In its enthusiasm to spread the word about the rapid uptake of renewable sources of energy, the Climate Reality Project recently circulated the picture below. It references the amount of wind energy, in particular, that is now being generated in the German State of Schleswig-Holstein.
This is Germany’s northernmost state and borders both the North Sea and the Baltic, so benefits from the windy climate that this geography offers. It is well known as Germany’s windiest area
In recent years and as part of the overall push to generate more renewable energy in Germany, considerable wind energy capacity has been installed in this region. While the current level of generation from wind is laudable, this is far from 100% renewable energy. The actual milestone that the state has reached was more accurately described as follows;
The Northern German coastal State of Schleswig-Holstein will be able to mathematically meet its electricity demand fully with renewable energy sources this year if wind yields reach at least average levels, Robert Habeck, Minister of Energy said when presenting a new study last week (May 2014).
This means that the amount of wind (and solar) electricity generated in Schleswig-Holstein will be equal to total demand, but these may not match in terms of timing. At certain times the state will export surplus wind generated electricity into the grid and at other times it will need to draw from the grid to meet its needs, particularly during periods of little wind. Nevertheless, it is quite an achievement, even though it highlights the need for a substantial backup system for renewable electricity generation.
But there is a second major reality associated with “100% renewable energy” statements. We live in a global economy that is only partly powered by electricity, to the extent that even if this electricity is generated entirely from renewable sources, the percentage of renewable energy in the final energy mix will still be less than 20% (see below). Even in OECD countries where electricity is more widely used, this only rises by a few percentage points.
The largest slice of final energy (i.e. energy that is used by the final consumer for the delivery of an energy service, e.g. mobility) is oil, used mainly for mobility in road vehicles, planes, trains and ships. Natural gas and coal are also very large, used primarily for industrial processes such as steel making, chemical plants and similar. Natural gas is also used extensively throughout the world as a residential fuel for boilers and direct home heating.
Coming back to Schleswig-Holstein, the actual percentage of renewable energy in the final mix is probably higher than most areas, not just because of its renewable electricity production but also because of the availability of biomass from the agricultural sector. In Germany as a whole, even if all the electricity was sourced from renewable energy (but it isn’t) and adding to this the biofuel and waste energy sources, a level of ~27% renewable energy would be reached. For Schleswig-Holstein with its current level of renewable generation, that probably translates to ~30% today.
That’s an impressive feat, but it isn’t 100%.
Last week the UK media put a lot of effort into reporting on the EU ban on the sale of the most powerful vacuum cleaners and then extended the discussion to possible future action on other high end appliances that consume a lot of energy, such as powerful hair dryers, kettles, toasters and so on. This was also in a week when there was an extraordinary amount of other news to report on as well, ranging from ISIS to celebrity photo leaks, so it wasn’t as if they were short of content. Yet kettles seemingly won the day.
Some media outlets were just outraged at the broader idea of Brussels interfering yet again, but others began a discussion about the effectiveness of the measure, with The Guardian resorting to the headline “Will banning high-powered kettles and hairdryers help climate change efforts?”.
The intention behind the legislation stems from the EU Energy Efficiency Directive, which in turn is part of the 20/20/20 for 2020 package – i.e. 20% reduction in GHGs, 20% renewable energy and 20% improvement in energy efficiency. The package aims to meet a number of energy related policy objectives, but the big three are climate, competitiveness and security of supply.
The Telegraph also reported on the issue and was able to quote EU Energy Commissioner, Günther Oettinger, who said that legislation preventing consumers from buying high-wattage appliances was necessary to fight climate change. To quote;
“We haven’t got round to these devices yet, we want curb power consumption,” he told Bild newspaper. “All EU countries agree that energy efficiency is the most effective method to reduce energy consumption and dependence on imports and to improve the climate. Therefore there needs to be mandatory consumption limits for small electrical appliances.”
Unfortunately it isn’t quite this simple. While using energy more efficiently may well improve EU competitiveness and, provided there is no domestic efficiency driven rebound, might even lower the dependence on imports, the impact on “climate change” will likely be zero. This is because of the “stock” nature of the carbon dioxide problem in the atmosphere and the scale of energy demand globally. Nevertheless, there is the notion expressed by many, that as efficiency effectively drives down local energy use (e.g. in a household or factory), mandating efficiency must be part of the policy mix to reduce global carbon dioxide emissions. Efficiency is a vital part part of economic growth, but it’s relationship to carbon dioxide emissions is much more complex.
