Before Father Christmas becomes a climate refugee …

As this is my last post before Christmas I thought I would look forward to some good cheer and also perhaps some seasonal gifts.  Here’s my request to Father Christmas at the North Pole (or according to your preferred tradition Papa Noel, St Nicolas, Santa Claus, or another bringer of good cheer at this time of year).

“Dear Father Christmas,

can we please have for Christmas something that makes global carbon dioxide emissions rise no more than 0.5 % p.a. until they reach that peak, leads them to peak in 2025, and then fall at 3.5% p.a. forever, so that global temperatures this century increases by no more than 2.0 degrees centigrade due to extra carbon dioxide in the atmosphere.

Thank you”

You can fill in your own numbers for your own particular wish in this spreadsheet

Adam Whitmore’s summary of the Allen and Stocker model

Sometimes it seems like it will need a miracle from Father Christmas to get to the sorts of numbers you have probably entered, certainly if they are like mine.  But if the world can at least make good progress towards these numbers next year, it will make the best Christmas present the planet could have.

Here’s hoping it works out that way, and in the meantime enjoy the holiday season.

Adam Whitmore – 18th December 2014

Note:

If you want to know more about the basis of this calculation see my earlier post here.  The parameters define cumulative CO2 emissions given current emissions (area under the curve), and this converts to linearly to temperature. I’ve assumed a transient climate response to emissions (TCRE) of 2 degrees, a variable which is subject to considerable uncertainty.  The calculation is for CO2 warming only, and there may be another perhaps 0.4 degrees due to other greenhouse gasses, so you might want to be more ambitious about what you wish from CO2 than I have been here, even though the numbers already look rather ambitious.

Grains of rice, Japanese swords and solar panels

Even Greenpeace has underestimated the growth of renewables.  In particular, solar has been growing exponentially, and may continue to be so for a while, though likely at a slower percentage rate.

Greenpeace did much better than many at projecting the growth of renewable energy sources in the 2000s.  Their projections were very close to outturn for wind – the 1999 projections were a little below outturn, the 2002 projections a little above.  However even Greenpeace underestimated the growth of solar.  The projections were nevertheless startlingly better than those of the IEA, who have, as I’ve previously noted, consistently underestimated the growth of renewables by a huge margin.  Growth of solar has been exponential, as has that of wind (at least until recently).  Greenpeace appears to have done well by following the logic of exponential growth.

Greenpeace’s projections for wind growth in the 2000s were close to outturn, but they underestimated the growth of solar …

Capture

Exponential growth is so powerful that it can confound intuition about how large numbers can become.  The counterintuitive power of exponential growth is illustrated by the process of making a traditional Japanese steel sword.  The supreme combination of strength and flexibility of such a weapon is said to derive from the way an exponential process layers the metal.  As the metal is beaten out and folded repeatedly to forge the sword the number of layers in the metal doubles up each time.  Following this simple process 15 times creates 215 layers, well over 30,000.  This would be impossible in any other way with traditional methods, and the number of layers created would be hard to comprehend without doing the formal calculation.  This property of producing very large numbers from simple repeated doublings may have contributed to previous projections for renewables seeming implausible, because they were so much greater than the then installed base.  This may have contributed to even Greenpeace being a little cautious in its projections for solar.

Nevertheless exponential growth inevitably runs into limits as some stage.  This is captured by the classic fable of grains of rice on a chessboard, where one grain is put on the first square, two on the second, four on the third, eight on the fourth and so on, doubling with each square.  Half way through the chessboard the pile of grains, though very large, is manageable – around 50 tonnes for the 32nd square.  However amounts then quickly begin to go beyond all reasonable physical constraints.  The pile on the final square would contain 263 grains of rice, which is about 230 billion tonnes.  This is about 300 times annual global production, and enough to cover not just a square of the chessboard but the entire land surface of the earth (to a depth of about a millimetre or two).

