Pathways to 2050: Alternative Scenarios for Decarbonizing the U.S. Economy

As part of Climate Innovation 2050, C2ES led a group of companies in a collaborative exercise examining potential scenarios for decarbonizing the U.S. economy. The result is a set of three scenarios for reducing U.S. greenhouse gas emissions 80 percent from 2005 levels by 2050. A final report, Pathways to 2050: Alternative Scenarios for Decarbonizing the U.S. Economy, presents the detailed scenarios and a set of key takeaways.

Below are 1) quick descriptions of the three scenarios, 2) some results from our quantitative modeling of them, 3) key takeaways, and 4) a summary of key policies and other drivers in each scenario.

C2ES was joined in this exercise by colleagues at the RAND Corporation and at the Joint Global Change Research Institute (a partnership between the Pacific Northwest National Laboratory and the University of Maryland). More than two dozen leading companies across key sectors participated.

The 3 Scenarios

A Competitive Climate: Strong international pressure in the form of carbon tariffs and growing recognition of the competitive benefits of low-carbon innovation lead to a strong, early U.S. federal response, including an economy-wide price on carbon.

Climate Federalism: Responding to economic opportunities and intensifying climate-related disasters, a growing number of U.S. states implement ambitious climate policies, leading to calls from business for a more harmonized national response.

Low-Carbon Lifestyles: Increased urbanization, generational shifts, and technological breakthroughs lead to strong market demand for low- carbon consumption products and services, along with the emergence of innovative low-carbon business models.

Modeling Results

GHG emissions by sector

Reducing U.S. emissions by 80 percent requires action across all the major sectors of the economy. The figure below shows emissions and negative emissions by sector for each scenario in 2030 and 2050.

Notes

Note: Bars below the 0-emissions line indicate net negative emissions in a given sector and year.

Key elements of decarbonization

Consistent with a broad range of previous analyses, the scenarios all reflect the same fundamental shifts: decarbonizing the power supply; switching to electricity and other low-carbon fuels in the transportation, industry and buildings sectors; increasing energy efficiency across the economy; increasing carbon sequestration; and reducing emissions of non-carbon climate pollutants.

The figure below illustrates, in the case of A Competitive Climate, the relative contributions of these emissions-reducing strategies toward an 80 percent reduction in 2050. The lower figure shows that their relative contributions are roughly similar across all three scenarios.

Importance of broad-based action

An initial set of scenarios built around different lead drivers — federal policy, state policy, and consumer and company action — got only halfway to an 80 percent reduction by 2050. The final scenarios assume a more ambitious response across a wider array of actors.

The figure below shows GHG reductions through 2050 in the initial set of scenarios (dashed lines) and the final scenarios presented here (solid lines).

Role of policy in driving technology deployment

Technological innovation can greatly facilitate decarbonization, but, without adequate policy drivers, is insufficient to achieve it.

The figure below illustrates that without policies to drive deployment, advances in low-carbon technologies produce only limited emission reductions. The bars show the level and sources of electricity generation in 2050; the circles show the associated GHG levels.

The Advanced Elec Tech case and A Competitive Climate both assume the same cost reductions in solar, wind, nuclear, carbon capture and storage, and grid-scale storage. Levels of deployment and resulting emission reductions are modest in the Advanced Elec Tech compared to the same technological advances paired with a carbon price and other policies in A Competitive Climate.

Energy Sources and Technologies

Decarbonization requires the adoption of new energy technologies and a shift in energy sources used across the economy. These figures (choose in dropdown menu) show how the energy and technology mixes compare across the three scenarios in the power, transportation, industry and buildings sectors.

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Power Generation
Transportation Final Energy Use
Industry Final Energy Use
Buildings Final Energy Use

Key Takeaways

Pathways to 2050: Alternative Scenarios for Decarbonizing the U.S. Economy draws the following takeaways from this collaborative scenario exercise:

Decarbonizing the U.S. economy requires fundamental shifts in the ways we generate energy, produce goods, deliver services, and manage lands.
These fundamental shifts can be achieved through a host of alternative pathways reflecting different drivers, different contingencies, and different societal choices.
Decarbonization requires that action accelerates quickly and that everyone plays their part—policy-makers at all levels, investors, entrepreneurs, consumers, voters, and companies across key sectors of the economy.
The success of any pathway hinges on high levels of public support, expressed through stronger demand for effective policies and/or low-carbon goods and services.
Decarbonization requires a broad suite of policies that drive investment and action by setting goals, targeting resources, providing incentives, and ensuring a level playing field.
Technological innovation can greatly facilitate decarbonization but, without adequate policy drivers, is not sufficient to achieve it.
The private sector is an essential partner in any decarbonization pathway, and timely business leadership can help ensure choices that are beneficial for both companies and society as a whole.
Sectoral responses are highly interdependent—the pathway chosen by one sector may enhance or constrain the decarbonization options of others.

The Scenarios: Key Policies and Drivers

This table summarizes key policies and drivers in the three scenarios, including federal, state and local policies; business and consumer action; and technology innovation. More detailed descriptions of the specific elements of each scenario can be found in Appendix B of the report.


	A Competitive Climate	Climate Federalism	Low-Carbon Lifestyles
Overarching Drivers of Change	Strong international pressure in the form of carbon tariffs, and growing recognition of the competitive benefits of low-carbon innovation, lead to a strong federal response, including an economy-wide price on carbon	Responding to economic opportunities and intensifying climate-related disasters, a growing number of states implement ambitious climate policies, leading to calls from business for a more harmonized national response	Increased urbanization, generational shifts, and technological breakthroughs lead to new low-carbon consumption patterns and the emergence of innovative low-carbon business models
Federal Government	Implements economy-wide carbon price starting 2024 Implements more rigorous vehicle emission standards Makes strong investment in low-carbon research, development, demonstration, and deployment (RDD&D)	Implements economy-wide carbon price starting 2031	Is supportive, but plays no proactive leadership role
State and Local Governments	Most states implement ambitious complementary policies, including building codes, transportation policies, and clean energy standards in the electric power sector	Carbon trading expands on the east and west coasts through 2030 Complementary policies are implemented after 2031, including clean energy standards and more stringent building codes	Carbon trading expands on the east and west coasts through 2030 Highly urbanized states support cities’ ambitious policies, including by offering land-based sequestration incentives Cities make large investments in public transit, implement more stringent building codes, and implement zero-emissions vehicle mandates for ride-sharing services
Businesses	Driven by export opportunities, companies invest heavily in low-carbon technologies Companies engage in closer collaboration on RDD&D with the federal government	Facing a fractured regulatory landscape, companies push for a federal response to level the playing field	New business models (e.g., “sharing economy,” distributed power generation) transform key sectors The power sector voluntarily reduces emissions by 85% by 2050 Finance favors low-carbon over high-carbon investments
Consumers	Consumers are willing to pay more for domestically produced low-carbon products	Consumer preference for electric vehicles increases	Improved carbon accounting and transparency enable consumers to easily act on growing preference for low-carbon products Dietary and other behavioral shifts occur (e.g., beef consumption decreases)
Technology	Federal RDD&D support lowers costs for nuclear, carbon capture and storage, grid-scale battery storage, and cellulosic biofuel	Low-carbon investment favors domestic technologies, including hydrogen and nuclear energy With lower incentives for innovation, more low-carbon technologies are imported	Consumer demand and new, technology-enabled business models drive rapid electrification, greater efficiency in buildings and industry, and improved renewables integration
Rest of the World	Countries achieve International Energy Agency Sustainable Development Scenario targets in 2050 (OECD countries, 67% below 2005; non-OECD countries, 40% below 2005)