This piece was first published in Forbes on April 15, 2019. It is reprinted with their permission.
In early April a group of 63 global investment managers, scientific think tanks and environmental organizations sent a letter to the executive director of the International Energy Agency in Paris, Fatih Birol, urging him to use the World Energy Outlook as a tool to fight climate change. The WEO offers the authoritative global outlook on the mix of fuels that will supply our energy decades into the future and, by extension, the level of carbon dioxide emissions that will result. Reverence for the document is so great in government and industry that some maintain that it does more than merely project the future, but in fact defines our path toward it.
For this reason, the signatories argue that the most ambitious of the three forward-looking energy transformation scenarios modeled by the IEA in its 2018 report, in which low carbon energy rapidly replaces fossil fuels and greenhouse emissions fall fastest, must be recast as the main scenario in future editions of the World Energy Outlook.
The ambitious pathway, which the IEA calls the “Sustainable Development Scenario,” is the one option that offers a fighting chance of limiting global warming to 1.5 degrees Celsius. In contrast, the most recent report’s central forecast, the deceptively titled “New Policies Scenario,” sends Earth on a trajectory toward three degrees of warming. The Intergovernmental Panel on Climate change has warned that such an increase will be economically and environmentally catastrophic.
By urging the IEA to use the considerable influence of the World Energy Outlook to recast ambitious goals as something more akin to business as usual, the letter’s authors are calculating that the report can play an important role in focusing investment on ambitious climate solutions, and actively prod us onto a path of maximum climate survivability.
Yet reshuffling the deck of energy scenarios isn’t going to be enough. The letter warns that a true Sustainable Development Scenario will take “a precautionary approach to negative emissions technologies.”
This cautionary note, buried in the letter’s ninth paragraph, references one of the most controversial and consequential assumptions at the center of ambitious carbon reduction scenarios. Namely, it’s the premise that net zero emissions technologies, most prominently bioenergy with carbon capture and storage (BECCS) and carbon direct air capture and storage (DACS), will in the foreseeable future be both economic and available at a scale capable of lowering global carbon emissions to net zero. IEA’s SDS assumes negative emissions will account for 7% of cumulative emissions reductionsby 2040, or 2300 Mt of CO2 removed from the atmosphere. The single operating BECCS plant in the U.S.today captures just 1 Mt.
The assumed availability of negative emission technologies underpins the ambitious carbon reduction pathways described in another outlook, the Intergovernmental Panel on Climate Change’s Global Warming of 1.5 Degrees report, published last October.
“Many don’t realize that embedded in those pathways is a lot of negative emissions,” says Glen Peters, research director at the Center for International Climate Research in Oslo, Norway. That’s a steep ask for a group of technologies that don’t exist in a practical sense today.
As the IEA builds new models for energy transformation it should not rely on similar assumptions of the technology’s availability, the letter to Secretary General Birol warns. Without negative emissions, the goal of net zero carbon emissions is practically unattainable.
Yet the current cost of negative emissions, most notably Bioenergy with Carbon Capture and Storage (BECCS) and Direct Air Capture with Storage (DACS) of CO2, doesn’t make room for blind optimism.
A recent report on the political economy of negative emissions in the journal Climate Policy suggests that the cost of BECCS, in which energy crops are grown, harvested and burned and the CO2 from emissions collected, could fall to $100 per ton of CO2 by the year 2030, a price at which the technologies might make begin to make sense. The same report puts economic DACS, currently estimated to cost at least $400 per ton of buried CO2, much further out.
Further, “the IPCC models are saying that it is cheaper to have negative emissions in the future than it is to have short term emissions reductions today,” says Peters. “Now, what’s driving that?” The discount rate.
“The cost of negative emissions in 2100 is almost irrelevant, it will be basically free given a high discount rate, or even a low one,” says Peters. “To get the level of negative emissions you may need in 2050 or 2100, you really need to start deploying those negative emissions today.”
If negative emissions will make a dent in the climate problem, their cost will need to fall dramatically. Absent that, governments will have to step up. In October the National Academies of Sciences published a report urging government investment in R&D to drive down the cost of negative emissions technologies. Carbon pricing will also be key. Any carbon price will need to be bold. The U.S. Department of Energy currently puts the social cost of carbon at $42, far shy of even the most optimistic BECCS and DACS cost projections.
California’s Low Carbon Fuel Standard Program is a good example of policies that move in the right direction. Just this year, a consortium of investors including subsidiaries of Occidental Petroleum and Chevron invested $68 million into Canadian direct air capture company Carbon Engineering. The oil companies’ motivation is to speed development of new sources of low carbon fuel to help them meet the California standard, which aims to lower the carbon intensity of fossil fuels 20% by 2030.
Carbon Engineering’s technology can recycle carbon dioxide captured from the atmosphere into new fossil fuels, at a cost that the company claims to be as low as $94 per ton. Yet recycled emissions aren’t the same thing as negative emissions, the type that end up buried deep underground, which are again much more expensive.
At the end of the day, the IEA has a tall order. It’s being asked to put forth “a central and realistic 1.5 degree scenario going forward,” that’s even more assured to limit warming to 1.5 degrees than its most ambitious current pathway. It must do this even as the true potential of negative emissions remains in doubt.
The letter writers were right to ask for full transparency around this issue. If the IEA follows their recommendation, which it should, a clear view of the magnitude of the challenge ahead might be the strongest motivation to act to mitigate our climate impact, and speed the arrival of scalable emissions solutions.