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What Might the Future Look Like if We Took Climate Change Seriously?

Merrian Borgeson, Senior Scientist, Energy and Transportation, San Francisco

A new analysis lays out several detailed “pathways” to a low-carbon future for the United States, and offers practical guidance for policy makers. The bottom line finding is that there are multiple ways we can significantly reduce greenhouse gas emissions, with known technologies and with an incremental cost equivalent to less than 1 percent of gross domestic product. But the choices we make in the short term matter a lot if we want to avoid the most catastrophic effects of climate change.

This work is important because the negotiations in Lima last week set a positive direction for the international climate agreement planned for next December in Paris. As the United States considers its strategy, it is important to reflect on what it would take – on a nuts and bolts level – to meet an aggressive climate target. This includes talking about sources of energy, power lines, industrial facilities, homes and buildings, cars and trucks and the fuels they run on – the physical infrastructure necessary to massively reduce our greenhouse gas emissions.

Thumbnail image for Thumbnail image for 1.jpgWith all the international dialogue and ongoing climate modeling, there has been surprisingly little analysis done on what needs to happen to respond to climate change from the perspective of physical infrastructure. And while sure, no one can predict the future, we need to start imagining (in detail) the range of options that would enable the United States to meet an aggressive climate target over the longer-term. We need to be able to credibly ask whether proposed policies can reduce emissions enough – or whether they lead to dead ends that may meet short term targets but foreclose upon the future we need to build.

Fortunately, the United States has an important new resource to help answer these questions. The Deep Decarbonization Pathways Project (DDPP), convened by several nonprofit organizations affiliated with the United Nations, recently released a preliminary technical report and identified four technology “pathways” that America could take to reduce its greenhouse gas emissions by 80 percent below 1990 levels by 2050. This is a target that would allow the United States to do its part to limit global average temperature rise to 2 degrees Celsius, an objective agreed upon by the international community to avoid the most catastrophic effects of climate change. The United States is not doing this analysis in isolation. There are 14 other high-emitting countries (including China, India and Brazil) that are part of the DDPP doing similar concrete analyses to identify pathways to reduce their carbon emissions (i.e. to “decarbonize”). The United States team includes the consulting firm Energy and Environmental Economics (E3), Lawrence Berkeley National Lab, and Pacific Northwest National Laboratory.

The results are stunning both in their detail and in the stark clarity of the key principles they highlight. The analysis explores four scenarios described by the technology they use most heavily to meet the GHG target: High Renewables, High Nuclear, High Carbon Capture and Storage (CCS), and a Mixed Case that uses a combination of these technologies. They find that it may be possible for any of these technologies, or a combination, to meet the target at a relatively modest cost – less than 1 percent of gross domestic product. And that doesn’t account for the benefits of avoiding the human and infrastructure costs of climate change and air pollution.

The analysis team developed a model that includes the minutia of the United States’ physical infrastructure, including sources of electricity, types of fuels used, buildings and the equipment they house, industrial processes, our transportation infrastructure and so on. They use largely conservative assumptions. For example, they deploy only existing technologies, no brand new innovations (which is unlikely over 35 years). Other assumptions include: costs of existing technologies don’t come down significantly (which they probably will), they only “retire” infrastructure and equipment at the end of its useful life, no use of international offsets, and only modest increases above our historic improvements in energy efficiency. They also assume that we maintain our (very high) levels of energy reliability and that the American economy continues to grow robustly. In other words, we keep enjoying our current lifestyle, but with FAR fewer emissions. Not bad!

While there are a number of ways to reach the target, there are some key principles that are constant across the scenarios and that are vital to combating climate change according to this analysis. Here are my top three takeaways from the report:

1. We need to take path-dependence seriously

This means that our short-term choices may determine what our options are in the longer term, and may allow or prevent the United States from significantly reducing emissions. This analysis shows that what we buy and build in the next 10 years matters, especially for long-lasting infrastructure and equipment (the stuff we won’t get rid of or replace in a few years). The graph below shows how many “replacements” will happen before 2050 for a range of items from buildings to lighting systems. Getting the long-lasting items right matters because we won’t have many chances to replace them with a low-carbon alternative. So what matters most? Buildings. Power plants. Boilers. Basically anything that lasts longer than 25 years, we have to get right in the next decade if we want to realize a low-carbon future. And every time we replace one of these long-lasting items, we have to think about 2050 and beyond, because it’s going to last a long time and affect our ability to reduce emissions.

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Source: DDPP, Stock Lifetimes and Replacement Opportunities

The danger is that we could reach an interim emissions reduction target, say for 2030, and actually hit a dead end for getting to the 2050 target. For example, switching from coal to natural gas for electricity generation might get us short-term emissions reductions, but the DDPP analysis shows that natural gas (at least with current technologies) will not get us the reductions we need by 2050. And if we make big investments in natural gas power plants in the short-term, we could get locked into a path that is headed toward failure.

