Analyzing climate “silver bullets” with system dynamics

By Aproop Dheeraj Ponnada, En-ROADS Climate Ambassador
August 29, 2024

At the start of an En-ROADS workshop, we often ask: “What is one promising climate solution you have recently worked with or encountered that you think will get us to a 1.5°C future?”

The answers from the audience vary based on where they are coming from: a general public perception, industry experience, activism, policy advocacy, or as an everyday consumer. Here are the top 5 we hear most commonly, in no small part due to widespread media coverage on the topics:

Electrifying transport — transforming our roads and rails
Nuclear fission — building next-generation large nuclear reactors
Nuclear fusion — creating our own sun here on Earth
Bioenergy — growing fuel out of the ground
Carbon dioxide removal — putting the genie back in the bottle

Spoiler alert: whilst each of these solutions have their own merits (or demerits), none of them on their own can get us to a Paris Agreement-aligned (1.5-2°C) future. With En-ROADS and systems dynamics, we can investigate why this is the case.

Will electric vehicles keep enough oil in the ground?

The growth story of electric vehicles (EVs) over recent years has been nothing short of spectacular. The IEA estimates that nearly 1 in 5 cars sold globally in 2023 was electric, and by 2030 the widespread adoption of electric vehicles could eliminate the need for 5 million barrels of oil per day.

In En-ROADS in 2023, electric vehicles make up about 6% of transport sales. Note that this statistic includes all transport (cars, trucks, buses, trains, ships, and airplanes), not just cars.

Policy has played a key role in boosting EV sales: take China, the world’s largest EV market by absolute number of vehicles sold. Government subsidies and tax breaks helped establish local supply chains that made EVs accessible to consumers at lower prices. On the consumer front, the US Inflation Reduction Act provides up to $7,500 in tax credit for the purchase of EVs.

In En-ROADS, simulating a generous 50% subsidy on the initial purchase cost helps boost the electric share of transport sales to 50% by 2040, about 3x higher than it would have been without the subsidy.

Yet, the net effect on emissions and temperature rise is quite negligible.

So what’s going on? Two dynamics explain this:

Capital stock turnover delays: While electric share of new vehicle sales is an important statistic, there are still billions of cars (and a few hundred million other transport vehicles) on the road today that will be around for another decade or two. This translates to a “long fat tail” in oil demand. While 50% of new vehicle sales in 2040 in this scenario are EVs, without other policies in place, only about 27% of all vehicles would be electric.

Grid emissions: Even with capital stock turnover delays, we see a net reduction in oil demand, and therefore CO₂ emissions. Yet looking at the graphs of CO₂ Emissions from Coal and CO₂ Emissions from Oil, we see a remarkable rise in coal-based emissions coinciding with the drop in oil emissions, implying a fossil-for-fossil substitution in the energy mix.

In this scenario, coal remains the second cheapest source of electricity after renewables. This means that both coal and renewable energy can grow to meet the increasing demand for electricity from electric vehicles. However, this growth cancels out any emission reduction benefits from using less oil, unless we decarbonize the grid simultaneously. This dynamic is sometimes referred to as “squeezing the balloon.”

See this scenario in En-ROADS.

What if we pushed for more nuclear and less coal to power the grid?

Nuclear energy came back into the spotlight at COP28, with a pledge from 22 countries to triple nuclear energy by 2050. What would happen if we simulated such a policy in conjunction with transport electrification?

In the En-ROADS Baseline Scenario, about 10 EJ of primary energy demand is supplied by nuclear in 2050. Applying a -$0.04/kWh subsidy would triple the energy from nuclear by 2050, leading to around 0.05°C of warming reduction.

If we were to push more adoption of nuclear by making it cheaper than coal, we could either subsidize it further or tax coal. If we apply a hefty tax of $100/ton of coal (effectively doubling its price), this would achieve a further 0.2°C of warming reduction by reducing emissions from coal.

It is noteworthy that even this combined set of ambitious policies across electric vehicles, nuclear, and coal will not achieve a 1.5-2°C pathway.

See this scenario in En-ROADS.

What if we brought nuclear fusion into the picture?

A long-running joke about nuclear fusion is that “it is always 30 years away”—reflective of the difficulty in making the technology commercially viable. However, several advances in recent years have led to increased interest and investment in fusion, with some optimists in the industry projecting that the first commercial reactors could be operational in the 2030s. Fusion holds advantages over fission, with key ones being little radioactive waste and an abundant supply of fuel.

