Vision and Framework for Strategy and Planning
Published August 2005

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Appendix A:  Summary of Scenarios Analyses and Preliminary Insights

In order to develop plans, carry out activities and help shape a R&D portfolio that will advance the attainment of its vision, mission, and strategic goals, the CCTP needs a long-term planning context, informed by analyses from multiple sources and aided by a variety of decision support tools. An important part of this planning and analytical context is assessing potential contributions that advanced technologies can make to CCTP strategic goals, given a range of assumptions about the future.

Such assessments are complex and subject to many uncertainties. The long-term nature of both climate and technological change, when considered within the context of the UNFCCC’s ultimate objective, requires a century-long planning horizon. It also requires a global perspective reflective of changing regional demographics and forecasted patterns of economic activity, which are uncertain. Uncertainties inherent in climate science and associated impacts make it difficult to determine the level at which atmospheric greenhouse gas (GHG) concentrations in the Earth’s atmosphere might be considered harmful. Finally, the long-term costs of GHG emission reductions will depend, in part, on future technological innovations, many of which are presently unknown, and on other factors that could either promote or constrain the use of certain technologies in the future.

One approach to planning under conditions of uncertainty is scenarios analysis. Aided by computer simulations, scenarios analyses can explore alternatively imagined technological futures across a range of uncertainties.   Such simulations can account for, in a methodical and consistent way, the complex relationships among economic and demographic factors, energy supply and demand, technological change, and emissions. Scenarios analyses can help estimate the costs and benefits of emission reductions under various future conditions, as well as illuminate the complex interactions among the factors that underlie them, based on assumptions incorporated into the analysis. Across many scenarios, such analyses can reveal insights and help characterize elements of proposed strategies either as robust or sensitive to various assumptions. These insights can help inform and guide long-term technology R&D planning.

By clarifying the potential role of climate change technologies under various assumptions about the future, scenarios analyses can support the application of the Portfolio Planning and Investment Criteria (see Box 1, p.28) to the CCTP portfolio. Scenarios analyses can provide a relative indication of the potential climate change benefits for a particular portfolio mix, compared to others. They can help determine which classes of technology would most likely provide larger-scale benefits. Scenarios analyses can help clarify the logical sequence for R&D investments.

Much work has been published in the field of GHG emissions, their projections, and alternative scenarios for their mitigation. The CCTP reviewed about 50 scenarios developed by other organizations, including Shell International,²⁵ the National Academy of Sciences,²⁶ the governments of the United Kingdom^{27, 28} and Canada,²⁹ the World Business Council for Sustainable Development,³⁰ and the International Energy Agency (IEA).³¹

In addition, the IPCC developed long-term GHG emission scenarios in mid-1990s and updated them in 2000.³² More recently, the IPCC’s Working Group Report on Mitigation³³ incorporated a set of “Post-SRES” mitigation scenarios, many using the same underlying models that were used for the SRES scenarios.

In carrying out scenarios analyses, a number of assumptions are made regarding the roles and attributes of various types of technology. The review of scenarios analyses published by the IPCC and others revealed that, for the most part, scenarios that achieved significant reductions in future CO₂ emissions had underlying technology assumptions that could be characterized as falling into one of three broad categories:

Scenario #1. This scenario envisions advanced fossil energy technologies with carbon capture and storage, the introduction of hydrogen as an energy carrier, and high-efficiency energy conversion.

Scenario #2. This scenario envisions carbon-free energy sources, such as renewable energy (wind power, energy from bio-sources, and other solar energy systems) and nuclear power, expanding over the 21st century, eventually gaining market advantages over traditional fossil fuel-based systems, especially in the electric power sector.

