Lori Bennear Research Group

Tag: climate change

Growing Dirty: Why China’s Energy Boom is America’s Problem

September 27, 2012 / / 6 Comments

by Olivia Shepard

COMMON BUT DIFFERENTIATED

In 1992 at the United Nations Rio Earth Summit, government representatives from 255 countries met to address a long list of climate and energy problems. They penned the Rio Declaration on Environment and Development, which introduced the concept of Common but Differentiated Responsibility (CBDR) stating that,

“The developed countries acknowledge the responsibility that they bear in the international pursuit of sustainable development in view of the pressures their societies place on the global environment and of the technologies and financial resources they command.”

The concept of CBDR suggests that developed countries, which in 1992 were emitting close to 80% of global CO2, have a mitigation responsibility proportional to their emissions. The logical extension of this being that developing countries are less to blame and thus essentially given a free pass to “grow dirty” as we, the United States, once did. But do these developing countries really have a right to their own Industrial Revolutions? On the one hand, it is unfair to handicap the growth of developing countries with emissions-based constraints that developed countries grew without, but on the other, it is neither logical nor moral to allow developing countries to knowingly ignore climate change simply for the sake of equality.

CHINA’S RAPID RISE

With no other country is the concept of CBDR more controversial than with China. While technically still a developing nation, in the past year China has surpassed the United States not only as the country with the largest economy, but also as the number one global emitter of greenhouse gases. These two superlatives are not unrelated either; they are linked through energy intensity, a measure of energy use per GDP. China’s energy intensity is 50% greater than the United States, so even if the US and Chinese economies were growing at the same rate, China would see a 1.5 times greater increase in greenhouse gas emission than the US. But the Chinese GDP is growing approximately ten times faster than that of the United States. Due to this rapid growth in GDP, even if China is able to meet its five-year plan to reduce energy intensity by 16% before 2015, it will still experience a net increase in greenhouse gas emissions. That is the one-two punch of growth coupled with high energy intensity. The fact that China emits more greenhouse gas per unit of GDP than any other country in the world and also has the largest, fastest growing GDP in the world means that despite CBDR, China must play a leading role in mitigating climate change. Yet China is resisting pressure from the United Nations to commit to an emissions target, which they claim will cause harmful economic shocks. China has little incentive to control emissions.

SINO-AMERICAN RELATIONS

While China avoids taking on greenhouse gas reduction obligations, the United States is reluctant to commit to United Nations imposed regulations unless all major emitters (not just developed countries) sign on as well. US law makers want to avoid “free riders” who benefit from US emissions reduction without contributing to the reduction themselves. In addition, if the US were to set an emissions goal without Chinese reciprocation, this would provide China with an unfair advantage in global trade. The Chinese-American political landscape is a complicated diplomacy game with plenty more facets than just the energy issue. Key to China’s recent growth is its reliance on trade with the US. China’s overall trade surplus in 2011 was $155.1 billion, but against the United States alone for the same year it was $272.3 billion, or 175.6% of the total surplus.

SOLAR AND WIND SUBSIDIES

Ironically, one of the largest growing categories of imports from China to the US are solar panels. Thus to some extent, China’s dirty growth (70% of its fuel supply comes from coal, as compared to 23% from coal in the US), actually enables clean energy infrastructure in America. In order to curb their trade deficit, last May the United States imposed an anti-dumping tariff on 31% of Chinese-made solar cells. Dumping refers to selling goods to a foreign country at a price lower than would be charged for the same goods domestically. Before the tariff, China dominated half the American market. The US hopes that the tariff will strengthen the domestic solar market, giving America a chance to compete. While beneficial to the US, the new tariff is a point of concern for China (and for other foreign countries with large solar markets such as Canada) since it will shrink trade in the global solar market and increase prices. A decrease in sales will reduce jobs as well, since about half the jobs provided by the solar sector are in installation. There is also tension regarding Sino-American competition in other renewable energy markets as well. Because the Chinese government provides large subsidies for wind turbine production, the US has trouble competing.

