Carbon capture and storage: combining economic analysis with expert elicitations to inform climate policy

The relationship between R&D investments and technical change is inherently uncertain. In this paper we combine economics and decision analysis to incorporate the uncertainty of technical change into climate change policy analysis. We present the results of an expert elicitation on the prospects for technical change in carbon capture and storage. We find a significant amount of disagreement between experts, even over the most mature technology; and this disagreement is most pronounced in regards to cost estimates. We then use the results of the expert elicitations as inputs to the MiniCAM integrated assessment model, to derive probabilistic information about the impacts of R&D investments on the costs of emissions abatement. We conclude that we need to gather more information about the technical and societal potential for Carbon Storage; cost differences among the different capture technologies play a relatively smaller role.     

Impacts of different diffusion scenarios for mitigation technology options and of model representations regarding renewables intermittency on evaluations of CO2 emissions reductions

This paper evaluated the impacts of climate change mitigation technology options on CO₂ emission reductions and the effects of model representations regarding renewable intermittency on the assessment of reduction by using a world energy systems model. First, different diffusion scenarios for carbon dioxide capture and storage (CCS), nuclear power, and wind power and solar PV are selected from EMF27 scenarios to analyze their impacts on CO₂ emission reductions. These technologies are important for reducing CO₂ intensity of electricity, and the impacts of their diffusion levels on mitigation costs are significant, according to the analyses. Availability of CCS in particular, among the three kinds of technologies, has a large impact on the marginal CO₂ abatement cost. In order to analyze effects of model representations regarding renewables intermittency, four different representations are assumed within the model. A simplistic model representation that does not take into consideration the intermittency of wind power and solar PV evaluates larger contributions of the energy sources than those evaluated by a model representation that takes intermittency into consideration. Appropriate consideration of renewables intermittency within global energy systems models will be important for realistic evaluations of climate change mitigation scenarios.     

Oil prices and energy technology innovation: An empirical analysis

To achieve environmental sustainability and reduce their vulnerability to oil shocks, countries can develop new energy technologies. Technological advances reduce the cost of structural changes in the energy economy, and thus also increase the political feasibility of such changes. But what explains international variation in the form and quality of energy technology innovation? We build on previous theories and offer an integrated account: increasing oil prices reinforce existing sectoral innovation systems, both politically and economically, thus allowing public policymakers and private entrepreneurs to profitably invest in new energy technologies. We test this theoretical argument against data on public R&D expenditures and patents in the domain of renewable energy technology for industrialized countries from 1989 to 2007. We find strong support for the interactive hypothesis. Thus, we contribute to literatures on (i) domestic responses to international shocks, (ii) environmental sustainability and energy security, and (iii) the political economy of technology innovation.     

Engagement in the Third U.S. National Climate Assessment: commitment,capacity, and communication for impact

This paper examines the dynamics of energy investments and clean energy Research and Development (R&D) using a scenario-based modeling approach. Starting from the global scenarios proposed in the RoSE model ensemble experiment, we analyze the dynamics of investments under different assumptions regarding economic and population growth as well as availability of fossil fuel resources, in the absence of a climate policy. Our analysis indicates that economic growth and the speed of income convergence across countries matters for improvements in energy efficiency, both via dedicated R&D investments but mostly through capital-energy substitution. In contrast, fossil fuel prices, by changing the relative competitiveness of energy sources, create an economic opportunity for radical innovation in the energy sector. Indeed, our results suggest that fossil fuel availability is the key driver of investments in low carbon energy innovation. However, this innovation, by itself, is not sufficient to induce emission reductions compatible with climate stabilization objectives.     

Technology innovation and diffusion in “less than ideal” climate policies: An assessment with the WITCH model

This paper examines the dynamics of innovation in low-carbon energy technologies distinguishing between research and development and technology diffusion as a response to alternative climate policies. We assess the implications of second-best policies that depart from the assumption of immediate and global participation and of full technology availability. The analysis highlights the heterogeneous effects of climate policy on different energy R&D programs and discusses the contribution of important determinants such as carbon price and policy stringency, policy credibility, policy and technological spillovers and absorptive capacity.     

R&D Subsidies and Climate Policy: Is There a “Free Lunch”?

