Archive for the ‘Coal’ Category

A recent story in The Guardian expressed some optimism that “humans will rise to the challenge of climate change”. Ten reasons were given to be hopeful, but not one of them mentioned the climate basics such as a carbon price or carbon capture and storage. Rather, the offerings were largely tangential to the reality of rising CO2 emissions, with the hope that because European homes are using less energy and solar prices are dropping, then ipso facto, atmospheric CO2 levels would somehow stabilize (i.e. annual CO2 emissions falling to zero).  Without wanting to be pessimistic, but rather realistic, it may not be the case that emissions just fall and here are ten reasons why not. For those who visit this blog more regularly, sorry for the repetition, but hopefully this is a useful summary anyway.

1. There is still no carbon price

Although discussions about carbon pricing are widespread and there are large systems in place in the EU and California, pervasive robust pricing will take decades to implement if the current pace is maintained. Yet carbon pricing is pivotal to resolving the issue, as discussed here. The recent Carbon Pricing Statement from the World Bank also makes this point and calls on governments, amongst others, to work towards the goal of a global approach.

2. Legacy infrastructure almost gets us there

The legacy energy system that currently powers the world is built and will more than likely continue to run, with some parts for decades. This includes everything from domestic appliances to cars to huge chemical plants, coal mines and power stations. I have added up what I think is the minimum realistic impact of this legacy and it takes us to something over 800 billion tonnes carbon emitted to the atmosphere, from the current level of about 580 billion tonnes since 1750. Remember that 2°C is roughly equivalent to one trillion tonnes of carbon.

3. Efficiency drives growth and energy use, not the reverse

The proposition that energy efficiency reduces emissions seems to ignore the cumulative nature of carbon emissions and is apparently based on the notion that energy efficiency is somehow separate to growth and economic activity. What is wrong with this is that the counterfactual, i.e. that the economy would have used more energy but grown by the same amount, probably doesn’t exist. Rather, had efficiency measures not been taken then growth would have been lower and energy consumption would have been less as a result. Because efficiency drives economic growth, you have to account for Jevons Paradox (rebound). After all, economies have been getting more efficient since the start of the industrial revolution and emissions have only risen. Why would we now think that being even more efficient would somehow throw this engine into reverse?

4. We still need a global industrial system

In a modern city such as London, surrounded by towns and idyllic countryside with hardly a factory in sight, it’s easy to forget that an industrial behemoth lurks around the corner producing everything we buy, eat, use and trade. This behemoth runs on fossil fuels, both for the energy it needs and the feedstock it requires.

5. Solar optimism

There’s little doubt that solar PV is here to stay, will be very big and will probably be cheap, even with the necessary storage or backup priced in. But it’s going to take a while, perhaps most of this century for that to happen. During that time a great deal of energy will be needed for the global economy and it will come from fossil fuels. We will need to deal with the emissions from this.

6. Developing countries need coal to industrialize

I talked about this in a very recent post – developing countries are likely to employ coal to industrialize, which then locks the economy into this fuel. One way to avoid this is to see much wider use of instruments such as the Clean Development Mechanism, but at prices that make some sense. This then comes back to point 1 above.

7. We focus on what we can do, but that doesn’t mean it’s the best thing to do

Methane emissions are currently attracting a great deal of attention. But cutting methane today and not making similar reductions in CO2 as well means we could still end up at the same level of peak warming later this century. It’s important to cut methane emissions, but not as a proxy for acting on CO2.

8. It’s about cumulative carbon, not emissions in 2050

Much of the misconception about how to solve the climate issue stems from a lack of knowledge about the issue itself. CO2 emissions are talked about on a local basis as we might talk about city air pollution or sulphur emissions from a power plant. These are flow problems in that the issue is solved by reducing the local flow of the pollutant. By contrast, the release of carbon to the atmosphere is a stock problem and the eventual stock in the atmosphere is linked more to the economics of resource extraction rather than it is to local actions in cities and homes. Thinking about the problem from the stock perspective changes the nature of the solution and the approach. One technology in particular becomes pivotal to the issue, carbon capture and storage (CCS).

9. Don’t mention CCS, we’re talking about climate change

Following on from the point above, it’s proving difficult for CCS to gain traction and acceptance. This is not helped by the UN process itself, where CCS doesn’t get much air time. One example was the Abu Dhabi Ascent, a pre-meeting for the upcoming UN Climate Summit. CCS wasn’t even on the agenda.

10. We just aren’t trying hard enough

A new report out from the MIT Joint Program on the Science and Policy of Global Change argues that the expected global agreement on climate change coming from the Paris COP21 in 2015 is unlikely to deliver anything close to a 2°C solution. At best, they see the “contributions” process that is now underway as usefully bending the global trajectory.

The analysis shows that an agreement likely achievable at COP-21 will succeed in a useful bending the curve of global emissions. The likely agreement will not, however, produce global emissions within the window of paths to 2050 that are consistent with frequently proposed climate goals, raising questions about follow-up steps in the development of a climate regime.

