To meet the world’s growing demand for energy amid efforts to stabilize the global climate will require the deployment of low‑carbon energy sources on a massive scale. But mobilizing the financial resources, technological advances, public opinion and political resolve needed to move toward net zero emissions will not be easy. Moreover, the economic and environmental risks posed by such a fundamental energy transition are considerable.
Leveraging years of leading-edge expertise identifying challenges, hazards and potential barriers to low-carbon options deployed at continental to global scales—including knowledge generated in MIT’s Energy-at-Scale project—researchers at the MIT Joint Program on the Science and Policy of Global Change convened a workshop on November 7 on the MIT Campus centered on challenges and opportunities in large-scale, low-carbon energy technology deployment.
Part of a series of Joint Program workshops aimed at providing decision-makers with actionable information on key global change concerns, the conference featured five panels of Joint Program researchers. Panelists shared their expertise on the science, technology and policy of decarbonization in presentations and in conversation with invited sponsor representatives and other energy industry stakeholders. Discussions underscored the potential of unique Joint Program assessment strategies and tools to quantify the economic and environmental impacts of large-scale decarbonization and support investment and policy decisions in this space.
Low-carbon options with carbon capture and storage (CCS)
Research Scientist Jennifer Morris discussed the economics of BECCS (bioenergy with CCS) deployment under long-term climate policies targeting a 1.5oC or 2oC rise in global average temperature over the preindustrial baseline. Noting the key role that negative emission technologies are expected to play in these two scenarios, Morris showed that large-scale deployment of BECCS is technically feasible, would reduce carbon prices and climate policy costs and barely raise global food prices, but may be limited by public concerns about potential ecosystem impacts and loss of natural land.
Research assistant Erin Smith, a master’s student in MIT’s Technology and Policy Program, summarized her team’s findings on the role of CCS technology in a climate mitigation portfolio. Smith highlighted four promising projections: In a 2oC scenario, CCS comprises 40% of world electricity production by 2100; industrial CCS reduces the cost of meeting global climate targets while increasing output; 8,000–55,000 metric gigatons of CO2 geologic storage capacity is estimated to be practically accessible worldwide; and to achieve decarbonization pathways in China, CCS would likely be deployed after 2065 to meet the nation’s more stringent late-century emissions targets.
Climate-related financial risks and disclosure: Use of scenarios
Founding Co-Director Emeritus Henry Jacoby described a recently-released report, organized by MIT’s Vice President for Research, which considers possible improvements in the way climate-related scenarios are used in corporate financial disclosure reporting. These disclosures aim to give investors more precise, reliable data to assess organizational resilience to a low-carbon energy transition. The MIT report outlines the main shortcomings (inconsistent metrics across firms, lack of transparency, incomplete reporting) of many current corporate efforts. Jacoby highlighted the MIT report’s conclusions about changes in practice, by financial institutions seeking this information as well as by scenario producers and firms, which could improve the usefulness of these disclosure reports.
Co-Director John Reilly presented results of an economic model-based analysis to explore price and value information that might be used to assess climate-related financial risk within components of the energy sector or of an individual company. Comparing different emissions policy pathways (several targeting a 2oC warming cap) with a no-policy path, the study combines model results (e.g. change in fuel prices, emissions charges, change in fossil fuel demand) to evaluate the likely loss in value—stranded assets—in fossil energy sectors over the next 20 years.
Greening electricity and predicting intermittency
Deputy Director C. Adam Schlosser presented recent advances in data, analysis and potential predictability of intermittency, deployment and aggregation of wind and solar technologies. Schlosser observed that the primary hurdle in large-scale deployment of intermittent renewables, sudden power spikes (losses or gains) and persistent power losses, could be overcome through aggregation over wide geographical areas and co-location of wind and solar power generation. He also illustrated techniques that map the landscape of risk in intermittency changes under an evolving global climate.
