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E-fuels promise to replace fossil fuels with renewable electricity without the demand-side transformations required for a direct electrification. However, e-fuels’ versatility is counterbalanced by their fragile climate effectiveness, high costs and uncertain availability. E-fuel mitigation costs are €800–1,200 per tCO2. Large-scale deployment could reduce costs to €20–270 per tCO2 until 2050, yet it is unlikely that e-fuels will become cheap and abundant early enough. Neglecting demand-side transformations threatens to lock in a fossil-fuel dependency if e-fuels fall short of expectations. Sensible climate policy supports e-fuel deployment while hedging against the risk of their unavailability at large scale. Policies should be guided by a ‘merit order of end uses’ that prioritizes hydrogen and e-fuels for sectors that are inaccessible to direct electrification.E-fuels—hydrocarbon fuels synthesized from green hydrogen—can replace fossil fuels. This Perspective highlights the opportunities and risks of e-fuels, and concludes that hydrogen and e-fuels should be prioritized for sectors inaccessible to direct electrification.

Achieving net-zero CO 2 emissions has become the explicitgoal of many climate-energy policies around the world. Although many studies have assessed net-zero emissions pathways, the common features and tradeoffs of energy systems across global scenarios at the point of net-zero CO 2 emissions have not yet been evaluated. Here, we examine the energy systems of 177 net-zero scenarios and discuss their long-term technological and regional characteristics in the context of current energy policies. We find that, on average, renewable energy sources account for 60% of primary energy at net-zero (compared to ∼14% today), with slightly less than half of that renewable energy derived from biomass. Meanwhile, electricity makes up approximately half of final energy consumed (compared to ∼20% today), highlighting the extent to which solid, liquid, and gaseous fuels remain prevalent in the scenarios even when emissions reach net-zero. Finally, residual emissions and offsetting negative emissions are not evenly distributed across world regions, which may have important implications for negotiations on burden-sharing, human development, and equity. Despite global initiatives to reach net-zero CO2 emissions, the tradeoffs of energy systems to reach that goal remain understudied. Here the authors analyze all net-zero scenarios used for the 2018 IPCC report and quantify the role of renewable energy, fuels, and emissions in attaining a zero CO2 world.

The COVID-19 pandemic continues to strongly affect global energy systems. Global power sector CO2 emissions have shown a substantial decline, thanks to (a) the COVID-19-induced economic downturn and resulting reduction of electricity demand and (b) a decrease of carbon intensity of power generation as coal generation is decreased most strongly. These effects illustrate the opportunity for different policies to support a structural and accelerating decline of power sector emissions.The societal response to the pandemic has reduced global power demand, disproportionally affecting coal power generation and thus leading to a strong CO2 emissions decline. Policy should apply 2020’s lessons to ensure that power sector emissions have peaked in 2018 and go into structural decline.

Cheap and abundant coal fuelled the industrialization of Europe, North America and Asia1. However, the price tag on coal has never reflected the external cost to society; coal combustion produces more than a third of today’s global CO2 emissions and is a major contributor to local adverse effects on the environment and public health, such as biodiversity loss and respiratory diseases. Here, we show that phasing out coal yields substantial local environmental and health benefits that outweigh the direct policy costs due to shortening of the energy supply. Phasing out coal is thus a no-regret strategy for most world regions, even when only accounting for domestic effects and neglecting the global benefits from slowing climate change. Our results suggest that these domestic effects potentially eliminate much of the free-rider problem caused by the discrepancy between the national burden of decarbonization costs and the internationally shared benefits of climate change impact mitigation. This, combined with the profound effect of closing around half of the global CO2 emissions gap towards the 2 °C target, makes coal phase-out policies attractive candidates for the iterative strengthening of the nationally determined contributions pledged by the countries under the Paris Agreement.Coal use is responsible for a large proportion of climate damages. This study shows that phasing out coal yields substantial near-term, local environmental and health benefits that outweigh direct policy costs, providing incentives for immediate climate action.