Perhaps of even greater concern is the potential that the UNFCCC process has for creating lock-in to a less than adequate policy regime. They note:

Nevertheless, if an agreement is reached in 2015, going into effect by 2020, the earliest review of performance along the way might not be before 2025. In this case, an effort to formulate the next agreement under the Climate Convention, or a tightening of COP-21 agreements, would not start until 2025 or after, with new targets set for a decade or more after that. If this expectation is correct, then global emissions as far out as 2045 or 2050 will be heavily influenced by achievements in the negotiations over the next 18 months.

 

 

While all fossil fuels are contributing to the accumulation of carbon dioxide in the atmosphere, coal stands apart as really problematic, not just because of its CO2 emissions today (see chart, global emissions in millions of tonnes CO2 vs. time), but because of the vast reserves waiting to be used and the tendency for an emerging economy to lock its energy system into it.

Global energy emissions

Global emissions, million tonnes CO2 from 1971 to 2010

I recently came across data relating to the potential coal resource base in just one country, Botswana, which is estimated at some 200 billion tonnes. Current recoverable reserves are of course a fraction of this amount, but just for some perspective, 200 billion tonnes of coal once used would add well over 100 billion tonnes of carbon to the atmosphere and therefore shift the cumulative total from the current 580 billion tonnes carbon to nearly 700 billion tonnes carbon; and that is just from Botswana. Fortunately Botswana has quite a small population and a relatively high GDP per capita so it is unlikely to use vast amounts of this coal for itself, but its emerging neighbours, countries like Zimbabwe, may certainly benefit. This much coal would also take a very long time to extract – even on a global basis it represents over 25 years of use at current levels of production.

This raises the question of whether a country can develop without an accessible resource base of some description, but particularly an energy resource base. A few have done so, notably Japan and perhaps the Netherlands, but many economies have developed by themselves on the back of coal or developed when others arrived and extracted more difficult resources for them, notably oil, gas and minerals. The coal examples are numerous, but start with the likes of Germany, Great Britain, the United States and Australia and include more recent examples such as China, South Africa and India. Of course strong governance and institutional capacity are also required to ensure widespread societal benefit as the resource is extracted.

Coal is a relatively easy resource to tap into and make use of. It requires little technology to get going but offers a great deal, such as electricity, railways (in the early days), heating, industry and very importantly, smelting (e.g. steel making). In the case of Great Britain and the United States coal provided the impetus for the Industrial Revolution. In the case of the latter, very easy to access oil soon followed and mobility flourished, which added enormously to the development of the continent.

But the legacy that this leaves, apart from a wealthy society, is a lock-in of the resource on which the society was built. So much infrastructure is constructed on the back of the resource that it becomes almost impossible to replace or do without, particularly if the resource is still providing value.

As developing economies emerge they too look at resources such as coal. Although natural gas is cleaner and may offer many environmental benefits over coal (including lower CO2 emissions), it requires a much higher level of infrastructure and technology to access and use, so it may not be a natural starting point. It often comes later, but in many instances it has been as well as the coal rather than instead of it. Even in the USA, the recent natural gas boom has not displaced its energy equivalent in coal extraction, rather some of the coal has shifted to the export market.

Enter the Clean Development Mechanism (CDM). The idea here was to jump the coal era and move directly to cleaner fuels or renewable energy by providing the value that the coal would have delivered as a subsidy for more advanced infrastructure. But it hasn’t quite worked that way. With limited buyers of CERs (Certified Emission Reduction units) and therefore limited provision of the necessary subsidy, the focus shifted to smaller scale projects such as rural electricity provision. These are laudable projects, but this doesn’t represent the necessary investment in large scale industrial infrastructure that the country actually needs to develop. Rooftop solar PV won’t build roads, bridges and hospitals or run steel mills and cement plants. So the economy turns to coal anyway.

This is one of the puzzles that will need to be solved for a Paris 2015 agreement to actually start to make a difference. If we can rescue a mechanism such as the CDM and have it feature in a future international agreement, it’s focus, or at least a major part of it, has to shift from small scale development projects to large scale industrial and power generation projects, but still with an emphasis on least developed economies where coal lock-in has yet to occur or is just starting.

Some energy system home truths

One point of note on the annual calendar of energy events is the release by BP of their Statistical Review of World Energy. The data, all available to download in Excel format, covers the period up to the end of the previous year (i.e. the current data is to the end of 2013) and as such is about 18 months ahead of the equivalent data from the IEA (which is currently up to 2011 but will be updated later this year). Just about anything you might want to know on energy supply, energy consumption, CO2 emissions, fossil fuel reserves etc, is there for the interested user. In recent years BP have updated the tables to include a more comprehensive look at renewable energy as well.

The most recent release by BP was just a couple of weeks ago, so here are a few key energy/climate home truths within it;

Global CO2 emissions just keep on rising: This is hardly a surprise, but given the recent burst of capacity from the renewable energy sector there might be some sign of some levelling off at least. OECD emissions are at least flat now, but non-OECD emissions continue to rise sharply as coal use increases in particular (chart below in millions tonnes CO2 per annum).

Global emissions

 

The global CO2 intensity of energy isn’t budging: This is a bit more surprising given the influx of natural gas into the global economy and the build rate of renewables. But coal continues to surge and quite some nuclear has been shut down in Japan. The chart below shows the OECD intensity falling as renewables take off in Europe and natural gas increases in the USA, but non-OECD intensity offsets this to give a flat picture overall (chart below is in tonnes of CO2 per barrel of oil equivalent).

