Innovation opportunities from a
transition to low carbon prosperity ECO-Innovation Summit
March 23, 2010
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of the European Climate Foundation is strictly prohibited
Maintaining growth and reducing emissions implies carbon
productivity must increase by ten times
1
0
1
2
3
4
5
6
7
8
9
10
11
Carbon productivity trends and forecast requirements
Index (2008 = 1)
Carbon productivity
Growth required
5.6% per annum
World GDP growth at
current trends* 3.1% per
annum (real)
Emissions de-
crease to 20 GtCO2e by
2050: -2.4% p.a.
2050 45 40 35 30 25 20 15 10 2005
0
2
4
6
8
10
12
14
16
18
20
22
24
0 20 40 60 80 100 120 140
Index Year 0 = 1
Years
* Global Insight GDP forecast to 2037, extrapolated to 2050
Source: McKinsey analysis, Contours of the World Economy 1–2030 A.D., Maddison, 2007
Carbon productivity
2008-2050
US labour productivity growth
1830-1955
2
EU-27 total GHG emissions GtCO2e/yr
SOURCE: McKinsey Global GHG Abatement Cost Curve; IEA WEO 2009; US EPA; EEA; Team analysis
Sector
Power
Road transport
Industry
Buildings
Agriculture
Waste
Air & sea transport
Forestry
Abatement
95% to 100%
95%
40%
95%
20%
100%
50%
-0.25 GtCO2e
An 80% GHG reduction could be achieved by maximum abatement
within and across sectors
1990
0.4
0.1
0.2
0.1
2050
5.4
0.3
0.3 0.2
1.0
0.9
0.6
0.9
1.0
0.7
0.9
5.2
2010
1.2
1.0
1.2
0.9
1.1
0.5
2030
5.3
0.5
0.1
1.2
0.3
0.9
2050 abated
-0.3
0.6
0.4
5.9
1.2
-80%
The pathways cover a wide range of technology mixes and are
assessed based on set criteria
3
Security of energy supply and technology risk
Economic impact Sustainability
System reliability
Decarbonization pathways
60% RES
20% Nuclear
20% CCS
40% RES1
30% Nuclear
30% CCS
80% RES
10% Nuclear
10% CCS
100% RES
SOURCE: ECF Roadmap 2050
4
80% RES: DSM reduces transmission requirements
with 24%
80% RES, 20% DSM
Iberia
France
UK &
Ireland
Nordel
Benelux &
Germany
Italy &
Malta
South East
Europe
Central Europe
Poland &
Baltic
5GW
7GW 14GW
46GW
3GW
8GW
7GW
10GW
12GW
12GW
4GW
Centre of gravity
SOURCE: ECF Roadmap 2050
Half of the capex is required for wind and solar PV up to 2050 for a
60% RES decarbonized pathway
60% RES PATHWAY Capex by technology by decade, EUR billions
SOURCE: ECF Roadmap 2050
EXAMPLE
0
100
200
300
400
500
600
700
2010-2020 2020-2030 2030-2040 2040-2050
Wind
Solar PV
Other RES
Non RES
396
637 619
545
Grid
investments 19 25 19 9
Key low carbon technologies
6
On- / Offshore wind Solar PV / CSP Automotive power train Energy Efficiency
Super / Smart Grid Biomass & -fuels CCS
To achieve this, the EU is facing large challenges over the next
years
7
•! Drive faster investment in cost-effective measures to reach 20%
end-use efficiency improvement by 2020 and continue efficiency
gains beyond 2020
Energy
Efficiency
Power
Markets
•! Ensure timely retirement of existing high-carbon resources
•! Drive commercialization and deployment of critical low-carbon
technologies
•! Create a durable business case for investment in long-lived, capital-
intensive low-carbon resources needed to meet load growth
Grid
Expansion
•! Timely delivery of the required expansion in inter-regional power
transfer capability
•! Create a business case for appropriate load mgmt/smart grid
investments
SOURCE: ECF Roadmap 2050
Opposing voices Supporting voices
8
Opposing and supporting voices are quoted
“A 30 per cent reduction by 2020 would be physically impossible”, F.
Conti, CEO Enel
“EU must not increase in any way its 20 per cent commitment without a full
global deal “, BusinessEurope
Source: Financial Times, the Economist
“The green revolution has started and by 2020, green technology will have
surpassed the car industry as well as the engineering sector in Germany”, P.
Löscher, CEO Siemens
“[…] we must rely much more on renewable energy, which is clean, safe
and make us more independent”, N. Röettgen, Germany’s environment
minister
“Europe’s competitiveness vs. the US is at risk [with ambitious climate
targets]”, F. Sijbesma, CEO DSM
““Whoever is first to conquer green-tech markets will have an enduring export
advantage and create jobs” Angela Merkel
“““The private sector can and will make GHG reductions” J. vd Veer on behalf
of ERT
9
Incumbents’ voices have traditionally been much louder than
the new industry’s
* Estimate
Source: Burson Marsteller, Guide to Effective Lobbying 2009; European Commission Register of interest representatives
70
7
0 20 40 60 80
Car industry*
European
Federation for
Transport and Environment
Number of lobbyists