Executive Summary
The Reference Solution described in this report shows a path that enables ten billion people in the period 2050 – 2070 to live in freedom with adequate prosperity in social balance, an intact environment and a stable climate system. The design of the energy system is of crucial importance for this, as it has a major influence on success or failure in climate protection and wealth creation. A heuristic approach was chosen for the development of the Reference Solution. It was developed with the aim of enabling good development for humankind at a given climate gas mitigation pathway and initially without technological constraints or other (ex ante set) boundary conditions, and at the lowest possible cost for all economies of the world. The guiding idea is global energy prosperity through innovation and the market, instead of managing energy scarcity. The Reference Solution is embedded in the regulatory framework of a global ecological-social market economy with ecological and social guard rails (“green and inclusive economy”) and aims at a full implementation of the 2030 Agenda (Sustainable Development Goals). The aim must be to find consensual paths into the future that can find a high level of approval worldwide. The Reference Solution is based on a division of the countries into three groups – the group of the extended OECD (rich, Western-oriented countries, 47 in total), the China Club, which comprises the countries that have historically relied heavily on fossil energies and have the corresponding resources (ten countries), and the Challenge Group, predominantly developing and emerging countries (128 countries). At the time of 2025, the starting point for the implementation of the Reference Solution, the countries of the expanded OECD, the China Club and the Challenge Group will each account for about one third of the world’s approximately 39 billion tonnes of CO2eq emissions. The countries of the Challenge Group want to achieve prosperity and are facing large population growth. The latter are the focus of the Reference Solution. The Reference Solution is based on the assumption that energy demand in the Challenge Group will potentially increase by a factor of 2.5 over the next decades, taking into account population growth as well as the targeted increase in prosperity – despite a doubling of energy efficiency over the same period. If the historical energy mix were to be maintained on this path, an additional 20 billion tonnes of CO2 per year would have to be removed from these countries by 2050. Preventing this is the real challenge in global climate protection.
The central elements of the Reference Solution and their interactions are as follows: An important element of the solution is a comprehensive (1) expansion of renewable energies combined with reliably controllable sources for the generation of electricity. No full expansion of renewables is envisaged. Rather, the energy supply should rest on “two pillars”. In addition to volatile, renewable energies, reliable, controllable energy sources are of essential importance for ensuring affordable and climate-neutral electricity. These must be provided in a climate-neutral way. To this end, fossil energy sources, especially natural gas, continue to play a central role in addition to a certain amount of nuclear energy. By using (2) carbon capture technologies, they become practically climate-neutral (so-called green fossil energy sources). CO2 is captured and stored, for example in caverns, or carbonised in silicate-containing rock. Carbon capture is the decisive wild card of the Reference Solution. A ramp-up to 15 billion captured tonnes of CO2 per year by 2050 seems feasible. In order not to have to achieve an even greater expansion to, for example, 20 billion captured tonnes of CO2 per year, electricity generation should be based on natural gas instead of coal wherever possible, as this halves the amount of CO2 to be captured in each case. Carbon capture technologies will become more important overall than green hydrogen production, as they are more easily scalable and follow more closely the guiding principle of “conversion instead of demolition”. Moreover, the potential for ramping up global electrolyser capacity by 2050 appears to be limited to a maximum of 4,000 gigawatts. This capacity will be far from sufficient to develop electrolysis hydrogen into a global back-up system for fluctuating renewables. Using fossil fuels with carbon capture in the future also means a less drastic adjustment of the business models of countries that currently live off these resources and/or have significant reserves. This approach should significantly increase the willingness of these countries to cooperate in the climate sector. Moreover, the immediate capture of CO2 at point sources is significantly cheaper than its subsequent removal from the atmosphere in the context of removal strategies. Carbon capture technologies can still play an important role in making process industries such as steel, cement, chemicals or aluminium climate-neutral, and are more readily available than hydrogen. In many cases, the use of carbon capture is even unavoidable (hard-to-abate sectors such as cement). (3) Climate-neutral fuels and energy carriers are another important solution element in the energy sector. In the mobility sector, for example, climate-neutral fuels for cars and trucks must be used alongside electromobility in order to be able to use the steadily growing large number of vehicles with combustion engines in a way that does not harm the climate. There are different ways to achieve such fuels. Making climate neutrality possible here is a decisive contribution to future mobility for ten billion people and to global climate protection.
