TODAY’S STUDY: Positive Disruption Can Still Beat Climate Change
Positive Disruption; Limiting Global Temperature Rise To Well Below 2 Cº
Marshall Abramczyk, Martha Campbell, Aman Chitkara, Mia Diawara, Aileen Lerch, and James Newcomb (Rocky Mountain Institute)
The news about climate change is increasingly bleak. Already, deep and consequential changes in the earth’s systems, including the oceans, forests, and atmosphere, are occurring as a consequence of fossil-fuel emissions. Looking ahead, scientists warn that the window of opportunity is rapidly closing for taking actions that could keep global average temperature increase to less than 2 Celsius degrees (C°) above the preindustrial era.i According to the latest UN Emissions Gap Report, even if all signatories met the emissions reductions pledges in the Paris Agreement, the world would still be heading for a temperature rise of 2.9– 3.4 C° by the end of this century.
Scientists concur that consequences of global average temperature rise greater than 2 C° are potentially very grave. An analysis in 2016 indicates that even warming of around 2 C° could trigger feedbacks that would cause multi-meter sea level rise within as little as 50–100 years, as well as very significant increases in extreme weather events and dramatic changes in the ocean currents and circulation patterns around which human civilization has evolved.2 In such a scenario, human societies and the global economy could face forces of disruption so great that dealing with the root causes of climate change would become impossible.
President Trump’s decision to pull the United States out of the Paris Climate Agreement further undermines global eforts to reduce global emissions and meet the climate goals espoused in the agreement.3 This shift in policy stance not only lends uncertainty to the U.S. greenhouse gas emissions trajectory, but also may jeopardize international governance structures built to address the threat of global climate change.
Today, many experts doubt that energy systems can decarbonize fast enough to prevent this scenario. But this belief is both dangerous and wrong—dangerous because despair undercuts the will to act; and wrong because this view does not take into account events already taking place that indicate a possible pathway to a rapid energy transition.
This paper describes scenarios for transitions in energy, agriculture, and land use that together are sufficient to limit global average temperature increase to 1.5–2 C°. Unlike conventional modeling approaches, these scenarios entail patterns of disruption, innovation, and nonlinear change, harnessed at global scale, that mirror the episodic and disruptive ways that individual industries and the economy as a whole have changed historically. The great transitions in the economy, such as the Industrial Revolution, have been driven by such self-reinforcing patterns of change. Their signs are all around us.
Rather than a long and slow transition constrained by slow capital turnover, our scenarios describe a transition in which the pace of technological improvement gains momentum as it moves forward, that disrupts and revolutionizes today’s conventional business models, and that difuses rapidly throughout the global economy. Under the right conditions, positive feedbacks in the economy drive sustained, exponential improvements in technologies and rapid diffusion of new products and services, just as Moore’s Law has driven far-reaching changes in the global economy.
Transitions of this kind, while they are rare, occur much faster than almost anyone anticipates, accelerated by feedbacks in industrial economics, social behavior, finance, and technology…
Experts Often Underestimate The Speed Of Transition
In energy, as well as in many other fields, experts often underestimate the speed of disruptive transitions. In 1980, for example, AT&T commissioned McKinsey & Company to predict U.S. cell phone usage by 2000. The consulting group argued that cellular telephony would be a niche market with about 900,000 subscribers. In fact, McKinsey’s estimate was less than 1% of the actual figure: 109 million. Today the planet has more phones than people, and the speed of leapfrog transitions to wireless telephony in emerging markets has been extraordinary.
Similarly, the International Energy Agency (IEA) and many other mainstream analysts, such as the U.S. Energy Information Agency, have consistently underestimated the uptake of solar and wind—raising their forecasts without ever catching up with reality. Their models cannot capture the expanding returns that are obvious when we simply observe that the more renewables we buy, the cheaper they get, so we buy more, so they get cheaper.
The mainstream view of energy transitions, reflected widely in academic and policy literature and in energy industry analyses, is that major shifts in the energy system require decades. The standard argument is that even when new technologies ofer significant performance and cost advantages, the pace of change is constrained by such forces as:
1. The vast scale and complexity of major energy transitions
2. The slow rate of capital turnover
3. The resistance caused by “lock in” or “path dependency” of existing energy systems
4. The active resistance of incumbent actors working to contain or subvert the transition. Gert Jan Kramer and Martin Haigh, for example, argue in a paper published in Nature in 2009 that “physical limits” on the rate at which new energy technologies can be deployed constrain the speed of a major shift in global energy supply.6 “Unlike with consumer goods,” they assert, “there are robust empirical ‘laws’ that limit the build rate of new and existing energy technologies and thereby the potential to deliver much of the hoped for transition [to renewables] by 2050.”
Based on historical data for oil, nuclear, natural gas, biofuels, solar, and wind, Kramer and Haigh observe that new energy technologies typically go through several decades of exponential growth before they are widely available. After reaching “materiality,” defined as delivering about 1% of the world’s energy mix, the growth rates for these technologies become linear until the technology captures its final market share. Accordingly, the authors bleakly conclude that “the best we could reasonably hope to achieve for new energy deployment” would be a scenario in which two-thirds of world energy supply still comes from fossil fuels in 2050.7
The facts on the ground, however, are already contradicting these forecasts. The growth in global renewable energy supply has already crossed the supposed 1% threshold and is continuing to grow at exponential rates with steeply falling costs. Modern renewables (excluding hydropower) contribute nearly 7.9% to the global electricity mix and roughly 2.4% of global final energy consumption…
From Business As Usual To The Transformation Of The Economy
A business-as-usual emissions scenario leads to a steady increase in global average temperatures relative to preindustrial averages, with temperature increases of approximately 3.7 C° by 2100. In this scenario, the 1.5 C° threshold is breached in 2033 and 2 C° in 2049.
To describe an alternative pathway, we focus on a few key vectors with the potential to drive major shifts in energy demand and supply. These vectors were chosen based on market analyses, expert interviews, and technical potential to reduce emissions. In our alternative scenarios, efciency measures reduce energy demand by approximately 60% and virtually all remaining energy demand is electrified. On the supply side, a rapid uptake in renewables provides clean energy supplies to meet remaining demand…