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Climate Change


The Technological Challenge of Climate Change

Limiting the rise in global average temperature will require that all nations, including the United States, reduce greenhouse gas emissions to near zero.

The National Research Council (NRC) report, Limiting the Magnitude of Future Climate Change (NRC 2009a), recommends strategies for limiting domestic greenhouse-gas (GHG) emissions to a level consistent with a global effort to hold future temperature increases to acceptable levels. Not surprisingly, technological innovation is a key strategy. Indeed, new technology for the production and use of energy will be essential to limiting future emissions of GHGs. The Limiting report suggests that technologies that are in hand today—or nearly so—can go a long way toward meeting a reasonable goal for reducing GHGs from the domestic energy sector by mid-century.

However, simply bringing these known technologies to commercial readiness will not be enough to solve the problem. These technologies must displace an enormous, embedded energy infrastructure, and ultimately, newer and less costly technologies must replace them in turn. In the process, energy consumers will have to learn to live with a transformed energy system.

The Climate Challenge

In 2009, U.S. primary energy consumption was 95.4 quadrillion Btus, 83 percent of which was generated by fossil fuels. Liquid fuels accounted for 45 percent of the fossil fuel supply, and coal and natural gas, in roughly equal measures, accounted for the balance. These proportions have hardly changed in the last 40 years, which is testimony to the difficulty of changing the U.S. energy system. Indeed, the only significant change in the fuel mix in those four decades was the introduction of nuclear power in the 1970s.

Combustion of fossil fuels in the energy system generates about 85 percent of domestic GHG emissions.1 Forty-one percent of these emissions come from the burning of coal to generate electric power. The transportation sector contributes 33 percent of the total, chiefly from petroleum. Residential and commercial buildings and industry account for the balance.

An important feature of each sector of the energy system is the long lifetimes of most of the assets involved in the production and use of energy. Electric power plants, the building stock, and most industrial facilities have decades of useful life. The transportation stock turns over somewhat faster, but even there the average life span of an automobile is close to 15 years.

Limiting the increase in global average temperature from climate change will ultimately require that all nations, including the United States, reduce GHG emissions to near zero. Between now and then, a limited amount of GHGs can be emitted. Thus, the first issue that must be addressed in a U.S. technology strategy is how to set the limit for U.S. domestic GHG emissions. Figure 1 shows conceptually the steps required to establish a U.S. emissions budget.

Figure 1

As a practical matter, setting that limit will be very difficult. At the start, we will need an agreement on the acceptable rise in global average temperature. Then significant scientific challenges will have to be met, notably but not exclusively because the sensitivity of the climate to increases in atmospheric concentrations of GHGs has not been pinned down. In addition, translating a global limit on GHG emissions to a target for the United States will involve important non-scientific judgments about fairness.

The Issue of Fairness

Between 1850 and 2000, the United States was responsible for about 30 percent of global GHG emissions. During that time, all of the developing nations together accounted for about 20 percent of the total. For this reason, some now argue that the United States should do more than developing nations to limit its emissions in the future. Others, acknowledging that meeting the global limit will be an expensive proposition, argue that it should be done in the least expensive way.

The differences between these two positions are profound. The least-cost criterion places a heavier burden on developing countries, where energy systems are typically less efficient than in industrialized countries, and as developing economies grow, opportunities are created to use new technologies. By contrast, the equity requirement—for example, equal per capita emissions integrated over a given period of time—shifts the burden to industrialized countries.2

The NRC Limiting report relies on recent modeling by the Energy Modeling Forum (EMF) to suggest that a representative U.S. budget for emissions from the domestic energy system from 2012 to 2050 would be between 170 gigatons (Gt) and 200Gt of carbon-dioxide equivalent (CO2−e) in GHG emissions. This modeling uses a least-cost criterion for determining the U.S. budget. However, an equity criterion (e.g., equal per capita emissions globally) could mean reducing the U.S. budget by nearly an order of magnitude.

The Technological Response

Setting a domestic emissions budget would provide a yardstick for measuring the challenge we face in transforming the energy system. One clear result of applying the yardstick would be to highlight the need for decisive action in spite of the considerable inertia of the existing system. The United States presently emits about 7Gt CO2−e annually, so it’s easy to see that unless we take action to limit emissions, the proposed budget of 170 to 200Gt CO2−e would be exhausted long before 2050. A crucial question, therefore, is whether it is possible to meet the budget constraint with available technology.

