Pathways to deep decarbonization

Aggregate Results and Cross-Country Comparisons from the 15 National DDPs

6.5.2  Power generation: Figure 6.9. gCO2/kWh  2010
switch to low-carbon electricity Decline in carbon intensity of electricity for the 15 DDPs 590  2050
Electrification and the decarbonization of electric- 34
ity plays a central role in all 15 DDPs. Electricity - 94%
has a much larger role in energy supplies. The share
of electricity in final energy consumption almost Increase in the share of electricity in nal energy for the 15 DDPs + 16 pt
doubles from 2010-2050, rising from 20% to 20%
36%. Power generation is almost completely de-
carbonized in all countries. On average, the CO2 36%
intensity of power production is reduced by 94%,
from 590 gCO2 per kilowatt-hour (kWh) in 2010 Figure 6.10. Carbon intensity of electricity production (gCO2/kWh)  2010
to 34 gCO2 per kWh by 2050 (Figure 6.9).  2050
To reach such a low level of carbon intensity, Australia
power needs to be generated almost exclusively Brazil
from zero- or low-carbon sources in all countries: Canada
renewable energy, nuclear power, or fossil fuels China
with CCS. Across countries, the DDPs achieve the France
deep decarbonization of power generation through Germany
a diverse mix of low-carbon energy sources because India
countries have different potential for renewable Indonesia
energy, geological storage capacity for CCS, and Japan
social preferences and degrees of public support for Korea
nuclear power and CCS (Figure 6.11). But by 2050, Mexico
almost all electricity in all 15 DDPs is generated Russia
from zero- and low-carbon sources (Figure 6.10). South Africa
UK
USA -10

0 200 400 600 800 1000 1200 1400

Figure 6.11. Electricity generation mix in 2050

Australia  Fossils fuels
Brazil  Fossils fuels w CCS
Canada  Nuclear
China  Other RW
France  Solar
Germany  Wind
India  Hydro
Indonesia
Japan 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Korea
Mexico
Russia
South Africa
UK
USA

0%

35 Pathways to deep decarbonization — 2014 report

Aggregate Results and Cross-Country Comparisons from the 15 National DDPs

6.5.3  Residential buildings

Measuring aggregate improvements in the per capita) are thus imperfect for cross-coun-
energy efficiency of residential buildings is try comparison and are not reported here.
difficult because of the many uses of energy For the CO2 intensity of residential energy
in buildings, such as heating, cooling, cooking, use, all 15 DDPs show a significant decrease
and appliances. The relative importance of (Figure 6.12), driven primarily by increased
these energy uses varies both between and electrification of residential energy in most
within countries, in part due to differences countries (Figure 6.13) and increased use of
in climatic conditions. Energy efficiency in- solar thermal energy and combined heat and
dicators (e.g., energy use per square meter or power (CHP) in others.

Figure 6.12. Figure 6.13.
Carbon intensity Share of electricity
of residential energy in residential energy use

Australia  2010  2010
Brazil  2050  2050
Canada
China 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 0% 20% 40% 60% 80% 100%
France tCO2/toe percent
Germany
India
Indonesia
Japan
Korea
Mexico
Russia
South Africa
UK
USA

Pathways to deep decarbonization — 2014 report 36

Aggregate Results and Cross-Country Comparisons from the 15 National DDPs

6.5.4  Passenger transport tries. In other middle-income countries (e.g., Indo-
nesia, Mexico, South Africa), increases in passenger
Among the 15 DDPs, most high-income countries mobility are more moderate.
see a modest reduction (Canada, France, USA) or a All 15 DDPs achieve a sharp decrease in the energy
small increase (Australia, Japan, South Korea, UK) in intensity of passenger transport (toe per passenger
passenger mobility (passenger kilometers traveled kilometers traveled) (Figure 6.15), combined with
per capita) between 2010 and 2050 (Figure 6.14). a decrease in the CO2 intensity of energy used for
Russia, the only high-income country with low passenger transport (tCO2 per toe of final ener-
2010 levels of passenger mobility, sees a large in- gy consumed) (Figure 6.16). The electrification of
crease in mobility that brings it more in line with passenger vehicles plays an important role in de-
other high-income countries. Some middle-income carbonizing the energy used in passenger transport,
countries (e.g., China, India) see a sharp increase but Country Research Partners use other decarbon-
in passenger mobility, converging to levels that ization strategies as well, including biofuels and
match, or are close to, today’s high-income coun- fuel cell vehicles powered by renewable hydrogen.

Figure 6.14. Figure 6.15. Figure 6.16.  2010
Passenger mobility Energy intensity Carbon intensity  2050
of passenger transport of passenger transport energy

Australia

Brazil

Canada

China

France

Germany n.c. n.c.
India

Indonesia

Japan

Korea

Mexico

Russia

South Africa

UK

USA

0 5 10 15 20 25 30 0.00 0.02 0.04 0.06 0.08 0.10 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5
thousands of p-km per capita toe / thousands of p-km tCO2/toe

37 Pathways to deep decarbonization — 2014 report

Aggregate Results and Cross-Country Comparisons from the 15 National DDPs

6.5.5  Freight transport freight transport—electrification, compressed
or liquefied low-carbon gas, modal shifts, and
All 15 DDPs (except one) decouple freight mo- sustainable biofuels—they all face challenges in
bility (freight ton-kilometers) from GDP growth deploying at the scale needed to achieve sig-
(Figure 6.17). However, total CO2 emissions from nificant CO2 reductions. The results from these
freight transport increase because reductions in preliminary DDPs underscore the importance
the energy intensity of freight transport (toe per of a strong global R&D push on technologies
ton-kilometer traveled) and the CO2 intensity of and strategies to reduce CO2 emissions in
freight transport energy (tCO2 emitted per toe) freight transport. Beyond technology, the sector
are relatively small (Figures 6.18 and 6.19). should also explore ways to organize freight
The 15 DDPs illustrate that, in general, freight transport differently (through modal shifts)
transport is more difficult to decarbonize than and to reduce the need for freight transport
passenger transport. Although there are sev- through optimized production, consumption,
eral options for reducing the CO2 intensity of and transportation patterns.

Figure 6.17. Figure 6.18. Figure 6.19.
Freight mobility intensity of GDP Energy intensity of freight mobility Carbon intensity of freight transport energy

Australia  2010
 2050
Brazil
n.c.
Canada
0 0.5 1 1.5 2 2.5 3 3.5
China tCO2/toe

France

Germany n.c. n.c.
n.c.
India n.c.

Indonesia 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07
toe / thousands of t-km
Japan

Korea n.c.

Mexico

Russia

South Africa

UK

USA

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8
t-km/$

Pathways to deep decarbonization — 2014 report 38

Aggregate Results and Cross-Country Comparisons from the 15 National DDPs

6.5.6  Industry reductions in the CO2 intensity of energy used in
industry (Figure 6.20). Electricity’s share of indus-
As with residential buildings, measuring aggregate
energy efficiency in industry is difficult because of trial final energy consumption increases significant-
the diversity of sub-sectors within industry. Nation- ly across all countries (Figure 6.21).
al comparisons are difficult because of differences
in industrial sector composition between countries Even with reductions in energy CO2 intensity in indus-
and the complex nature of the modern global trad- try, aggregate industrial emissions in the 15 DDPs rise
ing system. Nevertheless, there are similarities in
decarbonization strategies across countries. All 15 over time. By 2050, industrial emissions account for
DDPs include aggressive energy efficiency meas-
ures to reduce energy consumption in industry. 51% of total emissions, up from 31% in 2010. These
Using three main strategies—electrification, fuel
switching, and CCS— most DDPs achieve large results suggest the importance of developing innova-

tive technology pathways for reducing CO2 emissions
from key industrial sectors (i.e., tCO2 per ton output),
as well as less materials-intensive production meth-

ods (i.e., requiring fewer tons of materials) and less

carbon-intensive production materials.

Figure 6.20. Figure 6.21.
Carbon intensity of industrial energy Share of electricity in industrial energy use

Australia  2010
Brazil  2050
Canada
China 0 % 10 % 20 % 30 % 40 % 50 % 60 % 70 %
France percent
Germany
India
Indonesia
Japan
Korea
Mexico
Russia
South Africa
UK
USA

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
tCO2/toe

39 Pathways to deep decarbonization — 2014 report

Aggregate Results and Cross-Country Comparisons from the 15 National DDPs

6.6  Areas for further analysis casting approach, which was new to many of the
Country Research Partners, created a framework
The DDPP results thus far, while preliminary, il- for innovative thinking and produced creative
lustrate both the technical possibilities and the results. Over the eight months since the project
challenges for deep decarbonization across a wide began, including several face-to-face meetings,
range of national contexts. As a next step, and this process has led to the development of much
before we quantify the costs and benefits of de- more ambitious DDPs than found in many previ-
carbonization, identify national and international ous studies of national mitigation potential.
finance requirements, analyze in more detail how This report is only a start. But it is our hope that
the twin objectives of development and deep this report, as well as the more comprehensive
decarbonization can be met through integrated report to be published during the first half of 2015,
approaches, and map out the policy frameworks will make a useful contribution to the debate by
for implementation, the Country Research Part- spurring the development and international com-
ners will explore four areas that were not included parison of country-level DDPs and by promoting
in the first round of technical feasibility analysis. the global cooperation required to achieve them.
First, the Country Research Partners will explore
a greater array of technology options, including
some that are still at the pre-commercial stage.
So far, they have incorporated emerging technolo-
gies and energy system configurations to different
extents in their analyses, and there is likely still
potential to further reduce CO2 emissions per
unit of activity (e.g., CO2 per passenger kilome-
ter traveled) in the DDPs, although the feasibility
of technology deployment at the national level
will have to be examined carefully. Second, they
will further explore energy drivers in their models
through scenario analysis. Most of the DDPs are
based on conservative assumptions about activity
drivers, and reducing the level of these drivers will
reduce CO2 emissions (e.g., reductions in passen-
ger kilometers traveled will reduce CO2 emissions
from passenger transport). Third, they will con-
sider in further details the issue of infrastructure
stocks, Fourth, they will estimate cumulative CO2
emissions from 2010-2050, rather than focusing
only on a single year (2050).
An important outcome of the DDPP so far is that
it has fostered interactive learning and a coop-
erative problem-solving mindset among the par-
ticipants. Country Research Partners have shared
their technical and macroeconomic assumptions,
sectoral expertise, and data sources. The back-

Pathways to deep decarbonization — 2014 report 40

Part III

National
Deep Decarbonization
Pathways Developed by
Country Research Partners

Australia   43
Brazil   59
Canada    71
China   83
France    93
Germany   105
India   115
Indonesia    129
Japan   139
Mexico   149
Russia   157
South Africa   167
South Korea   179
United Kingdom   189
United States   201

41 Pathways to deep decarbonization — 2014 report

Part III 

pathways to

deep decarbonization

National Deep
Decarbonization
Pathways Developed
by Country Research
Partners

Pathways to deep decarbonization — 2014 report 42

Australia

Australia

Frank Jotzo, 1 Country profile
Crawford School of Public Policy, 1

Australian National University 1.1  The national context for deep
decarbonization and sustainable
Anna Skarbek, development
ClimateWorks Australia
Australia is a mid-sized developed economy with
Amandine Denis, high per capita greenhouse gas emissions. Exports of
ClimateWorks Australia energy, minerals, and agricultural commodities have
always played an important role in the Australian
Andy Jones, economy, with the relative importance of specific
ClimateWorks Australia commodities changing over the decades in response
to international demand.
Rob Kelly, Australia has abundant renewable and non-re-
ClimateWorks Australia newable energy resources and relatively easily
recoverable reserves of coal, gas, and uranium.
Scott Ferraro, Australia is one of the leading exporters of coal
ClimateWorks Australia and domestic coal production is forecast to con-
tinue to increase.1 With a number of liquefaction
Niina Kautto, projects under construction, the country is also
ClimateWorks Australia set to soon become the world’s largest export-
er of liquefied natural gas (LNG).2 In addition,
Paul Graham Australia is a major supplier of minerals such as
(technical advisor), Commonwealth
1 BREE, 2014. Australia is the world’s largest exporter of met-
Scientific and Industrial Research allurgical coal and the second largest thermal coal exporter
Organisation (CSIRO), Australia by volume.

Steve Hatfield-Dodds 2 BREE, 2014. Seven new liquefied natural gas liquefaction
(technical advisor), Commonwealth facilities are expected to enter the export market by 2022.

Scientific and Industrial Research
Organisation (CSIRO), Australia

Philip Adams,
Centre of Policy Studies,

Victoria University

Pathways to deep decarbonization — 2014 report 43

Australia Australia

bauxite, alumina, iron ore, uranium, copper, yyThe relatively large contribution of energy and
and lithium. Australia’s abundant renewable emissions-intensive industrial activity to the
energy resources and significant sequestration Australian economy;
potential through carbon plantings could be
harnessed under decarbonization. yyThe historically low cost of energy;
Australia’s economy is highly emissions-inten- yyThe economic importance of agriculture; and
sive due to the extensive use of coal in electric- yyThe long distance transport requirements re-
ity supply. Energy accounts for two-thirds of
Australia’s greenhouse gas emissions. Electricity sulting from the concentration of Australia’s
generation makes up about half of energy emis- population in urban centers and large distances
sions, with coal fired power accounting for 69% between the urban centers.
of generation and gas providing a further 19%. Figure 1a shows Australia’s 2012 greenhouse gas
The remainder is mostly supplied by renewable emissions by source and Figure 1b shows the de-
energy technologies, including hydroelectricity composition of energy-related CO2 emissions (i.e.
(6%), wind (2%), bioenergy (1%), and solar from fossil fuel combustion).
photovoltaic (PV) (1%).3 Australia exports ura- Australia’s economic circumstances are some-
nium but does not generate any electricity from what unique in the global context insofar as emis-
nuclear power. sions from mining and manufacturing contribute a
Service industries, including education, tourism, relatively large share (over one third) of Australia’s
and finance are important in Australia’s econ- total greenhouse gas emissions, of which about
omy, contributing more than half of Australia’s one third are process and fugitive emissions. In
GDP. The competitiveness of exports from these addition, about 15% of Australia’s total emissions
sectors is strongly influenced by exchange rates, are attributable to agriculture, including meth-
and these industries are likely to expand over the ane emissions from livestock. Figure 2 shows the
medium term. proportional contribution of industry sectors to
Global deep decarbonization would significantly Australia’s total greenhouse gas emissions, GDP,
change demand for Australian exports while do- and export revenues.
mestic decarbonization would require fundamen- However, Australia has made some recent pro-
tal changes in Australia’s energy system over the gress in decarbonizing its economy. Over the
coming decades. These changes would present past two decades Australia’s greenhouse gas
both challenges and opportunities for Australia, emissions have remained stable while the size
both within the energy sector and more widely. of the economy has almost doubled. As a re-
sult, the emissions intensity of Australia’s GDP
1.2  GHG emissions: current levels, has nearly halved and emissions per capita have
drivers, and past trends decreased by approximately 25% over this period
(see Figure 3f). Increasing emissions from energy
Australia’s per capita emissions are among the use were roughly offset by reduced deforestation
highest in the world. This is due to: and increased plantation forestry.
yyThe predominance of coal-fired generation in Since 2008/09, emissions from fuel combustion
have stabilized, driven by a significant expan-
Australia’s electricity supply; sion in renewable energy, a drop in demand for
grid-supplied electricity, and a tripling in the rate

3 BREE, 2013a. Oil and other sources (including multi-fuel fired power plants) contribute 2%. On average, solar PV and
wind have grown 95% and 20% over the past five years, respectively. The data is for 2011/12.

