Abstract
Low-carbon investments are necessary for driving the energy system transformation that is called for by both the Paris Agreement and Sustainable Development Goals. Improving understanding of the scale and nature of these investments under diverging technology and policy futures is therefore of great importance to decision makers. Here, using six global modelling frameworks, we show that the pronounced reallocation of the investment portfolio required to transform the energy system will not be initiated by the current suite of countries’ Nationally Determined Contributions. Charting a course toward ‘well below 2 °C’ instead sees low-carbon investments overtaking fossil investments globally by around 2025 or before and growing thereafter. Pursuing the 1.5 °C target demands a marked upscaling in low-carbon capital beyond that of a 2 °C-consistent future. Actions consistent with an energy transformation would increase the costs of achieving the goals of energy access and food security, but reduce the costs of achieving air-quality goals.
This is a preview of subscription content, access via your institution
Access options
Access Nature and 54 other Nature Portfolio journals
Get Nature+, our best-value online-access subscription
$29.99 / 30 days
cancel any time
Subscribe to this journal
Receive 12 digital issues and online access to articles
$119.00 per year
only $9.92 per issue
Buy this article
- Purchase on SpringerLink
- Instant access to full article PDF
Prices may be subject to local taxes which are calculated during checkout
Similar content being viewed by others
Change history
02 July 2018
In the version of ‘Supplementary Data 1’ originally published with this Article, the units for the ‘Capacity|Electricity|*’ variables in the ‘Non_Investment_Annual’ tab were incorrectly given as EJ/yr; they should have read GW. This has now been corrected. Also, some of the variables listed in the ‘Non_Investment_Variable_Defs’ were not required and have therefore been removed.
References
Clarke, L. et al. in Climate Change 2014: Mitigation of Climate Change (eds Edenhofer, O. et al.) Ch. 6 (IPCC, Cambridge Univ. Press, 2014).
Kriegler, E. et al. The role of technology for achieving climate policy objectives: overview of the EMF 27 study on global technology and climate policy strategies. Clim. Change 123, 353–367 (2014).
Riahi, K. in Global Energy Assessment: Toward a Sustainable Future (eds Johansson, T. B. et al.) 1203–1306 (Cambridge Univ. Press, Cambridge, 2012).
Rogelj, J. et al. Energy system transformations for limiting end-of-century warming to below 1.5 °C. Nat. Clim. Change 5, 519–527 (2015).
Carraro, C., Favero, A., & Masetti, E. Investments and public finance in a green, low carbon, economy. Energy Econ. 34, S15–S28 (2012).
Perspectives for the Energy Transition—Investment Needs for a Low-Carbon Energy System (OECD/IEA & IRENA, 2017).
McCollum, D. L. et al. Energy investments under climate policy: a comparison of global models. Clim. Change Econ. 04, 1340010 (2013).
Annex to G20 Leaders Declaration: G20 Hamburg Climate and Energy Action Plan for Growth (G20, 2017).
Paris Agreement Decision 1/CP.17 (UNFCCC, 2015).
Transforming Our World: The 2030 Agenda for Sustainable Development (A/RES/70/1) (UN, 2015).
Fujimori, S., Hasegawa, T., Masui, T. & Takahashi, K. Land use representation in a global CGE model for long-term simulation: CET vs. logit functions. Food Secur. 6, 685–699 (2014).
Fujimori, S., Masui, T. & Matsuoka, Y. AIM/CGE [basic] Manual Discussion Paper Series (Center for Social and Environmental Systems Research, National Institute for Environmental Studies, 2012).
Stehfest, E. et al. Integrated Assessment of Global Environmental Change with IMAGE 3.0. Model Description and Policy Applications. (PBL Netherlands Environmental Assessment Agency, 2014).
Fricko, O. et al. The marker quantification of the Shared Socioeconomic Pathway 2: a middle-of-the-road scenario for the 21st century. Glob. Environ. Change 42, 251–267 (2017).
Krey, V. et al. MESSAGE-GLOBIOM 1.0 Documentation (IIASA, 2016).
Criqui, P., Mima, S., Menanteau, P. & Kitous, A. Mitigation strategies and energy technology learning: an assessment with the POLES model. Technol. Forecast. Social Change 90, 119–136 (2015).
Keramidas, K., Kitous, A. G., Després, J. & Schmitz, A. POLES-JRC Model Documentation. EUR 28728 EN. Report JRC107387 (Joint Research Center, 2017).
Kriegler, E. et al. Fossil-fueled development (SSP5): an energy and resource intensive scenario for the 21st century. Glob. Environ. Change 42, 297–315 (2017).
Luderer, G. et al. Economic mitigation challenges: how further delay closes the door for achieving climate targets. Environ. Res. Lett. 8, 034033 (2013).
Bosetti, V., Carraro, C., Galeotti, M., Massetti, E. & Tavoni, M. WITCH: a World Induced Technical Change Hybrid model. Energy J. 27, 13–37 (2006).
