Addressing the Policy Implications of Potential Abrupt Climate Change Induced by Greenhouse Gas Emissions

							A d d ressin g th e P olicy Im p lication s of P oten tial A b ru p t C lim ate C h an ge In d u ced b y G reen h ou se G as E m ission s
P eter R ea d
* p read 2@ attglob al.n et

fu rth er th o u g h ts o n la st y ea r ’s IE W p a p er B io -E n erg y w ith C a rb o n S to ra g e (B E C S ): a S eq u en tia l D ecisio n A p p ro a ch to th e th rea t o f A b ru p t C lim a te C h a n g e

P eter R ea d a n d J o n a th a n L erm it
(fo rth co m in g in E n erg y)

Six criteria (Joseph Aldy):
1. Environmental effectiveness [address the real problem – ACC] 2. Dynamic efficiency [max agg disc net benefit but not defined under U] 3. Dynamic cost effectiveness [eliminates inferior strategies but „fast train to wrong station‟] 4. Distributional Equity [value judgements, no efficiency criterion ] 5. Flexibility to take account of new info 6. Participation and compliance [if 4 then 6 ??]

Is it a fast train in the wrong direction to assume that a problem that is caused by the energy sector is best solved in the energy sector ? [a different question from „who pays?‟ – of course the polluter pays but going in the wrong direction may lead to an unacceptable price] Recent WTO decisions will entail global land use change (and about time too ! )

Global energy related emissions are ~8 GtC p.a. Terrestrial biosphere emits ~110, absorbs ~110+~2 Oceans absorb ~3 Net annual increase ~ 3

?
Is it more sensible to change the balance of terrestrial biosphere by 4 per cent OR to cut global energy related emissions by 50 per cent

Back of envelope calculation
1.36e9 ha arable land * e4sqm/Ha * .2m deep*10% charcoal * 0.4 sp gravity ~11e10 tons C ~110Gt C or ~25 years emissions

And there is 3.48bHa of pasture land

Why do that?
Aldy No 1: environmental effectiveness

Also: the Terra Preta or black earth story
www.eprida.com

Another back of Envelope calculation Energy security 500 GJ/Ha-yr x 500 million Ha = 250 EJ annually [[half current best commercial practice in Brazil x 40 per cent of cultivable land said by IPCC to be available after allowing for growing food supplies]] 30 per cent conversion displaces 75 EJ gasoline annually = 120 EJ crude (assuming 5/8 high value fractions) = 12,000EJ per century = 12,000 x 24 mtoe = ~ 2.2 millions of millions of barrels of oil, over twice global proved reserves Say 1½ allowing for a slow start in first few decades. [NB Andre Faaij and colleagues in University of Utrecht derive 1000EJ in a GIS based model using the IMAGE2 database ] Aldy No 3 : this dominates Kyoto or any strategy that neglects LUC Kyoto may be a fast train to the wrong station

Manhattan Project style actions taken over the following decade in response to scientific news of Abrupt Climate Change precursors 1 2 3 4 5 Retrofitting of all large point source fossil and bio fuel emitters with CCS technology All new large fossil and bio fuel plant fitted with CCS technology A system of gathering pipelines installed to collect captured CO2 and deliver to below ground storages All long rotation policy land converted to short rotation mainly bio-fuel production with the part grown bio-mass material used wholly for biofuel Shift from half to full atp for non-fuel renewable energy and technological progress.

(These could be outcomes of shift to very high C-price, but other measures, such as absorption portfolios protect consumers and may be preferable) The effect of these measures is that emissions per ton of fossil fuel fall from .025tC/GJ to .015tC/GJ and per ton of biofuel from zero to – 0.01tC/GJ,with biofuel supply rapidly dominating the market. Aldy‟s No 5 – flexibility in light of changing circumstances

Raised soil fertility facilitates Policy driven global land allocations under a „be prepared For Abrupt Climate Change with and without precursor signals two decades hence (H=nature horrid, N=nature nice)
Land use response s to states of nature under precautionary policy
2 1.8 1.6

Short rotation area (PH) Short rotation area (PN) Long rotation area (PN) Long rotation area (PH)

L and area (G H a)

1.4 1.2 1 0.8 0.6 0.4 0.2 0 0 10 20 30 40 50 60 70

Time after start (2005?)