GOOD FOR THE EARTH GOOD FOR THE ECONOMY

The tariffs implemented by the United States on Chinese renewable infrastructure such as solar cells and wind turbines are put in place to protect the American market. China can produce and sell these goods much cheaper than can the US so imposing the tariffs allows America to compete. But rising prices also means less consumption of solar panels and wind turbines and therefore less mitigation of greenhouse gases. So what can we do to overcome this tug-of-war between the environment and the economy? Therein lies the solution to entirety of the global energy crisis. The best solution will be both economically and environmentally advantageous. At this point, it is not likely that there will be one supremely effective mitigation strategy. Instead, relief will come from a confluence of methods. A free market approach will not be enough to jump-start many renewable energy industries. One potential idea could be a reinforcing structure whereby energy technology and infrastructure can be traded. If China continues to be a supplier of solar and wind energy systems to the US, the US can purchase these in capital investments in Chinese renewable projects to be implemented in China, thereby helping China as we help ourselves.

Sources

Bradsher, Keith and Diane Cardwell. U.S. Slaps High Tariffs on Chinese Solar Panels. The New York Times. http://www.nytimes.com/2012/05/18/business/energy-environment/us-slaps-tariffs-on-chinese-solar-panels.html?pagewanted=all&_moc.semityn.www. May 17, 2012.

Bradsher, Keith. Chinese Data Mask Depth of Slowdown, Executives Say. The New York Times. http://www.nytimes.com/2012/06/23/business/global/chinese-data-said-to-be-manipulated-understating-its-slowdown.html?pagewanted=all. June 22, 2012.

Bullis, Kevin. The Chinese Solar Machine. The Technology Review. http://www.technologyreview.com/featured-story/426393/the-chinese-solar-machine/. January 2012.

Chang, Gordon G. China is 175.6% Dependent on the U.S. http://www.forbes.com/sites/gordonchang/2012/01/22/china-is-175-6-dependent-on-the-u-s/. January 22, 2011.

Leggett, Jane A. China’s Greenhouse Gas Emissions and Mitigation Policies. Congressional Research Service. http://www.fas.org/sgp/crs/row/R41919.pdf. July 18, 2011.

United States Senate Committee on Environment and Public Works. The Real Story Behind China’s Energy Policy and What America Can Learn From It. http://epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=f29ee5f7-c9f5-46ca-9500-0f10b27f41ed. December 8, 2010

Farms and Fracking: A Call for Compromise

September 19, 2012 / / 3 Comments

Guar plants. Source: Hindu Business Line http://tinyurl.com/guar-pic

This post was written by Dani Replogle

Last March I learned (to my slight disappointment) that I would be spending the majority of my summer in Houston, Texas. Now, the point of this post is not to bash Houston, but there was one thing about that city that would prevent me from living there in the long term: the heat. The overwhelming heat index prevents outdoor activity from being even remotely attractive between the hours of 9am and 8pm. The frightening outbreak of West Nile virus has done nothing to make an evening jog more appealing. Perhaps that’s part of the reason that Texas is ranked by the CDC as of the most obese states in the U.S. Although Texas summers have never been a picnic, there are those who speculate that the weather and health risks are worsening due to our old nemesis, climate change.

The toughest part about this for me was driving down to my aunt’s beach house in Galveston, passing by oil rig after oil rig, and thinking to myself that these problems all lead back to this. Houston boasts an unemployment rate that is consistently lower than the national average, leading people to flock to Texas for jobs that are frequently in the lucrative oil industry. The emissions from this oil are part of the climate change problem that is plaguing not only our planet, but also our health and the health of our families.