Global CO2 intensity of energy

 

The annual increase in fossil fuel use far exceeds the increase in renewable energy production: While many will readily quote the annual increase in renewable energy investment or annual increase in renewable energy capacity as evidence of turning the corner, the reality in terms of renewable energy produced is somewhat different. The chart below compares the annual coal increase with global solar and wind increases. For reference, the total fossil fuel increase from 2012-2013 was 183 Mtoe (million tonnes oil equivalent). The whole picture is rather distorted by the global financial crisis, but coal alone is increasing by something like 100-150 Mtoe per annum. At least for the last couple of years solar has been flat at about 7 Mtoe annual increase.

Increase in coal use

Solar and wind are growing rapidly, but the fossil fuel share of global primary energy is high and steady: Both solar and wind are in their early rapid growth phase where double digit annual increases are expected, but as they become material in the energy system at around 1% of global energy production, don’t be surprised to see this start to level off. The chart below has a log scale (otherwise solar and wind are barely discernible) and shows fossil fuel up in the mid 80′s as a percent of the global energy mix.

Energy mix fraction

Even in Germany it is taking a while for solar to make a showing: While solar PV in Germany is having a profound impact on electricity generation on long sunny days in June, the annual story when looking at total energy use is different. Solar has reached about 2% of the mix (i.e. reached materiality) and might even be showing some signs of slowing up and growing at a more linear rate (but a few more years data are needed to see the real trend). Again, this is a log chart.

German solar

 

Thanks to BP for the time and effort they put into this work every year.

Selling CCS at a climate conference

As COP 19 rolls on in Warsaw, both delegates and observers that I have talked to are seeing little agreement, despite the sometimes upbeat assessment coming from the UNFCCC. It may well be late on Friday or even Saturday before something appears from this COP.

Meanwhile the side event and external (to the formal COP) conference programmes continue. It is through these processes that participants can meet and discuss various aspects related to climate change. This being a meeting about climate change, it might be expected that attendees would be interested in hearing about carbon capture and storage (CCS), but it turns out this is a hard sell here. The problem seems to start at the COP venue itself, where the meeting room banners feature various approaches to energy and environmental management. CCS doesn’t get a mention.

 COP Banners

All I could find were Energy Efficiency, Renewable Energy Sources, Air Protection and Water & Wastewater Management.

This theme continues in many presentations, speeches, dinner conversations and panel discussions. While CCS does of course feature when organizations such as GCCSI hold events, at more general climate solution events it struggles to hold its own. Rather the focus is solidly on energy efficiency and renewables. Neither of these are anything close to sufficient solutions to the climate problem as it stands today, yet you could sometimes come to the conclusion that this is what the COP is actually about.

Energy efficiency has transformed global industry since the first day of the industrial revolution. Everything we do is possible through a combination of technology innovation and energy efficiency, from power stations to vehicles to mobile phones. The result of this has been tremendous growth, but with it has come a continuous rise in greenhouse gas emissions, particularly CO2. We use more goods and services, buy more stuff and travel further than at any point in human history and there is no apparent let up in this trend as it continues to pervade the entire global economy. But now energy efficiency is being sold as a mechanism for reducing emissions, throwing into reverse a trend that has been with us for over 200 years and fundamentally challenging economic building blocks such as Jevons Paradox. A parade of people representing business organizations, environmental NGOs and multilateral institutions will wax lyrical about energy efficiency. In one presentation an airline industry spokesperson talked about the tremendous improvements in efficiency the industry was making, through engine design, light weighting, route optimization and arrival and departure planning. There is no doubt that this is happening, but it is also bringing cheaper air travel to millions of people and of course forcing up emissions for the industry as a whole. There is no sign of this trend reversing itself. Adding a carbon price to the energy mix is the way to change this trend and still make energy efficiency improvements. 

The renewable energy story is told in a similar way. While there is also no doubt that the application of renewable energy is bringing benefits to many countries, offering distributed energy, providing off-grid electricity and supplementing the global energy supply in a tangible way, the global average CO2 intensity of energy has remained stubbornly the same since the 1980s when it dropped on a relative scale (1990 = 100) from 107 in 1971 to 100 in 1987 (Source: IEA). It was still at 100 in 2011. This is not to say it will never change, but simply advocating for renewable energy is very unlikely to take us to net zero emissions before the end of this century. The fossil fuel base on which the economy rests is also growing as demand for energy grows. As recent IEA World Energy Outlooks have repeatedly shown, much of this new demand is being met with coal. The only way to manage emissions from coal is the application of CCS, yet this seemingly falls on deaf ears here in Warsaw.

When CCS does get a mention, it is increasingly phrased as CCUS, with the “U” standing for “use”. In her one upbeat mention of CCS that I have heard, UNFCCC Executive Secretary also referred to it as CCUS. In another forum, one participant even talked about “commoditizing” CO2 to find a range of new uses. The problem is that CO2 really can’t be used for much of anything, with one modest (compared to the scale of global emissions) but important exception. The largest use today is for enhanced oil recovery where the USA has a mature and growing industry. It was originally built on the back of natural CO2 extracted from the sub-surface, but the industry now pays enough for CO2 that it can provide support to carbon capture at power plants and other facilities (usually with some capital funding from the likes of DOE).  This has helped the US establish a CCS demonstration programme of sorts.

