Governing the transition to low-carbon futures: A critical survey of energy scenarios for 2050

Futures 43 (2011) 1105–1116

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Governing the transition to low-carbon futures: A critical survey of energy scenarios for 2050§ Patrik So¨derholm a,*, Roger Hildingsson b, Bengt Johansson c, Jamil Khan c, Fredrik Wilhelmsson d a

Economics Unit, Lulea˚ University of Technology, Lulea˚, Sweden Department of Political Science, Lund University, Lund, Sweden c Environmental and Energy System Studies, Lund University, Lund, Sweden d AgriFood Economics Center, Lund University, Lund, Sweden b

A R T I C L E I N F O

A B S T R A C T

Article history: Available online 29 July 2011

There is a growing scientific consensus that limiting the increase in global average temperature to around 2 8C above pre-industrial levels is necessary to avoid unacceptable impact on the climate system. This requires that the developed countries’ emissions are radically reduced during the next 40 years. Energy scenario studies provide insights on the societal transitions that might be implied by such low-carbon futures, and in this paper we discuss how a greater attention to different governance and institutional issues can complement future scenario exercises. The analysis is based on a critical review of 20 quantitative and qualitative scenario studies, all of relevance for meeting long-term climate policy objectives. The paper: (a) analyzes some key differences in energy technology mixes and primary energy use patterns across these studies; (b) briefly explores the extent and the nature of the societal challenges and policy responses implied; and (c) discusses a number of important implications for the design and scope of future scenario studies. Our review shows that in previous scenario studies the main attention is typically paid to analyzing the impact of well-defined and uniform policy instruments, while fewer studies factor in the role of institutional change in achieving different energy futures. We therefore point towards a number of strategies of integrating issues of transition governance into future scenario analyses, and argue for a closer synthesis of qualitative and quantitative scenario building. ß 2011 Elsevier Ltd. All rights reserved.

Keywords: Energy scenarios Low-carbon society Transition governance

1. Introduction There is a growing scientific consensus that limiting the increase in global average temperature to around 2 8C above preindustrial levels is necessary to avoid unacceptable climatic impacts. This requires that global greenhouse gas (GHG) emissions are halved during the next 40 years, implying in turn that the developed countries’ emissions may have to be reduced by 70–95%. Such radical emissions cuts require fundamental societal transitions, and scenario analysis is used intensively to outline possible paths to future low-carbon energy systems. Scenario studies, however, often present

§ The research undertaken in preparation of this paper forms part of the multi-disciplinary LETS research program (see www.lets2050.se), which aims at analyzing the societal transitions that are implied by low-carbon futures. Financial support from the Swedish Environmental Protection Agency, the Swedish Energy Agency, Vinnova, and the Swedish Transport Administration is gratefully acknowledged, as are helpful comments from Mert Bilgin and one anonymous reviewer. * Corresponding author at: Economics Unit, Lulea˚ University of Technology, 971 87 Lulea˚, Sweden. Tel.: +46 920 492078; fax: +46 920 492035. E-mail address: [email protected] (P. So¨derholm).

0016-3287/$ – see front matter ß 2011 Elsevier Ltd. All rights reserved. doi:10.1016/j.futures.2011.07.009

