Category: Green growth

How might Article 6 work in practice?

dchone October 11, 2019

This is a critical year for Article 6 of the Paris Agreement. The ‘rule book’ wasn’t agreed at COP24 in Katowice, so the focus of negotiations at COP25 in Santiago will largely be on Article 6. This is the section of the Paris Agreement that sets out the framework under which cooperative action can be organised between Parties with a view to achieving their Nationally Determined Contributions (NDC). While cooperative action could take many forms, Article 6 is being negotiated as a carbon trading framework. There are very significant benefits in doing this, as recently shown in new work from the University of Maryland.

There are a number of interpretations of how Article 6 should work, hence the lack of agreement in Katowice, but the text in the Paris Agreement is really very clear. As I recently discussed, the underlying issue is the implication of the rules. A simple illustration helps explain Article 6 and can show why it is so important, why robust accounting is essential and why it can help deliver an overall reduction in global emissions.

In the illustration below, we have three countries (A, B and C) and the aviation sector. They each have a goal of zero emissions, but that is not the current state they find themselves in.

County A still has considerable emissions (100 units) from its heavy industry sector, but with no local abatement opportunities. As such, it is stuck and unable to make further reductions.
Country B has reached zero emissions but has not developed local options to easily sequester carbon dioxide as it has no need to do so.
Country C is undeveloped and has no emissions, but needs to develop energy infrastructure.
The aviation sector still has emissions (200 units) despite efficiency improvements and perhaps some fuel substitution. It has no immediate opportunities for further reductions.

These countries and sector decide to make use of Article 6 of the Paris Agreement to achieve their goals, enhance ambition and achieve further reductions. Investors develop a large scale air capture project in Country B, with geological storage. Emissions for Country B fall to -100, but they transfer units to Country A using Article 6.2 which underpins the original investment. Both A and B adjust their inventories accordingly with each now achieving net-zero emissions.

A similar transaction is executed between Country B and the aviation sector, but this time using afforestation as a natural sink. Country B remains at net-zero emissions as it adjusts its inventory and the aviation sector emissions can now be reported as 100 units. The transfer of nature based units, again using Article 6.2, has delivered real reductions for the sector.

But aviation still needs to take further action and as such encourages project developers to implement an avoided emissions project in Country C using the mechanism under Article 6.4. The project investment delivers reduction units that are then sold to the sector, bringing emissions to net zero. However, because of the need for a corresponding adjustment to their own inventory under the rules of 6.4, Country C now finds itself with 100 units of emissions, despite having no physical emissions in the country itself. This is because of the strict accounting rules of the Paris Agreement that are designed to ensure an eventual net zero outcome.

So in this example, Country C opts for a transfer from Country B under Article 6.2, with Country B further developing its natural sink potential to allow the transfer to take place.

After making all the local reductions that were possible and then utilizing the cooperative trading approaches offered by Article 6, the overall outcome across the countries and the sector is net zero emissions, which aligns with their desired goals.

Article 6 has delivered in many ways;

An overall reduction in global emissions has been achieved, with emissions falling from 300 units to net zero.
Ambition has been enhanced, with the countries and the sector all able to confidently target a net zero emissions outcome instead of stopping short of that goal.
Economic activity across the countries has been enhanced, with jobs and investment resulting from the transfers and project activity. Importantly, no country or the sector has had to reduce its economic output to meet emissions goals.
No double counting has taken place and clear carbon emissions accounting has ensured that the actions are visible to all and pass the critical test of environmental integrity.
Project developers have made use of the capabilities of Article 6.2 and 6.4 and invested with confidence, knowing that the transaction and supporting accounting systems behind Article 6 would deliver a return on their investment, without delay and without withholding of units.
The transaction under 6.4 delivered valuable revenue to another developing country through its share of proceeds provision (Article 6.6).

While the above is a very simplified illustration, it nevertheless shows the importance of the market oriented aspect of Article 6 in delivering the goals of the Paris Agreement. In addition, there is Article 6.8 which will be used to deliver non-market oriented approaches, such as the Kigali Amendment to the Montreal Protocol. With regards the market provisions of Article 6, early and clear implementation of the rule-book, embracing the clear intent of the Paris Agreement as shown above, is the essential next step.