There are other minor industrial gas uses (soft drinks), some scope for vegetable greenhouses such as the Shell project in the Netherlands (which provides refinery CO2 to Rotterdam greenhouses for enhanced growing, rather than have them produce it by burnaing natural gas) and a technology that quickly absorbs CO2 in certain minerals to make a new material for building, but all of these are tiny. The problem is that CO2 is the result of combustion and energy release and therefore any chemistry that turns it into something useful again requires lots of energy – nature does this and uses sunlight. Even if such a step were possible, this wouldn’t change the CO2 balance in the atmosphere, just as any bio process doesn’t change the overall balance in the atmosphere. Only sequestration, either natural or anthropogenic, changes that balance.

What to make of COP 19?

The flight from London to Warsaw this week gave me a chance to flick through the latest World Energy Outlook from the IEA (I couldn’t use the word “read” here as that would barely be possible on a flight to Melbourne, let alone Warsaw) and read a number of articles in the principle introductory publication to COP 19 (Climate Change – The New Economy), which amazingly enough was available in the BA Lounge at Heathrow.

 Climate Change - The New Economy

Further to these publications, UNEP released their 2013 Gap Report on Wednesday afternoon at a side event in the football stadium where the COP is being held (it doubles as a convention centre).

The COP publication contains a series of articles from various stakeholders, all extolling the virtues of one particular technology over another as a means of delivering the needed emission reductions over the coming decades (e.g. efficient lighting!!). But on opening the publication there is a two page advertisement for a much more efficient and clean coal bed methane to liquids process  under the heading “You will be amazed what we can do with coal”, followed by a two page spread from WWF titled “Help Save the Fridge”, with an expansive picture of pack ice in Spitsbergen. This rather sets the scene for the tensions that may well run right through this particular conference.

The document then continues with messages from the Polish Minister for the Environment (the COP President) and Christiana Figueres, Executive Secretary of the UNFCCC. Ms. Figueres’ article outlines with great exuberance how climate change represents “the mother of all opportunities” and goes on to note that more than 30 countries have climate legislation and 100 countries have renewable energy regulations. Of course she needs to be optimistic, how else could anyone face up to the reality of increasing global coal use and the task of delivering a deal that needs to bring global emissions to somewhere near zero later this century.

The contrast between these realities is highlighted by the UNEP Gap Report and the IEA World Energy Outlook. The Gap Report clearly recognizes that current national actions will not put us on a trajectory that looks anything like 2°C, but it then outlines a wide range of actions that UNEP claim could potentially be taken to reverse this trend. Although the Gap Report notes that timing is now very tight, it nevertheless goes on to outline reduction potentials across all the major emitting sectors (including agriculture) that add up to 17 GtCO2e per annum (middle of the range) below “business as usual” in just six years. This would take us well below current emissions and reverse a trend, almost overnight, that has been a reality for over 200 years.

 Bridge the GAP

 

The IEA also present a 450 ppm scenario, as they always have, but perhaps a more realistic scenario is their New Policies case. This scenario assumes the continuation of existing policies and measures (like the ETS in Australia !!!) as well as cautious implementation of policies that have been announced by governments but are yet to come into effect (e.g. the ETS in Korea). Given the pace of energy policy change over the last decade and the time it takes to debate, agree and implement new policies, this is probably a much fairer assessment of what is to come. Under this scenario, CO2 emissions in the energy sector rise from 31 GT in 2011, to 34.5 GT in 2020. This is quite a modest increase of just 1.2% p.a. which may well have been (almost) realized between 2011 and 2012 (see previous post), but that depends entirely on whose data is used. However, it isn’t the reduction that UNEP is saying is still possible.

This isn’t exactly news, but despite the wealth of optimistic publications and climate-speak here in Warsaw, the 2°C pathway remains out of reach. Perhaps the two page spread in the front of the COP publication was inserted as a sobering but much needed reminder of how the energy system is actually developing. Until delegates and observers come to terms with this and plan for it rather than attempt to swim upstream against the deluge, it is hard to see real progress being made. There continues to be a lot of criticism of the fact that Poland is holding this conference while at the same time continuing to run its economy on coal, but hopefully this actually helps ground the process in the difficult reality that is the current global energy system.

It is widely known that Poland gets much of its energy from coal (it is even a net exporter). Many countries do, so it is hardly alone in this regard. In my last post I illustrated the increasing global dependence on coal through a recent tender issued by two states in India for a total of 8 GW of coal. At the recent Chatham House Climate Conference, one speaker noted that current Asian coal projects will add some 250 GW of capacity by the end of this decade. These facts highlight the challenge that we face in trying to manage global emissions.

In light of the above, what should we then make of the Warsaw Communique released recently by the World Coal Association and the Polish government. Of course Warsaw is the location of the COP 19 Climate Change Conference and the Polish government will preside over the event. For many environmental NGOs and others the Communique was a step too far, with “outrage” emanating from some green groups.

On the surface, there is a contradiction between coal use and managing global emissions. After all, coal is the most carbon intense fossil fuel and its global use has risen sharply in recent years along with a corresponding rise in emissions. If it were not for this significant increase in coal use, renewable energy would actually be making inroads into the global energy mix and taking some measureable market share. In reality, it isn’t. But the Communique argues that increasing the efficiency of coal combustion can go a long way towards addressing its increased use. The text also makes some reference to carbon capture and storage and clean coal, but its focus is solidly on efficiency.