Mitt Romney wants to focus on making the U.S. energy independent. I don’t wholeheartedly disagree with him, but his focus on increasing oil and coal production while reducing subsidies for cleaner energy technology is alarmingly shortsighted. If we want the U.S. to remain a leader in the international realm, both politically and economically, it is imperative that we be on the forefront of clean energy development. This means continued subsidies for solar, wind and bio-fuel development. The source of these subsidies should be obvious. It’s widely known that until last year the federal government provided huge subsidies to the agricultural sector to feed the corn industry. This policy is disastrous for the environment. A large part of this funding should be redirected toward clean energy development.

In the interim between lowering coal (still the largest source of electric energy production in the U.S.) and oil production and lowering costs for solar and wind infrastructure, the U.S. should focus on the already growing natural gas industry to pick up the slack. “Fracking” is still a controversial topic, but as a short term solution there’s no arguing that natural gas is the lesser of two evils when compared to coal. Supporting fracking also provides a way to quiet the roar that the farm lobbyists are justifiably making by incentivising farmers to grow guar beans, a crop used in fracking fluid that natural gas companies are scrambling to buy.

The natural food movement already has a growing number of followers that could only be increased by federal propaganda. Instead, federal government regulations openly state that they make small-scale, organic farming very difficult. By growing guar organically, we would not only offset some of the negative consequences of burning natural gas, but also support the displacement of industrialized farming with greener, healthier organic farms. Struggling organic farms could use revenue from their guar crop to further promote themselves, eventually making economically unsustainable government subsidies unnecessary. For Republicans, this plan offers less dependence on Middle Eastern countries that are currently the primary guar exporters. Best of all, guar is a resistant crop that can withstand arid conditions. If this summer’s trend continues arid conditions are what farmers, and the rest of America, will be up against in the coming years.

The new Farm Bill is the perfect opportunity to finally attack agriculture’s contribution to climate change, but nothing will ever be done if our government continues to be bullied by industrial farm lobbyists and impeded by a system that discourages revisiting bills. Fracking isn’t a forever solution by any means, but I believe that it can play an important role in a long term plan that will build cleaner farms, promote energy independence and encourage green technological development. These issues are all connected, and the Farm Bill provides a way to deal with them comprehensively- if our leaders have the guts to stand up to both big business and hardcore environmentalists and do what is necessary. Environmental ethics aside, it is absolutely necessary that our policy adapts to combat climate change for the sake of all American interests.

 

Nuclear power versus climate change: Is that the choice?

January 18, 2012 / / 0 Comments

First blog post of the new semester is by our newest environmental economics faculty member, Professor William Pizer of the Sanford School of Public Policy and the Nicholas Institute for Environmental Policy Solutions.

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Last week I gave a talk to the Orange/Chatham County Sierra Club on this topic.  Since the disaster at the Fukushima Daiichi Nuclear Power Plant last spring, there appears to be a global retreat from nuclear power.  Countries planning to expand nuclear power are reconsidering and countries that were already uncomfortable with nuclear power – namely Germany – have made plans to phase it out.  What does that mean for climate change?  Can we successfully address the threat of climate change without leaning on nuclear power?

To address this question, I first looked at a number of stabilization scenarios produced by various modeling teams over the last few years to see what they said about the potential role of nuclear power and then tried to understand what their analyses implied about both costs and other consequences.  Here, stabilization scenarios represent views by various experts about how we might limit atmospheric concentrations of greenhouse gases to certain levels, thereby limiting the impacts of climate change.  There are a wide range of views about the appropriate or achievable stabilization level, but they can be loosely grouped in terms of whether they target 450, 550, or 650 ppm (parts per million) of carbon dioxide equivalent concentrations.  Carbon dioxide “equivalent” (or CO2e) references the inclusion of other greenhouse gases, expressed in terms that can be added to concentrations of carbon dioxide (CO2).  Again, roughly speaking, this amounts to best guess warming of 1.5, 2.5, and 3 °C of average global warming (see discussion here).