Pathways to deep decarbonization — 2014 report 44

Australia

of energy efficiency improvement in large indus- and subsidies for energy efficiency, carbon pricing,
trial companies. Rising energy prices and govern- and support programs for renewable energy) have
ment programs and policies (including standards helped achieve this outcome.

Figure 1. Decomposition of GHG and Energy CO2 Emissions in 2012

1a. GHG emissions, by source 1b. Energy-related CO2 emissions by fuel and sectors

250 MtCO2

MtCO2 eq 373  Energy-related 200
emissions 150
555 Electricity
31  Processes (Allocation
by End Use Sector)
87  Agriculture

40  Fugitive 100  Natural Gas Total MtCO2
12  Waste 50 64

 Petroleum Products 127

0  Coal 180
373
+ 11  LULUCF Electricity Generation Transportation Other
8
(Land Use, Land Use Change, and Forestry) Industry Buildings

Source: BREE, 2013b, Department of the Environment, 2014. Data variations ar1e9d3ue to rou6nd8ing error.90 13

Figure 2. Composition (%) of total greenhouse gas emissions, GDP and exports, 2012

Agriculture & Forestry Transport Agriculture & Forestry

19% 7% 2% 10% 11% 6%
19% 7%
Mining 8% Services
5% 15% 2% GDP
2% Emissions 7% 16% Exports
5% 4% 51%
5%

14% 52%
20%

Manufacturing Services Mining

 Agriculture & Forestry  Mining  Manufacturing  Services  Transport
 Construction  Electricity, Gas & Water  Residential

Source: ABS, 2012; Department of the Environment, 2014.

45 Pathways to deep decarbonization — 2014 report

Australia

Figure 3. Decomposition of historical energy-related CO2 Emissions, 1990 to 2010 Note: Figure 3a and 3b for international comparison.

3a. Energy-related CO2 emissions drivers 3b. Energy-related CO2 emissions by sectors

40% Five-year variation rate of the drivers 500 MtCO2

30%

20%  GDP per capita 400 372  Other
10%  Buildings
 Population 322 356
0%
-10%  Energy 300 280  Transportation
-20% 255
-30% per GDP
-40% 200  Industry
 Energy Related
1995 2000 2005 2010 100
1990 1995 2000 2005 CO2 Emissions
per Energy 0  Electricity Generation

1990 1995 2000 2005 2010

3c. Energy related CO2 emissions and drivers 3d. Energy-related energy and CO2 intensity
Change from 1990
Change from 1990 1.2

2.0  GDP 1.0
1.8
1.6  Energy-related 0.8  Emissions
1.4 intensity
CO2 emissions 0.6 of energy

 Energy use 0.4
1.2  Population
1.0  Energy
intensity
of GDP
0.8

0.6

0.4 0.2

0.2

0.0 0.0
1990 1995 2000 2005 2010
1990 1995 2000 2005 2010

3e. Net CO2eq emissions (all sources) 3f. Net CO2eq emissions underlying drivers (all sources)
Total net CO2eq emissions (MtCO2eq) Change from 1990
700
600 2.0
500
400 1.8  GDP
300
200  Waste 1.6  Energy related
100  Agriculture 1.4 CO2 emissions
 Commercial
0 & Residential 1.2  Population
1990 1995 2000 2005 2010  Industry
1.0  Net CO2eq
 Transport 0.8
emissions

 Electricity 0.6  Other GHG
Generation
0.4 emissions

0.2

 Forestry 0.0

1990 1995 2000 2005 2010

Source: ABS, 2012, 2013; BREE, 2013b; Department of the Environment, 2014.

Pathways to deep decarbonization — 2014 report 46

Australia

2 National pathways to deep decarbonization
2

2.1  Illustrative deep Summary (aggregate vision for 2050)
decarbonization pathway Australia can maintain economic growth and
prosperity, and decarbonize by 2050. The results
2.1.1  High-level characterization from the illustrative pathway show that between
now and 2050, real GDP grows at 2.4% per year
Australia has a broad range of options for decar- on average, resulting in an economy nearly 150%
bonizing its economy and multiple possible path- larger than today. Productivity keeps rising, with
ways could be modelled. However the analysis in 43% growth in real wages and exports growing
this report describes and presents results for one at 3.5% per annum. Table 1 summarizes the eco-
illustrative pathway in line with the global project nomic and population growth trajectory.
parameters and methodology. The modelling for However economic growth is not uniform across
the illustrative pathway prioritizes continued eco- the economy. Growth driven by the increase in
nomic growth and focuses on technological solu- activities such as renewable energy generation and
tions, with less emphasis on change in economic forestry is offset by significant reductions in prima-
structure or consumption patterns beyond current ry industries such as coal production, oil extrac-
projections. Assumptions about the availability and tion, and heavy manufacturing. This is discussed in
cost of technologies are deliberately conservative section 2.1.2 under the ‘Industry’ heading.
in the context of a decarbonizing world. In 2012, Australia’s energy related emissions were
Potential step changes in technology and eco- approximately 17 tCO2 per capita and for Austral-
nomic structure are not included in the example ia to contribute to the objective of limiting global
pathway but are being explored qualitatively. The temperature to <2°C, this would need to decrease
possibility that some technologies included in the by an order of magnitude by 2050. In the illustrative
example pathway are not available, or end up being pathway, Australia’s energy-related emissions are
more costly than assumed in the modelling, has substantially reduced to 3.0 tCO2 per capita in 2050,
been explored in section 2.3. and are lower still at 1.6 tCO2 per capita if emissions
The analysis builds on previous Australian work, in- directly attributable to the production of exports
cluding Commonwealth Science and Industrial Re- are excluded. Within the modelling parameters
search Organisation (CSIRO) power, land, and trans- of the illustrative pathway, including the forecast
port sector modelling.4 It has also been informed growth in global demand for energy and mineral
by the feedback gathered via consultation with over commodities,5 deeper decarbonization of Austral-
40 industry and academic experts, which identified
that stakeholder views diverge on the viability, likely 4 Graham et al., 2013; Reedman & Graham, 2013.
extent and costs of options such as carbon capture 5 IEA, 2009, 2012.
and storage (CCS), carbon forestry, and bioenergy.

Table 1. Development Indicators and Energy Service Demand Drivers

2012 2020 2030 2040 2050
32.62 36.01
Population [millions] 22.72 25.53 29.17 91,291 102,677
GDP per capita [$A/capita] 65,715 72,240 80,862

47 Pathways to deep decarbonization — 2014 report

Australia

ia’s energy-related emissions would likely require existing and emerging trends in consumer pref-
technological advances that increase the viability erences, continued growth of the service sec-
and/or reduce the cost of decarbonization options. tor, and a plateauing of distance travelled per
Australia’s total primary energy use decreases by capita in cars and other modes of transport. In
21% from 2012 to 2050 while final energy use combination, these changes lead to a halving of
increases by 22% (see Figure 4a and 4b). There are final energy use per dollar of real GDP by 2050.
significant changes in the fuel mix; coal use is al- yy Energy efficiency: Energy efficiency is assumed
most entirely phased out (the only remaining use to continue to improve at current rates until
is for coking coal in iron and steel), and there is an 2020, but accelerates thereafter, especially in
increase in renewables and biomass, and gas use. the building and transport sectors.
Australia’s energy-related CO2 emissions pathway yy Electrification and fuel switching: Electrification
from 2012 to 2050 is shown in Figure 5a to 5c. becomes widespread, especially for cars, buildings
and industrial processes such as heating processes
Pillars of decarbonization (energy) or material handling. Thermal coal use in industry
Decarbonization of energy transformation (mainly is considerably reduced via a shift to gas and bio-
electricity generation) combined with electrifica- mass wherever possible. Freight fuels move away
tion (supplied by decarbonized electricity) and fuel from diesel with a significant shift to gas.
switching leads to nearly a 75% reduction in the yy Decarbonization of energy transformation:
emissions intensity of energy use across all econom- Electricity generation is almost completely de-
ic sectors. The contribution of these pillars is shown carbonized via 100% renewable grid-integrated
in Figure 6b, while a description is provided below: supply of electricity, with some on-site gas fired
yy Structural change: The illustrative pathway electricity generation particularly in remote (non-
grid integrated) areas. Other mixes of technologies
only assumes changes in economic and/or in- for electricity generation are modelled as variants
dustrial structures that occur in response to (refer to section 2.3). There is significant replace-
domestic and global macroeconomic trends. ment of direct fossil fuel use with bioenergy.
These include global demand for commodities,

Figure 4. Energy Pathways, by source

4a. Primary Energy

6.06 EJ - 21 % 4b. Final Energy
0.21 6.0 4.81
+ 22 % EJ
1.30 5.0 4.0
3.53 3.0
4.0 0.81 2.0 4.30
0.04 1.0 2050
2.30 3.0 1.78
0
2.0 1.79  Renewables & Biomass 0.68 1.99  Electricity and Heat
1.40  Natural Gas 0.22 0.11  Biomass
2.24 1.0 1.54  Oil 1.37  Liquids
0.08  Coal 2012 0.78  Gas
0 0.05  Coal
2012 2050
Note: For international comparison.

Pathways to deep decarbonization — 2014 report 48

Australia

Non-energy emissions (industry, agriculture, industrial process and fugitive emissions. The
forestry and land use) modelling assumes that best practice is applied in
The illustrative pathway includes considerable farming and livestock production, and that global
reductions in non-energy emissions, including beef demand decreases slightly in response to

Figure 5a. Energy-related CO2 Emissions Pathway, 5b. Energy-related CO2 drivers decomposition
by Sector, 2012 to 2050 3.0 Change from 2012

500 MtCO2 2.5  GDP

2.0

400 372 1.5  Population
6 1.0  Energy use
- 71%
0.5
8  Energy related
0.0
300 87 CO2 emissions

2012 2020 2030 2040 2050

200 78 5c. Energy-related energy and CO2 intensity
1.20 Change from 2012

100 193 109 6  Other 1.00

0 1  Buildings 0.80
2012 2050 37  Transportation
53  Industry 0.60  Energy intensity
Note: For international comparison. 13  Electricity Generation 0.40 of GDP

0.20  Emissions intensity
0.00 of energy

2012 2020 2030 2040 2050

Figure 6. Energy-related CO2 Emissions Drivers, 2012 to 2050 Note: For international comparison.
6a. Energy-related CO2 emissions drivers
6b. The pillars of decarbonization
100% Ten-year variation rate of the drivers Pillar 1. Energy Intensity of GDP
Energy ef ciency 2.4 MJ/$
80%
2012
60%

40% 2050 1.2 - 51 %

20%  GDP per capita Pillar 2. Electricity Emissions Intensity
0%  Population Decarbonization of electricity 773 gCO2/kWh
2012
-20%  Energy per GDP - 97 %

-40%  Energy-related CO2 Emissions 2050 23
-60% per Energy
Pillar 3.
-80% Electri cation of end-uses Share of electricity in total nal energy
2012 22 + 24 pt
-100%

2020 2030 2040 2050 2050 46 %
2012 2020 2030 2040

49 Pathways to deep decarbonization — 2014 report

Australia

increases in price (due to its relatively high emis- markets. Figure 7 shows the underlying drivers
sions intensity and land constraints). of decarbonization (Figure 7b) and the pathway
Australia has substantial potential to offset emis- of decarbonization (Figure 7a) for all emissions
sions via land sector sequestration. The illustrative sources and sinks.
pathway includes a shift in land use toward carbon After accounting for all emissions sources and
forestry, driven by carbon abatement incentives, sinks, the pathway includes intermediate emis-
where profitable for land holders; but it does not sions reductions milestones of 19% below 2000
include the sale of emissions offsets into overseas levels in 2020, at least 50% below 2000 levels

Figure 7. Net CO2eq emissions (all sources) and underlying drivers, 2012-2050

7a. Net CO2eq emissions (all sources) by sector 7b. Net CO2eq emissions (all sources) drivers - decomposition
Total net CO2eq emissions (Mt CO2e) Change from 2012

600 3.00

500  Waste 2.50  GDP
400 2.00  Population
300  Agriculture 1.50
200 1.00
100  Commercial 0.50
& Residential
0  Industry 0
-0.50
-100  Transport -1.00  Energy related
-200 CO2 emissions
-300  Electricity
Generation
2012  Net CO2e emissions
 Forestry
 Other ghg emissions

2050 2012 2020 2030 2040 2050

Figure 8. Greenhouse gas emissions per capita by sector and source, tCO2eq per capita, 2012 and 2050

8a. Fuel combustion emissions 8b. Net emissions

Other  16.6 - 82 % Forestry  24.7
Transport  1.5 Fugitive, process & waste  0.5
3.7
4.2 Agriculture 
3.9

Buildings  5.1 Fuel combustion  16.6 0.0
0.9
Industry  5.9 3.0 1.6 0.8 2.9
1.1 0.6 3.0
1.7 2012
2050 -6.8
2012 2050 Net of exports
Total 2050

