Michael P. Totten, Chief Advisor, Climate, Water and Ecosystem Services, Conservation International, describes the impor...
REDD IS THE IMMEDIATELY AVAILABLE CCS (Reducing Emissions from Deforestation-Degradation – Carbon Capture & Storage) Michael P. Totten, Chief Advisor, Climate, Freshwater & Ecosystem Services Conservation International,
[email protected] April 2, 2009 version
Climate science insights regarding uncertainty of predictions emphasize that reducing the range of uncertainty is not likely to take place for many decades, theoretically or empirically.1 In effect, the passage of time is a global experiment conducted by humans experiencing the triggering of continuously cascading multiple climate impacts. The uncertainty is serving as a weapon by climate naysayers and skeptics who inaccurately claim nothing will happen with a doubling of CO2 atmospheric concentrations (to 550 ppm), or if anything does happen it will be more positive than negative. The mainstream climate science, reflected in the cautious and inherently compromising assessment reports by the Intergovernmenal Panel on Climate Change (www.ipcc.ch/) emphasize the mean probability distribution resulting from a doubling of CO2. However, a cluster of highly respected climatologists and economists are warning about the uncertainties in a heavy-tail distribution. These are low-occurrence events but with potentially mega-catastrophic consequences.2 Nassim Nicholas Taleb's Black Swan: The Impact of the Highly Improbable (2007), reminds us that history is littered with high-impact rare events known in quantitative finance as "fat tails." Fat tail distributions exhibit power law decay. By contrast to fat tail distributions, the normal distribution (Gaussian or bell curve) posits events that deviate from the mean by five or more standard deviations ("5-sigma event") as extremely rare, with 10- or more sigma being practically impossible. The recurring financial meltdowns of the past century,3 of which the current multi-trillion dollar financial bailout is just the most recent, were considered improbable events under the Gaussian normal distribution risk assessments upon which bankers/financial institutions make assumptions and operate(d). What does this mean regarding climate probability distributions? Renowned NASA climatologist James Hansen and a group of highly respected climatologist co-authors cogently argue that the fat tail is going to strike with a vengeance far sooner than suggested by the bell curve modeling of most studies.4 The bottom line according to Hansen et al: if humanity wants 1
Andrew Watson, Certainty and Uncertainty in Climate Change Predictions: What Use are Climate Models? Environ Resource Econ (2008) 39:37–44, http://www.springerlink.com/content/j13t6w3618485052/fulltext.pdf.
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"Fat tail," Wikipedia, http://en.wikipedia.org/wiki/Fat_tail: "A fat tail is a property of some probability distributions (alternatively referred to as heavy-tailed distributions) exhibiting extremely large kurtosis particularly relative to the ubiquitous normal [distribution] which itself is an example of an exceptionally thin tail distribution."
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10 American Financial Meltdowns in the Past Century, October 10, 2008, www.neatorama.com/2008/10/08/10american-financial-meltdowns-in-the-past-century/.
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James Hansen, Makiko Sato, Pushker Kharecha, David Beerling, Robert Berner, Valerie Masson-Delmotte, Mark Pagani, Maureen Raymo, Dana L. Royer and James C. Zachos, Target Atmospheric CO2: Where Should Humanity Aim?, October 2008, Open Atmospheric Science Journal, http://arxiv.org/abs/0804.1126. In
to avert catastrophic, irreversible climate disasters it needs to stabilize atmospheric concentrations below 350 ppm. Allowing a doubling to 550 ppm, which current public policy initiatives (and the lack thereof) are heading us well beyond, is tantamount to triggering longterm, world-wide climate catastrophes.5 The new insight that society must shoot for a CO2 amount less than the current level is a dramatic change from most previous studies, which even most recently suggested that the dangerous level of CO2 was likely to be 450 ppm or higher. The downward change "is caused by realization that ‘slow’ feedback processes, such as ice melt and release of greenhouse gases by the soil and ocean in a warming climate, can occur on the time scale of decades and centuries. This realization stems from both improving data on the Earth’s climate history and ongoing observations of change, especially in the polar regions." At the same time, Hansen et al continue, “There is a bright side to this conclusion, by following a path that leads to a lower CO2 amount we can alleviate a number of problems that had begun to seem inevitable, such as increased storm intensities, expanded desertification, loss of coral reefs, and loss of mountain glaciers that supply fresh water to hundreds of millions of people.” Economists continue to debate which valuation methodology is most appropriate to use in determining planetary welfare and the social cost of carbon (e.g., marginal abatement cost or marginal damage cost). The difference between the low and high cost estimates can be more than two orders of magnitude (i.e., from several dollars to several hundred dollars per ton of CO2). The lower marginal social cost estimates result from using a narrower frame of reference that tends to