Dr. Hannah Daly:

The marginal abatement cost in 2030 is certainly hair-raising. I will provide a few notes for context. We have modelled different levels of effort between agriculture and energy. We focused on energy. To meet the overall 51% target, if agriculture reduces by 20% or less, which is in the current agrifood strategy, then energy needs to reduce by more than 65%. With the marginal abatement curve, as we move towards more abatement, small additional levels of effort produce exponentially higher marginal abatement costs as we pick the low-hanging fruits and come to the hard, high coconuts, as my colleague said. We are modelling a conservative, business-as-usual scenario, with low levels of new technological breakthroughs. There is a substantial volume of new wind and solar energy but we do not assume much more bioenergy or demand reduction in the core scenario. That is not to say that this is what will happen or that the costs will be €1,000 per tonne but it is to hold up a mirror and say that if we need to reduce energy emissions by 60%, 65% or 70%, if we do not have low energy demands and there are no energy breakthroughs, then it will be extremely challenging to reach the target. This is why we have modelled the low energy demand scenario. It is a fantastic scenario from the top down.

We do not model in detail how each of the individual measures are met. We have a narrative around every sector. It includes freight kilometres per capitagoing back to what they were in, for example, in 2010, and passenger kilometres per capitareducing, sharing different segments, with a mode shift, and a reduction in total trips. It includes a reduction in cement demand because of a move to timber-framed housing. In the residential sector, internal temperatures go down somewhat and we reduce the size of new houses. We do not say how we can get there, what policies are required or what the cost of achieving that is. We need to do more work on that and to collaborate with people doing these things on the ground. We look at the systems. If we focus on all forms of low energy demand in a systemic way, it would reduce the size of the energy system and the speed at which we need to ramp up renewables, wind, electric vehicles and so on. If we manage to get these things done correctly, it would make the challenge much easier. We also have scenarios that assume technological breakthroughs, including more use of hydrogen, EVs coming faster and production of more biofuels. That also makes the transition easier. If the low energy scenario is combined with a scenario that is optimistic about technology, it is even more feasible, so that is what we should aim for.