Pathways to deep decarbonization — 2014 report 50

Australia

in 2030, and to net zero emissions by 2050. The In 2050, 84% of electricity demand is met by
cumulative emissions to 2050 are compatible grid-integrated renewable energy generation,
with Australia’s carbon budget recommended mostly from rooftop and large scale solar photo-
by Australia’s Climate Change Authority,6 an in- voltaic panels, onshore wind, enhanced geother-
dependent body established under the Climate mal systems, wave, biomass, and solar thermal
Change Act 2011. This would require strong miti- generation (see Figure 9). This is possible through
gation action in all sectors of the economy, in the the inclusion of both flexible and variable renew-
context of a strong global decarbonization effort. able energy technologies as well as advances in
energy storage technologies, which would also
2.1.2  Sectoral characterization be widely used in the transport sector.7 The re-
maining electricity demand is met by distributed
The trajectory of decarbonization pathways var- supply, mostly from renewable energy generation
ies substantially among sectors, depending on with one quarter (or 4% of total demand) sup-
the availability and relative cost of technolo- plied by on-site gas fired electricity generation in
gies required in each sector. In 2050, industry is remote (non-grid integrated) areas.
the largest contributor to energy emissions, due
to continued high levels of activity in mining Figure 9. Energy Supply Pathway for Electricity Generation,
and manufacturing, followed by transport (see by Source
Figures 7 and 8). Nearly half of Australia’s en-
ergy emissions in 2050 are directly attributable 790 gCO2/kWh 800
to exports, mostly for production of industrial 600
commodities (see Figure 8). 
By 2050, fuel combustion emissions reduce 400
by about 80% compared to 2012. The main 
contributor to Australia’s non-energy emissions
in 2050 is agriculture, as currently there are 200
limited options for reducing emissions from the
agricultural sector. Sequestration via carbon  20
forestry of approximately 7 tCO2e per person
is required for Australia to achieve zero net 800 TWh  0
emissions (see Figure 8). 700

Power (electricity generation) 600
Electrification across all sectors drives a two and
one-half fold increase in electricity demand by 500  Other renewables
2050, however the substantial change in Austral- 400  Biomass
ia’s electricity generation mix leads to a greater
than 95% reduction in the emissions intensity of 300
electricity to 0.021 tCO2/MWh.
200  Solar
6 Climate Change Authority, 2014.
7 This can be thought of as a “co-benefit” or “spill-over” 100  Wind

effect whereby a sector is unintentionally impacted by 0  Hydro
an action taken by another sector.  Natural Gas
2012 2020 2030 2040 2050  Coal

51 Pathways to deep decarbonization — 2014 report

Australia

The mix of power generation technologies mod- mand for commodities. In particular, reduced de-
elled for the illustrative pathway is based on work mand for coal9 and oil is expected to drive decreases
by the Commonwealth Scientific and Industrial Re- in coal and oil production of 60% and 30% respec-
search Organisation (CSIRO).8 Depending on the tively. For some manufacturing activities, including
development of technologies, costs and regulatory metals production (iron, steel, and iron ore) growth
frameworks, a near-zero emissions power system slows, and consequently their proportional contri-
could comprise different energy sources and mixes bution to economic activity decreases. Conversely,
(variants are explored in section 2.3). demand for non-ferrous metals and other minerals
such as uranium and lithium is expected to increase.
Industry In addition, some domestic trends are estimated
By 2050, industrial energy emissions decrease by to continue, such as the progressive closure of all
nearly 60% while the economic value added of in- oil refining capacity in Australia – approximately
dustrial activities more than doubles. Metal ores, one-third of this capacity is expected to be sub-
metals, and gas contribute nearly two thirds of the stituted by biofuel refining. Figure 10a shows the
total industrial energy-related emissions in 2050, industry energy demand by fuel source.
and 80% of these emissions are attributable to
commodities produced for exports. Buildings
Across the mining sector, energy intensity doubles Greenhouse gas emissions from commercial and
instead of tripling or quadrupling (in the absence residential buildings reduce by 95% to 2050 due to
of energy efficiency improvements). At the same significant energy efficiency, electrification of direct
time, manufacturing sector energy efficiency im- fuel use (e.g. gas for heating), and the use of de-
provements continue in line with recent trends carbonized electricity. Energy use per square meter
for the first two decades then capital stock re- of commercial building and per residential dwelling
placements by more energy efficient stock drive decreases by approximately 50%. There is strong
increased energy efficiency. growth in distributed, grid integrated electricity gen-
Industrial processes are electrified where feasible, eration, in particular rooftop solar PV. Figure 10b
and there is a shift from coal to gas and increased shows the building energy demand trajectory.
use of bioenergy (Figure 10a). Process emissions and
fugitive emissions are reduced via various means Transport
including process improvements, materials substi- A substantial shift from internal combustion
tution, the partial use of bio-coke in iron and steel engine vehicles to electric and hybrid vehicles,
production, increased combustion/catalyzation of and to a lesser extent hydrogen fuel cell vehi-
gases with high global warming potential, and CCS. cles, results in over 70% improvement in the
CCS is also applied to industrial process and fugi- energy efficiency of cars and light commer-
tive emissions, as well as to CO2 emissions from cial vehicles. Gas is used extensively for road
fuel combustion for the liquefaction of natural gas, freight. As a result, oil use for road transport
where it has been applied for fugitive emissions. decreases by 85% between 2012 and 2050
Global decarbonization drives changes in global de- while vehicle kilometers travelled nearly double.

8 Electricity generation plant technology performance and costs are based on BREE (2012, 2013c), and the capital cost
reduction time path developed by Hayward & Graham (2012).

9 For the illustrative pathway, Australia’s production of coal is assumed to decrease in line with global demand. Fur-
ther analysis could be conducted in the future on the relative competitiveness of the Australian coal industry in a
decarbonizing world, which could help refine estimates of future Australian coal production.

Pathways to deep decarbonization — 2014 report 52

Australia

Biofuels replace 50% of oil use in aviation, trajectory and Figure 11 shows the composition
as this is one of the only decarbonization of drive train technologies from 2012 to 2050 for
options currently available for this sector. cars and light commercial vehicles, and the fuel
Figure 10c shows the transport energy demand mix for freight and aviation over the same period.

Figure 10. Energy Use Pathways for Each Sector, by Fuel, 2012 – 2050

Carbon intensity gCO2/MJ 50 gCO2/MJ 60  gCO2/MJ 70
40 50 67.0 60
 40 50
45.6 19.6 30 23.8 30 40
20  20
3.0 EJ  30
2.5  5.9 35.2 20
10 10
10
0 0 0

2.0 2.0 EJ 2.0 EJ

1.5  Electricity 1.5 1.5
1.0
1.0  Biomass 1.0 0.5  Other
& Biogas  Hydrogen
0  Electricity
 Liquid fuels 2012
 Liquid fuels
0.5 0.5
 Pipeline gas
0  Pipeline gas 0  Electricity
2012  Coal 2012  Pipeline gas 2050

2050 2050

10a. Industry 10b. Buildings 10c. Transportation

Figure 11. Transformation of the transport sector

11a. Cars and Light commercial vehicles drive type 11b. Fuel use for freight and aviation transport

300 (billion vehicle kms travelled) 600 (PJ)  Hydrogen
500  Coal
250  Hybrid 400  Oil
300
200  Plug in hybrid 200  Gas
150 Internal  Electric 100
100 combustion  Fuel cell  Bioenergy
0  Electricity
50
0

2012
2015
2020
2025
2030
2035
2040
2045
2050
2012
2015
2020
2025
2030
2035
2040
2045
2050

53 Pathways to deep decarbonization — 2014 report

Australia

Agriculture and forestry 2.2  Assumptions
Soil and livestock emissions are reduced through
the implementation of best practice farming tech- Potential for renewable resources, geological car-
niques, in particular for beef (e.g. intensification bon storage and energy efficiency
of breeding, improvement in feeding and pasture The potential for generating energy from renew-
practices, as well as enhanced breeding and herd able resources in Australia is far greater than
selection for lower livestock methane emissions). Australia’s total energy use today.10 As such, the
In addition, a small relative reduction in beef challenge for Australia is not the availability of
demand is expected to result from increases in renewable resources, but harnessing the potential.
beef prices in a decarbonized world. Together, Australia also has substantial potential for geologi-
these factors drive a 45% reduction in emissions cal carbon storage with large potential storage ba-
intensity of agricultural activity. However, this sins across the country, including a number in close
is not sufficient to compensate for the growth proximity to fossil fuel reserves and major industrial
in activity that sees agricultural emissions grow areas.11 The industrial-scale Gorgon Carbon Diox-
by 20% between today and 2050. Some of this ide Injection Project is one of the world’s largest
production, and the associated emissions, is at- CCS projects under development; it is expected to
tributable to exports. commence operation in 2015, and all government
Feedstocks for the production of bioenergy are approvals for capturing and re-injecting carbon di-
sourced from agricultural and forestry residues and oxide from the extraction and processing of natural
wastes, dedicated energy crops, and grasslands, gas have been granted for this project.12
and are used primarily in the aviation and mining Despite recent increases, Australia’s rate of energy
sectors. The increases in agriculture and forestry efficiency improvement is lower than in other ma-
activities required to collect and gather this bi- jor developed economies. Thus, considerable po-
omass has been accounted for in the modelling. tential for energy efficiency improvements remains
As already described in section 2.1.1, Australia and is modelled in the illustrative pathway. Energy
has great potential to offset emissions via for- efficiency improvements are driven by much higher
estry bio-sequestration. Under price incentives energy efficiency in the new housing stock (and
for afforestation, large shifts in land use from ag- domestic appliances within) required to be built for
ricultural land (in particular grasslands) to carbon Australia’s growing population. In addition, many
forestry would become profitable. However, this of Australia’s aging industrial assets are replaced
would require significant development of supply with more energy efficient capital stock by 2050 as
chains as well as regional capabilities and work- part of natural asset life cycles. Transport systems
forces. also have significant potential for greater energy
For the illustrative pathway, the total uptake efficiency through modal shift and urban planning.
of carbon forestry was capped by the volume
required to meet the budget recommended by Conditions influencing the example pathway
Australia’s Climate Change Authority, equivalent The electrification of industrial processes will
to approximately 40% of the total economic po- be necessary for all country pathways and elec-
tential identified. trification technologies are likely to be a global
R&D focus. Large technological advances in the

10 AEMO, 2013; see also Geoscience Australia & ABARE, 2010

11 CO2CRC, 2011
12 CCS Institute, 2014; CO2CRC, 2011

Pathways to deep decarbonization — 2014 report 54

Australia

potential for electrification (e.g. heat pumps and most cost-effective way of reducing emissions.
conveyors) are assumed, even though many such Electrification of industry and the use of bioenergy
technologies are not yet available and/or not yet and/or CCS may be interchangeable decarboniza-
widely deployed. tion options, depending on the scale of substitu-
Australia’s non-energy emissions are substantial tion and corresponding marginal costs. As such, if
compared with other industrialized countries and one or more of the technologies is not deployed
currently there are very few options for reducing or to the extent assumed in the modelling, Australia
offsetting a large proportion of non-energy emis- could still have the potential to decarbonize.
sions other than the use of bioenergy, CCS, and car- The use of bioenergy for fuel switching in indus-
bon forestry. Hence these technologies are likely to try will necessitate increased feedstock collec-
be critical to Australia’s decarbonization pathway. tion, aggregation, processing and distribution to
Carbon forestry has large potential to offset emissions end-use locations, and a focus on supply chain
(more than twice the amount that has been mod- development. If additional bioenergy is required
elled) so it could contribute more to decarbonization there may be trade-offs in the allocation of land
in the event that other technologies do not contribute for feedstocks with other land use needs includ-
to decarbonization to the extent anticipated. ing agriculture, carbon forestry, and ecosystem
The role of CCS in sequestering industrial process services. This may limit the potential for further
and fugitive emissions, and fuel combustion emis- bioenergy fuel substitution in industry.
sions in LNG production, is highly dependent on
CCS being demonstrated as viable (including the Electricity generation variants modelled
long-term risks of fugitive emissions), socially ac- For the illustrative pathway, 100% grid-supplied
ceptable, and cost-effective, also at smaller scales. renewable energy electricity generation was
modelled; two additional electricity generation
2.3  Alternative pathways and pathway technology mixes were modelled as variants to
robustness demonstrate contingency for any uncertainty
about the viability of the 100% grid-supplied
Pathway robustness renewable energy electricity pathway. All three
By reducing total energy demand, energy effi- mixes result in a similar relative emissions inten-
ciency improvements enable low carbon energy sity of electricity generation by 2050, well below
supply to contribute a greater proportion to to- the present intensity of 0.77 tCO2e/MWh, as sum-
tal energy supply. Energy efficiency is also the marized in Table 2. Emissions from all electricity

Table 2. Electricity generation variants modelled

Technology Generation mix in 2050 Emissions intensity of electricity in 2050
0.02 tCO2e/MWh
100% renewables grid 96% renewables 0.05 tCO2e/MWh
CCS included 4% gas (onsite)
0.04 tCO2e/MWh
Nuclear included 71% renewables
14% coal CCS
7% gas CCS
9% gas
75% renewables
14% nuclear
11% gas

55 Pathways to deep decarbonization — 2014 report

Australia

generation technology mixes could be further yyIf CCS for small scale fuel combustion appli-
reduced by the use of biogas in on-site and peak cations could be developed cost-effectively, it
gas generation (provided further resources in bi- could be applied to reduce energy emissions
ogas are secured). from many of Australia’s energy-intensive sec-
tors. For example, CCS applied to a third of
2.4  Additional measures and deeper all cement and non-ferrous metals production
pathways sites (excluding aluminum) could lead to a fur-
ther reduction in industrial emissions of over
The illustrative pathway does not model behavioral 4 MtCO2in 2050 or 0.12 tCO2/capita.
changes or step changes in technology, and only
structural changes in response to domestic and yyBreakthroughs in fuel cell technology could lead
global macroeconomic trends. However, deeper to fuel cell vehicles penetrating the market sooner
pathways could be achieved via the following: than modelled. For example, if half of the gas used
for road freight was replaced by hydrogen by 2050,
Behavior change this could lead to a further reduction in transport
yySmaller houses, greater range of tolerance in emissions of 5.5 MtCO2, or 0.15 tCO2/capita.

heating/cooling requirements (where feasible), yyThe cost of renewable energy technologies has
less travel, more widespread availability and fallen faster than anticipated and further break-
better public transport, increased proportion of throughs could speed up decarbonization, offering
less emissions-intensive products in shopping, greater flexibility of future decarbonization options.
decreased beef consumption.
yySubstitution of business travel with telecon- yyBreakthroughs in storage technology, particu-
ferencing, preferential sourcing of less emis- larly batteries, could see a more rapid adoption
sions-intensive products and services. of electrification and distributed renewable en-
ergy generation.
Structural change
yyUrban design for shift to rail for passenger travel yyMaterial efficiency (e.g. through 3D printing)
could significantly reduce emissions by reducing
and freight transport. the demand for minerals and base metals, de-
yyProactive and accelerated transition from emis- pending on the life cycle emissions of materials
required for manufacture.
sions-intensive manufacturing and mining to
more services. 2.5  Challenges, Co-benefits, and
Enabling Conditions
Step changes in technologies
yyBioenergy potential in Australia is partially de- Challenges
There are various technological, economic, so-
pendent on improvements in agricultural pro- cial and political challenges to implementing
ductivity, given agricultural residues are a large decarbonization pathways in Australia. However
component of potential feedstocks. If agricultural this report focuses on the technological chal-
productivity improves then the potential of bio- lenges, which include:
energy could increase. For example, based on the yyDemonstrating the viability of decarbonization
highest estimates of combined feedstock availa-
bility, an additional 1000 PJ of biomass could be technologies (e.g. CCS, energy storage, emerg-
used to replace gas and oil use in industry and ing renewables such as wave and enhanced ge-
transport, driving a further emissions reduction othermal systems, and rigorous carbon forestry
of nearly 30 MtCO2 in 2050 or 0.8 tCO2/capita. accounting standards);