Stock, flow and cobalt. Issues for the EV transition.

dchone July 11, 2018

In Shell’s recently released Sky Scenario, around 1 billion electric passenger vehicles (EVs) could be on the roads as early as the 2040s. These 1 billion vehicles will each need a battery and while there are different battery chemistries available, it is likely that these batteries will need to include the vital element cobalt, a material that confers upon the battery good cycle ability and power output.

The new Tesla Model S has a Nickel-Cobalt-Aluminium Lithium Ion battery which contains just under 5 kg of cobalt, the lowest cobalt content of the various batteries that Tesla use.

While cobalt use per battery has fallen, with one manufacturer releasing information on the possible development of a cobalt free battery, some industry insiders believe that the Tesla Model 3 use of 10% cobalt in the battery cathode (8:1:1 Nickel:Cobalt:Manganese) is the minimum required for safety and battery longevity reasons.

If 8:1:1 were to be the dominant battery chemistry in the coming decades, an interesting dilemma emerges for automakers as they pursue electric vehicle development and rapid deployment. A look at global cobalt reserves, published recently in the BP Statistical Review of World Energy but drawing on data from the US and British Geological Survey, shows a current estimate of some 7 million tonnes, or 7 billion kilograms of cobalt. This is against current global production of 140 thousand tonnes, which has doubled over the last decade, giving a reserve to production ratio of 52 years.

The cumulative amount of cobalt (the stock) needed to be mined for passenger vehicle batteries will depend on the eventual number of cars in service (or batteries produced) and the amount of cobalt per battery. This stock is unrecoverable until cobalt is no longer used in batteries (or until cars transition again to some other propulsion mechanism), but it is reused repeatedly as older cars are scrapped, the cobalt recovered and recycled as new cars are built (the flow).

As the EV transition depicted in Sky gets going, the draw on cobalt increases and the stock builds. For example, by 2040 in Sky, 12.7 trillion vehicle kilometres are supplied by EVs, which could mean about 800 million to a billion vehicles on the basis of current usage patterns. At 4 to 5 kg each, that would require nearly 4 billion kilogrammes of cobalt, or more than half the global reserves. Before 2050 in Sky, the current global reserve of cobalt would be exceeded by EV deployment, without considering all the other demands for cobalt.

The above model assumes 100% recycle of cobalt as well, although this has little early impact in that recycle in 2040 will only come from production of EVs in the 2020s, which is still low compared to the potential 2040 stock. In any case, recycle is largely about annual flow, not stock. But an alternative model could emerge, which would see a much lower stock requirement for cobalt and therefore lessen the need to find alternatives, even with the same demand for passenger transport.

Autonomous vehicles offer the potential for vehicle sharing. If autonomous technology emerges rapidly, then the total number of cars in society can sharply decline under a vehicle sharing model, in that each car is used for a high percentage of the day, rather than parked awaiting the single use by its owner. While an individual car would likely have a much shorter life, say two to three years instead of fifteen, the stock requirement for materials such as cobalt would be much lower.

If by 2040 the number of EVs serving the above 12.7 trillion km demand is 100 million instead of 1 billion, then each vehicle would be driving 127,000 km per annum, leading perhaps to a two-year life after which there is either major refurbishment or even replacement. Annual production, or flow, of vehicles might remain largely unchanged, depending on the ratio of vehicles shared to vehicles owned and the life of a single vehicle under a high usage scenario. Whether the trend is towards refurbishment or replacement, the important materials such as cobalt are recycled and the total stock required by society is a fraction of the traditional ownership model. In a 100 million vehicle system, the required stock of cobalt could be as low as 500 million kilograms, just a fraction of current estimates of global reserves.

The above discussion introduces a new dimension into EV scenario thinking for auto manufacturers. The future might be dictated more by total vehicle stock considerations, in that manufacturers could encourage an alternative ownership model as the more cost-effective route forward to balance the demands on certain materials like cobalt. The alternative requires a continual search for different battery designs or seeking new deposits of hard-to-find minerals.

Note: Scenarios are not intended to be predictions of likely future events or outcomes and investors should not rely on them when making an investment decision with regard to Royal Dutch Shell plc securities. Please read the full cautionary note in http://www.shell.com/skyscenario.

