funding high-emitting assets that remain necessary in the near term—but for a specified period and with a clear plan for winding them down. Sustainable land and forestry funds could help preserve forests, and “brown-to-green” funds could help carbon-intensive companies decarbonize.

Scaling up blended finance could also help increase capital flows. Blended finance combines public and private capital, reducing the risk faced by private capital providers. Philanthropic capital can play a part as well. Because public capital is often limited, it is important that it be carefully channeled into areas where the need is most acute, such as supporting the transition in lower-income or lower-middle-income countries. For example, those countries may be investing in raising energy access, but doing so with low-emissions technologies could incur high capital costs. Various reforms are also being considered to ensure that blended finance, grant funding, and loans on concessional terms are used to their full potential, such as increasing the funding available via multilateral institutions and adjusting the terms on which it can be provided. 60 By multilateral institutions, we mean those that are funded by the governments of more than one country. See Scaling up blended finance in developing countries , OECD, 2022; and Strengthening multilateral development banks: The triple agenda , Independent Expert Group commissioned by Indian G-20 Presidency, 2023. Also, implementing blended-finance projects can be slow; to address that problem, financial institutions and multilateral institutions could develop “off-the-shelf” guidance on general financing structures and frameworks that could then be tailored to different needs.

Companies can use the various sources of capital discussed above, such as project finance or brown-to-green funds. But they could also reallocate their own capital resources from high- to low-emissions businesses. That often involves making large capital investments or transforming large physical assets. The step is not a straightforward one, and it will require creating incentives for companies to make the investments. Long-term purchase agreements, for example, provide companies with a guaranteed source of revenue over an extended period, giving them an incentive to invest in new technologies.

All these solutions would need to be supported by more transparency and a better understanding of the potential demand, costs, and risks of specific new technologies and projects. Climate-related disclosures could help, and so could efforts by companies and financial institutions to build capabilities to better assess new risk-return profiles and identify new opportunities.

Redesigning physical and energy systems

The net-zero transition calls for far-ranging changes to many existing systems. Some of those systems provide the physical inputs necessary to build low-emissions assets; others provide energy. If not performed well, the changes could compromise affordability, reliability, and the pace of emissions reduction. The next three principles show how to make the changes effectively.

Principle 4: Anticipate and remove bottlenecks for materials, land, infrastructure, and labor. The transition will call for increases in the supply of certain minerals, such as lithium and nickel, and of manufactured goods, such as wind turbines and electrolyzers. It will require substantial amounts of water for mining, hydrogen production, and other uses. It will also require a great deal of land for solar panels, wind farms, transmission infrastructure, forests, and crops that could be turned into biofuels. Infrastructure, such as EV charging networks, electrical grids, and hydrogen pipelines, will need to be scaled up. And a great deal of labor will be needed to build and operate new physical assets.

The potential supply of those inputs will generally not be a limitation. For example, enough mineral reserves exist to meet the demand expected under the net-zero transition. But various bottlenecks could limit access, especially in the near term. This is not an unprecedented problem; bottlenecks have threatened high-emissions supply chains in the past, and they have been managed effectively. But if the bottlenecks threatening the transition are not also managed effectively, material shortages and price spikes could result, impairing affordability, reliability, and the pace of the transition.

Long lead times are often a problem. For example, the time that elapses between initial exploration and starting to operate a new mine is typically five to 15 years. 61 Patricia Bingoto, Michel Foucart, Maria Gusakova, Thomas Hundertmark, and Michel Van Hoey, The net-zero materials transition: Implications for global supply chains , McKinsey & Company, July 2023; and Material and resource requirements for the energy transition , Energy Transitions Commission, July 2023. Partly for that reason, shortages of copper, lithium, nickel, rare earth metals, and cobalt—materials used heavily in EV batteries, wind turbines, and other low-emissions technologies—could begin before 2030. 62 Patricia Bingoto, Michel Foucart, Maria Gusakova, Thomas Hundertmark, and Michel Van Hoey, The net-zero materials transition: Implications for global supply chains , McKinsey & Company, July 2023. Similarly, it can take three to 12 years for a new electricity transmission or distribution project to be planned, receive the necessary permits, be built, and become active. 63 Average lead times to build new electricity grid assets in Europe and the United States, 2010–2021 , International Energy Agency, January 2023. In the United States, getting a new nuclear reactor approved can take up to five years of complex safety reviews, environmental assessments, and public hearings, and building it can take five years or more. 64 “Nuclear explained: US nuclear industry,” US Energy Information Administration, August 24, 2023.

Another potential bottleneck is concentration. For example, China produces more than 70 percent of the world’s silica-based solar photovoltaic modules and two-thirds of battery cells. 65 Energy technology perspectives , International Energy Agency, March 2023. While concentration can bring efficiency gains, it can create supply-chain bottlenecks if supply from the few sources is affected—say, by natural disasters or trade restrictions.

A multitude of constraints can affect the supply of land. Those constraints do not include the amount of land available in the world, but they do include the natural endowments of a given region (such as sunniness, windiness, and forests), competing priorities for land (for example, agriculture), local regulations, and public sentiment. As for labor, the availability of necessary skills is a potential challenge. Nuclear power could face shortages of workers with the required expertise because many are now reaching retirement age. 66 “Nuclear industry census reveals positive signs of growth alongside workforce challenges,” Nuclear Industry Association, January 25, 2022. Similar challenges could exist for other jobs related to the manufacture and installation of low-emissions technologies. 67 World energy employment 2023 , International Energy Agency, November 2023.

Stakeholders should therefore conduct analyses of where bottlenecks could emerge and take measures to remove them. Some ways of doing so would increase the supply of inputs. Long-term supply contracts, such as those that are forming between auto manufacturers and minerals producers to provide lithium used for battery technologies, help individual manufacturers secure supply of key inputs over long periods while supporting the scale-up of capacity for new materials. 68 “LG Energy Solution and Toyota sign long-term battery supply agreement to power electric vehicles in the U.S.,” Toyota, October 4, 2023. And workforce retraining programs could increase the supply of workers with the necessary skills quickly. For example, teaching technicians who already install heating, ventilation, and air-conditioning systems how to install heat pumps could be a fast way of building a capable workforce.