The large majority of climate change mitigation scenarios that hold warming below 2 °C show high deployment of carbon dioxide removal (CDR), resulting in a peak-and-decline behavior in global temperature. This is driven by the assumption of an exponentially increasing carbon price trajectory which is perceived to be economically optimal for meeting a carbon budget. However, this optimality relies on the assumption that a finite carbon budget associated with a temperature target is filled up steadily over time. The availability of net carbon removals invalidates this assumption and therefore a different carbon price trajectory should be chosen. We show how the optimal carbon price path for remaining well below 2 °C limits CDR demand and analyze requirements for constructing alternatives, which may be easier to implement in reality. We show that warming can be held at well below 2 °C at much lower long-term economic effort and lower CDR deployment and therefore lower risks if carbon prices are high enough in the beginning to ensure target compliance, but increase at a lower rate after carbon neutrality has been reached. Many trajectories for reaching climate change mitigation targets exaggerate the long-term need for CO 2 removal (CDR) because they assume an exponentially increasing carbon price. Here the authors analyse alternative carbon price pathways that halt warming while limiting CDR, and may be easier to implement.

Cost degression in photovoltaics, wind-power and battery storage has been faster than previously anticipated. In the future, climate policy to limit global warming to 1.5–2 °C will make carbon-based fuels increasingly scarce and expensive. Here we show that further progress in solar- and wind-power technology along with carbon pricing to reach the Paris Climate targets could make electricity cheaper than carbon-based fuels. In combination with demand-side innovation, for instance in e-mobility and heat pumps, this is likely to induce a fundamental transformation of energy systems towards a dominance of electricity-based end uses. In a 1.5 °C scenario with limited availability of bioenergy and carbon dioxide removal, electricity could account for 66% of final energy by mid-century, three times the current levels and substantially higher than in previous climate policy scenarios assessed by the Intergovernmental Panel on Climate Change. The lower production of bioenergy in our high-electrification scenarios markedly reduces energy-related land and water requirements. The impact of rapidly falling costs of renewable energy and battery technology on long-term climate stabilization pathways is not well understood. Luderer et al. show that reduced renewable costs and climate policies will make electricity the cheapest energy carrier and can lead to electricity accounting for nearly two-thirds of global energy use by mid-century.

The decarbonisation of industry is a bottleneck for the EU's 2050 target of climate neutrality. Replacing fossil fuels with low-carbon electricity is at the core of this challenge; however, the aggregate electrification potential and resulting system-wide CO2 reductions for diverse industrial processes are unknown. Here, we present the results from a comprehensive bottom-up analysis of the energy use in 11 industrial sectors (accounting for 92% of Europe's industry CO2 emissions), and estimate the technological potential for industry electrification in three stages. Seventy-eight per cent of the energy demand is electrifiable with technologies that are already established, while 99% electrification can be achieved with the addition of technologies currently under development. Such a deep electrification reduces CO2 emissions already based on the carbon intensity of today's electricity (∼300 gCO2 kWhel−1). With an increasing decarbonisation of the power sector IEA: 12 gCO2 kWhel−1 in 2050), electrification could cut CO2 emissions by 78%, and almost entirely abate the energy-related CO2 emissions, reducing the industry bottleneck to only residual process emissions. Despite its decarbonisation potential, the extent to which direct electrification will be deployed in industry remains uncertain and depends on the relative cost of electric technologies compared to other low-carbon options.