Like it or not, coal use is going to continue, but arguing for increased efficiency as an approach to managing its emissions is where the criticism should be leveled, not at the idea that coal use is potentially compatible with a very low emission future.

Increasing the efficiency of coal use is really where the whole issue of rapidly increasing global emissions started, so it is very unlikely to be the place where it stops. It was William Stanley Jevons who noted that coal use increased as efficiency improved. Jevons Paradox is the proposition that technological progress that increases the efficiency with which a resource is used tends to increase (rather than decrease) the rate of consumption of that resource. In 1865 Jevons observed that technological improvements that increased the efficiency of coal use led to increased consumption of coal in a wide range of industries. He argued that, contrary to common intuition, technological improvements could not be relied upon to reduce fuel consumption. There are more modern versions of this analysis, one of which I wrote about in a post last year.

While individual coal plants may well become more efficient as a result of a global efficiency initiative, total coal use and therefore the total accumulation of emissions over time will likely rise. This then pushes us faster towards some fixed amount of atmospheric warming (as this is directly related to cumulative emissions over time).

So the Warsaw Communique is barking up the wrong tree, even as it opens up the valid discussion about growing global coal use in the face of a desire to see emissions fall. The focus of the Communique should have been Carbon Capture and Storage, not efficiency. CCS is the bridge technology between a world that will use more coal but also wants to reduce emissions. There are more than enough people already barking up the efficiency tree, but precious few trying to hold a real conversation about CCS.

A Communique that focused on CCS would have been a real achievement and a welcome addition to the COP. Unfortunately the Communique that did emerge may turn out to be an “own goal”.

Redrawing the Energy-Climate Map

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The world is not on track to meet the target agreed by governments to limit the long term rise in the average global temperature to 2 degrees Celsius (°C).

International Energy Agency, June 2013

The International Energy Agency (IEA) is well known for its annual World Energy Outlook, released towards the end of each year. In concert with the WEO come one or more special publications and this year is no exception. Just released is a new report which brings the IEA attention back squarely on the climate issue, Redrawing the Energy-Climate Map. The IEA have traditionally focused on the climate issue through their 450 ppm scenario. While they continue to do that this time, they are also going further with a more pragmatic model for thinking about emissions, that being the “trillion tonne” approach. I have discussed this at some length in previous posts.

The report looks deeply into the current state of climate affairs and as a result fires a warning shot across the bows of current national and UNFCCC efforts to chart a pathway in keeping with the global goal of limiting warming to 2 °C above pre-industrial levels. The IEA argue that we are on the edge of the 2 °C precipice and recommends a series of immediate steps to take to at least stop us falling in. With the catchy soundbite of ” 4 for 2° “, the IEA recommend four immediate steps in the period from now to 2020;

  1. Rapid improvements in energy efficiency, particularly for appliances, lighting, manufacturing machinery, road transport and within the built environment.
  2. Phasing out of older inefficient coal fired power stations and restricting less efficient new builds.
  3. Reductions in fugitive methane emissions in the oil and gas industry.
  4. Reductions in fossil fuel subsidies.

These will supposedly keep some hope of a 2°C outcome alive, although IEA makes it clear that much more has to be done in the 2020s and beyond. However, it didn’t go so far as to say that the 2° patient is dead, rather it is on life support.

I had some role in all this and you will find my name in the list of reviewers on page 4 of the report. I also attended a major workshop on the issue in March where I presented the findings of the Shell New Lens Scenarios and as a result advocated for the critical role that carbon capture and storage (CCS) must play in the solution set.

As a contributor, I have to say that I am a bit disappointed with the outcome of the report, although it is understandable how the IEA has arrived where it has. There just isn’t the political leadership available today to progress the things that really need to be done, so we fall back on things that sound about right and at least are broadly aligned with what is happening anyway. As a result, we end up with something of a lost opportunity and more worryingly support an existing political paradigm which doesn’t fully recognize the difficulty of the issue. By arguing that we can keep the door open to 2°C with no impact on GDP and by only doing things that are of immediate economic benefit, the report may even be setting up more problems for the future.

My concern starts with the focus on energy efficiency as the principal interim strategy for managing global emissions. Yes, improving energy efficiency is a good thing to do and cars and appliances should be built to minimize energy use, although always with a particular energy price trajectory in mind. But will this really reduce global emissions and more importantly will it make any difference by 2020?

My personal view on these questions is no. I don’t think actions to improve local energy efficiency can reduce global emissions, at least until global energy demand is saturated. Currently, there isn’t the faintest sign that we are even close to saturation point. There are still 1-2 billion people without any modern energy services and some 4 billion people looking to increase their energy use through the purchase of goods and services (e.g. mobility) to raise their standard of living. Maybe 1-1.5 billion people have reached demand saturation, but even they keep surprising us with new needs (e.g. Flickr now offers 1 TB of free storage for photographs). Improvements in efficiency in one location either results in a particular service becoming cheaper and typically more abundant or it just makes that same energy available to any of the 5 billion people mentioned above at a slightly lower price. Look at it the other way around, which oil wells, coal mines or gas production facilities are going to reduce output over the next seven years because the energy efficiency of air conditioners is further improved. The fossil fuel industry is very supply focused and with the exception of substantial short term blips (2008 financial crisis), just keeps producing. Over a longer timespan lower energy prices will change the investment portfolio and therefore eventual levels of production, but in the short term there is little chance of this happening. This is a central premise of the book I recently reviewedThe Burning Question.

