The Good News: Climate Change Doesn’t Matter Anymore
While climate change itself is obviously an important issue, it is increasingly unimportant with respect to the policy debate surrounding our energy sector’s transformation.
By Tam Hunt, Policy Advisor at Clean Coalition
My provocative title represents the increasing awareness that we don’t need to believe in climate change to do the right thing when it comes to energy. Of course, climate change is a real threat to us and our environment. But there are many highly valid reasons to become more energy efficient, conserve energy through behavior change, and transition to renewables – entirely independent of climate change concerns.
I raise this point because there is an increasing backlash to the idea of climate change as a serious threat. Concern about climate change has been diminishing rapidly in the U.S. over the last few years, for a variety of reasons, including the poor economy (and the wrong perception that mitigating climate change will harm the economy), the “climate-gate” affair resulting from hacked emails from climate scientists, and a very aggressive campaign by corporate and conservative interests that just don’t want to believe that humans can impact global climate.
A Yale 2010 survey found that those who believe human activities are primarily responsible for climate change dropped from 57 percent in 2008 to 47 percent in 2010. And it’s probably dropped further since. US News & World Report mused about this trend in a recent article, asking rhetorically whether Americans care about climate change anymore.
Now for the good news. I believe that declining public belief in climate change as an important issue doesn’t matter because there are many very positive trends with respect to energy that are here today and will only increase in the future. These trends will mitigate climate change, but will also greatly enhance energy independence, reduce traditional air pollution, create millions of new jobs, and will actually save us all a lot of money through decreased electricity costs.
These very encouraging trends are: 1) an ongoing improvement in global energy intensity, leading to far fewer emissions per dollar of GDP in coming decades; 2) price-induced conservation; 3) a dramatic increase in global wind power over the last decade; 4) and, perhaps most importantly, the growth in global solar power may lead to an incredibly rapid transformation in how we produce energy.
Energy intensity is a relative measure. It is defined as units of energy required for each unit of GDP. The Energy Information Administration projects that global energy intensity will improve by almost 100 percent by 2035. This means that we will be able to produce goods and services with half as much energy by 2035.
Figure 1. Projected global energy intensity (source: EIA Int’l Energy Outlook 2010).
In recent years, the U.S. has been a great of how improved energy intensity can make a real difference in emissions. U.S. greenhouse gas emissions actually fell 7.5 percent from 2008 to 2009 due in part to improved energy intensity. The recession was also a substantial factor, but only accounted for about 1/3 of the improvements, according to the EIA (Fig. 2 and 3). The other 2/3 came from improvements in energy intensity and carbon intensity (more renewables and natural gas, less coal).
Figure 2. U.S. greenhouse gas emissions (source: EIA).
Figure 3. Sources of U.S. greenhouse gas emissions reductions in 2009 (source: EIA).
But energy intensity is a relative measure, not an absolute measure. So even if we improve energy intensity dramatically, current global economic growth projections result in greenhouse gas emissions growing substantially by 2035, all else being equal.
This is where the next three trends can help a great deal. “Price-induced conservation” refers to the fact that as energy prices go up we often see remarkable changes in how much energy is used because people and businesses change their behavior to adjust to the high prices (conservation refers to behavior change, whereas efficiency refers to technology improvements).
A good example of price-induced conservation is U.S. reduction in gasoline consumption as prices approach or exceed $4/gallon. Since 2007, U.S. net gasoline consumption has declined, due to both the recession and price-induced conservation (which are closely related trends, of course). A 2004 meta-analysis of studies on gasoline consumption elasticity found that a sustained 10 percent increase in gas prices leads to a 2.5% decline in consumption. Price does matter.
U.S. gas prices have increased far more than ten percent in recent years and exceeded the seasonal record this spring. Prices remain very high, though below the records reached in 2008. It is very likely that prices will continue to rise in coming years due to the ongoing structural imbalance between supply and demand, which is partly masked by the ongoing global economic problems. As the global economy continues to recover, prices will rise further, and conservation will increase. [Editor’s note: for more on how the price of gas affects the use of renewable energy, check out Jennifer Kho’s What High Gas Prices Mean for Renewable Energy.]
The third key trend is the remarkable growth in global wind power over the last decade. Average annual growth has been about 25 percent. A 25 percent rate of growth leads to a doubling every 3.1 years. 2010 was a relatively bad year for U.S. wind power, but a very good year globally. We now have about 200 gigawatts (GW) of global wind capacity, enough for the equivalent of about 60 million California homes and about 300 million Chinese homes. Wind power growth rates are projected to diminish but even at an annual growth rate of 20 percent, the installed capacity doubles every 3.8 years. At this growth rate 200 GW becomes about 1,600 GW (1.6 terawatts (TW)) by about 2030 or so. That’s enough to power the entire U.S. under today’s demand for electricity. (Total installed electric capacity in the U.S. in 2008 was approximately 1085 GW.)
Figure 4. Global wind power growth (source: Global Wind Energy Council).
The last trend is perhaps the most exciting. Where global wind power has grown about 25 percent per year in the last decade, global solar power has grown an average of 68 percent each year over the last five years (including Bloomberg New Energy Finance projections of 28 GW of new solar in 2011). This is a doubling literally every 1.3 years. So today’s 40 GW of capacity becomes, under the same growth rate, an astronomical 1.3 million GW by 2030. Obviously, the recent rate of growth won’t continue because, among other reasons, this is far more power than we need for the entire globe! But even if solar power’s rate of growth drops in half to 35 percent over the next two decades, this produces a doubling every 2.3 years and we get 16,000 GW (16 terawatts) by 2030 – almost as much as the entire world will need by then.
