Perhaps the best thirty minutes I spent at COP18 in Doha was listening to a presentation by Myles Allan, Professor of Geosystem Science in the School of Geography and the Environment, University of Oxford and Head of the Climate Dynamics Group in the University’s Department of Physics. The presentation was given at the opening of the WBCSD Business Day on Monday 10th December and focused on the root issue that must ultimately be dealt with, the accumulation of carbon dioxide in the atmosphere. Myles made the point, very clearly with the aid of props, that while the UNFCCC and others argue endlessly about the flow rate of CO2 into the atmosphere (i.e. the emissions at some point in time), that fossil carbon continues to add to the carbon stock in the biosphere and that this stock is linked directly with global temperature, ocean acidity and so on. A portion of his presentation is available on YouTube. In short, the CO2 issue is a stock problem, not a flow problem. Dealing with it in terms of flow will not resolve the stock issue, at best it may delay it by a few years. At the current rate of accumulation, the 2 deg.C stock equivalent is passed in about 2043.
Myles concluded with just one key observation: that the logical conclusion of the stock approach to climate change (rather than the flow approach) is that CCS is the game changing technology. This comes from the view that the global use of fossil fuels for energy will not go away (and possibly not even decline) and therefore, to prevent the stock of carbon continuing to accumulate in the biosphere, fossil carbon must be returned to its source, the geosphere. As such, the focus of efforts in policy circles should be in getting CCS going as fast as possible.
Against this background came the news of last Friday from the European Commission regarding the award of the 1st round of NER300 project funding for CCS and novel renewable energy projects.
Nearly all RES projects were confirmed. Most CCS projects were, however, not confirmed by the Member State concerned, and therefore could not be retained. Member States were unable to confirm the projects for various reasons: in some cases there were funding gaps, while other CCS projects were not sufficiently mature to allow for such confirmation under the first call for projects.
Only one CCS project was mentioned, but this had already been withdrawn, so no CCS projects made it through to receive funding through the 1st call for projects. There is at least the small consolation that the money earmarked for the withdrawn CCS project will roll through to the 2nd call for projects, but this guarantees nothing for CCS. By contrast, 23 renewable energy projects are listed in the Commission document.
But the NER300 is a mechanism that was initially proposed to support CCS and underpin the construction of some ten demonstration projects across the EU.
It was first suggested in early 2008 by various proponents of CCS both within and outside the EU Parliament and consisted of a pool of 500 million allowances which could be drawn on in exchange for future stored CO2. In very simple terms, it would “multiply the prevailing carbon price”, which was seen as a necessary early step to kick-start this key technology. Throughout the negotiations surrounding the Energy and Climate package, the mechanism morphed somewhat: it linked itself to the New Entrant Reserve (NER), adopted novel renewable technologies, fell to as low as 100 million allowances at one point but ended up at the 11th hour as the final gavel fell at 300 million allowances (hence the name – NER300). As I described back in June;
The mechanism, in combination with a robust underlying carbon price, meant that a viable demonstration programme could emerge. The 300 million allowances could conceivably generate €9 billion in funds, which meant up to €1.35 billion for some projects (i.e. the 15% limit). With potential Member State co-funding adding additional support, a 500 MW end-to-end CCS power station was even feasible and some of the projects originally submitted to the Commission for consideration were on this scale.
But the collapse of the CO2 price in the EU throws a huge question mark over the viability of the programme. So far the European Investment Bank (charged with monetizing the 300 million allowances) have sold over a 100 million allowances at a price of around €8.10 each. That’s a good effort in the current market, but it substantially changes the economics of a project. Now the maximum grant that any given project can collect is €360 million and it will be operating in a €6 CO2 market. Even with matching funds from the relevant member state, now much more challenging due to EU financial circumstances, a large scale project looks very unlikely. Large scale early CCS projects require a CO2 price in the range €60-100, not €20-25 (assuming €6 ETS price, maximum NER 300 financing and some member state co-financing).
The selection process for projects will proceed over the balance of this year with an announcement expected in December, but at least for the CCS part of the NER300 (innovative renewable energy projects are also supported) one wonders how this will pan out.
This had all the hallmarks of a train wreck waiting to happen, with the observers watching from the sidelines. Sadly, despite the efforts of groups such as ZEP, the trainwreck is now underway. The EU Commission has followed the NER300 rules to the letter (which arguably it has to), the market isn’t providing the necessary carbon price for CCS investment and Member State support is lacking given the EU financial situation.
The end result is the sad but unfortunately predictable absence of CCS projects from a funding mechanism specifically designed to support them. While CCS projects will still develop in the UK, Australia, Canada and the USA, no single country has the ambition of the original EU demonstration programme. The NER300 process will continue but CCS may fare no better in Round 2 if action isn’t taken. The Commission and Member States need to reflect on the outcome of the first round of the NER and learn the lessons, perhaps looking again at the conditionality of the funding to ensure that the second round awards result in an overall balance between renewables and CCS across the mechanism as a whole. The EU Commission has a real challenge in front of it to rescue the situation, although with 200 million allowances now allocated in the first round (albeit with some money returning for the failed CCS project), there is limited resource remaining for a meaningful demonstration of CCS.
If CCS is the game-changing technology for the climate issue, then we may well be on our way to a very different but much more significant trainwreck.
David,
First, I am very much enjoying reading your blog. I only just discovered it a week ago and have been reading through past entires. Please keep it up!
