Exploration of pathways towards a clean economy by 2050: How to realise a climate-neutral Netherlands

Only a mix of technologies can realise a clean economy by 2050

In March 2011, the European Commission produced a roadmap outlining how greenhouse gas emissions in Europe could be reduced by 80 percent from 1990 emission levels, by 2050. Europe needs to make such a reduction to limit global warming to two degrees Celsius. Other developed and developing countries are also expected to make an appropriate contribution. The current Dutch Cabinet has decided to produce a similar roadmap for the Netherlands.

The PBL Netherlands Environmental Assessment Agency has supported this policy process together with the Energy research Centre of the Netherlands (ECN), by exploring technical possibilities and identifying the steps to take.

At present, a large share (about 80 percent) of greenhouse gas emissions is the direct result of the use of fossil fuels. Developing innovative technologies will take many decades, as will replacement of existing products and processes with new products and processes and development of associated production chains and infrastructure. The construction of a new system that uses more sustainable and cleaner technology will take many decades, and investments made in the coming years will partly determine the situation in 2050.

There are four important pillars for a clean energy system:

• Energy efficiency improvement and reduction in final energy demand
• Use of biomass to fully or partly replace coal, gas, oil and oil products. Without the implementation of biomass, emission reductions of 80 percent will be close to impossible. The Netherlands will probably need to import biomass.
• Carbon capture and storage. Combining biomass with carbon capture and storage (CCS) in fuel production is important as this makes it possible to achieve negative emissions. However, storage capacity is subject to much uncertainty.
• Electricity generation without direct CO₂ emissions (wind, solar and nuclear energy), in combination with increasing the share of electricity in final energy demand.

Direct costs of the energy system

The total direct annual cost of an energy system that produces a maximum of 45 Megatonne in greenhouse gas emissions by 2050 is projected to be between 0 and 20 billion euros more than under a continued use of current technologies. Costs cannot be determined more accurately due to uncertainties around future cost levels of many still developing technologies and future changes in the price of fossil fuels and biomass.

These probably higher direct costs may be offset by positive external effects on health and ecosystems and savings related to the avoidance of climate change damage and the costs of adaptation. However, this was not explored any further in this report.

Cost efficient realisation of 2020 targets is not sufficient

The realisation of an 80 procent reduction in greenhouse gas emissions by 2050 will require further development of other and more innovative technologies than the techniques that are currently being stimulated to meet the EU 2020 targets for the Netherlands. To stimulate the innovation that is necessary for an 80 percent reduction in the long term, additional initiatives should be developed today.