Before talking about the specific implications for nuclear power, it is useful to first note that these stabilization scenarios have fairly dramatic implications for fossil fuel use generally.  450 ppm CO2e scenarios imply that global emissions CO2 emissions, which are otherwise forecast to perhaps double by 2050 (see slide 8), need to fall by 50% or even more.  550 ppm CO2e scenarios imply 2050 concentrations that are roughly the same as today, and 650 implies maybe a 50% increase (see slide 6).  Because emissions are roughly proportional to fossil fuel use, this implies dramatic consequences for energy use around the world.

What kind of consequences?  Generally, four.   (1) Less energy use overall; (2)  More renewables; (3) More nuclear; and (4) Carbon capture and storage (CCS), where fossil fuels are burned and the CO2 is captured and pumped deep underground.  The first two consequences are important, but limited.  Energy conservation can help countries that use too much energy per capita, but cannot address the needs of growing countries with large development needs.  Currently, 39% of the world’s population does not have access to basic energy services (see slide 9).

Non-biomass, non-hydro renewables – solar and wind – are an important piece of the puzzle, but are limited because of their intermittency.  This implies higher costs, because backup power needs to be available, but also penetration limits because of stability issues.  Large scale hydroelectric power allows storage, but frequently has adverse environmental impacts (e.g., this report).  New developments in biofuels are promising, but raise issues with a potential food-fuel trade-off (see, for example, these essays) as well as land-use and lifecycle emission issues.  This leaves two large potential sources of low-carbon emissions:  nuclear and fossil with CCS.

We see exactly these two technologies, along with non-biomass renewables, dominating power generation in the scenarios produced by a recent analysis under the U.S. Climate Change Science Program (slide 15).    This 550 ppm CO2e global analysis was carried out by 3 of the top modeling teams in the United States.  What is interesting is that the two technologies play different roles in the three studies.  The MIT team, for example, assumed that nuclear power was constrained to current levels by political and/or proliferation concerns.  Meanwhile, the Stanford and Maryland models assumed nuclear power more than doubles by 2050.

A more recent study by the International Energy Agency (IEA), in its World Energy Outlook 2011, had nuclear more than doubling by 2035 in a 450 scenario (slide 10).  But their study, which came out after Fukushima, also considered a “low nuclear 450 scenario” where nuclear power actually falls by 50% in 2035 (slide 13).

Finally, in a 2009 analysis of H.R. 2454, the domestic climate change bill passed by the U.S. House of Representatives, the U.S. Energy Information Administration considered a “limited technology” scenario where both capture and storage and nuclear technologies were assumed to be 50% more expensive.  While the base case for H.R. 2454 showed nuclear power in the United States doubling by 2030, the “limited technology” case had nuclear power staying at current levels (slide 16).

So at this point, I think it is fair to make two observations.  First, stabilization of greenhouse gases at the more ambitious levels envisioned by most scientists will require significant limits if not absolute reductions in carbon dioxide emissions over the next half-century even as energy use rises to meet development needs in emerging economies.  Second, significant reductions will lean, to a large extent on nuclear power or capture and storage technologies, along with non-biomass renewables – but the exact amount remains an open question.  Generally, less nuclear means more CCS, and vice-versa.  Solar and wind are important, but become problematic at high penetration levels due to intermittency.

My final question is what does this mean for costs.  The IEA study indicated that their low nuclear 450 scenario only raised costs by 10 percent compared to the ordinary 450 scenario.  The EIA study, where both CCS and nuclear were limited, raised allowance prices by almost 100 percent holding other policy variables equal (e.g., comparing the “limited technology/limited international offset” case to the “limited international offset case” in slide 20).  While these are just two data points, the lesson is this:  limiting nuclear power is not impossible and perhaps not even that much more expensive – but it puts a lot more pressure on other technologies, notably CCS.  Without nuclear and CCS, it becomes a lot harder if not impossible to achieve greenhouse gas stabilization.

