BLAIR REPORT SAYS EFFICIENCIES NOW, CAP&TRADE FOR THE LONG RUN

Blair Says Saving Energy Is Faster Fix Than C02 Trade
Mathew Carr and Alex Morales, July 6, 2009 (Bloomberg News)
and
UK's Blair says practical steps needed in climate fight
Peter Griffiths (w/Janet Lawrence), July 6, 2009 (Reuters)

(The content of the report's illustrations is great. The quality is not. Click to enlarge for added value. Apologies.)

SUMMARY
Technology for a low carbon future, from the Breaking the Climate Deadlock team (lead author Shane Tomlinson) and sponsored by The Climate Group and former UK Prime Minister Tony Blair, points the way to a measured and effective response to global climate change.

Its objective: Minimize the risk of irreversible impacts by keeping the average global temperature increase below 2 degrees C. The New Energy, Energy Efficiency and political policy tactics and strategies outlined in the report aim to hold down global temperature by stopping the growth of world greenhouse gas emissions (GhGs) before 2020 and cutting them as much as 85% from pre-2000 levels by mid-century.

The report bases its planetary prescription on 5 conclusions:
(1) The technologies, where they must be deployed and how much they will cost are known.
(2) The technologies to meet the 2020 goal are proven and available and policies that will drive their implementation are known.
(3) To bring present technologies to scale and to drive the innovation of future technologies, investment must be made now.
(4) Investment means spending, a lot of spending, but it is called investment because it will pay off in climate and non-climate benefits.
(5) The December world summit on climate change in Copenhagen can produce an international agreement and collaboration that will make New Energy and Energy Efficiency costs affordable and drive their deployment.

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The emissions reduction goal for 2020 is 19 gigatonnes; for 2050, it is 48 gigatonnes.

New technologies must come in 4 key sectors: (1) Power, (2) Transport, (3) Buildings and (4) Industry. It will cost $1 trillion in yearly average investment through 2050.

70+% of the 2020 GhG reductions can come from (1) Increased energy efficiency, (2)reduced deforestation and (3) deployment of nuclear (per the report) and New Energies.

7 policies, already effectively enacted locally, that will drive these changes: (1) Renewable Energy Standards (RESs), (2) Industrial efficiency standards, (3) Building codes, (4) Vehicle efficiency standards, (5) Fuel carbon content standards, (6) Appliance standards, and (7) Policies that prevent deforestation and forest degradation.

Those 7 policies must be brought to global scales. Policies putting a price on GhGs, such as cap&trade and a carbon tax, are incentives that will act in the longer term.

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The future options still requiring investment in research and development include (per the report): (1) CCS, (2) next generation nuclear, (3) solar power plants (SPP) that use concentrated solar power (CSP), (4) battery electric vehicles (BEVs), and (5) smart grid infrastructure.

As a long term solution, the report sees the development of a global emissions market and/or other mechanisms, such as carbon taxes, to price emissions. It contends that markets will, beyond 2020, drive innovation and commercialization of New Energy and Energy Efficiency and expects a global emissions market to cut the cost of needed GhG reductions 20%.

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The report does not see mechanisms that price GhGs to be effective in the absence of “top-down” government policies to drive changes.

30% of GhG abatement through 2030 will come in large emerging economies, especially India, China and Brazil. Investment there will cost an estimated $100-to-$160 billion per year from 2010 to 2020. But such investment pays off. German policies to drive innovation and commercialization created 100,000 New Energy jobs between 2004 and 2006. As the U.S. moves toward obtaining 5% of its power from wind by 2020, estimates show it will create $60 billion in capital investment in rural America, provide $1.2 billion in new income for farmers and rural landowners and create 80,000 new jobs.

The report also calls for $10-to-$30 billion per year in research, development and demonstration (RD&D) for New Energies and Energy Efficiencies through 2020.

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The report calls for “a comprehensive technology mechanism” to be established at the Copenhagen summit that formalizes and “sets the scale and pace” for the transition to an international New Energy economy.

