Transcript Commentary on Presentations by Bassett, Brown, and

Commentary on Presentations by
Bassett, Brown, and Rosenfeld
in the Symposium on
Extreme Energy Efficiency
John P. Holdren
Heinz Professor & Director
Program on Science, Technology, & Public Policy
John F. Kennedy School of Government
HARVARD UNIVERSITY
2005 Annual Meeting of the
American Association for the Advancement of Science
Washington, DC • 21 February 2005
The big questions (and answers)
• What do we mean by “extreme”?
Kaarsberg, Bassett: Thinking “outside the box”.
Holdren: The challenge to efficiency is extreme, which is
why thinking outside the box is required.
• How much technical efficiency potential is there
and where is it to be found?
Bassett, Brown, Rosenfeld: Huge, growing, everywhere.
Holdren: I agree.
• How much of the potential do we need to exploit?
Holdren: Addressed in the rest of this commentary.
• How are we going to make it happen?
Edenhofer, Clay/Roop, Laitner (coming next).
How much of the potential do we need to exploit?
MOTIVATIONS THAT DETERMINE THE “NEED”
• Saving money – demand side (savings on energy bills
exceed investments needed to achieve the savings)
• Saving money – supply side (reduced pressure to expand
supply allows foregoing costliest options, worst sites)
• Reducing air pollution, water pollution, habitat destruction,
accident risks, & waste-management burdens from supply
options
• Reducing greenhouse-gas emissions from the energysupply sector.
All of these are worthy motivations, but the most demanding
is the last. It defines how much we need (& means that the
incentive structure for efficiency must reflect this driver).
Increase in C-free energy needed to stabilize
atmospheric CO2 below 550 ppmv
To avoid a doubling of preindustrial CO2, conventional fossil
primary energy must not exceed 500 EJ in 2050 and 350
EJ in 2100. Starting from 350 EJ of conventional fossil
fuel in 2000 and BAU rates of change in world GDP and
energy intensity, it follows that EJ/yr of C-free energy
needed in 2050 and 2100, compared to 100 EJ/yr actual in
2000, are…
2000
2050
2100
-------
------
------
C-free energy under BAU
100
600
1500
...if E/GDP falls 1.5%/yr
100
350
800
...if E/GCP falls 2.0%/yr
100
180
350
Commentary on Presentations by
Edenhofer, Clay/Roop, and Laitner
in the Symposium on
Extreme Energy Efficiency
John P. Holdren
Heinz Professor & Director
Program on Science, Technology, & Public Policy
John F. Kennedy School of Government
HARVARD UNIVERSITY
2005 Annual Meeting of the
American Association for the Advancement of Science
Washington, DC • 21 February 2005
Addendum on how much efficiency we need
• Dr. Edenhofer’s opening remarks reminded me of something I should have said in connection with my “thought
experiment” on the relation between the rate of efficiency
improvement and needed growth in carbon-free energy:
– My numbers corresponded to stabilizing CO2 at 550
ppmv. But it’s increasingly apparent that this target is too
weak to avoid “dangerous anthropogenic interference”. If
the goal is to avoid exceeding 2°C above pre-industrial,
CO2 must be held to 400-450 ppmv.
– All else equal, that means the C-free energy requirements for any given rate of efficiency improvement in the
21st century go up.
– On the other hand, my economic-growth baseline was
IS92a, which some analysts think too high. If global
economic growth is assumed to be lower than that, this
reduces the needs for C-free energy from those shown in
my table.
How are we going to get there?
• Dr. Edenhofer noted that models of the costs of reducing GHG
emissions generally overstate those costs by failing to account
adequately for induced technological innovation and for learning.
– I agree.
– In addition, some distinguished economists (e.g., Harvard’s Dale
Jorgenson) argue that conventional analyses don’t adequately reflect
benefits for economic growth that will result if revenues from C taxes or
permit sales are used to reduce other taxes.
– It’s also the case that the typical portrayals of costs in terms of lost GDP
are less alarming than they look at first sight. For example, the
statement that US GDP might be 3% lower in 2050 under carbon
constraints than under BAU only means that Americans would need to
wait until 2051.5 to be as rich as they otherwise would have been in
2050.
How are we going to get there? (continued)
• The analysis by Clay, Kaarsberg, Hopson, & Roop reinforced the
proposition that the more realism and relevant detail one adds to
energy/economic models, the larger are the predicted positive impacts
of advanced technologies on energy intensity & carbon intensity and the
lower the net costs (or the larger the net benefits) to the economy of
implementing those technologies.
• The paper by Laitner underlined once more the “extreme” technical
potential for increased energy efficiency available across every sector of
the economy, while reinforcing earlier contentions about how much of
this potential we must capture in order to address the global climatechange challenge.
How are we going to get there? (continued)
TAKE-AWAY MESSAGE ON WHAT TO WORK FOR NOW
• A price on carbon emissions, either as a carbon tax or a cap-and-trade
approach, SOON.
• A significant ramp-up in CAFÉ standards (because initial C price will be
below the real cost of emissions and will not reflect the oil-dependence
externality).
• Extension & expansion of tax incentives for private-sector energy RD&D.
• A doubling of Federal investments in ERD&D, emphasizing end-use
efficiency and low- & no-carbon supply.
• A companion program to subsidize accelerated deployment of the most
attractive options emerging from demo.
• A tripling of Federal investments in international cooperation on ERD3.
See www.energycommission.org.