Pathways to deep decarbonization — 2014 report 56

Australia

yyDeveloping the supply chains and workforce for new Enabling conditions
technologies and services (e.g. bioenergy, carbon The fundamental enabler for the decarbonization
forestry technologies and accounting methods). of the Australian economy is the simultaneous
decarbonization of all other major industrialized
Co-benefits countries. For Australian industries to remain
In a decarbonized world, Australia’s abundant re- competitive in global markets, their competitors
newable energy resources could form the basis of in other countries must also be exposed to the
a new comparative advantage in low carbon energy decarbonization pressures and drivers. This will
generation, replacing the existing comparative ad- also encourage public and private sector R&D
vantage possessed through fossil fuels. Realizing this efforts focused on low carbon technologies such
comparative advantage could result in a revival in as electrification, CCS and bioenergy.
energy-intensive manufacturing such as aluminum
smelting, and the potential to develop renewable 2.6  Near-term priorities
energy carriers for export markets, such as biogas or
solar-thermal based energy carriers. The prerequisite Australia faces the risk of locking in energy-inten-
for these co-benefits is that all major producing econ- sive assets, especially for new vehicles, buildings,
omies face strong carbon constraints, either through industrial plants, mines, and power stations. To
their domestic frameworks or through import de- ensure new technology developments can con-
mand favoring products from zero-carbon sources. tribute effectively and efficiently to deep decar-
Australia has the opportunity to be a global leader bonization, clear signals about Australia’s likely
in CCS expertise and technology development long-term emissions pathways are required to
thanks to its great potential for carbon capture inform investment decisions. Government has
and storage. Prospects for the extraction, refining a vital role to play in providing predictability of
and export of minerals such as non-ferrous metals policy settings in order to minimize investment
and ores, uranium, lithium, and other precious hold-ups and to reduce the risk of suboptimal
metals may also be attractive. investment decisions.
Australia’s substantial potential for bioenergy gen- The development of decarbonization technolo-
eration and bio-sequestration could contribute, for gies and their costs is subject to steep and of-
instance, to the economic revitalization of regional ten unpredictable learning curves. A portfolio
and rural communities, biodiversity protection, and approach to R&D investment in technologies is
improved water quality.13 Indigenous-led carbon required to maximize the chances of developing
mitigation projects, applying traditional land man- technologies that will achieve the deepest emis-
agement practices, offer the opportunity to simulta- sions reductions at the lowest costs. Long-term
neously address climate change, biodiversity, health, approaches for the development and deployment
and social and cultural inclusion challenges.14 of these solutions will be required, and key areas
Other co-benefits include better air quality and for further investigation include:
improved health due to reduced fossil fuel use, yyR&D for renewable energy technologies, storage
increased production levels due to improved ener-
gy efficiency, and workforce productivity gains in and grid-integration;
more naturally lit and energy efficient workplaces. yyPlanning for increased electrification of the

economy, including the transport system;

13 See for instance Eady, Grundy, Battaglia & Keating, 2009; Stucley et al., 2012.
14 Green & Minchin, 2012.

57 Pathways to deep decarbonization — 2014 report

Australia

yyCCS, including R&D and deployment of stand- yyR&D on advanced bio-sequestration options
alone industrial applications; and large-scale production of biofuels; and

yyInvestigation of options for zero-carbon energy yyReducing food waste and the emissions attrib-
industries; utable to the food production.

yyContinued energy efficiency improvement Transition to a decarbonized world will require
throughout the economy; new forms of international collaboration, and
a concerted approach to collaborative national
yyApplied research and on-ground experiments to knowledge creation and problem solving.
determine tree species, soil types, and growing
conditions that will maximize the potential for
carbon forestry;

Australia References

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National Accounts: National In- (2014). Gorgon Carbon Dioxide L., Elgindy, T., … Hayward, J.
come, Expenditure and Product, Injection Project. Retrieved (2013). Modelling the Future
Dec 2012. June 2014, from http://www. Grid Forum scenarios. CSIRO.
globalccsinstitute.com/project/
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Renewable Study - Modelling Melbourne: Commonwealth of (2012). AEMO 100% renewa-
Outcomes. Department of the Australia. ble energy study: Projection of
Environment. electricity generation technology
zzCO2CRC (CRC for Greenhouse capital costs for Scenario 1.
zzBREE (Australian Government, Gas Technologies) (2011). CCS Newcastle: CSIRO.
Bureau of Resources and Energy projects in Australia. Retrieved
Economics). (2012). Australian June 2014, from http://www. zzIEA (International Energy Agen-
Energy Technology Assessment. co2crc.com.au/research/auspro- cy). (2009). Energy Technol-
Canberra: Commonwealth of jects.html ogy Transitions for Industry,
Australia. Strategies for the Next Industrial
zzDepartment of the Environment. Revolution. Paris: OECD/IEA.
zzBREE (Australian Government, (2014). National Greenhouse
Bureau of Resources and Energy Gas Inventory - Kyoto Protocol zzIEA (International Energy
Economics). (2013a). 2013 Aus- Accounting Framework. Retrieved Agency). (2012). World Energy
tralian Energy Update. Canberra: April 2014, from http://ageis. Outlook 2012. Paris: OECD/IEA.
Commonwealth of Australia. climatechange.gov.au/NGGI.aspx
zzReedman, L., & Graham, P.
zzBREE (Australian Government, zzEady, S., Grundy, M., Battaglia, (2013). Transport Greenhouse
Bureau of Resources and Energy M., & Keating, B. (2009). An Gas Emissions Projections 2013-
Economics). (2013b). 2013 Analysis of Greenhouse Gas 2050. Report No. EP139979.
Australian energy statistics. Mitigation and Carbon Seques- CSIRO.
Canberra, July. tration Opportunities from Rural
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2013 Model Update. Canberra: tural and Resource Econom- New South Wales: Bioenergy
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Pathways to deep decarbonization — 2014 report 58

Brazil

Brazil

Emilio Lèbre La Rovere, 1 Country Profile
COPPE, Federal University 1

of Rio de Janeiro (UFRJ)

Claudio Gesteira, 1.1  The National Context for Deep Decarbonization
COPPE, Federal University and Sustainable Development

of Rio de Janeiro (UFRJ)

Brazil has a unique position among major greenhouse gas (GHG) emitting

countries due to relatively low per capita energy-related GHG emissions,

which is attributable to the use of abundant clean energy sources. Major

emissions have been historically concentrated in agriculture, forestry, and

other land use (AFOLU), related mostly to deforestation, crop growing

1

and livestock. In Brazil, deforestation has recently slowed down consid-

erably, to the point where forestry has ceased to be the major source

of emissions. The agriculture and livestock emissions have been driven

by the expansion of the agricultural frontier in the “cerrado” (savannah)

and Amazon biomes for crop and cattle raising activities, as Brazil is

an important world supplier of soybeans and meat. In parallel, as the

economy grows, emissions related to the combustion of fossil fuels for

energy production and consumption have been increasing significantly

and are expected to become the dominant source of GHG emissions

over the next decade.1 Brazil faces the challenge of building upon the low

historical GHG emission levels through new decarbonization strategies

while pursuing a rise in the living standards of the population.

In the past, Brazil had been strongly dependent on oil imports, mostly

for the industrial and transportation sectors (oil products are neither

used significantly in electricity generation nor in the residential sector,

1 La Rovere, E.L., C.B.S. Dubeux, A.O. Pereira Jr; W.Wills, 2013; Brazil beyond
2020: from deforestation to the energy challenge, Climate Policy, volume 13,
supplement 01, p.71-86.

Pathways to deep decarbonization — 2014 report 59

Brazil Brazil

as ambient heating is needed only sparingly in the come strata of the population witnessing a greater
south of Brazil). Oil imports have in particular fue- increase in income than the national average. Re-
led on-road modes of transportation that dominate gional inequality is also high and is the subject of
the sector both for urban and long distance trav- some regional incentive programs. On this point,
el, whether freight or passenger-related. Over the the need to provide enough energy to fulfill the
last decade, large offshore oil reserves were found, needs of the whole population while decarboniz-
raising the expectation that Brazil can become a ing the economic activity remains a key challenge,
major oil exporter, since these reserves exceed the although not an insurmountable one.
country’s own consumption needs and current gov-
ernmental plans do not envision using these reserves 1.2  GHG Emissions: Current Levels,
for internal needs. The country is not endowed with Drivers and Past Trends
large coal reserves, having only a low-grade variety,
and the coal use is limited to a few industries that The Brazilian population has increased from 145 to
need it for their specific processes (e.g. coke for steel 191 million people between 1990 and 2010. Pop-
mills, cement) and to some complementary electric- ulation growth rates have declined to 0.9 percent
ity generation. Natural gas produced in the country per year. GHG emissions increased from 1.4 in 1990
has not matched the rapid growth in demand, creat- to 2.5 billion metric tons CO2 equivalent (GtCO2e)
ing a need to import gas either through the pipeline in 2004, followed by a substantial reduction (by
from Bolivia or as liquefied natural gas (LNG). The half), reaching 1.25 GtCO2e in 2010, thanks to the
need to import natural gas will be eliminated in the sharp fall of deforestation (see Figure 1 below).
future as new discoveries are fully exploited. Due to the lower rate of deforestation, the share of
Brazil is also endowed with a large renewable ener- CO2 in the GHG emissions mix has declined sharply,
gy potential. Hydropower provides more than 70% from 73% to 57% between 2005 and 2010. The
of the country’s electricity and has great untapped recent growth in GHG emissions has been driven
potential, although not all of it will be used due to by methane emissions from the enteric fermenta-
concerns over environmental impacts. Brazil also tion of the large Brazilian cattle herd (numbering
has an abundance of land that can be sustainably 213 million heads in 2012), and the share of fossil
used to produce biofuel feedstocks, especially sug- fuel combustion in total GHG emissions has been
arcane for ethanol, which is already widely used steadily increasing in recent years, from 16% to 32%
as a fuel for light-duty vehicles. The country also over the period 2005-2010, ranking second after
has a great wind and solar potential, and the last agriculture and livestock in 2010 (see Figure 2a).
five years have witnessed an increase in the use of Among fossil fuels, oil is by far the dominant source
wind for electricity generation.2 Therefore, keeping of emissions, followed by natural gas and coal (see
a low energy emissions growth trajectory appears Figure 2b). Population and economic growth have
feasible, and, if carefully planned and prioritized, been consistent drivers of increased energy-related
economic growth can be achieved with a declining CO2 emissions, whereas the energy-related CO2 in-
consumption of most fossil fuels, with the possible tensity per unit of GDP increased from 1990 to 2000
exception of natural gas. but decreased from 2000 to 2010 (see Figure 3a).
Income inequality is another major concern, and, Transportation is the largest energy-related emis-
although the level remains high, there has been sions source, followed by industry, electricity gen-
visible progress in recent years, with the lower in- eration, and buildings (see Figure 3b).

2 EPE (2013), ‘Balanço Energético Nacional’ ; Available at: http://www.mme.gov.br/mme/galerias/arquivos/publicacoes/
BEN/2_-_BEN_-_Ano_Base/1_-_BEN_Portugues_-_Ingles_-_Completo.pdf

Pathways to deep decarbonization — 2014 report 60

Brazil

Figure 1. Brazilian GHG Emissions by Source 1990-2010  Land Use & Forest
 Agriculture & Livestock
3000 MtCO2eq  Industrial Processes
2500  Waste
2000  Energy and Fugitive
1500
1000
500

0

Source: MCTI,2013: Estimativas Anuais de Emissões de Gases de Efeito Estufa no Brasil.
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2000
2009
2010

Figure 2. Decomposition of GHG and Energy CO2 Emissions in 2010

2a. GHG emissions, by source 2b. Energy-related CO2 emissions by fuel and sectors

MtCO2 eq 375  Energy-related 200 MtCO2
emissions 175

82  Processes 150 Electricity

125 (Allocation
by End Use Sector)

1240 437  Agriculture 100

75 Total MtCO2

49  Waste 50  Natural Gas 53
18  Fugitive
25  Petroleum Products 266
279
0  Coal 30
 LULUCF
Electricity Generation Transportation Other
(Land Use, Land Use Change, and Forestry)
Industry Buildings

38 128 162 20 348

Figure 3. Decomposition of historical energy-related CO2 Emissions, 1990 to 2010

3a. Energy-related CO2 emissions drivers 3b. Energy-related CO2 emissions by sectors

40% Five-year variation rate of the drivers 400 MtCO2 348
300
30% 292  Buildings
269
20%
 Transportation
10%  GDP per capita 200 203
163
0%  Population
 Energy per GDP 100  Industry
-10%  Energy Related

1995 2000 2005 2010 CO2 Emissions 0  Electricity Generation
1990 1995 2000 2005 per Energy
1990 1995 2000 2005 2010

61 Pathways to deep decarbonization — 2014 report

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2 National Pathways to Deep Decarbonization
2

2.1  Illustrative Deep Non-energy related GHG emissions
Decarbonization Pathway Insofar as agriculture and livestock is currently the
most important source of GHG emissions in the
2.1.1  High-level characterization country, the decarbonization pathway assumes
the extension of the policies and measures of the
Through 2030 the illustrative Brazilian deep de- Plan for Consolidation of a Low Carbon Emission
carbonization pathway assumes that a majority Economy in Agriculture,3 launched to meet the
of the economy-wide emission reductions will be voluntary goals set for 2020. It thus assumes mit-
realized through actions outside of the energy igation actions such as the recovery of degraded
sector. However, actions will need to be taken in pasture land. Moreover, there will be an increase
the near-term to set in motion the major infra- in land covered by agroforestry schemes, and
structure changes that would allow for the signif- more intensive cattle raising activities (integrated
icant reduction of energy-related emissions after agriculture/ husbandry/forestry activities), while
2030. Thus, Brazil`s energy-related emissions are the planted area under low tillage techniques will
expected to grow in the immediate future, to peak also be expanded. In addition, areas cultivated
around 2030, and then decline through 2050. with biologic nitrogen fixation techniques will be
Since Brazil has sizable biological CO2 sinks, which increased, replacing the use of nitrogenous fer-
are assumed to increase until 2050, the Illustra- tilizers, and there would be greater use of tech-
tive Pathway will be strongly complemented with nologies for proper treatment of animal wastes.
initiatives promoting decarbonization outside the In forestry and land use, the decarbonization path-
energy sector. way assumes the extension of the policies and
The large share of renewable resources in the Bra- measures of the Action Plan for Prevention and
zilian energy mix will form a strong starting point Control of Deforestation in the Amazon4 and of the
for the process of deep decarbonization, which Action Plan for Prevention and Control of Deforest-
will focus on the expansion of existing systems. ation and Fires in the Savannahs,5 launched to meet
Deep decarbonization will be further supported by the voluntary goals set for 2020. These action plans
efficiency measures and structural changes that include a number of initiatives that combine both
can reinforce the mitigation gains while at the economic and command-and-control policy tools
same time improving living conditions and fueling that succeeded in bringing down the rate of de-
economic growth. In fact, economic growth is forestation in recent years (see Figure 1).
assumed to be very strong through 2050, with Moreover, the proposed decarbonization path-
a tripling of GDP per capita, and total popula- way assumes the successful implementation of
tion will stabilize at around 220 million people afforestation and reforestation activities, which
between 2040 and 2050, as shown in Table 1.