I have written about this many times before and perhaps the explanation that I keep returning to as to why people accept the above notion is an examination of the Kaya Identity, which although correct in its presentation of carbon dioxide emissions in the economy leads to a flawed conclusion as to what to do about them. The International Energy Agency (IEA) followed this line of thinking in their 2013 report, Redrawing the Energy-Climate Map. Like many others, they projected what business-as-usual emissions would be by 2020 and then argued that a focus on energy efficiency could reduce this, effectively claiming an emissions reduction. Nevertheless emissions continue to rise. This reasoning appears to show energy efficiency as the most important contributing factor to change, yet in reality the original projection represents a situation that may never have occurred. The economy requires improvements in energy efficiency to drive growth, which is why efficiency is so important, but that doesn’t mean emissions reduce in the sense that the eventual load on the atmosphere is impacted. If energy efficiency really is a route to a lower concentration of carbon dioxide in the atmosphere, then it needs to pass one clear test, i.e. which known fossil fuel resource will be left in the ground (or a proposed extraction project shelved) because of this? Only then are cumulative emissions potentially impacted, which is the real driver of the climate issue.
One unintended consequence of energy efficiency policy can be to exacerbate the emissions problem. In the worst case scenario, an energy efficiency improvement in the power generation supply chain can incentivize the resource holder (e.g. coal mine) to expand the resource base and therefore increase the potential tonnes of carbon that will be released into the atmosphere.
Efficiency mandates have had both positive and negative consequences over time.
- In many instances they have spurred innovation, leading to the introduction of new products and also reducing the cost of energy services. Air conditioning is a good example, with innovation spurred by programs such as Japan’s Top Runner approach. But this has also made air conditioning much more affordable and therefore more widely available, which in turn has resulted in enormous demand for airconditioners, more settlement and development in hot arid areas and therefore more energy use. This efficiency drive has offered huge benefits to society, but one of them has not been to help manage the accumulation of carbon dioxide in the atmosphere.
- In the USA, the introduction of tough CAFE standards for vehicles in the 1970s and 1980s was partly blamed for the rise of the SUV or light truck. As these were not covered by the standard, they offered a loophole for both the manufacturers and their customers to have larger vehicles without having to invest heavily in new technology to make them more efficient.
The vacuum cleaner mandate is already having a perverse effect. There is a rush to the shops to buy a powerful machine before they vanish, which rather undermines the whole effort . . . . . .
In my most recent post outlining ten reasons why the global 2° C goal is more difficult than most commentators imagine, I referenced a new MIT report, Expectations for a New Climate Agreement, which looks at the prospects for the expected Paris COP21 agreement actually changing the current global emissions pathway. The findings don’t give a lot to be hopeful about, but nevertheless are worthy of further review.
The work has been carried out by the MIT Joint Program on the Science and Policy of Global Change, a unique coming together of disciplines ranging from atmospheric chemistry to macro-economics, all under one roof. The team has developed considerable modelling expertise, which also combines the aforementioned disciplines to allow policy feedback to impact emissions and therefore the climate model itself. For the sake of transparency, Shell is a sponsor of the Joint Program.
The first stumbling block the researchers hit in trying to assess what Paris might deliver was the current lack of detail or even a basic outline of the scope of the deal; this with just 15 months to go. While it is now widely assumed that COP21 will deliver a bottom up agreement based on contributions at a national level, there is almost no information available on accounting periods, review options, the nature of a contribution (e.g., reduction quantity, mitigation action, adaptation effort, financial aid, capacity building, technology transfer, R&D effort), terms of compliance, extension provisions and so on. Rather, all this had to be assumed, with the consequence of considerable uncertainty around the MIT findings. For example, MIT focus on a target date of 2030 for the first round of contributions, but continue the simulation of the effects of assumed contributions through to 2050.
A reference case is presented which sits within the RCP 8.5 range, the equivalent of atmospheric concentrations of CO2 exceeding 1000 ppm over the long term. This represents a 4+°C scenario by the end of the century.
Electricity generation is the single largest emitting sector in most countries and therefore features first in the resulting analysis. The MIT team argue that the majority of policy effects on emissions can be covered with just two options: controls on coal-fired generation and renewable energy mandates. In the case of coal, various regions and countries are assumed to pledge restrictions in coal generation, as outlined in the table below. Crucially though, large future users such as India are not expected to make a pledge of this type.
Renewable energy is also expected to grow strongly, with the EU reaching a 35% share in electricity generation by 2050, with other regions following, albeit not as aggressively.
