IEA report, Part 2: Climate Progress has the 450-ppm solution about right

Part 1 discussed the basic conclusion of the new International Energy Agency report — cutting global emissions in half by 2050 is not costly. In fact, the total shift in investment needed to stabilize at 450 ppm is only about 1.1% of GDP per year, and that is not a “cost” or hit to GDP, because much of that investment goes towards saving expensive fuel.

In this post I will discuss the basic solution IEA is proposing. I will also start to look at how the report is too pessimistic about renewables, and thus it overestimates costs. In their business-as-usual baseline, neither solar thermal nor solar photovoltaics are ever commercially competitive. Part 3 discusses IEA’s very dubious assumptions in the transportation sector. The IEA assumes the price of oil is half of current levels and is frozen at $65 a barrel from 2030 to 2050. I kid you not. That is a key reason their marginal price of CO2 is so absurdly high.

My central argument in recent months has been that stabilizing at 450 ppm requires about 14 wedges — carbon mitigation strategies deployed over a few decades that ultimately each prevent the emission of one billion tons of carbon annually [see “Is 450 ppm (or less) politically possible? Part 2: The Solution“]. The IEA comes to almost exactly the same conclusion, and has relatively similar wedges, so I view this report largely as a vindication of my analysis.



As you can see, the IEA report concludes a variety technology strategies can reduce global CO2 emissions from the projected 62 Gt baseline level to 14 Gt in its BLUE Map scenario. Note this is a 48 Gt drop in carbon dioxide emissions, or almost exactly a 13 GT drop in carbon emissions — 13 wedges. Each wedge is about a 7.7% reduction on the right hand side of the chart.

In the transportation sector, most of the “end-use fuel switching” is alternative fuels for cars divided almost equally among: second-generation biofuels, electric vehicles (EVs) and plug ins, and hydrogen fuel cell vehicles (FCVs). The efficiency in transportation is largely fuel economy gains and hybrids in the medium term, but by 2050, the IEA seems to be crediting some of the efficiency to electric drives (EVs, Plug ins, and FCVs), which are indeed more efficient than internal combustion engines. The transportation analysis is the most skewed by questionable assumptions and is the focus of Part 3.


The rest of this post will concentrate on the IEA’s solution for electricity. The IEA is projecting almost a wedge of nuclear, as I do.

They have about as much efficiency as I do — roughly 3 wedges. It looks like “power generation efficiency & fuel switching” is what I label cogeneration or combined heat and power. A little “end-use fuel switching” is solar space and water heating for buildings. Even more is high-efficiency heat pumps for heating and cooling.

They project almost 3 wedges of renewables for electricity generation, comprised of wind, biomass (combined cycle gasification and co-combustion with coal), solar photovoltaics, concentrated solar thermal power, geothermal, waste-to-energy, tidal, and other. I have five wedges of renewables.

They make up for the lower amount of renewables with a huge amount of carbon capture and storage (CCS), which they believe will not just extent to coal, but also natural gas, industrial processes and “transformation” (e.g. petroleum refining). They appear to have about 2.5 wedges of CCS (whereas I have one).The IEA concludes that “technologies that already exist, or are in an advanced state of development, can bring global CO2 emission back to current levels by 2050,” but that cutting another 15 or so Gt of CO2 to get to half of current levels by 2050 will “demand deployment of technologies still under development, whose progress and ultimate success are hard to predict.” In short, we need what they call technology breakthroughs.

Let me explain why I think they have the relative contribution of renewables and CCS wrong — and why they are confused about “breakthroughs.” First off, the IEA greatly complicates its analysis by including the most expensive strategy (in terms of tons of CO2 avoided per dollar spent) as one-third of its fuel-switching in the transportation sector — hydrogen fuel cell vehicles. HFCVs clearly do require breakthroughs in hydrogen storage and the fuel cells. This assumption not only jacks up overall costs for the IEA, it means they need a large source of hydrogen, and the most obvious source is fossil fuels with CCS. I’ll discuss this further in Part 3.

Second, CCS is almost certainly going to be a high-cost solution. It must be considerably more expensive than current coal plants, which are now going for more than $5000/kw. You probably need coal gasification, which adds even more cost, and then you need capture/separation, which adds even more cost and requires energy from the coal plant. Then you have the massive distribution infrastructure for shipping around carbon dioxide for burial. Just one wedge of CCS requires an infrastructure comparable to the entire planet’s oil delivery infrastructure. We won’t do 2.5 wedges of CCS if we have plausible renewable alternatives, but here is where the IEA assumptions really fall apart.

Third, for reasons I just cannot fathom, the IEA’s baseline or business-as-usual case, is absurdly pessimistic about renewables. For instance, their baseline for wind has “400 GW capacity by 2050.” Yet the world had a total installed capacity of almost 100 GW by the end of 2007 and we added 20 GW of wind last year alone, a 5-fold increase from 2000 (see “Wind Power — A core climate solution“). If wind production just stayed at current levels, we’d have more than double the total installed wind that EIA projects for 2050. But no growth for annual wind production is itself an absurd assumption, so IEA’s wind numbers are far, far too low.