minimize or exclude non-market damages, equity concerns, and non-marginal damages (e.g., value of life or impacts on economies beyond their ability to cope effectively with climatic perturbations).6 More fundamental, however, is that while cost-benefit analyses (CBAs) producing marginal cost estimates provide useful rankings of the cost-effectiveness and risk profiles for a range of mitigation options, they do not consider long-term catastrophic impacts occurring over multicentury and multi-millennia timeframes. A significant fraction of CO2 emissions remain in the atmosphere and accumulate over geological time spans of tens to hundreds of thousands of years, raising the lurid, but real threat of extinction of most life on Earth. From this vantage point, as Harvard Economics Professor Martin Weitzman argues, CBAs are “especially and unusually misleading,” and a more illuminating and constructive analysis would be determining the level of retrospect it shouldn't be surprising that the appropriate "CO2 target" is below 350 ppm, the authors note, because "humanity and natural ecosystems adapted to the climate produced by the pre-industrial ~280 ppm CO2 amount that existed for the past 10,000 years. Civilization’s infrastructure was built for the climate zones of the Holocene, and the infrastructure depends on the stable sea level of the past several thousand years." 5
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Even the G8 commitment to reduce GHG emissions 50% below 1990 levels by 2050 is woefully insufficient. It would result in atmospheric concentrations eventually surpassing 1000 ppm impacting future generations, significantly raising the risk of human extinction (based on paleoclimate evidence of past extinctions, see Peter Ward, Under a Green Sky). Downing, T. and Paul Watkiss. 2002. Overview: The Marginal Social Costs of Carbon in Policy Making: Applications, Uncertainty and a Possible Risk Based Approach. www.defra.gov.uk/environment/climatechange/research/carboncost/pdf/downing_watkiss.pdf.
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“catastrophe insurance” needed: “rough comparisons could perhaps be made with the potentially huge payoffs, small probabilities, and significant costs involved in countering terrorism, building anti-ballistic missile shields, or neutralizing hostile dictatorships possibly harboring weapons of mass destruction… A crude natural metric for calibrating cost estimates of climate-change environmental-insurance policies might be that the U.S. already spends approximately 3% of national income on the cost of a clean environment”.7
CCS? NOT AVAILABLE What does this mean, then, for an IMMEDIATE call to action? A key step, say Hansen et al, are no new coal plants unless they include carbon capture and storage (CCS). While CCS focuses on the projected doubling of new coal-fired electricity by 2030, it does not address the 3,800 GW of current coal generation worldwide, which emitted 11 billion metric tons of CO2 in 2005. Hansen et al call for phasing out existing coal emissions between 2010 and 2030, pointing out that the phase out, combined with avoiding emissions from tar sands and oil shale,8 would lead to atmospheric CO2 peaking "at 400-425 ppm and then slowly decline." Moreover, peak CO2 could be kept close to 400 ppm, “if the most difficult to extract oil and gas is left in the ground via a rising price on carbon emissions that discourages remote exploration and environmental regulations that place some areas off-limits.” In a recent testimony before the Committee on Ways and Means, Hansen argues for a gasoline tax of $1 per gallon, equivalent to a carbon tax of $115 per ton CO2. This would generate $670 billion per year in tax revenues, which he recommends returning 100% of that money to the public.9 Most problematic, however, is that CCS is not yet commercially available, and the multi-billion dollar CCS demonstration phase (to around 2015) is projected to sequester each ton of CO2 at a 7
Weitzman, M. 2008. On Modeling and Interpreting the Economics of Catastrophic Climate Change. Harvard University Department of Economics. www.economics.harvard.edu/faculty/weitzman/files/REStatFINAL.pdf.
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More than $125 billion of oil sands projects are planned for development by 2015. The larger operators, including Shell, ExxonMobil, BP and ConocoPhillips, each plan on producing several hundred thousand barrels per day from the oil sands by 2020. Most development is occurring in Alberta, Canada, threatening 140,000 km2 of boreal forests, and is water-intensive, consuming 3 barrels of water for every barrel of oil produced. Canada’s oil reserves – virtually all of them in tar sands – are now officially recognized as second only to those of Saudi Arabia. Source: Oil Sands Fever series, Pembina Institute, 2008, www.pembina.org/. Oil shale is less developed, with the U.S. possessing most of the world's resources. Other countries with significant resource deposits include Brazil, Congo, and China. It has been calculated that the power plants and chemical reactions required to produce 3 million barrels of oil per day from U.S. oil shale would generate 350 million tons of CO2 a year -- about 5% of current annual US GHGs, and this is in addition, and equal to, the CO2 emissions released in consuming the fuel. Operations would also require about 10 million barrels of water per day. Source: WWF, Unconventional Oil – Scraping the Bottom of the Barrel? 2008, www.panda.org/oilsands.