Other measures would reduce the demand for inputs. Examples include recycling materials, developing new battery chemistries that rely less on raw materials that are in short supply, and replacing dated wind turbines in existing windmills with newer, more efficient ones, thus reducing the amount of land needed for a given supply of electricity.

Principle 5: Revamp energy markets and planning approaches for an electrified world. Electricity will play a larger and larger role as the transition takes hold. In a net-zero world, electricity systems could provide about three times as much energy as they do today, and the share of all electricity that was generated by wind and solar power could grow. 69 World energy transitions outlook 2023: 1.5°C pathway , International Renewable Energy Agency, June 2023. Almost twice as many transmission and distribution lines would need to be constructed as exist today. 70 Energy technology perspectives , International Energy Agency, March 2023.

In a number of ways, current markets and planning approaches for the generation of electricity may no longer be suited for that expansion and may no longer function well once it happens. 71 Though this discussion focuses on electricity, other energy markets will also need to shift or develop, including those for natural gas and hydrogen. We focus on electricity because it will undergo an especially dramatic transformation and will require especially innovative solutions. Four challenges stand out.

The first is that companies may not have incentives to build and operate all the necessary generation capacity. Many markets currently use marginal costs (which are typically driven by the cost of using a fuel, such as gas or coal) to set electricity prices, and those prices serve as incentives to build capacity. But that arrangement will not work in a system in which generation assets have no marginal costs or low ones—examples are wind and solar power—because the resulting electricity prices would be very low and volatile, and generators would receive almost no payments for the power they supplied, on average (Exhibit 8).

The second challenge is that wind and solar power are intermittent. That is, they provide electricity only when the wind is blowing or the sun is shining. Therefore, planners and market designers need to ensure that the right plans and market signals exist to drive investment in assets, such as energy storage and gas plants, that can support wind and solar power.

Third, in an electrified world, it may be harder to time supply to match demand. 72 Conversely, lower dependence on fuel inputs will reduce the risk of “commodity shocks,” in which a fuel commodity suddenly becomes scarce. Such shocks can significantly increase the price of electricity generation, and they can also eliminate access to the commodity entirely, jeopardizing the reliability of electricity. For example, in 2002, Bangladesh could not obtain supplies of natural gas that had been rerouted to Europe as a result of the shortage of gas there, and widespread outages resulted. Demand for electricity may be especially high in the winter in places where people replace fossil fuel–based heating systems with electric ones. It may also be especially high at night if people continue to adopt EVs and to charge them overnight. So systems will need to be designed to manage different demand at different times of the year and different times of day. Moreover, solar panels generate less power in the winter and none at night, complicating the problem if they become a larger part of the energy mix.

Fourth, because of the increase in wind and solar generation and the changing climate, planners and market designers must now accommodate weather volatility. For example, as Texas discovered during a severe freeze in 2021, some power plants and natural gas facilities are not winterized; that is, they stop working or suffer diminishing performance in extreme cold. 73 Garrett Golding, “Texas electrical grid remains vulnerable to extreme weather events,” Federal Reserve Bank of Dallas, January 24, 2023.

A number of steps could start addressing these challenges in both regulated and deregulated markets for electricity. To build low-emissions assets affordably, power companies in regulated markets could either take on the job themselves, reducing costs through internal efficiency improvements, or issue competitive bids for other companies to do it. In deregulated markets, auctions for supply agreements will probably still be critical. In both kinds of markets, solar and wind power (or other forms of capital-intensive power) need to be able to compete on a level playing field with generation technologies that have relatively low capital costs but high fuel costs.

To help keep supply aligned with demand, a system depending on solar and wind power will also need to build a great deal of flexible capacity—that is, capacity that can provide electricity when wind and solar cannot. 74 Note that flexible capacity does not necessarily call for fossil fuels; renewable resources often provide some capacity during critical times. Similarly, fossil fuels are not a sure bet at such times, as Texas’s experience in 2021 demonstrates. (Flexible capacity is sometimes called resource adequacy, depending on the location and the length of time that the capacity covers.) Some of that flexible capacity would support wind and solar over the course of a day; for example, batteries could store solar power during the day and release it in the evening. In regulated markets, a procurement authority could require generators to make available a certain amount of such capacity. In deregulated markets, it could be attained by requiring assets to compete against each other to provide it.

Other kinds of flexible capacity would support electricity markets for more than a day in order to counteract seasonal and extreme events. For example, it may be necessary to maintain generation plants, which could run on fossil fuels today but eventually be retrofitted with carbon capture or shift to using low-emissions fuels. They would be used much less than they are today, so incentives would be needed for companies to maintain and run them, as well as the necessary support infrastructure, such as gas pipelines. 75 Running gas power plants to provide only backup capacity will entail numerous shifts. For example, gas pipelines, even if they carry less, may need even more investment, including investment in expanding the size of pipes so that they can provide adequate supply to generators at critical moments. Gas generators that will eventually shift to CCUS or hydrogen will also need investment.

Compensation mechanisms would have to change to give companies incentives to provide this kind of capacity. In regulated markets, planners could determine the amount of capacity needed and allow companies to build or maintain more assets to cover the need, compensating them with a regulated return on those assets. In deregulated markets, other compensation mechanisms, such as a price paid per gigawatt of flexible capacity, would provide incentives for companies to build or maintain assets well in advance of the need, because power capacity cannot be built overnight. Acceptable system risks would also need to be defined.

Flexibility will be critical regardless of the generation mix as more and more parts of the economy become electrified. Planning mechanisms will be necessary to determine the need—for example, which seasons and types of events present the greatest challenges and how much electricity will be needed to maintain reliability. A particularly important planning tool in determining how much capacity a resource can provide during critical times is probabilistic modeling, which can account for variations in demand for electricity and for intermittent supply.

