The IEA’s Closing Window

One small mercy in the global warming debate is that the International Energy Agency (IEA) has not become a closet supporter of the carbon lobby under the mantra “drill, baby drill”. The IEA, basically a rich country club that focuses on energy security and research, has come under criticism over the years for downplaying the potential for renewables and for underplaying the threat from peak oil, bit can’t be accused of neglecting the issue of climate change (or at least not recently).

Every year, the IEA issues its flagship publication, the World Energy Outlook (WEO), around November. Jump back a decade to see the WEO’s view of the world in 2001  here. This publication mentions both renewables and carbon capture and sequestration (CCS) technology—but there is no explicit mention of climate change. For renewables, an economic case exists for their introduction irrespective of global arming (if you can get down to the right price point). But the WEO was being rather coy with CCS; it is a pretty pointless technology if you don’t already buy into the threat posed by climate change. So at the time, climate change could be characterised as the energy issue ‘that dares not speak its name’.

As the years rolled by, the WEO become rather less reserved about the issue, culminating with a sea change in its approach in the 2006 report, in which the Executive Summary kicked off with this sentence:

The world is facing twin energy-related threats: that of not having adequate and secure supplies of energy at affordable prices and that of environmental harm caused by consuming too much of it.

And, at last, we are out of the closet:

Safeguarding energy supplies is once again at the top of the international policy agenda. Yet the current pattern of energy supply carries the threat of severe and irreversible environmental damage – including changes in global climate.

The report then went on to note that its mandate had been revised to “advise on alternative energy scenarios and strategies aimed at a clean, clever and competitive energy future” and that “greenhouse-gas emissions would follow their current unsustainable paths through to 2030 in the absence of new government action”.

The following year, the 2007 report (here) explained the scale of the  challenge in more detail:

According to the best estimates of the Intergovernmental Panel on Climate Change, this concentration would correspond to an increase in average temperature of around 3°C above pre-industrial levels. In order to limit the average increase in global temperatures to a maximum of 2.4°C, the smallest increase in any of the IPCC scenarios, the concentration of greenhouse gases in the atmosphere would need to be stabilised at around 450 ppm.

To achieve this, CO2 emissions would need to peak by 2015 at the latest and to fall between 50% and 85% below 2000 levels by 2050.

We estimate that this would require energy-related CO2 emissions to be cut to around 23 Gt in 2030 – 19 Gt less than in the Reference Scenario and 11 Gt less than in the Alternative Policy Scenario. In a “450 Stabilisation Case”, which describes a notional pathway to achieving this outcome, global emissions peak in 2012 at around 30 Gt.

In the subsequent WEO in 2008, an entire section of the report (the full report can be found here) was devoted to setting out the energy production paths required to hit both 450 ppm and 550 ppm CO2-equivalent targets.  Through providing such depth of analysis, the IEA had thus positioned itself as a vital source of information for anyone trying to understand the challenge of climate change.

Fast forward to November 2011, and we have another 4 years of data compared to what the IEA had in hand back in 2007. So how well are we doing in terms of achieving their “450 Stabilisation Case” (stabilisation at 450 parts per million of  CO2 equivalent)?

As I stressed in my ‘Odds of Cooking the Kids’ posts, it is possible for any person on the planet to answer this kind of question by periodically checking into the fossil fuel carbon emission data releases found here. The most up-to-date data we have is the advance estimate for fossil fuel carbon emissions in 2010, which is 9.1 giga tonnes. Translate this into CO2 (remembering to multiply by 3.67) and we saw 33.5  giga tonnes of CO2 emitted in 2010. So the 2007’s global emissions peak of 30 giga tonnes in 2012 looks a bit of a stretch goal!

But if we go back to my post here, we should note that such peaks are not cast in stone: we have a trade-off between early CO2 emission peaks and slow reductions, and late peaks and aggressive reductions.

This brings us to the current World Energy Outlook for 2011, in which some new knowledge is brought to the table in the form of energy production inertia and the price of production. (Note that for past issues of the WEO it is possible to access the full reports for free, but for the most recent issue only the Executive Summary  (here) is available without payment.)

Let’s just accept for the moment that 450 ppm CO2-equivalent is our atmospheric goal, and this will likely restrict the rise on global mean temperature rise to below 2 degrees Celsius above pre-industrial revolution levels—the level deemed dangerous. Then ignoring cost, we may be ambivalent between the three pathways in the chart above. But, of course, cost does matter.

Now it could be argued that the cost of renewables will come down as technology advances, so suggesting we hang back in their deployment. However, the IEA pokes holes in this line of reasoning through emphasising the large upfront sunk costs of energy production infrastructure and the long life of such plant once it is built. In short, once you have installed a coal-fired power station, it makes little sense to decommission it before the end of its useful life.

Imagine that you buy a brand-new SUV with the intention of going green at some stage in the future by buying an all electric Nissan Leaf. Assuming there is no second hand market (which there isn’t for power stations), then the time to switch cars from an economic perspective is when the useful life of your SUV has come to an end. Now you could make the trade three years after buying your SUV, but—remembering there is no second market—that would mean trashing a vehicle with many years left of useful life and considerable economic value. This is the logic the IEA follows. In their words:

Four-fifths of the total energy-related CO2 emissions permissible by 2035 in the 450 Scenario are already “locked-in” by our existing capital stock (power plants, buildings, factories, etc.). If stringent new action is not forthcoming by 2017, the energy-related infrastructure then in place will generate all the CO2 emissions allowed in the 450 Scenario up to 2035, leaving no room for additional power plants, factories and other infrastructure unless they are zero-carbon, which would be extremely costly.

In sum, to hit the 450 CO2-equivalent target, we would have to stop building new fossil fuel based energy capacity completely after 2017. And if we maintain the current rate of fossil fuel based energy production installation, we will head for far higher degrees of warming as can be seen in the chart below.

The major culprit is, of course, coal, which has been taking the lion’s share of new capacity installation. Indeed, over the last decade new coal plant has been almost equivalent to all other types of energy generation capacity put together.

The gloomy conclusion is that the 450-eq, and thus 2 degree of warming target, is already almost out of reach. The key question then is “how far could we overshoot looking at the cost dynamics of energy installation alone?” This is a topic I will return to in future posts.

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2 responses to “The IEA’s Closing Window

  1. If only this were as easy as closing the window, turning on the air con and ignoring the climate. We have become so disconnected from our environment that we fail to understand the depth of our collective stupidity. Each one of us makes very little difference but all of us acting togther are rushing into a dangerous and uncertain future.

    Keep up the good blogging.

    • I guess this is Downs paradox, or the paradox of voting. But as a species we have evolved the ability to exhibit empathy to those outside our immediate gene pool. This is a huge topic, and on my blog ‘to do’ list—and as you say is absolutely critical.

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