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James E. Hansen, "Carbon Tax and 100% Dividend vs. Tax-and-Trade", testimony before the U.S. House of Representatives, Committee on Ways and Means, February 25, 2009, http://www.columbia.edu/~jeh1/2009/WaysAndMeans_20090225.pdf. As Hansen notes, "Each adult legal resident gets one share, which is $3000 per year, $250 per month deposited in their bank account. Half shares for each child up to a maximum of two children per family. So a tax rate of $115 per ton yields a dividend of $9000 per year for a family with two children, $750 per month. The family with carbon footprint less than average makes money – their dividend exceeds their tax. This tax gives a strong incentive to replace inefficient infrastructure. It spurs the economy. It spurs innovation."
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cost between $60 and $90. When CCS does prove commercially scalable between 2020 and 2030 the storage cost is projected to average about $45 per ton CO2, adding about 3 cents to the cost of each kWh of coal-generated electricity.10 For perspective, hypothetically, if CCS was suddenly available and applied to the 2.4 billion tons of CO2 emissions from U.S. fossil-fired electricity generation (coal, natural gas and oil) at that $45 per tCO2, this would amount to nearly $100 billion per year (500% more than if offset through REDD at $7.50 per tCO2). There also will be additional long-term CCS costs, notably the essentially "infinitely" long insurance and monitoring dealing with the risk of CO2 leakage from the underground geological storage systems over a many millennia time frame. As a recent McKinsey report laconically understates, "…as storage duration (thousands of years) is far longer than the typical lifetime of a company, the state would always be implicitly responsible for leakage in the long run."11 Coal gasification with CCS could be either slightly cheaper or more expensive than nuclear power by 1 or 2 cents per kWh depending on regional economics12, but both of these will be more than twice as expensive as wind power, three times more expensive than onsite combined heat and power generation (CHP), and up to 15 times more expensive than end-use efficiency improvements.13 And, if given a committed level of federal R&D and sustained incentive support for solar photovoltaic power systems that has been provided to nuclear power over the past half century, solar PV generated electricity could be at grid parity by 2015, before either coal+CCS is commercially viable or new construction of nuclear plants.14 Ironically and contrary to constant media mis-reporting, the cost of reducing coal emissions turns out to be a money saver and financial gainer for consumers, and especially retail-facing businesses. Multi-billion dollar annual energy savings are up for grabs, and will occur most rapidly as more and more states adopt utility decoupling/financial-aligning innovative regulation (see below)! One example is particularly illustrative and exemplary: electric drive motor systems. Nearly half of electricity worldwide is consumed by electric motors, pumps, compressors and fans (60% in China, 50% in USA). Retrofitting such systems can yield 30% electricity savings at a levelized cost of just 1 cent per kWh saved. New systems enable 50% savings, typically at a negative cost per kWh (i.e., both capital and operating savings). This one measure could displace one-fourth of all planned new coal plants worldwide through 2030, while accruing monetary savings of a 10
MIT Study on the Future of Coal, Options for a Carbon-constrained World, 2007, www.mit.edu/.
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McKinsey & Company, Carbon Capture and Storage: Assessing the Economics, Sept. 22, 2008, www.mckinsey.com/clientservice/ccsi.
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Research done for the California Public Utility Commission on how to comply with AB32 (California's Global Warming Solutions Act) puts the cost of power from new nuclear plants at 15.2 cents per kWh and the cost of coal gasification with CCS at 16.9 cents per kWh. Discussed further by Joe Romm, Is 450 ppm possible? Part 5: Old coal’s out, can’t wait for new nukes, so what do we do NOW? Climate Progress, May 8, 2008, http://climateprogress.org/2008/05/08/is-450-ppm-possible-part-5-old-coals-out-cant-wait-for-new-nukes-sowhat-do-we-do-now/.
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Amory B. Lovins and Imran Sheikh, The Nuclear Illusion, Ambio Nov 08 preprint, draft 18, May 27, 2008, www.rmi.org/.
14
The European Union's PV Tech Platform has set the year 2015 for achieving "grid parity."
