Investment consequences of the Paris climate agreement

Abstract

This paper develops a simple model of an energy transition. Projections for growth in renewables and electric vehicles suggest that the oil and gas industry will be disrupted during the 2020s, but that, as things stand, carbon dioxide emissions are unlikely to fall fast enough to keep within a 2° emissions budget. To keep warming to 2°, additional ways of reducing emissions from industry or of accelerating emissions reductions from generation, transport and buildings will be needed together with an extensive programme of carbon dioxide removal.