Balancing variable renewables like wind and solar – the wind doesn’t always blow and the sun doesn’t always shine – becomes an important issue as high penetrations of these technologies are achieved. It won’t be that difficult to deal with, however, as numerous reports in the U.S. and elsewhere have found on average that balancing renewables adds about 10 percent to the cost of power even when penetration exceeds 20 percent. I’ll address this issue in more detail in a future essay.
Figure 5. Global solar growth (source: REN21 annual report; Bloomberg New Energy Finance for 2011).
Under solar’s recent rate of growth (68 percent), it would surpass global wind power capacity before 2020 even if wind continues to grow at an average of 30% per year. But more realistically, solar power surpasses wind power by about 2024 if solar grows at an average 35 percent rate and wind at a 20 percent annual average growth rate. At that time, both wind and solar will be about 2,500 GW – up from 40 for solar in 2010 and 200 for wind. 5,000 GW of wind and solar is enough to provide more than 1/6 of the entire world’s electricity demand, just 13 years from now!
Figure 6. Comparing wind and solar growth projections.
At the same rates of growth (35 percent for solar and 20 percent for wind), these power sources could provide the entire global demand by 2030. Will this actually happen, even at half the rates of growth that we’ve seen for wind and solar over the last 5-10 years? There is in fact a real limit to how fast electricity infrastructure can turn over due to sunk costs in existing power plants like coal, nuclear and hydro – so even if solar and wind become highly cost-effective in coming years, they won’t displace all other forms of power by 2030.
As for a real rate of growth that we can count on, I don’t know and in fact no one does. As Yogi Berra stated, forecasts are difficult – especially about the future. But solar power growth, in particular, seems likely to continue to grow rapidly because the backlash against rapid growth in solar power will generally be far less than that for wind.
For wind power to scale beyond the approximately one percent of global power it represents today (but as high as 25 percent in Denmark, approaching 20 percent in Spain and almost 10 percent in Germany), it will probably have to go offshore in a big way. And offshore wind, particularly deepwater wind, poses a set of very difficult problems that are not insurmountable but remain challenges today.
For solar power to scale to a significant portion of our power base, however, there is no need to go offshore (which isn’t feasible for solar anyway) and no necessary public backlash because solar power is more modular than wind power. Solar power doesn’t have to be mega-scale at each installation to make a big impact (and nor does wind, but solar is more suited to smaller installations in many ways than wind).
Due to the growing backlash against mega-scale projects, the medium-scale market for solar power is particularly promising – what is referred to as “community-scale” solar or “wholesale distributed generation,” generally between one and 20 MW. This type of project requires between five and 160 acres, generally not large enough to provoke major opposition. One study of California’s potential in this size range found enough existing transmission capacity and readily available land to interconnect about 28 GW – though the actual potential is far higher.
Today’s wind turbines are getting bigger and bigger because of economies of scale – and bigger means more power at lower prices. But because the turbines are so big (up to 500 feet high now), and because the wind resource is not as widespread as solar power, as well as the rapidly falling cost of solar power, I predict that we’ll see solar power increasingly out-compete other renewables – inlcuding fossil fuels and nuclear, of course. This is already happening in California, with the large majority of new renewable energy contracts signed by the big utilities coming from solar power instead of wind power.
Cost is obviously very important when it comes to renewables and mitigating climate change. But cost is increasingly becoming a non-issue as technology costs continue to fall. I recently wrote about the cost trends for renewables in California and elsewhere, demonstrating that these renewables can often be cost-effective today. Wind power has been cheaper than fossil fuels for some time in the U.S. and other places around the world. Solar has historically been more expensive but is fast approaching grid parity.
The United Nations recently issued a major report recognizing these very encouraging cost trends, finding that many renewables can now compete with fossil fuels on cost alone.
Figure 7. UN findings with respect to renewable energy costs (Source: UN Special Report on Renewable Energy Sources and Climate Change Mitigation).
The future looks increasingly bright – despite ongoing concerns about peak oil and climate change – what I call the “twin crises.” While the looming threat of peak oil is very real, it seems we may be on a path to mitigation of both climate change and peak oil in time to avoid major economic disruptions – at least insofar as electricity is concerned. The far larger problem with peak oil occurs in the transportation sector, however, because there are fewer scalable options when it comes to replacing petroleum.
The improved energy intensity and price-induced conservation trends I’ve discussed apply as much to transportation as to electricity, but the wind power and solar power trends only apply if we can rapidly electrify the transportation sector though electric vehicles and plug-in hybrids – and that is far more difficult than switching from fossil fuels to renewables in the electricity sector. I’ll address this additional set of issues in a future essay.
To wrap up, we seem to be on a path toward a far more sustainable future because of the momentum finally pushing wind and solar, as well as increased efficiency and conservation, to ever greater heights. So while climate change itself is obviously an important issue, it is increasingly unimportant with respect to the policy debate surrounding our energy sector’s transformation. And that’s a good thing given the public’s refusal to take the threat seriously.