This also implies that “market forces” alone will not be enough. Even if we put a price on carbon, which is an important step, we cannot just sit back and watch the magic of the market at work. The cheapest, easiest, market-driven path to short-term emissions reductions may not be sufficient to get us the longer-term savings we need to limit global average temperature rise to 2 degrees Celsius (or other aggressive climate target). This means “successful implementation depends on ‘directed technological change’ – that is technological change that is propelled through an organized, sustained, and funded effort engaging government, academia, and business with targeted technological outcomes in mind,” as the DDPP described in the 15-country preliminary report released earlier this year. In other words – research, development, demonstration, and deployment initiatives that are informed by analyses like this report.

2. Electrify, Electrify, Electrify.

All of the scenarios require cleaning up our electricity supply – moving to renewable energy, nuclear power, or fossil power plants with carbon capture and storage – and using electricity for as many things as possible. This analysis shows that electricity generation will need to approximately double while its carbon intensity is reduced to 3 to 10 percent of its current level. This means electric space and water heating in buildings. Electrified transportation (through plug-in electric vehicles, or perhaps cars and trucks running on hydrogen produced with electricity). Under the scenarios, the very limited use of fossil fuels like natural gas and oil would be reserved for activities that are extremely hard to electrify, including some industrial processes and heavy duty vehicles.

3. Energy efficiency is required to keep costs low

Energy efficiency is a cornerstone of all four scenarios. Affordable deep decarbonization requires highly-efficient homes and buildings, equipment and appliances, transportation, and industrial processes. This analysis starts with the Annual Energy Outlook projections for efficiency and adds to them in several areas. The assumptions are appropriately aggressive for some end uses like lighting, which in the model moves almost entirely to LED technology by 2050. But the assumptions about the potential for overall building performance and other improvements we’re likely to see, based on past experience, appear to be conservative. That’s good news – we can do even better, which may give us some additional breathing room to reach the emissions reduction target.

No one knows exactly what the world will look like in 2050. But this kind of analysis is required to start imagining, in detail, the path forward so that we can choose a path (or paths) that will allow us to combat climate change and avoid hitting a dead end. We don’t know everything, but we know enough to make informed choices today about what to build, invest in, and experiment with to move in the right direction. And, as this analysis shows, the choices we make in the next 10 years will impact our ability to safeguard our world in the long run.

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Engineer- Poet's picture
Engineer- Poet on Dec 27, 2014 3:03 pm GMT

What Might the Future Look Like if We Took Climate Change Seriously?

Every major electric grid in the world would have a generating mix like France and Ontario.

Keith Pickering's picture
Keith Pickering on Dec 27, 2014 6:44 pm GMT

The key graph in the report is figure 12 on page 24: the high-nuclear scenario is the lowest cost (median $160 billion); while the high-renewables scenario costs more than four times as much (median $650 billion).

Schalk Cloete's picture
Schalk Cloete on Dec 27, 2014 9:45 pm GMT

Interesting study that once again confirms a centralized nuclear & CCS system as the most economic rapid decarbonization pathway. 

However, as with all studies of this kind, the most important assumptions are continued rapid reductions in energy intensity coupled with uninterrupted economic growth. The substantial reduction in final energy demand assumed between now and 2050 keeps the total investment manageable and the optimistic economic growth assumptions enable optimistic statements like “the incremental cost is only 1% of GDP”. 

In reality, however, the additional 1% of GDP annual investment will in itself reduce GDP growth which, in turn, will reduce the ability of the economy (and the political system) to realize these additional investments. And then of course there are other growth headwinds such as demographics, inequality, reduced labour force participation and the tremendous overhang of debt and other unfunded liabilities.

So far this century, the US has managed to squeeze out nearly 2% average economic growth (which is great compared to other developed nations). Without the massive QE efforts facilitated by the reserve currency status of the US dollar and the high quality job creation by the fracking revolution, US growth would be stagnating like Europe and Japan. Given the temporary nature of these two positive influences, it is highly questionable whether the US can achieve continued exponential growth of 2.5% p.a over the next 35 years while simultaneously making large additional investments in clean energy infrastructure as assumed in this report.

In summary, it is easy to come up with technically feasible decarbonization scenarios if the non-linear interactions between the energy system, the economic system and the political system are simply ignored. We will need substantially more sophisticated modelling to realistically assess the challenge of rapid decarbonization.  

Hops Gegangen's picture
Hops Gegangen on Dec 28, 2014 1:09 pm GMT

 

The part about switching from natural gas to electricity is troubling. By my calculations, I pay about 3 times as much for a BTU from electricity as for natural gas right now. And my electricity provider is substantially nuclear. 

