Tag Archives: carbon

Peak Carbon, Revisited

A little over two years ago I wrote an article for Environmental Leader declaring that 2007 would be the year of “Peak Carbon” in the US, such that GHG emissions would generally decline from that point on (with accommodation for random short blips upwards). In the short term I figured that the economy would get the curve to peak, and that then a series of other policy and economic factors would continue to drive the emissions downward in a steady matter.

If you read the comments you’ll see that some people thought the whole notion was stupid, some said “doesn’t matter unless China reaches peak carbon also”, and others disagreed emissions were going to peak. I didn’t disagree with the China point, but felt (and still feel) like a true downward trend in US emissions is an important milestone.

Based on the latest numbers from the EPA, it looks like there is good news on two fronts (see chart from EPA’s carbon website). First, the data so far supports my theory – 2008 was lower than 2007, and 2009 took another good step downward. But even if you don’t care about my prediction, the other good news was that the 2009 drop was bigger than the economic downturn would suggest. This indicates some real decarbonization of the economy, which is encouraging.

Like my predication, the data suggests that the decarbonization wasn’t from a single trend, but from the accumulation of multiple shifts. Interestingly it was split between a reduction in the energy intensity of the economy, and a decarbonization of the energy supply itself. While the first is a mixed blessing since it usually indicates a further erosion of the US industrial base (and if those jobs just moved somewhere else, then the emissions just moved with them), but the second is a good sign, especially given the lack of momentum in federal energy and GHG emissions policy.

One thing that I think we need to start looking at more closely is the effectiveness of local, state and regional level efforts at clean energy deployment, coupled with new roadblocks to new coal plants. Evidence would suggest that there are some successes there that we should be paying attention to, and trying to replicate more broadly.

I also continue to believe that the 2009 experience will be representative of the general nature of the decarbonization of the US – the cumulative effect of lots of small and medium sized actions and policies, as opposed to a single big policy or technology which has a dominant effect.

So overall I’m gaining even more confidence in my prediction, and continue to hope that I was right on the money! If you want to vote for or against me, I’ve registered this as bet #436 at longbets.com. So far there’s 7 against and 0 for!

Electric Cars: Headway, But Improvements Needed

With the 500 car Cooper Mini E field trial, we’re finally started to get some real-world data on the performance of electric vehicles.

The WSJ recently ran an article which surveyed participants in the field test and found they were generally getting in the 100-110 miles per charge range, less than the advertised 150. The battery in the Mini E is 35 kWH (not 35 kW as stated in the article). Combining this with data from a standard Mini Cooper, we can start to get a look at the actual emissions and cost of driving of the Mini E.

On the emissions front, if we assume 35 kWH for 100 miles, we can calculate the emissions if we use grid electricity. Using the EPA’s eGRID data, we can calculate the emissions per 100 miles. On the gas-powered Mini, the average fuel economy is 32 MPG, and with 19.9 pounds of CO2 per gallon of gas, 100 miles produces a little over 62 pounds of CO2. I’ve attached a chart (pdf, xlsx) which shows the comparison on a state-by-state basis (the pdf is set to 100 miles of range for the Mini E, and the spreadsheet shows the same data, but lets you change the Mini E range and see the effect).

As we can see from the chart, with 100 mile range the Mini E has less emissions in 40 states, and has more in 10 states and the District of Columbia. Based on 12,000 miles of driving (a year’s worth for many people), the Mini E would save 0.85 tons of CO2 per car, assuming they were spread across the US. To see the effect of state electricity sources, we see that in Wyoming the Mini E would generate almost a ton more CO2 than the gas-powered version, and in California it would generate almost 2.5 tons less. (Note to electric car marketeers – please stop telling me your car is zero-emissions.)

By playing with the range of the Mini E in the spreadsheet you can start to see that it is right on the cusp of being either a carbon winner or carbon loser. At 70 miles range (as some claim they were getting on the highway), the Mini E is worse than the gas-powered vehicle in 26 states plus the District of Columbia, and the national average goes negative. But at 150 mile range it is better everywhere in the US, saving 1.7 tons/12K miles.

In addition to GHG emissions we can trivially use this data to calculate the relative operating cost of the two Minis. In general we see the Mini E being $2 to $6 per 100 miles cheaper than its gas-powered sibling, or $250-$700 per year assuming 12,000 miles. While we don’t know what the final price of the Mini E will be, we do know that the lease rate is about $500 more per month than the standard Mini, so its pretty safe to say that people won’t be jumping on the Mini E as a cost-saving measure unless we (the taxpayers) all pitch in with an amazing rebate program (which wouldn’t surprise me).

Finally, we don’t have to settle for standard grid power. If I were to generate 10kW of solar a day, I could cover the 12,000 miles with no driving emissions (for real, this time). The DOE says I’d need 1,000 square feet or more of solar area to do this, but that’s not out impossible (though it does dwarf the 30 sq ft area of the car itself!). The problem is that this would also raise the price of electricity over grid power, so would make the financials look even worse (unless, again, I can hit the rebate jackpot).

