Now it’s transport’s turn to limit global warming. Power generation has been the focus of efforts to decarbonise economies. That was the first frontier, but it can’t achieve climate targets alone. That’s why the next global focus must be on reducing emissions from ships, trains, planes and road vehicles.
All countries signed up to the 2015 Paris Agreement aim of limiting global warming in 2100 to well below 2⁰C above pre-industrial levels – ideally 1.5ºC.
We have created a Clean-Power-and-Transport-2040 scenario – CPT-2040 – in which power generation is fully decarbonised by 2040 by replacing fossil fuels with renewable technologies such as solar and wind.
This is a substantial first step, given power generation is responsible for 27 per cent of man-made greenhouse gases. But our next scenario adds the transport sector and could cut emissions by 76 per cent from projected levels based on current policies.
Industrial processes generate almost one fifth of CO2 emissions from fossil fuels but there are technological difficulties in decarbonising high-emitting petrochemical or steel plants. Transport emission levels are similar but lower-carbon alternatives are becoming more viable.
Decarbonising transport is a crucial second frontier. The sector emits more than 15 per cent of greenhouse gases. Our CPT-2040 scenario combines zero-carbon electricity with low-carbon transport to demonstrate how the emissions gap can be substantially reduced.
Supportive policy, technological advances and cost improvements mean that electricity, hydrogen and biofuels can replace oil as fuel feedstocks for different transport modes.
The transport sector relies on oil for 92 per cent of its feedstock, making oil to transport the biggest supply-to-demand flow in the global energy system. Cars account for 37 per cent of transport emissions, heavy-goods vehicles 25 per cent, light trucks and buses another 4 per cent each with shipping responsible for 13 per cent and aviation 12 per cent.
Shipping can decarbonise by switching from bunker fuel to natural gas or possibly hydrogen while controlling speeds and designing fuel-efficient fleets.
Heavy-goods vehicles’ decarbonisation has been limited, but replacing diesel with a mix of hydrogen, electricity and natural gas could cut emissions by 66 per cent by 2040. Electric trains and cars are a proven technology: for a CPT-2040 scenario we assume all cars and trains are electric by 2040, along with electric bikes and light-goods vehicles. Buses can be electrified or run on hydrogen.
And even if planes continue to burn liquids, biofuels could supplement kerosene.
The transition would make substantial demands on infrastructure, requiring investment in new components, equipment and facilities for ships, trains, planes and road transport.
New infrastructure projects this century will cost trillions of dollars anyway. The investment for clean transport will form a core part of that expenditure, but that outlay must be compared with the costs associated with not acting.
CPT-2040 is not a projection of what we think is most likely to happen. It demonstrates what we consider a likely approach to closing the emissions gap. But if we don’t go beyond clean power to tackle the sectors that are harder to address then climate impacts such as rising temperatures, altered water cycles and severe extreme weather will worsen. That’s why transport must be next.
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The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s) whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the covering analyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) or issuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and any other views or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Ashim Paun
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