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quarter of a trillion dollars per decade, and achieving multi-billion ton CO2 emission reductions at negative cost (i.e., savings). In 2006, there were nearly 1,500 coal-powered units at electrical utilities across the US, with a total nominal capacity of 336 gigawatts (GW), generating roughly 2 trillion kWhs, consuming 930 million metric tons or 92% of all coal, and emitting 2.4 billion tons CO2. The electric motor efficiency retrofit savings just noted would displace 15% of this total amount, or 300 billion kWh per year, at a savings of tens of billion of dollars per year, while preventing one-third of a billion tons of CO2 emissions. "Amory Lovins, whose organization works in 50 countries, said that a quarter of global development capital goes to make and deliver electricity. Spending on energy saving, rather than electricity production, costs a thousand times less in capital investment, with a 10 times faster return. 'That 10,000-fold capital leverage is the biggest macroeconomic opportunity in the world to free up money for other development needs,' he said."
"California points the way, in the United States, to an energy-efficient future", October 29, 2008, International Herald Tribune, http://www.iht.com/articles/2008/10/29/business/renconserv.php
Necessary, Not Enough Efficiency improvements are essential -- ultimately displacing the equivalent of 13 billion rail cars of coal while accruing tens of trillions of dollars in cumulative savings this century -- but not sufficient.15 And stopping coal emissions is essential, but not sufficient. The upper end of emissions from just widespread deforestation amount to about 130 ppm, which, added to today's 385 ppm CO2e atmospheric concentration, will put us close to Hansen et al's catastrophe probability distribution. REDD, THE IMMEDIATELY AVAILABLE CCS Bolder IMMEDIATE actions are imperative, which needs to be clearly and continuously enunciated to citizens, business leaders, and Mayors and Governors, since national politicians are unlikely to make a strong case for sufficiently bold action. They will have to be pushed by their constituents to do and maintain the right, mega-bold actions.16 15
Totten, Michael P. Energy Efficiency, chapter, in Mittermeier, R.A., M. Totten, L. Ledwith Pennypacker, F. Boltz, C.G. Mittermeier, G. Midgley, C.M. Rodríguez, G. Prickett, C. Gascon, P.A. Seligmann, and O. Langrand. 2008. A Climate for Life: Meeting the Global Challenge. Arlington: CEMEX Conservation Book Series; ILCP, www.aclimateforlife.org.
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This is a critically important reason why citizens should be far more ambitious in applying web-based communication tools that are already accessible by one-fourth of humanity (and very soon to one-third given phenomenal growth rates in developing countries of web-accessible smart phones). Extraordinary, high quality, continuously expanding social collaborations like the Wikipedia encyclopedia are compelling evidence of how to trigger a socially driven global force. It took about the same amount of hours to create and operate Wikipedia -- now 10 times longer than any other encyclopedia, daily expanded, error corrected, and files being translated into 150 different languages, by 80,000 volunteers – as Americans spend viewing TV ads each weekend (~100 million hours)!!! (See, Clay Shirky, Institutions vs. Collaboration, TED talk, 2005, http://www.youtube.com/watch?v=sPQViNNOAkw). Catalyzing a Wikipedia-like "knowledge in action: public asset around the theme of "A Climate for Life" is essential for harnessing an vast force of web-savvy engaged change agents, who not only annually offset their carbon and land footprints, but push for big policy changes, and catalyze friends and others like crazy to do likewise. Not at all surprisingly, Al Gore is
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One obvious action immediately available is requiring all existing fossil-fired power plants to offset their CO2 emissions until such time the plant ceases operation or is retrofitted with CCS (likely to cost above $100 per tCO2). Offsetting all U.S. electricity coal-fired CO2 emissions (which generates 55% of total U.S. electricity) at the European Trading Scheme's prices (~$25 per t CO2) would amount to $60 billion per year. However, using REDD offsets that cost $10 per ton CO2 would only require $24 billion, avoiding more than $36 billion per year in unnecessary costs, and raising the cost of coal-fired electricity by slightly less than one cent per kWh. This amounts to less than a 10 percent increase in the price of delivered electricity. Using REDD offsets that cost $10 per ton CO2 would only require $24 billion per year and raise the cost of U.S. coal-fired electricity by less than one cent per kWh. This is significant savings compared to the EU Trading price, which would amount to $60 billion. It is also significant savings compared to CCS when available 15 years from now, costing at least $100 billion.
