Monthly Archives: March 2014

Carbon Dioxide Removal Approaches: Long-Term Implications And Requisite Societal Commitments

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In recent years, a number of climate change commentators, non-governmental organizations, and intergovernmental organizations have discussed the potential need for so-called “negative greenhouse gas emissions” strategies. It is also anticipated that Working Group III of the Intergovernmental Panel on Climate Change will include a discussion of this approach in its upcoming report pursuant to its contribution to the Fifth Assessment Report. The rationale advanced for focusing on negative emissions approaches are usually the threat posed by burgeoning emissions, which could result in exceeding of critical climatic thresholds in a few decades, as well as system inertia, which could lock in temperature increases associated with radiative forcing for many centuries. The processes that could effectuate permanent removal carbon dioxide from Earth’s atmosphere include air capture, bioenergy and carbon capture and storage, ocean iron fertilization and soil mineralization, and are usually classified as carbon dioxide removal (CDR) geoengineering approaches.

In my next few postings on the site, I’d like to highlight some of the excellent peer-reviewed literature on carbon dioxide removal strategies that has been released in the past few years. In 2010, Stanford professors Long Cao and Ken Caldeira published a study in the journal Environmental Research Letters (open access) that sought to assess both the long-term consequences and level of commitment required to effectuate massive removal of carbon dioxide from the atmosphere. The researchers employed a coupled-climate carbon cycle model, initially integrated under a fixed pre-industrial atmospheric concentration of 278ppm for 5000 years. The model was subsequently integrated under prescribed historical carbon dioxide concentrations between 1800-2008, and then forced with carbon dioxide emissions from 2009-2049 following the IPCC’s A2 emissions scenario. The study then simulated cessation of carbon dioxide emissions and two extreme carbon dioxide scenarios, one in which carbon dioxide was instantaneously set to its pre-industrial level of 278ppm at the beginning of 2050 by removing all carbon dioxide from atmosphere, with carbon dioxide levels in the atmosphere permitted to evolve freely thereafter, and the other scenario in which carbon dioxide was set at 278ppm in 2050 and then held at that level thereafter. In both scenarios, integration of the simulations was continued until 2500.

Among the study’s conclusions:

1.     Following an extreme one-time removal of all anthropogenic carbon dioxide from the atmosphere, atmospheric concentrations are restored under the simulation to pre-industrial levels of 278ppm.

a.     However, due to efflux of carbon from land associated with responses of net primary production and soil respiration, as well as releases of carbon from oceans, atmospheric concentrations experience an overshoot, with a peak concentration of 362ppm 30 years after the removal.  Overall, 27% of removed carbon returns to the atmosphere. Thus, if society would wish to maintain atmospheric concentrations of carbon dioxide at a specified level, it would have to commit itself to long-term removal of carbon dioxide released from land and ocean sources;

b.     A one-time removal of anthropogenic carbon dioxide also reduces warming by a little less than 50% at the time of removal, and radiative forcing by two-thirds on centennial timescales.

2.     If atmospheric concentrations of carbon dioxide were restored to 350ppm, it would result in surface warming of 1.2°C, which would last for several centuries;

3.     The simulated reduction in temperatures in the study yields a cooling of 0.16°C for every 100 PgC CO2 removal. The conclusion that the concept of proportional temperature change to cumulative carbon dioxide emissions is apposite to carbon dioxide removal has implications for assessing the potential effectiveness of such approaches.

4.     The study also contains a cautionary note: if effective heat capacity should prove to be less than estimated in the study, or the carbon dioxide degassing timescale proved longer, it could result in temperature overshoots in which initial temperature decreases are reversed when carbon dioxide re-accumulates in the atmosphere. However, the research concluded that they did not observe this result in their simulations.

Of course, it is not likely that deployment of negative emissions approaches would, or in the case of most prospective technologies, could, follow what the researchers themselves characterize as an “extreme” scenario, i.e. a one-time removal of all carbon dioxide at a discrete point. Moreover, it’s far from clear that society would seek to return to pre-industrial climatic conditions, even if that could be effectuated. And, of course, the study did not address issues associated with feasibility, However, this study is very valuable for a number of reasons. First, it provides a preliminary estimate of anticipated reductions in temperatures per 100 PgC CO2, providing a guide to policymakers who might contemplate more limited uses of negative emissions strategies than contemplated in this study. Second, the study provides a pointed reminder of the fact that a negative emissions strategy would likely necessitate a multi-generational societal commitment, with all of the implications that this would hold for governance, ethics and practical logistics. Finally, the study could provide students with an excellent window into the methods, as well as challenges, of simulating the climatic impacts of geoengineering strategies with climate models.

