The climate change challenge is not technical nor even economic, but a matter of enacting the right policies, writes Silvio Marcacci, Communications Director at San Francisco-based think tank Energy Innovation. Based on new research, Marcacci outlines the the types of policies that are the most effective.
The world’s scientists estimate we have a decade to reduce global greenhouse gas emissions, prevent dangerous levels of global warming beyond 2° Celsius, and avoid the worst impacts of climate change – but there’s no single silver bullet solution.
As government officials and other policymakers determine how to meet emissions reductions commitments pledged under the Paris Agreement or reach clean energy deployment and decarbonization goals, they need to be able to identify which policies work and how to design those policies.
It’s a daunting challenge, and each day that passes makes the challenge ahead more difficult, but the technologies, policies, and strategies to meet it exist today: Energy Innovation’s new book Designing Climate Solutions: A Policy Guide for Low-Carbon Energy finds that 10 policies applied to the 20 largest-emitting nations, can meet the 2°C target.
Policy contributions to meeting the 2°C global warming target. (Analysis done using data with permission from the International Institute for Applied Systems Analysis) ENERGY INNOVATION
Doing the math on emissions
The vast majority of GHG emissions come from a handful of countries – nearly 75% of global greenhouse gas emissions are generated by just 20 countries. Energy use (power plants, vehicles, and buildings) or industrial processes (cement or iron and steel manufacturing) is the predominant source of emissions in these countries, so focusing efforts accordingly can drive the fastest emission reductions.
The top 20 emitting countries are responsible for roughly 75 percent of global emissions. (Graph data reproduced with permission from CAIT Climate Data Explorer, 2017. ENERGY INNOVATION
The Paris Agreement, signed in 2015 by 189 countries responsible for nearly 99% of the world’s GHG emissions, committed each country to reduce emissions over the next 10-30 years. If these targets are met, they would move the emissions curve a third of the way toward the 2°C target, and if existing policies and the Paris pledges are extended to 2100 with the same ambition, the emissions curve moves about 80% of the way to a 2°C pathway.
Pledges made as part of the Paris Agreement get us partway to the 2°C pathway. (Graph data reproduced with permission from Climate Interactive and Climate Action Tracker) ENERGY INNOVATION
Even if the United States withdraws from the Paris Agreement, commitments from remaining countries still cover more than 80% of the world’s current emissions – without counting pledges from U.S. states, cities, and businesses to meet the Paris goals.
Many policymakers understand the need to reduce GHG emissions, but need data to evaluate available policies. Different policies are best suited for different circumstances, and some policies look good on paper but fail to perform in the real world. Despite this, a practical consensus about successful policy is emerging, and can generally be classified as one of four types, each of which reinforces the others:
- Performance standardsimprove new equipment and help capture savings that economic signals cannot because of market barriers.
- Economic signalscan be highly efficient and encourage the uptake of more efficient equipment driven by performance standards.
- Research & development (R&D)and supporting policies lower the costs of performance standards and economic signals by pushing new technologies to market and lowering the costs of existing technologies by removing deployment market barriers.
A portfolio of policies including these four policy types is the most effective, lowest-cost way to drive down GHG emissions. Properly designed, they reinforce each other through system dynamics that emerge organically.
Reducing power sector emissions
The power sector is responsible for 25% of annual GHG emissions, or about 12 billion tons of CO2 emissions. This is expected to grow to nearly 18.9 billion tons by 2050, comprising roughly 30% of annual GHG emissions in 2050. Without additional policies, the power sector will be responsible for 28% of cumulative emissions through 2050.
The emissions growth is largely caused by increasing amounts of coal and natural gas for power generation. For example, the U.S. Energy Information Administration projects global coal electricity generation will grow from 8.1 terawatt-hours (TWh) in 2010 to 11.1 TWh in 2050, while global natural gas electricity generation will grow from 4.6 TWh in 2010 to 11.1 TWh in 2050.
Reducing power sector emissions involves using low- or zero-carbon technologies to produce power and reduce electricity demand, and the best policies for increasing carbon-free power generation are renewable portfolio standards and feed-in tariffs. Complementary power sector policiesencouraging utilities to pursue cleaner options and reduce electricity demand are also important, as are policies that reduce demand by improving the efficiency of energy-consuming products (e.g., appliances). In total, smart power sector policies can contribute at least 21% of the reductions needed to meet the 2°C target.
