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Publication Date
13 December 2022

Implications of Policy Design and Socioeconomic Uncertainties for Energy Transitions and Sectoral Responses



Studies exploring energy transitions typically focus on a single or small set of scenarios, often with idealized policy assumptions (e.g. with global carbon pricing and significant negative emissions). However, there are countless possible ways the future could unfold, with different implications for energy transitions. In this work, we develop a probabilistic multi-sector coupled human-natural system model and explore both deep uncertainty about climate policy design and parametric uncertainty about socioeconomic assumptions, and the implications of those uncertainties for energy transitions and sectoral responses. To reflect policy design uncertainty, we utilize a set of increasingly stringent global emissions pathways comprised of increasingly stringent regional GHG constraints, and consider both “Optimistic” and “Pessimistic” design conditions that represent deep uncertainties for climate strategy, including whether or not there is international emissions trading, coverage of land use emissions and availability of carbon dioxide removal technologies. For each of these scenarios, we then run large ensembles of our model, sampling from probability distributions for uncertain socioeconomic parameters (e.g. productivity growth, population, technology costs, fossil resources). Using this approach, we can quantify uncertainty in the future energy mix and sectoral responses (e.g. emissions, output and energy use) and how that uncertainty shifts for different policy design assumptions.

Results suggest many possible energy mixes are consistent with a given global emissions pathway, and the policy design has significant implications for future energy mixes. In particular, whether or not international emissions trading is allowed results in vastly different amounts of BECCS and afforestation pursued globally, which in turn affects how much fossil energy can continue to be used and decarbonization strategies employed in different regions and sectors. This approach demonstrates the importance of considering uncertainty when planning for energy transitions and that planning for a single future is risky.

Morris , Jen, Steven K Rose, and Angelo Gurgel. 2022. “Implications Of Policy Design And Socioeconomic Uncertainties For Energy Transitions And Sectoral Responses”. In American Geophysical Union (Agu) Fall Meeting. Chicago, IL/Online.
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