Twinning REDD with Efficiency = Carbon Neutral/Revenue Positive Outcome Of course, even the CO2-emitting electricity cost increases from REDD offsets can be straightforwardly reduced by implementing several well-proven public policy and regulatory innovations, like those long operating in California, Vermont and other states. Most valuable is aligning utility financial interests with those of their customers by rewarding utilities for delivering electric, gas and water services through efficiency gains whenever it is less than the cost of expanding supplies (and especially CO2-free supplies). In return for this cost diligence, the utilities are able to recoup their lost earnings as a result of reduced sales revenues (technically referred to as decoupling revenues from earnings).17 As indicated in McKinsey energy efficiency productivity assessments, the pool of efficiency measures providing a 12% or better ROI is gargantuan; this could result in utilities costeffectively capturing five to 10 times more efficiency gains than if voluntarily left to customers to undertake such actions (all due to higher-customer vs. lower-utility discount rates). Utilities would remain financially whole, while customers' utility bills would decline, as would additional CO2 emissions at negative cost.
aggressively promoting the use of advanced web social-networking/citizen-collaboration tools for accelerating bold climate actions. See, Al Gore: What Now? Web 2.0 Summit, Nov. 5-7, 2008, http://en.oreilly.com/web2008/public/schedule/proceedings. 17
California Energy Commission, 2007 Integrated Energy Policy Report, November 2007, CEC-100-2007-008CTF. And, California Public Utility Commission, California Energy Efficiency Strategic Plan (Draft) Rulemaking 06-04-010, February 8, 2008, www.californiaenergyefficiency.com/.
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CAP & TRADE DOWNSTREAM – NOT MID-STREAM A second policy innovation – a load-facing (customer-facing) carbon cap-and-trade system, similar to the one adopted by California and several other states -- significantly reinforces utility decoupling, and further expands the pool of cost-effective end-use efficiency (electricity, natural gas, and water services), as well as onsite and distributed energy systems (i.e., site-erected and/or building-integrated solar photovoltaics, solar hot water, and combined heat and power systems). This action is superior to federal legislative proposals that would allocate CO2 credits to the midstream polluting utilities, which financial analyses have shown will only result in higher utility bills (20 to 45%, in Texas and Midwest, respectively), but insignificant emission reductions (0 to 6 percent, in Texas and Midwest, respectively).18 This remains the case even if done through an auction.19 The load-facing type of emission cap-and-trade allocation system (i.e., implemented at the local distribution utility level) is also far more profitable to Mayors and city governments, and retailfacing businesses, as well as the supply chains servicing all these industries, and the customers purchasing from these retail businesses. Opposition, of course, which is already substantial and persistent, would continue to come from inflexible coal and oil companies. TIE-IN WITH REDUCING POVERTY The policies mentioned so far are applicable throughout North America, and in any other nation's utility system – capitalist, socialist or communist. It is definitely applicable to the most impoverished populations in developing countries, helping accelerate elimination of poverty, and doing so in a way that greens the economic development process as it scales larger.20 18
Richard Cowart, Architecture and Policy of Cap and Trade: Power Sector Issues, Presentation to NARUC, Conference on Climate Change and Utility Regulation, July 23, 2008, Regulatory Assistance Project, www.raponline.org/.
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Upstream allocations are cheaper than mid-stream allocations (possibly avoiding more than $150 billion per year in excess costs in the U.S), but appears to be more expensive than a downstream allocation, and sub-optimal in spurring available financial capital for undertaking continuous efficiency improvements in end-use efficiency, smart grids, and most importantly, the integration of the utility and transport sectors (i.e., plug-in hybrid electric vehicles). An upstream cap-and-trade architecture has been developed by Yale economist Robert Repetto for the U.S. Presidential Climate Action Project. It includes several intriguing, important and relative ease-ofimplementation and operation features that deserve close scrutiny. First, the upstream plan is based on comprehensive coverage, bringing all of the 2,000 first sellers of fossil fuels – oil, natural gas, and coal – under a cap. It would set an annual percentage reduction in carbon fuel use, rooted in mandatory limitations on the first sales of fossil fuels (Repetto proposes 1 to 1.5 percent per year), and include an auction for the permits, instead of allocating them to the polluters. The intriguing aspect is what to do with the revenues generated from auctioning permits. Among a half dozen suggestions are included land-based carbon offsets. Repetto is vague as to whether this includes REDD worldwide, or is limited to U.S. activities, hence the value of closer scrutiny. See, Robert Repetto, National Climate Policy: Choosing the Right Architecture, April 2007, Yale School of Forestry and Environmental Studies, www. , prepared the Presidential Climate Action Project, www.climateactionproject.com/docs/Repetto.pdf. See also, The 100 Day Action Plan to Save the Planet: A Climate Crisis Solution for the 44th President by William Becker, Presidential Climate Action Project.
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J Goldemberg, T B Johansson, A K N Reddy, R H Williams, An End-Use Oriented Global Energy Strategy, Annual Review of Energy, November 1985, Vol. 10, Pages 613-688.
