Paris Agreement Compatible Sectoral Benchmarks

While national emission trends are a useful tool for measuring government progress towards meeting the Paris Agreement 1.5˚C temperature limit at a global level, each government will have to address its own sectors, each with their own, different baseline. What should government sectoral benchmarks be? Will they meet the global carbon budget

The Climate Action Tracker (CAT) has defined and analysed a global-level series of Paris Agreement-compatible benchmarks, across four major sectors – Power, Transport, Industry, and Buildings – and for seven individual countries – Brazil, China, EU, India, Indonesia, South Africa and the US. Within each sector, we define benchmarks for several separate but complementary indicators.

The CAT has developed the benchmarks for both 2030 and 2050, with additional temporal resolution depending on the approach and indicator.

Key Lessons

• Global decarbonisation by 2050 means that, on average, all sectors need to decarbonise on the same timeframe
• Benchmarks differ in terms of timing between countries and sectors but converge closer to 2050
• Benchmarks useful to policymakers guide which interventions are needed
• Progress by 2030 is important to keep carbon budgets within reach
• Power sector is making progress in decarbonising and should remain a government priority
• Industry, transport, buildings need to advance significantly

Paris Agreement-compatible sectoral benchmarks

Why do we need sectoral benchmarks?

To inform policy improvements and to gauge the state of transformational change – whether it is already underway, or more action is required – we need more granular information than the Paris Agreement’s goal of limiting warming to well below 2°C and to pursue efforts to limit it to 1.5°C. Sectoral indicators and benchmarks (such as, in the power sector, identifying the necessary share of renewable energy required to meet the Paris Agreement temperature goal) allow us to track the various elements of action that together will allow us to meet the global temperature goal.

Compared to national total greenhouse gas emissions, sectoral indicators and benchmarks speak more closely to those making the relevant decisions and help to map out pathways to a Paris-compatible world in more detail.

What are the main challenges in determining sectoral benchmarks?

The main challenge in defining the sectoral benchmarks is that a global temperature goal cannot unambiguously be translated into individual actions. Different strategies could be used to meet the long-term goal; e.g. by assigning more reductions to specific sectors, as long as the overall emissions budget is met (since the overall budget determines the long-term temperature increase).

A good starting point can be to ask whether a sector can decarbonise by 2050, and if not, why?

What is the rationale behind the benchmarks?

The Climate Action Tracker team defines detailed Paris Agreement compatible sectoral benchmarks as a level of an indicator that would be “sufficient” for national action to decarbonise sectors in line with the Paris Agreement’s 1.5˚C temperature limit. We set our benchmarks at a level of “highest plausible ambition,” which means they:

• are generally technically and economically feasible within the foreseeable future
• take into consideration current circumstances in terms of existing infrastructure and institutions in individual countries
• ensure that the benchmarks push boundaries on all levels and increase our chances of collectively meeting the Paris temperature limit

We do not predetermine how governments should reach a benchmark but can show that it is possible through one or more decarbonisation routes

How are the benchmarks determined?

In defining the sectoral benchmarks, we use multiple sources of information as input and take informed decisions on the basis of the available data. The input data includes:

A literature review, comprised of:

• Global scenarios of emissions limits to meet the Paris Agreement goal
• Sectoral technology scenarios
• Recent technological trends and potential new developments
• Most ambitious projects, targets, or goals*

Our own analysis of scenarios

• Analysis based on existing global model-based scenarios
• Development and application of our own sectoral models

The results of the literature review and our own analysis are combined to identify the “highest plausible ambition” benchmarks for each sector. This step requires explicit decisions or selection of what is considered highest plausible ambition, which we explain individually for each sector in our detailed methods report.

How is equity taken into consideration when defining the benchmarks?

The benchmarks defined above consider the extent to which each sector should be decarbonised within the bounds of a given nation (or globally) to be compatible with the Paris Agreement, irrespective of who pays for this transition.

The very limited carbon budget does not leave much room for some countries to decarbonise more slowly based on differences in their historic responsibilities or current capabilities. As the Paris Agreement requires full decarbonisation by mid-century there will be a need for financial transfers and other support between countries, so the development described by the benchmarks is fair and just. But the extent of this support and how it can be achieved is a separate political discussion that could not be covered in this analysis.

Some aspects of social and climate fairness we have implicitly taken into consideration when determining the benchmarks. In general, we focus on convergence of efficiencies (e.g. share of renewables or emissions per tonne of steel) while the activities are growing faster in developing countries and are often declining in developed countries. We also account for different paces of decarbonisation between countries and potential co-benefits in each sector.