Assessment of Efforts to Reform the European Union’s Emissions Trading System

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In January, the European Commission published its proposal for the Climate and Energy Package 2030, which is slated for submission to the European Council this week. An important component of the proposed package is several changes to the European Union’s beleaguered Emissions Trading System (EU-ETS) For instructors who include a discussion of the EU-ETS, or more generally, emissions trading, in their courses, check out a new study by Paris-Dauphine University’s Climate Economics Chair. The study employed a model that sought to simulate supply and demand for emissions allowances (European Union Allowances or “EUAs”), year after year, incorporating the measures proposed by the Commission to date, including “backloading” allowances during the third phase of EU-ETS implementation and ratcheting up the linear annual emissions reduction factor from 1.74% to 2.2% from 2021 onward. It also focuses on the establishment of a market stability reserve (MSR) mechanisms, which, if implemented, will establish two triggering thresholds based on the quantity of allowances in circulation: a “high threshold” that triggers removal of 12% of the allowances in circulation when the quantity of allowances in circulation is greater than 833 Mt., and a “low threshold” that removes 100 Mt of allowances when the quantity of allowances in circulation is less than 400 Mt.

The study’s primary findings are as follows:

  1. If EU-ETS market participants’ expectations lead to early reductions in emissions from 2021 onward and high banking of allowances (keeping allowances for future use) (designated in the study as a “high scenario”), then prices for EUAs may reach 50 euros per ton in 2021 and remain above price levels in the baseline scenario until 2030. By contrast, under a “low scenario,” in which participants don’t consider it necessary to immediately reduce emissions or hold many allowances for banking purposes, prices rise to lesser degree than under the high scenario and fall below the reference price when the MSR leads to additional allowances being injected into the market;
  2. The MSR introduces greater price volatility into the market compared to a reference scenario without this mechanism. The reason is that the MSR lacks provisions to account for and respond to fluctuations in participants’ needs for allowances related to factors e.g. the evolution of abatement costs, relative energy prices, changes in technology and weather and economic conditions;
  3. While banking in emissions trading systems is generally recognized as salutary, as it permits participants to reduce emissions in the most economically manner possible, the establishment of the MSR may scupper this result. The reason for this, argues the authors of the study, is that if agents decide to purchase allowances with the intention of banking them for future use, this could ease triggering of the MSR, “which … would go against their interests as an equivalent quantity would be withdraw from auctions.” Similarly, if agents decide they don’t need to purchase allowances currently, this would result in a lower number of allowances in the system, resulting in a release of additional allowances into the system from the MSR. This would also vitiate the economic efficiency of the system.

Among the in-class discussion questions that this study brings to mind are:

  • Given what you know about the state of the European economy and its energy markets, what is the likelihood that the “high scenario” cited by the study will occur in 2021 and beyond? How about the “low scenario?” What are the implications for different allowance prices in terms meeting the objectives of the EU-ETS?
  • Does the MSR vitiate the operation of the EU-ETS as a “market-based” mechanism? If yes, is that problematic?
  • Given the fact that many believe that volatility in allowance prices can severely undercut investment in technologies to de-carbonize the economy, could there be ways to revise the MSR to avoid the potential price volatility cited in this study?

 

Effects of Feed-In Tariffs on Renewable Energy Generation

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Feed-in tariffs (FITs) have become a widely used instrument to seek to drive market penetration of renewable energy sources. A recent study concluded that FITs have been implemented in 63 countries and 26 regional jurisdictions. In the United States, FITs have been adopted in twelve states and numerous municipalities. However, the impacts of FITs remain contested. A new study on the effects of FITs would make a good student reading in graduate courses with students with good quantitative skills.

The study used instrumental variables to estimate the causal effect of FITs on renewable electricity generation in 26 industrialized countries in the period of 1979-2005. The study employed two different instruments, a spatial instrument based on average FIT in neighboring countries (argued to be a strong predictor of a country’s FIT) and a 4-year lag of a country’s own FIT (argued to be a strong predictor of a country’s current FIT).

The researchers concluded that increasing the FIT by one cent U.S. per kilowatt hour increases the percentage change of renewable energy’s share in the electricity mix by 0.11%. Over a decade, a FIT of 10 cents would thus increase a country’s renewable energy share of electricity production by approximately 12%, with this share exceeded in several studies countries, including Austria and Portugal.

Among the in-class discussion questions that would be pertinent to this study include the following:

  1. Are the results here pertinent to developing countries?
  2. Are FITs the optimal instrument to incentivize renewable energy market penetration? How do we compare the instrument’s effectiveness vis-a-vis other approaches, e.g. renewable portfolio standards or net metering?;
  3. Some countries have begun to scale back FITs on the grounds of costs and maturation of some renewable energy technologies. How does society engage in the cost-benefit analysis to determine optimal levels of FITs?