Showing posts with label SCC. Show all posts
Showing posts with label SCC. Show all posts

Wednesday, April 14, 2021

Engineering Work Plan for Climate Emergency

 

Putting Canada on the path towards meeting our Paris Agreement GHG emissions reduction target of 30% below 2005 levels by 2030 is a task that will require enormous engineering effort  calculating the Social Cost of Carbon (SCC) and in the construction of infrastructure to mitigate the effects of Greenhouse Gas emission.

Engineering mitigation of GHG effects

 

  Marieke Walsh writes in the Globe and Mail that Environment Minister Wilkinson says that 2019 will be the last year of emission increases in Canada. The highest emitting sectors in Canada (oil and gas and transportation) are the ones that Mr. Wilkinson said he will be most focused on in the years ahead. 


On transportation, Mr. Wilkinson said emissions can largely be cut through regulatory changes that will target vehicle fuel efficiency. He said in his talks with Mr. Biden’s special envoy for climate, John Kerry, the focus is on “how fast can we go in terms of raising the level of ambition” on fuel economy standards. More investments in zero-emission vehicle infrastructure will also be needed, he said. On the oil and gas sector, Mr. Wilkinson said the increasing stringency of methane regulations will “start to bite” and the pending implementation of the clean fuel standard will also have a “significant impact on emissions.” Raising the carbon price to $170 a tonne by 2030 is the key reason why Canada can show that it will meet its emissions targets in less than a decade.1



An article in The Economist proposes this is the moment for an ambitious attempt by President Biden to deal with climate change and move America to less carbon and blackouts. Biden has said that he wants fossil-fuel emissions from power generation to end by 2035 and the economy to be carbon-neutral by 2050. America is not just the world’s second-largest emitter, but also a source of climate-related policy, technology and, potentially, leadership. What is about to unfold in Washington will set the course in America for the next decade—and quite possibly beyond.


Time is pressing. Neither Mr Biden nor his successors may get a second chance to recast policy on such a scale. Global emissions from fossil fuels and cement production in 2019 were 16% higher than in 2009. It will be even harder to limit climate change to less than 2°C above the pre-industrial level, the global threshold from which America’s target for 2050 comes. To be carbon neutral, the world must curb emissions by 7.6% a year for a decade, a steeper decline than in 2020, when covid-19 cut demand for oil and coal. For America, delaying action to 2030 would nearly double the cost of reaching net zero or, more likely, mean it overshoots its targets. Yet there are grounds for hope. Although the Republican Party is against almost all action, voters are increasingly alarmed by climate change. Two-thirds of them think the federal government is doing too little about it, and that share includes plenty of younger Republicans. Although the fossil-fuel lobby remains powerful, many Republican business donors want more action—partly because asset managers are urging firms to align their strategies with the net-zero world Mr Biden envisions. Most encouraging of all, the costs of power from wind and solar have plunged by 70% and 90% over the past decade. Along with cheap gas, this has already helped America decarbonise at an impressive rate, despite Donald Trump’s rolling back of fossil-fuel regulations. Price has not been the only factor; more than half of the states have some sort of clean-energy mandate, a device that Mr Biden wants to introduce on a national scale.2


The Canada Department of the Environment and Climate Change reported on Greenhouse gas sources and sinks in 2020. Emission increases since 2005 in the oil and gas and transportation sectors have been offset by decreases in electricity and heavy industry.