Another way to reconcile the timing of supply and demand is to offer consumers and businesses incentives to shift their demand for electricity to times when there is more available supply. For example, EV charging does not have to happen in the evening. And data centers can align their demand to times and locations at which renewable sources of electricity are operating. 76 Rasoul Rahmani, Irene Moser, and Antonio L. Cricenti, “Inter-continental data centre power load balancing for renewable energy maximisation,” Electronics , volume 11, number 10, 2022.

Not only the generation of electricity but also its transmission faces a challenge: the transmission capacity necessary for the transition needs to be built. The challenge exists both for large-scale, high-capacity lines that would cover long distances and for smaller lines that would connect them to generators. There is no shortage of capital seeking to build large-scale transmission in many developed countries. The problem, rather, is planning procedures that assess only the reliability value of a single line. More modern planning procedures—which evaluate a portfolio of transmission lines and value several benefits, such as resiliency, access to clean energy, and economic development—are increasingly being adopted. Such procedures should balance costs and benefits among jurisdictions to account for their different approaches. Another reason for not building transmission capacity is permitting, as this report discussed earlier.

The distribution of electricity likewise faces a challenge in the transition. In many places, regulations provide utilities with most of their returns on the basis of their nondepreciated capital assets. That system gives the utilities an incentive to deploy more capital than they otherwise might. Several countries, such as Italy, are therefore planning to shift to models that reward total spending, not just capital spending. Such models could give utilities an incentive to be more capital efficient, which could lead to shifts in behavior, such as repairing assets (which does not always count as capital spending) rather than replacing them (which does).

Another area that could require market changes and planning focus is distributed energy resources, such as rooftop solar panels. Such resources could potentially reduce spending on transmission and distribution, and they could also provide small-scale flexible capacity. However, as use of distributed energy grows, its users will naturally depend less on utilities, requiring the utilities to plan carefully. Establishing clearer standards for compensating consumers for these resources will be vital.

Navigating risks and opportunities

If the world is to protect affordability and reliability during the net-zero transition, it will also have to navigate risks while moving from an old energy system to a new one. And to become more competitive, countries and companies will have to prepare for the many opportunities offered by the transition.

Principle 6: Manage existing and emerging energy systems in parallel. The net-zero transition will entail revamping how the world produces and uses energy. As that happens, the world will need to run two energy systems in parallel, smoothly ramping down the old, fossil fuels–based one while scaling up the new. Doing so well can help reduce emissions to net zero while ensuring reliable and affordable access to energy.

To help decision-makers better understand how to enable a smooth transition, we started by examining scenarios of demand for oil, gas, and coal from a range of sources, including the IEA, the IPCC, and McKinsey’s Global energy perspective 2023 (Exhibit 9). 77 See World energy outlook 2023 , International Energy Agency, October 2023; “World energy balances,” International Energy Agency, August 2023; “AR6 Scenario Explorer and Database hosted by IIASA,” International Institute for Applied Systems Analysis, 2022; and Global energy perspective 2023 , McKinsey & Company, October 2023. The scenarios are for fossil fuels used for energy production but also for other uses. By oil demand here, we mean demand for a range of liquids, including crude oil, natural gas liquids, biofuels, coal-to-liquids, gas-to-liquids, methyl tert-butyl ether, refinery gains, and low-emissions fuels. Those scenarios have different warming outcomes by 2100, ranging from 1.5°C above preindustrial levels to about 3.0°C.

Three line charts show demand scenarios through 2050 for oil and other liquid fossil fuels, natural gas, and coal. The oil chart plots actual demand of about 90–100 million barrels a day from 2010 to 2020, where it splits into 11 lines following different demand scenarios from McKinsey GEP, the IEA, and the IPCC, which range from about 35–105 by 2050. The gas chart plots actual demand of about 3.5–4 trillion cubic meters a year over the 2010s, after which the 11 scenario lines begin and spread from 1–5 trillion by 2050. The coal chart plots actual demand of about 5.5 billion metric tons of coal equivalent a year over the 2010s, after which the 11 scenario lines begin and descend to 0.5–4.5 billion by 2050.

For oil demand, some of the scenarios show growth during the next few years, but then the picture changes. In all of the scenarios examined here, demand eventually starts to fall, and in most, it is lower by 2050 than it is today, though to varying extents. A key driver of the variation in projected demand for oil is the transportation sector—specifically, the use of EVs and the efficiency of transportation.

Gas demand is also expected to grow in the near term in some of the scenarios we examined. Over time, though, some scenarios show increases in demand between now and 2050, while others show declines. The overall impact on demand would depend on how various factors pushed it up or down. Faster declines could be caused by a more rapid increase in the use of renewable energy for power generation, growing electrification to replace the use of gas (particularly in heating systems in buildings), and a shift away from natural gas in industrial processes. But some transition-related solutions could push gas demand up: using gas to produce hydrogen, switching from coal to gas to generate electricity, and using gas power to provide firming capacity for renewable power generation. Using gas as a feedstock for chemicals could also increase demand.

And for coal demand, all scenarios show declines. The steepness of the declines depends in particular on how demand in India and China, the world’s biggest consumers of coal, evolves.

Stakeholders approaching the management of two energy systems in parallel should therefore consider two implications. First, in scenarios in which warming is kept to the levels envisioned by the Paris Agreement, the process of shifting from the old energy system to the new means that oil, gas, and coal will play at least some part in the energy mix in the next few years. So it is vital that direct emissions from their operations be as small as possible.

Second, these numerous scenarios show that although demand for oil and gas will be lower in 2050 than it is today—substantially lower, on a 1.5°C trajectory—the decline will not be immediate. In the interim, it will be important for demand to be met with enough supply so that access to energy is reliable and affordable. At the same time, however, it will be absolutely critical to ensure that reliance on the old system, to the extent needed, does not slow momentum toward the new.

