Phase down or phase-out | is there a difference?

This article was also published on Top1000funds.

The discussion here relates to the winding down of fossil fuels. Arguably, the most high-profile use of the terms was in the concluding statement for COP26. The draft statement included the phrase “phase-out” in relation to the global use of coal. India pushed for, and was successful in, a change of words to “phase down” coal use. As an interesting aside, at COP27 India has pushed for agreement on the “phase down” of all fossil fuel use, which Saudi Arabia appears less keen on.

The two phrases relate to two different pathways, with the implication being that the paths converge on the same destination, such as ‘net zero by 2050’. In this case there can only be any interest in comparing them if the nature of journey would be qualitatively different. Or, if the implication of convergence turned out not to be true. Let’s explore…

We should first define our terms. In the absence of a commonly-held definition, we in Thinking Ahead suggest we define ‘phase out’ to mean the progressive reduction over successive periods to the point where no further usage occurs. In contrast, ‘phase down’ will also mean a progressive reduction over successive periods, but to a level that is deemed acceptable to continue into the indefinite future. In other words, ‘phase out’ gets to net zero by 2050 by contributing absolute zero (annual) emissions from fossil fuels, while ‘phase down’ requires the simultaneous building up of carbon capture and storage (CCS) to a level that offsets the continuing ‘phase down’ emissions.

We can now consider the two scenarios introduced above. The first is that the down and the out pathways converge on net zero annual emissions by 2050. From the construction of this scenario there is no meaningful difference between the pathways in terms of their impact on the climate. Instead, the difference will be seen in the mix of energy types and, possibly, in the quantity of energy supplied. The phase out path means that the energy mix in 2050 will not contain any energy derived from the burning of coal, oil or gas. In turn, this would have big implications for certain sectors where electrification is less straightforward (eg shipping, trucking, flying, high-temperature manufacturing). The quantity of energy supplied in 2050 will directly depend on the rate of investment in new (non-carbon) energy generation between now and then.

The phase down path means that we will still be burning fossil fuels as part of our energy mix in 2050. Again, from the construction of this scenario the amount of fossil fuel (and, by extension, the total amount of energy) will depend on the rate of investment in, and the efficiency of, CCS. The amount of energy can be further boosted by also investing in non-carbon energy if there are sufficient funds. This path gives us greater scope to continue benefiting from the hard-to-electrify sectors.

The second scenario is that the pathways actually diverge. Phase out still gets us to zero absolute emissions in 2050, but it gives us the headache of finding substitutes for the hard-to-electrify services we currently enjoy. It could also result in a fall in the total amount of energy supplied, which would be an aberration in a historical context. This would imply some form of energy rationing, which is a difficult proposition for those of us in the global north to wrap our heads around.

The divergence, therefore, comes from the phase down path. We will either default on the phasing down (nobody likes energy rationing, so we keep on burning fossil fuels), and/or we will discover that CCS is more difficult, more expensive, or less efficient than we hoped – and therefore we will do less of it. In this scenario, ‘phase down’ does not get to net zero by 2050.

Why might CCS disappoint? First there is the technological angle. Every successful new technology takes a number of decades to mature. Solar electricity took 40 years to become price competitive with fossil fuels. CCS has only 25 years to show it can be successful, and to mature and scale. Second, there is the physics. Capturing carbon from the air, compressing it and pumping it underground takes energy[1]. Why dig up more natural ecosystems to find the materials, to build new energy generating capacity, to power CCS when it would be simpler, cheaper and more efficient to burn less fossil fuel instead? Third, there is the biology, or the human domination of natural ecosystems. It would be nice if the so-called ‘nature-based solutions’ could do the heavy lifting of carbon removal for us. Unfortunately that ship has sailed. The atmosphere enjoyed 10,000 years of stability in the run up to the industrial revolution. The concentration of carbon dioxide didn’t vary much from 280 parts per million (ppm). In 2022 the concentration passed 420ppm. In other words, while nature has done its best, it was not able to offset the light economic activity of 1bn people, let alone the heavy economic activity of 8bn people now. Tropical rainforests are transitioning from carbon sinks to sources, and permafrost has started to melt, releasing long-stored greenhouse gases. Against these considerations, how much confidence should we have in the effectiveness of CCS?

In this piece we have considered phase down vs phase out at the very highest level. A proper consideration would require a much longer piece and a breath-taking amount of complex detail. For me, however, the primary importance lies in the high-level abstract realm. The choice of phase down or phase out will reveal our underlying values and beliefs. It is, pretty much, an ideological choice. In the run up to COP26 Greta Thunberg wrote that “we now have to choose between saving the living planet or saving our unsustainable way of life[2]”. It is my argument that phase out is a choice to save the living planet, while phase down is an attempt to save our unsustainable way of life.

[1] Currently 2,000 kWhours per ton of CO2, according to James Dyke in We Need to Stop Pretending we can Limit Global Warming to 1.5°C, Byline Times (, 6 July 2022.

[2] There are no real climate leaders yet – who will step up at Cop26?, The Guardian, 21 Oct 2021