Because of the long-term nature of the climate problem, technological advances are often seen as an important component of any solution. However, when considering the potential for technology to help solve the climate problem, two market failures exist which lead to underinvestment in climate-friendly R&D: environmental externalities and the public goods nature of new knowledge. As a result, government subsidies to climate-friendly R&D projects are often proposed as part of a policy solution. Using the ENTICE model, I analyze the effectiveness of such subsidies, both with and without other climate policies, such as a carbon tax. While R&D subsidies do lead to significant increases in climate-friendly R&D, this R&D has little impact on the climate itself. Subsidies address the problem of knowledge as a public good, but they do not address the environmental externality, and thus offer no additional incentive to adopt new technologies. Moreover, high opportunity costs to R&D limit the potential role that subsidies can play. While R&D subsidies can improve efficiency, policies that directly affect the environmental externality have a much larger impact on both atmospheric temperature and economic welfare.     

The public perception of carbon dioxide capture and storage in the UK: results from focus groups and a survey

Abstract

A series of meetings of two ‘Citizen Panels’ were held to explore public perceptions of off-shore carbon dioxide (CO₂) capture and storage (CCS). In addition, a face-to-face survey of 212 randomly selected individuals was conducted. We found that, on first hearing about CCS in the absence of any information on its purpose, the majority of people either do not have an opinion at all or have a somewhat negative perspective. However, when (even limited) information is provided on the role of CO₂ storage in reducing CO₂ emissions to the atmosphere, opinion shifts towards expressing slight support for the concept.

Support depends, however, upon concern about human-caused climate change, plus recognition of the need for major reductions in CO₂ emissions. It also depends upon CCS being seen as just one part of a wider strategy for achieving significant cuts in CO₂ emissions. A portfolio including renewable energy technologies, energy efficiency, and lifestyle change to reduce demand was generally favoured. CCS can be part of such a portfolio, but wind, wave, tidal, solar and energy efficiency were preferred. It was felt that uncertainties concerning the potential risks of CCS had to be better addressed and reduced; in particular the risks of accidents and leakage (including the potential environmental, ecosystem and human health impacts which might result from leakage).     

Optimal Technology R&D in the Face of Climate Uncertainty

This paper explores optimal near-term technology R&D in the face of uncertain damages caused by the buildup of greenhouse gases. The paper puts particular emphasis on understanding how optimal near-term R&D expenditures might vary based on the technologies pursued in the R&D program. The exploration is conducted in the context of varying impacts from R&D on the global abatement cost function. The R&D planning problem is considered first within a theoretical framework and is then pursued in a stylized application using the DICE model. The paper provides intuition into the circumstances under which near-term technology R&D might increase or decrease under uncertainty, thereby serving as a hedge against climate uncertainty.     

中国低碳车辆技术现状与发展趋势

为探讨道路交通部门节能减排的决策依据,在总结低碳车辆技术主要种类基础上,重点评述了车辆动力系统和燃料替代技术的低碳化发展现状与趋势,包括全生命周期能效和温室气体排放情况。为进一步支持车辆技术低碳化,除加强综合节能技术和混合动力技术应用、电池技术升级和燃料电池技术研发之外,需加快生物燃料二代技术的研发进程和煤基燃料路线中二氧化碳捕获和封存技术等低碳技术的应用。     

US institutional pathways to clean coal and shale gas: lessons for China

China's 12th Five-Year Plan (2011–2015) envisages that shale gas and coal will be central to its energy future. However, for China to meet the energy security and climate change objectives set out in its 12th Five-Year Plan it will be reliant on the widespread commercial deployment of two key technologies; hydraulic fracturing combined with horizontal drilling for shale gas, and carbon capture and storage (CCS) for coal. China is moving to acquire these technologies through technology transfer and diffusion from the US, but progress has been slow, and neither is currently available in China on a commercial scale. Drawing on interviews in the US and China, this article argues that China's expectation of technology from the US may well be disappointed because of factors unique to the US institutional environment that have made the development of fracking technology possible and hinder the development of CCS technology at a commercial scale.