Extrapolating growth rates for solar PV from the period 2000 to 2013, when cumulative installed capacity doubled every two years, runs into similar limits.  At this growth rate the entire surface of the earth would be covered with solar panels before 2050.  This would provide far more energy than human civilisation would need, if there were room for any people, which there would not be because of all the solar panels.   So are there constraints that imply that renewables are now in second half of the chessboard – or, if you prefer a more conventional model, the linear part of an s-curve for technology adoption?

Looking at solar in particular, as I’ve previously commented, it needs a lot of land, but this is unlikely to be a fundamental constraint.  Some have previously suggested a limit as technologies reach scale, defined as about 1% of world energy supply, after which growth becomes more linear.  However solar manufacture and installation are highly scalable, so there are fewer obstacles to rapid growth than with traditional energy technologies.

Costs are rapidly falling, so that solar is becoming competitive without subsidy, both compared to other low carbon technologies and, increasingly, with high carbon technologies, especially if the cost of emissions is taken into account.  There is no obvious limit to how low the costs of solar cells can go that is likely to bind in the foreseeable future, although the ancillaries may show slower cost falls.  The costs of lithium ion batteries are also falling rapidly, having approximately halved in the last five years and continuing to fall at a similar rate.  As a result daily storage is becoming much more economic, reducing the problem of the peakiness of solar output and easing its integration into the grid, although seasonal storage remains a daunting challenge.

Solar still accounts for only around 1% of world electricity generation so globally there are plenty of opportunities globally in new electricity demand and from scheduled retirement of existing generating plant.  The vexed issues around grid charges, electricity market structures and role of incumbents may slow growth for a while, at least in some jurisdictions, but seem unlikely to form a fundamental barrier globally as long as costs continue to fall.

In short there seem few barriers to solar continuing to grow exponentially for a while, although likely at a slower percentage rate than in the past – each doubling is likely to take longer than two years given the current scale of the industry.  Solar can still continue moving quite a long way up the chessboard before it hits its limits.  How large the industry will become will need to await a future post, but provisionally there does not seem any reason why solar PV should not become a 300-600 GW p.a. or more industry.

Policy has played an important role in the development of solar to date mainly by providing financial incentives.  It will continue to play an important role, but this will be increasingly around removing barriers rather than providing a financial stimulus.

Of course I cannot know if this fairly optimistic view is right.  But it does at least to avoid some issues that might bias projections downwards.  First, it recognises the potential validity of counter-intuitive results.  In a sector such as energy which usually changes quite slowly the numbers resulting from exponential growth can seem implausible.  This can lead to rejection of perfectly sound forecasts, as the intuition of experienced professionals, which is based on long experience of incremental change, works against them.  Second it avoids assuming that all energy technologies have similar characteristics.  Finally, it takes into account a wide range of possibilities and views and considers the drivers towards them, helping to avoid the cognitive glitch of overconfidence in narrow limits to future outcomes.

The rate of growth of renewables is intrinsically uncertain.  But the biases in forecasts are often more towards underestimation than overestimation.  If you’ve been in the energy industries a while it’s quite likely that your intuition is working against you in some ways.  Don’t be afraid to make a projection that doesn’t feel quite right if that’s where the logic takes you.

Adam Whitmore – 25th November 2014

Notes

In the calculations of the results from exponential growth I have, for simplicity, assumed very rough and ready rounded values of 40,000 grains of rice = 1litre = 1 kg.  I’ve assumed 10m2/kW (including ancillaries) for the area of solar panels. The land surface of the earth is 1.5 x108 km2.  Solar capacity doubled around every 2 years from 2000 to 2013, growing from 1.25GW in 2000 to 140 GW in 2013 (source:  BP statistical review), reaching a land area of around 1400km2.  217 times its current area takes it past the land surface of the earth, so it would take to 2047 (34 years from 2013) with doubling of installed capacity every 2 years to reach this point.  The source of the story about sword-making is from the 1970s TV documentary The Ascent of Man and accompanying book.

For data on Greenpeace’s historical projections see:

http://www.greenpeace.org/international/Global/international/publications/climate/2012/Energy%20Revolution%202012/ER2012.pdf See pages 69 and 71

 

Making climate change policies fit their own domain

A new framework acts as a sound guide for policy formation.