Not all roadmaps follow viable roads

dchone April 5, 2017

There is certainly concern in the academic community that the world is following an emissions pathway which will result in overshoot in comparison with the Paris goal to limit warming of the climate system to well below 2°C. Because of this, considerable effort is being expended on developing pathways and roadmaps that may help change that course; but not all are viable. One example emerged recently from a group of researchers representing the Stockholm Resilience Centre, the Royal Swedish Academy of Sciences, the International Institute for Applied Systems Analysis, the Potsdam Institute for Climate Impact Research and the Australian-German Climate and Energy College, School of Earth Sciences, University of Melbourne. This is a distinguished group, without a doubt.

They propose a global decadal roadmap based on a simple heuristic — a ‘carbon law’— of halving gross anthropogenic carbon-dioxide emissions every decade. In addition, they propose an expansion of the renewable energy base by keeping the historical doubling times of around 5.5 years constant in the next three decades. This would yield full decarbonisation in the entire energy sector by ~2040, with coal use ending around 2030–2035 and oil use, 2040–2045. The proposed transition also calls for rapidly scaling up carbon dioxide removal by technical means from zero to at least 0.5 GtCO2/year by 2030, 2.5 by 2040, and 5 by 2050.

While the pathway proposed and its component parts do illustrate the Herculean (their terminology for the period 2020-2030) efforts required to limit warming to 1.5°C, their proposal also stretches past the point of feasibility. This starts with the premise that carbon emissions must halve each decade, which means the biggest effort is required in the first decade. This is the opposite of an outcome that a technology pathway might deliver. For example, some months ago I looked at the theoretical pathway required in the passenger automobile sector to rapidly reduce emissions to near zero in under 40 years [Link]. If this is translated into emissions for that sector, on the basis of each internal combustion engine passenger vehicle doing 10,000 miles per annum and emitting some 4 tonnes of CO2, then the emissions profile would be approximately as given in the chart below (Blue line). The red dotted line represents a halving of emissions each decade, as the ‘carbon-law’ pathway proposes. As manufacturing of electric vehicles scales up in the early years, the impact on emissions is small, but after 2030 when the internal combustion engine vehicle stock begins to fall sharply, the emission reduction accelerates. The biggest drop in emissions is in the decade 2040-2050, not 2020 to 2030 as the ‘carbon law’ dictates.

The second major issue with the proposed roadmap is the notion of doubling of renewable energy capacity every five or so years. While this has been the case in the early years of renewable energy deployment, it will not continue through to full deployment. This is simple to test by considering the last doubling, when renewable energy capacity would need to shift from half its final level of deployment to full deployment in just five years. This would require an extraordinary scale up of manufacturing capacity for wind turbine blades and solar PV cells. But after five years that capacity would then be redundant as no further major deployment of renewable energy would be required. The investors in the manufacturing facilities would be left with stranded assets had the investments been made

While it is certainly the case that initial deployment of new energy technologies can take place at exponential rates, once the technology reaches material deployment (>1% of the energy system), the rate increase begins to decline, although the absolute level of deployment may well continue to rise. This is a typical pathway for growth rates and has been seen at national level, for example in China. The very high annual growth rates of a decade ago have passed, but absolute annual growth is higher today than it was in 2007.

Limiting warming to well below 2°C or even to 1.5°C will certainly require very rapid change in the energy system, but this may still follow historic patterns of deployment, even if the overall rate of change can be accelerated to levels not seen in prior transitions. Those transitions have followed hard to break deployment ‘laws’ that may yet guide the current transition.

What can really be done by 2050?

dchone February 11, 2015

The calls for action are becoming louder and bolder as the weeks continue to countdown towards COP21 in Paris. Perhaps none have been as bold as the recent call by The B Team for governments to commit to a global goal of net-zero greenhouse gas emissions by 2050, and to embed this in the agreement to be signed at COP21 in Paris.

The B Team is a high profile group of business and civil society leaders, counting amongst its number Richard Branson (Virgin Group of Companies), Paul Polman (CEO of Unilever) and Arianna Huffington (Huffington Post). The team is not just looking at climate change, but the even larger challenge of doing business in the 21^st Century; shifting from Plan A which requires business to focus on profit alone, to Plan B which encompasses a more holistic set of objectives around financial performance, sustainability and business as a force for good to help solve challenging social and environmental goals. It is perhaps the next big step forward in what was originally termed “sustainable development”.