Policy relevance

If China is to meet the energy security and climate change objectives set out in its 12th Five-Year Plan it will be reliant on the widespread commercial deployment of fracking and clean coal technologies. While China expects to acquire these technologies via technology transfer and diffusion from the US, progress has been slow. Because of factors unique to the US institutional environment the availability of both technologies on a commercial scale in China is unlikely in the coming years. As a result, Chinese policy makers would be well-advised not to count on these technologies to meet their energy and climate goals.     

Innovation benefits from nuclear phase-out: can they compensate the costs?

This paper investigates whether an inefficient allocation of abatement due to constraints on the use of currently available low carbon mitigation options can promote innovation in new technologies and have a positive impact on welfare. We focus on the case of a nuclear power phase-out and endogenous technical change in energy efficiency and alternative low carbon technologies. The research is inspired by the re-thinking about nuclear power deployment which took place in some countries, especially in Western Europe, after the Fukushima accident in March 2011. The analysis uses an Integrated Assessment Model, WITCH, which features multiple externalities related to greenhouse gas emissions and innovation market failures. Our results show that phasing out nuclear power stimulates R&D investments and deployment of technologies with large learning potential. The resulting technology benefits that would not otherwise occur due to intertemporal and international externalities almost completely offset the economic costs of foregoing nuclear power. The extent of technology benefits depends on the stringency of the climate policy and is distributed unevenly across countries.     

Adapting agriculture to climate change: a review

The agricultural sector is highly vulnerable to future climate changes and climate variability, including increases in the incidence of extreme climate events. Changes in temperature and precipitation will result in changes in land and water regimes that will subsequently affect agricultural productivity. Given the gradual change of climate in the past, historically, farmers have adapted in an autonomous manner. However, with large and discrete climate change anticipated by the end of this century, planned and transformational changes will be needed. In light of these, the focus of this review is on farm-level and farmers responses to the challenges of climate change both spatially and over time. In this review of adapting agriculture to climate change, the nature, extent, and causes of climate change are analyzed and assessed. These provide the context for adapting agriculture to climate change. The review identifies the binding constraints to adaptation at the farm level. Four major priority areas are identified to relax these constraints, where new initiatives would be required, i.e., information generation and dissemination to enhance farm-level awareness, research and development (R&D) in agricultural technology, policy formulation that facilitates appropriate adaptation at the farm level, and strengthening partnerships among the relevant stakeholders. Forging partnerships among R&D providers, policy makers, extension agencies, and farmers would be at the heart of transformational adaptation to climate change at the farm level. In effecting this transformational change, sustained efforts would be needed for the attendant requirements of climate and weather forecasting and innovation, farmer’s training, and further research to improve the quality of information, invention, and application in agriculture. The investment required for these would be highly significant. The review suggests a sequenced approach through grouping research initiatives into short-term, medium-term, and long-term initiatives, with each initiative in one stage contributing to initiatives in a subsequent stage. The learning by doing inherent in such a process-oriented approach is a requirement owing to the many uncertainties associated with climate change.     

Exploring the orientations which characterise the likely public acceptance of low emission energy technologies

There is a large body of research and development into the low emission energy technologies that has the potential to assist developed and developing countries transition to more sustainable energy systems. It has long been recognised that public perceptions can have a fundamental effect on the market for technology and this issue raises questions about the role society will play in developing a low emissions energy future. Understanding how the public will respond to the range of low emission energy technologies as part of a climate change mitigation package is therefore critical for researchers, policy makers and industry stakeholders. In the current research, we investigated the Australian public’s likely acceptance of a range of low emission energy technologies by assessing the diverse ‘orientations’ that have emerged in response to low emission energy technologies. In a survey of two Australian states we measured the support for, and knowledge of, a range of low emission energy technologies. Using self-organising maps, a relatively new approach for segmenting response profiles, we identified that at least four distinct ‘orientations’ have emerged toward the issue and are characterising the likely acceptance of these technologies: ‘Disengaged’, ‘Nuclear Oriented’, ‘Renewables Oriented’, and ‘Engaged’. The implications of these multiple public viewpoints are described for climate change mitigation policy and for future research into the social acceptance of alternative energy technologies.     