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conflicting results regarding important issues such as future energy consumption, technology diffusion patterns, and the cost of policy compliance. Although the necessary transformations of energy systems might be possible to achieve from a technological point of view [17], institutional theory suggests that any process of social change is dependent on and restricted by different institutional contexts [39]. Technological and behavioral changes presuppose institutional and policy changes, which are contingent on path dependencies and lock-ins to certain technologies and policy trajectories [44]. Furthermore, the governance literature provides us with an understanding of the role of different actors and the multi-level nature of policy processes [37]. The ambition to stabilize GHG emissions at a level preventing dangerous interference with the climate system entails a unique policy challenge. Firstly, the transformation has to take place over a relatively short time period with the peak in global emissions having to occur as early as 2020 [26]. Secondly, the climate issue is a global concern implying emission reductions will have to be made in all parts of the world, and there is a potential conflict with the need of developing countries to achieve continued economic growth. This transition is likely to require new approaches to governance, not only in terms of introducing effective policies to provide the enabling conditions for system change, but also to handle unanticipated conflicts of interest and strains on the political system. This article addresses the role of energy future studies in providing insights on the societal transitions that are implied by contemporary visions of low-carbon futures. The analysis is based on a critical review of 20 scenario exercises of relevance for meeting long-term (i.e., 2050) climate policy objectives. Specifically, the paper aims at (a) analyzing key differences in the scenario results presented (e.g., technology mixes and energy consumption patterns); (b) exploring the extent and the nature of the societal challenges and policy responses that are implied by the scenarios; and (c) discussing the implications for the design and scope of future scenario studies. The review includes both quantitative and qualitative scenario studies, and we highlight some important issues that could complement existing scenario approaches. These include, for instance, the distributional consequences of policy efforts, the nature of technological progress and the role of innovation policy, and the complexity of policy change. 2. Energy scenarios for transition governance for low-carbon futures 2.1. Different approaches in energy scenario studies Energy scenarios can be described as predictive, explorative or normative. A predictive scenario tries to answer the question What will happen?, while an explorative scenario and a normative scenario answer the questions What can happen? and How can a specific target be reached?, respectively [10]. The usefulness of each approach depends on the focus of the analysis. There is currently a consensus in the scientific literature [12] that the predictive approach is less suitable for the analysis of issues connected to long-term developments. For instance, long-term energy forecasts typically perform poorly due to the difficulties in addressing structural changes. Explorative scenarios could be used for analysing both how external factors could develop and what could happen if we act in a certain way. In normative scenarios, the starting point is taken in one or more policy targets, and the ways in which these can be reached are analyzed. Backcasting is such a normative approach and involves working backwards from a desirable future and finding possible pathways to reach that future [16]. The studies that are surveyed in this paper have either an explorative or a normative approach to the long-term development of energy systems. Scenario studies are useful to widen the focus from the short-term policy debate, and to envisage the more radical system changes necessary to reach almost zero carbon emissions. The scenarios can identify new key technologies for which the development and implementation may have to start today even if major breakthroughs cannot be expected until later. Scenarios can also indicate whether technological innovation and diffusion alone are sufficient to meet strict reduction targets or if, for instance, behavioral changes are also needed. New resource scarcity issues can be identified; these may be of minor importance when technologies are used in small scale but become critical in the case of large-scale use (e.g., land-use competition in the presence of biomass use). In this way scenario exercises help us avoid short-sighted lock-ins and thus extend the time horizon for decision-making. Energy scenario studies can also be distinguished by their reliance on either primarily quantitative models or on qualitative information and narratives. The main difference is the amount of effort put into outlining technical and economic parameters on the one hand and describing social, political and cultural developments on the other. Traditionally quantitative assessments have rested on the use of two types of models that address the interactions between the energy sector, the economy and the environment: top-down and bottom-up models. They differ mainly with respect to the emphasis placed on detailed, technologically based treatment of the energy system (bottom-up), and theoretically consistent descriptions of the economy (top-down). In the former case ‘a technology’ represents a particular activity or process, and climate policy compliance implies a discrete shift from one process to another. By contrast, in topdown models (e.g., computable general equilibrium models), ‘technology’ is defined by continuous production functions. During recent decades a number of so-called hybrid models have also been developed thus combining features from topdown and bottom-up models [48]. Qualitative scenarios do not rest on formal modeling but are primarily based on the intuitive logics and explorative modes of future thinking, including creative thinking and stakeholder deliberations, that originate from strategic planning

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approaches and foresight studies. Such scenarios are seen as heuristic tools for ‘thinking the unthinkable’ [28] by exploring alterations in the broader socio-political context. Constructing a set of alternative scenarios based on the examination of variations in the framing conditions provides opportunity to contrast multiple futures deemed plausible for the particular problem of interest to which, for instance, the robustness or feasibility of various policy options and pathways could be assessed [6]. In our survey of previous scenario studies we address both quantitative and qualitative approaches, and argue that these represent complementing methodologies. Quantitative analysis lends coherence to scenario exercises by elaborating the possible consequences of future events and policies, but they may often result in futures that too narrowly resemble current patterns of behaviour. Qualitative approaches normally include societal processes that are too complex to be represented in a formal model. In these traditions scenarios are used as heuristic tools, and they permit the envisioning of scenarios involving, for instance, radical system innovation and the unfolding of political and social circumstances under which such changes may occur. 2.2. Transition governance for low-carbon futures While energy scenario studies contribute to envisage possible low-carbon futures it is equally important to address the societal transitions implied by these futures, and investigate how these can be governed, implemented and achieved. During the last decade a growing body of research, from different perspectives, has developed that aims at understanding and analysing the conditions for transition governance. The ‘transition management’ literature based in co-evolutionary economics and innovation theory, has developed a way of understanding socio-technical system change and the process of ‘managing’ system innovation and transformation [29]. While emphasizing the dynamic and complex nature of systemic change this literature has yet to develop a coherent theory of policy change that includes issues of governance, politics and institutions as well as issues of power, interest and conflict. Efforts in that direction currently resemble an emerging concept of transition governance [21,36]. Moreover, the subfield of transition scenarios attempts to bring together scenario traditions with transition theory in analysing transitional lowcarbon pathways [24,50]. Besides this, other theories on policy and institutional change that devote attention to, for instance, networked or negotiated governance [37], multi-stakeholder collaboration, and agenda-setting [30] are available to understand transition governance. Clearly, institutional and political factors are relevant as they set the conditions for societal change and transformative processes. In institutional theory, neoinstitutional approaches [22,39] emphasize the role of institutions and other factors for social stability and change, such as the role of power and vested interests in prohibiting change and the problems of institutional inertia and increasing returns to scale producing path dependencies. Historical institutionalists [44] have emphasized the important role of time and sequence in policy making as an explanation to both institutional continuity and change, of which the latter occurs at the advent of critical events as well as through more subtle processes of change. Furthermore, the environmental governance literature has paid increased attention to the multi-actor and multilevel nature of governance [3] as well as to the emergence of new environmental policy instruments and new modes of governance [34]. Taken together, these strands of thought indicate that governing transitions subject to low-carbon futures have to engage with both socio-economic and politico-institutional structures and practices. A fundamental challenge will be to provide the enabling conditions for energy system transformations and to stimulate, coordinate and steer the transitions in certain, desired directions while taking into account various interests and perspectives. Hence, to make scenarios more instrumental in supporting policy-making processes, they need to better take into account political and economic developments, including prevailing conditions for political and institutional change. 3. Contemporary low-carbon energy scenarios in perspective In this section we review and discuss 20 studies that analyze the consequences of substantial GHG emission cuts until the year 2050 and beyond. Our focus lies on studies that address the development of the entire energy and transport system, and we cover both global and regional studies. While the review is not implied to be exhaustive, it enables the identification of a number of important distinguishing features of previous energy scenario studies as well as an opportunity to address some differences in outcomes. Tables 1 and 2 summarize the scope and the results of a selection of quantitative energy scenario studies. Methodologically there appears to be a bias in the reviewed quantitative scenarios towards bottom-up and hybrid (technology-rich) models, typically generating relatively detailed results on future energy technology and fuel mixes in different sectors. Some of the studies explicitly consider scenarios that are consistent with the 2˚ C target (implying an assumed stabilization target of at least 500 ppm CO2-eq but normally as low as 400 ppm CO2-eq). In a majority of the studies the reduction scenarios build on the requirement that the stabilization targets must be met no later than the year 2100, but in our review we focus mainly on the implications for the energy system in 2050. In the majority of the studies uniform prices on CO2 represents the main drivers for change. These prices are implemented as a tax on CO2 emissions or in the form of restrictions on these emissions, thus creating shadow prices on CO2 allowances. This type of policy presupposes the diffusion of cost-effective compliance strategies globally or in the countries covered by the analysis, i.e., the global models normally assume full global participation in climate policy. The price incentive induces