Ultimately, each of these choices involves troubling risks that are difficult to quantify.  Climate change, nuclear power, and CCS – pumping billions of tons of carbon dioxide deep underground – all pose risks that we would prefer to avoid.  But we cannot avoid all of them, and putting an absolute premium on avoiding one risk only exacerbates the other risks.  While the choice is not really “nuclear power or climate change,” thanks to CCS and other options, prudent policymaking will require a careful balancing of multiple risks.

Profile: Travel; Relationship Status: It’s Complicated

October 24, 2011 / / 63 Comments

We all wear several different hats.  I’m a professor, a wife, and a mom (probably in reverse order of importance).  In trying to lead a balanced life we may sometimes struggle with conflicts among these roles.  Similarly many of us find ourselves with multiple labels:  environmentalist, feminist, economist, global citizen.  In trying to live a purposeful life we may also run into situations in which there are conflicts created by these various labels.

I run into the latter conflict every time I’m confronted with the carbon footprint of my own travel.  One of my goals is to have a lower environmental impact.  But another goal is to live as a global citizen and, in particular, to raise my children as global citizens.  One of the most transformative experiences of my life was the year I spent as an exchange student in Germany. Learning another language, culture, and way of living is critical in our globalized economy.  And I believe that it is critical for successful negotiation of solutions to our global environmental problems.

I intend to expose my children to as many other countries and cultures as I can (and not just at Epcot) so that they can appreciate the myriad of human differences as well as appreciate the fundamental ways in which we are all the same. But that involves getting on planes.  Big planes.  Traveling long distances.  Emitting a lot of carbon dioxide.

Sit down with any carbon footprint calculator and watch it skyrocket the with every plane trip.  If you think you can reduce carbon emissions from other areas (by buying local food or driving around town less) you are probably wrong.   Let’s take an example from my own life.  Last year I went to Switzerland with my daughter and my mother.  That’s three coach-class round trips tickets from RDU to Zurich which works out to be approximately 4.71 tons of carbon.  My reasonably long daily commute from Raleigh to Duke results in about 12,000 miles per year on my Honda Odyssey minivan and that is equivalent to 5.32 tons of carbon.  So if I never drove to work I could offset one trip to Europe, but smaller changes (that I have made) like carpooling one day and working from home one day, won’t be sufficient.[i]

So how do we reconcile this conflict.  Many advice sites suggest that you decrease your travel or take a “stay-cation” in order to lower your travel footprint.  I think this is fundamentally wrong-headed.   Even if you don’t care about experiencing other cultures, there is something odd about advocating for cleaner air at the Grand Canyon and then not travelling to see it!  So here are my recommendations for reconciling travel and carbon emissions.  I look forward to hearing yours!

  1. Travel consciously.  Pick your vacations to maximize your exposure to new experiences and cultures.  It’s fine to enjoy a beach vacation, but try to avoid an an-inclusive resort where you will only meet other Americans and will never experience any local culture.
  2. Stay longer.  Rather than take many short trips, consider a yearly vacation where you stay 2 weeks or longer.  This reduces the number of plane trips and the associated carbon, and also allows you to really get to know a place.
  3. Stay local.  This isn’t always a great idea.  If you are in an area where safety is a concern, you might want to stick to larger international chains.  But if you are travelling to a relatively safe place, consider forgoing the international chains and staying at a locally-owned hotel or resort.
  4. Consider offsets.  I’m not entirely sold on this one, largely because I feel like in the absence of a carbon policy, whether I purchase offsets or not probably makes no difference to overall climate change (see my first post of the semester).  But should we ever get a climate policy, carbon offsets will be a key component of cost-effectiveness.  If the marginal utility I get from travel exceeds the price of carbon, I should pay for someone else to reduce carbon and take my trip.  You can do this now, voluntarily through several major sellers of carbon offsets.
[i] All estimates of carbon emissions were calculated using the carbon footprint calculator at Carbonfund.org.

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