There is a widely held narrative for climate policy that runs something like this.  The costs of damage due to greenhouse gas emissions are not reflected in economic decisions.  This needs to be corrected by imposing a price on carbon, using the power of markets to incentivise efficient emissions reduction across diverse sources.  Carbon pricing needs to be complemented by measures to address other market failures, such as under-provision of R&D and lack of information.  Correcting such market failures can help carbon markets function more efficiently over time.  However further interventions, especially attempts by governments to pick winners or impose regulations mandating specific solutions, are likely to waste money.  This narrative, even if I have caricatured it a little, grants markets a central role with other policies in a supporting role.  Its application is evident, for example, amongst those in Europe who stress and exclusive or central role for the EUETS.

While this narrative rightly recognises the important role that markets can play in efficient abatement, it is incomplete to the point that it is likely to be misleading as a guide to policy.  A better approach has recently been characterised in a new book by Professor Michael Grubb and co-authors.  He divides policy into three pillars which conform to three different domains of economic behaviour.  Action to address all three domains is essential if efforts to reduce emissions to the extent necessary to avoid dangerous climate change are to succeed.  These domains and the corresponding policy pillars are illustrated in the chart below.

Three domains of economic behaviour correspond to three policy pillars …

Domains and pillars diagram

In the first domain people seek to satisfy their needs, but once this is done they don’t necessarily go further to achieve an optimum.  Although such behaviour is often characterised by economists as potentially optimal subject to implicit transaction costs this is not a very useful framework.  Much better is to design policy drawing on disciplines such as psychology, the study of social interactions, and behavioural economics.  This domain of behaviour relates particularly to individuals’ energy use, and the corresponding policy pillar includes instruments such as energy efficiency standards and information campaigns.

The second domain looks optimising behaviour, where companies and individuals will devote significant effort to seeking the best financial outcome.  This is the domain where market instruments such as emissions trading have the most power.  Policy making here can draw strongly on neoclassical economics.

The third domain is system transformation, and requires a more active role from governments and other agencies to drive non-incremental change.  The policy pillar addressing this domain of behaviour includes instruments for technology development, the provision of networks, energy market design, and design and enforcement of rules to monitor and govern land use changes such as deforestation.  Markets may have a part to play but the role of governments and other bodies is central here.  The diversity of policies addressing this domain means that it draws on a wide range of disciplines, including the study of governance, technology and industrial policy, institutional economics and evolutionary economics.

As one moves from the first to the third domain there is increasing typical scale of action, from individuals through companies to whole societies, and time horizons typically lengthen.

This framework has a number of strengths.  It is both simple in outline and immensely rich is its potential detail.  Each domain has sound theoretical underpinnings from relevant academic disciplines.  It acknowledges the power of markets without giving them an exclusive or predominant role – they become one of three policy pillars.  It implies that the vocabulary of market failures becomes unhelpful, as I’ve previously argued.  Instead policy is framed as a wide ranging endeavour where the use of markets fits together with a range of other approaches.  While this may seem obvious to many, the advocacy of markets as a solution to policy problems has become so pervasive, especially in Anglo-Saxon economies, that this broader approach stands as a very useful corrective to an excessively market-centric approach.

The framework is high level, and specific policy guidance needs to draw on more detailed analysis.  The authors have managed to write 500 pages of not the largest print without exhausting the subject.  However, the essential framework is admirable in its simplicity, compelling in its logic, and helpful even at a high level.  For example it suggest that EU policy is right to include energy efficiency, emissions trading and renewables – broadly first, second and third domain policies respectively – as well as to be active in third domain measures such as improving interconnection, rather than relying exclusively on emissions trading (although as the EUETS covers larger emitters, so first domain effects are less relevant for the covered sector).

The framework in itself does not tell you what needs to be done.  In particular the challenges of the third domain are formidable.  But it provides a perspective which deserves to become a standard structure for high level guidance on policy development.

