Research Paper: Growth in a Low Carbon World

An analysis carried out by Vivid Economics for the Energy Transitions Commission shows how simultaneous radical improvements in energy productivity across the transport, industry and buildings sectors could reduce global energy demand by 60% compared with business as usual by 2050. These improvements are driven by increased energy efficiency of a wide range of equipment and appliances, combined with structural shifts in urban design and economic activities.

Providing goods and services to an estimated 9.6 billion global people by 20250 while limiting the rise of global temperatures to less than 2°C will require not only to decarbonize our energy supply, but also to limit the foreseeable rise in energy demand at world level. A structural break in energy productivity improvements is needed to accelerate energy productivity improvement from 1.7% per annum today to 2.5 to 3% per annum.

The research carried out by Vivid Economics demonstrates that achieving this pace of improvement is technically possible, if significant progresses are made simultaneously across the transport, industry and buildings sectors by leveraging two key drivers of energy productivity:

- Providing a greater level of services with a given quantity of energy (e.g. less energy consumed per kilometre travelled), through technological improvements and shifts to more efficient practices.

- Enabling more economic activity to be generated with a given level of energy-based services (e.g. more GDP created with less kilometre travelled), through structural shifts such as more adequate urban design, the shift to a service-based economy and the development of circular and sharing economy models.

In the transport sector, Vivid Economics estimates that energy demand could be reduced by 70% compared to a business as usual scenario, through a combination of reduced travel needs, modal shifting and improved vehicle efficiency, alongside a large-scale fuel shift to electricity for passenger travel and alternative fuels for freight transport.

In the industry sector, energy demand could be halved compared to a business as usual scenario, if more efficient technologies and practices are developed across a wide set of industrial activities and then rapidly deployed to newly industrialising countries.

In the buildings sector, energy demand could be reduced by two thirds compared to a business as usual scenario, through increases in energy efficiency of buildings envelopes and equipment, alongside a shift in energy sources, especially for heating, from fossil fuels to electricity and district heating.

About The Energy Transitions Commission:

The Energy Transition Commission (ETC) is a uniquely diverse group of individuals and organisations from across the energy landscape (investors, incumbent energy companies, industry disruptors, equipment suppliers, non-profit organisations, and research institutes) and from the developed and developing worlds. We aim to accelerate change towards low-carbon energy systems that enable robust economic development and limit the rise in global temperature to well below 2°C.

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