Any recovery from COVID-19 — which in idling the economy, has exposed oil-industry inefficiencies and made a dent in pollution — can and should include a mandate for the transition to a lower-carbon future, a report Thursday from consultants McKinsey & Co. says.
That future requires aggressive approaches, not without tradeoffs, that call on all sectors of the economy to change to some degree, in many cases creating jobs and advancing technology to usher in such change, the report shows . Sharing the burden of reducing emissions, which in the report targets livestock practices, reforestation, switching to renewable electric power, promoting hydrogen use and more, eases the pressure on the fossil-fuel industry /zigman2/quotes/209723049/delayed CL00 -0.07% to evolve alone, or even most quickly.
The McKinsey researchers carve up their approach in a couple of ways, laying out three scenarios, shown in the graphic below. Within that bigger picture, they detail five shifts in production and consumption, all with the intention of setting the globe on the path toward a 1.5° Celsius warming target, the more aggressive end of what’s been deemed a manageable level of average warming in coming decades by the Paris Climate accord and other initiatives. The Paris pact, for instance, has called for slowing to at least 2°C by 2050.
“The 1.5 degree pathway is hard, put possible,” said Kimberly Henderson, a partner in the firm’s Washington office and one of the report’s authors. “The math is daunting, as is the timeline. Ten years is significant to really bend the curve on greenhouse gas emissions. Most targets talk about 2050, but when staying within 1.5, 2030 is the timeline that really matters.”
McKinsey Global Energy Perspective 2019: Reference Case; McKinsey 1.5°C scenario analysis
The scenarios in the report focus on CO2 emissions (the most prevalent anthropogenic greenhouse gas and key to any GHG-abatement scenario), but the authors said that methane emissions and other types should be addressed as well on the 1.5°C pathway.
While the call is for all sectors to participate with the best intentions, the report recognizes that compliance may be spotty. The research shows a possible outcome if a car-loving American society is slow to cut its fossil-fuel obsession. In one set of circumstances, for instance, oil and gasoline continue to be the major fuel for transport, and that sector decarbonizes more slowly. To compensate, reforestation would need to speed up, and 90% of CO2 emissions from deforestation would have to be abated by 2030. In this scenario, all sectors/sources except transport would manage to abate by at least one-third of their 2016 emissions by 2030.
Across the scenarios, reforestation can often pick up the slack for the hardest-to-abate sectors, particularly for pre-2030 emissions.
“For too long the mindset was if we all do one thing, it will solve the global warming problem, or address past wrongs. No one solution comes close,” said Matt Rogers, a McKinsey senior partner in its San Francisco office, and a report co-author. “We have to have significant change across many sectors. We believe we can open the aperture to highlight for each sector how to get there.”
Rogers and colleagues, in another recent report, emphasized that the pandemic should increase pressure on the public and private sectors to act on climate change sooner than later.
“Not only does climate action remain critical over the next decade, but investments in climate-resilient infrastructure and the transition to a lower-carbon future can drive significant near-term job creation while increasing economic and environmental resiliency,” they wrote . “And with near-zero interest rates for the foreseeable future, there is no better time than the present for such investments.”
Some of the behavioral “shifts” toward the 1.5°C pathway in the report include: