28Sep

RGGI Holds First US Auction

Filed in Energy | Environment

With allowances exceeding current emission’s forecast the first auction of allowances in a mandatory US system brought little new information. Keith Johnson at Environmental Capital put it this way:
“But don’t get too excited. The Regional Greenhouse Gas Initiative, or ”RGGI,“ is more likely to start with a whimper than a bang. Prices for the carbon permits are likely to be low, and that will probably undermine the scheme’s plan to force utilities to generate cleaner power.”

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22Sep

Cutting US Greenhouse Gas Emissions

Filed in Energy | Environment

US GreenHouse Gas (GHG) emissions are estimated to rise to 9.7 gigatons of Carbon Dioxide equivalents (CO2e) up from 7.2 gigatons CO2e in 2005. Coupled with a gradual decrease in cabon sinks’ absorption many experts and legislation currently before the US Congress places the 2030 target at 3.5 to 5.2 gigatons of CO2e.

All of this is from McKinsey & Company in a report on how the US can cut GHG emissions by 3.0 to 4.5 gigatons at a marginal cost below $50 per ton using tested approaches and high-potential emerging technologies.

Key findings are both encouraging and at the same time, highlight the effort facing the US and the world in dramatically cutting GHG emissions.

  • Carbon abatement opportunities are highly fragmented and widely spread across the economy.
  • Almost 40% of abatement can be achieved with a positive ROI.
  • Abatement costs, potential and mix vary across regions of the country.

Investments of about $50 billion annually through 2030 are needed to cut 3.0 gigatons of emissions. These investments are highly concentrated in the power and transportation sectors. This number will increase if the nation chooses to mandate higher-cost options and/or if some energy efficiency gains do not materialize.

Five abatement potential sectors from least to highest average cost:

  • Improve building and appliances efficiency – 710 to 870 megatons
  • Increase fuel efficience in vehicles – 340 to 660 megatons
  • Industrial sector – 620 to 770 megatons
  • Cargon sinks – 440 to 590 megatons
  • Reduce carbon intensity of electricity generation – .8 to 1.57 gigatons

Across all sectors, greater energy productivity can reduce the need for abatement investment and in many instances provide net economic gains. Energy efficiency in buildings, appliances and industrial uses could offset up to 85% of incremental electricity needs cutting most if not all of the incremental coal-fired power plants used in the baseline.

Bottom line is things need to start soon around these themes:

  1. Stimulate action through strong, coordinated policies to capture GHG reductions effiently across all sectors and geographies.
  2. Quickly pursue energy efficiency and positive ROI options.
  3. Accelerate low-carbon energy infrastructure development.

Acting soon, we can reach these goals at an acceptable impact to lifestyle and quality of life. Delay will increase the cost greatly and is likely to lead to significantly larger impact to those least able to absorb it.

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12Sep

Increasing Carbon Productivity Tenfold

Filed in Energy | Environment | Management

In The Carbon Productivity Challenge, McKinsey & Company focuses on two objectives — stabilizing atmospheric greenhouse gases (GHGs) and maintaining economic growth — and proposes the world has 50 years to increase the GDP per unit of carbon dioxide equivalents (CO2e) tenfold. A task the authors equate to the productivity improvement delivered during the 100 years of the industrial revolution.

A daunting task for sure, yet the study highlights that current technology allows us to get there provided investments, significant investments, begin soon.

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