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How? A quarter century ago Indian Professor Amulya K. N. Reddy, joined forces with Brazilian Professor Jose Goldemberg, Swedish Professor Thomas Johansson and Princeton Professor Robert Williams, to develop a path-breaking energy assessment called the end-use-oriented global energy strategy. In the world of scenario modeling it is a superb illustration of bottom-up, economic-engineering analysis and backcasting. They clearly showed how economically attractive energy technology was already available or forthcoming to essentially provide all human beings worldwide with the level of well-being experienced by modern Europeans in the 1970s, on just 1 kilowatt (KW) of energy supply. For comparison, the U.S. average is 10 kW, OECD countries range between 4 and 7 kW, the world average is about 2.5 kW. At the time they published their assessment the average energy consumption in developing countries was 1 kW. But it was super-inefficient, as well as highly polluting and sickness causing. For example, open-fire combustion for cooking, heating and lighting are (still) responsible for 36% of all lower respiratory infections and 22% of all chronic obstructive pulmonary disease, leading to 5,000 deaths per day. An end-use-oriented strategy has the great benefit of not only capturing higher efficiencies at the point of use, as well as eliminating the inefficiencies of remote generation and long-distance transmission and distribution, but applying modern energy carriers that are far less polluting and health-threatening. Reddy et al's detailed assessment was released in 1985, entitled Energy Strategy for Sustainable Development (Wiley: New Delhi). Gus Speth, then head of the World Resources Institute, published a condensed version, and it was a core part of WRI's mission in the 1980s and 1990s. When Speth became head of the UNDP he continued spearheading this approach, notably within the UNDP energy program, with very clear links to reducing poverty, empowering women, reducing environmental problems, and for avoiding energy security perils. Amulya Reddy often called this new energy paradigm a poverty-oriented energy strategy for sustainable development, and coined the acronym, DEFENDUS (DEvelopment-Focused, ENDUse-oriented, Service-directed paradigm). In the 1990s he and his graduate students developed a software program called DEFENDUS, widely used to show government officials how to deliver more clean, safe, affordable energy services per dollar of investment through the end-useoriented approach than from the conventional large-scale power plant model. What this means worldwide, developed and developing countries alike, is: 1. Satisfying human energy (and water) service needs more rapidly, thoroughly, cheaply and cleanly 2. Dramatically reducing energy-related, sickness-inducing contaminants and pollutants 3. Reducing the amount of revenues required to deliver electricity (and natural gas and water) utility services. Instead of >$150 trillion of revenues spent by customers this century on these services, half that amount could be freed up from the utility sector for other economic development
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4. Deep CO2 reductions (as well as SOx and NOx) would be achieved via the efficiency gains, avoiding utility rate hikes or government taxes for costly clean-up operations. 5. Several times more employment generated per dollar of energy investment. 6. Reduced conflicts over displaced poor people by large dams and energy projects. REDD AS CCS FOR MOTOR GASOLINE COMBUSTION AS WELL A similar offset requirement should be applied to gasoline when purchased at the gas pump. Using REDD offsets that cost $10 per ton CO2 would increase the cost of a gallon of gasoline by just 9 cents. This is less than a 6 percent increase in gas pump prices. About 390 million gallons of motor gasoline are consumed each day or 142 billion gallons per year. Offsetting the 1.28 billion tons CO2 would amount to $12.8 billion. About 390 million gallons of motor gasoline are consumed each day or 142 billion gallons per year. Using REDD offsets that cost $10 per ton CO2 to offset the 1.28 billion tons CO2 from motor gasoline would amount to $12.8 billion. This would increase the cost of a gallon of gasoline by just 9 cents.
Twinning REDD with Vehicle Efficiency – Carbon Neutral and Revenue Positive As with the utility offset costs, the motor gasoline offset costs can be reduced through efficiency gains. The opportunities, both in manufacturing and policy incentives, are detailed in the Defense Department sponsored report, Winning the Oil Endgame.21 Doubling vehicle efficiency can be accomplished at a levelized cost of $14 per barrel of oil equivalent – five to 10 times lower than petroleum and biofuel prices over the past year. Obviously this would take a decadeplus to manifest at a large commercial scale, as the vehicle stock is rolled over and replaced with higher efficiency models. More immediately, the CO2 offset costs could be recouped several times over by simply practicing better vehicle driving habits and maintenance procedures (e.g., proper tire pressure), which are empirically shown to improve fuel economy by 10 percent. So, a 20-mpg SUV with annual fuel costs of $1,854 (at $3 per gallon) and a CO2 offset cost of $54, would see $169 in net annual savings from the improvement to 22-mpg (now $1,686 in fuel costs and $49 CO2 offset). Far greater annual net savings of $927 would accrue by trading in the 20-mpg vehicle for one getting double the fuel mileage (with fuel costs declining to $900 and the CO2 offset to $27). Cost of Reducing Global Deforestation by half by 2020, and 3/4th by 2030 According to the recent UK Eliasch Review on financing global forestation for climate mitigation,22 it is estimated that it would take between $17 and $32 billion per year to finance a 21
Winning the Oil Endgame: American Innovation for Profits, Jobs, and Security, September 2004, by Amory B. Lovins, E. Kyle Datta, Odd-Even Bustnes, Jonathan G. Koomey, Nathan J. Glasgow, www.oilendgame.com/.