Table 1. Development Indicators and Energy Service Demand Drivers

  2010 2020 2030 2040 2050
222,619 220,857
Population [Millions] 190,756 206,933 217,715 26.305,84 35.634,84
GDP per capita [$/capita] 11.236,54 14.928,24 20.014,95

Pathways to deep decarbonization — 2014 report 62

Brazil

Figure 4. Energy Pathways, by source

4a. Primary EJ 4b. Final Energy
Energy + 112 % 25
23.82 EJ
0.21
20 + 116 % 20 19.64
15 5.89
15 13.58
4.08
0.21 11.25 10  Nuclear 1.67 9.11 10  Electricity
2.88  Renewables & Biomass 7.30  Biomass
5.23 5 2.17 5 2.06  Liquids
1.20  Natural Gas 4.14 0.31  Gas
6.81  Oil 2050  Coal
4.04 0 0.34  Coal 0.71 0
4.58 0.42

2010 2050 2010

would lead to a dramatic increase of forest plan- The waste management system will require large
tations using eucalyptus and pine trees, not only investments in sewage pipelines, waste disposal
for the pulp and paper industry, but also for timber facilities, and industrial effluents treatment units
and charcoal use in the production of pig iron and with methane capture and burning facilities that
steel. In fact, there is a huge availability of degrad- may curtail emissions. With the capture of meth-
ed land in the country where these afforestation ane, a renewable fuel source is created, and biogas
programs would be developed with both envi- would be used to replace some fossil natural gas.
ronmental and economic benefits. It is assumed
that such initiatives will continue and expand in Energy-related GHG emissions
the coming decades, so that as early as the mid In 2050, renewables and biomass become the
2020’s, land-use change and forestry will become dominant source of primary energy and are used
a substantial net carbon sink, and, by 2050, it to meet a majority of final energy needs, nota-
would be capable of offsetting a substantial share bly through direct use of biomass and low-car-
of the emissions from the energy sector. bon electricity generation. Energy efficiency has
The robustness of such a pathway was demon- a strong potential in Brazil, and several energy
strated by a recent study using various models saving initiatives have been set in motion in re-
and climatic datasets: an estimate of the carrying cent times and will be extended across the board
capacity of Brazil’s 115 million hectares of cultivat- (see Figure 4).
ed pasturelands has shown that its improved use Energy-related CO2 emissions stabilize by 2030
would free enough land for expansion of meat, and decline thereafter as a result of opposing
crops, wood, and biofuel, respecting biophysical drivers that result in a 2050 emission level that
constraints, and including climate change impacts.6 is only slightly higher than in 2010 (see Figure 5).

3 Available at: http://www.mma.gov.br/images/arquivo/80076/Plano_ABC_VERSAO_FINAL_13jan2012.pdf
4 Available at: http://www.mma.gov.br/florestas/controle-e-preven%C3%A7%C3%A3o-do-desmatamento/plano-de-

a%C3%A7%C3%A3o-para-amaz%C3%B4nia-ppcdam
5 Available at: http://www.mma.gov.br/florestas/controle-e-preven%C3%A7%C3%A3o-do-desmatamento/plano-de-

a%C3%A7%C3%A3o-para-cerrado-%E2%80%93-ppcerrado
6 B.B.N. Strassburg, B.B.N.; Latawiec, A.E.; Barioni, L.G.; Nobre, C.A.; da Silva, V.P.; Valentim, J.F.; Vianna, M. Assad, E.D.;

“When enough should be enough: Improving the use of current agricultural lands could meet production demands
and spare natural habitats in Brazil”, Global Environmental Change 28 (2014) 84-97

63 Pathways to deep decarbonization — 2014 report

Brazil

Figure 5. Energy-related CO2 Emissions Drivers, 2010 to 2050 5b. The pillars of decarbonization
5a. Energy-related CO2 emissions drivers

50% Ten-year variation rate of the drivers Pillar 1.
Energy ef ciency
40% 2010 Energy Intensity of GDP
4.2 MJ/$
30%

20% 2050 2.6 - 64%

10%  GDP per capita Pillar 2.
Decarbonization of electricity
0%  Population 2010 Electricity Emissions Intensity
-10%  Energy per GDP 90 gCO2/kWh
-20%
-30%  Energy-related CO2 Emissions 2050 14 - 85 %
-40% per Energy
Pillar 3.
-50% Electri cation of end-uses Share of electricity in total nal energy
2010 17 + 7 pt
2020 2030 2040 2050
2010 2020 2030 2040 2050 24 %

Figure 6. Energy-related CO2 Emissions Pathway, 2.1.2  Sectorial characterization
by Sector, 2010 to 2050
All sectors experience growth in absolute terms,
400 MtCO2 + 8 % 375 but the structure of the Brazilian economy features
a partial evolution towards the commercial sector,
348 30 see Table 2. The commercial sector increases the
300 20 share in GDP by 1 percentage point per decade to
reach 70.3% in 2050, whereas the share of heavy
200 154 industry decreases (as a consequence of the uncer-
162 tain growth prospects in a globalized and mobile
industrial landscape), and the share of agriculture
100 and livestock remains constant (capturing increas-
ing global demand for food), see Table 3.
250 128 173  Buildings
 Transportation
0 38 19  Industry
2010 2050  Electricity Generation

Emissions will be pushed upwards by the strong Electricity generation
growth of GDP per capita, but this effect is off- The illustrative deep decarbonization pathway in-
set by a decreasing demographic pressure (where cludes a further expansion of hydropower, tapping
population stabilizes by 2040) and, even more the potential for doubling the installed capacity
importantly, by a substantial fuel shift towards with environmentally acceptable projects, along
renewable energy supply and a decrease in final with an expansion of bioelectricity generation and
energy intensity per unit of GDP. The transpor- a limited amount of wind and solar photovolta-
tation and industrial sectors will be responsible ic generation. Nuclear energy currently provides
for the bulk of emissions, with transportation only 2.7% of total electricity in Brazil, and no
emissions dominating across most of the period, further increase of this output level is considered
but surpassed by emissions from industry in 2050 in this pathway, due to high costs compared to
(see Figure 6). other electricity generation options and uncertain
social acceptance.

Pathways to deep decarbonization — 2014 report 64

Brazil

The full utilization of the country´s hydropower po- the pathway includes use of the huge potential
tential requires an improved design and construc- for renewable biomass, mainly from wood and
tion of hydropower plants with reservoirs, while from sugarcane byproducts of ethanol production
simultaneously meeting local environmental con- (i.e. bagasse, tops and leaves, and stillage).
cerns. In recent years hydropower construction has This renewable electricity mix can be designed to
included minimal reservoirs (i.e. mostly run-of-the match the country’s variable electricity demand
river plants) with limited energy storage capacity by exploiting the complementarity between the
and without dispatchable generation character- renewable resources and by including a sizable
istics. Therefore improved designs are needed to standby capacity of dispatchable generation com-
decrease the reliability concerns associated with ing from natural gas- and biomass-fired power
this potentially intermittent resource. In addition, plants, which will progressively displace all coal-

Table 2. Sectorial GDP (Billion 2010 US$) Table 3. Sectorial GDP Shares (%)

  2010 2020 2030 2040 2050   2010 2020 2030 2040 2050

Total GDP 2,143 3,089 4,358 5,856 7,870 Agriculture and Livestock 5.7 5.7 5.7 5.7 5.7
Agriculture and Livestock 122 176 248 334 449
Heavy Industry 600 834 Heavy Industry 28.0 27.0 26.0 25.0 24.0
Commercial 1,133 1,464 1,889
1,421 2,079 2,976 4,058 5,533 Commercial 66.3 67.3 68.3 69.3 70.3

Figure 7. Energy Supply Pathways, by Resource

89.6 gCO2/kWh 100 Carbon intensity
80
 60

 13.6 40 55.5 gCO2/MJ 60
 20 
 40
2020 2030 2040 0
2000 TWh 7a.Electricity  20
1750  Other renewables
1500  Biomass 7 EJ 28.3
1250  Solar 0
1000  Wind
6
750  Hydro
500 5
250  Nuclear
 Natural Gas 4  Biofuel
0  Petroleum products
2010 2050  Coal 3

2  Oil

1

0 2020 2030 2040 2050
2010 7b. Liquid Fuels

65 Pathways to deep decarbonization — 2014 report

Brazil

and petroleum product-fired power plants. The ethanol to fuel most of the light-duty vehicle
resulting carbon intensity of electricity generation fleet (with some natural gas used by taxicabs
in 2050 is therefore much lower than the (already in major cities) and blending aviation jet fuel
low) 2010 level (see Figure 7a). with biokerosene for long distance transpor-
tation. The biodiesel blend to diesel, used by
Transportation trucks and buses, would be further increased to
In the transportation sector, the reliance on 25% (the government has just announced an
renewables, especially ethanol, will increase. increase from 5 to 7%). Therefore, more than
Regular gasoline sold in the country will con- half of total energy used in transportation would
tinue to contain a 25% mandatory ethanol be renewable and the carbon intensity of fuels
content, and most new cars manufactured for per unit of energy would be cut by more than
the internal market will continue to be ‘flex-fu- half in 2050 (see Figure 8c).
el,’ capable of running on 100% ethanol. An Energy efficiency standards would be used to in-
ambitious biofuel program will increase the crease fuel economy of cars, buses, and trucks,
production of ethanol from sugarcane and bio- and a shift in freight towards trains and waterways
diesel and biokerosene from a combination of would be promoted (when possible) for a deep
sugarcane and palm oil. This would allow for a decarbonization of the transportation sector. Also,
significant substitution of gasoline by renewable the pathway includes a significant extension of ur-

Figure 8. Energy Use Pathways for Each Sector, by Fuel, 2010 – 2050 gCO2/MJ 70

Carbon intensity gCO2/MJ 50 gCO2/MJ 50  60
40 40  50
26.7 40
 16.5 30 30 55.6  30
 20  20
EJ 10 13.9 7.9 20  10
12   10
25.2
0
0 0

10  Non-grid
electricity

8  Grid 8 EJ 8 EJ
electricity

66 6  Grid
 Solid biomass electricity

4 4 4  Liquid
Grid biofuels
2  Liquid fuels 2  electricity 2

0  Pipeline Gas 0  Solid biomass 0  Liquid
 Coal &  Liquid fuels fossil fuels
 Pipeline Gas
petroleum  Pipeline Gas
coke
2010
2020
2030
2040
2050
2010
2020
2030
2040
2050
2010
2020
2030
2040
2050

8a. Industry 8b. Buildings 8c. Transportation

Note: Carbon intensity for each sector includes only direct end-use emissions and excludes indirect emissions related to electricity generation.

Pathways to deep decarbonization — 2014 report 66

Brazil

ban mass transportation infrastructure (subways energy efficiency for all LPG uses (cooking and
and trains, bus rapid transport systems, etc.). As water heating) and greater energy efficiency in
a result, the energy intensity per passenger-kilo- all electricity uses to reduce some of the growth
meter of travel would be reduced by 40% in 2050 in demand. In the end, building energy use would
compared to 2010. to more than double and most energy needs of
this sector would be met by low-carbon electricity
Buildings (see Figure 8b).
Demand for energy in buildings is likely to rise
strongly, reflecting economic growth and so- Industry
cial-inclusiveness. Energy efficiency is to be Most of the industrial (productive sector includ-
pursued, although the efforts are not likely to ing energy-related emissions from agriculture and
produce as significant a reduction as in countries livestock) GHG emissions are composed of CO2.
with colder climates, where insulation and other More than half of the emissions are energy-re-
efficiency measures can considerably reduce lated, but non-energy emissions resulting from
the relative weight of sizable heating needs. industrial processes are also significant, corre-
Fuel shifts in households would be focused on sponding in 2010 to roughly 40% of the industrial
solar thermal for hot water, with some replace- GHG emissions.
ment of LPG by natural gas, ethanol, and grid It is assumed that the share of industry in energy
electricity. The adoption of solar photovoltaic demand would remain relatively stable over time,
panels in residences through a proper regulatory with almost a doubling in absolute terms despite
framework and smart grid infrastructure would the assumed widespread adoption of energy ef-
be stimulated, allowing for the introduction of ficiency measures. As a consequence, its share
photovoltaic power. of energy emissions would grow (Figure 6) since
For household electricity consumption, the share fuel switching is not always feasible in industrial
of lighting will be reduced due to the emergence processes. The non-energy emissions of industri-
of compact fluorescent light bulbs (CFLs) and al processes are also likely to increase, given the
light emitting diodes (LEDs), while consumption inflexibility of some of those processes.
from electronic equipment and appliances would In the illustrative pathway, the growth in indus-
increase. Air conditioners will become more wide- trial energy emissions will be tempered by a re-
ly adopted in the future, and despite the use of duction in both the energy intensity of industrial
more efficient technologies (such as split units, products and in the emission factors. This will
central air conditioning, and heat pumps), their come about by substantially increasing energy
total consumption of electricity will increase. efficiency in all uses of petroleum products,
In the commercial sector (including both private natural gas, and electricity, which will result in
businesses and public institutions), the expansion the industrial energy intensity per unit of value
of energy consumption and the associated emis- added decreasing by 30% in 2050 compared
sions follow economic growth. Decarbonization to 2010. This reduction in energy intensity is
measures to be adopted in this sector are simi- complemented by a transition to greater use
lar to those in the residential sector, with more of renewable energy sources (biomass residues,
weight given to energy efficiency in air condition- biogas, wood and charcoal, solar energy, and
ing installations. small hydropower) and by increased levels of
In both the residential and commercial sectors, recycling in selected industries (plastics, alu-
the decarbonization pathway includes increasing minum, scrap steel, paper, etc.) (Figure 8a).