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Table 1 Quantitative energy scenario studies of deep GHG emissions cuts: global studies. Study

European Commission [18]

Model approach

Bottom-up partial equilibrium model (POLES)

Time horizon

2050

Geographical scope

Global (with a European focus)

Scenario assumptions and results GHG emissions and reduction targets in 2050

Comments

30 in Europe and 15 elsewhere (reference)

GHG emissions are 225% of the 1990 level in 2050 (44 Gt), with a CO2 concentration of 900– 1000 pmv. Stabilization at 500 ppmv in 2050. GHG emissions are 125% of the 1990 level) but only 50% in the Annex B countries). Stabilization at 500 ppmv in 2050. Emissions 6% higher than in the above reduction scenario.

Moderate climate policies lead by the European Union.

Higher carbon prices but limited use of flexible mechanisms among Annex B countries. A doubling of primary energy consumption compared to 1990. The production of hydrogen (primarily) used in the transport sector) accounts for 13% of final energy consumption.

Annual CO2 emissions equal 45 Gt in 2050. Annual CO2 emissions equal 10 Gt in 2050, with a CO2 concentration of 450 pmv.

Consistent increase in world primary energy consumption. Overall primary energy consumption is reduced by almost 50%, and the share of renewable energy sources is 50%.

GHG emissions are 86% higher in 2050 compared to 1990. 25% reduction of GHG emissions by 2050 compared to the 1990 level.

The share of renewables out of primary energy consumption about 20%. Primary energy consumption is 28% lower compared to the baseline, with a renewables share of 40%.

CO2 emissions increase by 130% over the period 2005–2050. 50% emissions reduction compared to 2005 emissions.

Primary energy consumption increases by 100% over the period 2005–2050. End-use energy efficiency improvement account for most of the reduction.

200

200 (and hydrogen technology breakthrough) Krewitt et al. [33]

10-region bottom-up energy system model

2050

Global

0 (reference) 50

Russ et al. [46]

Bottom-up partial equilibrium model (POLES).

2050

Global

5 (baseline) 64 (22 in developing countries)

IEA [27]

Bottom-up model (MARKAL)

2050

Global

40 (reference) 160–400

Azar et al. [2]

Bottom-up energy system model (GET 1.0)

2100 (results for 2050)

Global

There is an implicit price on carbon but the specific level is not provided

The study does not specify an explicit baseline scenario, but considers the cost-effective way to reach a stabilization target of 400 ppmv by 2100.

Global primary energy supply increases by 50% in 2050 (compared to 1990). Fossil fuels (oil, coal and gas) still play a dominant role in the energy mix, but there is also an increase in biomass.

Kitous et al. [31]

Bottom-up partial equilibrium model (POLES)

2100 (results for 2050)

Global

Not stated (baseline)

GHG concentration of 500 ppmv in 2050, i.e. doubling of CO2 emissions relative to 2000. GHG stabilization at 400 ppmv in 2100, i.e., 80% reduction of GHG emissions by 2050.

