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Cancun Climate Talks: Irrelevant?

Geoffrey Styles's picture
GSW Strategy Group, LLC

Geoffrey Styles is Managing Director of GSW Strategy Group, LLC, an energy and environmental strategy consulting firm. Since 2002 he has served as a consultant and advisor, helping organizations...

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  • Nov 30, 2010
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The mood going into this week’s global climate conference in Cancun, Mexico is decidedly different than that for last year’s session in Copenhagen, which had been intended to culminate the process begun two years earlier in Bali. It’s not just that expectations for a comprehensive and binding global climate treaty have been dramatically lowered; much of the debate since Copenhagen has moved away from the notion that it’s even possible to reduce emissions sufficiently to avert many of the adverse consequences of a warming and less stable climate. It’s no coincidence that the cover story of this week’s Economist is dedicated to the increased need for adaptation to climate change, while the lead op-ed in the energy pull-out section in today’s Wall St. Journal highlights an agenda for making clean energy the cheapest kind–not by subsidizing it even more than we already are, but by driving innovation.

After describing the magnitude of the challenge involved in decarbonizing the global economy by enough, soon enough, to limit the increase in global average temperatures in this century to 2° C, The Economist concludes, “The fight to limit global warming to easily tolerated levels is thus over.” That doesn’t mean that agreements to bend the trajectory of emissions growth below the status quo trendline aren’t worth pursuing, but it suggests that we need to devote much greater attention and resources to adapting to a world that will likely include more droughts, floods, famines, and human migration than we’ve had to deal with thus far, and for which both the drivers and consequences are being amplified by economic development and population growth. The Economist sees climate adaptation focused on three main areas: infrastructure, migration and food, and their analysis is worth reading.

Another factor I believe the magazine should have highlighted is the difficulty of undertaking any of these efforts at a time when the developed world is hobbled by weak economic growth and related deficit and debt problems that threaten to render even the current level of subsidies for renewable energy sources unsustainable. As the EU grapples with the debts of Greece and Ireland, with Portugal and Spain waiting in the wings, it’s no accident that Spain has just cut its feed-in tariff for solar power, which had already been reduced from previously lavish levels. The elephant in the room in Cancun, as it was in Copenhagen, is that binding agreements requiring severe emissions reductions by and large transfer payments from the developed countries might have looked attainable when the economy was booming, but they have become much less feasible in the wake of the worst recession and financial crisis since the Great Depression.

That same fundamental challenge makes the innovation arguments raised by Ted Nordhaus and Michael Shellengerger of the Breakthrough Institute more urgent than they would be otherwise. Because today’s renewable energy technologies remain more expensive without subsidies than coal, oil and natural gas–even when the consumption subsidies the latter receive are stripped away–the cost of replacing our existing, high-emitting energy sources with entirely green ones looks unaffordable in today’s world. I would add that reliance on experience curve effects–building out a subsidized green energy economy and depending on volume to drive down its cost to the point of competitiveness–is unlikely close that gap, and where it can, there is no guarantee that the country providing the incentives will receive the benefits it is entitled to expect. To cite the most obvious current example, Germany has invested tens of billions of Euros subsidizing solar energy and has indeed created a globally competitive solar industry–mainly in developing Asia.

What makes Nordhaus and Shellenberger’s suggestion seem much more practical than global climate treaties and mountains of green subsidies is that the money currently being spent on renewable energy deployment incentives, which constitute a small fraction of the total annual investment in energy infrastructure, would go much farther buying R&D, rather than hardware. The US investment tax credit paid to a single 100 MW wind farm could fund an entire university energy innovation laboratory and graduate degree program.

Of course none of these strategies should be regarded as entirely either/or propositions. Adaptation doesn’t let us off the hook for trying to address the causes of climate change, nor does shifting more of government’s limited resources into clean energy R&D mean we don’t need any of the real-world learnings that only come from deploying technology and seeing how it works under uncontrolled conditions. There’s also a parallel role for research into geoengineering to provide a backstop–a potential Hail Mary pass–should all of these other efforts fall short and climate change move beyond a range we can live with. If nothing else, the COP 16 meeting in Cancun might shed more light on the degree to which the UN body is the right umbrella to cover all this work.

Tomorrow at 1:00 PM EST I’ll be presenting in a webinar entitled, “Natural Gas: Sustainability Friend or Foe”. To sign up follow this link.

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Tim Havel's picture
Tim Havel on Dec 2, 2010

Yesterday I heard a lecture by Carl Buzzuto, author of “Clean Combustion Technologies” and a veteran power plant designer at Alstom Power, say they’ve got pilot plants that capture 90% of CO2 with a 20 percent energy overhead today, and he sees no reason they couldn’t get that down to 10% in due course (http://www.alstom.com/news-and-events/press-releases/Alstom-takes-the-in...). That’s not much worse than the first coal plant scrubbers for SO2 were, and Ronald Reagan himself went along with that cap-and-trade scheme. The only thing keeping us from solving the climate change problem at a hardly noticeable price is politics. And the only place where politics is uglier than the US Congress is at the UN.

Geoffrey Styles's picture
Geoffrey Styles on Dec 3, 2010

Timothy,

Sad but true.  A 20% energy penalty for CCS would be a big improvment over 30%, and as a long-time advocate of CCS R&D I find that encouraging, even though it still means 20% more plants burning 20% more fuel.  Unfortunately, the laws of thermodynamics suggest that extracting CO2 from fossil fuel combustion will never be a free lunch.  In the meantime, if we should have learned anything from the ongoing debacle of the RFS cellulosic ethanol targets it’s to wait for demonstrated proof of technology, rather than passing laws based on wishfulness.  That sounds a lot like something else President Reagan said that has been quoted extensively in the last couple weeks.

Geoffrey Styles's picture
Thank Geoffrey for the Post!
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