IEA’s business as usual for concentrated solar thermal electric power is “technology not commercially competitive” through the year 2050, with world capacity remaining below 10 Gigawatts. That is equally absurd. CSP is, arguably, commerical now (see “Concentrated solar thermal power — a core climate solution“). Yes, most (but not all) CSP is currently being constructed with the help of subsidies or government renewables standards. Where would the nuclear industry be without subsidies, even today? And how much coal would we have we hadn’t exempted so many plants from having to meet clean air act standards? The world will have 10 GW of CSP by 2020, if not 2015, at which point it will be cheaper than both new coal and new nuclear. Again, I’d be happy to bet anyone that CSP will provide more power than all forms of CCS every year through 2050 (my daughter can collect the winnings).

IEA’s business as usual for solar PV is “PV remains not commercially competitive” through 2050, with total world capacity below 60 GW. But the world installed nearly 3 GW in 2007, and annual PV installations have been growing at a rate of over 50% a year recently (see here). For IEA to assume average PV installations of under 2 GW a year through 2050 is, again, absurd.

The IEA assumes we need major government-funded technology breakthroughs to make PV and CSP commercial, but even the Bush Administration’s own energy experts don’t think so (see “Do we need a massive government program to generate breakthroughs to make solar energy cost-competitive?“). Steady incremental technology improvements, with learning and economies of scale should be enough.

Bottom Line: We need about 13 wedges by 2050 to stabilize around 450 ppm (fewer wedges if we deploy them faster, more if we deploy them slower). We probably don’t need major breakthroughs — but it certainly would be a good idea to increase R&D. What we mostly need is rapid deployment of commercial and near-commercial technologies, especially renewables and efficiency.

20 Responses to IEA report, Part 2: Climate Progress has the 450-ppm solution about right

  1. David B. Benson says:

    Joe — I gather you are not yet ready to give up on CCS? Why not? Many others have.

  2. Joe says:

    David — Same reason I don’t give up on nuclear even though it is also a high cost strategy — the situation is too dire to abandon any potential low carbon strategy. The funny thing is that most of us skeptics about CCS would like to make a bigger push to see if it is possible than the coal industry and Bush administration has.

    Not sure how you can give up on something we haven’t seriously tried yet, but I wouldn’t be surprised if it didn’t end up being a major part of the solution.

  3. Daniel Haran says:

    Best buys first? If CSP and Nukes are more expensive, what happens if we spend that money on efficiency or renewables instead?

  4. Joe says:

    Best buys first for large-scale deployment.
    R&D is a different matter.

  5. tidal says:

    Am I the only who thinks this particular IEA-wedges graphical presentation is a vast improvement to the Pacala-Socolow version? I never understood why P&S flat-lined existing annual emissions from fossil fuels out 2004 to ~ 2050… since that basically articulates a plan that ultimately fails? I know that is not the intent of P&S, but it just always peeved me when I saw it… This presentation more visually communicates why it has to be 13-14 wedges… not a “pick-and-choose from a vast menu to get to 7″…

    Anyway, just my impression…

  6. Robert says:

    Technical solutions exist, but that’s not the point. They only seem relevant because you are not defining the problem correctly.

    The problem is political. No individual country (or the world as a whole) has a political system that will allow technical solutions to be imposed. The market determines what happens and no-one controls that.

    Climatologists are predicting 10 or 15 years of relatively cool temperatures before GW takes off again….

    [JR: No climatologists have been making such predictions, as I have blogged previously.]

  7. David B. Benson says:

    Robert — Meantime the seas suffer:

    Diminished ocean organisms as acidity increases:

    Hall-Spencer, J. M. et al. Nature advance online publication doi:10.1038/nature07051 (2008). 77.html

    and sson there will be only jellyfish to eat. Know any receipes?

  8. David B. Benson says:

    Joe — An ultra-simple method is to sequester canbonaceous materials such as biochar and torrified wood. Just bury deep in carbon landfillls or abandoned mines. Cost is about $135 per tonne of carbon, less if done in areas (such as Africa) with low labor costs.

    Could be started right now…

  9. Finnjor says:

    Forgot the potential energy of the Greenland and Antarctic ice masses?

    What about the Himalayan and Andes? Mass weight 3 x ice, height as well 3 x.
    Any calculations about these wedges? Must be tenfold all other wedges. Too smart to understand?

  10. drwoood says:

    The wedges argument suggests that this much mitigation is possible. An important question is what policy measures are needed to lead to these wedges ()or similar ones) being deployed. One approach is a cap and trade scheme that is as brad as possible in coverage which reduces emissions by an amount equivalent to the wedges. All of the permits should be auctioned, and a large amount of the option should go back to people on low and middle incomes.