Primary energy consumption doubles compared to 1990 level. Coal becomes the dominant source of energy. Primary energy consumption increases by 50% by 2050 (compared to 1990). Fossil fuels primarily replaced by biomass. Important roles for CCS and energy efficiency improvements.

400

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Carbon price 2050 (s/ton CO2)

Hybrid MERGE model

2100 (results for 2050)

Global

Not stated

Targets set for 2100: 400 ppmv, 450 ppmv, 550 ppmv CO2-eq, all compared to a baseline above 800 ppmv in 2100.

Deep emission cuts presuppose major technological change. Electricity use more than doubles compared to 2000 in the reduction scenarios. CCS essential for very low carbon stabilization.

Leimbach et al. [35]

Hybrid model REMIND-R

2100 (results for 2050)

Global

Not stated (baseline)

A doubling of CO2 emissions by 2050 (compared to 2000).

100

GHG stabilization at 400 ppmv in 2100, i.e. 70% reduction by 2050.

Primary energy consumption doubles over the period 2000–2050. Fossil fuels constitute more than 50% of the total in 2050, but also increases in biomass, wind and nuclear. Primary energy consumption increases by 60% over the period 2000–2050. Substantial increases in biomass and nuclear.

Not stated (baseline)

Doubling of GHG emissions over the period 2000–2050. Two GHG stabilization targets for 2100; 400 ppmv and 500 ppmv. 400 ppmv requires 75% emissions decrease by 2050.

Focus on macroeconomic implications; GDP growth rates 2–3% 2000–2050. The stabilization scenarios lead to macroeconomic benefits, especially in the presence of unemployment with GDP slightly above the baseline.

Not stated (baseline)

Roughly a doubling of global GHG emissions by 2050 compared to the 1990 level.

Not stated (mitigation costs presented in terms of percentage change in GDP relative baseline)

Three GHG stabilization targets for 2100; 400, 450 and 550 ppm. Emission reductions by 2050 are (compared to 2000) 60% for the 400 ppm profile.

Doubling of primary energy consumption by 2050. Substantial increases in the use of coal and natural gas. Improved energy efficiency results in the stabilization of primary energy consumption in Europe and the USA by 2050. CCS and bioenergy critical for complying with the stricter targets.

0 (baseline)

Concentration of CO2-eq equals 675 ppmv in 2050. Concentration of CO2-eq. 550 ppmv. Global GHG emissions in 2050 15% lower than in 1990.

Barker and Serban Scrieciu [4]

Van Vuuren et al. [49]

Barkman et al. [5]

Hybrid macroeconometric and energy technology model (E3MG).

2100 (results for 2050)

The IMAGE modeling framework

2100 (results for 2050)

Bottom-up partial equilibrium model (POLES)

Global

80 and 240, respectively.

2050

Global

Global

120

Primary energy consumption increases more than 2.5 times by 2050. Primary energy consumption is reduced by 40% (relative baseline), and share of carbon-free energy is 35%.

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Magne´ et al. [38]

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Table 2 Quantitative energy scenario studies of deep GHG emissions cuts: regional and national studies. Study

Model approach

Time horizon

Geographical scope

Carbon price 2050 (s/ton CO2)

GHG emissions and reduction targets in 2050

Comments

20 (baseline)

GHG emissions 94% of the 1990 level in 2050.

300

58% reduction of GHG emissions compared to 1990.

No baseline figures are presented for energy production and fuel mix, etc. Significant reductions in the energy sector (including solar PV and wind). Limited use of CCS.

2050

DEPA [14]

Bottom-up spreadsheet model (STREAM)

2050

Denmark

25 in all scenarios

Three technological scenarios focusing on 60 and 80% reductions in GHG emissions compared to a baseline that is close to emission levels in 1990.

Little policy discussion but major breakthroughs in technology, e.g., introduction of electric cars and wind power. In addition, a large number of energy efficiency measures are assumed.

IVA [25]

Sector-specific bottom-up assessments

2043

Sweden

No assumption

Essentially a back-casting scenario investigating the technical possibilities to achieve 100% reduction in GHG emissions by 2043.

Technically possible to achieve zero emissions (i.e., a balance between emissions and storage), if focus on: (a) the electric society; (b) agriculture and forestry; and (c) CCS technology.

A˚kerman et al. [1]

Sector-specific bottom-up assessments

2050

Sweden

No assumption

Essentially a back-casting scenario investigating the possibilities to achieve 85% reduction in GHG emissions by 2050.

A pure technology scenario is not enough to achieve 85% reduction, but has to be complemented by behavioral changes, including a significant reduction in personal car use.

Dagoumas and Barker [13]

Hybrid macro-econometric and energy technology model (E3MG).

2050

United Kingdom

20 (baseline) 30, 70 or 160 (depending on the reduction target)

Three policy scenarios with 40%, 60% or 80% reduction of GHG emissions relative to the 1990 level.

Carbon price combined with regulations and investments in energy efficiency, etc. Reduced energy demand compared to 2005 by 20% up to 60%. Electrification of the transport sector.