Emmerling, J. et al. The WITCH 2016 Model—Documentation and Implementation of the Shared Socioeconomic Pathways (Fondazione Eni Enrico Mattei, 2016).
Iyer, G. et al. Measuring progress from nationally determined contributions to mid-century strategies. Nat. Clim. Change (in the press).
GCAM Documentation http://jgcri.github.io/gcam-doc/toc.html (PNNL, 2016).
Cameron, C. et al. Policy trade-offs between climate mitigation and clean cook-stove access in South Asia. Nat. Energy 1, e15010 (2016).
Amann, M. et al. Cost-effective control of air quality and greenhouse gases in Europe: modeling and policy applications. Environ. Model. Softw. 26, 1489–1501 (2011).
Abel, G. J., Barakat, B., KC, S. & Lutz, W. Meeting the Sustainable Development Goals leads to lower world population growth. Proc. Natl Acad. Sci. 113, 14294–14299 (2016).
Parkinson, S. et al. Balancing clean water-climate change mitigation trade-offs. IIASA Working Paper WP-18-005 (IIASA, 2018).
Parkinson, S. C. et al. Climate and human development impacts on municipal water demand: a spatially-explicit global modeling framework. Environ. Model. Softw. 85, 266–278 (2016).
Riahi, K. et al. The Shared Socioeconomic Pathways and their energy, land use, and greenhouse gas emissions implications: an overview. Glob. Environ. Change 42, 153–168 (2017).
World Energy Investment 2016 (OECD/IEA, 2016).
World Energy Investment 2017 (OECD/IEA, 2017).
Rogelj, J. et al. Paris Agreement climate proposals need a boost to keep warming well below 2 °C. Nature 534, 631–639 (2016).
The Emissions Gap Report 2016 (UNEP, 2016).
ADVANCE contributors. ADVANCE wiki: The Common Integrated Assessment Model (CIAM) Documentation Website (CIAM, 2017); http://themasites.pbl.nl/models/advance/index.php/ADVANCE_wiki
Grubler, A. et al. in Global Energy Assessment: Toward a Sustainable Future (eds Johansson, T. B. et al.) 1665–1744 (Cambridge Univ. Press, Cambridge, 2012).
Millar, R. J. et al. Emission budgets and pathways consistent with limiting warming to 1.5 °C. Nat. Geosci. 10, 741–747 (2017).
World Bank Statistical Database (World Bank, 2018); https://data.worldbank.org/indicator/NY.GDP.DEFL.ZS.AD?locations=US
Acknowledgements
We acknowledge funding by the World Bank and the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 642147 (‘CD-LINKS’ project). S.F. is supported by the Environment Research and Technology Development Fund (2-1702) of the Environmental Restoration and Conservation Agency Japan and JSPS KAKENHI grant number JP16K18177. P. Kolp of IIASA is also recognized for his assistance with Web database development and support. The views expressed by J.D. and A.S. are purely theirs and may not in any circumstances be regarded as stating an official position of the European Commission.
Author information
Authors and Affiliations
Contributions
D.L.M., K.R., J.R., M.F. and C.N. posed the initial research questions to frame the study and then selected the scenarios to analyse. V.K., M.G., O.F., D.H., S.F., M.H., D.v.V., H.-S.d.B., C.B., E.K., J.E., L.D., V.B., J.D., A.S. and G.I. ran the integrated assessment models for obtaining the energy investments. V.K., Si.P., Sh.P., M.P.-C., N.R., P.R., W.S. and S.F. carried out the investment analyses for the other SDGs. W.Z. and D.L.M. compiled and analysed results from all models and analyses. D.L.M. and W.Z. led the writing of the manuscript, with all other authors contributing.
Corresponding author
Ethics declarations
Competing interests
The authors declare no competing interests.
Additional information
Publisher’s note: Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Supplementary information
Supplementary Information
Supplementary Tables 1–2, Supplementary Figures 1–9, Supplementary Notes 1–7, Supplementary Methods, Supplementary References
Supplementary Data 1
Data underlying paper
Supplementary Data 2
Scenario modelling protocol
Supplementary Data 3
Policy details of scenarios
Rights and permissions
About this article
Cite this article
McCollum, D.L., Zhou, W., Bertram, C. et al. Energy investment needs for fulfilling the Paris Agreement and achieving the Sustainable Development Goals. Nat Energy 3, 589–599 (2018). https://doi.org/10.1038/s41560-018-0179-z
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1038/s41560-018-0179-z
This article is cited by
-
Advancements in hybrid energy storage systems for enhancing renewable energy-to-grid integration
Sustainable Energy Research (2024)
-
Regional variation in social norm nudges
Scientific Reports (2024)
-
Targeting net-zero emissions while advancing other sustainable development goals in China
Nature Sustainability (2024)
-
Potential for small and micro modular reactors to electrify developing regions
Nature Energy (2024)
-
Prudent carbon dioxide removal strategies hedge against high climate sensitivity
Communications Earth & Environment (2024)
