Shell Energy Scenarios to 2050

Thursday, 2. October 2008     0 comment(s)
Lotta Numminen
International Politics of Natural Resources and the Environment research programme

Shell and VTT, Technical Research Centre of Finland, joined forces to discuss future energy challenges at the Old Student House, Helsinki, on 30 September 2008. Among the speakers were Jorma Ollila and Wim Thomas, who presented Shell Energy scenarios to 2050.

The Stern Review on the Economics of Climate Change points out that if climate change is ignored, it will damage economic growth and lead to great difficulties in economic and social activity. According to the review, climate change presents a unique challenge for economics as the greatest and widest-ranging market failure ever seen. Climate change is taken seriously by a number of commercial enterprises. They now seek to understand and debate the challenges that environmental change will cause in the future.

Shell has joined the discussion by developing two alternative scenarios that outline possible developments to 2050. The scenarios are based on an assumption that the world will have to cope with three hard truths: growing energy demand, the end of easily accessible oil and gas, and increasing environmental stresses.

The first scenario, Scramble, is a supply-driven scenario, which reflects focus on national energy security. In a Scramble –world, decision makers are driven by immediate pressures, such as security of energy supplies and an overriding interest in economic growth. Little attention is paid to more efficient energy use until supplies are close to running out. Greenhouse gas emissions will be taken seriously only after brutal climate shocks emerge.

The second scenario, Blueprints, is based on an assumption that people start to act locally instead of waiting for settlement of international agreements and legislation. Local action would address the challenges of economic development, energy security, and environmental degradation. Clean energy technologies, such as carbon capture and storage (CCS), are developed. New coalitions from local to international levels will start to emerge, and cross-border cooperation will be established.

It was pointed out that technology plays a key role in the challenges relating to energy and climate change. Political and regulatory choices are pivotal, and the next five years will be critical.

The audience posed questions of whether Shell’s scenarios are ambitious enough. The Blueprints scenario may be too optimistic and even that it may fall short of to what is needed to prevent catastrophic climate change. It was also noted that Shell had not created a worst case scenario, which would evaluate related developments with a temperature rise of six degrees by 2025.

Clearly, the Blueprints scenario would provide prospects for sustainable development in the future. However, at this point it seems to me that we are heading closer to development described in Scramble scenario.

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