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Bottom-up model (MARKAL-Nordic, EU PRIMES)

Nordic Council of Ministers [42]

Nordic countries

Scenario assumptions and results

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fuel substitution and technology diffusion and affects overall energy demand. Some studies highlight the importance of technology policies (e.g., R&D support), but the effects of these are typically only implemented indirectly (e.g., in terms of pre-determined cost reductions for energy supply technologies). Other types of policy instruments, such as spatial planning measures and information, are overall ignored, even though these could also be included indirectly by, for instance, affecting assumptions on energy demand levels. The above implies that most quantitative scenario studies rely on the introduction of cost-effective abatement strategies in a ‘frictionless’ world, but with little regard for the prospects of implementing such policies in practice. The results presented in the studies depend critically on the deployment of new and existing energy technologies. A common feature is that most energy system studies tend to pay more attention to supply-side technologies (thus enabling society to lower GHG emissions per primary energy input), and less attention to end-use energy efficiency technologies (implying a decline in energy use per GDP).1 Still, large differences exist and since many studies differ in their emphasis on, for instance, specific carbon mitigation technologies the resulting compliance strategies may also vary substantially. For instance, some studies emphasize primarily renewable energy technologies, while others give more weight to carbon capture and storage (CCS) technology and/or nuclear power. Moreover, some studies also apply limits to the introduction of certain technologies, e.g., wind power may be capped by its potential in relation to land availability. The above also implies that the (shadow) carbon price is not necessarily closely correlated with the emission reduction targets. An illustrative example is attained by comparing the results of the European Commission [18] and Krewitt et al. [33] studies. In contrast to many other studies they involve very similar baseline emissions of CO2; 44 and 45 Gt respectively. They, however, assume quite different emission reductions compared to the reference scenario, the former assuming a 19 Gt reduction and the latter a 35 Gt decrease in CO2 emissions. This is in spite of the fact that the carbon price is substantially higher in the Commission’s scenario (200 s/ton) than in the Krewitt et al. study (50 s/ton). An important reason for this is the more optimistic assumption about energy efficiency improvements in the latter study. In the European Commission scenario primary energy consumption doubles over the scenario period, while it remains more or less constant in the Krewitt et al. study. Moreover, the share of renewable energy sources out of total primary energy consumption is 20% in the Commission’s study [18] and as much as 50% in Krewitt et al. [33]. The latter large fraction is in part a result of the lower total energy consumption. This is a common result in the studies reviewed. In scenarios with low (or even zero or negative) growth in primary energy consumption levels, the development of new renewable energy sources is limited by energy efficiency due to the diffusion of more efficient demand-side equipment. In some cases total demand for renewable energy sources is therefore only marginally higher in the policy scenario than in the baseline scenario. Edenhofer et al. [17] note that in many of the global studies with less strict emission targets (e.g., 550 ppm), the models permit flexible use of a variety of technologies as substitutes in achieving this target. In other words, if the availability of some key technology is restricted, policy compliance can be secured by switching to other energy sources. Stricter targets imply, though, some loss of flexibility and that a number of key technologies – in particular bioenergy and CCS – become indispensable for policy compliance. In spite of this dependency, though, few quantitative studies address the political and institutional preconditions for materializing the necessary technological innovation and deployment of this scale. Increased attention to these issues would highlight the strains on society in the case of, for instance, a low biomass potential (in the presence of intense land use competition) and/or a limited public acceptance or higher-than-expected costs for the CCS technology. The regional and national scenario studies (Table 2) also display the importance of technology-specific assumptions and the strong reliance on a uniform carbon price. It is worth noting that while a carbon price of 160 s/ton would lead to an 80% GHG emissions reduction in the UK [13], a mere doubling of this price would only achieve a 58% reduction in the Nordic countries (all compared to 1990) [42]. This difference is in part due to the already high share of carbon-free energy sources (e.g., hydropower and nuclear) in the Nordic energy sector, thus implying that the marginal cost of additional carbon abatement is comparatively high. Furthermore, in the light of the strong emphasis on bioenergy in the global scenario studies, it is interesting to note that the Nordic and Swedish studies [25,42] present a comparatively more modest view on the role of future bioenergy use (at least in the transport sector). For this reason they call for greater emphasis on the development of, for instance, electric vehicles [25] and the promotion of behavioral change in car use. These considerations are mainly based on the assessment of the potential for forest-based biomass. In the global scenarios, though, biomass from the agricultural sector plays a significantly more important role. Table 3 summarizes the results of four qualitative scenario studies outlining scenarios for the year 2050 (in one case 2040). In general these scenarios tend to address politico-institutional contexts more explicitly than the quantitative studies, and they thus provide insights on a number of broader societal and governance challenges associated with certain policy pathways. This is achieved both ex ante in the identification of the key drivers of societal change as well as ex post in outlining important analytical categories for the policy analysis. Three of the studies [7,11,51] apply a framework that captures two main dimensions as defining characteristics. While representing a legitimate heuristic approach to emphasize the key drivers and uncertainties of primary interest for the analysis, such an approach could prove to be problematic in the sense

1

For en extended analysis of long-term energy efficiency trends in the context of future scenarios, see [15].

