Dead on arrival? Implicit stranded assets in leading IAM scenarios

While it is acknowledged that asset stranding could jeopardize the political feasibility of climate policies, the amount of stranded assets is rarely made explicit in most decarbonization pathways. This paper introduces a novel method that extracts, for every given energy sector transition scenario, the implicit amount of new power generation capacity that is added every year, and the required amount of stranding if this scenario is to be in line with its projected generation mix. We show that most scenarios that stabilize warming to below 1.5-2°C require a high level of asset stranding, not only for future capacity additions, but also for already existing and currently planned generators. Such stranding affects China and the U.S. most. The amount of future fossil fuel capacity stranding required, in line with 1.5-2°C warming, has increased by 21% between 2005 and 2015. We discuss implications for investors and policy makers.