Technical Summary / FAQ
- Our climate goal is to restore a healthy climate. We are well down the road to doing that. It could be accomplished by 2070, or as early as 2040.
- Restoring the climate has 2 parts: a) switching from fossil fuel to clean energy; and b) possibly using geoengineering to restore the ice caps while we restore CO2 levels. Geoengineering has been researched and can be accomplished for a few billion dollars per year, not trillions. It is controversial now, but that could change in a year or so as progress in reducing emissions becomes more visible and accepted.
- Fossil fuel replacement: Looking from an endpoint of 80% fossil fuel replacement several decades from now, backwards towards the present, we see that new oil and gas development will have ceased. After new FF development ceases, it will be about 25 years before most FF use is replaced with clean energy. Existing oil and gas well outputs decrease about 5% per year, which is 600 GW / year. (That’s 17 TW X 80% fossil fuel X 5% per year). Therefore wind and solar capacity for electricity, heat and transportation will be expanding at that 600 GW / year rate to replace decreasing oil and gas well output.
- When do we stop developing new oil and gas wells? When the clean energy industries are producing the same amount of new capacity each year as the new wells would produce, which is about 600 GW per year. After that there is no economic reason to invest in new wells, and without that investment expense, existing wells will be profitable cash cows for oil companies.
- As developing new oil and gas gets more expensive, it is becoming relatively cheaper to get that new energy from wind and solar, which are falling in price and picking up market share in new electrical generation capital equipment. Current trends indicate that the crossover will happen about 2021, when new wind and solar production expand enough to meet the energy demands now supplied with new oil and gas development.Source
- The following graph shows how this looks for the US, which is more homogeneous than the whole world, and therefore easier to model (spreadsheet here)
- This 100 GW / year for the US or 600 GW / year globally includes electricity, transportation and heat. Over a 20-30 year period it is reasonable to replace most cars with electric cars, and furnaces with electric heat pumps. Both of which can be 2-5 times more efficient than the current fossil fuel versions.
- The cost of building 600 GW / year of new wind and solar is $1.1 trillion / year at the current ~$2 / watt. This is about the same amount that oil companies now spend each year to develop new capacity.
- New wind and solar capacity have been doubling every 2 years for 10 years. That is five doublings. Three more doublings takes the 90 GW (solar + wind) in 2014 up to the needed 600 GW / year by 2020. About that time new oil and gas capacity will no longer be needed.
- In the US, the area of solar photovoltaics (PV) needed to replace the power from all fossil fuel use is about the same as is now planted with corn used for ethanol production. In reality less than half that will be needed because other sources, especially wind, will split energy production with solar.
- Capacity factors for solar are 20%, and 32% for wind in most of the world, compared to 45% for natural gas plants in the US, so a factor of 2-4 is needed to account for that difference. However efficiency improvements give about that same factor, and decreasing production costs are expected to reduce costs by a factor of two as well.
- If these estimates are off by a factor of two, that would require another two years of growth at the start, and 80% more annual costs. Those costs, $1.8 trillion are still less than half the money spent on oil and gas now, about $4 trillion, and our gas and oil consumption will be dropping steadily. After halting the $1 trillion per year of new FF production costs and reducing FF consumption, we would be saving money by 2025, without even considering the health benefits.
- Natural gas is competing with, and now losing to renewables, with 56% of new generating capacity globally being renewables (72% in Europe, 51% in China, 51% in US).Wind and solar prices drop 5%-15% per year, so demand should continue increasing.
- The energy storage market will attract entrepreneurs to build cost effective storage when it’s needed (about 2030, when wind and solar comprise > 80% of power), electric cars (2025), and electric heat pumps (2020). The demand for those gradually expands along with the steady increase of low cost renewable electricity. The 25 year transition period means that vehicles and industrial processes are gradually replaced with efficient electrical versions as the old equipment wears out anyway—capital expenses rise slightly if at all—new technology, such as cars, tends to be lower cost than old.
- In some regions nuclear will expand. To date all operating nuclear power plants were developed by state-owned or regulated utility monopolies. No merchant nuclear plant has ever been built. In theory, nuclear will expand when it is less costly than wind and solar plus storage. When built, it will accelerate the replacement of fossil fuels. However significant future expansion appears unlikely according to current trends. There are 435 plants in operation and 60 new plants now under construction in 13 countries, mostly in Asia. That could increase nuclear energy production by 10-15% over 10 years (1.5% per year), bringing it nearly back to 2006 levels. Costs for nuclear are expected to continue with rapid increases. Social Cost of Carbon is a price on carbon that US agencies say represents the cost to society of a ton of CO2 released into the atmosphere. Currently it is set to $37. That is considered to be far too low, putting zero value on lost species, destroyed environments, and even wildfires and droughts.