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Table 3 A selection of qualitative climate and energy policy scenario studies. Murphy et al. [40] Purpose Method Scenarios Description Policy and energy focus

Outline and analysis of five policy scenarios for addressing climate change until 2050. Global scope with implications for Canada Qualitative assessment of alternative policy regimes. All scenarios strive for the goals of; (i) 50% reduction in GHG emissions; and (ii) sustainable economic growth. Comparative assessment of scenarios regarding, e.g., political feasibility, environmental integrity and economic aspects Kyoto-plus scenario (Daughter of Kyoto) UNFCCC approach (Back to the UNFCCC) Contraction and convergence Global climate tax Anarchy Reigns Emission targets in Annex I/B countries; International agreement on global emissions Binding national targets, towards Global tax No global agreement voluntary efforts in non-Annex I/B to guide non-binding national goals universal per capita emissions Domestic policy Domestic taxes are International emissions trading and Domestic trading systems. No international Targets for all countries, excess levied on emissions without international flexibility options flexibility options emission rights can be sold coordination internationally

ADAM project [7,47] Purpose Method

Description Policy and energy focus

World Energy Council [51] Purpose Method Scenarios Description

Policy and energy focus

Analysis of four plausible policy scenarios until 2050, and assessment of how well they achieve WEC’s policy goals (accessibility, affordability, acceptability). Global scope Qualitative analysis based on quantitative reference case. Scenarios differentiated by (i) government engagement and (ii) international cooperation Low government engagement, High government engagement, High government engagement, Low government engagement, low international cooperation low international cooperation high international cooperation high international cooperation Emissions +110% compared to 2005 No international climate treaty. Emissions +40% compared to 2005 Strong international agreement Emissions +90% compared to 2005 on climate change. Emissions +35% compared to 2005 Open global markets to promote Focus on domestic economic Domestic energy security in focus. Sustainable development in growth and technological development. development and barriers to trade Less trade and transfer of know-how the energy sector. Technology Risk of energy shock development solves many problems

Bruggink [11] Purpose Method Scenarios Description Policy and energy focus

Four scenarios until 2050 that explore possible energy transitions in Europe. Global scope but emphasis on Europe Qualitative analysis based on two dimensions: (i) global climate change cooperation; and (ii) peak oil and oil shortage. Assessment of the likelihood for the scenarios based on current economic and political trends ‘‘Firewalled Europe’’ with limited trade ‘‘Fossil trade’’ continues as at present ‘‘Sustainable trade’’, promotion ‘‘Fenceless Europe’’ with basically of green trade free trade No viable post-Kyoto policy. Oil No viable post-Kyoto policy. Oil Post-Kyoto climate policy. Oil Post-Kyoto climate policy. Oil production peak 2010–2020 production follows demand production peak 2010–2020 production follows demand 2010–2020 Europe diversifies and keeps all options Europe turns to large scale trade Mainly business-as-usual but with Europe turns to coal and nuclear power. open. Public-private networks. High in renewables. High carbon prices, increased use of coal and gas to liquid. Common EU policy focusing on energy but stable energy prices. Environmental R&D policy. Very high and rising Market liberal model. Low but rising security. High but stable energy prices. and social impact labelling. Carbon prices energy prices energy prices. No policy on energy Building and technical standards to efficiency. Private R&D in advanced improve energy efficiency fossil fuels

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Scenarios

Develop climate policy scenarios until 2040 for analyzing EU climate policy. Global scope but emphasis on Europe Qualitative analysis based on two dimensions; (i) degree of international coordination of climate policy; and (ii) primary climate policy objective (mitigation, adaptation); followed by policy analysis based on six governance dilemmas Coordinated mitigation (Kyoto +++) Autonomous mitigation (Fragmentation) Coordinated adaptation (Sharing burdens) Autonomous adaptation (Let them adapt!) 2 8C target. Binding targets (universally). 2 8C target. Binding or voluntary emission 4 8C target; focus on adaptation to impacts targets; technology-oriented growth Five ‘policy domains’: (a) EU-ETS (global ETS; linking systems; regional w/BTAs); (b) RES policy; (c) burden sharing; (d) adaptation policy; and (e) water resource management. Analyzes how these policy domains might develop in the scenarios and assess their robustness to variations in contextual factors. Key elements of current policy play a role in all scenarios, but an expansion of the current toolbox is suggested.