Nor has the natural gas ever failed, while I have experienced hours-long electrical outages where I live now, and one days-long outage when I lived in the Northwest. What would people use for a backup? 

While it may be warmer on average in 2050, we have already seen how disruptions to the jet stream can bring prolonged periods of Arctic air into densely populated areas. Last year, natural gas demand spiked and zillions of BTUs were drawn from storage. When electricity demand spikes, does the grid fail? Where do the reserves come from?

 

Jeffrey Miller's picture
Jeffrey Miller on Dec 28, 2014 3:26 pm GMT

“This also implies that “market forces” alone will not be enough. Even if we put a price on carbon, which is an important step, we cannot just sit back and watch the magic of the market at work.”

 

This depends on how a carbon tax or a (politically more feasible) carbon fee + 100% rebate is implemented.


If the carbon fee is small and fixed it would have a small effect and would not result in deep decarbonization.


If however the fee (+rebate) is designed to start small (say $5 a ton, adjusted for inflation each year) and scheduled to rise by a fixed amount each year (say $3 to $5 a ton per year, again in inflation adjusted dollars), it would have a dramatic effect. The effect would not be just on the immediate consumption of fossil fuels, but also, and more importantly on investments in long term infrastructure. If we had the political will to implement such a fee (and impose tariffs on products from countries that did not also implement it), we really could, to a large degree, just sit back and watch the magic of the market at work. 


The current conventional wisdom is that such a fee + rebate scheme is politically impossible. I’m not convinced that this perceived impossibility is immutable. For example, if people understood that 60 to 80% of the population would either gain or end up neutral from such a scheme, many would favor it. At the end of the day, the political difficulty in passing a ratcheting carbon fee is a very good proxy for the degree to which we are not serious about addressing climate change.


“This means “successful implementation depends on ‘directed technological change’ – that is technological change that is propelled through an organized, sustained, and funded effort engaging government, academia, and business with targeted technological outcomes in mind,” as the DDPP described in the 15-country preliminary report released earlier this year. In other words – research, development, demonstration, and deployment initiatives that are informed by analyses like this report.”


This is the deus ex machina solution which everyone loves because it does not seem to require any hard choices or trade-offs. Who isn’t enamored by the allure of a painless fix? A sedentary, overweight smoker who professes to want to enjoy better health, but who does not wish to eat less, exercise more, or give up smoking is certain to favor a research program into a magic pill that would cheaply and effortlessly restore and maintain his health.   


While sustained well funded research is a highly desirable public good (more knowledge is always good), it is unlikely to be a panacea for several reasons.


First, the results of research efforts are highly uncertain. There is no guarantee they will pay off in the short time frame that we have to drastically reduce our carbon emissions. Ten years ago, the Gates Foundation launched an ambitious research program, the Grand Challenges to try to solve some of the perennial vexing problems in global health. The payoff from the one billion invested to date has been very meager indeed


The second problem with hoping that more research will save us is that it reduces our incentives to act now. If we had unlimited time, this would be OK. Unfortunately, we do not have this luxury – we can’t afford to wait twenty or thirty years to see if something turns up from our research efforts which will allow us to easily replace fossil fuels. Instead, we need to focus on the tools, like nuclear power and some mixture of location dependent renewables, that we already have at hand which will allow us to decarbonize our economies at modest costs. 


The third and biggest problem is that placing all our eggs in the research basket is that this is a very centralized approach. It leaves out the creative energies of the vast majority of the world’s population who do not work in national labs. This is in strong contrast to a market based – carbon fee – solution which provides everyone with a strong direct incentive to innovate and use less carbon. 

Bob Meinetz's picture
Bob Meinetz on Dec 29, 2014 12:26 am GMT

Merrian, each of the four scenarios presented in this report – including “Heavy Renewables” – includes a significant percentage of nuclear energy.

What might the future look like if NRDC put its ideological, antinuclear agenda aside and took climate change seriously?

Bob Meinetz's picture
Bob Meinetz on Dec 28, 2014 5:34 pm GMT

Hops, for me the part about destroying the environment with fossil fuel waste is troubling. Even more, putting convenience above responsibility for changes in the climate which could last for eons.

Hops Gegangen's picture
Hops Gegangen on Dec 28, 2014 6:05 pm GMT

 

I’m concerned about the CO2 as well, but as was discussed in other TEC articles, we could make methane from biomass and/or nuclear. The big advantage of methane is the existing storage facilities. Billions of cubic feet are stored in old coal and salt mines. 

There seems also to be a transmission advantage. Somehow, my utility burns methane to generate some portion of its electricity, and my cost of a delivered BTU from the utility is 3X that of the same methane, even at retail, and I’m sure they are buying wholesale.

If you want to use all electric heat, you have to greatly improve the capacity and reliability of the grid as well as over-build the nuclear to cover peak demand for heating.