After hovering between 700 and 720 megatonnes of carbon dioxide equivalent (Mt CO2 eq) in recent years, in 2018 (the most recent annual dataset in this report) Canada’s greenhouse gas (GHG) emissions increased to 729 Mt CO2 eq. This increase is attributed to higher fuel consumption for transportation, winter heating and oil and gas extraction. Over the long term, Canada’s economy has grown more rapidly than its GHG emissions: the emissions intensity for the entire economy (GHG per Gross Domestic Product [GDP]) has declined by 36% since 1990 and 20% since 2005. Emission trends since 2005 remain consistent, with emission increases in the Oil and Gas and Transportation sectors being offset by decreases in other sectors, notably Electricity and Heavy Industry. The Pan-Canadian Framework on Clean Growth and Climate Change (adopted in 2016) puts Canada on the path towards meeting our Paris Agreement GHG emissions reduction target of 30% below 2005 levels by 2030. The Framework is a comprehensive plan to reduce emissions across all sectors of Canada’s economy, stimulate clean economic growth and build resilience to the impacts of climate change. Canada is committed to continue implementing the Framework, while working to exceed its 2030 emissions reduction goal, and developing a plan to achieve net-zero emissions by 2050.3


Breach Media reports on a committee formed by the Canadian Association of Petroleum Producers ( CAPP ) and Canadian Government representatives named “Create the Path Table” to discuss regulations and creating “opportunities” post-pandemic.  Themes for discussion included advancing offshore projects in Atlantic Canada and tar sands projects in Western Canada, “cooperation in building investor confidence,” and “government industry collaboration to strengthen energy trade” with the United States.


 There was discussion of “emission reducing technologies,” hydrogen energy, and carbon capture and sequestration—several proposals promoted by oil companies that have been widely panned as false solutions perpetuating fossil fuel use. “Canada’s LNG” is referred to as an “opportunity” for the country’s climate plans, even though scientists have concluded that liquified natural gas is in fact a carbon-intensive fuel that needs to be phased out. CAPP “greatly appreciated” government engagement with industry. The oil lobby’s focus on Natural Resources Canada appears to have paid off.  In June, O’Regan announced that the government would exempt offshore drilling in Newfoundland and Labrador from federal environmental impact assessments. In September, he announced a $320 million public handout with no strings attached to Newfoundland’s offshore oil industry. That same month, O’Regan began echoing the CAPP’s talking points by touting LNG as the answer to the climate crisis and a key part of the Liberal’s “green recovery” agenda. Soon after, he reassured CEOs from Husky and Suncor that the federal government “cannot achieve Net Zero without our oil and gas sector” and that any economic recovery would involve “continued exploration” for oil off the east coast, according to a memo obtained by Greenpeace.4


Mitigation of the effects of the climate emergency on Canada is an enormous engineering challenge that will require government support of research, training, design and construction of infrastructure that meets the IPCC goals on emission reduction and supported by SCC calculations.

 

References

 


1

(2021, April 12). 2019 will be last year of emission increases in Canada, Environment .... Retrieved April 13, 2021, from https://www.theglobeandmail.com/politics/article-canadas-last-year-for-emissions-increase-was-2019-jonathan-wilkinson/ 

2

(2021, February 20). How America can rid itself of both carbon and blackouts | The .... Retrieved April 13, 2021, from https://www.economist.com/leaders/2021/02/20/how-america-can-rid-itself-of-both-carbon-and-blackouts 

3

(2021, January 19). Greenhouse gas sources and sinks: executive summary 2020 .... Retrieved April 13, 2021, from https://www.canada.ca/en/environment-climate-change/services/climate-change/greenhouse-gas-emissions/sources-sinks-executive-summary-2020.html 

4

(2021, April 13). Oil lobby, Trudeau government formed secretive committee during .... Retrieved April 13, 2021, from https://breachmedia.ca/oil-lobby-trudeau-government-formed-secretive-committee-during-pandemic/ 


Saturday, February 20, 2021

Economic and scientific analysis of Climate Challenge to impact Canada

 Politicians, economists, risk assessors, and climate scientists have numbers and models to guide their analysis of the climate emergency.
Climate change risk assessment

 

  David V Wright of the University of Calgary, Faculty of Law, writes that American economist Frank Ackerman called the social cost of carbon (SCC) “the most important number you’ve never heard of.” Times have changed. Today, the SCC figures prominently in climate policy discussions and analyses, and recent developments in Canada and the US are sure to reach any late adopters out there. That’s because the social cost of carbon (SCC) is a cornerstone in the Biden Administration’s ambitious climate action, and this comes at a time when Canada is showing a rejuvenated commitment to this important tool.