13 In addition, the (4) elimination of technical methane leakages is a central solution element. Methane emissions alone account for 16 % of the global greenhouse gas impact and, due to the limits of replacing molecules with electrons in the energy sector, are a key starting point for reducing greenhouse gases. This involves minimising emissions during the extraction, transport and use of natural gas. Much more than is the case today, biological systems are put at the service of climate stabilisation through (5) nature-based solutions – forests, soils, wetlands and oceans. Currently, at least 14 billion tonnes of CO2 are stored annually in biological systems and oceans, so they do not pollute the climate. Nature is therefore an important sink for CO2 emissions. Especially those that are difficult to eliminate. Within the framework of the Reference Solution, the natural buffer for the absorption of more than 10 billion tonnes of CO2 annually is to be strengthened, among other things through (5a) consistent rainforest protection. In addition, as part of a gigaprogramme of nature-based solutions, the (5b) afforestation in the tropics (forestry) and the (5c) improved humus formation (in agriculture on degraded land), each on an area of 1 billion hectares, are parts of the Reference Solution. If such enhancement succeeds, it will reduce the amount of CO2 emissions that need to be eliminated annually through technological measures. The Nature-Based Solutions gigaprogramme contributes to value creation, increases overall prosperity and is self-financing. Furthermore, the gigaprogramme plays an important role in the use of the previously mentioned climate-neutral fuels: Nature must also serve as a sink for CO2 emitted from volatile sources from the mobility sector in the long term. It is expected that a buffer the size of more than 10 billion tonnes of CO2 will be possible from a strengthening of biological systems overall. Emissions from remaining fossil sources without CCS and climate-neutral fuels using carbon capture and use with fossil CO2 (e.g. green methanol based on CO2 from gas power plants) can thus be compensated. In combination with the other measures, these removals should mean that in the long term, from 2070 onwards, each person will still be able to emit an average of 1 tonne of CO2 per year (10 billion tonnes of CO2 – removals for ten billion people) and climate neutrality will still be achieved due to the buffer effect of the biological system. Another value-adding measure in the area of nature-based solutions is the establishment of (5d) short-rotation plantations on 150 million hectares for the production of biomass and the extraction of biogenic CO2 . The following elements form the starting points for financing and providing regulatory support for the GES Reference Solution. A co-financed (6) global cap-and-trade system should serve as a catalyst for the reduction of CO2 emissions on the basis of Nationally Determined Contributions (NDCs) of the countries. To this end, a (7) revision of the conditional NDCs of the countries in the Challenge Group, which today are mostly linked to conditions with regard to their financing, is crucial. The conditional NDCs must be subjected to a comprehensive analysis in order to define realistic paths for their implementation. Both the financing of the necessary political processes and the implementation of the measures must be plausibly clarified for each country. In the period up to 2050, the immense projects currently formulated in the NDCs in the field of nature-based solutions will already be activated step by step. In addition to the gigaprogramme mentioned in point (5), this involves, for example, afforestation and the development of agricultural land in arid regions outside the tropics, boreal coniferous forests or the activation of the potential of marine plantations of algae for CO2 absorption or algae in bioreactors. Here, several more gigatonnes of CO2 removals can be generated as part of the clean-up of conditioned NDCs. This handling of the conditional NDCs then allows a canonical derivation of a cap-and-trade system from 2025 onwards that reflects the NDCs of the countries. A trading option is created that lowers costs for all. In the Reference Solution, it is necessary to activate a total of 1.2 trillion US dollars (1,200 billion US dollars) per year from the extended OECD, supplemented by voluntary contributions from nonstate actors, in order to fully engage the countries of the Challenge Group in the transformation. The additional costs caused by climate protection compared to business as usual should – in analogy to the Montreal Protocol successfully implemented to close the ozone hole – be borne by the OECD world via (8) differential cost payments (CfD). For example, the rich countries must assume the costs of carbon capture technology or the increased use of gas instead of coal to avoid 8 – 12 billion tonnes of CO2 emissions per year in the ramp-up to 2050 in the countries of the Challenge Group. Here, costs amounting to 600 billion US dollars per year are incurred. Furthermore, (9) (transnational) energy infrastructures have to be co-financed, for example in the field of renewables, which requires 150 billion US dollars per year. Further costs are incurred in the context of nature-based solutions. Here, upfront costs of 200 billion US dollars per year need to be borne in order to create the conditions for the private sector to become active on a large scale. The programme to prevent technical methane leaks also requires upfront costs in order to create a favourable starting position for the private sector to implement the necessary measures at its own expense on the basis of political requirements. After all, revisioning conditional NDCs and enabling their implementation costs US$ 250 billion per year. If the financial involvement of the extended OECD does not succeed to the extent described above, the necessary global transformation will not be possible, which means that the climate goals and Agenda 2030 will ultimately remain unachieved. This means that citizens in the enlarged OECD will have to pay an average of 800 US dollars per capita and year. That is a lot, but it should be achievable – in view of the escalating crises worldwide and the steadily rising costs of energy transformation at home, which alone will not be enough to master the global challenges. All the more so because the solution described addresses not only energy and climate issues, but ultimately all 17 Sustainable Development Goals (2030 Agenda). In this context, international financial flows are not to be seen as classic funds for development cooperation, but as funds for (10) system services provided that serve to stabilise ecological and social systems, e.g. climate protection and biodiversity contributions. They serve the implementation of the Sustainable Development Goals in all their economic, ecological and social facets. In the process, parts of the measures finance themselves by leading to new CO2 emission rights that can be purchased. The self-interest of the rich countries in the face of looming crises and possible systemic collapses should be a sufficient argument for making the necessary flows of money possible. The annual 1.2 trillion US dollars represent nothing more than a Marshall Plan for the poorer parts of the world. Linking all the measures described above together creates significant economic opportunities for the entire world, especially by enabling a GDP increase in developing and emerging countries from 20 to 80 trillion US dollars by 2050. If the Reference Solution is implemented, it will eventually succeed in achieving global net carbon neutrality and re-achieving the 2°C target by 2070. Under the Reference Solution, it is calculated that the expanded OECD will achieve Net Zero in 2050. The China Club, as publicly announced, will achieve this in 2060. The Challenge Group represents the as yet unanswered but crucial challenge on the path to Net Zero for the world, which will not achieve climate neutrality until 2070. The Reference Solution relies heavily on consensus and cooperation. It takes into account the essential concerns of the various countries and is in this sense capable of peace. It shows a way out of the climate crisis that threatens the entire world and that no country in the world can prevent alone. It also opens up the chance of a global economic miracle that will make all the costs incurred easily bearable. If it is implemented, there is a realistic chance of achieving the formulated climate, energy and prosperity goals in the period 2050 – 2070.