67 Pathways to deep decarbonization — 2014 report

Brazil

A substantial effort will be required to reduce most production occurs more than two thousand
CH4 and CO2 fugitive emissions from the oil and kilometers away from the Amazon.7
gas production system (platforms and transport While some second generation biofuels from
facilities), as the huge resources of the pre-salt sugarcane, such as biokerosene and farnesene
layer are exploited. With the deployment of new (“diesel oil”), have already demonstrated tech-
infrastructure and some technical progress, it is nical feasibility, they see limited growth in the
assumed that the rate of natural gas venting and transportation sector due to the current high
flaring can be reduced. costs. Biodiesel production from palm oil would
In Brazil, the bulk of GHG emissions associated increase given the potential to grow the feed-
with agriculture and livestock are not related to stock on the huge surfaces of degraded land
energy use. The decarbonization measures that available in the country.8
will be adopted to curb sectorial energy-related Clean power generation would be provided by
emissions are the progressive replacement of die- hydropower, complemented by bioelectrici-
sel-based electricity generators by grid electricity ty (to ensure reliability) along with emerging
or locally produced biomass, small hydropower onshore wind and solar photovoltaic energy. In
or solar energy coupled with increasing energy the productive sector, increased use of green
efficiency. The use of biofuels (ethanol and bio- electricity and biomass coupled with an interim
diesel) to replace diesel in tractors and agricultural substitution of natural gas for coal and petro-
equipment would also be important. leum products would be required.

2.2  Assumptions 2.3  Alternative pathways and pathway
robustness
The Illustrative Pathway designed for a deep
decarbonization of the energy system would be Alternative deep decarbonization pathways in
achieved through efficiency gains and fuel switch- Brazil might be designed with a larger deployment
ing, mostly relying upon existing technologies, of electric vehicles coupled with a substantial
such as hydropower and bioenergy. The produc- increase in clean power generation. Electric cars
tion of ethanol from sugarcane is acknowledged are not an immediate priority in Brazil for GHG
as an advanced first generation biofuel and reductions purposes because “flex fuel” light duty
production levels can be considerably extend- vehicles can run on ethanol with a near-zero net
ed without causing any competition with food emissions and lower transition costs. However,
production or deforestation, as demonstrated electric cars have other benefits (less urban air
by recent trends since the doubling of sugarcane pollution and noise, etc.) and may be an alter-
areas between 2004 to 2011 (from 5 to 10 million native option. Electrified buses could also reduce
hectares) has occurred in parallel with a notable GHG emissions and local pollution. Other path-
fall of deforestation rate (from nearly 3 to less ways would be made possible by technological
than 1 million hectares per year). Actually, sug- breakthroughs and cost reductions in technolo-
arcane production areas are far from forests, as gies such as second generation biofuels, carbon

7 Sources: INPE; IBGE; UNICA; NIPE-UNICAMP; CTC; in ICONE, 2012; Nassar et al, 2008 in Sugarcane Ethanol: Con-
tributions to Climate Change Mitigationand the Environment. Zuurbier,P.; Vooren, J.(eds). Wageningen: Wageningen
Academic Publ.

8 Estimates vary from 20 to 60 million hectares, according to the level of degradation (high, medium and low), see
PPCDAm, PPCerrado and Strassburg et al, 2014.

Pathways to deep decarbonization — 2014 report 68

Brazil

capture and sequestration (CCS), offshore wind, the abundance of offshore sites, thanks to the
and concentrated solar power. potential synergy with the huge effort on off-
Brazil has a huge renewable energy potential from shore oil and gas drilling that would help reduce
a number of different sources (hydropower, bi- its costs. In addition, other clean power genera-
omass, wind, and solar energy) and the relative tion facilities may be built, such as concentrated
shares of these technologies in the future energy solar power units with thermal storage, producing
mix will depend mostly on the outcome of the dispatchable energy.
technological race towards economic feasibility. Advanced batteries could overcome the non-dis-
patchability of intermittent renewable power
2.4  Additional Measures and Deeper sources, such as solar and wind, making it possi-
Pathways ble to replace natural gas as the base load sup-
ply, further reducing GHG emissions from power
The availability of new technologies could even- generation.
tually help Brazil follow a deeper decarbonization CCS in Brazil is not important for the purpose
pathway than the illustrative pathway discussed of reducing GHG emissions from coal, since the
hereinabove. Among the promising technologies, use of coal is very limited; however, CCS coupled
the diffusion of second-generation biofuel tech- with the use of natural gas could support deep-
nologies, when proven economical, may contrib- er decarbonization. CCS could also be helpful to
ute to further expand the already large Brazilian lower fugitive emissions from oil and gas pro-
biofuel production. In the case of substantial cost duction, due to its continuous deployment and
reductions brought about by technological break- expansion, given its high future availability from
throughs, ethanol production from lignocellulos- the pre-salt country’s resources. CCS is already
ic materials (wood, bagasse, and other biomass being developed by Petrobras through the injec-
wastes) would allow for a much higher ethanol tion of CO2 for offshore enhanced oil recovery,
use in Brazil. A deeper pathway would be made but the feasibility of large-scale deployment of
feasible by the combination of high-efficiency bi- CCS remains unclear.
omass production and use, electric vehicles, and
green electricity generation, and more substantial 2.5  Challenges and Enabling
modal shifts towards railways and waterways in Conditions
the transportation sector.
The infrastructure of urban mass transportation, Given that such a formidable society-wide trans-
relying mostly on a large privately owned bus formation as that implied in decarbonizing the
fleet, could be further decarbonized with the ex- country’s economy will certainly have its winners
pansion of urban and suburban trains. Long-dis- and its losers, the political resolve that is neces-
tance freight transportation, currently carried out sary to muster the forces for change cannot be
almost entirely on roads, could become more ef- obtained without some preconditions. The first is
ficient if financial resources are made available for a strong public awareness of the potential dan-
substantial investment in railways and waterways. gers of climate change and the pitfalls of inaction.
In order to make possible a substantial shift to Brazil would clearly benefit from a decarbonized
low-carbon electric vehicles, a number of addi- world, given the abundance of non-fossil natural
tional sources of clean power generation may resources in the country.
become increasingly available in Brazil. Offshore The main risk here is the temptation to chan-
wind farms may become a relevant option, given nel the recently discovered huge offshore oil

69 Pathways to deep decarbonization — 2014 report

Brazil

and gas resources to expand its domestic use lishment of technology transfer mechanisms. The
through a low pricing policy that would help worldwide adoption of carbon valuation schemes
to curb inflation down. So far, the announced and cutting back of fossil fuel subsidies would
governmental policy, confirmed by Congress, also be crucial.
goes in the opposite direction, aiming to export
the bulk of the oil resources and channel the 2.6  Near-Term Priorities
oil revenue to finance government investments
in education and health. It is imperative for For Brazil to get engaged in a deep decarboniza-
the feasibility of a low-carbon future in Brazil tion process, there are a number of immediate
to stick to this policy, avoiding the use of the policy and planning measures that can be rec-
newfound oil resources in such a way as to ommended. Reinforcing the initiatives aimed at
weaken the efforts to foster energy efficiency curbing deforestation is one such measure to
and renewable energy use. ensure that there would be no major deviations
The main technological challenges here are the from a trajectory that leads to no illegal deforest-
design and building of a new generation of hydro- ation within a decade, at most. A similar priori-
power plants in the Amazon that would avoid the ty should be granted to substantially expand the
disruption of ecosystems, and using dispatchable forest plantations in degraded land, providing the
bioelectricity to replace fossil fuel generation. appropriate financial schemes to meet the upfront
Many of the strategies would require structural costs. Another required effort is to pass legislation
changes and higher upfront costs. The barriers to so that the net effect of the system of taxes and
their implementation are related to pricing, fund- subsidies on energy markets favor the widespread
ing, and vested interests, especially in two fields: adoption of renewable energy and energy effi-
power generation and transportation (long-dis- ciency options. To this end, in the near-term it is
tance transportation and urban mobility). The essential to cut subsidies to gasoline and diesel,
huge upfront costs and long construction times and redress the financial health of the electricity
involved in tapping the hydropower potential and generation sector.
building low carbon transportation infrastructure Extending the already existing incentives for in-
will require substantial financial flows and upgrad- vestments in renewable energy resources to other
ed institutional arrangements (e.g. public/private types of equipment such as PV and solar heat-
partnerships) to provide funding in appropriate ers, and prompting electricity providers to adopt
terms. The financial flow will need to largely come smart grid technologies would also produce short-
from outside of Brazil given the low savings ca- term returns. Drafting a detailed and feasible plan
pacity of the Brazilian economy. for restructuring long-distance transport in Brazil,
Internationally, a set of technical and policy ac- prioritizing an infrastructure that allows for the
tions, with a realistic chance of delivering on the most energy and emissions-efficient modes of
promise of a climate-stable planet, together with transportation such as railways and waterways,
a convincing case for the perils of inaction, would is another initiative that would both cut down
be required to mobilize the resources needed for emissions and respond to the concerns of the
initiatives such as: accelerated research on the business community. A similar initiative should
development of safe and energy-dense renew- also be undertaken, in collaboration with local
able fuels; research on industrial processes and authorities, concerning urban mobility, an aspect
materials useful to bring down the investment of Brazilian infrastructure that needs improve-
costs of renewable power sources; and the estab- ment and is currently high in the political agenda.

Pathways to deep decarbonization — 2014 report 70

Canada

Canada

Chris Bataille, 1 Country profile
Navius Research & Simon Fraser 1

University Faculty 1.1  The national context for deep
of the Environment decarbonization and sustainable development

Jacqueline Chan (Sharp), To contribute to a path that limits the global increase in
Navius Research temperature to less than 2°C, Canada would need to dra-
matically reduce CO2 emissions from energy- and indus-
Dave Sawyer, trial process-related activities. Emissions would need to be
Carbon Management Canada transformed from 20.61 tonnes of carbon dioxide equivalent
per capita (tCO2e/cap) in 2010 to less than 2 tCO2e/cap in
Richard Adamson, 2050. This represents a nearly 90% reduction in emissions
Carbon Management Canada from 2010 levels by 2050.
The Canadian context presents a number of challenges re-
lated to achieving deep decarbonization:
yy First, national circumstances create structural impedi-

ments to decarbonization. Challenges include Canada’s
vast land area (which drives substantial transportation
demand), climate (which drives winter heating and sum-
mer cooling demand), and the importance of the resource
extraction sector to the economy.

1 Excludes LULUCF emissions

Pathways to deep decarbonization — 2014 report 71

Canada Canada

yy Second, Canada’s natural resource develop- access to globally sourced GHG reduction op-
ment aspirations are consistent with a global portunities will be politically and economically
2oC pathway only if deep decarbonization important to Canada’s decarbonization effort.
technologies are deployed. Global demand These assumptions are necessary in order to
for fossil fuels and other primary resources is look beyond the status quo and investigate
projected to rise even in deep decarbonization the transformative technological pathways that
scenarios. As a result, the continued develop- deep decarbonization in Canada will require.
ment of Canada’s fossil fuel and mineral natural The insights gained from this analysis can then
resources for global export can be consistent be used to inform policy discussions, as well as
with a 2°C pathway. However, this requires that identify the implications of global decarboni-
transformative GHG mitigation technologies zation-driven technological shifts for Canada’s
be deployed at every stage, including extrac- economy.
tion, processing, and end-use.
1.2  GHG emissions: current levels,
yy Third, significant political, economic, and drivers, and past trends
technical barriers to deep decarbonization
need to be overcome, both in Canada and In 2010, total Canadian GHG emissions (in-
abroad. Technical constraints currently limit cluding LULUCF) were 775.2 MtCO2e, equiva-
the availability of many options (such as hy- lent to 22.8 tCO2e per capita (20.6 excluding
drogen use for personal travel), and significant LULUCF). As shown in Figure 1, emissions are
research, development, and deployment efforts dominated by the industrial and transportation
will be needed both domestically and interna- sectors and driven by the use of fossil fuels,
tionally. Cost and competitiveness outcomes particularly refined petroleum products and
are other challenges that must be overcome natural gas.
for technologies to be widely deployed (such Between 1990 and 2010, energy-related emis-
as CCS). Finally, even options that meet both sions rose by 101 Mt CO2e, driven by population
of these feasibility criteria may fail to be imple- and economic growth (Figure 2a). Industrial
mented due to public opposition and political output (particularly in the oil and gas sectors)
pressures. has risen substantially, and the growing pop-
ulation and economy have spurred increasing
The Canadian analysis presented in this chap- transportation demand. These factors have
ter considers and incorporates these factors. been offset by improvements in energy efficien-
However, in order to achieve the objective of cy: between 1990 and 2010 energy efficiency
the current phase of the DDPP process—identi- regulations drove an improvement of approx-
fying national technological pathways to deep imately 15% in the average fuel efficiency of
decarbonization—the analysis also looks be- the Canadian car fleet and approximately 25%
yond current political realities and envisions a in the heating energy intensity of new residen-
hypothetical future in which Canada and other tial buildings.
nations are aligned on the need to implement While the overall carbon intensity of energy
stringent policies to drive these changes and in- use did not change significantly between 1990
ternational competitiveness concerns associated and 2010, Canadian electricity production has
with differential action are alleviated. Another started shifting toward lower and zero emission
important simplifying assumption in the analysis sources. The Canadian federal government re-
is that the Canadian emission reductions are
achieved domestically, despite the fact that

Pathways to deep decarbonization — 2014 report 72

Canada

cently imposed regulations effectively requiring feed-in-tariffs and a coal-fired power ban in
all new and retrofitted electricity generation Ontario, a flexible levy on marginal industrial
to have the GHG intensity of a natural gas emissions in Alberta, a renewable portfolio
combined cycle gas turbine or better. Each standard in New Brunswick and Nova Scotia,
province also has carbon regulations in place and a net zero GHG standard for new gener-
that drive electricity decarbonization, such as ation in British Columbia.

Figure 1. Decomposition of GHG and Energy CO2 Emissions in 2010

1a. GHG emissions, by source 1b. Energy-related CO2 emissions by fuel and sectors
250 MtCO2

MtCO2 eq 570  Energy-related 200
emissions 150
775 100 Electricity
54  Processes (Allocation
50 by End Use Sector)

55  Agriculture Total MtCO2
20  Waste
 Natural Gas
0.2  Other 150

 Petroleum Products 271

+ 76  LULUCF 0  Coal 91

(Land Use, Land Use Change, and Forestry) Electricity Generation Transportation Other
0
Industry Buildings

98 147 198 69 512

Note: Combustion CO2 emissions does not include upstream fugitive emissions (58 Mt in 2010).