The models on which the emissions budget is based also produce scenarios of technology deployment in the energy system that would enable us to stay within the budget constraints. Several deployment scenarios were produced based on the different models used in the EMF project. Although none of these scenarios should be regarded as an immutable forecast of a future energy system, taken together they do provide a plausible range of deployment levels for major technologies.

In another large study, America’s Energy Future (AEF), the NRC examined the full range of technologies now available, as well as technologies being developed, for the supply and use of energy in the United States. The AEF committee estimated the technical potential of deploying these technologies in 2020 and/or 2035. In the AEF report, “technical potential” was a measure of whether a technology would be technically ready for commercial deployment before 2020 and whether, at that point, it could be deployed at the maximum rate short of a crash program. Thus technical potential was a committee judgment based on a determination of how fast energy technologies have penetrated the market in the past (NRC, 2009b).

In effect, then, the combination of EMF modeling and AEF technical potential creates a picture of the demand for technologies to meet a GHG emission budget and of the ability to deploy these technologies at the required rate. Table 1 illustrates this comparison for the year 2035 for one emissions budget.

Table 1

Based on this very rough comparison, the Limiting report makes the following observations:

  • GHG emissions from electricity production could be nearly eliminated by 2035 with a combination of improved end-use efficiency and the production of energy from renewable sources, nuclear fission, and coal combustion with carbon capture and storage (CCS). A prerequisite would be the demonstrated commercial feasibility of new nuclear power plants and CCS by 2020.
  • Improved end-use efficiency could reduce emissions in the transportation sector by about half. However, alternate fuels from coal and biomass would not be able to close the rest of the gap. Other energy options, most likely electric or hydrogen power, would be required.

The good news is that available (or nearly available) technology could potentially move the nation a long way toward satisfying a plausible domestic GHG emissions budget. However, realizing this potential in the real world is another matter. And even if it were realized, it might not be the best answer. In the remainder of this article, I discuss three major reasons for tempering our technological optimism.

Barriers to Deployment

Two key assumptions underlie the AEF estimates of technical potential. First, it is assumed that a technology will be demonstrated to be commercially feasible between today and 2020. This means that the cost and performance characteristics of the technology will be understood well enough to attract private-sector investment.3 Second, AEF assumes that this technology can be deployed, essentially unimpeded, in the energy system at an accelerated rate. These assumptions are useful for ensuring that the AEF estimates of technical potential are both transparent and comparable for a variety of technologies, but of course neither is a sure thing.

Technological Readiness

First consider technological readiness. Today, only improved energy efficiency and renewable technologies (shown in Table 1) can be considered commercially feasible. Numerous studies have confirmed that a number of efficiency technologies are ready for commercial deployment; a few renewable technologies can also make that claim. One of the AEF series of studies, Real Prospects for Energy Efficiency in the United States (NRC, 2010), provides a comprehensive review of energy efficiency.

The main commercially feasible renewable energy resource is wind, and wind technology is widely deployed, albeit with considerable government financial and regulatory support. The AEF estimate of technical potential for renewables is based mainly on the continued deployment of wind technology.

However, CCS and new nuclear technology have not been commercially proven at this point. AEF concludes that their feasibility could be demonstrated by 2020 with an aggressive program to build commercial-scale facilities. However, the challenges for these two technologies are quite different.

The new generation of nuclear technology is on offer today, and plants are being built abroad using this technology. However, the United States has not built a nuclear power plant for more than 30 years. Our challenge is to show that we can do so in a commercially feasible way.

By contrast, CCS has never been demonstrated at scale as a complete system. Although the components of the CCS system appear to be technically feasible, and hopes for the system are justifiably high, CCS has yet to meet the twin challenges of technical and commercial feasibility.

Market Penetration

To reduce GHG emissions substantially, feasible new technologies must rapidly replace the existing infrastructure of the energy system. As noted above, the AEF report assumes that replacement will be essentially frictionless, but of course it won’t be. For one thing, the new technologies will have to find their way through the maze of laws, regulations, and public opposition that impedes all new energy projects.

In addition, AEF points out that replacing the present energy infrastructure will also require overcoming other significant industrial and economic challenges:

  • Large amounts of private investment capital will have to be mobilized. The U.S. Census Bureau reports that total domestic investment in buildings and equipment in 2007–2008 was around $1.3 trillion, of which utilities and transportation accounted for about $175 billion (U.S. Census Bureau, 2010). A strong economy could probably accommodate accelerated investments in those two sectors, but the additional requirement would be consequential.
  • The change will require retiring or retrofitting existing power plants that still have long useful lives. According to estimates by the U.S. Energy Information Administration, in the absence of policy to the contrary, only 0.6 percent of U.S. generating capacity is retired every year, almost all of it fueled by natural gas (EIA, 2010).
  • We will have to educate and train the industrial and workforce capacity to build new facilities that we have never built before or, in the case of nuclear and coal power plants, have not built for many years.
  • We will have to develop and produce key supporting technologies, notably in the electricity supply and distribution system.

