Questionning the scenarios of the International Energy Agency

by Michel Lepetit, Vice-president, The Shift Project - CEO, Global Warning

 

The specific nature of climate risk is becoming increasingly important for most economic players and countries. This context favours an abundance of scenario methodologies for estimating and planning the necessary economic transition. The IEA being the main reference concerning energy transition scenarios, The Shift Project believes it is relevant to question its methodology.

The International Energy Agency (IEA) has released its annual flagship publication: the 2017 World Energy Outlook (WEO): 782 pages of dense energy expertise, and energy forecasts, for the 25 years to come.

The IEA WEO is used as a reference by both governments and the energy industry. Its forecasts are known and used worldwide. The IEA is in a situation of quasi monopoly regarding energy transition scenarios[1].

From now on, The Shift Project and Global Warning will regularly assess the quality of IEA scenarios[2] and its macroeconomic hypotheses.

 

[1] See for instance: FSB Task Force on Climate-related Financial Disclosure (TCFD) report to the G20 (july 2017). Technical Supplement : The Use of Scenario Analysis in Disclosure of Climate-Related Risks and Opportunities

[2] IEA produces « transition risk scenarios », i.e. pathways to deliver a given limit to warming. They can reflect a faster or slower transition depending on different rates of change of key parameters (technology development and deployment; changes in timing of key policies …). These are different from “physical risk scenarios” which show the response of Earth’s climate to changes in atmospheric GHG concentrations, and are mostly adopted through the IPCC.

Read the first edition of this analysis.