Even exciting new technologies such as LED lighting may not actually reduce energy use, let alone emissions. Today, thanks to LEDs, it’s not just the inside of buildings where we see lights at night, but outside as well. Whole buildings now glow blue and red, lit with millions of LEDs that each use a fraction of the energy of their incandescent counterparts – or it would be a fraction if incandescent lights had even been used to illuminate cityscapes on the vast scale we see today. The sobering reality is that lighting efficiency has only ever resulted in more global use of lighting and more energy and more emissions, never less.

doha_skyline_560px

An analysis from Sandia National Laboratories in the USA looks at this phenomena and concludes;

The result of increases in luminous efficacy has been an increase in demand for energy used for lighting that nearly exactly offsets the efficiency gains—essentially a 100% rebound in energy use.

 I don’t think this is limited to just lighting. Similar effects have been observed in the transport sector. Even in the built environment, there is evidence that as efficiency measures improve home heating, average indoor temperatures rise rather than energy use simply falling.

The second recommendation focuses on older and less efficient coal fired power stations. In principle this is a good thing to do and at least starts to contribute to the emissions issue. This is actually happening in the USA and China today, but is it leading to lower emissions globally? In the USA national emissions are certainly falling as natural gas has helped push older coal fired power stations to close, but much of the coal that was being burnt is now being exported, to the extent that global emissions may not be falling. Similarly in China, older inefficient power stations are closing, but the same coal is going to newer plants where higher efficiency just means more electricity – not less emissions. I discussed the efficiency effect in power stations in an old posting, showing how under some scenarios increasing efficiency may lead to even higher emissions over the long term. For this recommendation to be truly effective, it needs to operate in tandem with a carbon price.

The third and fourth recommendations make good sense, although in both instances a number of efforts are already underway. In any case their contribution to the whole is much less than the first two. In the case of methane emissions, reductions now are really only of benefit if over the longer term CO2 emissions are also managed. If aggressive CO2 mitigation begins early, and is maintained until emissions are close to zero, comprehensive methane (and other Short Lived Climate Pollutants – SLCP) mitigation substantially reduces the long-term risk of exceeding 2˚C (even more for 1.5˚C). By contrast, if CO2 emissions continue to rise past 2050, the climate warming avoided by SLCP mitigation is quickly overshadowed by CO2-induced warming. Hence SLCP mitigation can complement aggressive CO2 mitigation, but it is neither equivalent to, nor a substitute for, near-term CO2 emission reductions (see Oxford Martin Policy Brief – The Science and Policy of Short Lived Climate Pollutants)

After many lengthy passages on the current bleak state of affairs with regards global emissions, the weak political response and the “4 for 2°C “ scenario, the report gets to a key finding for the post 2020 effort, that being the need for carbon capture and storage. Seventy seven pages into the document and it finally says;

In relative terms, the largest scale-up, post-2020, is needed for CCS, at seven times the level achieved in the 4-for-2 °C Scenario, or around 3 100 TWh in 2035, with installation in industrial facilities capturing close to 1.0 Gt CO2 in 2035.

Not surprisingly, I think this should have been much closer to page one (and I have heard from the London launch, which I wasn’t able to attend, that the IEA do a better job of promoting CCS in the presentation). As noted in the recently released Shell New lens Scenarios, CCS deployment is the key to resolving the climate issue over this century. We may use it on a very large scale as in Mountains or a more modest scale as in Oceans, but either way it has to come early and fast. For me this means that it needs to figure in the pre-2020 thinking, not with a view to massive deployment as it is just too late for that, but at least with a very focused drive on delivery of several large scale demonstration projects in the power sector. The IEA correctly note that there are none today (Page 77 – “there is no single commercial CCS application to date in the power sector or in energy-intensive industries”).

Of course large scale deployment of CCS from 2020 onwards will need a very robust policy framework (as noted in Box 2.4) and that will also take time to develop. Another key finding that didn’t make it to page one is instead at the bottom of page 79, where the IEA state that;

Framework development must begin as soon as possible to ensure that a lack of appropriate regulation does not slow deployment.

For those that just read the Executive Summary, the CCS story is rather lost. It does get a mention, but is vaguely linked to increased costs and protection of the corporate bottom line, particularly for coal companies. The real insight of its pivotal role in securing an outcome as close as possible to 2°C doesn’t appear.

So my own “ 2 for 2°C before 2020“ would be as follows;

  1. Demonstration of large-scale CCS in the power sector in key locations such as the EU, USA, China, Australia, South Africa and the Gulf States. Not all of these will be operational by 2020, but all should be well underway. At least one “very large scale” demonstration of CCS should also be underway (possibly at the large coal to liquids plants in South Africa).
  2. Development and adoption of a CCS deployment policy framework, with clear links coming from the international deal to be agreed in 2015 for implementation from 2020.

But that might take some political courage!

Has global warming stopped?

