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This edition of the Global Energy and Climate Outlook (GECO 2020) puts its focus on analysing the impact of the Covid-19 outbreak on the transport sector as a whole. The transport sector has suffered the greatest slump in mobility demand of the history during the lockdown period, while the oil price has plummeted. This report explores the impacts of transport activity trends that may persist in the future from the structural changes induced by the Covid-19 pandemic, as well as of policy initiatives that may be adopted as enabling measures for low-carbon transport. While greenhouse gas emissions in this “New Normal” differ significantly compared to previous projections, the emissions gap towards a 2°C pathway is closed only by some 29%, thereby stressing the need of more ambitious collective action to maintaining global temperature change to well below 2°C., JRC.C.6-Economics of Climate Change, Energy and Transport

This technical report describes a multi-regional generalized RAS (MR-GRAS) procedure to update/project input-output tables or social accounting matrices. The method is able to incorporate a number of constraints on row and columns sums as well as specific flows between economic sectors and specific taxes in an input-output table. This feature is particularly useful to reconcile information coming from different data sets. In the application described in this report, the method is tailored towards constraints with regard to the energy system. Specifically, we specify constraints in the updating/projecting algorithm that are able to reproduce the economic values reflected in an energy balance from an energy system model. Here, we show that the method is able to generate input-output tables that are forward projected until 2050 and can be used as a baseline in a computable general equilibrium model like JRC-GEM-E3., JRC.C.6-Economics of Climate Change, Energy and Transport

When modeling medium and long-term challenges we need a reference path of economic development (the so-called baseline). Because sectoral models often offer a more fundamental understanding of future developments for specific sectors, many CGE modeling teams have adopted approaches for linking their models to sectoral models to generate baselines. Linked models include agricultural sector, energy sector, biophysical and macroeconomic models. We systematically compare and discuss approaches of linking CGE models to sectoral models for the baseline calibration procedure and discuss challenges and best practices. We identify different types of linking approaches which we divide into a) one-way, and b) twoway linking. These two types of linking approaches are then analyzed with respect to the degree of consistency of the linkage, information exchanged, as well as compromises in aggregations and definitions. Based on our assessment, we discuss challenges and conclude with suggestions for best practices and research recommendations.

This report analyses global transition pathways to a low Greenhouse Gas (GHG) emissions economy The main scenarios presented have been designed to be compatible with the 2°C and 1.5°C temperature targets put forward in the UNFCCC Paris Agreement, in order to minimise irreversible climate damages. Reaching these targets requires action from all world countries and in all economic sectors. Global net GHG emissions would have to drop to zero by around 2080 to limit temperature increase to 2°C above pre-industrial levels (by around 2065 for the 1.5°C limit). The analysis shows that this ambitious low-carbon transition can be achieved with robust economic growth, implying small mitigation costs. Results furthermore highlight that the combination of climate and air policies can contribute to improving air quality across the globe, thus enabling progress on the UN Sustainable Development Goals for climate action, clean energy and good health. Key uncertainties in future pathways related to the availability of future technological options have been assessed for Carbon Capture and Sequestration (CCS) and bioenergy. If CCS technologies would not develop, a 2°C pathway would have a similar mitigation trajectory in the first half of the century as a 1.5°C scenario with CCS., JRC.C.6-Economics of Climate Change, Energy and Transport

In this document the economic balances for the Baseline scenario used in the Global Energy and Climate Outlook (GECO) 2018 are presented. The Baseline scenario represents a projection of the world economy with corresponding energy demand and GHGs emissions under the assumption of current climate and energy policies and also realization of Nationally Determined Contributions (NDC) in line with Paris agreement. As this scenario still does not allow avoiding catastrophic climate change in the future, it is used as a reference to compare alternative scenarios with more stringent policy measures. Economic balances are supplemented by energy balances, where the latter are coming from energy models, but are consistent with economic data. Finally we show GHGs evolution over time that comes from economic activity presented in the Baseline. The procedure that was used to generate Baseline scenario is called PIRAMID which stands for: Platform to Integrate, Reconcile and Align Model-based Input-output Data. PIRAMID is a new methodology to project Multi-Regional Input-Output tables over time. This approach allows for integrating data from external models and databases. The result is a series of consistent and transparent IO tables., JRC.C.6-Economics of Climate Change, Energy and Transport

The report describes the importance of oil for oil exporting countries and analyses the potential economic effects that current low oil prices may have in their economy and political stability. Firstly, the report describes the main drivers that have led to the present low oil prices. Secondly, descriptive statistics are employed to show the exposure of the main oil exporting countries to the oil price, where GDP and government revenue is found to be closely correlated to the oil price. In general, several Sub-Saharan African and North African countries show high risk due to the high exposure of their economy and of their government revenue combined with limited reserves per capita. Secondly, the macro-economic effects of a 60% fall in the price of oil is analysed with the GEM-E3 model, which is an stylized representation of the oil market change over the last two years. The results show that such an oil price drop has different effects across oil exporting countries, unsurprisingly strongly correlated with export dependence to oil. For instance, a 60% fall in the price of oil could lead to a reduction of the GDP of Sub-Saharan Africa by around 8.5%. The final section discusses the migration patterns from the studied countries, as a proxy of what might happen be they destabilised because of a lasting low oil price., JRC.J.1-Economics of Climate Change, Energy and Transport