The letter’s signatories – experts, business leaders, politicians and more – call on the IEA to make the 1.5°C target the central scenario in its highly influential annual World Energy Outlook. At present, its “New Policies Scenario” puts us on track for between 2.7°C and 3.3°C. That’s a problem, because too many energy decision-makers cite it as an acceptable guide, making it a self-fulfilling prophecy. Even the “Sustainable Development Scenario” is not good enough, say the signatories, and want its targets tightened. Hannah McKinnon quotes the key extracts from the letter and puts them into context. (Letter extracts and signatories at end of article).

In order to succeed, we need the best tools at our disposal. We need to understand whether decisions will lead to success or failure, and we need policymakers and investors to have access to that information. Remarkably, almost all energy decision-making is based on assumptions that we will fail in meeting the Paris climate goals. This includes the go-to source for descriptions of our energy future: the International Energy Agency (IEA).

Last Tuesday (2nd April 2019), over 60 business leaders, investors, and energy experts found remarkable alignment around demanding more from the IEA. In a letter covered by the Financial Times, a broad collection of signatories called on the IEA to develop a truly Paris-aligned scenario (including a reasonable chance at staying within 1.5 degrees Celsius with a precautionary approach to Negative Emissions Technologies), and make this the central scenario in the World Energy Outlook (WEO), replacing the current dominant business-as-usual scenario.

The letter’s signatories range widely: heads of major businesses, asset managers and leaders of major investor networks, former heads of state and politicians, leading academics and experts in energy, and more.

“Without the inclusion of a central and realistic 1.5C scenario going forward, the World Energy Outlook would abdicate its responsibility to continue to chart the boundaries of the path of the global energy sector,” the letter reads.

The suggested changes to the IEA’s WEO would have an outsized impact on everything from the urgent need to “shift the trillions” away from climate-incompatible fossil fuel financing to helping governments plan for success in energy decision-making to how we collectively conceive our energy future.

WEO Scenarios miss the target

The IEA has a mandate “to ensure reliable, affordable and clean energy,” and yet its main description of what the future of energy might look like, the “New Policies Scenario,” assumes we are still on track for between 2.7 and 3.3 degrees Celsius of warming. And since that is the future the IEA emphasises, energy decision-makers treat it as the default, most likely outcome. The resulting policies and investments risk making it a self-fulfilling prophecy – past expansions of fossil fuel development in places like the Australian coal basins and Canadian tar sands have cited the IEA’s scenarios as justification for continued build-out.

Even the IEA’s “Sustainable Development Scenario,” which is little more than a footnote in the IEA’s press releases, falls short of the Paris goals. Both assume that fossil fuels will continue to dominate our energy mix for decades to come, an assumption that dangerously underestimates our collective ability to do what it is necessary to address this challenge. This ambition shortfall is even more egregious on the heels of the Intergovernmental Panel on Climate Change’s “Special Report on Global Warming of 1.5ºC” released last fall.

The world can do better

One of the great successes of the Paris Agreement was that it made a fossil fuel-free future seem possible. As a result, we can imagine renewable energy powering economic development and providing energy access for all, we can imagine transporting ourselves and our goods without diesel or petrol, and we can imagine a managed but ambitious transition of workers, communities, and economies away from dependence on the energy of the past. This expansion of the collective political imagination is critical to our shared progress.

An emerging group of actors are redefining “climate leadership” by putting an end to approvals and financing for fossil fuel expansion, and setting critical global precedents for what a phase-out of oil, coal, and gas can look like. But the majority of energy decisions around the world are not yet this forward-thinking, in part no doubt because they are based on energy scenarios that lead to failure.

Money spent on fossil fuels is money wasted

A failure to plan for success is a threat not only to the climate, but to our economies as well. Investors make decisions based on the IEA’s energy demand scenarios daily, and failing to get it right threatens billions upon billions of dollars in capital. As it stands, even the IEA’s so-called “climate scenario” is encouraging massive continued investment in fossil fuels that we cannot burn if we are to stay within the Paris limits.

This dangerous combination of capital and climate risk must be addressed. The world needs scenarios that assume success in meeting our collective goals, rather than projections of current and inadequate ambition. Recognizing these risks, the signatories of this letter are using their positions as key WEO users to demand the Paris-aligned ambition we need from the IEA.

The IEA has deep and rich expertise in projecting our energy future, but it is time for it to evolve. We need a vision for the future that is predicated on success, and this new climate scenario must become the centerpiece of the IEA’s annual flagship World Energy Outlook.

We are living in times of exciting and unprecedented change: Commitments and actions that would have been unthinkable just a few short years ago are challenging our assumptions and our imaginations. We cannot afford to underestimate ourselves by assuming that the future will do little more than follow the trends of the past. We must base our decisions on assuming success, and embrace the bold leadership it will take to get us there.

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Hannah McKinnon is Director, Energy Transitions and Futures Program at Oil Change International

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Key excerpts of letter sent to Executive Director Fatih Birol and the IEA governing council chair on April 2, 2019:

We are therefore calling on the IEA to:

1) Make clear that the New Policies Scenario (NPS) is a business as usual scenario that charts a dangerous course to a world with between 2.7ºC and 3ºC of warming. We recognize that it has always been your intent to warn policymakers of the insufficiency of the NPS, but given the central role it plays in the WEO, most users interpret this scenario as the guiding one. We suggest that the NPS scenario take on another name that more clearly communicates its shortfall. “New Policies” is by now no longer new, and it clearly represents an insufficient level and pace of transformation.