In addition to studying demand for oil, we examined expectations of supply. 78 Supply was modeled only until 2040 because uncertainty about future sources of production made modeling challenging after that point. Specifically, we looked at the potential production of crude oil and natural gas liquids from existing oil fields (accounting for their expected depletion as well as for future production there that can be enabled by maintenance and other measures) and from projects currently under development (Exhibit 10). 79 Existing oil fields consist of those that are currently producing; we account for their expected depletion as well as for future production that can be enabled by maintenance and other measures, such as infill drilling. Projects under development include those that are in the post–final investment decision (FID) stage. The analysis excludes major pre-FID project redevelopments and expansions, as well as new investments in shale oil, unconventional wet gas, and associated natural gas liquids. It also assumes that existing sanctions regimes continue and that some spare capacity remains in the system. We found that at least through 2040, some shortfall could exist between that production and potential demand for oil, even with the substantial decline in demand for oil expected on a 1.5°C trajectory. 80 The 1.5°C scenarios that we examined are from the IEA and the IPCC.

A combination chart uses area to plot supply projections and lines to plot demand scenarios for crude oil and natural gas liquids. The supply plot starts in 2020 at about 88 million barrels a day, peaks at about 92 million in 2023, and then descends to about 45 million by 2040. The demand scenario plot includes 11 lines, the same scenarios from the previous exhibit, starting in 2020 at about 90–100 million and spreading out to a range of 50–100 million by 2040 and 25–100 million by 2050.

And depending on how demand for gas evolves, new infrastructure may be needed, in particular for pipelines and for facilities that transform gas into liquefied natural gas (LNG) and then back. In the United States, for example, new pipeline infrastructure may be needed in parts of the country to supply gas to support renewable power systems. Likewise, Asia has only modest gas reserves of its own, so it may need new facilities to service LNG imported from abroad.

These analyses point to a number of solutions that could help manage two energy systems effectively in parallel. First and foremost, it will be critical to scale up the new energy system as quickly as possible. This could be done by expanding alternative energy sources, changing end-use sectors, and improving energy efficiency, as we have described in depth elsewhere in this report. But more is needed.

One important step is to reduce Scope 1 and 2 emissions from fossil fuel operations to the extent possible. 81 Scope 1 emissions come from sources that are controlled or owned by an organization; Scope 2 emissions are those “associated with the purchase of electricity, steam, heat, or cooling.” See US Environmental Protection Agency, Center for Corporate Climate Leadership, “Scope 1 and Scope 2 inventory guidance,” August 21, 2023. Estimates suggest that such emissions of methane from oil and gas operations could be reduced by 35 percent at nearly no net cost. 82 Emissions from oil and gas operations in net zero transitions , International Energy Agency, June 2023. See also Curbing methane emissions: How five industries can counter a major climate threat , McKinsey & Company, September 2021. Methane emissions could be reduced by fixing leaky connections and updating operating procedures to reduce venting at wells, pipes, and tanks. 83 Methane emissions from the energy sector are highly concentrated in a few countries, which could create barriers to emissions reduction if those countries do not actively pursue it. According to the International Energy Agency, the five biggest methane emitters for energy-related uses are China, Russia, the United States, Iran, and India, which together account for over half of the global total. Of those countries, only the United States has signed the Global Methane Pledge. See “Methane tracker,” International Energy Agency, February 2023. Other measures could include reduced flaring, electrification of equipment, and use of carbon capture.

Another step is for decision-makers to undertake fossil fuel–related investments in ways that provide as much energy as necessary and prevent price volatility but also maintain momentum toward net zero and do not risk locking in the use of fossil fuels. Increasing the efficiency and effectiveness of existing operations to maximize production—for instance, through improved management of reservoirs—is one opportunity. Another, to the extent new projects are needed, is deploying capital in a modular fashion. That is, rather than investing in projects that require large, up-front capital outlays in return for long useful lifetimes, companies could identify opportunities for which capital can be deployed in segments. Also, projects with low emissions intensity could be prioritized.

Principle 7: Compete for opportunities created by the transition, using comparative advantage as a guide. As the transition unfolds, and as demand for high-emissions products and their components falls, jobs and output in some parts of the economy may be harmed. 84 For example, see Pia Andres et al., “Stranded nations? Transition risks and opportunities towards a clean economy,” Environmental Research Letters , volume 18, number 4, March 2023. Other parts of the economy could gain. By 2050, the transition could result in a gain of about 200 million jobs and a loss of about 185 million jobs globally. 85 The net-zero transition: What it would cost, what it could bring , McKinsey Global Institute, January 2022. Countries will need to consider how to support vulnerable workers and industries.

But even as the transition reduces demand and affects some parts of the economy, it will also create new opportunities for countries and companies to participate in a net-zero economy. Some of those opportunities are direct ones involving low-emissions products and processes: improving the energy efficiency of heating systems, building wind and solar farms, manufacturing EVs, and so on. Those opportunities will in turn create others, such as extracting and refining new materials needed for the transition, crafting new financing mechanisms, and building infrastructure, such as EV charging stations. As we discussed above, many net-zero technologies are already commercially mature, while others are in the early market stage and ripe for further development. Building and scaling up new green businesses can boost jobs, exports, and economic output (in both developed and developing countries); they can also create value for companies.

Customizing net-zero strategies for different countries

Every country will face different challenges and imperatives on its net-zero journey. Although detailed country strategies are beyond the scope of this work, here we highlight a few characteristics that could help inform such strategies. 1 For a range of near-term actions that countries and regions around the world could take, see The energy transition: A region-by-region agenda for near-term action , McKinsey & Company, December 2022.