- Next generation small nuclear reactors (SMR) have been in development for many years, and a few have been operation since the 1970’s. Many people believe in them and are financing their expansion. Initial units are expected in 2022-2024 according to World Nuclear Association. Estimates of when production at scale might begin have not been found. Westinghouse put its SMR project on hold in 2014 in response to market projections.
- Fusion energy has been in development since 1951, there are no estimates of when production at scale might begin, despite regular reported breakthroughs. Despite significant progress, the rule of thumb for fusion is “Nuclear fusion is just 30 years away – and always will be.”
- Cold fusion has been making remarkable progress since 2010, with at least three companies working on it: Brillouin Energy, Leonardo Corporation, and Defkalion. Although many labs are reporting positive results, no date for commercial energy production is published.
- Biomass energy has large potential, when considering the use of agricultural, and municipal waste. According to the International Energy Association’s (IEA) World Energy Outlook 2011, “biomass and waste” covered roughly ten percent of global energy demand over the past decade, whereas the share of nuclear power has fallen to below six percent. However biomass is not expected to expand exponentially as wind and solar are doing. Germany expects to use biomass to help provide energy in the winter.
- Geothermal energy, like biomass, is growing, but is limited. In the US it supplies almost 0.5% of electricity, and that is expected to increase to 1% by 2025 according to NRDC.
- Wave and tidal energy, like geothermal is growing but is limited to less than 1% of total energy use.
- Coal is not discussed here because China and India, the major users of coal are both committed to eliminating it soon. Bloomberg estimates that “peak coal” will be in 2015 to 2017. A price on carbon will cause coal usage to drop rapidly. The US coal industry employs about 100,000 people, compared to about 1 million now in wind and solar.(Cite)
- Reducing emissions is an investment issue more than a consumption issue. Fossil fuels are used in capital equipment such as electrical generation plants, trucks, cars, and furnaces. The capital equipment that now uses fossil fuels must be replaced by clean energy generation and usage. The faster we replace FF capital equipment, the faster we’ll reduce emissions. Other factors such as efficiency and agricultural process improvement will help significantly, but only the replacement of FF capital equipment with clean energy equipment will actually end our dependence on fossil fuels.
- Efficiency improvement reduces the amount of clean energy equipment required, and in most cases insulating a building is cheaper than building the equivalent amount of clean generation. In most cases we prefer to have the market choose between investing in efficiency or clean energy. Either way, we’re replacing the same amount of fossil fuel capital equipment.
- A steadily increasing carbon tax will make all of this go faster, and be far better for companies and investors because they’ll have more certainty about future prices and demand for fossil fuels. They’ll be able to confidently invest in future clean energy sources and technologies.
- Implementing the carbon tax as a carbon fee and dividend, with 100% of revenues rebated back to households has been shown to produce 2.2 million new jobs, increase the GDP, and save 13,000 lives per year according to a recent detailed study REMI 2014 (summary). The surprising benefit is caused by the shift of revenue from capital intensive oil and gas, via the dividend, to households who spend it locally on labor intensive retail and health.
- A carbon fee that increases $10 / ton per year is needed (raising the cost of a gallon of gas by 87 cents after 10 years). Common carbon tax rates are $30 / ton or less now. They do reduce emissions, but only slightly. Studies show that the economic, health, and climate benefits are maximized by a steadily increasing tax. This eliminates the need to guess an optimum rate.
- Action to take: Get solar panels for your home or business. This action will change your brain, besides saving you money long term. Seeing the panels up there will remind you and your friends and neighbors that you care about the climate and that you make a difference. People who get panels tend to take many other bold and effective climate actions. Eight years ago, that was this author’s first climate action.
- Why a carbon tax if we’re on the way anyway? A gradually increasing price on carbon (as a carbon fee and dividend, CFD) will provide certainty to investors that we are indeed shifting from fossil fuel to renewables, while causing little economic disruption because the price is gradually rising. After ten years it will raise a gallon of gas by just 87 cents while reducing emissions by 31% compared to no CFD. So the CFD will have us move faster, and with far more certainty about where we’re all headed. This will be good for the economy, good for people, and good for the climate.
- Cap and trade policies are second best compared to a simple carbon tax
- Cap and trade (CAT) was developed as an alternative to taxing emissions after the word “tax” became derogatory.