Adam Whitmore – 31st October 2014

Costing damages from climate change offers only a partial guide to choice of policy

Estimates of the cost of damages from greenhouse gas emissions are more use for ruling in policy measures than ruling them out.

Estimates of the cost of the damages caused by greenhouse gas emissions (often referred to as the social cost of carbon) are widely used to assess the cost effectiveness of policies to reduce emissions.  Broadly speaking, emissions reductions that are cheaper than the cost of damages are judged cost-effective, while emissions reductions more expensive than the cost of damages risk being deemed not cost effective.  For example, the US EPA uses an estimate for the social cost of carbon of $39/tonne of CO2 (in 2015 at a 3% discount rate) as its benchmark, with policy measures leading to emissions reductions at a cost lower than this being considered cost effective.  Such estimates also act as a benchmark for carbon prices, on the grounds that an economically efficient carbon price should equal the expected cost of damages [1].

Detailed modelling is used to estimate the additional costs of damage per tonne of additional emissions (see notes at the end of this post for a short summary of this process).  The modelling is often thorough and elaborate, and attempts to be comprehensive.  However there are several factors which tend to lead to estimates of the cost of damages being below what it is really worth paying to avoid emissions.

Omitted costs

Many of the costs of climate change are omitted from models, essentially assuming that they are zero.  For example, knock-on effects, such as conflict from migration, are often not modelled, but may be among the largest costs of climate change.  Other costs are dealt with only partially, because they are difficult to estimate reliably [3], or difficult to measure as a financial loss.  For example, it is difficult, and in many ways impossible, to develop adequate costings for the loss of major ecosystems.

Difficulties in estimating the effects of large temperature changes

Models designed to estimate the cost of damages for a temperature change of one or two degrees may be become highly misleading if used to estimates the costs of larger temperature changes.  Damages may increase only quite slowly with small temperature changes, but are likely to increase quite rapidly thereafter, and perhaps catastrophically when certain thresholds are reached [4].  This is often not represented adequately in models.  For example, the widely used DICE model shows GDP only approximately halving with a temperature rise of 19 degrees centigrade.  This is unlikely to be realistic, and indeed the model’s author has cautioned against its use for temperature changes above around 3 degrees.  But temperature changes above 3 degrees would be very likely under a business as usual emissions scenario, and the effects of such large temperature changes are a major cause for concern.

Treating GDP growth as exogenous

Most models assume that the drivers of GDP growth are largely unaffected by even very severe climate change.  Over a century, even slow growth (anything above 0.7% p.a.) more than doubles GDP, and so more than offsets the costs of warming even if GDP is assumed to halve from the level it would otherwise reach.  Even with a temperature rise of 19 degrees over a century people appear, on average, better off than today, because the benefits of growth (more than doubling GDP) outweigh the costs of climate change (halving GDP).  Calling this result counterintuitive is something of an understatement.

Role of risks

Analysis often excludes some risks which are difficult to model, for example some types of climate feedbacks.  This effectively assumes that they won’t happen and so won’t cause any damage, ignoring the risks.  Indeed, even attempting to set a single average cost of damages fails to address the question of willingness to tolerate the chance of a cost much larger than the estimated average (due to low probability high impact events).  The EPA does estimate of the cost in the upper tail of the damage distribution, and some other modelling explicitly includes a range of sensitivities.  However these approaches, at best, go only part way towards addressing the problem of the risk of catastrophe outcomes, especially in view of the other limitations I’ve outlined.

Finally, the process of assessing policy measures needs to take account of all costs and benefits.  Measures to reduce emissions often have valuable co-benefits for health which need to be factored in to decision making.  And analysis needs to take account of future benefits for emissions reduction, for example in promoting early stage technologies.

Estimates of the cost of damage from greenhouse gas emissions remain useful inputs into decision making.  They can be useful in ruling policy measures in – if a policy measure has a cost per tonne below even a cautious estimate of the cost of damages then it is very likely cost-effective.  But they are much less useful for ruling measures out.  It is probably worth paying a good deal more to reduce the risks of large changes to the climate than the conventional estimates of damage costs suggest.  And in any case judging which risks are acceptable will always be a matter of political and ethical debate, rather than a simple matter of costings.