Without wanting to question the broader motives of The B Team, I do challenge their view that the climate issue can be resolved in just 35 years. For some this may sound like a long time, but it is the span of just one career. In fact it is the span of my career in the oil and gas industry from when I started work in Geelong Refinery in Australia in 1980. At least in one industry today, IT, everything has changed in that time, but that is not true elsewhere. In 1980 there were no personal computers in Geelong Refinery; today it probably can’t run without them, although the distillers, crackers and oil movement facilities being run by them have hardly changed and in many instances are precisely the same pieces of equipment that were running in 1980. In almost every other industry, the shift has been gradual, perhaps because of the installed base which of course wasn’t an issue for personal computing and mobile telephony. I suspect that this is true in Mr Polman’s own industry (household products) and it is certainly true in Mr Branson’s. In 1980 I flew on my first trip to London on a 747 and today I am in San Francisco, having arrived here on a 747, albeit a slightly longer, more sophisticated, efficient and larger capacity one than the 1980 model, but still a 747 burning many tons of jet fuel to get here. During his time in office which started with the election in 1980, Ronald Reagan replaced the existing Air Force One 707 with a 747 which still flies today but which Mr Obama has just announced will be replaced with a 747-8. Those planes will likely fly for some 30 years, as will all the other planes being built today, with many just entering the beginning of their production runs (787, A350, A380), rather than heading towards the end as we might be with the 747 series. There are also no serious plans for the jet engine to run on anything other than hydrocarbons for the foreseeable future (i.e. 50+ years) and even the attempts to manufacture bio-hydrocarbon jet fuels are still in their commercial infancy.

So why would we think that everything can be different in just 35 years? There is no doubt that to quickly and decisively solve the climate issue and have a better than even chance of keeping the surface temperature rise below 2°C that we need to do this, but that doesn’t mean we can. To start with, there has to be tremendous political will to do so and to be fair, this is clearly what The B Team is trying to foster by making the call. But political will isn’t enough to turn over the installed industrial capacity that we rely on today, let alone replace it with a set of technologies that in some instances don’t exist. The development and deployment of radical new technologies takes decades, with the energy industry able to make that change at about half the rate of the IT industry. Even the latter has needed nearly 50 years to invent (ARPANET in 1969) and extensively deploy the internet.

We are now seeing real progress in the sale of electric cars, but even there the numbers don’t stack up. To completely outpace conventional vehicle manufacture and replace the entire legacy stock of on-road vehicles will take about 50 years, assuming a ramp up of global electric car production of at least 20% p.a. every year until all internal combustion engine manufacturing is phased out. While this might be conceivable for personal transport, the progress on finding an alternative for heavy transport, including ships, is slow.

For medium to heavy industry that relies almost completely on hydrocarbon fuels for high temperature operations in particular, there are no easy alternatives. Electricity could be an option in some instances, but almost all operations today choose coal or natural gas. For smelting, coal is essential as it provides the carbon to act as a reducing agent for the chemical conversion of the ore into a pure metal.

Perhaps the area in which rapid progress will be seen is electricity generation, where a whole range of zero emission technologies exist. These include wind, solar, geothermal, tidal, nuclear and carbon capture and storage. But even with complete success in this one area, we shouldn’t forget that electricity is less than 20% of the current global final energy mix. This will surely rise, but it is unlikely to reach 100% in 35 years given that it has only moved from 11% to 18% the last 35 years.

Shell’s own New Lens Scenarios show that significant progress can be made between now and 2050, but not in terms of a massive reduction in emissions, although that process is clearly underway in the Mountains Scenario by then (see below). Rather, the time to 2050 is largely filled with the early deployment of a range of new energy technologies, which sets the scene for rapid reductions to net-zero emissions over the period 2050-2100. Another critical development for the near-term is a complete global policy framework for carbon pricing. Even assuming big steps are made between now and Paris in even getting this into the agreement, the time for implementation is a factor that must be recognised. With a fast start in Paris, the earliest possible date is 2020 in that this is when the global agreement kicks in, but even the EU ETS took 8 years between initial design and full operation, similarly the CDM alone took over 10 years to fully institutionalize. Expanding full carbon pricing globally in the same period is challenging to say the least.

The aspiration of the B Team is laudable, but not really practical. The Paris agreement should certainly be geared around an end-goal of net-zero emissions but the realistic, albeit still aggressive, time span for this is 80+ years, not 35 years.

Energy reality meets Climate Reality

dchone September 16, 2014

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%.

The hairdryer conundrum

dchone September 8, 2014

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 . . . . . .