The other thing to keep in mind is that we assumed that we could power the car from the existing grid capacity. If we add lots of electric cars we’ll have to turn on some more electrical generation capacity (aka ‘non-baseload’), which is usually coal. We can see from the eGrid numbers that the CO2/kWh goes up from 1.29 lbs to 1.58 lbs when we use non baseload electricity, and the result (bottom row of the chart) is that we drop the Mini E emissions advantage from 0.85 to 0.37 tons per year.

In summary, its great to see the first electric cars finally hitting the road, and that we can start to get our first real data. For an initial pilot I consider these results to be quite good, assuming that you weren’t really expecting zero emissions. But as we’ve seen, government subsidies and overall energy policy will be critical in determining whether electric cars will be a financial and environmental success.

International Carbon Offsets: The Next Trillion

In my role of Chief Sustainability Officer at Sun, I take part in an annual discussion of whether the company should purchase carbon offsets as part of our GHG reduction plan. Since we can buy carbon offsets at a price which is lower than what it costs us to reduce our GHG directly, we have four different approaches available to us:

  1. use offsets to report a greater emissions reduction at the same price as if we only did internal projects
  2. use offsets to report the same emissions as internal projects, but at a lower price
  3. ignore offsets and just do internal projects
  4. some mix of offsets and internal projects

So far, each year we have elected to only invest in internal projects. Our rationale is that we can help the company and the environment with that choice — the company gets more efficient and the we lower our direct GHG emissions. Furthermore we find that this rationale is applicable to each marginal dollar of investment, so that we end up only investing in internal projects as opposed to a mix. This means that the emissions reductions that we report aren’t as low as they theoretically could be, but that’s a tradeoff that we think makes sense for us, since we keep reducing our own emissions instead of paying others to reduce theirs.

As it thinks about creating a cap and trade system, the US Government faces the same decision: do we allow international offsets in order to keep costs down and/or make the results look better, or do we stick to investing within the country?

With that in mind I was very interested to read the following on page 4 of the summary of the EPA analysis of the Waxman-Markey draft bill:

Offsets have a strong impact on cost containment.

  • The capped sector uses all of international offsets allowed in all years of the policy (1.25 billion tCO2e offsetting 1 billion tCO2e of capped sector emissions annually).

  • The 1 billion tCO2e annual limit on domestic offsets is never reached due to limited mitigation potential.

  • Without international offsets, the allowance price would increase 96 percent.”

In order to understand the magnitude of these statements, we need to use a cost of carbon. The graph below is from page 15 of the EPA analysis, and shows the anticipated offset prices for the period covered by the bill. Elsewhere in the presentation it give specific numbers: 2015 – $13 to $17, 2030 – $28 to $36, and 2050 – $74 to $96.

In order to estimate the total cost, I’m going to use a 2012 starting price of between $11 and $15, and do two linear approximations, one from 2012 to 2030, and one from 2030 to 2050. This will produce a result that is a slightly higher than the curve shows, but only by a few percent.

With these approximations and a purchase of 1.25 billion metric tons of international offsets per year, we get the following results:

2030-2050: $1.28T to $1.65T

Total (2012-2050): $1.72T to $2.22T

Per household per year (counting 111M US households), this comes out to:

2012-2030: $218 to $236 per household per year

2030-2050: $577 to $743 per household per year

This looks pretty outrageous. This money is going to foreign countries, and the selection of where it goes will be done by the companies who are purchasing offsets (who will be presumably working off of a list of approved offsets). Personally I’m all for making strategic investments in GHG reductions outside of the US, but to put in place a program where this much money over this long of a period flows beyond the US makes no sense, recession or no.

So why is this even part of the design? The answer is in the Sun example, as well as the note from the EPA report. If you want to appear to be reducing your GHG emissions, its cheaper to pay someone outside of the US to do it instead of doing it here. One option would be to commit to lower reductions, but Waxman-Markey has ruled that out as an option. Another is to commit to reductions within the US but at a higher cost (96% according to the EPA analysis), which is politically untenable in today’s economy. So instead, Waxman-Markey puts us on a path to spend $2T or so over the next 38 years to improve the GHG efficiency of other countries.

Two related notes:

  1. Roger Pielke, Jr. reports on the trillion dollar plus reduction in the GDP which is in the EPA analysis. This is also a huge deal.

  2. Supporters of the bill are citing the EPA analysis with relatively low numbers for the increase in household cost. However, its clear reading through the EPA analysis that they have only examined direct energy costs, and not the increase in costs throughout the economy that consumers will have to bear. Its interesting to note that some people are citing annual impacts per household that are lower than the amounts above which would flow overseas – that tells you that how far below reality these estimates are.