 

A few aspects of the new US context stand out as particularly relevant for Canada. First, the reconvened US IWG will provide renewed institutional might that was lacking for the last four years. In particular, this IWG can resume its leadership role in refining and improving SCC methodologies, and, for better or worse, Canada can comfortably resume its follow-the-leader approach (see here for a detailed account; more discussion on this below). Second, and related to the first point, the US is going to publish its new “interim” SCC values imminently (as well as SCM and SCN), so Canada will likely want to adopt similar revised values to ensure congruence across economies to the extent consistency is desired (which it typically is). Third, it would make sense for Canada to get to work in parallel or in collaboration with the US IWG on a similar timeline toward final revised SCC values by January 2022 (and, to be candid, this may well be happening already; I have not heard word). Fourth, by requiring the IWG to make recommendations on other federal “areas of decision-making, budgeting, and procurement… where SCC, SCN and SCM should be applied”, the Climate EO is signaling potential expansion of spheres where the SCC may be deployed. For example, this may build on emerging practices in the US of integrating the SCC into project-level approval decisions (see this article for discussion of such), something that has not happened in Canada to date (as discussed below, and see my and Meinhard Doelle’s discussion of this here). As such, Canada ought to be considering similar expanded options.1

An explainer by Kevin Rennert and Cora Kingdon reviews the social cost of carbon, from a basic definition to the history of its use in policy analysis. The SCC is used in benefit-cost analysis to quantify the dollar-value of a policy’s effect on climate change due to changes in greenhouse gas emissions. For policies that increase emissions, the expected increase in emissions (in tons) is multiplied by the SCC, and the result is included as part of the total estimated costs of the policy. For policies that decrease emissions, the change in emissions is multiplied by the SCC, and the result is added to the expected benefits of the policy.

 Estimates of the SCC are calculated in four steps using specialized computer models.

  • Step 1: Predict future emissions based on population, economic growth, and other factors.

  • Step 2: Model future climate responses, such as temperature increase and sea level rise.

  • Step 3: Assess the economic impact that these climatic changes will have on agriculture, health, energy use, and other aspects of the economy.

  • Step 4: Convert future damages into their present-day value and add them up to determine total damages.

These four steps are completed to obtain a baseline value for the damages of emissions. Then, the modeling process is repeated with a small additional amount of emissions to see how much it changes the total cost of damages. The increase in damages from the additional emissions provides an estimate of the SCC. The model is then run hundreds of thousands of times to evaluate the uncertainty of the estimates.2
Climate change is a classic market failure. The costs of emitting CO2 are borne by society at large, whereas the benefits accrue to those burning fossil fuels. In order to correct the market failure – for instance, with a carbon tax – we need to know the social cost of those CO2 emissions.

 Moreover, when governments measure the costs and benefits of a policy or investment decision, they need a value for CO2 emissions. If the SCC is high, then the benefits of cutting CO2 are large and costly climate actions will be justified. If the SCC is low, regulations might be more trouble than they’re worth.3

The Economist asks what impact Joe Biden will have on the fight against climate change. Joe Biden’s climate-friendly energy revolution seeks to find what it will take to fight rising temperatures.

 

Mr Biden has shown a willingness to pull multiple levers of power in pursuit of his climate agenda, announcing support for action through diplomacy, financial regulation, transport planning and more. The next decade is crucial in averting climate catastrophe, according to the UN’s Intergovernmental Panel on Climate Change. Mr Biden, along with Mr Kerry, will also have to helm America’s efforts at climate diplomacy, helping to persuade other countries to go further, faster. The Biden administration believes it has to co-operate with China to make sufficient progress on reducing global greenhouse-gas emissions, but arguments over security, trade and human rights make that difficult. COP26, the UN’s climate summit scheduled for November in Glasgow, will be a crucial test of the new president’s skills. But he seems committed to the task. Almost all the calls he made to world leaders after winning the election mentioned climate change, according to his transition team. And the world in which Mr Biden assumes office is different from the one he left at the end of the Obama administration. The need for economic recovery from the covid-19 pandemic means that governments are prepared to plough unprecedented sums of money into projects. Renewable energy is cheaper than ever before. Greener pastures might, at last, lie ahead.4

