Ch. 7

Question 1

Define reference scenarios.

Answer 1

a set of agreed-upon projections of global emissions trajectories, with accompanying socio-economic narratives and estimates for physical impacts (as calculated by climate models)

Question 1

What does “net-zero” mean?

Answer 1

reducing global emissions (“sources”) to zero in almost every sector of the global economy and balancing out any residual emissions that cannot be eliminated with removals, or offsets (“sinks”) on an ongoing basis.

Question 2

What is a key difference between RCP and SSP scenarios?

Answer 2

the RCPs did not originally include a socioeconomic “narrative” but only emissions trajectories calculated using certain assumptions about energy use.

Question 3

What are the IEA’s two core scenarios?

Answer 3

1) Stated Policies Scenario, which reflects existing policy frameworks and announced policy intentions, and 2) the Sustainable Development Scenario (SDS), which combines climate and social targets and limits warming to 2°C in line with Paris targets.

Question 4

What are IAMs?

Answer 4

broad-spectrum models designed to allow analysis of how societal and economic choices affect each other and the natural world

Question 5

What are sector decarbonization pathways?

Answer 5

these decarbonization pathways are constructed to be compatible with Paris Agreement targets, so a firm making use of these to gauge Paris Agreement alignment can mainly restrict itself to the question of gauging whether it is possible for the firm to align with the trajectory

Question 6

How do climate models differ from integrated assessment models (IAMs)?

Answer 6

Climate models are based on physical science, whereas IAMs are only grounded in economic theory.

Question 7

How does physical risk scenario analysis for corporations differ from that for transition risk?

Answer 7

Transition risk scenario analysis makes heavy use of emission trajectories, whereas physical risk scenario analysis mainly looks at operational risk.