In En-ROADS, we can simulate a breakthrough in fusion with the introduction of a “new zero-carbon” energy source. Let’s assume we introduce a breakthrough in 2025, with fusion taking just 7 years to commercialize and producing power at half the cost of coal, and even cheaper than renewables:

Before, the En-ROADS scenario pointed towards a 2.95°C future. With the introduction of such a spectacular breakthrough, we only achieve a further 0.1°C temperature reduction. The reason is evident from the “Global Sources of Primary Energy” graph: nuclear fusion replaces some coal demand, but due to its cost dominance, it also replaces some renewable demand, leading to a cannibalization effect amongst clean energy sources. We call this the “crowding out” effect.

We must also consider capital stock turnover: replacing the world’s existing fleet of coal and gas power plants takes time. Simply adding new capacity won’t immediately eliminate the demand for fossil fuels, as these existing assets will continue to operate and consume resources until they are fully retired.

Scenario without a new zero-carbon breakthrough:

Scenario with a new zero-carbon breakthrough (in orange):

See this scenario in En-ROADS.

What if we used more bioenergy to displace combustion fuels?

Given that electrification by itself does not substantially reduce fossil fuels, what if we displace the direct use of fuels, especially oil, with bioenergy?

In the current scenario, bioenergy (in pink) is more expensive both as a fuel and as a source of electricity when compared with coal, gas, and renewables:

Subsidizing bioenergy by $25/barrel of oil equivalent (corresponding to roughly 15% of the retail price of B20 and B100 biodiesel in the US) makes it cost-competitive with coal, provided the coal is taxed at $100/ton as in this scenario. Yet temperature actually increases when we subsidize CO₂ in this scenario.

The primary reason for the increase in emissions is the source of the bioenergy feedstock: approximately 60% of today’s bioenergy is derived from wood. Harvesting wood from forests reduces the ability of forests to remove CO₂ from the atmosphere and results in additional emissions from soil carbon, seen in the “CO₂ Net Emissions from Forest Bioenergy” graph below.

Producing bioenergy from crop or waste feedstocks could help mitigate this issue, but the limited availability of these materials would constrain bioenergy’s future role in the energy mix.

See this scenario in En-ROADS.

If all else fails, could carbon removal save us?

Carbon dioxide removal (CDR), like other experimental climate technologies, has seen its share of news in recent years. In their Net Zero Scenario, the IEA estimates that over 1.7 billion tons of CO₂ needs to be removed from the atmosphere each year by 2050, more than 1700 times what was removed in 2022.

CDR describes several technologies and practices that could remove CO₂ from the atmosphere and sequester it underground:

Afforestation: Planting trees
Direct air capture and storage (DACCS): Pulling CO₂ out of the air with machines
Enhanced mineralization: Spreading specific rocks on the ground to absorb CO₂
Agricultural soil carbon sequestration: Practices such as cover cropping that build up carbon in the soil
Biochar: Organic matter that is turned into charcoal and buried

Controls for CDR in En-ROADS are located under the Technological Carbon Removal and Nature-Based Carbon Removal sliders.

CDR faces a number of fundamental challenges, including significant energy demands (DACCS could require a quarter of global energy in 2100), permanence of storage, and land requirements. All of these factors translate to high costs and scalability issues.

Maximizing the potential of the above technologies in En-ROADS allows for over 15 Gt of annual CO₂ removal by mid-century, yet only leads us to a cumulative 2.5°C scenario when combined with the previous actions.

The reason for this muted effect is quite evident from the geometry of the “CO₂ Emissions and Removals” graph: there is simply more being emitted than being removed from the atmosphere. Relying on carbon removals to meet our emissions gap is like trying to save the Titanic by bailing out buckets of water.

See this scenario in En-ROADS.

In conclusion

Climate change is a complex problem, and decarbonizing our energy system is inevitably a complex solution space. Whilst all of the above technologies have a role to play, there are no “silver bullet” solutions that can magically limit emissions and global warming.

So if the most popular solutions we’ve discussed above do not get us to our decarbonization goals, what will? As covered in our analysis of the outcomes from COP28, a few deliberate and interconnected actions still have the potential to keep us on track to a Paris-aligned pathway:

Prioritizing energy efficiency and electrification
Cleaning up the grid with increasing renewables and decreasing thermal generation
Targeting fossil fuel subsidies, and proactively managing phase out of fossil fuels
Ensuring responsible stewardship of our forests
Limiting carbon removal to essential reduction of residual emissions
Actively tackling methane and other greenhouse gases