A very different pathway forward

dchone September 11, 2013

During a future energy workshop that I attended recently the audience heard from Professor Jorgen Randers, from the Center for Climate Strategy at the Norwegian Business School. Although Professor Randers has been involved in scenario planning for many years, he introduced his lecture by saying that it was time to just do a realistic forecast of what is “going to happen” and be done with it. He held out little hope for any sort of coordinated global action on emissions, which basically meant that the world would just have to come to terms with its higher atmospheric CO2 future. What was interesting though was the forecast that he then proceeded to give – it certainly wasn’t the runaway apocalypse that some will have us believe we are in for. I should say that Professor Randers earnestly thought we need to do better than this, he just couldn’t see how it might come about.

The forecast he presented is available on his website (www.2052.info). He uses a very small number of key metrics to establish his outlook, but takes a different view on how they might develop. The starting point is population, which he sees reaching a plateau of 8 billion in 2040, at the low end of UN forecasts (but not outside the forecast) . This is because of declining fertility rates as women increasingly move into the workforce and seek careers. As the existing population ages the global death rate increases as well. This population trend is, not surprisingly, a critical assumption for his forecast.

The next key assumption is that global GDP will begin to slow down, linked in part to the population assumption (the number of people in the 15-65 age bracket actually falls after 2035) and a second critical assumption that continuous improvement in labour productivity will eventually end as this metric plateaus (he noted that it has already started to). The result is global GDP also reaching a plateau in the 2050s and beyond. Linked to this is a plateau in consumption which is dampened by the need to spend a non-trivial amount of global GDP on adaptation and reconstruction (coastal cities etc.) as the climate changes and sea levels continue to rise. This latter point is an important self regulating part of the analysis.

Randers then turned his attention to energy use, shown in the chart below. With energy use per unit of GDP (efficiency) continuing its downward trend, global energy use peaks in 2040 and then declines.

The energy mix also changes over the period, with renewable energy coming on strongly, oil use reaching a long plateau around 2020 then declining quite quickly and both coal and natural gas use peaking in the 2030s. As a result CO2 emissions peak in 2030 and decline, dropping 10 billion tpa over the subsequent 20 years.

All of this then feeds through to an eventual plateau in atmospheric CO2 and therefore temperature. Randers clearly recognizes that we shoot through 2°C, but the end point in his forecast is about 3°C, not the much higher levels of 4, 5 or even 6°C that some are concerned about. In effect, this is now a self regulating system, albeit one that has to deal with significant changes in sea level and other impacts.

There was no attempt to endorse any of this, quite the opposite. Randers also noted that some of his assumptions are seen as politically or socially unacceptable, such as the declining birthrate and an eventual plateau in GDP. As such, the forecast itself becomes something of a political hot potato.

Whether he is right or wrong isn’t really the point, what is interesting about the analysis is that some very small changes in basic assumptions can have a profound effect on the outcome. Pretty much anybody that has constructed even the simplest spreadsheet with built in growth rates recognizes this, but I hadn’t seen it applied in this manner before. Even though they may be outside our normal expectation, all of his assumptions fall within the bounds of credibility, so the forecast is essentially a valid one. A 3°C world is far from where we are today, but it is useful to recognize that our global climate / economic system is now essentially a single entity and that there may be an outcome which is very different to the alternate vision of “meltdown”.

The Burning Question: A review

dchone May 31, 2013

There are many books and thousands of reports on climate change, carbon economics, energy transformation and the like, but few encapsulate the issue as well as a recently released book by Mike Berners-Lee and Duncan Clark, The Burning Question. Judging by the recommendation on the cover, even Al Gore liked it.

Rather than speculate on the potential severity of climate events or try to convince readers that simple changes in consumer behaviour and green, job creating investment will solve everything, the book takes a thought provoking but dispassionate look at the global energy system. The authors discuss the role of fossil fuels and the carbon emission limits that we know we should meet and set out to explain the rock and the hard place that we find ourselves between. The rock in this case is the trillion tonne of carbon limit for cumulative emissions over time and the hard place is the abundance of fossil fuels, the rate at which we use them and the relative ease with which more becomes available as demand rises.

Berners-Lee and Clark present a compelling set of stories which show how fossil fuels dominate the global energy market, why it is proving almost impossible to displace them (on a global basis) and why strategies such as improving energy efficiency and deploying renewables are not effective approaches to try and limit global emissions. In fact they make the point that in some instances the reverse happens – emissions just rise faster.