Economic consequences of the US withdrawal from the Kyoto/Bonn Protocol

Abstract

The US decision not to ratify the Kyoto Protocol and the recent outcomes of the Bonn and Marrakech Conferences of the Parties have important implications for both the effectiveness and the efficiency of future climate policies. Among these implications, those related with technical change and with the functioning of the international market for carbon emissions are particularly relevant, because these variables have the largest impact on the overall abatement cost to be borne by Annex B countries in the short and in the long run. This paper analyses the consequences of the US decision to withdraw from the Kyoto/Bonn Protocol both on technological innovation and on the price of emission permits (and, as a consequence, on abatement costs). In particular, the analysis highlights mechanisms and feedbacks related to technological innovation, technological spillovers and R&D which could be relevant and which modify some policy relevant conclusions. First, we identify two feedback effects which explain why our results lead to a less significant fall in the price of permits than in most empirical analyses recently circulated. We show that the US defection from the Kyoto Protocol, by inducing a decline in the demand and price of emission permits, lowers the incentives to undertake energy-saving R&D. As a consequence, emissions increase and feed back on the demand and supply of permits, thus implying a lower decline in the price of permits than previously estimated. At the same time, as a result of the reduced R&D investments and the augmented emissions, climate change damages intensify and require an increase in investments that are again coupled with a growth of emissions. By thus again increasing the demand for permits and reducing their supply, this effect enhances the previous mechanism. Notwithstanding the lower decline in the price of permits, the paper still identifies a smaller price than would occur with a US participation. Therefore, we emphasise in a second step the crucial role of Russia in climate negotiations due to a large increase in Russia's bargaining power.     

Economic consequences of the US withdrawal from the Kyoto/Bonn Protocol

The US decision not to ratify the Kyoto Protocol and the recent outcomes of the Bonn and Marrakech Conferences of the Parties have important implications for both the effectiveness and the efficiency of future climate policies. Among these implications, those related with technical change and with the functioning of the international market for carbon emissions are particularly relevant, because these variables have the largest impact on the overall abatement cost to be borne by Annex B countries in the short and in the long run. This paper analyses the consequences of the US decision to withdraw from the Kyoto/Bonn Protocol both on technological innovation and on the price of emission permits (and, as a consequence, on abatement costs). In particular, the analysis highlights mechanisms and feedbacks related to technological innovation, technological spillovers and R&D which could be relevant and which modify some policy relevant conclusions. First, we identify two feedback effects which explain why our results lead to a less significant fall in the price of permits than in most empirical analyses recently circulated. We show that the US defection from the Kyoto Protocol, by inducing a decline in the demand and price of emission permits, lowers the incentives to undertake energy-saving R&D. As a consequence, emissions increase and feed back on the demand and supply of permits, thus implying a lower decline in the price of permits than previously estimated. At the same time, as a result of the reduced R&D investments and the augmented emissions, climate change damages intensify and require an increase in investments that are again coupled with a growth of emissions. By thus again increasing the demand for permits and reducing their supply, this effect enhances the previous mechanism. Notwithstanding the lower decline in the price of permits, the paper still identifies a smaller price than would occur with a US participation. Therefore, we emphasise in a second step the crucial role of Russia in climate negotiations due to a large increase in Russia’s bargaining power.     

The influence of negative emission technologies and technology policies on the optimal climate mitigation portfolio

Combining policies to remove carbon dioxide (CO₂) from the atmosphere with policies to reduce emissions could decrease CO₂ concentrations faster than possible via natural processes. We model the optimal selection of a dynamic portfolio of abatement, research and development (R&D), and negative emission policies under an exogenous CO₂ constraint and with stochastic technological change. We find that near-term abatement is not sensitive to the availability of R&D policies, but the anticipated availability of negative emission strategies can reduce the near-term abatement optimally undertaken to meet 2°C temperature limits. Further, planning to deploy negative emission technologies shifts optimal R&D funding from ??carbon-free?? technologies into ??emission intensity?? technologies. Making negative emission strategies available enables an 80% reduction in the cost of keeping year 2100 CO₂ concentrations near their current level. However, negative emission strategies are less important if the possibility of tipping points rules out using late-century net negative emissions to temporarily overshoot the CO₂ constraint earlier in the century.     

