Energy & Materials: Sustainability Issues

1. Energy & Materials: Sustainability Issues Mark Jaccard School of Resource and Environmental Management Simon Fraser University November, 2011 Jaccard-Simon Fraser University

2. Environment Resources Economy Wastes Two risks: resource scarcity and environmental harm from wastes and activity Jaccard-Simon Fraser University

3. Environment Resources Economy Wastes Resource scarcity:the risks of peak oil Jaccard-Simon Fraser University

4. Whither the price of oil? Forecast the average price of oil during the decade 2020 to 2030. $80-105 $105-140 $140-175 $175-210 >$210 Jaccard-Simon Fraser University

5. Peak oil – Hubbert’s Peak Bell-shaped curve of resource discovery and exploitation over time – implicit for all finite resources. Quantity Time Jaccard-Simon Fraser University

6. Peak oil global analysis Jaccard-Simon Fraser University

7. Peak oil theory and its purported consequences • The theory – we pass a global peak in the production of conventional oil and prices rise quickly and permanently to higher levels, leading to: • rapid decline of suburbia, • rapid decline of long-distance trade, • rapid decline of long-distance travel, • rapid decline of the fossil fuel era, • conflicts over scarce resources. Jaccard-Simon Fraser University

8. Theory vs evidence – oil response to price increase Ignores feedback relationship between price, exploration effort, technology and the discovery-development of conventional oil – reserves vs resource. Rising price shifts curve to right and peak upward Quantity Time Jaccard-Simon Fraser University

9. Theory vs evidence: substitutes to conventional oil Ignores feedback relationship between price, technological change and substitution of resources we use to produce refined petroleum products. Source: Farrell and Brandt, Berkeley, 2008 Jaccard-Simon Fraser University

10. Theory vs evidence: speed of substitution All taps are already open – commercial scale production. How fast can they be opened further and how far? Unconventional oil Coal-to-liquids Gas-to-liquids Biofuels Jaccard-Simon Fraser University

11. Tentative assessment ofpeak oil and impacts Short-run – oil and other energy markets will always be volatile. Tendency to mistakenly extrapolate short run price trends by ignoring supply and demand feedbacks. Forecast long-run average price (2020-2030) depends on: • income effect (rising demand of China, India, etc.) • price effect on demand (higher prices reduce demand) • price effect on supply (higher prices drive substitutes) Jaccard-Simon Fraser University

12. Environment Resources Economy Wastes Risks of environmental harm from wastes and activities Jaccard-Simon Fraser University

13. Focus on local environmental risks from wastes & activity Environment Resources Local wastes Economy Global wastes Jaccard-Simon Fraser University

14. Tar sands: an example of local environmental risk “Temporary” land alienation (multiple decades) “Permanent” land alienation leading to loss of natural habitat – possible loss of biodiversity, reduction of biological activity, disruption of fluvial-geological processes. Gradual dispersion of toxins into water and soils. Risk of extreme events – failure of settling ponds, pipeline rupture, major wildlife incident, major fire, etc. Jaccard-Simon Fraser University

15. Focus on global environmental risks from wastes & activity Environment Resources Local wastes Economy Global wastes Jaccard-Simon Fraser University

16. Fossil fuels and global environmental risk Combustion of fossil fuels increases greenhouse gases in atmosphere. (Includes tar sands production and eventual use of resulting fossil fuel products.) Higher greenhouse gas concentrations to cause rising temperatures and various related impacts. Jaccard-Simon Fraser University

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18. Climate economics Abatement Costs GDP in 2050 is 75% greater instead of 80% Energy costs in 2050 perhaps 30% higher than otherwise would be. Energy costs in typical household budget increase from 6% today to 8% by 2050. Do Nothing Costs Character of impacts Biodiversity loss with higher temp. Extreme weather events (drought, hurricane, heat wave) Ocean acidification Disease surprises Greater floods and coastal instability related to rising oceans Timing, magnitude and GDP cost Highly uncertain, but evidence we underestimate risks of extreme outcomes In 2050 – 20% of GDP lost? 50%? In 2100 – possibly catastrophic? Jaccard-Simon Fraser University