Emissions. Today, most GHG emissions come from high-income countries, which emit 34 percent of the total, and upper-middle-income countries, which emit about 50 percent. 2 Those calculations refer to emissions of CO 2 and other GHGs. Non-CO 2 emissions were converted into CO 2 equivalents according to their 100-year global warming potential. Emissions per capita have been rising for that second group, though their per capita emissions remain well below those of high-income countries (Exhibit 1). 3 These calculations exclude anthropogenic emissions from forestry and other land use because those data are most reliably available at the regional level and this is a country-level analysis. Those emissions amounted to 4.2 metric gigatons in 2019. See “FAOStat,” Emissions totals, Food and Agriculture Organization of the United Nations, May 2023. Low-income countries emit less than 5 percent of the total. 4 Country groupings by income came from the World Bank’s classifications for fiscal year 2019. See “New country classifications by income level: 2020–2021,” Data Blog, World Bank, July 1, 2020.

A line chart plots global per capita carbon dioxide equivalent emissions from 2000 to 2019, with different lines separating grouping countries by income: High income countries had the highest emissions but trended downward, from 17 to 14 metric tons per capita. Upper-middle countries trended upward, from 5 to 9. Lower-middle and low income countries remained flat at 1.5–2.5. Additional charts compare the income categories further, with donut style pie charts showing upper-middle income countries leading with a 50% share of global emissions, and circle area charts showing upper-middle income countries leading with 24 metric gigatons of carbon dioxide equivalent emissions. And stacked bar charts show a breakdown of emissions by sector for each group, with industry holding the largest share for high, upper-middle, and lower-middle income countries, and agriculture holding the the largest share for low-income countries.

The nature of emissions also varies from country to country. A large share of high-income countries’ emissions is from energy production, buildings, and transportation. In upper-middle-income countries, emissions resulting from energy production and industrial use are high. In low-income countries, emissions are relatively low from energy use but high from agriculture. Therefore, the priority for some countries may be energy-related emissions; for others, emissions from agriculture. But all countries will need to consider where there are opportunities to deploy underused lower-cost solutions and where transition solutions may be most appropriate (see principle 1).

All countries will also need to consider their opportunities to pursue three priorities simultaneously—emissions reduction, economic development, and adaptation to the risks posed by climate change—as well as tensions among those three priorities. For example, for the many low-income countries that have relatively low emissions today, the key priority might be driving economic growth and job creation now and striving to do so in ways that could also keep future emissions low.

Existing energy systems. Countries’ current capacity to produce energy also varies. In 2020, 4.6 billion people, all of them in developing (that is, low- and middle-income) countries, consumed less than 50 gigajoules of energy apiece—far less than the 140-gigajoule average in high-income countries (Exhibit 2). 5 Those estimates are based on information in DataBank, the World Bank, 2023; “Final renewable energy consumption,” International Renewable Energy Agency, July 2023; “World energy balances,” International Energy Agency, August 2023; and Global energy perspective 2023 , McKinsey & Company, October 2023. Developing countries also typically have less firming capacity that could one day support wind and solar power. The age of high-emissions assets also varies among countries. Emerging economies often have younger coal-burning power plants, for example, and less incentive to prematurely decommission them. The same point applies to young, high-emitting assets in other sectors, such as steel furnaces.

A stylized bar chart uses side-by-side rectangles to represent the world's economies, with width representing population and height representing final energy consumption per person in 2020. The economies are arranged from left to right in ascending order of consumption, resulting in a plot that is vertically shallow on the left and rising sharply on the far right. A vertical line near the middle of the plot marks the division between the 4.6 billion people in economies consuming less than 50 gigajoules per day, including Brazil at 46, Indonesia at 24, India at 18, Ethiopia at 15, and Democratic Republic of the Congo at 9, and the 3.2 billion people in economies consuming more than 50 gigajoules, including Mainland China at 65, Japan at 91, and the United States at 192. Color coding categorizes each economy by income level, with low and lower-middle income countries mostly on the lower-consuming side of the 50 gigajoules dividing line and upper-middle and high income countries on the other side.

In developing countries, therefore, designers of future energy systems must consider not only the emissions of such systems but also how to deliver affordable access to energy, address the lack of firming capacity, and tackle the risk of stranded assets. But the mix of energy solutions could vary substantially among countries. Steps to consider include switching cooking fuels from wood or charcoal to gas and electricity; building low-cost solar and wind power, either as part of electric grids or as distributed energy resources, and especially in places where the need for firming capacity would not substantially raise costs; building gas power, including gas power that could replace coal power where feasible, and ideally in a way that can provide long-term firming or clean capacity as well as near-term energy access; and considering other low-emissions alternatives, such as geothermal power and hydropower.

Also, after analyzing a scenario from the Network for Greening the Financial System, we found that developing countries would need to spend up to three times as much as developed ones, measured as a share of GDP, on low- and high-emissions assets for energy, materials, and land use systems (both for the transition and for economic development) to reach net zero by 2050. 6 The net-zero transition: What it would cost, what it could bring , McKinsey Global Institute, January 2022. That spending is largely used to build power systems. Yet financing is harder for those countries. So scaling up blended finance could be a particularly important solution (see principle 3).

Developed countries, by contrast, have more power assets that can provide firming capacity. So their priorities might include removing constraints on the supply of inputs needed for the transition (see principle 4) and revamping energy markets (principle 5).

Economic activity and endowments. Existing economic activity and jobs may be put at risk by the transition. Developing countries and fossil fuel–rich regions are the most vulnerable to both kinds of losses. 7 The net-zero transition: What it would cost, what it could bring , McKinsey Global Institute, January 2022. But all countries will need to consider how to support affected workers and industries. They will also need to consider how they can benefit from transition-related opportunities by taking advantage of their natural endowments (see principle 7) and reducing technology costs (principle 2). For example, India, which has 300 days of sunshine per year, is prioritizing building a solar power industry, and some estimates suggest that it could become the second-largest producer of solar components by 2026. 8 India’s photovoltaic manufacturing capacity set to surge , Institute for Energy Economics and Financial Analysis and JMK Research & Analytics, April 2023.

