Why a carbon price beats technology breakthroughs
The decarbonization data makes clear that if you want to beat 450 ppm and avoid catastrophic climate impacts, a significant price for carbon (plus aggressive technology deployment) is much more important than technology breakthroughs.
That is a central point of this post. That is what I learned in the mid-1990s when I helped to run the billion-dollar office at DOE in charge of federal clean energy technology breakthroughs and deployment — and had the chance to work with the top scientists and technology modelers at the national labs to figure out how we can cut emissions most quickly and cost-effectively.
The pursuit of the Holy Grail of multiple technology breakthroughs is, in fact, a side show — and for many, like Bush/Luntz/Gingrich/Lomborg, that pursuit is meant as a complete rhetorical distraction to the public so we can continue to avoid action, as I have repeatedly blogged. It was specifically designed by conservative strategist Frank Luntz as a core delaying strategy.
As for the authors of the recent Nature article, “Dangerous Assumptions” [PDF] and the founders of the Breakthrough Institute, Shellenberger and Nordhaus, they are not delayers — they say they genuinely want to address the climate issue. But I do know that by pushing some of the same rhetoric as Bush and Luntz, they are unintentionally reinforcing the core delay message. (I do take exception to how they have occasionally defined “breakthrough,” as I explained here, and their specific notion that solar PV or solar thermal require government-funded breathroughs, as I explained here.)
More importantly, it really doesn’t matter why they keep pushing analysis and conclusions that are wrong. It merely matters that they are wrong. Significantly, Roger Pielke, Jr., keeps using the wrong definition of decarbonization — and by "wrong" I mean not the one the IPCC uses in the very pages that Pielke references in the Nature paper.
I can’t imagine that any readers want to use “decarbonization” differently from how the IPCC (and most of the literature) uses it. But again, as we will see, much more important than semantics, the historical decarbonization data strongly suggests that the two major conclusions of the Nature article are wrong:
- The IPCC scenarios are not filled with “Dangerous Assumptions,” as the title of the Nature article asserts.
- The recent carbonization data does not support the central conclusion of the article “Enormous advances in energy technology will be needed to stabilize atmospheric carbon dioxide concentrations at acceptable levels.” In fact, if anything, it supports the reverse conclusion, the one stated in the first line of this post.
Pielke believes the issue is over. He just wrote a post titled “Case Closed.” But he completely misunderstood the purpose of my earlier post — I was not agreeing with his approach to the subject, I was just trying to point out that even using his (incorrect) approach, he had made a basic analytical mistake. He did. It is one of many he has made recently (see, for instance, this new RealClimate post and this old Scienceblogs post).
Decarbonization is one of the two core technology strategies (along with energy efficiency) needed to avert catastrophic global warming. So it must be understood completely by anyone who cares about the climate. Probably the best way to do that is to read the IPCCs’s own “Special Report on Emissions Scenarios” (which is cited in the Nature article) that has a whole section titled “Carbon Intensity and Decarbonization.” It is a very short section that has some terrific charts and that undermines the entire Nature article. Let’s look at the first chart.
Figure 2-11: Global decarbonization of primary energy — historical development and future scenarios, shown as an index (1990 = 1)
Here is what the IPCC believes is the most accurate way to describe what has happened (note: the carbon intensity of primary energy is carbon emissions divided by total energy):
Decarbonization denotes the declining average carbon intensity of primary energy over time (see Kanoh, 1992). Although the decarbonization of the world’s energy system shown in Figure 2-11 is comparatively slow, at the rate of 0.3 percent per year, the trend has persisted throughout the past two centuries (Nakicenovic, 1996). The overall tendency toward lower carbon intensities results from the continuous replacement of fuels with high carbon content by those with low carbon content.
Pielke doesn’t use this definition of decarbonization, even though pretty much everyone else does. Why? Who knows. It isn’t just semantics, though — and it is not, as Pielke claims, “dissembling and misdirection” on my part to explain all this, as we will see.
(Semantic aside: The Nature article says, “Decarbonization of the global energy system depends mainly on reductions in energy intensity and carbon intensity.” That is quite a confusing sentence, for if we used the standard definition of decarbonization, it would translate into, “The declining average carbon intensity of primary energy over time depends mainly on reductions in energy intensity and carbon intensity.”)
Pielke likes to focus on carbon/GDP, which isn’t anywhere near as analytically useful as decarbonization, as we’ll see. And, of course, carbon/GDP doesn’t have a hundred or two hundred year trend, a trend that undermines part of his case against the IPCC. In any case, if you use the common definition, the IPCC one, then you end up with data that suggests the IPCC isn’t making dangerous assumptions but is making reasonable ones and a useful distinction:
The carbon intensities of the scenarios are shown in Figure 2-11 as an index spliced in the base year 1990 to the historical development. The median of all the scenarios indicates a continuation of the historical trend, with a decarbonization rate of about 0.4 percent per year.
The scenarios that are most intensive in the use of fossil fuels lead to practically no reduction in carbon intensity. The highest rates of decarbonization (up to 3.3% per year) are from scenarios that envision a complete transition to non-fossil sources of energy.
