The Carbon Challenge
This analysis (from IEA, Green and others) shows global energy growth by 2050 under different plausible growth rates. To achieve zero CO2 emissions by 2050, we will have to build an energy infrastructure that is two to three times the current infrastructure, but has zero carbon emissions.
Substantial and rapid low carbon technology innovation is needed in the next two decades if the world is to have a plausible chance of limiting the most serious damage from climate change. Even if it occurs, carbon pricing alone—whether through a cap and trade system or a carbon tax—will not be sufficient to drive the essential expansion of carbon-free energy capacity in the next several decades.
CATF’s Low Carbon Technology Project promotes invention, business cooperation, and policy change to bring innovative low carbon energy technology into widespread application as soon as possible:
In the last five years, CATF has consulted with more than 100 experts in technology, finance, and government to answer the question: “What would need to change in U.S. and global policy and practice to promote the necessary innovation to achieve the scale of low carbon energy development needed by 2050?”
It is clear that the current U.S. technology innovation system is not doing the job, and is consistently weakened and sidetracked by the lack of a “customer” for these technologies. Adequate financing for the first commercial demonstration projects, such as innovative coal gasification systems, is simply not available. Other technologies—including the innovative nuclear power technologies such as advanced small modular reactors—have very long lead times (decades plus) before commercial application can be achieved and, as a result, the high development and licensing costs deter potential investors. In such market circumstances there is a strong argument for government startup support. But federal energy innovation policy focuses primarily on basic research and early stage development. Important technologies, such as advanced post combustion CO2 capture or underground coal gasification with CCS are neglected under current federal RD&D policies and spending patterns. Meanwhile, federal funding of demonstration projects for large, advanced low carbon technologies is simply insufficient to move technologies such as commercial scale post-combustion CO2 capture, advanced IGCC integrated with CCS, or advanced nuclear reactor designs to market. Which demonstration projects are chosen for funding is a decision often more heavily influenced by Congressional politics, not long-term strategy. The federal government currently spends about $2 billion on low carbon energy innovation. By contrast, the Department of Defense spends about $80 billion on research and development alone.
Unlike innovation in the field of information technology, low carbon technology faces stiff commodity price competition and little opportunity for produce differentiation (an illustrative comparison might be between an iPod or PC and electrons), very risky capital investment requirements, and entrenched incumbents. Low carbon energy innovation will not be—cannot be—another Apollo or Manhattan project, which were focused on a single customer, did not require market adaptation or scale-up, and enjoyed nearly unlimited budgets.
CO2 Reductions: The Technology Gap
MIT (Lester and Finan, 2009) analysis shows the amount of additional carbon-free energy from various sources (green) needed by 2050, compared to amount from these sources today (blue), in order to reduce U.S. power sector CO2 emissions 80% from today’s levels. This assumes energy efficiency is increased 3% annually in the U.S., a rate 50% faster than recent trends.
In September 2009, CATF released a report, co-authored with the Center for Science, Policy, and Outcomes (CSPO) at Arizona State University that emphasized the need for a much stronger role of government in technology innovation and the greater potential for success through multiple approaches to the problem of how to speed up private sector adoption and application.
Some of our specific recommendations included:
- Low carbon innovation policy and development should be entrusted to multiple centers within government, not just the Department of Energy. (For example, the Department of Defense may have a significant role to play in the process.)
- There needs to be a serious focus on “first of a kind” demonstration programs for key technologies at late development and pre-commercial stages.
- We need a sustained and well-funded research, development, and deployment (RD&D) effort akin to the Cold War defense technology program.
- Ultimately, the government may need to serve as the “customer” for low carbon technology in large-scale applications, much as it provides for public works projects.
In June 2010, CATF and CSPO released a second report, which synthesized the CATF/CSPO work and that of many other research teams at MIT, Harvard, the National Bureau of Economic Research and the Brookings Institution. There was remarkable convergence of conclusions — all suggesting the need a much more aggressive and comprehensive approach to energy innovation, including large scale "learning by doing" outside the lab, where most of current US innovation policy focusses.
Innovation Policies
CATF is working with CSPO and the National Commission on Energy Policy (NCEP) to develop comprehensive, implementable innovation policies for public policy makers and the private sector. Recommendations will be updated and expanded on an ongoing basis.
In one specific area, low carbon coal, CATF has issued Coal Without Carbon, a detailed report on pathways forward for government RD&D support for advanced coal/CCS technology. We are working with government and industry to implement this roadmap.
Direct Facilitation of Technology Innovation
CATF works directly with technology companies, investors, and others to bring innovation to markets. Examples of this work include:
- CATF’s Coal Transition Project has facilitated numerous technology company and investor connections that have resulted in projects moving forward in the United States. The Texas Clean Energy Project is ramping up plans to build an innovative low carbon power facility in Texas, capable of achieving a lower carbon profile than a natural gas unit. Here, CATF introduced the developer to the core technology and provided project advice and support.
- CATF's Asia Clean Energy Project, based in Beijing, has facilitated numerous business joint ventures involving Chinese and U.S. companies. These ventures advance low carbon technologies in both countries. Emphasis thus far has focused on advanced coal technology, with carbon capture and storage.
Providing Information on Technology to Policymakers, Industry, Investors and the Media
Building on our internal expertise as well as contacts in academia, industry, and the investment community, CATF is constantly and thoroughly assessing energy technologies. We want to ensure that policymakers are fully informed of the technology options available, in an environment free of hype and based on sound, objective data and analysis regarding the physical practicality, scalability, environmental impacts, and cost of the various options. CATF is working with strategic partners to launch a more transparent information platform that would allow for the assessment and comparisons of key technologies.
CATF has conducted several invitation-only seminars for key investors and technology players to assess various low carbon technologies, as well as the economic and policy environment in which they need to operate.
Some scientists are beginning to discuss geo-engineering ideas to combat climate change.