The tag line on the cover includes the teaser “So how do we quit?” (using fossil fuels). Do they really know? As the book unfolds and the problem they describe mounts in both complexity and difficulty, there is almost the feeling of a thrilling ending around the corner. SPOILER ALERT. Sadly this is not quite the case, but they do give some useful advice for policy makers trying to get to grips with the issue and the book itself gives the reader a very different perspective on the energy-climate conundrum (although hopefully one that the readers of this blog have picked up over time, but here it is all in one book).

I assume that for similar reasons to my own line of thinking (but after beating around the bush about it for 181 pages) they do finally land on a key thought:

In the course of writing this book we have come to think that the most undervalued technology in terms of unlocking international progress on climate change is carbon capture – both traditional CCS for point sources such as power plants and more futuristic ambient air capture technologies for taking carbon directly out of the atmosphere.

It would appear that The Inconvenient Truth and CCS are indeed inextricably linked. Clark and Berners-Lee don’t go so far as to argue that CCS is the convenient answer, but the message on CCS is a strong one. Nevertheless, geoengineering makes a surprise entrance at the end!!

Overall, this is an excellent discussion which is both easy to ready and hugely informative. It is well worth putting it on the summer reading list.

Mixed messages on energy and climate issues

dchone April 5, 2013

The Easter break provided a good opportunity to catch up on some recent climate stories, but the current messages delivered by the various media and other outlets vary enormously with a bewildering array of assertions and counter claims.

The continued arguments about the “pause” or otherwise in global warming continue, most notably in the Mail Online / Mail on Sunday, where columnist David Rose argues that there is “hard proof” that incorrect global warming forecasts are “costing us billions”. But his arguments have a number of problems.

The Mail chose to quote a number of climate scientists, one of whom almost immediately refuted the way in which the article had used his quote. Myles Allen, 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 is reported to have said;

“. . . . that until recently he believed the world might be on course for a catastrophic temperature rise of more than five degrees this century. But he now says: ‘The odds have come down,’ – adding that warming is likely to be significantly lower. Prof Allen says higher estimates are now ‘looking iffy’.”

But in an article in The Guardian, Allen made it clear that his point was very different to that expressed;

But I also explained that doubling pre-industrial carbon dioxide concentrations, which we are almost certain to do now, was just the beginning. Increasing use of fossil carbon at the current rate would drive atmospheric concentrations towards four times pre-industrial figures by 2100. So even if the “climate sensitivity” is as low as 2C, as some lines of evidence now suggest, we would still be looking at 4C plus by the early 22nd century.

The Mail article uses a simple surface temperature chart to argue that warming estimates have been a “spectacular miscalculation”, even though the heavy black line shown in the chart (see below) has not actually breached the 95% confidence limits, rather there is just the assertion that it “is about to crash out”.

Further to this, the Mail has not done any real analysis of this trend, such as presented in December 2011 by Foster and Rahmstorf (Global temperature evolution 1979–2010, Grant Foster and Stefan Rahmstorf, Environmental Research Letters 6 (2011) 044022 (8pp)). In their paper they correct for the effect of volcanoes, solar variability and ENSO (El Nino Southern Oscillation) in all the main global temperature data sets and present the chart below – which shows a steady and continuing issue with the global heat balance and a consequent rising temperature trend.

Other studies show similar findings, such as the Berkley Earth Surface Temperature Project. The Economist also weighed in and discussed the differences between climate modeling approaches and ventured some thoughts on why these models are giving quite different results at the moment.

One of the issues that the Mail article addressed was the money being spent in the UK on renewable energy and its flow through to electricity and fuel bills. There is no doubt that this is an issue at the moment in the UK, but the reasons for it are multiple and complex. Attempting to create a simple link between the need for offshore wind subsidies and recent temperature trends trivializes both the climate issue and the various discussions around energy security, competitiveness and energy costs.

The renewable energy issue leads onto another story published just before Easter – a posting by Paul Gilding in Australia which made the case that the fossil fuel industry is on the verge of massive disruption, leading to its inevitable extinction in just a few decades.

There are signs the climate movement could be on the verge of a remarkable and surprising victory. If we read the current context correctly, and if the movement can adjust its strategy to capture the opportunity presented, it could usher in the fastest and most dramatic economic transformation in history. This would include the removal of the oil, coal and gas industries from the economy in just a few decades and their replacement with new industries and, for the most part, entirely new companies. It would be the greatest transfer of wealth and power between industries and countries the world has ever seen.