Reducing transportation sector emissions
The transportation sector generates more than 15% of annual GHG emissions, with the most recent data showing about 7.5 billion tons of CO2emissions in 2014. This number is expected to grow to more than 9 billion tons by 2050, and without additional policies the transportation sector will be responsible for 14% of cumulative emissions through 2050.
Transportation’s emissions growth is largely due to increasing car ownership and freight transport: Passenger travel demand is expected to more than double between 2010 and 2050, and freight transport is expected to increase nearly 60% over the same period. Without action, the vast majority of this demand will be met with petroleum fuels, causing emissions to grow.
Reducing transportation sector emissions requires improving the efficiency of vehicles produced and average efficiency of vehicles sold, increasing the share of electric vehicles sold, and providing alternatives to owning and driving a vehicle through smart urban planning.
Decarbonizing the transportation sector is an important element of any climate strategy, with significant co-benefits such as reduced particulate pollution and lost time due to traffic. Together, smart transportation sector policies can contribute at least 7% of the reductions needed to meet the 2°C target.
Reducing building sector emissions
Our buildings are responsible for 8% of annual GHG emissions, or about 4 billion tons of CO2 emissions. This total is expected to grow to between 5-6 gigatons by 2050, and without policy solutions, the building sector will be responsible for 8% of cumulative emissions through 2050.
Buildings and appliances are also significant drivers of electricity demand. For example, buildings are responsible for 54% of global electricity demand, and that share is expected to grow to nearly 60% by 2050. When electricity emissions attributable to the building sector are included, its share of global GHG emissions increases to 20% and grows to 26% by 2050, largely due to a growing building stock filled with more energy-consuming technologies.
Reducing building sector emissions requires improving the efficiency of building equipment (e.g. air conditioning and heating equipment), the thermal efficiency of buildings, and the efficiency of appliances used in buildings. Decarbonizing the building sector and reducing electricity demand are essential emissions reductions strategies, and building codes and appliance standards can achieve at least 5% of the reductions required to meet the 2°C target. This can rise to an even higher share later on, because higher efficiency standards take years to reach full effect.
Reducing industrial sector emissions
The industrial sector, including agriculture and waste, is responsible for 38% of annual global GHG emissions, with CO2e emissions of about 19 billion tons. Emissions are expected to grow to more than 42 billion tons by 2050. Without additional policies, this sector will be responsible for 49% of cumulative emissions through 2050. The industrial sector is also responsible for roughly 44% of global electricity demand, although that share is expected to fall to about 36% by 2050.
Industry sector emissions can be broken into two categories: emissions from fossil fuel combustion for energy use and process emissions (released in industrial processes such as cement clinker manufacture and metallurgical coal coking). Non-energy emissions in agriculture and waste also fall under process emissions, and the share of industrial process emissions is significant. At least 10 billion tons of CO2e per year come from industrial processes: about 5.2 billion tons of CO2e per year from agriculture, 1.5 billion tons from waste, and 3.2 billion tons from more traditional manufacturing-related processes.
Reducing industrial sector emissions requires improving industrial production efficiency, thus lowering energy demand, and eliminating industrial process emissions. Heavily decarbonizing the industry sector is essential – industrial energy efficiency improvements can achieve 16% of the necessary reductions to meet the 2°C target, and reducing process emissions can achieve at least 10% of the necessary reductions.
The decarbonization role of cross-sector policies
In addition to sector-specific policies, cross-sector policies are crucial to decarbonization. Carbon pricing is one of the most important decarbonization policies and operates across multiple sectors, delivering large emission reductions. Similarly, support for R&D is critical to lowering long-run decarbonization costs, and typically targets technological breakthroughs in different economic sectors.
These policies are essential for cost-effective economic decarbonization, and although carbon pricing’s effect is directly related to the price or emission cap used, strong carbon pricing set at the social cost of carbon can achieve 26% of the emission reductions necessary by 2050 to hit the 2°C target.