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that it may adopt an ‘‘overly polarized and homogenous’’ view on megatrends [24]. As evidenced by the Murphy et al. study [40], which is based on a review of various options for a post-2012 international climate policy architecture, this is however not a necessary approach for conducting qualitative scenario building exercises since the selection of scenarios largely is an intuitive and non-logical process [16]. The qualitative scenarios are less precise and detailed concerning technology mixes and economic consequences. However, they have other advantages as they highlight important strengths and weaknesses of scenarios based on criteria such as environmental integrity, financing possibilities and political feasibility. They also pin-point the difficulties in achieving deep emission cuts; none of the WEC scenarios comes close to complying with the 2˚ C target, and Bruggink [11] concludes that the scenarios with less stringent emission targets appear more likely considering current economic trends and policies. An important implication of the qualitative ADAM scenarios [7,47] is that renewable energy support schemes represent a robust policy approach in that it has many positive side effects and thus contributes to other societal concerns besides climate change (e.g., security-of-supply, local employment, etc.). Moreover, qualitative approaches are often complementary in constructing scenarios that could later be subject to quantitative analysis and modeling. However, we see little evidence of such combined approaches. For this reason there exist strong arguments for paying increased attention to governance and legitimacy issues in the identification of policy-relevant scenarios for quantitative modeling studies. 4. Energy scenarios in low-carbon transition processes: a discussion Scenario studies are useful for low-carbon transition processes only if they can inform current decision-makers on available policy options and the policy pathways to pursue or avoid. Still, our review shows that a particularly salient weakness of previous low-carbon quantitative energy scenarios is that they tend to adopt a rudimentary approach when it comes to issues about politics, institutions and governance. One reason for this methodological scope is found in the rationale for conducting scenario building exercises, that is to provide ‘‘plausible representations of the future based on sets of internally consistent assumptions,’’ [6, p. 39]. Thus, scenarios do not reflect any empirical objective reality, but rather serve as heuristic tools to elucidate the possibility (or threat) space for certain objectives and policy options. Still, policy implications are not sufficiently addressed as policy is treated as a ‘‘constantly available lever which can be switched on or off’’ [24, p. v]. In line with this way of reasoning, Nilsson et al. [41] provide a call for taking more seriously John R. Robinson’s seminal backcasting ideal. In a final ‘‘implication step’’ Robinson emphasizes the analysis of social, economic and policy implications as an integral part of backcasting for ‘‘fleshing out these implications of different energy futures,’’ [45, p. 344]. However, backcasting practitioners have generally not picked up on this ideal but instead gone towards further detailed technological assessments for policy compliance. Thus, many backcasting studies represent what Hughes et al. [24] term ‘‘technical feasibility studies’’ rather than comparative policy analyses. The studies surveyed above typically belong to this former category. Most of the low-carbon scenario studies reviewed in this paper outline energy system transformations at an unprecedented scale. Bringing about such transitions requires that policy and institutional conditions are sufficiently altered to provide actors and sectors with the proper incentives for changing patterns of behaviour. To govern, coordinate and steer such transitions new approaches to governance will by all likeliness be required in order to provide both the enabling conditions for system change and the strategies for handling unintended consequences and conflicts of interest. As was discussed above, a co-evolutionary transition management perspective might help us understand the conditions for system innovation and technical change, while institutional theory and the governance literature provide insights into the mechanisms reproducing institutional stability and causing institutional inertia as well as into the applicability of different modes of governance. At a general level governance issues could be addressed both in the design of future scenarios and in terms of how the results of (quantitative) models are analyzed. With regard to the former point it should be noted that for any quantitative energy scenario, policy analysis could ex post complement the results of the modeling exercises by, for instance, addressing the societal and institutional transitions implied by each of the explorative scenarios. Still, often it may be more useful to consider transition governance issues already ex ante, i.e., in the design of the scenarios as well as in the model assumptions, while at the same time acknowledging that the cost-effective solutions are not necessarily feasible or legitimate in practice. These arguments are well exemplified by the important role of technological innovation and deployment in climate policy. The development and introduction of carbon-neutral energy technologies is key for achieving a low-carbon future. Still, in the models employed, technological change and diffusion are primarily ‘technical’ issues (often based on perfect foresight), in spite of the fact that they also raise fundamental questions about how to govern global and national innovation systems. Innovation activities do generally not undergo well-anticipated changes over time, and in these processes there often exists a close inter-relationship between private and public decision-makers [20], not the least since R&D activities normally are best pursued in parallel with practical applications and demonstration projects. In addition, the presence of vested interests, e.g., industry sectors that have invested a lot of human and physical capital in specific technical solutions, implies that technological change often is strongly path-dependent. Such considerations and the often blurred distinction between public policy and private decision-making in the innovation and technology deployment processes have at least two implications for the design of future energy scenario studies.

