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Mapping the climate transition by identifying policy interventions

Any given growth trajectory can be made consistent with net zero emissions if we can increase the level of energy efficiency i.e. reduce the energy used per unit of GDP and/or increase the greenness of energy i.e. reduce emissions per unit of energy.

Energy efficiency has been improving at 2.3% per annum over the last 10 years. The share of green energy in primary energy has to be increased to 70% of the total by 2070 in the low growth scenario or 82% in the higher growth scenario.

To achieve the changes targeted in aggregate parameters such as "Energy efficiency" and "Greenness of energy", it is necessary to intervene in different parts of the economy via specific policies. Raising the share of green energy to 70% or 82% of total energy by 2070 will involve massive investments in building electricity generation, storage and transmission capacity and also in developing infrastructure for green hydrogen.

Raising energy prices runs counter to the political perception that energy must not only be available but also affordable. Several studies suggest that as much as one-third of the reduction in emissions will come from higher energy efficiency. To the extent that this involves choosing a more energy efficient appliance, it can be helped by rational energy pricing.

Much of the energy efficiency has to come from switching to more energy-efficient systems, e.g, passengers shifting from cars to public transport, goods shifting from trucks to railways, which could become fully electric in traction, and from implementing more energy-efficient building designs.

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