In a report released just before Christmas, the UK Met Office lowered its decadal forecast for the expected average global temperature. The press release noted that:

 Global average temperature is expected to remain between 0.28 °C and 0.59 °C (90% confidence range) above the long-term (1971-2000) average during the period 2013-2017, with values most likely to be about 0.43 °C higher than average. The warmest year in the 160-year Met Office Hadley Centre global temperature record in 1998, with a temperature of 0.40°C above long-term average. The forecast of continued global warming is largely driven by increasing levels of greenhouse gases.

This was a noticeable change from previous forecasts and was the result of a new climate model being put into use. The upper chart shown below portrays the earlier estimate of temperature rise while the lower chart shows the new estimate. The dark blue lines show the mean, with the light blue lines indicating an upper and lower bound.

Global Annual Temperature (UK Met Office)

The revision was initially ignored in the Christmas rush, but with the festive season now over, the story has reappeared. Some media outlets interpreted this as evidence that “global warming had stopped”, given that the medium term forecast was no different to the temperature peak seen in the late 1990s. One particular columnist caused the Met Office to release a point-by-point rebuttal of his claim that the Office was “useless”.

Despite the acrimony, the revision does raise the question as to what is happening. On the one hand we are seeing an increase in the number of severe heat events globally, yet on the other there has been seemingly little change in global average temperature for much of the last decade.

The starting point must always be the fact that the increase in CO2 in the atmosphere will create a global heat imbalance, at least until a new steady state is reached (e.g. through changes in cloud cover, surface albedo etc. ). That steady state will also take many centuries to reach, given the huge inertia in the climate system. Current estimates put the size of the imbalance at about 3 W/m2 (Hansen et. al., 2009), which although small compared to the total heat arriving from the sun is significant compared to swings over the past million years that have resulted in large shifts in planetary ice cover.

The imbalance is offset to a degree by the effect of aerosols, which scatter incoming solar radiation and therefore act as coolants. There remains considerable uncertainty in the science community regarding the extent of the aerosol impact and how it might be changing over time. For example, the recent (10 years) sharp increase in coal use in China, much of which does not have sulphur emission handling, may well be adding enough sulphur (an efficient coolant) in the atmosphere to dampen the warming trend that would otherwise be seen. The charts below show the various forcings and the net effect. The large error bar illustrates the uncertainty linked with aerosols, to the extent that the red line (GHGs) and blue line (Aerosols) could cancel if at the extremes of their respective ranges.

Radiative Forcing

The proxy we use to “measure global warming” is the surface temperature record, because both a recorded history and derived history of this measurement exists and because it’s relatively easy to take the necessary measurements. In the case of the recorded history, it is typically 100-150 years, but in the UK it starts in 1659 (1772 for the daily series). But real “global warming” is far broader than this and includes ocean heating (surface and deep ocean) and land ice melting.

Take as an example land ice melting. There is good evidence that this has risen considerably in recent years, with both Greenland and Antarctica showing a combined reduction in ice mass of some 400 billion tonnes per annum. The amount of energy required to melt this much ice (to overcome the latent heat of fusion) is in the same ballpark as the energy required to raise the temperature of the atmosphere by 0.02 deg.C in a single year (a tenth of the expected decadal increase of 0.2 deg.C). A very simple (probably too simple as someone is bound to comment) analogy is a glass of iced water, which on a hot day will remain cold until the ice melts. Then the temperature starts rising rapidly – but this is not to argue that the climate system will do the same.

As the additional heat building up in the atmosphere distributes through the ocean/ice/atmosphere system it is unlikely that a uniform and unchanging temperature rise in one particular part of this system would be the result. The interaction between them and the impact of short term aerosols will likely result in volatility in the surface temperature record. This has been seen before, most recently in the post war period when temperature remained flat for about 20 years. Some have attributed this to the aerosol loading from the rapid increase in coal burning in the USA and Europe over that period, none of which had sulphur scrubbing. As sulphur emissions fell sharply with the arrival of scrubbers, so the masking effect was removed and temperatures began rising.

To simply argue that “global warming has stopped” is short sighted. The evidence to support such a claim is not there.

Is the CDM now increasing emissions?

Late last week Point Carbon reported that the Executive Board of the UNFCCC’s Clean Development Mechanism has (re)agreed to allow energy efficient coal fired power plants to be included under the mechanism. Point Carbon said:

The governing body of the U.N’s Clean Development Mechanism (CDM) has agreed to allow the most energy efficient coal-fired power plants to earn carbon credits under the scheme, causing outcry from green groups who claim the carbon market could be overrun by millions of low-quality offsets. The CDM Executive Board’s decision to lift its ban that prevented coal plants from seeking credits could allow some 40 projects, mostly based in China and India, to earn Certified Emission Reductions (CERs).

The credits are awarded to projects that cut emissions of greenhouse gases and can be used by companies and governments to meet carbon reduction targets.

. . . . .

. . . . .

The Board approved six coal plants for CDM registration before agreeing in November 2011 to suspend and review the methodology that outlines how many credits the schemes could earn, effectively stopping new projects from earning credits.

While it is always good to use a resource more efficiently, this move has potentially negative consequences for the very issue it is setting out to address, a reduction in the total emissions of CO2 to the atmosphere.