In the transport sector, efficiency is the trend to watch, with vehicle efficiency improving by 2% per annum from 2020 in developed countries and by 1% per annum in the rest of the world. Similarly, in the commercial transport sector, a constant focus on efficiency in trucking fleets sees emissions between 10 and 20% lower than the reference case by 2050. However, the sector remains oil based for the entire period.
Efficiency is also the major driver in reducing household emissions from the reference case, with developed countries leading the way and achieving a 20% differential by 2050. However, for other parts of the world this falls to as low as a 5% improvement over 30 years.
Significant improvements are also assumed for land use change emissions and methane emissions.
The effect of all this is noticeable, but growth in global emissions still continues through to 2050, although at a slower pace than the reference scenario. MIT have 2050 CO2-eq emissions at about 71 Gt, vs. their estimate of 56 Gt in the year of the agreement, i.e. 2015. This outcome is compared with two other projections in the figure below. One is the Reference case used throughout this analysis. Also shown, for comparison purposes, is their estimate of emissions to 2050 if commitments made in Copenhagen are met in 2020 and sustained thereafter. By this analysis, the expected contributions from current negotiations will bring the nations part way toward an RCP 4.5 pathway (a median global temperature increase of 1.8°C over this century or about 2.6°C above the pre-industrial level) but will also leave much to be done in subsequent efforts.
The issue of subsequent efforts and the nature of any review process is where the MIT analysis carries its starkest warning. The paper notes that 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.
Finally, the analysis calls for a common pricing regime as a preference to individual national actions conducted in isolation. The benefit here is a simple one, a lower overall cost for the global economy. Alternatively, for the same cost, greater ambition could be realized.
Based on the MIT work it would appear that negotiators and their national governments still have a long way to go to be able to say that they have a deal and set of actions that is effectively dealing with anthropogenic warming of the climate system.
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.
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.
As governments struggle to find practical routes forward with positive outcomes for CO2 mitigation, attention is turning to dealing with other greenhouse gases, particularly methane. A number of methane emission initiatives are now underway or being planned, for example those within the Climate and Clean Air Coalition.
Methane seems like an obvious place to start. Anthropogenic emissions are about 250 million tonnes per annum. A tonne of methane emitted now has a short term (20 years) impact on atmospheric warming which is some 80 times greater than a tonne of CO2. This means that over the period of twenty years, the methane will add 80 times the amount of heat to the atmosphere as the carbon dioxide. But methane breaks down in the atmosphere quite quickly with a ‘half life’ of about seven years, so on a 100 year basis (with the methane effectively gone) the impact of a tonne of methane emitted now compared to a tonne of CO2 is much less. The factor falls to about 28, but even with a lower multiplier reducing methane still seems to be a worthwhile endeavour. While agricultural methane may require real lifestyle changes to bring down, e.g. less meat consumption, industrial methane emission management looks like something that can be done. Often mitigation may be a case of good housekeeping, such as monitoring and maintaining pipelines to minimize fugitive emissions.
While most articles about methane simply use the GWP (Global Warming Potential over 100 years) of 28 and present data and economics on that basis, a few dig deeper. Of note is the work of the Oxford-Martin School who present a number of policy papers on methane. In the more popular press, Burning Question author Duncan Clark has written about methane.
Both follow a similar line of reasoning. They note that methane and CO2, while both greenhouse gases, behave very differently with regards their impact on the actual goal of the UNFCCC, to limit eventual peak warming to 2°C or less. As noted, methane is a relatively short lived gas in the atmosphere, whereas CO2 is a long lived gas that accumulates in the atmosphere. This means there is another dimension to the issue, time. The point in time at which they are emitted relative to each other and the shape of any reduction pathway relative to the other is important. Duncan Clark describes this in the following way:
The difference between carbon dioxide and methane is a bit like the difference between burning coal and paper on a fire. Both generate plenty of heat but whereas the coal burns steadily for a long time and accumulates if you keep adding more, the paper gives an intense burst of warmth but one that quickly disappears once you stop adding it.
