The Carbon Crunch and what to do about it
IPPR January 15th 2013
Dieter Helm, Professor of Energy Policy, University of Oxford Author of The Carbon Crunch: How we are ge ng climate change wrong and how to fix it. Yale University Press, 2012 The Ques ons
• What are the causes of global warming? – Facing up to some inconvenient facts • Why has so li le been achieved? – Recognising current failures • How do we make progress? – Delivering effec ve climate mi ga on
15th January 2013 Professor Dieter Helm 3 An ever-upward path Atmospheric CO2 (ppm)
400
390
380
370
360
350
340
330 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: US Department of Commerce National Oceanic & Atmospheric Administration (NOAA)
15th January 2013 Professor Dieter Helm 4 What causes global warming?
3 related causes: • The role of coal • China • Popula on growth
ICarbon consump on, not produc on, is what ma ers
15th January 2013 Professor Dieter Helm 5 Historical coal burn vs atmospheric CO2 (mt & ppm)
6000 400
390 5000
380 4000
370 3000 360
2000
350 Atmospheric CO2 (ppm)
1000 Coal consump on Atmospheric CO2 340
Coal consump on (million tonnes of coal equivalent) 0 330
Source: US Department of Commerce Na onal Oceanic & Atmospheric Administra on (NOAA), BP sta s cal 15th January 2013 Professor Dieter Helm 6 review of world energy 2011 World coal demand scenarios to 2035 (mt)
9000
8000
7000
6000
5000 New policies Current policies 4000
Million tonnes 450 scenario 3000
2000
1000
0 1980 2009 2020 2035
15th January 2013 Professor Dieter Helm Source: OECD/IEA World Energy Outlook 2011 7 Global and Chinese coal demand in the base-case scenario (BCS) and Chinese slow-down case (CSDC)
Source: IEA Medium-term coal market report 2012 8 Europe’s own dash-for-coal
• EUETS < EUR10 I gas coal • Germany: nuclear coal
I major new coal build in Europe I lignite coal is being expanded in Germany I There is a gas coal switch in Europe
15th January 2013 Professor Dieter Helm 9 Gas and coal-based electricity genera on in select European countries
From gas From From From gas Rela ve Rela ve Electricity Jan-Jun coal Jan- Coal Jan- Jan-Jun 2012 growth growth genera on 2011 (in Jun 2011 Jun 2012 (in GWh) (in %) (in %) GWh) (in GWh) (in GWh)
Germany 40984 34749 -15 129399 140008 8
Spain 40696 35790 -12 16803 27656 65
UK 71894 48109 -33 52422 70991 35
Source: IEA Medium-term coal market report 2012 10 Popula on growth – providing energy for another 2 billion people
Source: United Na ons
15th January 2013 Professor Dieter Helm 11 What is likely to happen before 2020?
By 2020: • China X 2 GDP • India X 2 GDP
While no further ac on following Durban & Doha before 2020
I 400 – 600 GWs new coal by 2020 (if 12th 5 year plan implemented in China)
15th January 2013 Professor Dieter Helm 12 Why has so li le been achieved?
• Kyoto is produc on-based & largely European • Europe has been de-industrialising • Some current renewables are expensive, contribute li le to global climate change mi ga on and raise energy prices • Nuclear is reducing across Europe (especially in UK and Germany) + being replaced by coal in Germany
15th January 2013 Professor Dieter Helm 13 EU Climate Change Package
• 2020 – 20 – 20 : It all adds up to 20!!!! • Ra onale was “World leadership” – offering 30% at Copenhagen But then…. • Nuclear exit • More coal • 2050 Roadmap and 2030 targets
15th January 2013 Professor Dieter Helm 14 Europe: an unviable posi on
Compe veness
Current renewables policies
Consump on of carbon Costs
• Current renewables cannot make much difference to global climate change– land & shallow sea areas just not big enough • Energy efficiency – good idea but does not necessarily reduce energy demand 15th January 2013 Professor Dieter Helm 15 How do we make progress (if we really want to)?
1. Carbon pricing and Carbon consump on and border adjustments 2. Coal gas subs tu on
And then…. 3. Enormous scope for new technologies – future renewables
15th January 2013 Professor Dieter Helm 16 Carbon taxes v. EU ETS
35 A carbon tax 30 alterna ve
25
20
15 Carbon price EUR price Carbon 10 EU ETS futures prices 5
0 Source: Bloomberg
15th January 2013 Professor Dieter Helm 17 Border carbon adjustments
• Focus on carbon consump on • Not to price carbon is to subsidise exports • Loca onal indifference • Start with small number of very large carbon- intensive industries • Encourages others to introduce carbon prices I Bo om up, step-wise towards global carbon pricing
15th January 2013 Professor Dieter Helm 18 Coal " gas for the transi on
Fossil fuel emissions
1000
800
600
400
200
0 Coal (average) Fuel oil Natural gas
Approximate CO2 emissions: grammes of CO2 per KwH of electricity generated Source: International Energy Agency "CO2 emissions from fuel combustion highlights 2011" 15th January 2013 Professor Dieter Helm 19 The new technologies – future renewables, ac ve grids and more…
• Next genera on solar • Smart Meters • Storage and ba eries • Electrifica on of transport • Biotechnologies • Nuclear: PRISM, Fast-breeders
15th January 2013 Professor Dieter Helm 20 Conclusions
• European leadership has failed • 2020 – 20 – 20 has probably made ma ers worse • Durban will probably lead to 450ppm ++
EITHER: • Change tack now • Admit defeat
15th January 2013 Professor Dieter Helm 21 8/21/12 The Carbon Crunch by Dieter Helm - Yale University Press