The Paris Agreement calls for a cooperative response with the aim of limiting global warming to well below two degrees Celsius above pre-industrial levels while reaffirming the principles of equity and common, but differentiated responsibilities and capabilities 1 . Although the goal is clear, the approach required to achieve it is not. Cap-and-trade policies using uniform carbon prices could produce cost-effective reductions of global carbon emissions, but tend to impose relatively high mitigation costs on developing and emerging economies. Huge international financial transfers are required to complement cap-and-trade to achieve equal sharing of effort, defined as an equal distribution of mitigation costs as a share of income 2 , 3 , and therefore the cap-and-trade policy is often perceived as infringing on national sovereignty 2 – 7 . Here we show that a strategy of international financial transfers guided by moderate deviations from uniform carbon pricing could achieve the goal without straining either the economies or sovereignty of nations. We use the integrated assessment model REMIND–MAgPIE to analyse alternative policies: financial transfers in uniform carbon pricing systems, differentiated carbon pricing in the absence of financial transfers, or a hybrid combining financial transfers and differentiated carbon prices. Under uniform carbon prices, a present value of international financial transfers of 4.4 trillion US dollars over the next 80 years to 2100 would be required to equalize effort. By contrast, achieving equal effort without financial transfers requires carbon prices in advanced countries to exceed those in developing countries by a factor of more than 100, leading to efficiency losses of 2.6 trillion US dollars. Hybrid solutions reveal a strongly nonlinear trade-off between cost efficiency and sovereignty: moderate deviations from uniform carbon prices strongly reduce financial transfers at relatively small efficiency losses and moderate financial transfers substantially reduce inefficiencies by narrowing the carbon price spread. We also identify risks and adverse consequences of carbon price differentiation due to market distortions that can undermine environmental sustainability targets 8 , 9 . Quantifying the advantages and risks of carbon price differentiation provides insight into climate and sector-specific policy mixes. An integrated assessment model analysis shows that a moderately differentiated carbon price could achieve as much climate mitigation as a uniform carbon tax, avoiding concerns regarding equity between participating countries or sovereignty.

The current nationally determined contributions, pledged by the countries under the Paris Agreement, are far from limiting climate change to below 2 ∘C temperature increase by the end of the century. The necessary ratcheting up of climate policy is projected to come with a wide array of additional benefits, in particular a reduction of today’s 4.5 million annual premature deaths due to poor air quality. This paper therefore addresses the question how climate policy and air pollution–related health impacts interplay until 2050 by developing a comprehensive global modeling framework along the cause and effect chain of air pollution–induced social costs. We find that ratcheting up climate policy to a 2 ∘ compliant pathway results in welfare benefits through reduced air pollution that are larger than mitigation costs, even with avoided climate change damages neglected. The regional analysis demonstrates that the 2 ∘C pathway is therefore, from a social cost perspective, a “no-regret option” in the global aggregate, but in particular for China and India due to high air quality benefits, and also for developed regions due to net negative mitigation costs. Energy and resource exporting regions, on the other hand, face higher mitigation cost than benefits. Our analysis further shows that the result of higher health benefits than mitigation costs is robust across various air pollution control scenarios. However, although climate mitigation results in substantial air pollution emission reductions overall, we find significant remaining emissions in the transport and industry sectors even in a 2 ∘C world. We therefore call for further research in how to optimally exploit climate policy and air pollution control, deriving climate change mitigation pathways that maximize co-benefits.

The 2015 Paris Agreement calls for countries to pursue efforts to limit global-mean temperature rise to 1.5 °C. The transition pathways that can meet such a target have not, however, been extensively explored. Here we describe scenarios that limit end-of-century radiative forcing to 1.9 W m−2, and consequently restrict median warming in the year 2100 to below 1.5 °C. We use six integrated assessment models and a simple climate model, under different socio-economic, technological and resource assumptions from five Shared Socio-economic Pathways (SSPs). Some, but not all, SSPs are amenable to pathways to 1.5 °C. Successful 1.9 W m−2 scenarios are characterized by a rapid shift away from traditional fossil-fuel use towards large-scale low-carbon energy supplies, reduced energy use, and carbon-dioxide removal. However, 1.9 W m−2 scenarios could not be achieved in several models under SSPs with strong inequalities, high baseline fossil-fuel use, or scattered short-term climate policy. Further research can help policy-makers to understand the real-world implications of these scenarios.