22
Eliasch Review, Climate Change: Financing Global Forests, 2008, UK Office of Climate Change, www.occ.gov.uk.
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50% reduction in global deforestation by 2020.23 This is well within the range of the $18 to $39 billion REDD-as-CCS offset costs recommended in this paper for U.S. coal-fired electricity and motor gasoline. In addition, the Review estimates capacity building in 40 forest nations could cost up to $4 billion over five years. This will include three key areas: research, analysis and knowledge sharing; policy and institutional reform; and demonstration activities. The Review further concludes that failure to radically reduce deforestation will lead to $1 trillion per year climate costs by 2100, and "The total damage cost of forest loss for the global economy could be $12 trillion in net present value terms." This does not include damage costs from other ecosystem services lost. The Eliasch Review repeatedly emphasizes the fact that due to the remarkably low cost of forest abatement compared to mitigation in other emitting sectors, the cost of cutting global carbon emissions 50% below 1990 levels could be reduced by up to 50 per cent in 2030 and up to 40 per cent in 2050 if the forest sector is included in a global trading system. These lower costs can enable the international community to achieve far more ambitious global stabilization targets more swiftly. Another recent "REDD-as-CCS" assessment by Strassburg et al. examined incentive costs to prevent deforestation in the top 20 developing countries by forest area, accounting for 77% of total forests in developing countries. They concluded from their projections that for an incentive of $5.63 per tCO2 all 20 countries would join and reduce their emissions by an aggregate rate of 94.5 percent. Annual costs would amount $29.6 billion, of which $ 20.9 billion are incentives, $1.1 billion transaction costs and $7.6 billion forest management and protection costs.24 Best Global Scale Energy Supply Options – Solar PV - and Wind as transition Paralleling these IMMEDIATELY implementable options (unfolding now and over the next several decades) should be the pursuit of other energy supply options that best satisfy upwards of a dozen important criteria repeatedly mentioned in the scientific literature as important for preventing and/or minimizing the adverse and unintended consequences when scaling any supply option globally and over the century. These criteria encompass the ecological, economical, equitable and security challenges confronting humanity.25 As described in the two energy chapters in A Climate for Life, the best available evidence to date indicates that [after implementing policies, incentives and practices ensuring continuous 23
Under the Eliasch Review reference scenario, emissions from deforestation were estimated to be 3.5 billion tCO2 per year by 2030. By including forests in a global cap and trade system, emissions from deforestation were projected to fall to 0.9 billion tCO2 per year by 2030. This reduction of 2.6 billion tCO2 per year represents a 75 per cent reduction in emissions from deforestation by 2030.
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Bernardo Strassburg, Kerry Turner, Brendan Fisher, Roberto Schaeffer and Andrew Lovett, An EmpiricallyDerived Mechanism of Combined Incentives to Reduce Emissions from Deforestation, CSERGE Working Paper ECM 08-01, Centre for Social and Economic Research on the Global Environment.
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Totten, Michael P., Renewable Energy chapter in Mittermeier, R.A., M. Totten, L. Ledwith Pennypacker, F. Boltz, C.G. Mittermeier, G. Midgley, C.M. Rodríguez, G. Prickett, C. Gascon, P.A. Seligmann, and O. Langrand. 2008. A Climate for Life: Meeting the Global Challenge. Arlington: CEMEX Conservation Book Series; ILCP, www.aclimateforlife.org.