Challenges in making assumptions about R&D achievement and spending make explicitly modeling R&D’s emissions reduction effect difficult, but R&D breakthroughs lower the costs of meeting the 2°C target and reduce the number and strength of policies needed. For example, decades of R&D coupled with strong policies driving deployment mean building new zero-carbon electricity generation like solar and wind turbines is cheaper than running existing fossil fuel generation in many parts of the country. The history of research-based cost declines coupled with well-designed policy shows how R&D fits together with other policy types to drive down costs and accelerate the clean energy transition.
How to win on climate
Climate change requires action as soon as possible to limit emissions and avoid exceeding 2° C of warming. Policymakers around the world have committed to reducing emissions, laying the foundation for deeper emission cuts that put the world on a trajectory to a lower-carbon future. The key now is in turning these pledges into reality—with laser-focused, well-designed policy.
We have the technology today to rapidly move to a clean energy system – and the price of that future, without counting environmental benefits, is about the same as a carbon-intensive one. So the challenge is not technical, nor even economic, but rather a matter of enacting the right policies and ensuring they are properly designed and enforced.
Silvio Marcacci is Communications Director at the San Francisco-based think tank Energy Innovation.
This article was first published on Forbes.com and is republished here with permission.
Daniel Williams says
It is said many times; there is no silver bullet. However, if we recognise that the problem is fossil fuels, then we have two options; either electrify those sectors that currently use fuels, or replace those fuels with a zero-carbon alternative. In my opinion, the best zero-carbon alternative (and one that doesn’t result in the release of particulates or other pollution in cities) is hydrogen. My other opinion is that battery supply chain issues are here to stay, we have not yet found a suitable alternative battery chemistry, and batteries are bulky.
Meeting the regular daily demand for energy with its predictable peaks and troughs means that we require energy storage (at the daily/weekly scale), and in colder countries we require interseasonal energy storage which is at the TWh scale.
The only option here is power-to-gas, and rather than separating focus on all the various technologies that ‘might’ work, a combined effort to switch from fossil fuels to hydrogen I think makes the best sense; and indeed might pose fewer problems than creating synthetic copies of current fuels. Using hydrogen; while requiring LOHCs or compression, provides efficiency improvements by a factor of 2-3 over conventional fuels (within fuel cells); and with generic, mass-produced components and parts, costs will decrease rapidly.
For example, both Toyota and Hyundai are confident that once 100,000 fuel cell cars are built each year, costs will reach those of conventional transport. The same goes for home fuel cells for heating – this is not very far away (TCO halves at 100k units – energypost .eu/fancy-having-your-own-power-plant-fuel-cell-micro-cogeneration-is-market-ready/).
The reason fuel cell technology has been moving slowly so far is because we do not yet have enough refueling stations, and this will take time and money. On-site refueling is competitive with fossil fuels (€5/kg is easily achievable at the average industrial price for electricity in Europe which is ~€60/MWh), and this figure will decrease over time, as electrolysers perform a grid balancing role and will be a necessity for the growth of the renewables industry. Some sections of central gas pipelines (where gas is compressed) may also need to be upgraded to plastic, if policymakers ever have the courage to switch to zero-carbon heating.
Toyota have new industrial burners for hydrogen, which will mean that most heat processes can now be decarbonised, given a sufficiently low cost of hydrogen production. This cost level is likely to be met soon after 2025, and earlier if policymakers factor in the inherent value of domestic fuel production over imports (Siemens report that electrolysis [power-to-gas] is ‘5 years away’ from cost parity with SMR-hydrogen).
As European TSO & electric utility associations are saying: we need to start building industrial-scale power-to-gas plants today – and this is happening.
So I think more emphasis needs to be placed on these technologies in order to reduce costs and expedite the expansion of the industry. Efficiency measures will only ever really keep pace with GDP growthrates and are not a long-term solution to climate change. We need to change the technologies we use.
Frank de Corbusier-Simmons says
I just think its great knowing that at least 10 technologies exist that will comfortably avert the very worst effects of catastrophic climate change, working towards 5-6°C. I also think hydrogen or power-to-gas could be a warning shot to the industry about what’s to come.