Emissions Scenarios in the Face of Fossil-Fuel Peaking

Emissions scenarios used by the Intergovernmental Panel on Climate Change (IPCC) are based on detailed energy system models in which demographics, technology and economics are used to generate projections of future world energy consumption, and therefore, of greenhouse gas emissions. We propose in this paper that it is useful to look at a qualitative model of the energy system, backed by data from short- and medium-term trends, to gain a sense of carbon emission bounds. Here we look at what may be considered a lower bound for 21st century emissions given two assumptions: first, that extractable fossil-fuel resources follow the trends assumed by “peak oil” adherents, and second, that no climate mitigation policies are put in place to limit emissions. If resources, and more importantly, extraction rates, of fossil fuels are more limited than posited in full energy-system models, a supply-driven emissions scenario results; however, we show that even in this “peak fossil-fuel” limit, carbon emissions are high enough to surpass 550 ppm or 2 °C climate protection guardrails. Some indicators are presented that the scenario presented here should not be disregarded, and comparisons are made to the outputs of emission scenarios used for the IPCC reports

Development, Energy, and Climate Change Policy: Enabling Sustainable Development through Access to Energy

Human rights, human development, and climate change clearly overlap in many ways. Development, as quantified by the Human Development Index (HDI), for example, has historically been strongly correlated with energy consumption. This fact is recognized in Sustainable Development Goal (SDG) 7, to “ensure access to affordable, reliable, sustainable and modern energy for all.” Currently the world is in the midst of a large wave of human migration, much of it involuntary and due to stymied development opportunities as well as political upheaval. Climate change will become, or already is, an exacerbating factor in migration dynamics. A pertinent question is how to ensure energy access in the context of a changing climate for those peoples who have not enjoyed the benefits of plentiful and cheap fossil fuels, the pathway followed by all industrialized countries. Policies and pathways for mitigating climate change can be investigated using computer models that examine current and future energy systems in many regions around the world. Although stylized in many ways through simplified economic representations and climate modules, these models very uniformly project that, undertaken judiciously, climate protection can be relatively inexpensive on a global scale. Looking more closely at the regional projections of these models, however, one often finds somewhat unrealistic assumptions as to how countries can supposedly develop while having access to only very small amounts of energy compared to what has been the historical norm. This paper shows some of these results. The key question is whether low-energy development pathways are feasible or if we will have to think harder about the effort needed to enable access to sustainable energy for developing countries

Logistic Curves, Extraction Costs and Peak Oil

Debates about the possibility of a near-term maximum in world oil production have become increasingly prominent over the past decade, with the focus often being on the quantification of geologically available and technologically recoverable amounts of oil in the ground. Economically, the important parameter is not a physical limit to resources in the ground, but whether market price signals and costs of extraction will indicate the efficiency of extracting conventional or nonconventional resources as opposed to making substitutions over time for other fuels and technologies. We present a hybrid approach to the peak-oil question with two models in which the use of logistic curves for cumulative production are supplemented with data on projected extraction costs and historical rates of capacity increase. While not denying the presence of large quantities of oil in the ground, even with foresight, rates of production of new nonconventional resources are unlikely to be sufficient to make up for declines in availability of conventional oil. Furthermore we show how the logistic-curve approach helps to naturally explain high oil prices even when there are significant quantities of low-cost oil yet to be extracted

Logistic Curves, Extraction Costs and the Effective Size of Oil Resources

The size of potential fossil fuel resources is an issue of perennial interest and controversy. Fundamentally, there appears to be a conflict in interpretation of available data for both past and future extraction histories. As fossil-fuel prices rose dramatically over the past several years, the question of resources once again became acute. In this paper we concentrate on conventional and non-conventional oil resources and make four main points, with the overarching theme that one can determine an effective oil resource that represents significantly less availability for consumption than usually posited by tallying resources in place. First, looking at oil production data in terms of a logistic curve pattern of cumulative production is useful, as many authors have pointed out, but must be done with the awareness of significant predictive shortcomings. Second, a modest disaggregation of oil production regions and of oil types (conventional and non-conventional) can help give some insight into likely production trajectories for the future. Third, historical precedent shows that the large non-conventional oil resources will likely not be produced quickly enough to compensate for increasingly challenging production of conventional oil; the analysis of this point is at the heart of the current work. The fourth point is that one can include some basic assumptions for extraction costs in the logistic-curve approach and, together with data from the International Energy Agency arrive at estimates of how both marginal and average costs will increase with time. These will be compared with recent historical patterns