Adam Whitmore – 13th October 2014

Notes

[1] This principle that pricing of pollutants should reflect the cost of damages is commonly discussed in terms of Pigovian taxes or the Polluter Pays Principle.  

[2] The cost of damages, commonly referred to as the social cost of carbon (SCC), is usually estimated by modelling the cost of damages from additional emissions.  A base case emissions track is specified.  The changes to the climate and the resulting impacts associated with this base case emissions track are modelled.  The financial costs of the damages resulting from the impacts, for example due to rising sea levels, are estimated.  This process is repeated, adding an additional (say) billion tonnes of extra emissions, and calculating the costs of the additional damages that result.  The (discounted) additional cost of damages per tonne of additional emissions is derived from this.  These calculations are usually done using elaborate models known as Integrated Assessment Models (IAMs).  Estimates of the Social Cost of Carbon such as those used by the US EPA can refer to estimates from several different IAMs.  The uncertainties involved in the modelling lead to a wide range of estimates for the SCC. 

[3] A good survey of omissions from calculations of the SCC is given by a recent report co-sponsored by the US NGOs the Environmental Defense Fund and National Resources Defence Council:  http://costofcarbon.org/blog/entry/missing-pieces

[4] A good review of the limits of modelling can be found in Nicholas Stern, The Structure of Economic Modelling of the Potential Impacts of Climate Change, Journal of Economic Literature 2013.  This includes the reference to damages at very large temperature changes, quoting work by Ackerman, Stanton and Bueno: Fat tail, Exponents, Extreme Uncertainty: Simulating Catastrophe in DICE, Ecological Economics 69, 2010

 

Carbon regulation becomes the norm

Regulation of greenhouse gas emissions, including caps and prices, is spreading around the world.  Jurisdictions without something in place are becoming the exception.

Back in January I noted  that carbon pricing is in place or legislated in jurisdictions accounting for around a quarter of the world’s CO2 emissions from energy and industry (with typically around half of emissions in these jurisdictions being priced).    This is a huge increase from ten years ago, just before the introduction of the EUETS, when the corresponding figure was less than 1%.  But this trend is now set to go much further as limits on carbon emissions spread nationally in China and the USA.  A national emissions trading scheme in China is expected before the end of this decade, following on from the provincial trial schemes already established.  EPA regulation in the USA will introduce caps on emissions from the power sector to take effect from 2020.  These measures will mean that jurisdictions accounting for around two thirds of emissions will have some sort of cap or pricing in place.  (EPA regulation will be implemented at a state level.  It is likely to involve carbon pricing in some cases, although some states may pursue a more direct regulatory approach.  In either case emissions will be capped.)   This will have been achieved in only about a decade and a half.

With measures in place across the EU, the USA, and China, carbon caps and pricing will have become the norm rather than the exception.  This is likely to put pressure on other jurisdictions without such measures to act.  This trend is likely to be reinforced by agreement at the UNFCCC conference in Paris next year, even if, as expected, any agreement there stops short of legally binding emissions reduction targets.

Step chart

The blue line represents the proportion of global emissions of CO2 from energy and industry occurring in jurisdictions with carbon pricing (i.e. excluding other sources of CO2 such as deforestation, and other greenhouse gases).  The green line represents the proportion of emissions actually priced, which is typically about half the total, because some sectors are usually excluded from pricing.

Looking at broader climate legislation, including not just carbon pricing but also other measures aimed at emissions reduction or adaptation to climate change, a similar pattern of rapid growth is evident.  The number of pieces of climate legislation introduced in the last ten years was nearly four times that in the previous ten years.  And legislation has been introduced in both developed and developing countries.

Globe data on legislation

Source:  GLOBE study of climate change legislation (see notes)

There are, of course, many reasons to remain cautious about progress.  The outlook national scheme in China remains uncertain in the timing of its introduction (here assumed to be 2018), its stringency and its effectiveness.  US EPA regulation remains subject to legal challenge, although it seems likely to survive this.  Prices in the EUETS remain low.  And, even with all the present and prospective schemes in place, emissions reductions goals still fall short of what’s necessary to have a good chance of meeting the international commitment to limit the rise in average temperatures to 2 degrees (a goal which now looks extremely challenging in any case).