 

Bob Meinetz's picture
Bob Meinetz on Dec 29, 2014 5:49 am GMT

Hops, all good points. We need to differentiate between short-term vs. long-term methods to get the most anti-carbon bang for the buck. In the short term, I agree that existing gas transmission infrastructure is a valuable asset, and what Ed Dodge calls RNG, or “renewable” natural gas, could theoretically provide the same energy to the same customers in a carbon-neutral way. I’m concerned for two reasons: 1) There isn’t remotely enough of it to replace fossil gas, and 2) Domestic shale gas is cheaper than RNG, which kills any economic incentive to use it in more than a greenwashing capacity.

New construction will never adopt electric heating until it’s economical, and it won’t be economical until there’s enough new nuclear generation to lower the price of electricity. So first, we need to make RNG and N2F gas (synthetic methane) competitive with shale gas – which will likely require carbon pricing to drive shale prices up. The priorities: price carbon, build out nuclear, solve the puzzle of nuclear-to-fuels with redoubled vigor, and begin mandating that a percentage of gas sold by utilities comes from carbon-neutral sources.

Nathan Wilson's picture
Nathan Wilson on Dec 29, 2014 6:43 am GMT

The reason fossil gas (methane) is 3x cheaper than electricity is because demand for oil and gas (which are produced together) is out of balance.  This may change in the future; as the DDPP report indicated, by 2050 oil use in transportation must drop significantly in every scenario; it’s replaced by batteries/electrification, hydrogen, and CNG/LNG.  Further something like 60% of the methane gas used is to be supplied by biomass and waste, which is likely to be more expensive (as well as having lower net-CO2).  So I would expect the cost of pipeline gas (a combination of fossil gas and biogas) to be around 50-90% to the cost of diesel, gasoline, and electricity.

The US plan in particular uses electric heat pumps for water and space heating; these devices deliver about 3 kWh of heat for every kWh of electricity used, so your heating cost shouldn’t change much (except for the upfront cost of the heat-pump).

The grid reliability concern is certainly valid; perhaps we’ll have to be diligent about keeping some wood on hand for the fireplace.  (Although my natural gas furnace uses an electric fan, so it is as useless as a heat pump during power outages).

In some of the colder countries like Russia and the UK, combined-heat-and-power and district heating is used.  In these systems, the heat can be distributed in a grid-like network, with multiple boilers for redundancy.  (District heating networks allow residences and businesses to get energy for space and water heating from a hotwater network which is powered with biomass, nuclear, or fossil fuel with CC&S).

Joris van Dorp's picture
Joris van Dorp on Dec 30, 2014 1:04 am GMT

A perfect example of why pro nuclear activism is so important today.

Antinuclearism is the root cause of rampant greenhouse gas emissions and energy poverty.

Promotors of antinuclear propaganda are the most dangerous people in the history of mankind.

Nathan Wilson's picture
Nathan Wilson on Dec 30, 2014 8:48 am GMT

The Deep Decarbonization Pathways Project US report envisioned our energy system going in some interesting directions:

  • Biomass use in electricity will be even lower than today’s 1.1% value! (it’s more valuable in fuel for transportation and industry.)
  • The solar share in electricity will be in the 5-15% range, and will generally be lower than the nuclear share (10-40%).
  • Neither geothermal nor hydro will grow much in any of the scenarios studied (around 0.6% and 6% respectively).
  • Wind power varies a lot across the scenarios: 14-62% of electricity.
  • The High CCS case is the only one with significant coal use.
  • Total electricity use must double by 2050 (US population goes up 35%).
  • The electricity has very low CO2 intensity, so the assumed end-use efficiency improvements are included to reduce cost, not reduce emissions!
  • For the transportation sector, the electricity share will be between 20-46% in passenger cars, but only 3% for freight.
  • Hydrogen and methane made from electricity will have a share between 2-55% for passenger cars and 6-39% for freight. (Ammonia was not studied, but would be in this category.)
  • The amount of land used for biomass is about the same as is used today for corn ethanol, and nearly all biomass is gasified to make methane or FT diesel.
  • Home energy use goes from 46% electricity now to 94% of final energy from electricity (commercial buildings are also largely electrified).
  • High use of dispatchable power-to-fuel in the hi nuclear and hi renewable cases mostly avoids the need for energy storage, and allows nuclear and renewables to work fine together.
  • The scenario with high use of CC&S combined with low renewables and nuclear nearly eliminates the need for power-to-fuel.
  • Steel & iron production is decarbonized by replacing the coal/coke energy source with bio-methane, power-to-fuel methane/H2, and electricity (except the CC&S case).
  • All of the CO2 reduction scenarios are expected to increase the energy system cost (external costs are not reported).  The annual incremental cost increases each year (at least for the mixed case), so that the largest costs are incurred decades in the future.

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