- CAT acquired a good connotation for reducing acid rain. Polluters actually discovered that their factories were more profitable with the cleanup–CAT just triggered the changes.
- CAT allows the government to set emissions goals in certain industries, and then force those companies to buy pollution permits, which they can trade to other companies.
- Generally companies dislike CAT because the price of the permits, which becomes a price on carbon, varies wildly as the economy grows and shrinks. This makes market planning very difficult.
- In addition, CAT only impacts some large industries. Other energy users are unaffected.
- On the other hand, companies with strong government relations can negotiate large allotments.
- Wall Street likes CAT because it makes money doing the trading, although that trading does nothing to reduce emissions.
- Social Cost of Carbon is a price on carbon that US agencies say represents the cost to society of a ton of CO2 released into the atmosphere. Currently it is set to $37. That is considered to be far too low, putting zero value on lost species, destroyed environments, and even wildfires and droughts.
- Why can’t we keep doubling wind and solar? Experts often say, “we can’t keep doubling wind and solar.”
Why not? To say it won’t happen, you have to have a reason. Either:
1) it’s physically impossible,
2) It’s technically unfeasible with tools at hand,
3) It’s financially impossible (e.g. if it required half of the whole GDP to accomplish), or
4) The speaker or some other leader won’t let it happen.
Here are some common arguments and rebuttals.
– Why not? If the doubling of wind and solar didn’t continue for 3 more doublings, what would the reason be?
1) No leadership: people will deny climate change and prefer business as usual.
– Even without leadership, the market is already buying more new renewables generation equipment, even with crude oil prices falling. Low crude oil prices will lead to higher NG prices in the US because fracking will slow down, reducing the supply of cheap NG.
– The roadmap is designed to empower leadership, showing that we can switch from fossil fuels.
2) There isn’t enough energy storage: That will happen as demand picks up. There are numerous technologies already, and new ones every year.
3) Not enough wind or sun available. No one is rigorously proposing that. Mark Jacobson rigorously disproves that, by several orders of magnitude.
4) Not enough capital available to build it. The amount of capital is similar to that spent for new oil and gas. We obviously have enough to invest.
5) The return on that capital is too low, people won’t invest.
- Currently wind and solar projects return 8-15% annually, sometimes more.
- Wind and solar have reliable overhead costs, independent of wars and cartels. and reliable income with 20 year power purchase agreements. With such low risk they only need to compete with government bonds, at a 2%-3% rate (Bloomberg).
- If society wants to make it go faster, we could raise the carbon tax, which would raise the cost of the FF competition. In fact the planned carbon tax (carbon fee and dividend) does goes up steadily.
6) People won’t allow wind turbines and PV farms to be built in their back yard.
- When people see that something makes a difference, they’ll send their children out to die for it. The people who say “no” now don’t see it’ll make a difference. This climate roadmap addresses that issue.
– When individuals are stubborn, the government can take action, as we have for highways, for example.
7) Energy demand went down and we didn’t need it. Ok. That’s just as good!
8) All the best spots for wind and solar are taken. That is always the case after the first best spot is taken–even for oil and gas. The oil industry has shown us that ever-improving technology makes the lesser sites profitable, seemingly forever.
9) Competing technologies, such as nuclear or fusion are better. “Better” is an opinion, valid for many people. But action makes things happen, and although many people think we should wait for better technology, the market is acting despite those opinions. Some nuclear fans are investing their own money, and many are investing government money. Despite those investments, the number of TWh of nuclear energy per year is now decreasing and market share is falling significantly.
10) The poor can’t afford to install PV on their property. Current economics no longer renders this true.
- PS: REMI shows that the CF&D benefits the poor the most.
11) Oil and gas companies buy out the wind and solar manufacturers and close them down, or keep FF prices artificially low. These business decisions would be unprofitable in the short term and the long term.
12) Legislators pass laws that impede wind and solar. This climate roadmap is intended to make that less likely.
13) We run out of raw materials for wind and solar plants. There is no rigorous evidence for this.
14) Electric cars will never take off–battery technology won’t get better. Battery technology is steadily improving and recharging stations distributed widely already allow electric cars to cross the country.
15) Electric trucks don’t look like they’ll be feasible for at least ten years. What will they do? They’ll pay the gradually increasing price on diesel until a solution is found. In 20 years truckers in the US will pay almost as much as truckers in Europe do now ($6/gallon). The market will predictably adjust to that slow change, and entrepreneurs, seeing billions in sales, will invent clean energy solutions. Bio-jet fuel is already being tested by most airlines.
16) What to do in Alaska in the winter? Use wind, biofuel, or imported biodiesel.