But there has been tremendous progress in a relatively short space of time.  Discussions on climate policy needs to recognise this context.  Any claims along the lines that either that “no-one’s doing anything” or “we’re the only ones doing something” are no longer valid.  There remains a pressing need to enhance this world-wide momentum, so that global emissions can peak and begin their ever more necessary downward track.  But acknowledging that should not obscure the remarkable progress that has been made.

Adam Whitmore –  30th September 2014

Notes

The spread of caps across the USA is shown as a single step on the above chart.  However the form of implementation of limits will in practice vary between states.  The caps under section 111(d) of the clean air act proposed by the EPA in the US are currently intensity based, with the conversion to mass based standards a matter of continuing discussion.  Implementation as the state level will vary, and it is likely that it will include pricing in some cases by not others.  Some states may join the Regional Greenhouse Gas Imitative (RGGI), others may include some kind of flexibility that in effect creates a carbon price in one state, or in a group, while others may pursue a more direct regulation of individual plants.

Japan and Mexico, which were deliberately excluded from the chart I posted in January as they have very low prices.  However they are included here.  The intention here is to give an indication of all the jurisdictions with action in some form.

The raw data for the chart showing the number of laws is here (see p.27):

http://www.academia.edu/6214974/The_GLOBE_Climate_Legislation_Study_A_Review_of_Climate_Change_Legislation_in_66_Countries._4th_Ed._Nachmany_Michal_Fankhauser_Sam_Townshend_Terry_Collins_Murray_Landesman_Tucker_Matthews_Adam_Pavese_Carolina_Rietig_Katharina_Schleifer_Philip_and_Setzer_Joana_  (see p.27)

Tranmission links to enable wind power

The availability of long distance transmission systems can help smooth out variations in availability of wind power, but helps solar less.  Policy needs to enable long-distance links to allow continuing increases in wind generation.

One of the challenges of moving to an electricity system running with a large proportion of wind and solar is that electricity output from these sources is variable, because the wind does not always blow and the sun does not always shine at any particular location.  With small proportions of these sources on the system this is not much of a problem.  However as a system becomes more dependent on these variable renewables, production is potentially curtailed in periods of high output, while there is a shortage of power at other times.  I’ll refer in this post to wind and solar photovoltaic (PV) power, which is by far the predominant form of solar electricity.  The issues with concentrated solar thermal power are different because there is some potential for storage in the power plant.

Difficulties with balancing supply and demand typically begin to become more severe as each type of variable renewable power, for example wind, begins to supply more than (very roughly) around 15% of annual electricity.  In practice the extent of the challenge of integration depends on a range of factors.  One influence is the amount of inflexible generating capacity such as nuclear on the system.  Another influence is the correlation between variable supply and demand.  For example, there is some seasonal correlation between electricity demand and wind output in Europe (in winter demand is higher and it’s windier), and there is some daily correlation between electricity demand and solar PV output in Australia (the demand peak is in the daytime).  Nevertheless, in any case there will be challenges in reliably meeting demand while accommodating very large amounts of variable supply.

To address this problem variable supply can be moved to different times, using storage, and to different places via transmission capacityDemand management can help, especially for a demand peaks, and some thermal back-up capacity is likely to be needed anyway in most cases.

The extent to which transmission links can help system balancing depends on the extent to which generation in different places is correlated.  If distant power sources tend to produce power at different times then transmission can greatly help smooth out variations in production, because when output is low in one location electricity can be moved there from another.  But if distant sources tend to produce power at the same time the advantages of long distance transmission will be reduced, because if output is low in one place there will be little electricity in the other place to move to fill the gap.  This is especially so if patterns of demand are also similar in the different places

Typically, correlations of output across regions for solar PV are much higher than for wind, especially as distances increase (see chart).  This is because solar output tends to depend strongly on time of day and season, which is quite similar even across an area as large as Western Europe, whereas wind varies with weather systems, which are less strongly related over distance of the order of 1000 miles or so.  Looking at the correlations between hourly output in different countries in Western Europe shows that the correlation between solar output in Germany and France is 88%, much greater than for wind at 44%.  Moving further away, the correlation between output in Germany and Spain is close to zero for wind, but still as high as 84% for solar.  The match of solar output is is actually greater than these figures imply due to the large number of times when solar output is zero for both countries.