Trade-offs between mitigation costs and temperature change

This paper uses the MERGE integrated assessment model to identify the least-cost mitigation strategy for achieving a range of climate policies. Mitigation is measured in terms of GDP foregone. This is not a benefit-cost analysis. No attempt is made to calculate the reduction in damages brought about by a particular policy. Assumptions are varied regarding the availability of energy-producing and energy-using technologies. We find pathways with substantial reductions in temperature change, with the cost of reductions varying significantly, depending on policy and technology assumptions. The set of scenarios elucidates the potential energy system transformation demands that could be placed on society. We find that policy that allows for “overshoot” of a radiative forcing target during the century results in lower costs, but also a higher temperature at the end of the century. We explore the implications of the costs and availability of key mitigation technologies, including carbon capture and storage (CCS), bioenergy, and their combination, known as BECS, as well as nuclear and energy efficiency. The role of “negative emissions” via BECS in particular is examined. Finally, we demonstrate the implications of nationally adopted emissions timetables based on articulated goals as a counterpoint to a global stabilization approach.     

The politics and policy of carbon capture and storage: Framing an emergent technology

Over the past decade carbon capture and storage (CCS) has attracted increasing international attention as a climate change mitigation option and moved into the center of climate policy debates and negotiations. This special issue of Global Environmental Change brings together leading scholars to analyze the politics, policy and regulation of CCS in cross-country comparisons as well as in a global context. The aim is to contribute on two fronts: first, by applying concepts, theories and methodologies from the social and policy sciences, to elucidate how societies are engaging with CCS as a mitigation option; and secondly, to point toward a future research agenda which, while exploring basic aspects of technology development as situated in a social context, would also be aligned with the needs of the climate and environmental policy community. The contributions address at least one of three inter-related research areas; CCS and the emergence of long-term climate and energy strategies; regulation, policy instruments and public acceptance; and international politics and CCS in developing countries.     

Vulnerability of solar energy infrastructure and output to climate change

This paper reviews the potential vulnerability of solar energy systems to future extreme event risks as a consequence of climate change. We describe the three main technologies likely to be used to harness sunlight—thermal heating, photovoltaic (PV), and concentrating solar power (CSP)—and identify critical climate vulnerabilities for each one. We then compare these vulnerabilities with assessments of future changes in mean conditions and extreme event risk levels. We do not identify any vulnerabilities severe enough to halt development of any of the technologies mentioned, although we do find a potential value in exploring options for making PV cells more heat-resilient and for improving the design of cooling systems for CSP.     

Mapping feasibilities of greenhouse gas removal: Key issues,gaps and opening up assessments

Greenhouse gas removal technologies and practices are essential to bring emissions to net zero and limit global warming to 1.5 °C. To achieve this, the majority of integrated assessment models (IAMs), that generate future emissions scenarios and inform the international policy process, use large-scale afforestation and biomass energy with carbon capture and storage (BECCS). The feasibility of these technologies and practices has only so far been considered from a relatively narrow techno-economic or biophysical perspective. Here, we present one of the first studies to elicit perspectives through an expert mapping process to open up and broaden the discussion around feasibility of afforestation and BECCS. Our stakeholders included business and industry, non-governmental organisations and policy makers, spanning expertise in bioenergy, forestry, CCS and climate change. Perspectives were elicited on (1) issues relating to BECCS with large-scale afforestation, and (2) specific criteria for assessing feasibility. Participants identified 12 main themes with 61 sub-themes around issues, and 11 main themes with 33 sub-themes around feasibility criteria. Our findings show important societal and governance aspects of feasibility that are currently under-represented, specifically issues around real-world complexity, competing human needs, justice and ethics. Unique to the use of these technologies for greenhouse gas removal are issues around temporal and spatial scale, and greenhouse gas accounting. Using these expert insights, we highlight where IAMs currently poorly capture these concerns. These broader, often more qualitative perspectives, issues and uncertainties must be recognised and accounted for, in order to understand the real-world feasibility of large-scale afforestation and BECCS and the role they play in limiting climate change. These considerations enable widening the scope to broader and deeper discussions about possible and desirable futures, beyond a focus on achieving net-zero emissions, attentive to the effects such decisions may have. We outline approaches that can be used to attend to the complex social and political dimensions that IAMs do not render. By complementing IAMs in this way opportunities can be created to open up considerations of future options and alternatives beyond those framings proposed by IAMs, creating opportunities for inclusion of knowledges, reflexivity and responsibility.