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This study assesses climate-related financial risks on energy infrastructure investments. We conduct an asset-level and forward-looking risk assessment on three downstream energy assets: natural gas, coal, and solar photovoltaic power plants. We first identify climate risk factors (physical and transition) that an asset is highly exposed to with its specific asset type, geographic location, time frame, and financing structure and build plausible climate risk scenarios using single or multiple risk factors. We then project an energy asset's cash flow and estimate the asset's probability of default under the built scenarios. We compare the financial impacts of varying climate risk scenarios by analyzing the time and size of the losses due to the given default. We observe climate-related financial risks that are systematic and idiosyncratic: some scenarios affect certain energy assets negatively and others positively, while others negatively affect multiple asset types simultaneously. Our comparative case study results also show that renewable energy investments are likely to be more resilient to climate change than fossil fuel-based energy assets. • Climate-related financial risks are assessed on three downstream energy assets. • Multiple climate scenarios are tested by the time and size of the financial default. • Climate-related financial risks are systematic or idiosyncratic. • Renewable investments are more resilient to climate change than fossil fuels. [ABSTRACT FROM AUTHOR]

The Energy Modeling Forum 24 study included a set of policy scenarios designed to compare economy wide market-based and sectoral regulatory approaches of potential U.S. climate policy. Models from seven teams participated in this part of the study assessing economy-wide cap-and-trade climate policy and sectoral policies in the transportation and electric sector in terms of potential greenhouse gas emissions reductions, economic cost, and energy systems implications. This paper presents an overview of the results from the U.S. policy scenarios, and provides insights into the comparison of results from the participating models. In particular, various metrics were used to compare the model results including allowance price, the efficient frontier, consumption loss, GDP loss, and equivalent variation. We find that the choice of economic metric is an important factor in the comparison of model results. Among the insights, we note that the carbon price should cautiously be considered when other non-cap sectoral policies affecting emissions are assumed in tandem. We also find that a transportation sector policy is consistently shown to be inefficient compared to an economy-wide capand-trade policy with a comparable level of emissions reductions. [ABSTRACT FROM AUTHOR]

Advances in the science and observation of climate change are providing a clearer understanding of the inherent variability of Earth’s climate system and its likely response to human and natural influences. The implications of climate change for the environment and society will depend not only on the response of the Earth system to changes in radiative forcings, but also on how humankind responds through changes in technology, economies, lifestyle and policy. Extensive uncertainties exist in future forcings of and responses to climate change, necessitating the use of scenarios of the future to explore the potential consequences of different response options. To date, such scenarios have not adequately examined crucial possibilities, such as climate change mitigation and adaptation, and have relied on research processes that slowed the exchange of information among physical, biological and social scientists. Here we describe a new process for creating plausible scenarios to investigate some of the most challenging and important questions about climate change confronting the global community. [ABSTRACT FROM AUTHOR]

• California has a new method to report retail electricity GHG emissions intensities. • The new rules focus on emissions accounting based on physical grid conditions. • The new rules improve the accuracy of emissions associated with retail loads. • However, a handful of transient effects could bias reported emissions downward. Accurately attributing greenhouse gas (GHG) emissions in the electric power sector is critical to measuring progress towards climate policy goals. We evaluate a new methodology adopted by the California Energy Commission to calculate the GHG emissions intensity of retail electricity providers. In the long run, the new regulations better align with the physical nature of grid operation than did past practices, but policymakers should monitor a set of potential challenges as market structures evolve. [ABSTRACT FROM AUTHOR]

The Energy Modeling Forum (EMF) 37 study on deep decarbonization and high electrification analyzed a set of scenarios that achieve economy-wide net-zero carbon dioxide (CO 2 ) emissions in North America by mid-century, exploring the implications of different technology evolutions, policies, and behavioral assumptions affecting energy supply and demand. For this paper, 16 modeling teams reported resulting emissions projections, energy system evolution, and economic activity. This paper provides an overview of the study, documents the scenario design, provides a roadmap for complementary forthcoming papers from this study, and offers an initial summary and comparison of results for net-zero CO 2 by 2050 scenarios in the United States. We compare various outcomes across models and scenarios, such as emissions, energy use, fuel mix evolution, and technology adoption. Despite disparate model structure and sources for input assumptions, there is broad agreement in energy system trends across models towards deep decarbonization of the electricity sector coupled with increased end-use electrification of buildings, transportation, and to a lesser extent industry. All models deploy negative emissions technologies (e.g., direct air capture and bioenergy with carbon capture and storage) in addition to land sinks to achieve net-zero CO 2 emissions. Important differences emerged in the results, showing divergent pathways among end-use sectors with deep electrification and grid decarbonization as necessary but not sufficient conditions to achieve net zero. These differences will be explored in the papers complementing this study to inform efforts to reach net-zero emissions and future research needs.

Economy-wide emissions drop 43 to 48% below 2005 levels by 2035 with accelerated clean energy deployment.