Correlations of hourly output between different Eastern European countries are much greater for solar than for wind …

Correlations chart

These factors mean that increasing interconnection will tend to enable higher proportions of wind more than it will enable higher proportions of solar.  (This is assuming transmission is for load balancing.  Interconnection to transport power from sunnier to less sunny regions may well be valuable.  Also, this conclusion would change if intercontinental of transmission of large amounts of power were possible, but this remains a distant prospect.)

Incidentally, the correlation between solar and wind output is negative (when it’s windy it tends to be less sunny and vice versa), so having some of each on the system tends to increase the combined total that can be accommodated, compared with a system only having either one or the other.

A recent study of the USA by the National Oceanic and Atmospheric Administration (NOAA) confirmed very large benefits from High Voltage Direct Current (HVDC) long distance transmission for systems with large amounts of variable renewables.   The study used very detailed weather and load data, and data on existing power plants.  It concluded that with optimistic projections of wind and solar costs it is possible to reduce CO2 emissions by 82% with somewhat lower electricity costs, provided sufficient transmission capacity is in place.  The study emphasised the importance of the transmission network encompassing a large geographical area, such as the 48 contiguous US states, due to the large geographical scales over which weather is variable.

However, interconnectors are not always quick, cheap or easy to build.  They often link or cross different jurisdictions – US States, Chinese provinces or European countries – and will often link different types of electricity trading arrangement.  This can impose substantial barriers around permitting, and also around operation.  Policy can help the growth of wind by reducing these barriers and recognising the growing role of internconnection, although the precise policy measures necessary will be quite locally specific.  Enabling increased transmission is likely to be an important step in enabling the continuing growth of wind power in particular, and is likely to become increasingly urgent as growth continues.

Adam Whitmore – 16th September 2014

References

Thanks to Mathieu Ecoifier for providing the correlation coefficients between wind and solar in Europe.  Correlation coefficients are a rough and ready indicator of independence.  Actual effects on system operation will depend on many factors.

For analysis of the inverse correlation of wind and solar see for example Correlations Between Large-Scale Solar and Wind Power in a Future Scenario for Sweden, Joakim Widén, IEEE Transactions on Sustainable Energy, Vol. 2, No. 2, April 2011

The US study mentioned is Alexander MacDonald et. al., NOAA Earth System Research Laboratory, Low Cost and Low Carbon Energy Systems Feasible with Large Geographical Size (2014) – Presentation at Imperial College London 27th May 2014

Could rising aviation emissions be good for the environment?

international aviation sector is likely to require a substantial number of offsets to meet its goal of achieving carbon neutrality above a 2020 baseline.  If these offsets are forestry related there is the possibility of generating substantial biodiversity co-benefits.

Emissions from international aviation are around 2% of total emissions, and are expected to roughly quadruple by 2050, well above the expected growth rate of other sectors.  Faced with this prospect, and challenged by measures attempting to include international flights within the EUETS, the governing body for aviation the International Civil Aviation Organisation (ICAO) last year decided to look at using market based measures to cap net international aviation emissions at 2020 levels globally, with agreement to be reached by 2016.  The chart below illustrates the scale of the action needed to achieve this.  The blue line shows a scenario with high growth in emissions, which already includes efficiency gains from introducing new aircraft.  The dashed green line represents a lower emissions growth scenario.  The light blue area shows the potential contribution of new technologies and processes such as additional maintenance.  There is also a contribution from running the system more efficiently, with improved air traffic management and airport operation, shown by the brown area.  Such measures can in total probably reduce emissions growth by about 40%.  However this still leaves around 60% of emissions growth which is difficult to avoid by technology changes except in the long term.   (Reducing the growth in aviation services would also reduce emissions of course, but any set of policies that severely caps the number and length of journeys is likely to prove politically intractable.)