19. In spite of recognizing our threat to the climate, and committing to action decades ago, why have humans failed to reduce GHG emissions? Jaccard-Simon Fraser University

20. Climate effort failure vs other environmental “successes” • Past “successes” addressing environmental threats • Acid emissions, smog creating emissions, ozone-depleting emissions, lead emissions, etc. • Yet climate policy failure now approaching three decades • 1980s – rising awareness led to 1988 G7 commitment, • 1990s – international negotiations to 1997 Kyoto commitment • 2000s – heightened awareness (Al Gore, IPCC, Stern) led to uncoordinated, unilateral efforts but no slowing of global emissions. • 2010s - ? • Do climate-altering emissions present a more difficult problem? • Mostly fossil fuel related emissions – but so too acid and smog emissions • Requires global response – but so too ozone-depleting emissions Jaccard-Simon Fraser University

21. Possible reasons for our climate ineffectiveness • Relatively high “start” cost / risk of CO2-free energy options • Carbon capture and storage expensive and uncertain • Most renewables require very expensive energy storage • Nuclear poses big risk to environment and global peace • Some countries depend heavily on fossil fuels for development • Countries rich in oil resources (Middle East, Nigeria, Indonesia, Mexico, Russia, etc.) • Countries rich in coal resources (China, India, US, Russia, etc.) • Bad luck (given global importance of US) • Election of George W. Bush in 2000 and 2004 • - gave time for fossil fuel and anti-government lobbies to organize and campaign • Financial crisis and health insurance occupy Obama since election • Increasingly polarized and biased view of the climate risk • 1997 52% of Democrats and 48% of Republicans • 2008 76% of Democrats and 42% of Republicans (worse today?) Jaccard-Simon Fraser University

22. Our current global (and national) commitment is to prevent human-caused temperature increase from exceeding 2° C. How can we know if our actions today are on that path? Jaccard-Simon Fraser University

23. GHG atmos. concentrations and likely ave. temp. increase by 2100 • Source of confusion • CO2 e = CO2 + methane + nitrous oxide + others • Scientists contemplate 4C beyond 2100 www.eci.ox.ac.uk/4degrees Source: Hamilton, 2009 and Anderson & Bows, 2009 Jaccard-Simon Fraser University

24. How do we reach these targets? • Model comparison with five energy-economy models (EMF, IPCC) • Business as usual = no climate policy; start date of 2000 • 3 CO2e stabilisation targets: 550ppm, 450ppm (=350CO2), 400ppm Falling global emissions before 2020 550 ppm CO2e target needs 50% global drop by 2050: rich countries by 75-85% Jaccard-Simon Fraser University

25. Current world energy path Next 50 years? CO2-free =15% CO2 emitting = 85% Jaccard-Simon Fraser University

26. Share of “CO2e – free” energy and CO2e concentrations Only possible if all energy investment is CO2-free from today CO2e-free share up from 15% to 60% in just 20 years – impossible. CO2-free share = biomass + other renewables + nuclear + fossil fuels with CCS (15% in 2010) =350 CO2 Source: Nakicenovic Jaccard-Simon Fraser University

27. Truth testing our politicians • Canadian commitment – 65% reduction from today by 2050 as part of a global effort. • - path to 550 ppm CO2e requires other developed countries to reduce 75-85% and developing countries 40% from today • Meanwhile, the Canadian government aggressively promotes major oil sands expansion, including pipelines like Keystone to the US and Gateway to the west coast. • Is the government’s action consistent with its 2050 promise? • Independent researchers study this in detail, e.g., study at MIT modeled Canada’s 2050 target and the global target of 550 ppm CO2e by 2100 – including implications for oil sands. Jaccard-Simon Fraser University

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29. Achieving 550 ppm CO2e MIT modeling GHG pricing policy Global emissions with no policy Global emissions - 50% drop from today by 2050 USA, Canada & other developed countries: falling immediately Source: Chan et al, MIT 2010 Jaccard-Simon Fraser University