In this instance the CDM is not acting as a carbon pricing mechanism, rather it is simply incentivizing energy efficiency. In a recent paper written by a colleague (featured in a July posting), the secondary impacts of energy efficiency policy as a climate change response are explored. This particular action by the CDM Executive Board falls right into one of the problem areas.

The paper presented the argument that energy efficiency action on its own could actually result in an increase in CO2 emissions. The diagram below explains this. On the vertical axis is the cost of providing an energy service, such as electricity. At the margin, this may be driven by non-fossil provision operating within the economy, such as a wind farm or the like. On the horizontal axis is a measure of the available carbon resource base. As the price of non-carbon alternative energy rises or falls, so too does the long term availability of the fossil alternative for a given technology set. At high alternative prices, more money is available to spend on expanding the fossil resource and vice versa. As the fossil resource expands, the cumulative number of tonnes of CO2 emitted will also grow, even if it takes longer for this to happen.

Assuming a given alternative cost of providing electricity (pnon-fossil), the more efficient the power stations that burn coal, the more the electricity provider can ultimately afford to pay for the coal that is used. As more coal is used and the price rises (all other things being equal), so the resource base expands (from UC1 to UC2 in the figure above) and so does cumulative CO2 in the atmosphere. Further, as the CO2 issue is basically an atmospheric stock problem, this then drives up long term warming, even if the rate at which CO2 is emitted happens to fall in the short term.

From a climate finance perspective the CDM has been a successful mechanism, albeit with some significant operational difficulties. It has paved the way for carbon pricing in many countries and has been an important catalyst for change in some areas (e.g. landfill methane). But subsidizing more energy efficient coal fired power plants, while well intentioned, may in fact have negative environmental consequences. The CDM needs to act in its purest sense, which is as a carbon price in the energy system of true developing economies.

N.B. Just prior to posting this, a colleague noted that the Executive Board may have only allowed the issuance of CERS against already approved projects to proceed, rather than allowing future projects to apply by releasing the current hold on the underlying methodology. Hopefully this is the case, but in any case the argument still stands.

Five short stories from WEO

The IEA’s World Energy Outlook (WEO) is an annual tradition, the result of much work, data analysis and presentation. A formative volume is produced for all to read and digest, but few of  us have the time to do so in the detail required. As such we rely to some extent on IEA presentations and summary documents. One such presentation was given by IEA Chief Economist Dr. Fatih Birol in Shell Centre last week, not for Shell but for the British Institute of Energy Economics. Rather than a WEO “tour de force”, the format was closer to storytelling, or more correctly short stories. Here are five pearls that emerge from the most recent WEO:

1.  A new trend in energy efficiency

Much emphasis is placed on the need for energy efficiency from policy makers and business leaders. We hear about how well certain enterprises are doing and how we need to replace our domestic boiler, insulate our homes and use public transport. Some leaders have even argued that energy efficiency is close to a single solution to energy prices, emissions and access in developing countries. But the stark reality of energy efficiency trends at the global level is the opposite to that which is desired. There is doubtless an impact here related to the financial crisis, but even before that the trend had started shifting.

2.  Oil security concerns shift

Perhaps since the gasoline lines of the 1970’s but certainly since 9/11 in 2001, a focus of US foreign policy has been security in the Middle East and by implication oil supply security. Although Europe has long been a significant importer of oil its attention has been more focused on Russian gas supplies. But all that is due to change. In the timeframe of the WEO (to 2035) China will become the world’s largest oil importer and the US dependence on oil from outside North America will decline. With increased domestic (NA) production from oil sands and light tight oil (using a similar extraction technology to shale gas), in combination with much tougher energy efficiency standards for cars, light trucks and trucks, US import demand will fall. This could have an eventual impact on global governance as China starts to look at Middle East supply and worries about its security. 

3.  The winner was coal

In the first decade of this century, coal accounted for nearly half of the increase in global energy use, with the bulk of the growth coming from the power sector in emerging economies. Next was natural gas, then oil and after that renewable energy. Nuclear was a distant fourth. That’s an order which is almost the opposite of where we should be going with emissions reduction as a high priority.

4.   Modern energy for all

Basic energy services are an essential part of life today, yet 1.3 billion people in the world live without electricity and 2.7 billion live without clean cooking facilities. The need to correct this has become a global imperative and remarkably this could be done with almost no impact on global energy demand and global emissions.

The flip side to this story is the point that I raised back in December when the UNFCCC declared that alleviation of poverty and energy access would become a key priority with mitigation and adaptation. Although “energy for all” is a critical issue, arguably it shouldn’t be on the agenda of the UNFCCC. Their focus needs to be squarely on the other 99.3% of emissions. “Energy for all”, as the IEA have clearly demonstrated, is not a climate change issue.

5.  The weight of a world issue shifts to Chinese shoulders

One of the longstanding arguments in the global debate on climate change has been that the burden rested with developed countries in that they had created the problem during their long industrial development era. But that situation is rapidly changing. By 2035 cumulative emissions from China will have exceeded the EU and will be rapidly approaching the US. China’s per capita emissions will also match the OECD average by then. This by no means puts the USA and EU in the clear, but it does shift the burden solidly to a tripartite response. 

Thanks to Dr Birol and the IEA for a stimulating presentation.