Climate Change, Development, and the Global Commons

An important link between energy, climate change, human development, and human rights comes in the form of a question that has yet to be answered satisfactorily: The earth’s atmosphere and other physical systems are the ultimate example of the global commons. Do future generations have a human right to an unchanged earth system? Sustainable Development Goals 13, 14, and 15 imply an affirmative answer. Given that climate scientists have a good estimate of the amount of carbon dioxide that can be emitted before the safe uptake capacity of the atmosphere is breached, how do we allocate that remaining atmospheric capacity to absorb emissions from our industrial processes and personal consumption while enabling sustainable development? One approach to determining pathways for decarbonizing the world’s energy system involves consideration of a cost-benefit analysis, weighing costs of transforming the energy system with potential future damages due to climate change. Another option is to set a limit on total carbon dioxide emissions over the next several decades, moving toward zero emissions, and then to find the most efficient way to work within those limits. Pope Francis, in his 2015 encyclical Laudato Si’, addresses these options from the perspective of Catholic social teaching that is to some extent not a dramatic departure from the teachings of his predecessors. However, the point that will be addressed in this contribution is that the message contained in Laudato Si’ has a very close secular counterpart in the distinctions made between “weak” and “strong” sustainability. In the end, we recognize that the economy is just one part of our relationship with the earth’s ecosystems and that societies make ethical choices based on shared values. Both Laudato Si’ and strong sustainability arguments lead us to consider a just distribution of the atmospheric commons between different countries and peoples

The Carbon Rent Economics of Climate Policy

By reducing the demand for fossil fuels, climate policy can reduce scarcity rents for fossil resource owners. As mitigation policies ultimately aim to limit emissions, a new scarcity for “space” in the atmosphere to deposit emissions is created. The associated scarcity rent, or climate rent (that is, for example, directly visible in permit prices under an emission trading scheme) can be higher or lower than the original fossil resource rent. In this paper, we analyze analytically and numerically the impact of mitigation targets, resource availability, backstop costs, discount rates and demand parameters on fossil resource rents and the climate rent. We assess whether and how owners of oil, gas and coal can be compensated by a carbon permit grandfathering rule. One important finding is that reducing (cumulative) fossil resource use could actually increase scarcity rents and benefit fossil resource owners under a permit grandfathering rule. For our standard parameter setting overall scarcity rents under climate policy increase slightly. While low discount rates of resource owners imply higher rent losses due to climate policies, new developments of reserves or energy efficiency improvements could more than double scarcity rents under climate policy. Another important implication is that agents receiving the climate rent (regulating institutions or owners of grandfathered permits) could influence the climate target such that rents are maximized, rather than to limit global warming to a socially desirable level. For our basic parameter setting, rents would be maximized at approximately 650 GtC emissions (50% of business-as-usual emissions) implying a virtual certainty of exceeding a 2 °C target and a likelihood of 4 °C warming

Boom or Bust? Mapping Out the Known Unknowns of Global Shale Gas Production Potential

To assess the global production costs of shale gas, we combine global top-down data with detailed bottom-up information. Studies solely based on top-down approaches do not adequately account for the heterogeneity of shale gas deposits and hence, are unlikely to appropriately capture the extraction costs of shale gas. We design and provide an expedient bottom-up method based on publicly available US data to compute the levelized costs of shale gas extraction. Our results indicate the existence of economically attractive areas but also reveal a dramatic cost increase as lower-quality reservoirs are exploited. At the global level, our best estimate suggests that, at a cost of 6 US$/GJ, only 39% of the technically recoverable resources reported in top-down studies should be considered economically recoverable. This estimate increases to about 77% when considering an optimistic recovery of resources but could be lower than 12% when considering pessimistic ones. The current lack of information on the heterogeneity of shale gas deposits as well as on the development of future production technologies leads to significant uncertainties regarding recovery rates and production costs. Much of this uncertainty may be inherent, but for energy-system planning purposes, with or without climate change mitigation policies, it is crucial to recognize the full ranges of recoverable quantities and costs