30. Canadian advisory body confirms MIT study - NRTEE Emissions must fall today to reach targets Canadian government targets Source: National Roundtable on Environment & Economy, 2009 Jaccard-Simon Fraser University

31. Energy system evolution to 2050 to achieve 550 ppm CO2e Electricity generation - 90% CO2-free by 2050 in developed countries, 60% in developing (renewables, fossil fuels with carbon capture and storage, nuclear). Buildings - 90% CO2-free by 2050 in developed countries, 60% in developing (electric-driven heat pumps, passive solar heating and cooling, biofuels, photovoltaics, solar hot water) Vehicles - 100% CO2-free by 2050 in developed countries, 80% in developing (electric, biofuel, hydrogen) Thus, global oil demand falls. Instead of rising, oil price stabilizes. Higher cost / higher emission oil unprofitable under reduced oil demand and CO2e reduction policies. Jaccard-Simon Fraser University

32. World oil prices: 550 ppm CO2e target World oil prices rise under business-as-usual World oil prices stay at today’s levels with global climate policy Source: Chan et al, MIT 2010 Jaccard-Simon Fraser University

33. Oil sands under 50% global CO2e reduction to 2050 2010-2040, higher cost / higher emission oil unprofitable under reduced oil demand and CO2e reduction policies (regulations or $100 /tCO2 charge by 2020, $200 by 2035). Thus, investments in oil sands production and pipelines today are inconsistent with Canada’s promise to reduce emissions 65% by 2050 and with global commitment to 550 ppm CO2e by 2100. To fulfill promises, oil sands must decline, not expand. “The main reason for the demise of the oil sands industry with global CO2 policy is that the demand for oil worldwide drops substantially. … there is so little demand for petroleum products which still emit CO2 when used that it can be met with conventional oil resources that entail less CO2 emissions in the production process.” - Chan et al., MIT, 2010 Jaccard-Simon Fraser University

34. Acting on environmental risk = reduction of one scarcity risk ? Environment Resources Local wastes Economy Global wastes Jaccard-Simon Fraser University

35. Obvious conclusion from independent studies World not on the path to 450 CO2e (=350 CO2). World not on the path to 550 CO2e. Canada not on a path to 65% reduction by 2050. (Oil sands + pipeline investments = government not telling truth.) World not on the path to 650 CO2e (Copenhagen commitments) Canada / world on a path leading beyond 800 ppm CO2e by 2100. This world path has significant damages from extreme weather, disease, ecosystem destruction, sea level rise and ocean acidification – to be experienced by people who are alive today. Jaccard-Simon Fraser University

36. If it is clear that we are on a path to exceed a 2° C change, what policies and political strategies should concerned citizens pursue? Jaccard-Simon Fraser University

37. If governments are seriously considering effective policy • Policy must make emitting costly or prohibit it (or the technologies and fuels) in whatever way is most politically feasible. • Economists insist on emissions pricing for economic efficiency (ie, carbon tax and/or cap-and-trade). But, • pricing policies are extremely difficult politically • policies for previous successes with acid, smog, ozone-depleting, and lead emissions were almost entirely from regulations on emissions, technologies, fuels, etc. • regulations can be designed for economic efficiency (see regulatory designs in Sustainable Fossil Fuels – Jaccard, 2005) Jaccard-Simon Fraser University

38. If governments are not serious (i.e., not telling the truth) • First, we must understand that most voluntary initiatives have little effect – includes carbon neutrality, green consumerism, corporate social responsibility, energy efficiency as savior. We must have effective policies from government – pricing and/or regulations. • Leads to the obvious question: What is your moral duty as a citizen if independent evidence consistently shows your government is not telling the truth and that the implications are disastrous? • Public relations / social networking campaigns / boycotts – focus on popular culture, Hollywood, etc. • Legal action – 100 US coal plants delayed or postponed in past 5 years. • Non-violent civil actions (350.org, Greenpeace, VTACC) • Sit-ins at government chambers and offices • Pickets at elected officials’ constituency offices • Blockades of fossil fuel facilities – coal plants, oil pipelines, oil sands • Blockades of downtown parking lots to hinder high-emission vehicles Jaccard-Simon Fraser University