Another back of Envelope calculation
C a rb o n in a tm o sp h ere u n d er „M a n ha tta n P ro ject‟ u rg en cy (in respo n se to „H ‟) A rea u n d er lo ng seq cu rve = ½ x 20 y rs x .6 G H a x 3 tC /H a -yr = 18 G t C A rea u n d er sh o rt ro ta tio n cu rve to 20 30 = ½ x 10 y rs x 1 .2 G h a x 1 0 tC /H a -y r = 6 0 G t C A ssu m e 90 p er cen t rep la cem en t of F ossil fu el C em issio ns = ~70 G t C no t em itted = 35 p pm b elo w “f.f.e.s.” tra jecto ry or ~4 00 p p m B y 2 04 0 a fu rth er 10 y rs x 1 .4G h a x 12 tC /H a -y r = ~1 50 G t C n o t em itted A d d itio na l to terra p reta sto ry – n o t q u ite (still n eed s m od ellin g ) T o tal = ~80 p p m b elow “ K y o to ” tra jecto ry by 204 0 . R em a in in g red u ctio n s u n d er „M a nh a ttan P ro ject‟ u rg en cy, a s illustra ted in fig 2 , is d u e to C C S tech no lo gy used w ith fo ssil fu el po in t so u rce em issio n s, to in crea sed en ergy efficien cy a nd to m o re no n -fu el ren ew a b les (w in d etc.).

Gigatons C in atmosphere (= ~2 x ppm Cat ) for three reference scenarios and with „be prepared‟ policy related to „Kyoto‟ case with and without response to ACC precursors after 2020. Note that negative emissions energy system is needed to get below 330ppm.

Carbon in atmosphere under policy respons e to state of nature

1400 1300

Carb on i n atm osp her e (G tonn es)

1200 1100 1000 900 800 700 600 500 400 0

Business as usual Kyoto only - nature nice Fossil free energy scenario Precautionary - nature nice Precautionary - nature horrid

10

20

30

40

50

60

70

Time after start (2005?)

Two Models
Common features of FLAMES (simulation) and LOLA (optimization) Partial equilibrium approach modeling dynamic demand and supply in three markets: “Fuel”: basic CxHyOz raw material with global current price ~$2/GJ. “Timber”: basic timber product industry raw material price ~$130/ton after separation from joint product bio-fuel at process cost ~$90/ton. “Land”: ~6bHa of non-barren, non conservation forest land that can be used commercially for farming or forestry or otherwise left to wilderness. Demands grow with population and per-capita living standards; supplies of fuel and land products grow with technological progress. Parameters are adjusted to achieve, in the without-policy case :  Constant real prices broadly consistent with historic patterns  Emissions paths to mimic reference case (i.e. no new scenarios) Policy is represented by land allocations to two activities – long rotation plantations and short rotations which are both joint producers of timber and bio-mass for energy in proportions (different for the two activities) determined by relative prices. Net policy costs are met by a tax on fossil carbon emissions.

FLAMES: progress, features and results
Recent work has seen the development of multi-region models, with trade in fossil fuel, in bio-fuel, and in timber. Also of an ACC response variant of the global model. Here we report on the global model and this variant. Rotation lengths are fixed (35 years for long rotation = half the modeled time horizon, 1 year for short rotation) Technological progress is nil at 3tons C per Ha-yr for long rotation; rises from 6 to 18 tons C per Ha-yr for short rotation over 70 years (240 to 720 GJ/Ha cf current best commercial practice 1300 for sugar cane, 1000 for eucalypt). Post-harvest land use is 50% to short rotation, 50% to farming for long rotation, 100% to continued short rotation for short rotation Reference scenarios two cases considered mimicking, respectively, IS92 business as usual and Tellus/Greenpeace fossil free energy scenarios; “Kyoto” is treated as half way between

