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The energy transition faces extraordinary uncertainty in the early 2020s due to global disruptions like the COVID-19 pandemic, the war in Ukraine, and severe weather events. S&P Global Commodity Insights outlines five 2023 outlooks, including three plausible scenarios (Inflections, Green Rules, Discord) and two speculative net-zero cases (Accelerated CCS, Multitech Mitigation).
Key questions include geopolitical shifts, the evolving security paradigm, government vs. company roles, goal delivery challenges, Asia's role in decarbonization, and identifying blind spots.
Inflections (Base Case): Post-COVID rebound with energy security focus, leading to sustained long-term transition. GHG emissions may cause a 2.4°C temperature increase by 2100.
Green Rules: Shift to a low-carbon economy for global stability and national security. Significant decarbonization progress, limiting warming to 1.7°C by 2100.
Discord: World fractured by crises, weak markets, and policies. Slow recovery with continued fossil energy reliance, resulting in a potential 3.0°C temperature increase by 2100.
Accelerated CCS (ACCS): Successful global Carbon Capture and Storage use, achieving net-zero GHG emissions by 2050, limiting warming to 1.5°C by 2100.
Multitech Mitigation (MTM): Emphasis on energy supply diversification and electrification, achieving net-zero GHG emissions by 2050, limiting warming to 1.5°C by 2100.
Common themes include industrial policy driving cleantech investment, reduced European fossil fuel demand due to the Ukraine conflict, varied Asia Pacific trajectories, renewables dominating future power generation, and peak fossil fuel demand by 2040.
Global net-zero remains elusive by 2050 in plausible scenarios. Scenario analysis provides clarity amid uncertainty, focusing on long-term trends.
The absence of a "Business as Usual" world ensures a decline in global GHG emissions.
Achieving the 1.5°C goal by 2100 may be challenging without significant global efforts and unforeseen developments.