IEA: Adopting Cleantech Could Save $100 Trillion by 2050
The once staid International Energy Agency continues its string of blunt, must-read reports laying bare the reality of our climate and energy system.
While so many “experts” and politicians make hand-waving pronouncements about how the primary solution to climate change is more R&D or how cheap natural gas is the answer to our problems, the IEA is one of the few international bodies with a comprehensive energy and economic model that cuts through the BS.
As their new report, Energy Technology Perspectives 2012, makes clear, new natural gas investments can play at best a limited, very temporary role “if climate objectives are to be met.” The only viable response to the threat of catastrophic climate change is rapid deployment of existing carbon-free technology.
The Executive Summary offers the key conclusion that the extra investment needed to achieve the 2°C Scenario (2DS) would be a net money saver:
Achieving the 2DS would require USD 36 trillion (35%) more in investments from today to 2050 than under a scenario in which controlling carbon emissions is not a priority. That is the equivalent of an extra USD 130 per person every year. However, investing is not the same as spending: by 2025, the fuel savings realised would outweigh the investments; by 2050, the fuel savings amount to more than USD 100 trillion. Even if these potential future savings are discounted at 10%, there would be a USD 5 trillion net saving between now and 2050. If cautious assumptions of how lower demand for fossil fuels can impact prices are applied, the projected fuel savings jump to USD 150 trillion.
Perhaps because people have misinterpreted their recent reports on natural gas — as I discuss in my May 30 post, “IEA Finds ‘Safe’ Gas Fracking Would Destroy A livable Climate” — the IEA has tried to be clearer here. And they have succeeded. Consider how the report was covered in the NY Times by Matthew Wald, who is no greenie:
Reducing carbon dioxide emissions by enough to prevent global temperatures from rising more than 2 degrees Celsius (3.6 degrees Fahrenheit) is “still within reach,’’ the International Energy Agency reported on Monday, but at the moment, trends in energy use are running in the wrong direction.
In the latest version of Energy Technology Perspectives, a report issued biennially by the agency, it said the technology to achieve that goal is available. But as Maria van der Hoeven, executive director of the agency, put it, “we’re not using it.’’ Since the agency published its first Energy Technology Perspectives in 2006, the evidence of climate change has only grown stronger, she said, but “if anything, it has fallen further down the political agenda.’’
Point #1: Delay makes no sense, since we have the technology to start aggressive emissions reduction and delay is very costly. The IEA explains here that “every additional dollar invested can generate three dollars in future fuel savings by 2050.” It has previously explained that, “Delaying action is a false economy: for every $1 of investment in cleaner technology that is avoided in the power sector before 2020, an additional $4.30 would need to be spent after 2020 to compensate for the increased emissions.”
Point #2: If natural gas is a bridge fuel, then the bridge is really, really short one. Here’s the NY Times again:
Coal consumption, for example, is still rising around the world, and that is “the single most problematic trend in the relationship between energy and climate change,” the report said. Building more efficient coal-fired plants operating at higher temperatures could cut emissions by 30 percent per kilowatt-hour. But to reduce global carbon dioxide emissions by 2050, coal use would have to fall by 45 percent from 2009 levels, the report said.
Natural gas is not the answer to this problem, the report points out. Gas-fired plants may emit only half as much carbon dioxide per kilowatt-hour generated than coal-fired plants, but by 2025 the amount emitted will be higher than the average for the entire electric system, it said.
The United States and some other countries are feverishly building new natural-gas-fired generating equipment, the report adds, but the level of emissions from gas raises “questions around the long-term viability of some gas infrastructure investment if climate objectives are to be met.”
The report expands on that point, to make clear that post-2030, natural gas must increasingly play a supporting role to renewables:
Post-2030, as CO2 reductions deepen in the 2DS, gas-powered generation increasingly takes the role of providing the flexibility to complement variable renewable energies and serves as peak-load power to balance generation and demand fluctuations. Natural gas will remain an important fuel in all sectors in 2050, and demand is still 10% higher in absolute terms in 2050 compared to 2009. The speci?c emissions from a gas-?red power plant will be higher than average global CO2 intensity in electricity generation by 2025, raising questions around the long-term viability of some gas infrastructure investment if climate change objectives are to be met. If near-term infrastructure development does not sufficiently consider technical flexibility, future adaptation to lower-carbon fuels and technologies will be more difficult to achieve.
In other words, either we plan now for the transition off natural gas, or our expanded investment in gas infrastructure is going to complicate any effort to preserve a livable climate.
Point #3: ”It is difficult to overstate the importance of energy efficiency, which is nearly always cost effective in the long run, helps cut emissions and enhances energy security.”
Point #4: We need to price carbon:
Ensuring that the true price of energy – including costs and bene?ts – is reflected in what consumers pay must be a top priority for achieving a low-carbon future at the lowest possible cost. Putting a meaningful price on carbon would send a vital price signal to consumers and technology developers.
Point #5: Finally, the IEA makes clear that renewable energy can play a dominant role in supplying electricity by mid-century, indeed, it must:
Low-carbon electricity is at the core of a sustainable energy system. Low-carbon electricity has system-wide benefits that go beyond the electricity sector: it can also enable deep reductions of CO2 emissions in the industry, transport and buildings sectors. ETP analysis shows how emissions per kilowatt-hour can be reduced by 80% by 2050, through deployment of low-carbon technologies. Renewable energy technologies play a crucial role in this respect. In the 2DS, their share of total average world electricity generation increases from 19% currently to 57% by 2050, a six fold increase in absolute terms. In fact, low-carbon electricity generation is already competitive in many markets and will take an increasing share of generation in coming years. Integrating a much higher share of variable generation, such as wind power and solar PV, is possible. In 2050, variable generation accounts for 20% to 60% of total electricity capacity in the 2DS, depending on the region.
It’s time for governments and journalists and opinion-makers to actually read IEA reports and stop pretending that our current energy policies are rational.
By. Joe Romm