The scenarios are not predictions of what is likely to happen or what bp would like to happen. ‎Rather, the scenarios help to illustrate the range of outcomes possible over the next thirty years, ‎although the uncertainty is substantial and the scenarios do not provide a comprehensive ‎description of all possible outcomes.‎

• The Rapid Transition Scenario (Rapid) posits a series of policy measures, led by a significant ‎increase in carbon prices and supported by more-targeted sector specific measures, which cause ‎carbon emissions from energy use to fall by around 70% by 2050. This fall in emissions is in line ‎with scenarios which are consistent with limiting the rise in global temperatures by 2100 to well ‎below 2-degrees Celsius above pre-industrial levels. ‎
• The Net Zero Scenario (Net Zero) assumes that the policy measures embodied in Rapid are both ‎added to and reinforced by significant shifts in societal behaviour and preferences, which further ‎accelerate the reduction in carbon emissions. Global carbon emissions from energy use fall by ‎over 95% by 2050, broadly in line with a range of scenarios which are consistent with limiting ‎temperature rises to 1.5-degrees Celsius. ‎
• The Business-as-usual Scenario (BAU) assumes that government policies, technologies and social ‎preferences continue to evolve in a manner and speed seen over the recent past*. A ‎continuation of that progress, albeit relatively slow, means carbon emissions peak in the mid-2020s. ‎Despite this peaking, little headway is made in terms of reducing carbon emissions from energy ‎use, with emissions in 2050 less than 10% below 2018 levels.‎

Primary energy demand increases by around 10% in Rapid and Net Zero over the Outlook and by ‎around 25% in BAU.‎

‎*BAU is comparable with the Evolving Transition Scenario in previous editions of the Energy ‎Outlook.‎

Scenarios differ due to alternative assumptions about policies and societal preferences

The differences between the scenarios are driven by a combination of different assumptions ‎about economic and energy policies and social preferences. ‎

Both Rapid and Net Zero assume a significant increase in carbon prices, which reach $250/tonne ‎of CO2 ($2018 prices) in the developed world by 2050 and $175 in emerging economies. This ‎increase in carbon prices incentivizes significant gains in both energy efficiency and the use of ‎lower carbon energy sources. This policy impulse is much smaller in BAU, with carbon prices ‎reaching only $65 and $35 per tonne of CO2 by 2050 in developed and emerging economies ‎respectively. ‎

In addition to carbon prices, the three scenarios assume a number of other policies are enacted ‎to affect both the growth of energy consumption and the mix of energy sources across different ‎sectors of the economy: industry, buildings and transport). ‎

Net Zero is based on the view that there may be economic and political limits to the extent to ‎which an accelerated energy transition can be driven solely by government policies. It assumes ‎that the impact of these polices is accentuated by the changing behaviour and preferences of ‎companies and households, with greater adoption of circular and sharing economies; increased ‎propensity to switch to low carbon energy sources; and less resistance to the accelerated ‎buildout of low carbon technologies and distribution networks. ‎

As a result of these policies and shifts in societal preferences, there is a decline in the share of ‎hydrocarbons (coal, oil and natural gas) in the global energy system in all three scenarios. This is ‎matched by a corresponding increase in the role of renewable energy as the world increasingly ‎electrifies. The scale of this shift varies significantly across the three scenarios, with the share of ‎hydrocarbons in primary energy declining from around 85% in 2018 to between 70-20% by 2050 ‎and the share of renewable energy increasing to between 20-60%.‎

Low carbon transition leads to a fundamental shift in the global energy system

The transition to a lower carbon energy system in Rapid leads to a fundamental restructuring and ‎reshaping of the global energy system. There are several different aspects to these changes.‎

First, there is a significant shift away from traditional hydrocarbons (oil, natural gas and coal) towards ‎non-fossil fuels, led by renewable energy. In Rapid, non-fossil fuels account for the majority of global ‎energy from the early 2040s onwards, with the share of hydrocarbons in global energy more than ‎halving over the next 30 years.‎

Second, the energy mix becomes far more diversified. For much of history, the global energy system ‎has tended to be dominated by a single energy source. For the first half of the previous century, coal ‎provided most of the world’s energy. As the importance of coal declined, oil became the ‎predominant energy source. The energy transition in Rapid means that for much of the next 20 years ‎the global fuel mix is far more diversified than previously seen, with oil, natural gas, renewables and ‎coal (for a time) all providing material shares of world energy. The greater variety of fuels means that ‎the fuel mix is increasingly driven by customer choice rather than the availability of fuels, with ‎increasing demands for integration across different fuels and energy services. ‎

This increased differentiation is further enhanced by the growing importance of electricity and ‎hydrogen at the final point of energy use in Rapid. These energy carriers are more costly to transport ‎than traditional hydrocarbons causing energy markets to become more localized.‎

The increasing diversification of the fuel mix also leads to greater competition across different forms ‎of energy as they compete for market share against a backdrop of plateauing energy demand in the ‎second half of the Outlook in Rapid. Moreover, the peaking and subsequent decline in the ‎consumption of coal, oil and natural gas in Rapid triggers greater competition within individual fuels, ‎as resource owners compete to ensure their energy resources are produced and consumed. This ‎heightened competition increases the bargaining power of consumers, with economic rents shifting ‎away from traditional upstream producers towards energy consumers. ‎

Similar trends are also apparent in Net Zero, although the pace with which the share of renewables grows is even faster.
Source: BP