Economics of Nuclear Power and Climate Change Mitigation Policies

The events of March 2011 at the nuclear power complex in Fukushima, Japan, raised questions about the safe operation of nuclear power plants, with early retirement of existing nuclear power plants being debated in the policy arena and considered by regulators. Also, the future of building new nuclear power plants is highly uncertain. Should nuclear power policies become more restrictive, one potential option for climate change mitigation will be less available. However, a systematic analysis of nuclear power policies, including early retirement, has been missing in the climate change mitigation literature. We apply an energy economy model framework to derive scenarios and analyze the interactions and tradeoffs between these two policy fields. Our results indicate that early retirement of nuclear power plants leads to discounted cumulative global GDP losses of 0.07% by 2020. If, in addition, new nuclear investments are excluded, total losses will double. The effect of climate policies imposed by an intertemporal carbon budget on incremental costs of policies restricting nuclear power use is small. However, climate policies have much larger impacts than policies restricting the use of nuclear power. The carbon budget leads to cumulative discounted near term reductions of global GDP of 0.64% until 2020. Intertemporal flexibility of the carbon budget approach enables higher near-term emissions as a result of increased power generation from natural gas to fill the emerging gap in electricity supply, while still remaining within the overall carbon budget. Demand reductions and efficiency improvements are the second major response strategy

A Clean Energy Utility for Multifamily Housing in a Deregulated Energy Market

Energy efficiency and renewable energy (EERE) investment in multifamily residences in the United States has not kept pace with investment in resident-owned facilities. Split incentives, where owners cannot benefit economically from energy cost savings for residences and resident investment in EERE is not feasible, have posed a significant barrier. A clean energy utility is posited to circumvent this barrier. This utility would be responsible for power purchase from the grid, ideally as a real-time purchase agent from the grid manager; investment in energy efficiency and renewable energy; and demand management through control of water heating, as well as supply-side management through deployment of stored solar at near-peak grid power purchase cost. A clean energy fee is posed for recovery of costs, in contrast to typical consumption strategies (per kW h). A case study approach is employed to evaluate the feasibility of this type of utility of reducing carbon production in this building sector. Considered in the analysis is a 2008 multifamily facility located in the Midwest of the U.S., with apartment level interval meters for both power and water. Historical data from these meters were used to assess the savings and demand-side management potential from investments in improved efficiency lighting, refrigeration, heat pumps, and water heaters, as well as investments in solar PV and storage for supply-side management. The results show that the packaged retrofit EERE investment could yield costs for residents and profits for energy manager comparable to those in the current residential pricing scheme, while reducing grid-sourced energy by 42%. When solar PV and battery storage are added to the solution, it is shown that a clean energy fee structure can cost-effectively drive savings to over 54%. For new construction, even deeper cost effective savings are realizable. This research demonstrates the potential to drive deep energy savings in the multifamily building sector that can lower costs to residents through the establishment of clean energy utilities which recover investments in energy efficiency, demand management, and solar PV/battery systems through resident clean energy fees rather than consumption fees

Sustainability Research Through the Lens of Environmental Ethics

Two core courses in the curriculum of the University of Dayton’s Sustainability, Energy, and the Environment minor, Sustainability Research I and II, were developed out of the frustration one author, Daniel Fouke, experienced while teaching a traditional course on environmental ethics for the Department of Philosophy. The often-overwhelming nature of environmental problems tended to demoralize both the instructor and the students. Seeking a way to integrate ethical analysis of complex problems with the search for solutions, two courses were proposed that would be team-taught by a philosopher and a scientist or an engineer. Development of the courses was initially funded through a course-development fellowship from the college of Arts and Sciences. The rationale for these courses is the recognition that technical and scientific knowledge cannot, by itself, provide reasons for utilizing that knowledge for ethical purposes. Similarly, ethical reasoning cannot operate in a vacuum. That is, individuals cannot have a duty to do what it is impossible to achieve. The courses facilitate understanding of how science, technology, and ethical analysis have a symbiotic relationship in assessing solutions to environmental problems—knowing our duties toward the natural world requires understanding what science tells us about the nature of environmental problems and then evaluating the strengths and limitations of technological solutions