Shell Sky Scenario Outlines Pathway to Well Below 2°C

27 March 2018: Shell has issued a report titled, ‘Sky: Meeting the Goals of the Paris Agreement.’ The report introduces a scenario that aims to hold the global average temperature increase to well below 2°C through a combination of “mutually reinforcing drivers being rapidly accelerated by society, markets and governments.”

The scenario recognizes that extending current efforts, such as efficiency mandates, carbon taxes or renewable energy support, is insufficient. It argues that concurrent climate policy actions, and the deployment of disruptive new technologies in government policy environments to incentivize investment and innovation will be required.

In 2013, Shell published its New Lens Scenarios focused on mountains and oceans, which, for the first time, featured scenarios with energy-system modeling to 2100, enabling the viewing of long-term transitions in their entirety. These scenarios showed that the application of CO2-targeted policy frameworks would lead to net-zero emissions in the energy system by the end of the century. However, because this falls short of the goal set by the Paris Agreement on climate change, the Sky Scenario looks at a possible decarbonization pathway of achieving net-zero emissions from energy use by 2070.

Under the Sky scenario, oil consumption would rise through 2025 before beginning to decline, drop in the 2030s and fall below current levels after 2040.

The scenario begins with the current structure of economic sectors and government policies, and assumes “very aggressive, but plausible,” ratcheting up of policy commitments through the first two global stocktakes (GSTs) under the Paris Agreement. It notes that, following the GSTs, greater uncertainties regarding policy implementation and technology development exist, which is why the scenario aims to be both ambitious and realistic by adopting an approach grounded in the energy system’s current reality combined with the long-term temperature goal.

In the Sky scenario, oil consumption would rise through 2025 before beginning to decline, drop in the 2030s and fall below current levels after 2040. Liquid hydrocarbon fuel consumption would decrease by 50% between 2020 and 2050, and fall by 90% by 2070. The scenario also includes sector transformations in transport, buildings, industry, electricity and energy.

The Sky Scenario is based on the following assumptions from now to 2070:

a change in consumer mindset where people preferentially choose low-carbon, high-efficiency options to meet their energy service needs;
a step-change in energy efficiency;
carbon-pricing mechanisms adopted during the 2020s, leading to a CO2 cost embedded in consumer goods and services;
the electrification rate of final energy more than triples, with global electricity generation nearly five times the current level;
new energy sources grow by a multiple of fifty, with primary energy from renewables surpassing fossil fuels in the 2050s;
10,000 large carbon capture and storage (CCS) facilities are built, compared to fewer than 50 in operation in 2020; and
net-zero deforestation is achieved, and an area the size of Brazil is reforested offering the possibility of limiting warming to 1.5°C.

Shell has also published quantitative data sets for the Sky Scenario for public use.

Shell is one of the world’s largest publicly traded oil companies, and produces approximately 3.7 million barrels of oil equivalent per day. [Publication: Sky Scenario: Meeting the Goals of the Paris Agreement] [Sky Scenario Webpage] [Shell Climate Change Blog] [Sky Data Set]