Their conclusions are similar. Peak warming is largely dictated by the cumulative amount of CO2 emitted over time. If a certain amount of methane is also emitted, the timing of that emission is what matters. Methane that is emitted today will immediately impact the rate of warming, but long before we reach peak warming (assuming CO2 emissions are eventually brought under control and warming actually peaks) the methane will have left the atmosphere and been converted to carbon dioxide, in which case it’s impact on peak warming is based only on the CO2 that remains from the methane. We may have accelerated warming in the short term but peak warming will remain largely unchanged. In this case, the warming potential of methane expressed in terms of its impact on peak temperature falls sharply and comes close to the stoichiometric conversion of methane to carbon dioxide, which is about 3, i.e. a tonne of methane when combusted or oxidised in the atmosphere gives rise to about three tonnes of carbon dioxide. Conversely, methane that is emitted much later, say when we are close to peak warming, will directly add to whatever level of temperature we happen to reach.
Does this mean that we shouldn’t bother about methane today? Unfortunately the answer is an ambiguous one. If we are confident that the world will quickly and decisively reduce CO2 emissions then of course we must also be reducing methane and other greenhouse gases as well. If we don’t, then we will still have a methane problem at the time peak CO2 induced warming occurs, in which case we will almost certainly overshoot our peak warming goal, i.e. 2°C, with the additional warming from the other greenhouse gases. But if we don’t address the CO2 issue, then addressing the methane issue now doesn’t offer a lot of benefit for later on. Instead, the benefit that we do get is less short term warming as we will have removed the intense burst of warming that the methane is providing.
Of course, since we don’t know how well or otherwise the task of CO2 mitigation will proceed (despite the fact that the track record is pretty poor), we feel obliged to act on methane now in case the CO2 mitigation picks up. At least we know that we will slow down the near term rate of warming by doing so.
Not surprisingly, it turns out that dealing with methane and atmospheric warming is just as complex as dealing with CO2. In the case of CO2, many are convinced that steps such as efficiency measures can curtail warming, when all they are probably doing is geographically or temporally shifting the same CO2 emissions such that the eventual accumulation in the atmosphere is unchanged. In the case of methane, treating it as if it were interchangeable with CO2 but with a convenient and high multiplier may make us feel that modest effort is delivering great benefit, when it may be the case that little benefit is being delivered at all.
In both cases it is the science that we have to look at to decide on the appropriate strategy, not expediency and certainly not sentiment.
As we head towards COP21 in Paris at the end of 2015, various initiatives are coming to fore to support the process. So far these are non-governmental in nature, for example the “We Mean Business” initiative backed by organisations such as WBCSD, CLG and The Climate Group. In my last post I also made mention of the World Bank statement on Carbon Pricing.
This week has seen the launch of the Pathways to Deep Decarbonization report, the interim output of an analysis led by Jeffrey Sachs, director of the Earth Institute at Columbia University and of the UN Sustainable Development Network. The analysis, living up to its name, takes a deeper look at the technologies needed to deliver a 2°C pathway and rather than come up with the increasingly overused “renewables and energy efficiency” slogan, actually identifies key areas of technology that need a huge push. They are:
- Carbon capture and storage
- Energy storage and grid management
- Advanced nuclear power, including alternative nuclear fuels such as thorium
- Vehicles and advanced biofuels
- Industrial processes
- Negative emissions technologies
These make a lot of sense and much has been written about them in other publications, except perhaps the second last one. Some time back I made the point that the solar PV enthusiasts tend to forget about the industrial heartland; that big, somewhat ugly part of the landscape that makes the base products that go into everything we use. Processes such as sulphuric acid, chlorine, caustic soda and ammonia manufacture, let alone ferrous and non-ferrous metal processes often require vast inputs of heat, typically with very large CO2 emissions. In principle, many of these heat processes could be electrified, or the heat could be produced with hydrogen. Electrical energy can, in theory, provide this through the appropriate use of directed-heating technologies (e.g. electric arc, magnetic induction, microwave, ultraviolet, radio frequency). But given the diversity of these processes and the varying contexts in which they are used (scale and organization of the industrial processes), it is highly uncertain whether industrial processes can be decarbonized using available technologies. As such, the report recommends much greater efforts of RD&D in this area to ensure a viable deep emission reduction pathway.
Two key elements of the report have also been adopted by the USA and China under their U.S.-China Strategic and Economic Dialogue. In an announcement on July 9th, they noted the progress made through the U.S.-China Climate Change Working Group, in particular the launching of eight demonstration projects – four on carbon capture, utilization, and storage, and four on smart grids.
Reading through the full Pathways report I was a bit disappointed that a leading economist should return to the Kaya Identity as a means to describe the driver of CO2 emissions (Section 3.1 of the full report). As I noted in a recent post it certainly describes the way in which our economy emits CO2 on an annualised basis, but it doesn’t given much insight to the underlying reality of cumulative CO2 emissions, which is linked directly to the value we obtain from fossil fuels and the size of the resource bases that exist.
