Review of 1.5°C and Other Newer Global Emissions Scenarios: Insights for Company and Financial Climate Low-Carbon Transition Risk Assessment and Greenhouse Gas Goal Setting

There is increasing interest in analyzing company and financial climate-related low-carbon transition risk and/or setting greenhouse gas (GHG) goals, with third-party organizations offering recommendations and methodologies. These activities are technically challenging and there is an overall unfamiliarity with the science. This study and other EPRI research strive to enable grounded discussion and decisions by providing a scientific basis for company climate risk assessment and goal setting.

EPRI completed a study in October 2018 that evaluated scientific understanding of the relationship between a company and a global temperature goal (Rose and Scott, 2018). Among other things, that study found that the available scientific knowledge is vast and well beyond what is being considered in current third-party company climate risk assessment and GHG goal setting methodologies. The study evaluated global emissions scenario resources as one input that defines the company-global temperature relationship.

This research update assesses 1.5°C and other newer global GHG emissions scenarios from the Intergovernmental Panel on Climate Change (IPCC) and International Energy Agency (IEA) and derives insights for company low-carbon transition risk assessment and GHG goal setting. In particular, this assessment evaluates the robustness of the insights and guidance derived in EPRI’s previous study based on earlier scenarios, and explores the details of pathways for limiting global warming to 1.5°C.

This study finds that caution is merited regarding the use of 1.5°C pathways in risk assessment and goal setting, and that it is important to consider pathway attainability, uncertainty, and global scenario issues. In addition, to capture scientific understanding, the newer scenario data should be combined with previous scenario data and scenario attainability, including plausibility, should be considered. Overall, we find that this research update validates and strengthens the technical observations, insights, and methodological guidance from EPRI’s previous study, and the insights and guidance, therefore, represent a reliable basis for evaluating and developing company methodologies now and into the future.