Meeting these challenges is possible, and even desirable, but it will clearly be a formidable task.

New Technology

As was suggested above, technologies that are likely to be available by 2020 could substantially decarbonize the electric power sector, but they would fall short in the transportation sector. Plainly, then, further technological innovation will be necessary to meet GHG emission-reduction targets. The obvious need is for non-fossil fuels in the transportation sector. If AEF is correct in concluding that liquid fuels from biomass have limited technical potential, then the likely candidates at this point would seem to be electricity or hydrogen power.

However, we will need innovation not only in the transportation sector but in other sectors as well. For example, the technologies available by 2020 to decarbonize the electric-power sector are likely to be only a first step toward creating an electric system that not only emits little or no carbon dioxide but also is both reliable and affordable. Many problems will have to be solved:

  • The cost of CCS will have to be reduced. Carbon capture, especially as a retrofit on existing power plants, creates large parasitic loads on the power plant, mainly because of the energy required to regenerate the catalyst. Research to reduce this parasitic load would pay off by reducing cost considerably.
  • Renewable power will have to be integrated into the system. Because wind and solar power are intermittent energy sources, integrating them into an electric system in which production closely tracks demand will be a significant challenge. However, recent integration studies in the U.S. have reported that 30 to 35 percent of intermittent energy sources can be accommodated with adaptive management practices and improved forecasting, at relatively low cost.4  Large-scale storage will be helpful at a use-level above 35 percent, but except for compressed-air storage systems, the storage problem has yet to be addressed.
  • Electricity transmission and distribution systems will have to be upgraded and expanded. Modern power electronics to manage flows and advanced controls to improve reliability would strengthen the transmission system. We will probably need a larger, more interconnected transmission system to accommodate new generating sources, especially renewable sources. Better communication with customers through smart meters would greatly improve distribution and demand management. If electric vehicles become popular, the distribution system will also have to extend service to the transportation sector.

Support for Research

The developments described above will be necessary to deploy technologies that are already reasonably well along. We will also need support for research to create new technologies with more favorable performance and cost characteristics than those of the technologies already on the drawing boards. Examples of breakthrough technologies might include artificial photosynthesis, more efficient solar cells, and the application of nanotechnology and bioengineering to energy problems. In any case, the climate problem will be with us for many decades, and it’s hard to imagine that late 20th century technology will be the best available by the mid-21st century or later.

According to the Limiting report, current public and private investment in energy research is incommensurate with the need. Government support for research has remained at a relatively low level (except for stimulus funding) compared to support in other countries and compared to U.S. research expenditures on other national priorities such as health and space. Similarly, private-sector investment in energy research, although difficult to track, appears to be well below the level of investment in other industries that require technological innovation for their survival.

The NRC is notoriously reluctant to suggest specific research budgets in its reports, and it does not do so in the Limiting report. However, a group of senior technologically savvy business leaders recently published a report in which they recommended an annual government investment of $16 billion (AEIC, 2010). This contrasts sharply with the current government budget of about $5 billion and would be consistent with the analysis in the Limiting report.

Household Decisions

As difficult as it will be to replace the existing energy infrastructure, however, that is only half the battle. Getting people to use new technology will also be a major challenge. A familiar but important example documented in numerous studies is that economically attractive energy-efficiency technology and practices are massively underused; the AEF efficiency report (NRC, 2010) reviews this issue. For reasons that seem to mystify economists, people just do not act rationally.

Household behavior is a crucial, often overlooked, element of the energy system. Dietz et al. (2009) estimate that direct energy use by households accounted for 38 percent of domestic GHG emissions in 2005. In other words, energy-conscious decisions at the household level could determine almost 40 percent of GHG emissions in the United States. These decisions could include improving heating, ventilation, and air conditioning systems (HVAC), adopting more efficient appliances, maintaining existing equipment more regularly, changing temperature settings, and altering behaviors such as driving habits.

In addition, household decisions indirectly influence another 25 percent of domestic GHG emissions through the energy used in the production and distribution of consumer goods. Dietz et al. (2009) studied how to nudge household decisions in the direction of lower energy use that would result in lower GHG production. Being social scientists, they know something about how to do the nudging.