    A tricky issue is what to do about land use, land use change and forestry emissions, and some agriculture emissions, which would be hard to measure. One approach would be a separate price based market, where clearing any land would attract a tax, and revegetation would attract a negative tax. The tax could be chosen so that it is similar to the carbon price in the cap-and-trade scheme. An advantage to this approach is that the tax could reflect other externalities associated with land use change, such as habitat benefits. This could decrease the species extinctions that would be caused by climate change.

  11. Peter Foley says:

    David B. Benson, Did you read the whole article? Note the PH numbers, Atmospheric CO2 would have to go to well over 2000 ppm’s to achieve the PH that causes probelms around vents. If ocean acidification was a possibility I would support Decarboning, it isn’t.
    A reverse coal mine, how ingenious. Did you miss the lecture about reversing entropy? If accelerated carbon sequestration is needed, manually doing it would be a criminal waste of economic resources.

    Drwood, anything that halts or slows the economic progress of the third and fourth worlds will cause more extinction events then a tiny change in the world’s average temp.
    If you can’t measure it, it isn’t a science. you know like carbon forced climatology.

  12. Daniel Haran says:

    Sorry, I meant CCS and Nukes- those seem too expensive to justify sinking money into them. Maybe some R&D money to CCS; Nukes certainly had enough of those.

    Money spent on renewables does seem well spent, as they will keep going down in price.

  13. Tommaso says:

    What about land management/tropical reforestation?

  14. David B. Benson says:

    Peter Foley — Even a little will mean fewer shellfish.

    Also, we already have evidence of jellyfish blooms. Mans there is nothing there to eat the little ones.

  15. David B. Benson says:

    “The certainty of uncertainty”

    which means that possibly even 450 ppm is too high to avoid catastrophy. :-(

  16. drwoood says:

    Peter Foley – emissions from deforestation and land use change can be measured, its just that they are difficult to measure precisely. A negative tax on reforestation or avoided deforestation could be designed so that it leads to financial transfers from high income countries (where most emissions take place) to low income countries.

    Tommaso – Hansen’s recent paper suggests that we will eventually need to bring CO2 levels back down to 350 ppm, which would require activities with negative emissions – land management and tropical reforestation seem to be an obvious choice.

  17. charlie says:

    what would be helpful is to take those “wedges” which are way too confusing, and explain to americans, ok, this is how you’re going to fuel you car in 2050. People want energy security, and if we save the climate at the same time great.

  18. Paul K says:

    People continue – drwood is the latest – to confuse cap/trade with cap/auction. The auction part is all wrong. It will not maximize deployment. It will not reduce emissions. It does not establish a market. It has the support of less than forty senators. It cannot succeed. It should be dropped from the discussion.

    Cap/trade can possibly succeed in establishing an artificial market that will maximize deployment and reduce emissions. Although there are big questions, including Earl Killian’s cogent old high emitting vs new low emitting conundrum, a market system works if it is properly constructed. It is really very simple, requirng only buyers (fossil fuel burners), sellers (any one producing non fossil based fuel or energy or its equivalent in efficiency), a product ( deployment, production and generation) and a medium of exchange (tax and/or penalty avoidance coupons).

  19. drwoood says:

    Paul K – what I (and I daresay most people) mean by a cap and trade scheme is where a set amount of permits are allocated, firms are permitted to trade the permits, and at the end of the period (usually a year) the firm must possess an amount of permits equal to the firms greenhouse gas emissions. The question that arises is how are the permits initially allocated? They can either be auctioned or handed out for free, and usually the party allocating the permits is a government of some kind (in the EU ETS it is a compination of national governments and the European Commission). I’m not sure what you mean by cap/trade, do you mean cap and trade which free allocation of permits? If not, then can you point to a reference detailing the system that you are attempting to describe?

    Auctioning has many advantages over free permits as a permit allocation method. Auctioning is simpler, while handing out free permits based on a firms previous emissions can lead to perverse incentives to have higher early emissions; handing out free permits means more opportunity for rent seeking from polluters; auctioning makes the polluter pay, while when permits are handed out for free firms make substantial windfall profits when they pass costs on to polluters, in either case firms are likely to pass costs on to consumers; with auctioning, the money raised can be used to reduce distortionary taxes, compensate people on low or middle incomes, or reduce emissions on areas not covered by the emissions trading scheme.

  20. Peter Foley says:

    David B. Benson, Take a deep breath and brush up on the PH system of acidity measurement. The added Co2 will lead to more shells/coral as the biosphere sequesters the carbon, as it has for the last couple of eons.
    Just how did the sea life make when CO2 levels where 10x this era’s?

    If needed, I think not, do we want to pull the anti-carbon parachute rip cord while world society is still miles above sustainable economic development atmosphere? At 2ppms/year we are 35 years from 450ppms. without the damage a anti-carbon jihad would create our global GNP will quadruple, giving all 4x the funds to “fix” the alleged carbon forced AGW.

    Drwood, Another tax structure? Don’t be silly. Read your statement, “negative tax….where most emissions take place, to low income countries.
    Anything that leads to a world government is unacceptable.
    Has anyone bothered to look at actual current average World temps recently? The facts are mooting this argument.