Figure 2. Decomposition of historical energy-related CO2 Emissions, 1990 to 2010

2a. Energy-related CO2 emissions drivers 2b. Energy-related CO2 emissions by sectors

20% Five-year variation rate of the drivers 1000 MtCO2

15%

10% 800

 GDP per capita

5%  Population 600 590 596 569
0% 531
-5%  Energy  Buildings
per GDP 471  Transportation

400  Industry
 Electricity Generation
-10%  Energy Related 200
-15%
CO2 Emissions
per Energy

-20% 0
1995 2000 2005 2010 1990 1995 2000 2005 2010
1990 1995 2000 2005

73 Pathways to deep decarbonization — 2014 report

Canada

2 National deep decarbonization pathways
2

2.1  Illustrative deep scenario. The results provide insight into the
decarbonization pathway key areas where decarbonization will occur, as
well as where deep emission reductions will be
2.1.1  High-level characterization challenging to achieve.

The Canadian deep decarbonization pathway Summary of Results
examines the major shifts in technology adop- The Canadian deep decarbonization pathway
tion, energy use, and economic structure that achieves an overall GHG emission reduction of
are consistent with continued growth in the nearly 90% (651 MtCO2e) from 2010 levels by
population and economy and a nearly 90% 2050, while maintaining strong economic growth
reduction in GHG emissions from 2010 lev- (see Table 1).2 Over this period, GDP rises from
els by 2050. It is important to remember that $1.26 trillion to $3.81 trillion (real $2010 USD),
this pathway is not a forecast, but rather an a tripling of Canada’s economy.
illustrative scenario designed to identify tech- The reduction in emissions is driven most sig-
nology-related needs, challenges, uncertainties, nificantly by a dramatic reduction in the car-
and opportunities. The analysis is based on a bon intensity of energy use, as renewables and
set of global and domestic assumptions about biomass become the dominant energy sourc-
key emissions drivers, technology availability, es, and there is broad fuel switching across
and economic activity. In order to reveal the the economy toward electricity and biofuels
technological pathways to deep decarbonization (Figure 3 and Figure 4a). Electricity production
in Canada, current political realities were sus- nearly completely decarbonizes (Figure 4b).
pended, and important assumptions were made Overall, the carbon intensity of Canada’s total
related to demand for Canadian oil and gas ex- primary energy supply declines by 90% be-
ports, commercial availability of transformative tween 2010 and 2050. This result is resilient
technologies, the availability of globally sourced to several technology scenarios. If biofuels are
GHG reductions, and the extent to which global not viable the transport stock could transition
decarbonization creates new export opportu- to increased use of electricity generated with
nities for Canadian goods and services. These renewables and fossil fuels with CCS, especially
assumptions are discussed at the end of this if better batteries become available. If CCS
section. A technology-specific energy-economy is not available, the electricity sector could
model (CIMS) was then used to simulate the decarbonize using more renewables and/or
energy-using technology pathways that firms nuclear, and vice versa.
and individuals would follow under the DDPP

Table 1. Development Indicators and Energy Service Demand Drivers

2010 2020 2030 2040 2050
44.8 48.3
Population [Millions] 33.7 37.6 41.4 67,500 78,882
GDP per capita [$/capita, 2010 price] 37,288 49,787 57,754

2 Net LULUCF emissions are omitted in the DDPP process.

Pathways to deep decarbonization — 2014 report 74

Canada

The other major driver of emission reductions is economy diversifies away from the industrial
the dramatic reduction in the energy intensity sector to some extent, and within the industrial
of the economy between 2010 and 2050, as sector, output from the refining, cement, and
shown in Figure 4a and Pillar 1 of Figure 4b. lime sectors falls compared to the reference
End-use energy consumption rises by only 17% case scenario, while output from the electricity,
over this period, compared to a 203% increase biodiesel, and ethanol sectors rises. Output
in GDP. This is due to both structural chang- from the oil and gas sector falls slightly from
es in the economy and energy efficiency. The the reference case, but it still doubles.

Figure 3. Energy Pathways, by source

3a. Primary Energy 3b. Final Energy
+ 24 % EJ
14 14.18 EJ
1.10 14

11.40 12 7.00 + 14 % 12 10.25
1.10 10
1.90 8 1.50  Nuclear 10 4.87  Electricity
1.10 6 0.30  Renewables & Biomass 9.01 0.71  Gas w CCS
4 1.30  Natural Gas w CCS 2.36  Gas
3.70 2.30  Natural Gas 8 0.90  Liquids w CCS
0.68  Oil 0.68  Liquids
3.60 2 2050  Coal w CCS 1.82 6 0.42  Coal w CCS
2010 0  Coal 3.66 4 0.30  Coal
3.23 2
0.30 0

2010 2050

Figure 4. Energy-related CO2 Emissions Drivers, 2010 to 2050

4a. Energy-related CO2 emissions drivers 4b. The pillars of decarbonization

100% Ten-year variation rate of the drivers Pillar 1. Energy Intensity of GDP
Energy ef ciency 7.2 MJ/$
80% 2010

60%

40% 2050 2.6 - 63 %

20%  GDP per capita Pillar 2. Electricity Emissions Intensity
0%  Population Decarbonization of electricity 184 gCO2/kWh

-20%  Energy per GDP 2010 - 98 %
-40%
-60%  Energy-related CO2 Emissions 2050 4
per Energy
Pillar 3.
-80% Electri cation of end-uses Share of electricity in total nal energy

-100% 2010 19 + 24 pt

2020 2030 2040 2050 2050 43 %
2010 2020 2030 2040

75 Pathways to deep decarbonization — 2014 report

Canada

In combination, these factors drive a nearly com- sil fuels) substantially decarbonize by 2050,
plete decarbonization of the buildings, transporta- and the sector is able to remain a thriving
tion, and electricity sectors. As shown in Figure 5, contributor to the national economy. This
by 2050 Canada’s remaining emissions in the assumption is discussed further in Technical
deep decarbonization scenario come primarily Options and Assumptions for National Deep
from industry. Decarbonization.
2. The analysis assumes that all emission reduc-
Key Scenario Characteristics tions are achieved domestically, despite the
Two of the core foundations of the Canadian importance of lower-cost global reductions to
deep decarbonization pathway—nearly com- achieving decarbonization in Canada. This as-
plete decarbonization of the buildings and trans- sumption is being made by all country teams,
portation sectors—are well understood, with since the DDPP process is focused on identify-
significant progress already achieved. Other ele- ing the decarbonization pathways and technical
ments of the pathway are less certain and more changes that are likely to drive deep emission
susceptible to global factors, including global reductions in each country. However, in prac-
demand (and hence emissions) from the heavy tice, international cooperation to maximize the
industrial and energy extraction and processing efficiency of worldwide emission reduction ef-
sectors and the availability of transformative forts will be critical.
GHG abatement technologies. 3. Global demand patterns for Canadian goods
To address these uncertainties, the Canadian anal- and services do not change. Depending on
ysis is based on four key characteristics: the decarbonization pathways followed by
1. International demand for crude oil and nat- other countries, demand for various Canadian
goods and services could increase, potential-
ural gas remains substantial under a deep ly including biomass (as cellulosic ethanol
decarbonization scenario. As a result, oil and or biodiesel), primary metals (iron, nickel,
gas production (as well as the end use of fos- zinc, rare earths, and uranium), fertilizers
(both from mined potash and nitrogen/am-
Figure 5. Energy-related CO2 Emissions Pathway, monia-based sources derived from natural
by Sector, 2010 to 2050 gas), and/or energy efficiency technologies
(particularly in the vehicle sector). However,
600 MtCO2 569 - 93 % the scope and scale of this impact is highly
500 69 uncertain. These dynamics will be explored
in future phases of the DDPP.
400 198 4. There will be significant domestic innovation
300 and global spillovers in transformative low-car-
bon technologies, leading to the commercial
200 201 viability of next-generation cellulosic ethanol
and biodiesel, as well as CCS in the electricity
3  Buildings generation, natural gas processing, hydrogen
100 5  Transportation production, and industrial sectors. These as-
101 38 sumptions are discussed further in Technical
25  Industry Options and Assumptions for National Deep
0 5  Electricity Generation Decarbonization.

2010 2050

Pathways to deep decarbonization — 2014 report 76

Canada

2.1.2  Sectoral characterization Oil and natural gas consumption decline, while
biofuels become the core liquid fuel, and hydrogen
Energy Supply enters the energy mix (Figure 6b). Sufficient access
In the deep decarbonization scenario, the Cana- to the feedstocks for cellulosic ethanol and bio-
dian energy supply is transformed between 2010 diesel was assumed; however, the electricity gen-
and 2050. Over this period, consumption of elec-
tricity rises nearly 70%, from 505 to 1,354 TWh, Table 2: Remaining GHG Emissions in 2050 by Sector (% of Total)
while the sector’s total emissions fall by 95%,
from 101 to 5 MtCO2. As shown in Figure 6, this is Sector % of Total
led by an increase in the share of renewable energy Electricity 5.9%
(hydro, wind, solar, and biomass) in the generation Transportation 5.9%
mix and supported by the use of CCS to decar- Buildings 3.5%
bonize coal and natural gas-fuelled generation. Industry
Nuclear output was assumed to remain constant, Agriculture 74.9%
due to facility siting and political challenges. 11.1%

Note: Total exceeds 100% due to rounding.

Figure 6. Energy Supply Pathways, by Resource

gCO2/kWh 200 Carbon intensity

 150 69

181 100  gCO2/MJ 60
 40
 50
4 28
 20
1600 TWh  0  0


1400 4.0 EJ
3.5
1200  Biomass 3.0  Hydrogen
 Solar 2.5  Biofuel
2.0
1000  Wind 1.5  Oil
1.0
800 0.5

600 2020 2030 2040  Hydro 0 2020 2030 2040 2050
400 6a.Electricity 2010 6b. Liquid Fuels
200  Nuclear
 Natural Gas w CCS
0  Natural Gas
2010  Coal w CCS
2050  Coal

77 Pathways to deep decarbonization — 2014 report

Canada

eration mix does not include net sequestration of switching to biofuels (predominantly cellulosic eth-
biomass, given insufficient information regarding anol for personal transport and biodiesel for freight
the availability of sufficient sustainable feedstock. transport), electricity, and hydrogen (Figure 7c).
Due to these fuel supply shifts, by 2050 the elec- Energy efficiency regulations have already led to
tricity, transportation, and building sectors have substantial GHG reductions in the transportation
almost completely decarbonized, and the Cana- sector, and new vehicle stock is on track to almost
dian emissions profile is dominated by a subset completely decarbonize by the late 2030s or early
of industrial emissions that are very difficult and 2040s if regulatory goals continue to strengthen
expensive to reduce (Table 2). The following sec- at their recent rate.
tions highlight the key changes that drive emis- Passenger kilometers travelled remain fairly con-
sion reductions in each of these sectors. stant, while freight movement per dollar of GDP
falls by 35% between 2010 and 2050, as the econ-
Transportation omy becomes less dependent on the movement
Overall transportation sector emissions fall by 97% of freight. Structurally, there is a slight mode shift
between 2010 and 2050, from 198 to 5 MtCO2. In from personal vehicles to mass transportation
the personal and freight transportation sectors, this (transit, bus, and rail), while in the freight trans-
decarbonization is initially driven by vehicle effi- portation sector, the use of heavy trucks declines
ciency improvements and then by substantial fuel substantially, primarily in favor of rail.

Figure 7. Energy Use Pathways for Each Sector, by Fuel, 2010 – 2050

Carbon intensity gCO2/MJ 50 gCO2/MJ 60  gCO2/MJ 70
40 50 69.5 60
 50
47.3 

 30 29.6 40 40
20  30
7.0 EJ 17.4 10 20 30
6.0   10
0.8  20
 0 10

0   0

5.0 5.0 EJ 5.0 EJ 1.5

4.0  Grid 4.0 4.0
electricity

3.0  Liquid fuels 3.0 3.0 Grid
w CCS 2.0 electricity
1.0
2.0  Liquid fuels 2.0 
0
 Pipeline Gas  Grid  Hydrogen
w CCS electricity
1.0  Pipeline Gas 1.0
 Biofuels
 Coal w CCS
0  Coal 0  Liquid fuels  Petroleum
 Pipeline Gas products
2010
2020
2030
2040
2050
2010
2020
2030
2040
2050
2010
2020
2030
2040
2050

7a. Industry 7b. Buildings 7c. Transportation

Note: Carbon intensity for each sector includes only direct end-use emissions and excludes indirect emissions related to electricity or hydrogen production.