Such a mechanism would:
(1) Create a Technology Development Objective to finance and commercialize New Energies and Energy Efficiencies.
(2) Create Technology Action Programmes for R&D, demonstration and commercialization of critical technologies.
(3) Reform and scale up the the Clean Development Mechanism (CDM) of the United Nations (UN) Framework Convention on Climate Change (FCCC) as a means for New Energy and Energy Efficiency development in emerging economies and developing nations.
(4) Create a Technology Executive Board under the (UNFCCC) to facilitate global roadmaps and action programs and establish measurable, reportable and verifiable (MRV) criteria for tracking.
(5) Facilitate technology sharing by creating a "protect and share" framework for intellectual property rights (IP R) that works within national and international law.

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COMMENTARY
(1) The power sector can provide 38% of total GhG reductions to 2050 in New Energy and (the report hopes) carbon capture and sequestration (CCS), nuclear power and biomass.
(2) The transport sector can provide 26% of total GhG reductions to 2050 in battery electric and (the report hopes) hydrogen fuel cell vehicles and biofuels.
(3) The buildings sector can provide 17% of total GhG reductions to 2050 in improved efficiencies.
(4) Industry can provide 19% of total GhG reductions to 2050 in CCS for industrial processes and industrial motor systems.

The $1 trillion yearly investment in New Energy called for in the report is 40% of global infrastructure investment and 1.4% of global GDP but it displaces business as usual spending so it does not really add $1 trillion per year to spending but ~$317 billion per year by 2015 and $811 billion in 2030. (These estimates assume an oil price of $60 per barrel. If the oil price is $120 per barrel, the incremental additional cost of New Energy technologies is almost zero.)

Investment in future solutions may seem burdensome but is less so than the costs of abating or mitigating global climate change in the absence of effective new technologies.

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The report finds that the cost of emissions reductions without CCS would be 70% higher through 2050. It anticipates CCS will provide 20% of global GhG reduction by 2020 and calls for spending to build 10 utility-scale demonstration plants and 8 industry demonstration plants by 2015.

Funding of the transition to the New Energy economy can come via market-based mechanisms like the Clean Development Mechanism (CDM) of the United Nations (UN) Framework Convention on Climate Change (FCCC) or through multilateral and public-private partnerships financing involving the World Bank Climate Investment Funds and private businesses and financial institutions.

The report calls for priority to be given to international agreements on important technologies like CCS, CSP and zero-carbon transport and suggests the Major Economies Forum (MEF) take the initiative with agreements on CCS and CSP global demonstration projects.

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QUOTES
- From Executive Summary of the Breaking the Climate Deadlock report: “Successfully reducing emissions to prevent dangerous climate change is without doubt a huge challenge and will require a revolution in the way we produce and consume energy, travel and design and manage our urban and rural environments. However, the pathway to this revolution is clear and, by means of ambitious international collaboration to develop and deploy low-carbon technologies, well within our grasp. We know what we have to do; this report shows us how.”

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- Tony Blair, former UK Prime Minister and report co-sponsor: "…[S]et the world on a new path…agree [to] the measures that people will be taking…In the short-term that is what will make the difference…We will get out of Copenhagen an interim target (for cutting emissions), whatever it may be, in the 25-40 percent range. The thing that will make the difference is people saying: 'What is more, this is how we do it'."
- Tony Blair, former UK Prime Minister and report co-sponsor: “If you want to meet a target that’s just over a decade away, there are things that we know that work, that we have to do now…Otherwise, we won’t get there.”
- Tony Blair, former UK Prime Minister and report co-sponsor: “[A global carbon market] will take time to develop, and it will yield a significant benefit.”
- Tony Blair, former UK Prime Minister and report co-sponsor: “As the carbon market develops, then the private sector will be increasingly important.”
Tony Blair, former UK Prime Minister and report co-sponsor: “What China and India and others want to know is that the West is going to take serious action…That will require a target, but it will also require realistic means of achieving it.”