Citing research he co-authored on the economic impacts of alternative options for financing renewables in the Spanish electricity sector, postdoctoral associate Xaquin Garcia-Muros highlighted a growing concern that renewables promotion will drive up electricity prices and thereby inflict an economic burden, particularly for low-income households. Garcia-Muros provided evidence against the use of a surcharge on electricity prices to promote renewables, and for the possible benefits of alternative ways of financing the promotion of renewables, including value-added or fuel taxes.
Reducing emissions in transportation and power generation
Deputy Director Sergey Paltsev projected a potential for substantial electrification of private transportation in coming decades, with electric vehicle (EV) fleets growing in all regions, including the largest markets (U.S., China, E.U.); that EVs will moderately reduce global oil use, with major reductions coming from economy-wide carbon pricing; that government policy will be a central factor in driving up rates of EV adoption; and that a substantial cost reduction will be needed to bring fuel cell electric vehicles (FCEVs) into the mainstream.
Research Scientist Mei Yuan described emissions-reduction policy development at the sector and state levels. Her research showed that for the power sector, non-renewable generation plays a critical role in maintaining grid reliability, and low-cost nuclear generation could significantly reduce the cost of deep decarbonization. Yuan emphasized the need for grid flexibility (to allow for the efficient deployment of intermittent renewables) and policy flexibility and coordination across regions in efforts to meet decarbonization goals at minimum cost to national economies. Future research in this space will incorporate leading-edge knowledge of the evolution of urban ecosystems.
Paths towards decarbonization
Research Scientist Henry Chen presented a case study of how global climate mitigation can affect domestic economies. The study compared the impact on Taiwan’s fossil-fuel/international trade-dependent economy of the Paris Agreement under two scenarios—one in which Taiwan fulfills its Nationally Determined Contribution (NDC)—to reduce GHG emissions by 50 percent relative to business-as-usual in 2005 by 2030—unilaterally, the other in which Taiwan does so in the context of a global effort. The results: under the current NDCs of the Paris Agreement, Taiwan’s economy fares better under a global policy than it would by acting alone, but that as NDCs become more stringent in coming decades, foreign climate mitigation policies could adversely impact Taiwan’s economy.
Jennifer Morris suggested that we may need to rethink “reference” or “business-as-usual” scenarios, which typically assume no climate action and continued growth of emissions. She explored key drivers that could lead to a bounding of global warming and toward net zero emissions and climate stabilization in the long-term, even in the absence of strong, concerted climate policy. These include more severe climate impacts, declining willingness to invest in long-term fossil fuel infrastructure, the influence of the Paris Agreement, government action, societal pressure, technology improvements, and legal decisions. Morris argued that finding viable paths toward deep decarbonization of the global economy should start with three fundamental questions.
The first: What is the minimum we can expect in terms of technology, policy and social action? The second: Where does the “inevitable”—energy efficiency improvements, low-carbon energy technology market penetration, financial and political constraints, land-use and agriculture changes, renewables growth, a fossil fuel phase-out, zero-emissions vehicle requirements and environmental policy—get us in terms of emissions and temperature goals? And the final question: What else would we need to believe to achieve more aggressive goals? Morris concluded by showing initial projections of multiple paths to decarbonization.
A collaborative effort
“Scaling-up low-carbon energy requires a thoughtful coordination of technological innovation, economic analysis, policy design, environmental assessments and public support,” said Sergey Paltsev after the workshop, for which he served as lead organizer. “The stakeholders we work with in our Energy-at-Scale project—from industry, government and academia—bolster our efforts to chart efficient pathways to an energy-abundant and emission-free future.”
The project seeks additional collaborative partners as it expands to analyze challenges and opportunities in scaling up low-carbon energy in different economic sectors and regions.
Story Image: Over 10,000 tracking heliostats focus solar energy at the receiver on the 640 foot power tower at the Crescent Dunes Solar Thermal Facility, which provides more than 500,000 megawatt hours of electricity per year, available day or night through molten salt storage. (Credit: Flickr/National Renewable Energy Lab)