As countries and companies begin to explore these areas, they should be guided by their potential to gain comparative advantage. For example, some countries may have outsize access to sunshine or wind; those countries might choose to produce green hydrogen, which relies on access to low-cost renewable power, or to follow energy-intensive courses, such as running data centers. Other countries may have deposits of mineral resources needed in the transition. Others may be able to take advantage of their geographic location to participate in new global trade networks, such as those for low-emissions fuels. In other cases, countries and companies may have technical know-how that can help them manufacture the goods that the transition will require. A good example is South Korea, which has taken advantage of its expertise in battery manufacturing to become a leader in grid-scale energy storage, capturing 50 percent of the global market in 2018 with support from government initiatives. 86 Korea’s energy storage system development: The synergy of public pull and private push , World Bank Group Korea Office, January 2020. (For more on how priorities during the transition could vary, see sidebar, “Customizing net-zero strategies for different countries.”)

Numerous measures can help countries capture opportunities. Investing in education and training programs could equip workforces with skills that green industries need. Creating ecosystems that enable local innovation could encourage the development of new ideas, products, and services within a country. And designing new initiatives carefully and holistically, with an eye toward how they interact with one another, will be important, because climate policy is intertwined with many other kinds of policy, including national security policy, industrial policy, innovation policy, and labor market policy.

Companies too can take steps to position themselves well and benefit from opportunities. Those steps include creating customer partnerships to build new markets, reallocating capital across their portfolios to emerging areas, and scaling up new green businesses. Our past research has identified many companies that are doing so. 87 Laura Corb, Anna Granskog, Tomas Nauclér, and Daniel Pacthod, “ Full throttle on net zero: Creating value in the face of uncertainty ,” McKinsey & Company, September 2023.

An illustration shows how following those principles could accelerate the world’s current trajectory

As the world embarks on the transition’s next phase, applying the principles described above could help reduce emissions while ensuring affordability, reliability, and industrial competitiveness.

To demonstrate that point, we conducted a set of analyses. They illustrate what might happen as a result of deploying lower-cost solutions (as in principle 1) and driving down the cost of more expensive ones (as in principle 2) to different degrees. Specifically, they provide rough assessments of the corresponding capital spending on low- and high-emissions technologies, as well as of emissions and warming levels. 88 In quantifying investment, we include what is typically considered investment in national accounts, such as investment in solar and wind power capacity, as well as some spending on what are typically considered consumer durables, such as electric vehicles. Our analysis distinguishes high-emissions assets and technologies from low-emissions ones. Low-emissions assets emit relatively low amounts of GHGs but are not necessarily carbon neutral. Examples of low-emissions assets are solar and wind farms and electric vehicles. In some cases, we also include enabling infrastructure, such as the transmission and distribution infrastructure needed for renewable power or the charging infrastructure needed for electric vehicles. Examples of high-emissions assets are fossil fuel–based power and vehicles with internal combustion engines. In this analysis specifically, we consider the investment needed for one transition solution—namely, switching coal power to gas power—as low-emissions capital spending. We do that because our analysis regards that switch as a way of lowering emissions. As we proceed from analysis to analysis, we show how progressively greater deployment of low-cost technologies, steeper cost declines of low-emissions technologies, and higher low-emissions spending lead to less and less warming, until finally we reach warming of 1.5°C.

A few words about our methods are in order. (For more detail, see the technical appendix.) To measure the implications of the two principles for affordability, we used capital spending on low-emissions assets, not operating spending. We did so for a number of reasons. First, the current challenge facing the world is to deploy capital toward low-emissions technologies; as we mentioned earlier, the amount of capital currently being spent on the transition remains far short of what is necessary to limit warming to 1.5°C. As we also mentioned earlier, even if the capital cost of low-emissions technologies declines as quickly as expected, only 50 percent of the capital spending on those technologies needed by 2030 to eventually achieve net zero is likely to take place under current policy frameworks; any additional spending would therefore depend on greater societal commitment, such as increased public spending or additional policies. 89 From poverty to empowerment: Raising the bar for sustainable and inclusive growth , McKinsey Global Institute, September 2023. That 50 percent includes both a continuation of today’s spending levels and increased spending likely under current policy frameworks. Second, capital spending is more relevant to low-emissions technologies than operating spending is, because many of those technologies cost more to build than to operate; the reverse is true for high-emissions technologies. In reality, some spending on operating costs would also be needed, particularly in the illustrative analyses that include greater use of high-emissions assets, which tend to have higher operating costs.

These are only illustrative analyses, and much more work would be needed to comprehensively and rigorously evaluate the implications of the measures we have applied here, consider additional ones, perform a broader and more careful assessment of costs, and design robust transition scenarios. Also, the analyses are intended to be not options that a decision-maker could choose among but rather an illustration of how different actions can together achieve the goals of the Paris agreement. Nonetheless, we believe the exercise can help us understand the potential implications of applying the two principles in full measure.

Our analyses are as follows (Exhibit 11).

Maintain current capital spending. Our first step was to establish a starting point from which to build subsequent analyses. We considered a starting point in which the current amount of spending on low-emissions technologies would continue, though it would grow over time with GDP; on average in this illustrative analysis, about $2.5 trillion would be spent annually between 2021 and 2050. 1 These estimates are higher than others in the literature because we have taken an expansive view of the spending required in end-use sectors and because we have considered agriculture and land use. And the cost of those technologies would continue to decline. 2 We assume that those rates would be 80 percent as fast as the rates that are expected in typical current policy scenarios. (In reality, as low-emissions technologies become more cost competitive with traditional alternatives, spending on those technologies could grow more quickly than GDP. We did not consider that effect because the goal of this analysis was to establish a baseline for the rest of our work.) In total, about $8 trillion would be spent each year from 2021 to 2050, on average, on both high- and low-emissions technologies. Emissions of CO 2 in 2050 would be higher than 2020 levels. Warming by 2100 could be roughly 3.5°C to 4.0°C above preindustrial levels, according to the relationship between emissions and temperature published by the IPCC. 3 See “Technical summary” in Climate change 2021—The physical science basis: Working Group I contribution to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change , Cambridge University Press, 2023. (For more detail, see the technical appendix.)