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The first is to allow the scenario design to be more influenced by informed reasoning about different institutional constraints to technology diffusion. Alternatively, in bottom-up models such considerations should also affect assumptions made about the availability of specific energy sources. Typically most energy system models only vary technical potentials with little consideration of other types of constraints; if constraints are implemented they tend to be based on arbitrary assumptions. For instance, Kitous et al. [31] illustrate that in the case of biomass, conflicts with other types of land use (food production, biodiversity protection, etc.) are typically not addressed.2 Similar conflicts emerge in the case of onshore and offshore wind power [32]. The need to consider conflicts of interest and the associated legal preconditions is accentuated by the fact that many renewable energy technologies require new infrastructure for their large-scale introduction. The above suggests the case for a closer synthesis of qualitative and quantitative scenario-building exercises. While quantitative scenario studies cannot alone address ways of handling constraints related to institutional and political feasibility, they can point towards important consequences in cases where the supply of some energy sources becomes substantially constrained. For instance, what will replace biomass in the presence of intense land use competition from food production, and what are the economic benefits of overcoming these constraints? By addressing such questions scenario studies could increasingly be used to prepare for a carbon constrained future, and help in identifying strategies to deal with the associated challenges. The second implication is that scenario studies should increasingly analyze second-best policy scenarios, not the least combinations of carbon pricing and technology policies. The economics literature [19] typically emphasizes the importance of carbon pricing, while giving a more limited role to technology support and R&D policies beyond overall technologyneutral innovation policies (e.g., support to basic R&D). Interestingly, this is in some contrast with the way national (and EU) climate policies tend to be designed in practice. Most governments are reluctant to introduce high prices on GHG emissions, and instead rely on a combination of moderate carbon prices as well as technology-specific subsidies and support schemes. From a transition governance perspective this may represent a sensible policy strategy. Subsidies are clearly easier to implement than taxes, and if targeted wisely they can lower technology costs and make it possible to introduce higher carbon prices in the future. In addition, while technology-specific policies run the risk of ‘picking future losers’, they also induce the establishment of new industries and vested interests advocating higher rather than lower carbon prices. In this way they provide further momentum to technology diffusion. There exists a need to address these types of ‘second-best’ policies and policy combinations in more detail in future scenario studies,3 and, for instance, clarify the trade-offs compared to what is perceived as an optimal policy path. This also implies that policy timings, in which technology support assumes a greater initial role while carbon pricing policies increase in importance over time, may be of particular interest to study from a transition governance perspective. Besides discussing how the design of (quantitative) scenario studies can be altered to generate insights of interest for transition governance, it is equally important to discuss the types of questions that are analyzed based on the model simulations generated. So far most of the attention in climate policy modeling has been paid to the assessment of aggregate costs, while very few studies address the role of compensation mechanisms to societal groups or geographical regions that will bear the main burden of these costs. Moreover, it is often implicitly assumed that cost-effective policies are easier to implement both globally and nationally. However, cost-effectiveness does not necessarily imply political legitimacy in the sense that, for instance, carbon taxes and other flexible policy instruments are perceived as fair and legitimate [23]. The introduction of cost-effective policies may even come at the price of increased distrust. Following this, the distribution of the costs of policy measures in society, e.g., societal groups, industrial sectors and geographical regions, requires additional attention. The few studies that exist show, for instance, that pollution taxes tend to be regressive with poorer households spending a larger fraction of their income on taxes. Also in this case it is useful to consider the trade-off between second-best but presumably more politically feasible policies on the one hand and costeffective policies on the other. The analysis can assist in assessing the extra cost to society of diverging from the cost-effective path under alternative policy regimes, and identifying policy pathways with reasonably low societal costs while at the same time being easier to implement and sustain over time. Another issue that deserves additional attention in low-carbon scenario studies is the identification of no-regrets policy measures. For example, when substituting renewable energy for fossil fuels other harmful emissions than carbon dioxide are often reduced jointly, and the promotion of renewable energy has other side-benefits such as improved security of supply and a more diverse fuel mix. Even at the company level, environmental and social responsibilities can be combined to gain competitive strength [8]. Nevertheless, practical policy interventions appear more sensitive to these issues than most scenario studies. Hence, acknowledging that climate policy extends well beyond a single price on carbon emissions and involves greater attention to the principles of feasibility, accessibility and transparency [9] represents a key challenge for future quantitative energy scenarios.

2 Some studies do consider economic rather than technical potentials, but these normally rely on the assessment of prevailing production costs and availabilities with little or no consideration of the impact on other users of the same energy source or land area in the presence of significant demand increases. 3 During the last decade a number of modeling studies have attempted to assess the economic consequences of climate policy in different second-best settings, including the presence of market power in the carbon allowance market, and the role of pre-existing tax distortions on labor inputs [43]. However, very few of these explicitly address issues related to the governance challenges associated with low-carbon transitions.

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5. Concluding remarks Energy scenario studies provide insights on the different societal transitions implied by approaching low-carbon futures in the next 40 years, and in this article we have discussed how greater attention to governance issues can improve future scenario exercises. In the 16 quantitative scenario studies reviewed, policy processes are implicitly viewed upon as logical and linear step-by-step procedures. In addition, attention is mainly paid to the impact of well-defined and uniform policy instruments while fewer studies factor in the role of policy and institutional change. However, this approach neglects the time dimension, the dynamics of policy processes and the influence of different actor constellations engaged in a given policy area. The complexities of policy processes call for a climate policy arsenal that is more diverse than the uniform carbon pricing policies that prevail in most quantitative scenario studies. Unless this is recognized in future scenario studies, they may be of little assistance in governing the transition to low-carbon energy futures. The four qualitative scenario studies examined in this paper include more detailed analyses of politico-institutional factors and a broader assessment of policy instruments but are poorly connected to quantitative accounts of future low-carbon energy and transport systems. In this article we have pointed towards a number of strategies for integrating issues of transition governance into energy future studies. We particularly stress the importance of a closer synthesis of quantitative and qualitative methods for scenario analysis, which despite their ontological and epistemological differences should be viewed as complements and not substitutes. 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