Regarding this post in particular, it seems as if it is very difficult to get people to take climate change seriously. This immediately-available transformative technology, CCS, is being thrown under a bus. What can we do that we are not already doing to encourage more action and awareness of this global challenge?
Furthermore, as a new hire within Shell, what can I do to help?
Permission to use image in my slide talk.
http://www.coal2nuclear.com/Repairing%20the%20Air.pdf
Thank you,
James P Holm, PE.
Yes, that’s fine to use the image.
Your saying, the ship isn’t sinking because of the big hole in the side, it’s sinking cos it’s half full of water! Sure we have to take CO2 out of the air ( and the ocean ), but not putting so much in would be a good first step
Remind me – what’s wrong with 1000 ppm of CO2 in atmosphere? We can sometimes get extreme weather, Earth being warmer by hard to detect amount, sea level rising by millimetres and water becoming less basic? Scary. On the other even small warming of UK would be beneficial but 4C would be great, more free plant food is good for everybody. Having few extreme winters in the last years I’m glad for “mild” winter this year – whatever is the cause. Sea level is no problem here and marine live is under pressure from overfishing and pollution, not less basic water.
Jiri,
You are more than welcome to continue to make poorly informed comments and I will doubtless continue to approve them for publication on this site, but at the end of the day you need to be mindful of the underlying physics behind rising levels of CO2 in the atmosphere. It will continue to result in a heat imbalance which will cause the ocean/atmosphere system to warm. A 1000 ppm world could be some 6-10 deg.C warmer than today as was the case in the Eocene period.
David
If we base the calculation on IPCC estimation of climate sensitivity (3+-1.5) then the global warming expected at 1000ppm world would be between 1.9 and 5.6C. CO2 concentrations several times higher than 1000ppm are quite normal during the last 500mil years of the Earth history. It took some time for plants to develop and dispose all easy to use carbon. Surprisingly to you, higher temperature than today were also normal few thousand years ago when CO2 concentration was already abnormally low (thanks to plants).
As you might expect I don’t really believe IPCC estimates. I’m supporting those scientists who estimate climate feedback close to 1. This means climate sensitivity around 1.2 and potential warming in 1000ppm world of 1.5C. This is consistent with warming observed over the past 150 years.
I would understand people with limited knowledge who don’t want to challenge IPCC claims. But, in your case you are far above their estimations. You are more alarmist than IPCC. I suspect that your alarmism is not based on your knowledge but rather on ideology.
Jiri,
You have been very active today and your vitriol continues. I don’t know where you get the idea that I have my own estimates regarding potential warming – perhaps it is the reference to the Eocene period. If we manage to raise GHG levels to 1000 ppm CO2e, then by the end of this century we could well see warming of some 3-4 deg.C, but that is not the new equilibrium. I agree that 10 deg.C is very high and would require a climate sensitivity at the upper end of current estimates, but temperatures would continue to rise well past 2100 in both these cases. This is shown in the IPCC 4th Assessment Report for the A1F1 and A2 scenarios (high fossil fuel use).
David
Jim Holm, I think that you have some major errors in you presentation (or whoever done that). First, I seriously doubt that without CO2 the average Earth surface temperature would be 0F (-18C). This is impossible. The most important GHG is water vapour and there are other GHGs so the green house effect would be still in work even without CO2. Also without CO2 or even at concentration below circa 250ppm the photosynthesis would stop and the life as we know would end. So, this is purely hypothetical situation as I don’t think there is any other significant process which could remove CO2 from atmosphere (apart from CCS, which is manmade).
Well, my last sentence is not entirely true as there is one physical process which takes up a lot of CO2. It is ocean. At the beginning of each ice age the ocean cools and consumes (dissolves) a lot of CO2. The CO2 concentration usually drops to level where photosynthesizing plants have difficulty to survive. This has serious impact on vegetation and glaciation. Fortunately, this appears to be remote possibility now thanks to the fossil fuel.
Still, I have nothing against thorium reactors or producing liquid fuel from CO2. With cheap energy and expensive carbon this can be a great idea how to make money. We need cheap energy and expensive carbon to make it work.
David, why you think my comments are vitriol? Because I call you on your unjustified alarmism? IPCC scenarios are just scenarios. They are not real. They are just computer games. Those computer games show wide spread of potential global warming but it would be fair to say that even these games don’t always end up in catastrophic global warming. On the other side the observations show quite benign and slow warming so far. No catastrophe is happening. When I was very young I can remember how people were scared what happens after the year 2000. Will we survive? Well, we have survived quite well. Will we survive 1000ppm CO2? No doubt we will. The scientist should strive to make good predictions. It looks to me that IPCC strive to run some political agenda instead. They do not represent development in the climate science. We saw lot’s of hidden agenda in previous IPCC reports and I’m afraid we continue to see that in the next report as well. Even the basic idea of intergovernmental panel run by UN is weird. OK, Shell sees that as opportunity to develop a new business stream but at least they should strive to base their business case on solid science.
You spend too much time lobbying for carbon trading and too little on studying the subject.
BTW, if this long equilibrium theory (or missing heat or heat in pipelines) was true and we would see continuing warming even after the climate forcing levels off, this would be also valid for grand solar maximum we saw over the previous 50 years. Even though the solar activity dropped recently the 50 years of extreme sun activity would do the job for years to come. Anyway, there must be a reason why we see no acceleration in global warming for about 100 years. IPCC can’t just say that this gentle warming will accelerate in the future with no proof whatsover and without any plausible theory and observations confirming this theory. Whithout this it is premature to take any expensive and futile action.