Pathways to deep decarbonization — 2014 report 78

Canada

Buildings (from 55 to 9.5 MtCO2e). These reductions result
Overall building sector emissions fall by 96% between from efforts to reduce atmospheric emissions due to
2010 and 2050, from 69 to 3 MtCO2. The bulk of the enteric fermentation, manure management, and agri-
emission reductions are the result of fuel switching, cultural soils, and include measures such as methane
with natural gas use virtually eliminated and electric- capture, controlled anaerobic digestion and flaring or
ity providing nearly all of the sector’s energy by 2050 generation, and no-till agricultural practices.
(Figure 7b). Air and ground source heat pumps are
the primary energy supply technologies in use, with 2.2  Assumptions
some peaking with baseboard electric heat.
Per capita residential floor area remains fairly The Canadian decarbonization pathway is domi-
constant, while the commercial sector becomes nated by four major dynamics, providing insight
more space efficient, and commercial floor area into the key areas where Canada can take action
per dollar of GDP falls by 36%. Building energy to decarbonize:
efficiency has already improved substantially, yyReinforced and deepened energy efficiency im-
and forthcoming energy efficiency regulations
will continue to drive reductions in space heat- provement trends in all energy end-uses;
ing energy use, keeping the sector on a trajectory yyEventual decarbonization of the electricity sector;
toward nearly complete decarbonization. yyFuel switching to lower carbon fuels and decar-

Industry bonized energy carriers (e.g. electricity, trans-
Industrial emissions fall by 80% between 2010 port biofuels and hydrogen); and
and 2050, from 313 to 64 MtCO2e. The structure yyDirect GHG reduction for industrial processes
of the industrial sector shifts, with output from and thermal heat generation (e.g. via carbon
the refining and cement and lime sectors falling capture and storage and process changes).
compared to the reference case and output from This section discusses each of these decarboniza-
the electricity, ethanol, and biodiesel sectors ris- tion opportunities and the key assumptions and
ing. While slightly lower than in the reference uncertainties involved.
case, output from the oil and gas sector still dou-
bles. The vast majority of the industrial sector’s Improved energy efficiency for all energy
emissions reductions are a result of fuel switching end-uses
(particularly to electricity) and the widespread End-use energy efficiency improvements are a key
adoption of CCS to reduce chemical by-product decarbonization pathway in Canada, particularly
and process heat related emissions (Figure 7a). in the transportation and buildings sectors. En-
Process emission controls are also put in place ergy efficiency roughly doubles in both sectors
for the cement and lime, chemical production, by 2050, which is consistent with the trajectory
iron and steel, and oil and gas extraction sectors. already established by existing and forthcoming
efficiency regulations.
Agriculture
While not the focus of the DDPP at this stage, this Decarbonization of electricity generation
study included an analysis of strategies to reduce Decarbonizing electricity production is essential,
agricultural non-CO2 GHG emissions, and the Ca- since it is a precondition to reducing emissions
nadian decarbonization pathway includes an 83% throughout the rest of the economy through elec-
reduction in these emissions between 2010 and 2050 trification. To decarbonize Canada’s electricity
generation stock, investment in a wide range of
low-emitting electric generation technologies will

79 Pathways to deep decarbonization — 2014 report

Canada

need to more than double from baseline levels in bustion or in-situ electrothermal extraction in the
the deep decarbonization scenario. petroleum extraction sector and switching from
Our modelling assumes that the cost and capacity pyro to hydro metallurgy in metal smelting).
factors of wind and solar improve to a degree that
allows 17% of generation to come from wind and 10% Assumptions
from solar PV. Both require restructuring of electricity As mentioned previously, the Canadian deep de-
markets and transmission grids to allow for and en- carbonization pathway assumes that international
courage high intermittent renewable content. demand for crude oil and natural gas remains sub-
In addition to intermittent renewables, significant stantial. If international oil prices remain above
deployment of CCS will be required to facilitate the cost of production, continued growth of the
large-scale switching to decarbonized electricity. Canadian oil sands sector (with decarbonization
The analysis assumes that post-combustion CCS measures) can be consistent with deep emission
will be commercially viable for the electricity sector reduction efforts and would support continued
by 2020 and that eventually solid oxide fuel cells economic development.
(which provide a virtually pure CO2 waste stream) The literature conflicts on whether production
or a technology of equivalent GHG intensity will be from the oil sands can be cost-effective in a deep
used to achieve approximately 99% CO2 capture. decarbonization scenario; the answer depends on
policy, the cost of reducing production emissions,
Fuel switching to decarbonized energy carriers and assumptions regarding transport energy use
The Canadian decarbonization pathway includes and efficiency. However, the International Energy
significant fuel switching to decarbonized energy Agency’s World Energy Outlook 2013 indicates
carriers, with the transportation, industrial, and res- that even in a 450 ppm world, oil sands production
idential/commercial sectors switching to electrici- could remain at levels similar to today or higher.3
ty, hydrogen, and advanced biofuels. Fuel switch-
ing in the transportation sector will require further 2.3  Alternative pathways and pathway
developments in batteries (less so for hybrid and robustness
plug-in hybrid vehicles) and hydrogen storage. Fuel
switching to advanced biofuels will also depend on Several elements of the Canadian decarboni-
the development of a decarbonized fuel source zation pathways are well understood and are
with adequate feedstocks (e.g. cellulosic ethanol expected to provide an essential foundation
and biodiesel based on woody biomass or algae) for deep decarbonization under all pathways,
and significant technological innovation to make such as energy efficiency improvements in the
these fuels commercially available. buildings and transportation sectors. Other ele-
ments depend on technological innovation and
Direct GHG reduction in industrial processes stronger climate policy signals, and their future
To achieve significant decarbonization, a cost-ef- contribution to Canadian emissions reductions
fective method of reducing chemical by-product is more uncertain. The commercial availability
(e.g. from natural gas processing and hydrogen, of CCS falls into this latter category, since the
cement, lime, and steel production) and process technology is not commercially viable with
heat-related emissions is essential. This will require current climate policy stringency.
the deployment of CCS in these sectors, along with If CCS does not achieve commercial viability in
other transformative technologies that are not yet the electricity production sector or is blocked
commercially available (e.g. down-hole oxy-com- due to public acceptability concerns, alternative

Pathways to deep decarbonization — 2014 report 80

Canada

decarbonization pathways could be based on 2.4  Additional measures and deeper
increased generation from either nuclear power pathways
or renewables. The Canadian decarbonization
pathway assumes that nuclear generation is The Canadian decarbonization pathway was de-
limited to current installed capacity, due to the veloped by using a technology-rich stock turnover
challenges associated with siting new facilities. simulation model, which includes and evaluates
However, if public acceptance and siting chal- both currently available technologies and those
lenges were overcome, this constraint could still under development but with the potential
be relaxed. Renewables such as solar and wind for future commercial availability. The Canadian
power are already projected to play a major role pathway is extremely aggressive and ambitious,
in electricity generation by 2050. They have the reducing emissions by nearly 90% between 2010
theoretical potential to expand further, but their and 2050. As a result, few additional measures
intermittency is a limiting factor, and further and deeper pathways are available. One emission
expansion would depend on development of reduction option that is currently being investi-
a North American-wide high voltage direct gated in Canada is accelerated weathering of mine
current transmission grid to balance renewable wastes. Some mine tailings mineralize atmospheric
supply and demand or significant breakthroughs carbon dioxide, and researchers are working on ac-
in storage technologies. celerating this process, both abiotically and micro-
The analysis also assumes substantial deploy- bially. This could offset the GHG emissions from
ment of CCS to address process heat emissions mining projects and has the theoretical potential
in natural gas processing, hydrogen production, to sequester much larger quantities of emissions,
and industrial sectors. If this does not occur, the turning mine wastes into a significant carbon
key alternative is direct electrification of industrial sinks.4 Another known decarbonization pathway
processes, such as substituting hydro metallurgy not included in this version of the analysis is the full
for pyro metallurgy. suite of potential options for switching from pyro
The Canadian decarbonization pathway also metallurgy (using heat) to hydro metallurgy (using
includes significant fuel switching to cellulosic acid solutions and electricity) in the metal smelting
ethanol and biodiesel in the transportation sec- sectors. Finally, another pathway that may allow
tor, which relies on the assumption that these deeper reductions is the use of biomass with CCS
fuels will be commercially viable. However, the in electricity generation to create net sequestration
transportation sector has more flexibility than electricity production; we have not considered this
many other sectors, since biofuels, electricity, and option due to potential feedstock limitation issues.
hydrogen all contribute to the sector’s emission
reductions. If biofuels are not available, alterna- 2.5  Challenges, opportunities and
tive decarbonization pathways could be based on enabling conditions
greater electrification of transportation or more
aggressive fuel switching to hydrogen (although Challenges
there are currently technical issues with practical The fossil fuel production and mineral extraction
hydrogen storage in personal vehicles, and there sectors play a major role in the Canadian econ-
is currently no hydrogen supply network). omy. However, their export-oriented nature is a

3 International Energy Agency (IEA). 2013. World Energy Outlook 2013. www.worldenergyoutlook.org

4 Dipple, G. et al. 2012. Carbon Mineralization in Mine Waste. Available online at http://www.cmc-nce.ca/wp-con-
tent/uploads/2012/06/Greg-Dipple.pdf

81 Pathways to deep decarbonization — 2014 report

Canada

challenge, since they create significant produc- national) emission reductions is the most efficient
tion emissions in Canada even though the outputs way to address this challenge. While the current
are consumed in other countries. The commercial phase of the DDPP project focused on identifying
availability of CCS will be essential to economi- national technological pathways, this topic will be
cally address these emissions. key in the next phase of the DDPP’s work.
More broadly, many of the major changes de-
scribed in the Canadian decarbonization pathway 2.6  Near-term priorities
will not occur without strong policy signals, which
will require public support and in many cases will The Canadian deep decarbonization scenario de-
be driven by public pressure, whether domestically pends on significant technological innovation and
or indirectly through external market-access pres- deployment. This requires both domestic invest-
sures. Technological innovation and deployment ment and innovation and global research coop-
is a critical component of the Canadian pathway, eration and technology spillovers. To remain on
but large-scale deployment of new technologies the path toward deep decarbonization, increased
is dependent on public acceptance, which must investment and accelerated research, develop-
be earned through continued engagement and ment, and deployment efforts will be required in
dialogue and cannot be assumed. the following priority areas:
yyImproving post-combustion CCS, for both electric-
Knowledge Gaps
A significant knowledge gap in the Canadian de- ity generation and industrial process applications;
carbonization pathway is how global decarboniza- yyDevelopment and commercialization of solid
tion efforts will change demand for products and
services that support low-carbon development oxide fuel cells and other technologies, includ-
and in which Canada has a competitive advan- ing pre-combustion capture, that either reduce
tage. Changing global demand patterns could GHG intensity or reduce the cost of CCS by
lead to the expansion of existing industries or producing a pure CO2 waste stream;
the development of new industries, dampening yyEnhanced transmission grid flexibility and en-
adverse decarbonization impacts and supporting ergy storage technologies to allow more elec-
continued economic development. tricity generation from intermittent renewables;
yyDevelopment and commercialization of cellulos-
Enabling Conditions ic ethanol and advanced biofuels derived from
International cooperation is required to support woody biomass, algae or other feedstocks; and
research, development, and deployment of crit- yyDevelopment and commercialization of batter-
ical decarbonization technologies, as well as to ies and hydrogen storage to enable electrifi-
implement a global equimarginal abatement ef- cation and fuel switching to hydrogen in the
fort through GHG reduction sales and purchases. transportation sector.
Technical constraints make the marginal cost of In parallel with efforts to collaborate on the deploy-
emissions abatement based on currently availa- ment of critical enabling technologies, addressing
ble technologies very high in the heavy industrial the significant differential in abatement opportuni-
and energy extraction and processing sectors, com- ties and marginal abatement costs across countries
pared to other Canadian decarbonization options and sectors must be an international priority. While
and to the cost of reducing emissions in many other challenging to implement, a global equimarginal
countries. A focus on global (rather than purely abatement effort through GHG reduction sales and
purchases has the potential to be the most efficient
way to achieve the global target while maintaining
strong economic growth.

Pathways to deep decarbonization — 2014 report 82

China

China

Teng Fei, 1 Country profile
Institute of Energy, Environment and 1

Economy, Tsinghua University 1.1  The national context for deep
decarbonization and sustainable
Liu Qiang, development
National Center for Climate
Change Strategy and International Despite fast growth over the last decade
(with an average GDP growth rate of 10%
Cooperation over 2000-2012), China is still a developing
country with a low level of economic devel-
Gu Alun, opment. In 2010, its GDP was 5,930 billion
Institute of Energy, Environment US$, and per capita GDP was just 4,433 US$.
and Economy, Tsinghua University China’s has a very significant secondary sector
of the economy, which contributed 48.3%
Yang Xi, to GDP in 2013, but this sector’s contribu-
Institute of Energy, Environment and tion has declined by 12.5 percentage points
since 2000, while the tertiary sector of the
Economy, Tsinghua University economy increased by 12 percentage points.
Due to economic and social development,
Chen Yi, China’s level of urbanization has risen from
National Center for Climate
Change Strategy and International

Cooperation 

Tian Chuan,
National Center for Climate
Change Strategy and International

Cooperation 

Zheng Xiaoqi,
National Center for Climate
Change Strategy and International

Cooperation 

Pathways to deep decarbonization — 2014 report 83

China China

26.4% in 1990 to 53.7% in 2013. With a 1% respectively (Figure 1a). The major emitting
increase in urbanization rate, 13 million Chi- energy activities are the coal-intensive power
nese inhabitants move to cities every year to generation and industrial sectors (Figure 1b).
pursue a higher standard of living. China is Notably, as the main sector driving economic
also the most populous country in the world; growth, the industry sector accounts for 68%
by the end of 2013, China’s population was of total final energy consumption and almost
1.36 billion, about 20% of the world total. 71% of total energy-related CO2 emissions in
Although China has made remarkable progress, 2010. This is essentially from a few energy-in-
it is under heavy pressure to improve environ- tensive industries, which consume about 50%
mental protection due its resource-intensive of energy use in the industry sector (iron and
development. Xi Jinping, China’s President, steel, cement, synthesis ammonia, and ethylene
has described the country’s recent model of production).
economic development as “unsustainable,” The growth of China’s economy has been the
not least because pollution is harming lives major driver of increasing emissions in the past
and livelihoods, particularly in cities. China three decades. The structure of this growth has
recognizes the problems created by pollution, had opposite dynamics over the last decades
both from greenhouse gases (GHGs) that cause with direct consequences on emissions. During
climate change and from other gases and par- the first ten years of China’s openness policies
ticles. China is also facing growing constraints (1980-1990), structural change favored low-
due to the limited availability of natural re- er-emission activities and helped to decouple
sources other than coal. China’s leadership emissions from aggregate growth. This was
has signaled its intention to accelerate the followed by a rapid process of industrializa-
transformation of China’s growth model, to tion, which saw a double digit growth rate
make China an innovative country, and to in the heavy industries. This industrialization
promote more efficient, equal and, sustainable accelerated growth in emissions faster than
economic development. GDP, though this was tempered in the 11th
Five-Year Plan. This shows the crucial im-
1.2  GHG emissions: current levels, pact of economic structure on China’s future
drivers, and past trends emission rates.
Coal has dominated China’s energy mix over the
According to “Second National Communication past decades, supporting economic growth with
on Climate Change” in 2005, China’s total GHG a high carbon intensity fuel. The only factor that
emissions were approximately 7.5 Gt CO2eq has significantly contributed to slow the rate of
of which carbon dioxide accounted for 80%, growth in emissions has been energy efficiency, as
methane for 13%, nitrous oxide for 5%, and seen in the reduction of China’s energy intensity
fluorinated gases for 2%. The total net GHG per unit of GDP (Figure 2a). Electricity generation
removals through land use change and forestry has been the major driver of the increase in carbon
was about 421 Mt CO2 eq. emissions, since the growing needs for electricity
Of total GHG emissions, energy activities rep- have been satisfied by the fast development of
resent 77% in 2010 (7.2 GtCO2) with direct coal-based power units.
emissions from electricity, industry, trans- Although China is now the country with the
portation, and buildings at 2,929 MtCO2, highest emission levels, current and historical
2,999 MtCO2, 634 MtCO2, and 633 MtCO2 per capita emissions are still lower than IPCC

Pathways to deep decarbonization — 2014 report 84