Of course it’s difficult for me to pass credible comment on this, given my affiliation to that industry, but the facts simply don’t stack up. While there is no doubt that renewable energy use is accelerating rapidly, so too is the use of fossil fuels and of course our overall use of energy. Both renewable energy and fossil energy will need to grow, simply to make energy ends meet. In the recently released Shell New Lens Scenarios, the Oceans scenario sees an extraordinary increase in solar energy uptake, which by 2030 is seriously outpacing the recent and current (1990-2020) surge in coal use. But even with this growth rate, it is not until about 2030 that fossil use drops below 80% of primary energy use and not until 2060 that overall fossil use actually starts to decline in absolute terms.

Finally, Bjorn Lomborg resurfaces in The Times with his article “The joy of global warming” (subscription required to read this). He argues again as he has for many years that the issue is something for later rather than for now (“ . . . global warming is a problem for the future but a benefit now . . . .”), but does make the cogent point that the emissions issue will not resolve itself until “green” energy comprehensively outcompetes fossil energy. However, he seems to miss the point that climate is a “stock problem” due to the accumulation of CO2 in the atmosphere, so simply waiting until later may not be the right course of action at all (again, another lesson from the recent Shell scenarios).

So, as already noted, a bewildering array of messages. It is little wonder that policy makers, the public, academia and NGOs are collectively at a loss as to how to take the climate issue forward. Most readers are probably well versed on my view of what needs to be done, but if not, it’s here.

The green economy: blessing or curse?

dchone March 5, 2012

The above was the title of a panel debate hosted by the UK newspaper, The Daily Telegraph, late last week. There is a short write up in the Saturday edition of the newspaper. I was fortunate to participate in this, alongside Oliver Letwin MP, Minister of State (providing policy advice to the Prime Minister in the Cabinet Office) and Cabinet attendee. Other panel members were UCL Professor Paul Ekins, Jeremy Nicholson from the Energy Intensive Users Group and renewable energy venture capitalist Ben Goldsmith.

Photo Courtesy of The Daily Telegraph

Although Mr Letwin chose not to offer any opening remarks, his subsequent comments revealed some interesting thinking in the UK Government on energy and climate change. Three particular lines of discussion emerged during the debate;

With the “Green Economy” often associated with wind-turbines and solar PV, there was much discussion on how the UK determines its future energy mix. Mr Letwin put forward the view that an entirely market determined outcome was not in the interests of Britain. There was the risk that such a direction could result in over dependency on a particular energy source, bringing with it issues such as reliability, future price exposure, capital cost and technology lock-in. He argued that although the market should play a major role in driving change, there was also a need for the government to ensure that the resulting energy mix was built on a variety of energy sources and technologies. These included renewables, nuclear and fossil fuels, the latter also supported by CCS. This in turn meant that there was a role for government to promote technologies in the early stages of development and that this would remain a feature of their energy policy. The government would also ensure that sufficient incentive was in place for the first stages of deployment of such technologies.
Following on from (1) there was some discussion on the potential role for CCS in the UK energy system. Mr Letwin reaffirmed the need for the government to support a large scale demonstration of the technology and that the proposed government injection of £1 billion was both justified and modest given the scale of the low carbon energy option that it had the potential to deliver, particularly given the remaining fossil fuel production potential of the UK. He expressed the view that the key issue with CCS was not the need to determine its technical feasibility but rather to determine its cost feasibility. Mr Letwin’s enthusiasm for CCS extended into his closing remarks where he concluded that the UK would have one of the first large scale CCS facilities in the world and that the demonstration therein that natural gas was a viable zero-carbon fuel would be of huge benefit to the UK.
Not surprisingly the subject of the UK carbon floor price emerged during the discussion. Mr Letwin linked the need for it to the points made in (1) above and defended its introduction given the current state of the EU-ETS and the very weak price signal it was now delivering. But he also made it clear that it would be better for all concerned if the ETS delivered the necessary price signal: his “fingers crossed” hand gesture when the proposed EU allowance set aside was mentioned was pretty clear body language.

Overall, it was an interesting evening and well attended. I am not sure that we ever really answered the question, but we did at least get some useful insight into the thinking that supports the current energy policy direction of the UK.