2) Develop an updated, fully transparent, ‘Sustainable Development Scenario’ (SDS) to reflect the full range of ambition of the Paris goals and make this the central reference of the WEO. This scenario should include a reasonable probability (66%) of limiting warming to 1.5ºC; a longer time horizon (beyond 2040); and a precautionary approach to negative emissions technologies. With the understanding that there are limitations and uncertainties in both industrial and natural approaches to negative emissions, natural carbon sinks must be prioritized. This scenario should also reflect the latest evidence of the pace and potential penetration of clean technologies, and their continuing rapidly falling costs. The current SDS emissions profile is effectively the same as the Copenhagen-era 450 Scenario, which aimed for only a 50% probability of keeping below 2ºC. As mentioned above, we now know the scope of the consequential difference between 1.5ºC and 2ºC.

SIGNATORIES

Achala C. Abeysinghe	Head, Global Climate Law, Policy and Governance Programme					International Institute for Environment and Development (IIED)
Lord Adair Turner	Chair					Energy Transitions Commission
Anand Mahindra	Chairman					Mahindra Group
Aron Cramer	Chief Executive Officer					BSR
Bill Hare	Chief Executive Officer and Managing Director					Climate Analytics
Catherine Howarth	Chief Executive Officer					Share Action
Christiana Figueres	Convenor					Mission 2020
Eduardo Paes				Former Mayor of Rio and former Chair of C40
Rt Hon Sir Edward Davey		Member of Parliament and Former UK Secretary of State for Energy and Climate Change					UK Government
Emma Herd		Chief Executive Officer					Investor Group on Climate Change (Aus & NZ)
Eric Usher		Head					UN Environment Programme – Finance Initiative
Faustine Delasalle		Director					Energy Transitions Commission
Fiona Reynolds		Chief Executive Officer					Principles for Responsible Investing (PRI)
Fletcher Harper		Director					GreenFaith
Gail Whiteman		Professor and Director					Pentland Centre for Sustainability in Business
Gebru Jember Endalew		Former Chair					LDC Group in the UNFCCC
Helen Clarkson		ED					The Climate Group
Helen Mountford		Programme Director					New Climate Economy
James Bevan		Chief Investment Officer					CCLA
James Hansen		Professor					Climate Science, Awareness and Solutions Program, Earth Institute, Columbia University
Jim Leape		William and Eva Price Senior Fellow and Co-Director, Center for Ocean Solutions					Stanford Woods Institute for the Environment
Joanna Haigh		Co-Director					Grantham Institute for Climate Change & Environment
Joeri Rogelj		Lecturer in Climate Change and the Environment					Imperial College London
Johan Rockstrom		Professor & Director					Potsdam Institute for Climate Impact Research (PIK)
John Schellnhuber		Professor and Director Emeritus					Potsdam Institute for Climate Impact Research (PIK)
Julian Sainsbury		Trustee					JJ Charitable Trust
Kelly Clark		Director					Finance Dialogue
Laurence Tubiana		CEO					European Climate Foundation
Leena Srivastava		Vice Chancellor					Teri University
Leon Kamhi		Head of Responsibility					Hermes
Lucy Guard		Trustee					JJ Charitable Trust
Malte Meinshausen		Director					Climate & Energy College, University of Melbourne
Manuel Pulgar Vidal		Climate Leader					WWF
Marc Andrus		Bishop					Grace Cathedral, San Francisco
Mark Campanale		Founder & Executive Director					Carbon Tracker
Mark Watts		Director					C 40
Mary Robinson		Former President of Ireland					Mary Robinson Foundation
Michael Mann		Distinguished professor of Meteorology, Penn State Director					Earth System Science Centre, Department of Meteorology, The Pennsylvania State University
Michael Oppenheimer		Albert G. Milbank Professor of Geosciences and International Affairs					Woodrow Wilson School at Princeton University
Michiel Schaeffer		Director and Senior Scientist					Climate Analytics
Mindy Lubber		President					Ceres
Monica Araya		Founder and Director					Costa Rica Limpia
Natasha Landell-Mills		Partner, Head of Stewardship					Sarasin & Partners
Nick Stansbury		Head of Commodity Research, LGIM.					LGIM
Nigel Topping		Chief Executive Officer					We Mean Business
Niklas Höhne		Professor					Wageningen University of the Netherlands and Partner NewClimate Institute
Oliver Bäte		Chair of the Board of Management					Allianz SE
Ottmar Edenhofer		Director and Chief Economist					Potsdam Institute for Climate Impact Research
Paul Simpson		Chief Executive Officer					CDP
Pavel Kabat		First Chief Scientist and Research Director					World Meteorological Organization
Peter Bakker		President & Chief Executive Officer					World Business Council for Sustainable Development (WBCSD)
Pushker A. Kharecha		Deputy Director					Earth Institute, Columbia University
Qiankun Wang		Research Analyst					GEIDCO
Rachel Kyte		Chief Executive Officer					Sustainable Energy for All
Ram Ramanathan		Professor of Atmospheric Sciences					Scripps Institution of Oceanography, UC San Diego
Rebecca Mikula-Wright		Director					Asia Investor Group on Climate Change (AIGCC)
Ricardo Lagos					Former President of Chile & Former UN Special Envoy on Climate Change
Sarah Butler-Sloss			Chair					Ashden Trust
Seb Beloe			Partner – Head of Research, Listed Equity					WHEB
Sonam P. Wangdi			Chair					UNFCCC LDC (Least Developed Countries) Group
Tim Smit			Co-Founder/Executive Chairman					The Eden Project
Tomás Insua			Executive Director					Global Climate Catholic Movement