Unlock lower-cost solutions first. Next, we considered what would happen if average spending on low-emissions technologies were about 10 percent higher than in the previous analysis. All of the increased spending would be allocated to lower-cost solutions—specifically, improving energy efficiency, reducing methane emissions in fossil fuel production, reducing GHG emissions in agriculture and land use, and switching power generation from coal to gas. 1 As this report mentioned earlier, other costs, such as stranded asset risks, may also exist for transition solutions, such as switching power generation from coal to gas. This analysis does not consider those costs. We ensured that the magnitude of abatement from the low-cost solutions was within bounds identified in the literature. As a result, our illustrative analysis suggests emissions of CO 2 in 2050 would be lower than 2020 levels by about 10 percent, and warming by 2100 could be roughly 3.0°C above preindustrial levels.

Accelerate cost declines too. Next, we considered what would happen if average spending on low-emissions technologies were 25 percent higher than in the first analysis. Some of that increased spending would be allocated to the lower-cost solutions just described. Some would be allocated to investment in R&D and market stimulation, and some to the early deployment of some higher-cost solutions, to help drive down the cost of such solutions. We assumed that those efforts could reduce costs twice as quickly as in the first analysis. 1 That assumption is in line with the conclusions stated in Rupert Way et al., “Empirically grounded technology forecasts and the energy transition,” Joule , volume 6, number 9, September 2022. For more detail, see the technical appendix. We recognize that this is an ambitious assumption, but we have made it to test the potential impact that such a measure could have on overall spending needs and warming levels. As a result of these measures, emissions of CO 2 would be further tempered: by 2050, they would be about 30 percent lower than 2020 levels. And warming could reach roughly 2.5°C above preindustrial levels by 2100.

And spend even more. Here, we considered what would happen if average spending on low-emissions technologies were 50 percent higher than in the first analysis. As in the previous analysis, some of that increased spending would be allocated to lower-cost solutions, and some would be allocated to driving down the cost of more expensive solutions, again making the reduction in the cost of technology twice as large as in the first analysis. As a result, emissions of CO 2 by 2050 would be about 60 percent lower than 2020 levels, and warming by 2100 could be less than 2.0°C above preindustrial levels.

Net-zero emissions by about midcentury. In none of the analyses described so far does the world achieve warming of 1.5°C above preindustrial levels. So we conducted two further analyses in which the world would succeed in reducing net emissions of CO 2 to zero by about 2050. 1 These two analyses are meant to show how applying the two principles more or less extensively could shift the low-emissions capital spending needed to achieve a 1.5°C outcome. Therefore, in the initial one, low-cost solutions are applied to a lesser extent than in the subsequent one, and the rate of cost reduction is slower. Neither analysis is a least-cost-optimized 1.5°C analysis of the sort performed by integrated assessment models, which try to minimize combined capital and operating costs. The analyses consider two ways to achieve that goal. In one case, average spending on low-emissions technologies each year would be three times as high as it is in the first analysis. Some of that increased spending would be allocated to lower-cost solutions. And the cost of more expensive solutions would be driven down 1.5 times as quickly as in the first analysis. 2 That rate of cost decline is in line with many typical 1.5°C scenarios.

In the other case, average spending on low-emissions technologies each year would be twice as high as it is in the first analysis. Slightly more of the increased spending would be allocated to lower-cost solutions. And far greater efforts would be made to drive down the cost of more expensive solutions, so that that cost would fall twice as quickly as in the first analysis. As a result, once again, net-zero emissions of CO 2 would be reached by about 2050 and warming could be limited to 1.5°C above preindustrial levels by the end of the century.

Though they are only illustrative, our analyses allow us to make four observations.

First, spending on lower-cost solutions holds promise for reducing emissions and improving warming outcomes. Second, accelerating the cost declines of low-emissions technologies does the same by more effectively using the capital that is deployed. In fact, these illustrative analyses suggest that if it was possible to unlock lower-cost solutions, double the rate of cost declines, and spend even one and a half times as much as the world is spending today on low-emissions technologies, as in the fourth analysis laid out above, the world could substantially bend the current trajectory of emissions. Doing so could potentially even limit warming to less than 2.0°C, in contrast to 3.5°C to 4.0°C without those measures. 90 Again, by the amount that the world is spending today, we mean the current amount but growing over time with GDP. Also, bringing down the cost of high-cost technologies has a second benefit, though it is not modeled here: it could help make low-emissions technologies more cost competitive with high-emissions ones, thus helping drive capital to them and increasing the likelihood of their adoption. For more details, see From poverty to empowerment: Raising the bar for sustainable and inclusive growth , McKinsey Global Institute, September 2023.

Third, limiting warming to 1.5°C would require spending two to three times as much as the world is spending today on low-emissions technologies. Here again, prioritizing lower-cost solutions and driving cost declines could help reduce low-emissions spending—potentially by as much as one-third, the difference between spending in our two illustrative analyses that limit warming to 1.5°C.

Finally, the total amount of spending on low- and high-emissions technologies together increases as we move from the first analysis to those with steeper emissions reduction, though much more slowly than does spending on low-emissions technologies alone. That indicates a substantial reallocation of spending from high- to low-emissions technologies.

Embracing a change of mindset can help the world move closer to its net-zero goals

The principles we have described could be applied in many other ways. But all of them depend on a needed change of mindset about the transition.

As stakeholders consider how to execute the next phase of the transition, in addition to making commitments to reach net zero in the future, they should commit to making more and more progress every year. By clearly defining near-term goals, they can illuminate the immediate next steps of the transition, helping turn the aspirations of the Paris Agreement into tangible action.

As we have discussed throughout this report, rather than considering emissions reduction alone, stakeholders should do so while bearing in mind affordability, reliability, and industrial competitiveness. Those objectives are important both in their own right and in accelerating progress toward net zero.