That doesn’t seem like such a dangerous assumption, does it? Seems kind of reasonable, actually, to use a lot of possible scenarios of the future, with the median decarbonization roughly equal to the historical rate for a century. Yes, this is a 2000 report, and when the IPCC stopped taking new input for the Fourth Assessment, around 2005, there were a few years of data that the decarbonization had at least temporarily reversed. Hardly a reason to throw out three dozen scenarios derived from the literature and based on a century of data.
Okay, I know what you’re thinking: Please, please let this be the last post on decarbonization But, Joe, wasn’t the real point of the Nature article that the most dangerous assumption by the IPCC in their scenarios was that most of the future decarbonization occurs “automatically” and “in the absence of climate policies”? Since those “spontaneous advances” aren’t happening, we need “Enormous advances in energy technology” just like they said. In fact, as we’ll see, that doesn’t really describe what’s going on in the scenarios — but that is a separate discussion, which I will defer until Part 2.
Breakthroughs don’t get you accelerated decarbonization
Now what is really fascinating to me is that the 20th century was certainly the greatest century for technology breakthroughs in the history of the world by far, including some major energy-related breakthroughs like nuclear power and combined cycle turbines and photovoltaics and the jet engine and the transistor. We also had two World Wars and two huge energy shocks in the 1970s. But the decarbonization trend hardly budges for the century.
What I draw from this is that the decarbonization trend was essentially independent of breakthroughs.
But the decarbonization trend reversed in 2000. Was it lack of improvements in technology or lack of investment in breakthroughs? No, that hasn’t slowed down. Indeed, it has accelerated, especially in the energy arena. We have dropped the price of wind and PV by about a factor of ten in a quarter century. We have hybrid cars. The world has been spending $1+ billion/year on hydrogen.
What changed, then? Two things, mainly. First, the price of the fossil fuel that has the least amount of carbon and which can be burned most efficiently — natural gas — went through the roof. So coal became much more economically attractive. A combined cycle natural gas plant has well under half the emissions of a typical coal plant. I would also add that nuclear, which saw steady growth in electricity delivered for the past few decades, also turned out to be expensive and risky and hard to develop rapidly — so growth slowed. At the same time, absent a price for CO2 reflecting its harm to society, renewables have not been able to capitalize on the high cost of natural gas and nuclear as quickly as they could have (except in Europe where renewables have much higher government subsidies and mandates and a price for carbon — but the same exact technology, of course, that we have here in America or that the Chinese have).
Conclusion No. 1: The best way to get back on the decarbonization trend is not through technology breakthroughs, but through the accelerated deployment of low-carbon technologies, which is best achieved in three ways: a price for carbon, government mandates (such as renewable standards), and government subsidies (such as tax credits or feed-in tariffs (I am not endorsing the latter)).
Indeed, it would seem pretty clear that absent a serious price for carbon (or major subsidies/mandates), it would be hard to make the case that any other strategy would do better than return us to the historical trend, 0.3 percent per year — a trend far too slow to get us to 450 ppm.
But there was another big post-2000 change. The fastest-developing country in the world, China, walked away from two decades of an aggressive energy-efficiency deployment program in the late 1990s (see my post and the video of a terrific talk by Dr. Mark Levine, co-founder of the Beijing Energy Efficiency Center). That meant the only way to grow was to build power plants as fast as possible — and since they have a lot of coal (and no price for carbon to reflect its harm), and most everything else was relatively expensive, they went on the biggest binge of coal-plant building in the world’s history.
Conclusion No. 2: Aggressively deploying energy-efficient technologies is a very good strategy for reducing or eliminating the need to build new power plants. And if the energy efficiency happens to be in a country whose power grid is very carbon-intensive and whose cheapest energy option (absent the costing of environmental impacts) happens to be the most carbon intensive, then that efficiency will contribute to decarbonization or at least to not reversing other decarbonization trends.
In short, I am arguing that the reason the more than century-old decarbonization trend of the global energy system reversed course in 2000, the reason that carbon dioxide emissions growth has been “anomalously” high since 2000, was a confluence of two main factors — the relatively higher price of low-carbon power vs. coal and China’s abandonment of energy efficiency. (In general, efficiency has no direct impact on decarbonization — this was an unusual case, but then, the recent recarbonization was historically unusual.)
And so I am concluding that the best way to reverse the recent “carbonization” trend is a price for carbon dioxide, aggressive deployment of low-carbon technologies through mandates and subsidies and other government deployment programs (where needed before the CO2 price really kicks in), and a return to aggressive energy-efficiency deployment in China.
If we don’t do those things, I honestly can’t see what all the breakthroughs in the world would get us, even if breakthroughs were easy to get, which they are not. Indeed, even if you got your breakthroughs, you would now have a bunch of low-volume, high-initial-cost disruptive technologies that would themselves need a price for CO2 and aggressive deployment programs to have any chance whatsoever against the market incumbents — just like we have today. We don’t just instantly invent an energy source that has half the price of coal. You must have cost reduction from the manufacturing learning curve and production volume economies of scale, anyway.
Bottom line: I would have thought it obvious that the single most important thing needed to remove carbon from our energy system much faster than the historical rate is a price for carbon. Otherwise, what is the economic incentive over the long term? Sure, there is always hope we might find something new and exciting with a big breakthough. But in fact it is applying the new smarts in small ways to old technology, like solar thermal electric, that holds the only genuine hope for changing the planet’s energy system fast enough to avoid climate catastrophe.
Stay tuned for Part 2.