LOLA: progress, features and results
The implausible price profiles generated by FLAMES show need for optimizing model in which inter-temporal arbitrage (mediated by landowners‟ felling and replanting decisions) smoothes out the sharp shifts in price trends. So far the behaviour of landowners growing existing forests and policy-induced long rotations has been modeled. Features include: Non-linear (S-shaped) growth of which a non-linear (S-shaped) proportion is usable as timber, but can be used for fuel, rising to 75 per cent of total biomass. After full growth in 40 years there is a plateau for 20, followed by linear decline (due to e.g. forest fires ?) over a final 40 years. Proportions of harvested woody material to each use is price dependent, as in FLAMES A tax transfer to meet costs of policy land planting and rents until end of land use change (35 years) Objective function is to maximize welfare (consumer surplus minus variable costs) implying price taking, jointly in the markets for timber and, in competition with fossil fuel. Landowners commercial rate of return is a constraint on welfare maximisation

Provisional inferences  Price profiles are smoothed out by optimizing behaviour.  Policy driven land use change induces policy leakage through reduced replanting by existing foresters (this is anticipated in FLAMES).  Providing landowners are price-takers, their required rate of return does not greatly impact on the pattern of harvesting and replanting.

Caveats
1. 2. Optimization modeling (LOLA) in early stages Low Cat levels require, in addition, high energy efficiency and increased use of non-fuel renewables as in f.f.e.s. scenario [but note that driven by ACC precursors not GCC as in f.f.e.s.]

3.
4.

Land use is assumed „Maximal‟
Need for capacity building

International Framework for Bioenergy Action Scenarios A1 Tech Hi Pop Lo Globalise Yes Values Econ Bioenergy Potential In 2050 North Am 111 Latin Am 253 Africa 363 S Asia 21 W Eu 32 E Eu &CIS 125 E Asia 178 Ocaeania 100 Total 1183 B1 Hi Lo Yes Enviro A2 Lo Hi No Econ B2 Lo v. Hi No Enviro

137 315 449 24 40 153 221 125 1464

4 46 42 14 0 3 10 15 134

34 178 151 21 14 76 21 60 555

Clearly the outcome in 2050 depends upon choices soon
NEGOTIATING A HEDGE AGAINST A.C.C. PROVIDES A CHANCE TO AVOID THE ERRORS OF KYOTO AND FOR THE RIO TREATY TO DELIVER: • • • ENERGY SECURITY
(NEEDS TRADE BUT NOT WITH OPEC)

JOBS FOR SURPLUS AGRICULTURALWORKERS
(AND BASIS FOR RURAL INDUSTRY)

SUSTAINABLE RURAL DEVELOPMENT
(AND END OF „ENERGY POVERTY‟)

Aldy‟s remaining criteria:

4. Distributional Equity 5. Flexibility to take account of new info 6. Participation and compliance 4&6 : It‟s got something for everyone in a world of technological progress 5 Explicitly designed as a 2-stage process {Manhattan start year variable}

IN CONCLUSION: A question Why, given its win-win-win-win-win potential, is the global bio-energy solution to the Climate Change issue ignored or down-played in policy formation ?? Win 1 – early and effective stabilisation and medium term reductions in atmospheric carbon. Win 2 – potential to respond effectively to Abrupt Climate Change Win 3 – deals with intractable problem of transportation emissions (no need for pie in the sky hydrogen or pie in the sky fuel cells) Win 4 – increased energy security and resistance to potential oil price increases Win 5 – sustainable economic prospects for landowners both in developed and developing countries

A Possible answer • Market co-ordination failure between suppliers of bio-energy raw material and potential users separated by decades, oceans, language and culture

• Unfortunate self-perpetuating error in the negotiations [that ended, almost – i.e. all bar Russia – at Marrakesh] due to maintained assumption that best policy is to price up carbon through TEPs, ignoring need to drive technology change, particularly land use change.
Nothing more path dependent than a negotiation Maybe it‟s time to try again in context of Art 3.3 of the 1992 Rio Convention, looking at the grounds for early action provided by threats of ACC.

Land allocations here described as „maximal‟ Nobody knows what is possible but, prima facie, the more that is done the better and the sooner the start the better : maybe the basis for bi-partizan support in the Senate (minimal impact on coal)

Expert Workshop here 30.ix.04-1.x.04 Greenhouse Gas Emissions and Abrupt Climate Change: Positive Options and Robust Policy
Mission Statement

“To address the policy implications of potential abrupt climate change”

www.accstrategy.org
“Registration does not imply invitation” (~24 presenters ~18 discussants, 3 workers, room for 65 max)