And stakeholders should approach the transition with a sense of participation and collaboration, because all of them have roles to play. Governments can create an environment that supports the transition to new technologies, develop an integrated view of how energy supply systems would transform in tandem with demand, and safeguard domestic competitiveness while also encouraging global cooperation. The social sector can help ensure that no single group is disproportionately burdened as the transition unfolds. Individual consumers, employees, and citizens will play a part. Companies will be the parties enacting the transition by building assets, developing products, and radically changing processes. Their strategy for value creation will have to include both guarding against risks and unleashing innovation to capture opportunities. All of these actors will have to work together to reimagine and execute the transition.

Guided by the principles described in this report, they might begin by asking a few provocative questions:

• How can lower-cost solutions be deployed to abate ten metric gigatons of GHGs by 2030?
• What would it take to double the rate at which expensive solutions become cheaper?
• Where might the worst bottlenecks occur, and how could they be preempted?
• How could a thoughtful portfolio of net-zero opportunities be constructed—and one that also mirrors each stakeholder’s comparative advantage?

The answers to such questions might dramatically increase the world’s likelihood of reaching global net-zero goals.

Mekala Krishnan is a McKinsey Global Institute partner in McKinsey’s Boston office; Humayun Tai  and Daniel Pacthod  are senior partners in the New York office; Sven Smit  is a McKinsey senior partner in the Amsterdam office and MGI’s chairman; Tomas Nauclér  is a senior partner in the Stockholm office; Blake Houghton is a partner in the Dallas office; Jesse Noffsinger is a partner in the Seattle office; and Dirk Simon is a consultant in the Boston office.

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Energy Conservation Essay

When people think about conservation, they often think about protecting the environment from human exploitation. However, conservation is a concept that encompasses many facets, including health and beauty, animal welfare and natural resources. Here are some sample essays on energy conservation.

100 Words Essay On Energy Conservation

Conservation is an important factor in maintaining the balance of life on earth. Human lives and industries depend on energy, so conservation is necessary for the continued existence of mankind. Furthermore, energy conservation promotes sustainable development. This means development that respects the environment and promotes healthy ecosystems instead of harmful ones.

Energy conservation helps protect the environment from harmful industrial processes like carbon dioxide emissions. Energy conservation has become an increasingly important issue as the world population continues to grow and our energy resources dwindle. We must use energy more efficiently if we are to preserve our planet and ensure that future generations have access to the resources they will need.

200 Words Essay On Energy Conservation

Energy is essential to our daily lives. Energy conservation is one of the most important topics when discussing environmentalism and sustainable living. It encourages sustainable development while protecting the natural environment. After all, without energy we couldn’t power our homes, run our businesses or get from A to B.

How To Save Energy

As our world becomes increasingly more digitalised, it’s important that we start to think about how we can conserve energy in our everyday lives. Here are a few tips on how you can start saving energy today:

Turn off electronics and appliances when you’re not using them. This includes your TV, computer, game consoles, lights, etc.

Unplug chargers for devices that aren’t in use. Even if they’re not turned on, they’re still using up energy.

Invest in energy-efficient appliances. Look for the Energy Star label when you next need to buy a new fridge, washing machine, etc.

Use natural light as much as possible during the daytime. Open up your curtains and blinds to let in some sunshine!

Dress appropriately for the weather. In winter, wear layers of clothing instead of cranking up the heating. In summer, wear loose fitting clothes and turn on a fan rather than using air conditioning.

500 Words Essay On Energy And Conservation

Energy is used to power transportation, communication and heating homes. Because of this, we should conserve energy whenever possible. Doing so helps the environment and our economy. Energy saving refers to efforts to reduce energy consumption. The energy on earth is not infinite. Also, energy can take a long time to recover. This undoubtedly makes saving energy imperative. Most notably, energy savings can be achieved by using energy more efficiently or reducing service usage.

What Is Energy And Conservation?

Energy is the ability to do work with any form of fuel. It is essential for living creatures and the environment. Conservation is the conscious management of energy. There are various sources of energy such as solar, wind, water, geothermal and biomass. Conservation is crucial in determining the state of our world.

What Is Physical Energy?

Physical energy is the power generated by bombardment, combustion or movement. All electric and mechanical engines consume energy, and it is converted into motion. The human body needs physical energy to survive and carry out daily tasks. Energy also powers weapons and tools used in warfare, agriculture and industry. Energy is also used to power your car or bike while you drive or ride.

Why Energy Conservation Is Essential?

First of all, energy saving plays an important role in saving non-renewable energy. Furthermore, non-renewable energy sources take many centuries to regenerate. Since humans consume energy faster than they can produce it, therefore, saving energy will lead to the conservation of these valuable non-renewable energy sources.

Energy conservation is essential in a growing economy. People use a lot of energy every day. This includes household and business energy usage. Everyone needs to make careful decisions about which energy sources to use and how to use them. This helps the economy grow without destroying or depleting the natural environment.

How Can We Conserve Energy?

Consumers can also help conserve energy by making smart choices. Replacing old appliances with more efficient models helps lower consumption as well as emissions. Many people don't realise that they're wasting power when they leave their lights on or their car running outside. In general, making simple choices saves a lot of energy.

Governments play an important role in promoting energy conservation. They issue laws regarding what resources can be used in vehicles and factories. They also regulate production and consumption of various energy sources such as coal, oil, natural gas and electricity. This ensures that all nations use the same standards for resource conservation and consumption alike. It ensures that everyone uses resources effectively and conserves energy at the same rate.

Energy conservation will lower the costs associated with fossil fuels. The extraction of fossil fuels is prohibitively expensive. As a result, consumers must pay higher prices for goods and services. Energy conservation would almost certainly decrease the amount of fossil fuel mined. This, in turn, would lower consumer costs.

Energy conservation is an essential way to run a sustainable economy. Consumers can save money by making smarter choices when using energy resources. Governments promote conservation in many ways to ensure everyone uses resources effectively and conserves energy wisely. Energy conservation is a vital part of modern life!

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