The energy demand sectors industry, transport and buildings are together directly responsible for around 51 % of the global energy-related CO2 emissions and indirectly drive the emissions in the energy supply sectors. The demand sectors are characterized by many subsectors, technologies, heterogeneous end-users with different preferences and needs, and rapid changes. This complexity is not easy to capture in global, long-term models analysing climate change mitigation pathways. A consequence of this is that also much less attention has been paid to the use of energy and the role of energy reduction in a global setting to achieve climate targets. Over the coming decades, if current trends remain unchanged, global energy demand is projected to continue to grow. This is despite improved energy efficiency. In 2050 projected global energy demand in respectively the buildings, industry and transport sector ranges from 180-220, 190-240 and 160-190 EJ. Scenario analysis shows that in order to meet internationally agreed climate targets both energy efficiency and fuel switching (including electrification) play an important role. Models pay relatively little attention to changes in the sectors activity to mitigate emissions, which could potentially complement, other strategies.

Better understanding and describing of the development of future energy demand could allow for greater policy relevance. We show for the electric vehicle transition case that new insights can be attained by dynamically modelling complex demand-side processes in a transparent manner while keeping the model relatively simple. The challenge ahead is to, where possible, identify simple cause-effect relationships based on empirical data, using multiple scenarios, comparing different model types and performing sensitivity analysis on uncertain assumptions to improve our understanding of and exploring the full solution space energy demand response. Moreover, future research should focus on better understanding of behavioral change, the physical requirements, such as infrastructure and material demand underlying the energy demand projections, alternative demand sector climate policy, possible barriers to sectoral transitions and the relation between short term and long term as well as local and global opportunities.

This seminar has been jointly organized by FEEM and IEFE, Bocconi University.