Scenario #3. This scenario envisions new technologies that significantly change the energy paradigm of the future, including major advances in fusion energy and novel energy applications for solar and Bio-X.³⁴

Such scenarios often share some important characteristics. First, most include significant technological advances in end-use energy efficiency, as the cost of implementing efficiency and other energy-saving measures is assumed to decline over time as a result of technological improvement. Many include significant deployment of low-cost terrestrial sequestration and allow for the continued realization of the resource potential of conventional oil and gas. Some recent scenarios also incorporate advanced technologies to reduce emissions of non-CO₂ GHGs from emission sources across all sectors (energy, industry, agriculture, and waste).

Advanced technology scenarios can then be modeled against a range of hypothetical GHG emissions constraints (e.g., low, medium, high, and very high). The results of these, in turn, can be compared against a series of reference or baseline scenarios, where the given GHG emissions constraints are met, but with different assumptions about the advancement of technology and costs, compared to the advanced technology scenarios.

While the assumptions in such work are informed by research, and held to be plausible, they are still hypothetical. Thus, caution must be applied in the interpretation of results. Over a range of analyses, however, the results can suggest what might be possible if the hypothetical assumptions could be realized, helping to inform the setting of technical goals for technology R&D programs.

One application of such an analysis was recently completed by the U.S. Department of Energy’s Pacific Northwest National Laboratory.³⁵ The goal of the analysis was not to predict future emissions, or to identify an optimal pathway for climate change technology development, but to gain insights by examining the emissions, energy and economic implications of a range of technology advances, under a range of emissions constraints. Figure A-1, adapted from this analysis, offers one glimpse of the range of emissions reductions new technologies might make possible in energy end-use, energy supply, carbon sequestration, and other GHGs, cumulative over a 100-year scale, across a range of uncertainties. In that regard, the particular scenarios presented here represent an effort to portray current understanding, and are not intended to restrict the future development and use of updated scenarios for program planning purposes. They are included here for illustrative purposes, not to offer a static framework to guide the CCTP program.  

From the many scenarios analyses reviewed by CCTP, a number of preliminary insights were drawn about the role of advanced technology in addressing climate change concerns. First, under a wide range of differing assumptions, advanced technologies in energy end-use, energy supply, and carbon sequestration, and controlling emissions of other GHGs could all potentially contribute significantly to overall GHG emissions reductions. No one area is markedly more or less important than others. This suggests the importance of a diversified approach to technology R&D with resources aimed at progress in each area.

Second, reductions in emissions of the non-CO₂ gases could play an important role in reducing overall GHG emissions. Analyses show that decreases of between 10 and 50 percent in methane (CH₄) emissions are possible by mid-century. Similarly, studies show that emissions of nitrous oxide (N₂O) could be reduced by as much as 35 percent by 2100. Successful R&D efforts in the areas of still other GHGs might virtually eliminate emissions of high “global warming potential” chemicals from a number of industrial applications.

Third, scenarios analyses suggest that successful development of advanced technologies could result in potentially large economic benefits, compared to other strategies not so advantaged. Independent of the particular combination of technologies explored, most of the advanced technology scenarios result in significantly lower overall costs, when meeting the range of varying and hypothetical GHG constraints, compared to reference or baseline scenarios.

Finally, scenarios analyses suggest that the timing of the commercial readiness of advanced technology options is an important planning consideration for some of the tighter of the hypothesized GHG emissions constraints. Looking over a 100-year planning horizon, and allowing for capital stock turnover and other inertia inherent in the energy system, technologies with zero or near net-zero GHG emissions would need to be available and moving into the marketplace many years before the emissions “peaks” occur in the hypothetical GHG-constrained cases. Allowing for appropriate lead-in periods, in most of the GHG-constrained cases, new technologies would need to be commercially ready for widespread implementation, should science so justify, between 2020 and 2040. Given time periods for technology development and commercialization, such considerations suggest that the technologies would need to be proven to be technically viable before these times and that initial demonstrations would be needed between 2010 and 2030.

Figure A-1: Potential Ranges of Cumulative Greenhouse Gas Emissions Reductions between 2000 and 2100 Resulting From Advanced Technology Scenarios³⁶