 

https://www.economist.com/img/b/800/420/90/sites/default/files/images/print-edition/20210220_FBC760.png

The Economist notes the problem is made worse by the fact that some conservative Democrats have their own reservations. Joe Manchin, a Democrat from West Virginia, says that he supports climate action. But he rejects the idea that coal, the dirtiest fossil fuel, might be permanently removed from the world’s energy portfolio.

 

A decisive American effort to reduce emissions would be a potent signal of solidarity and a great enabler of change. It is unlikely that poor- and middle-income countries, eager to lift their citizens out of poverty, will try hard to curb their emissions if the world’s richest nation declines to limit its own, which are among the world’s largest per person. A vibrant American programme would also guarantee levels of innovation devoted to the fight for a stable climate that easily exceed today’s. America’s wealth, national laboratories, universities, corporate giants and entrepreneurs, if properly harnessed to the task of decarbonisation, will undoubtedly produce novel approaches and technologies that would benefit other nations.5

Nine authors in Nature, offer eight priorities for calculating the social cost of carbon as advice to the Biden administration as it seeks to account for mounting losses from storms, wildfires and other climate impacts.

 

Biden’s actions mark a return of science-based policy in the United States. An open, transparent and inclusive IWG process will help to re-establish the SCC as central to climate policy. Reversing Trump’s changes will be quick and pragmatic for the interim number. Other steps require much more deliberation. Plenty of scientific and economic judgements need to be made. These include how to deal with endemic uncertainties, including sudden and irreversible ‘tipping points’, such as ice-sheet collapses. Ethical questions must be considered, including the consequences for vulnerable communities and future generations. Other nations use widely different SCC values or overall approaches2. Germany’s 2020 guidance presented two values: €195 (US$235) and €680 ($820). Some countries instead establish a goal for emissions reductions (such as the United Kingdom’s 68% reduction by 2030 compared to 1990 levels) and then focus on minimizing the costs of achieving it, estimated at $20–100 per tonne of CO2. This is called a target-consistent approach. Others have leaned heavily on the Obama-era SCC — including Canada, the state of New York and many major corporations. The Biden review will be influential well beyond the US government6

Economy decisions about when and how much resources to apply to the existential threat of the climate crisis can be debated using analytical tools like the SCC number.

 

References

 


1

David V Wright, “An Important Number You’ve Likely Heard About: Recent Social Cost of Carbon Developments in the United States and Canada” (February 19, 2021), online: ABlawg, http://ablawg.ca/wp-content/uploads/2021/02/Blog_DVW_Social_Cost_Carbon_Update.pdf 

2

(n.d.). Social Cost of Carbon 101 - Resources for the Future. Retrieved February 20, 2021, from https://www.rff.org/publications/explainers/social-cost-carbon-101/

3

(2017, February 14). Q&A: The social cost of carbon | Carbon Brief. Retrieved February 19, 2021, from https://www.carbonbrief.org/qa-social-cost-carbon 

4

(2021, January 31). What impact will Joe Biden have on the fight against climate change?. Retrieved February 19, 2021, from https://www.economist.com/the-economist-explains/2021/01/31/what-impact-will-joe-biden-have-on-the-fight-against-climate-change 

5

(2021, February 19). Decarbonising America - Joe Biden's climate-friendly energy .... Retrieved February 19, 2021, from https://www.economist.com/briefing/2021/02/20/joe-bidens-climate-friendly-energy-revolution 

6

(2021, February 19). Eight priorities for calculating the social cost of carbon - Nature. Retrieved February 20, 2021, from https://www.nature.com/articles/d41586-021-00441-0