Finally, Sachs isn’t one to shy away from controversy and in the first chapter the authors argue that governments need to get serious about reducing emissions;
The truth is that governments have not yet tried hard enough—or, to be frank, simply tried in an organized and thoughtful way—to understand and do what is necessary to keep global warming below the 2°C limit.
I think he’s right. There is still a long way to go until COP21 in Paris and even further afterwards to actually see a real reduction in emissions, rather than reduction by smoke and mirrors which is arguably where the world is today (CO2 per GDP, reductions against non-existent baselines, efficiency improvements, renewable energy goals and the like). These may all help governments get the discussion going at a national or regional, which is good, but then there needs to be a rapid transition to absolute CO2 numbers and away from various other metrics.
There is a well-known saying that “Politics makes strange bedfellows”. In recent weeks, carbon pricing has seen its share of media exposure and strange bedfellows, although this shouldn’t come as a surprise given that it is all about politics anyway. The good news is that this much maligned and misunderstood subject is finally getting some solid airtime, albeit from some interesting supporters.
The re-emergence of this subject has been building for some time now, but perhaps was highlighted by the June 21st op-ed by Hank Paulson in the New York Times. Paulson served as Secretary of the Treasury during the recent Bush administration, following many years at the helm of Goldman Sachs. Although his article was in part directed at the launch of the recent Risky Business report, Paulson used the opportunity to reach out to the Republican side of the political spectrum in the US and argue that a carbon price (a tax in this case) was “fundamentally conservative” and “will reduce the role of government” rather than the opposite which many opponents argue. At least in my view, he is right. Intervening in the energy mix, forcing certain technology solutions, requiring a given percentage from a particular energy source and so on are all big government steps towards addressing emissions. A carbon price is clean and simple and can get the job done.
On the opposite page of the New York Times was the reality check from Nobel Prize winning economist Paul Krugman. While Krugman made it clear that Paulson had taken a “brave stand” and that “every economist I know would start cheering wildly if Congress voted in a clean, across-the-board carbon tax”, the sobering reality from Krugman is “we won’t actually do it”. Rather, he imagines a set of secondary measures, the “theory of the second best” as he calls it, including vehicle efficiency standards, clean energy loan guarantees and various other policy measures. My view is that while all of these are important parts of a coherent energy policy, they are approaching third best when it comes to CO2 emissions.
Meanwhile, another strong advocate of carbon pricing has emerged, namely the World Bank. They have never been silent on the issue and indeed have pioneered policy approaches such as the Clean Development Mechanism of the Kyoto Protocol, but this time they have gone much further and are being considerably louder and bolder. The World Bank have produced a statement, “Putting a Price on Carbon” and have called on governments, companies and other stakeholders (e.g. industry associations) to sign up to it. The statement calls for:
. . . the long-term objective of a carbon price applied throughout the global economy by:
- strengthening carbon pricing policies to redirect investment commensurate with the scale of the climate challenge;
- bringing forward and strengthening the implementation of existing carbon pricing policies to better manage investment risks and opportunities;
- enhancing cooperation to share information, expertise and lessons learned on developing and implementing carbon pricing through various “readiness” platforms.
This is all good stuff, but of course now it needs real support. A further look at the World Bank website illustrates the growing patchwork of activity around carbon pricing. It’s quite heartening.
To finish where I started, the strange bedfellows, perhaps nothing could be closer to this than seeing Australian mining magnate and now Member of Parliament, Clive Palmer, on the same stage as climate crusader Al Gore. Only weeks before Mr Gore had made the very clear statement that “We must put a price on carbon in markets and a price on denial in politics”, but nevertheless stood with Palmer as he announced that he would support the Government’s decision to repeal the Carbon Pricing Mechanism (there isn’t a colour for repeal on the World Bank map). I don’t think Mr Gore was particularly happy about that bit, but hopefully was there for the follow-on, where Palmer announced that his party would require a latent ETS to be established in Australia for use once Australia’s main trading partners were also pricing carbon. Given PUP’s (Palmer United Party) hold on the balance of power in the Australian Senate, this might at least mean that Australia will stay in the ETS club and emerge again as a player in the years to come. However, considering the fact that New Zealand, the EU, parts of China, Pacific North America (i.e. California, British Colombia), Japan and (soon) South Africa all have some sort of carbon price, latency may indeed be short lived.
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).
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).
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.
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.
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.
Thanks to BP for the time and effort they put into this work every year.