A spirited competition for low carbon energy

This September some remarkable breakthroughs occurred in climate protection -almost enough to balance the grim news on the scientific front indicating rapidly thinning Arctic sea ice and acceleration of deglaciation in Greenland. The promising signs include India’s announcement of willingness to commit to greenhouse limits and adoption of a domestic cap and trade plan for energy efficiency in eight industry sectors; massive investments by China in wind and solar energy; and an announcement by Japan’s new Prime Minister, Yukio Hatayama, that Japan will commit to reduce its greenhouse emissions 25% below current levels by 2020. The Republic of Korea’s Green New Deal stimulus package, launched in January, had already disbursed 20% of the US $38.1 billion pledged for 2009-2012. Indonesia has also indicated the potential for cuts in carbon emissions of 40% below 2005 levels by 2030 through reductions in deforestation, peat land degradation, and energy consumption.

 

Despite this progress, the outlook is not auspicious for a sweeping North –South emissions accord by the conclusion of this December’s Copenhagen Climate Conference. Different perceptions by developed and developing countries over historic emissions, per capita emissions and emissions growth complicate near term efforts to get a deal on CO₂. Yet, the overall outlook for global emissions reduction is more promising if we look past the negotiations to what is actually happening as a global competition develops to dominate emerging low carbon energy fields.

 

Just as it became clear that cap and trade climate legislation was facing rough going in the US Senate and would be unlikely to be enacted before the December 2009 Copenhagen Climate Conference, environmental visionary Lester Brown reported the startling news that US energy sector carbon emissions based on data through summer 2009 had dropped 9% since 2007. In a few other instances in the last generation significant reductions in greenhouse emissions occurred quickly in major industrial countries. In the UK the National Union of Mineworkers led by Thatcher foe, Arthur Scargill, went on strike in March 1984 against the Prime Minister’s efforts to close some inefficient coal mines; when the strike ended a year later the union was broken and Thatcher managed to move the UK’s electricity base to natural gas, much coming from the North Sea. The fall of the Berlin Wall in 1989 and the reunification the next year of Germany led to a closure of highly inefficient factories in the East and a dramatic drop in overall German greenhouse emissions. Closing of some greatly inefficient factories and forcing individuals and industry to pay for energy consumed following the fall of the Soviet Union in 1991 resulted in a sharp drop in greenhouse emissions in virtually all of the countries that had once been part of the Soviet Union. Yet, unlike these moves produced by political upheaval, the sharp and quick drop in US emissions may be a harbinger of a profound change in perception by industry, investors and consumers of the need to adopt a more environmentally sustainable path. Some of the drop was, as Brown notes, likely attributable to the sharp spike in gasoline prices in 2008 and some to a slowdown in the economy. Much of it, however, appears attributable to shifts throughout the economy to a lower carbon path with new coal plants becoming as difficult to finance and license as nuclear plants have been since the Three Mile Island accident in 1979, wind emerging as a large-scale power technology, and greater use of a range of renewable and efficiency systems. This sharp US emissions drop happened largely before there would have been a chance for the Obama Administration’s green energy policy changes and stimulus package energy spending to take hold. It seems likely that they will give further momentum to this US de-carbonizing trend.

 

 The remarkable US emissions change may be an indication that the US economy is already moving rapidly toward a low- carbon path. On September 14, just a week and a half before the opening of the G-20 meeting in Pittsburgh, The Climate Institute (Australia), a widely respected climate protection group that has since its founding in 2005 helped catalyze an about face in Australian climate policy, and E 3 G, a London-based environmental think tank, released a report tracking the positioning of each of the G-20 member nations on what the report characterized as “ low carbon competitiveness,” namely the ability to have their economies thrive in a carbon-constrained world. These emission trends in the US likely reflect a broad-based move to de-carbonize, a product of actions of thousands of entrepreneurs and investors, many state and local policy makers, and millions of consumers whose growing environmental interest has reinforced the interest of investors and entrepreneurs in low and non carbon energy.

 

 Already there are signs in China of a similar concerted effort to move toward a low- carbon economy. Fed partly by perceptions of vulnerability to climate change and the air and water pollution associated with coal burning, this Chinese thrust may be driven even more by a desire to be preeminent in such technologies as solar, wind, and carbon capture and storage related to fossil fuel burning. It is likely that such change is underway in India, Japan, Korea, and many other countries and driven by competitiveness concerns as much as environmental commitment.

 

It is important to sustain investors’ and entrepreneurs’ perceptions that there will be a price to pay for emitting greenhouse gases and heat trapping particles, so it is vital that progress occur at Copenhagen. It is equally crucial, however, to pay much greater attention to short-lived greenhouse gases such as methane and heat trapping particles whose reduction could result in near term cuts in the radiative forcing that drives climate change. It is vital to develop a Global Warming Potential (GWP) for black carbon that would facilitate investment in cleaner cookstoves, retrofitted two stroke engines and much cleaner trucks. A shift to a 20 year rather than 100 year time frame for GWP calculations in trading could result in much sharper reductions in radiative forcing that threatens to cause climate change to move past irreversible tipping points. Fortunately the United Nations Environment Programme recognizes that black carbon reductions are a crucial part of an effective climate solution, and the United Nations Foundation has been examining the feasibility of greatly expanded clean cook stove programs that might slash both indoor air pollution deaths and global black carbon emissions. Building these win-win strategies into a climate deal would ensure that a climate treaty would have a lasting effect, whether negotiated in Copenhagen this December or 11 months later at COP16, expected to be in Mexico.