For example, Dietz examines the “plasticity” of household behavior, that is, the degree to which behavior can be changed by reasonably well known techniques without requiring major changes in lifestyle. Behavior plasticity varies substantially depending on the type of change desired. Thus, stimulating action to improve HVAC systems and weatherization is much easier than changing driving habits. The former simply requires investing in more efficient equipment, while the latter affects lifestyle. The study estimates that reasonably well known techniques could encourage household decisions that could reduce emissions by 20 percent over the next 10 years.

The social science focus on household energy decisions is recent but important, and it raises at least two interesting questions. First, what are the most effective ways to influence household decisions about energy use? It seems clear that householders do not respond to purely economic signals, so something more is required. Deitz explains that a combination of tools usually works best. For example, financial incentives alone are not necessarily enough, but when combined with programs that promote customer convenience, provide quality assurance, and employ marketing that advocates the social value of energy efficiency, the results can be impressive. Still, this is a relatively unexplored application of social science techniques to energy and climate issues, and further research and experience could prove valuable.

A second question is whether social science can have a long-term effect on household decisions. Dietz proposes actions focused on household decisions that directly affect energy use to bring emissions down in the relatively short term. In the longer term, however, we may need societal support for deploying low-emission production technologies and demand for consumer products with smaller carbon footprints.

Conclusion

Managing climate change to acceptable levels is a significant challenge, and the Limiting report makes the case that meeting that challenge will require prompt, sustained action. Much of the action, of course, involves the development and deployment of new technology. Ideally, we would begin immediately to make better use of available technologies; strive to bring CCS, nuclear, and other technologies to the point of commercial deployment by 2020; and invest heavily in future breakthroughs that would meet the economic and social challenge of climate change at least cost. That is a tall order for scientists and engineers, but the Limiting report is essentially optimistic that these communities can deliver.

Overcoming the barriers to putting all of this technology to work will be more difficult. To move as quickly as we must, we will have to make transformational changes in a deeply embedded energy system that has resisted change for decades. Assembling the financial and human resources to support those changes will be challenging. In addition, ordinary householders and consumers will have to change behaviors, which will require bringing social scientists into the energy picture in new and unfamiliar ways. Perhaps the most unexpected result of the Limiting report was to expand the scope of the challenge to include these additional considerations.

References

AEIC (American Energy Innovation Council). 2010. A Business Plan for America’s Energy Future. Available online at http://www.americanenergyinnovation.org/.

Deitz, T., G.T. Gardner, J. Gilligan, P.C. Stern, and M.P. Vandenbergh. 2009. Household actions can provide a behavioral wedge to rapidly reduce U.S. carbon emissions. Proceedings of the National Academy of Sciences of America 106(44): 18452–18456.

EIA (U.S. Energy Information Administration). 2010. 2010 Annual Energy Outlook Table 9.  Available online at http://www.eia.doe.gov/oiaf/aeo/excel/aeotab_9.xls.

NRC (National Research Council). 2009a. Limiting the Magnitude of Future Climate Change. Prepublication. Washington, D.C.: National Academies Press. Available online at http://www.nap.edu/catalog.php?record_id=12785.

NRC. 2009b. America’s Energy Future: Technology and Transformation.  Washington, D.C.: National Academies Press. Available online at http://www.nap.edu/catalog.php?record_id=12091.

NRC. 2010. Real Prospects for Energy Efficiency in the United States. Washington, D.C.: National Academies Press. Available online at http://www.nap.edu/catalog.php?record_id=12621.

U.S. Census Bureau. 2010. Capital Spending Report: U.S. Capital Spending Patterns—1999–2008. Available online at http://www.census.gov/econ/aces/report/2010/
capitalspendingreport2010.pdf
.

FOOTNOTES

1 Non-energy sources of GHG account for about 15 percent of the total, but only the energy system is considered here.

2 It is possible to combine equity and efficiency through the use of offsets, which would allow an industrialized country to pay for an emissions-limiting project in a developing country. However, an offset system would be very difficult to manage. 

3 Note that commercial feasibility depends on the existence of a market in which private-sector investment is profitable. In the absence of policies to compel action to limit GHG emissions—a price on carbon, for example—markets for CCS and other technologies may not exist.

4 For a discussion of integration studies, see the article by Arent in this issue (p. 31).

About the Author: Robert W. Fri is Senior Fellow Emeritus and Visiting Scholar, Resources for the Future.