chart

Source:  ICAO CAEP A38-WP/26, 2013

For this remaining emissions growth the only realistic option for capping net emissions at 2020 levels over the next few decades is likely to be the use of offsets.  Demand for offsets from aviation could reach some hundreds of millions of tonnes p.a. in the 2030s, and this demand would be reliable as well as large, given the steady growth in demand.  It could provide a much needed source of demand for international offsets, which is currently weak.  The cost of this to passengers is likely to be small.  Emissions from a transatlantic flight are very roughly around a tonne of CO2e per passenger, so this would add about $10 to the price of an economy class ticket assuming an offset price of $10/tonne, and less at current international offset prices, which are in the low single figures of dollars per tonne.

One source of offsets that looks particularly promising is reduced emissions from deforestation and degradation (REDD).  There has been a marked reduction in the rate of deforestation in Brazil (and some other jurisdictions) in the last decade, despite a slight increase last year.  The reductions in Brazil have been achieved through a variety of measures, including improved monitoring by remote sensing, new legal frameworks with better enforcement, more intensive agriculture and so forth.  But funding from governments, including Norway, Germany and the UK, has also played a useful role in reducing deforestation.  Future programmes will likely benefit from the additional funding that REDD offsets can provide. , although this funding will never be enough on its own.  And the scale of offsets available is potentially large.  For example, 500 million tonnes p.a. is equivalent to avoiding over 8,500sq. km of Amazon forest loss each year, compared with about 5,800 sq. km of forest currently lost in the Amazon region of Brazil last year (and an average annual loss of about 11,500 sq. km over the last ten years).

For a satisfactory scheme any offsets will of course need to be high quality, including meeting the usual tests of additionally, permanence and so forth, with adequate governance a prerequisite.  Buffers, exchange rates or risk premiums may be necessary to account for residual risks around permanence, leakage and other factors, or to realise an explicit goal of generating net benefits, with (for illustration) 1.5 tonnes of REDD offsets required for every tonne of aviation emissions.  This would somewhat increase the area protected for a given number of aviation emissions, assuming that REDD offsets are available at an appropriate price.

REDD programmes have the advantage that they help conserve biodiversity.  Indeed biodiversity benefits can be made an explicit criterion in programme design and selection.  This may, for example, include building on the current Climate, Community and Biodiversity (CCB) standard that is widely used in voluntary markets.  This would potentially allow an overall net gain for the environment if net carbon emissions were zero.  Reduced emissions from deforestation would match increased airline emissions, and biodiversity would additionally be preserved – hence the (deliberately provocative) title of this post.  Programmes can also provide opportunities for local communities, and the CCB standard is again relevant here.  Indeed appropriate community involvement in projects, ensuring local communities also benefit, is likely to be essential to any successful REDD programme.

Establishing that offsets issued now can be used after 2020 would provide valuable early demand for credits.  However given the early stages of development of proposals by ICAO it may be difficult to attract investors at present.

So far REDD has struggled to find adequate funding from carbon markets, despite discussion of allowing limited volumes of REDD credits under the California emissions scheme.  And significant challenges remain in any circumstances.  In particular, governance often remains difficult given the requirements for monitoring and permanence of REDD projects and programs.

Eventually some technical solution will be needed to enable aviation emissions to be reduced at source.  However in the meantime the chance to generate substantial additional benefits for biodiversity and other environmental goals by the judicious choice of forestry offsets to help meet aviation goals is an opportunity well worth further exploration.

Adam Whitmore – 10th July 2014

Thanks to Ruben Lubowski of Environmental Defense Fund for useful comments on this post.

Notes

The 1 tonne CO2e per transatlantic flight per economy class passenger figure is indicative, and depends on the multiplier applied to the CO2 emissions to represent other atmospheric effects of emissions at altitude.