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efficiency gains are captured when emerging from the essentially inexhaustible R&D pipeline throughout this century – envision eliminating the equivalent of nearly 14 billion coal railcars this century] the next best options are onsite building-integrated solar photovoltaics (BIPV), combined heat and power (particularly when fueled with local and regional biowastes), fielderected solar PV (only requiring 7% of existing urban land to provide 100% of electricity demand, and in the U.S. urban brown fields could provide 90% of that land). Not only is no new land required, but solar PV requires 99% less water than fossil, nuclear, hydro, or solar-thermal-electric power plants. However, accelerating cost reductions and scaling-up commercialization of solar PV will require 5 times more R&D funding (in contrast, nuclear has received 100 times more in federal R&D funds for decades), as well as states adopting best-in-play net metering laws (like New Jersey's)26, and sustaining significant federal tax incentives for solar PV manufacturers, installers and customers over the next two decades. Essentially every country in the world receives sufficient solar energy to effectively turn every urban center into a "solar energy generation system." A solar-based energy economy also presents extraordinary export market growth opportunities.27 It may take a decade or two to make solar PV cost-competitive (affordable, or financially cashpositive).28 In the transition period, wind power is already competitive with any other electricity option, and contrary to widespread misconceptions, has a relatively small land footprint. For example, providing 100% of U.S. electricity demand would require several hundred thousand 3 MW wind turbines, which would take up one-third of 1 percent of the Great Plains, while providing farmers and ranchers, on average, twice the earnings they now make farming/ranching 75% of the Great Plains!!! As with solar PV, wind farms require 99% less water than other power plants.29 An obvious technical innovation of immense proportions that straightforwardly comports with the emphasized actions highlighted above is connecting the utility grid to the transport sector. Vehicle-to-Grid connectivity is a system efficiency gain par excellent. It synergizes extraordinarily well with mainstreaming solar power and wind power, two ultra-clean, CO2-free intermittent energy sources that can be designed for baseload power as a result of using the 26
Network for New Energy Choices, Freeing the Grid, Best and Worst Practices in State Net Metering Policies and Interconnection Standards, 10-2008, www.newenergychoices.org/uploads/FreeingTheGrid2008_report.pdf.
27
Global energy expenditures over a century could cumulatively exceed $1,400 trillion, based on economists' projections of an average of 2.5 percent annual economic growth worldwide, and given energy expenditures typically constitute 8% of a nation's gross domestic product (GDP). Fossil fuels would constitute 80% of this amount under business-as-usual energy projections.
28
Local and state public policy innovations can greatly accelerate solar PV implementation, as has been demonstrated by the California cities of Berkeley, Palm Desert and Santa Monica. These cities have arranged for long-term financing that enables solar PV systems to be installed such that the building owner is cashpositive the day of installation. See: California Adopts Innovative Solar Loan Law, L.A. Times, July 22, 2008, http://latimesblogs.latimes.com/greenspace/2008/07/california-adop.html; City of Berkeley, FIRST, Financing Initiative for Renewable and Solar Technology, www.ci.berkeley.ca.us/ContentDisplay.aspx?id=26580; City of Palm Desert, Energy Independence Program, January 2009, www.cityofpalmdesert.org/Modules/ShowDocument.aspx?documentid=2569.
29
Totten, Michael P., A Brief Proposal: Wind Development and Ecological Restoration in the Great Plains, June 2007, www.scribd.com/my_docs.
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storage capacity in the distributed batteries of plug-in electric hybrid vehicles (PHEVs). When PHEVs saturate 10 to 30 percent or so of the total vehicle fleet, the amount of distributed onboard storage batteries could be sufficient to dramatically raise the operational capacity of solar and wind power to provide 100 percent of U.S. electricity demand. As with ensuring market commercialization of cost-effective solar PV power systems, a far greater amount of R&D is critical for sustaining the necessary technical breakthroughs in high-performance, advanced vehicle battery technology, as well as sufficiently sustained tax incentives for electric vehicle manufacturing and customer purchasing. The few technical strategies outlined in this memo would go a considerable way in getting global society moving towards largely eliminating climate catastrophic dangers, while also helping to accelerate resolution, and not hindering and slowing the process, of reducing mass poverty and protecting destruction of key biodiversity areas. More can and must be done, to be spelled out in future, longer memo. But one thing to keep in mind: Business-as-usual energy development this century (predicated on providing the energy services needed for the global economy to sustain 2 to 3 percent annual growth, as economists assume), will incur more than $1,400 trillion in cumulative expenditures, 80% dependent on fossil fuels, and resulting in catastrophic atmospheric CO2 concentrations of 1000 ppm. The strategy outlined above, which is drawn from a rich, evidence-based literature, would be able to deliver these energy services at half the cost – freeing up hundreds of trillions of dollars from the energy sector, while "greening" the remaining supply requirements, and not only avoiding multitrillion dollar oil wars, and averting the catastrophic consequences of climate change, but giving the greatest chances of protecting nature's irreplaceable biodiversity and the ecosystem services upon which human health and well-being are sustained.
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