Climate Mitigation through Supply and Demand
Three of the papers cited below address aspects of climate change mitigation in relation to supply and demand. A conference paper by Clora and Yu (2021) concentrates on decarbonizing the European economy, which will require interventions on both the supply-side and the demand-side in many sectors. As examples of action on climate change, the authors list the shift from fossil fuels to renewable energy, changes to agricultural production systems, more energy-efficient buildings and production processes, and the movement towards low carbon diets and greener modes of transport. They point out that these actions change both demand and supply, and patterns of production and consumption between different sectors and countries. This can have the effect of altering trade flows and the carbon emissions which traded goods embody. The term carbon leakage is used to describe the way in which decreased carbon emissions in one country may lead to rising emissions elsewhere. The authors use a modelling approach to quantify and compare the effects of a range of EU decarbonisation scenarios on trade flows and carbon leakage.
Modelling
involves the core areas of lifestyle choices, buildings, transport,
manufacturing, agriculture and land use, and the energy system. Different
scenarios can be represented by assuming variations in factors such as consumer
preferences, cost structures and efficiency improvements. More specifically,
levels of ambition toward achieving climate mitigation can be represented in
different sectors. Four levels of ambition can be used in the model, ranging
from the lowest which merely continues present trends to the highest which aims
for transformational change: these levels can be applied to the demand side
sectors of travel, homes, diet and consumption, and to the supply side sectors
of transport, buildings, manufacture, power, land and food.
Detailed
results follow, presenting quantitative relationships between EU plus the UK
and Switzerland decarbonisation scenarios and Europe’s trade flows and carbon
leakage. These results are summarised in three concluding statements. The first
is that high uniform decarbonisation ambitions on both demand-side and
supply-side would lead to substantial reductions of GHG emissions in Europe,
but would also reduce its trade balance with the rest of the world, and cause
substantial carbon leakage if similar decarbonisation did not also take place
elsewhere. The second conclusion is that different levels of ambition on supply
and demand side can modify the situation; unchanged ambition on the supply side
combined with increasing ambition on the demand side can improve the trade
balance while still achieving large reductions in emissions. The first and
second conclusions taken together show the need to coordinate supply and demand
mitigation. The third conclusion is that a worsening trade balance and a rising
carbon leakage rate are associated, as are reductions in European GHG emissions
and rising carbon leakage rates. This leads the authors to call for the EU, UK
and Switzerland to engage with the rest of the world in efforts to decarbonise.
Creutzig et
al. (2021) are concerned with the effects of demand-side solutions on human
well-being. They point out that mitigation solutions in general tend to be evaluated
from the viewpoints of cost and greenhouse gas reduction, without regard to
their implications for society. Since in their view it will not be possible for
low-carbon technologies to meet the projected energy demands of 2050,
demand-side reductions will be necessary, and it is therefore important to encourage
those demand-side measures which are consistent with improved well-being. Existing
evaluations of demand-side mitigation options are unsatisfactory in that monetary
valuation does not fully reflect their impact on the well-being of end users
and citizens; those options which have precise costs attached tend to be
preferentially evaluated; and measures of income and expenditure are often seen
as representing well-being, whereas they reflect only some of its multiple
dimensions. The authors then try to assess the potential of demand-side
mitigation options to address climate change, and their implications for
well-being.
Defining and
measuring well-being is not without problems. Objective approaches to
well-being have been described as using proxies such as income, literacy, and
life expectancy, whereas subjective approaches focus on how life is perceived
and experienced by individuals (Das et al., 2020). The issue is discussed in
some detail by Creutzig et al., who acknowledge that differing concepts of
well-being have diverging implications for climate change: however the
discussion here will be limited to the demand-side mitigation options, which their
analysis leads them to consider generally more conducive to well-being than
supply-side mitigation. The demand-side mitigations are grouped into three
categories, labelled Avoid, Shift and Improve. ‘Avoid’ denotes those mitigation
options that reduce unnecessary consumption, ‘shift’ describes the change to existing technologies and
services which are both competitive and low-carbon, and ‘improve’ refers to increasing efficiency of existing
technologies where its adoption by users is important.
‘Avoid’
options are relevant in all sectors, and reduction of food waste is cited as a
prime example. Design of products for longer life may avoid energy use; teleworking
can reduce the need to travel; planning which matches dwelling size to
household size reduces energy use, as does building design which optimises the
use of daylight; city planning can avoid some of the need for transport;
promotion of a sharing society can avoid some of the need for goods; the amount
of flying can be reduced by taxation of aviation fuel; and slowing transport shipping
reduces fuel needs.
‘Shift’ options
include a change of transport habits towards walking, cycling and shared pooled
mobility; movement towards flexitarian, vegetarian or vegan diets and regional,
seasonal and organic consumption; and replacing shipping transport by long-distance
train travel on appropriate routes, particularly across Eurasia.
‘Improve’
options include increasing the efficiency of building envelopes, household
appliances, and electric cars and making more efficient use of materials and
energy in industrial production. The use of control systems and digitalization
can help domestic buildings become efficient ‘smart’ homes, and the
infrastructure which supports electric vehicles offers scope for improvement.
Improved design of the propulsion systems and hulls of ships can lead to
greater efficiency. Policy interventions may be needed to implement some of
these improvements.
Not every
demand-side measure showed a positive link to well-being, but positive links greatly
outnumbered negative links. Cycling and walking, efficient buildings and
prosumer choices of renewable technologies have the widest beneficial effects
on well-being; urban and industry strategies are highly positive overall, but
they will have transient negative effects on and reshape supply-side businesses.
Shared mobility has highly beneficial effects on well-being overall but displays
negative consequences relating to security.
The highest benefits were noted in air, health and energy, with benefits
also seen in food, mobility, economic stability and water.
Jenkins et al. (2021) believe that unless the global demand for carbon-intensive
energy and products is reduced in an unprecedented way, carbon dioxide will
have to be captured and permanently stored on a scale of billions of tons annually
in order to meet Paris Agreement goals. In view of the current lack of
investment in permanent CO2 disposal they propose a progressive carbon takeback
obligation on fossil carbon producers and importers. They compare a carbon
takeback obligation (CTBO) with the use of global carbon pricing, and conclude
that the CTBO would have comparable costs but advantages in terms of governance,
speed, and controllability.
Limiting cumulative emissions of CO2 to deliver these ambitious goals will
require active CO2 capture together with geological-timescale carbon storage
(GCS) in order to reduce emissions that cannot be abated in other ways, to
remove excess CO2 from the atmosphere, and to help offset the possible release
of CO2 from natural carbon sinks as a result of climate change. GCS is expected
to be effective for 10,000 years or more, and could involve the injection of
CO2 into formations such as saline aquifers, or its incorporation into mineralized
forms on land or in the sea.
The authors look at the economic implications of a CTBO when applied as
either an alternative or as a complement to conventional climate policies.
Under such a scheme, described as “an affordable backstop climate policy”, carbon
extractors would be required to store CO2 at “a rate commensurate with ongoing
extraction”. The fraction of CO2 from fossil fuel burning that is recaptured
and stored is initially small (perhaps 1%) and progressively increases with
time: costs can therefore be low in the early stages of implementation, but by
mid-century all the CO2 produced from fossil fuels will have to be captured,
plus additional CO2 removal from the atmosphere to reduce its level. The costs
are passed on to consumers, reducing their willingness to “invest in products
containing fossil carbon”. The operation of the scheme is discussed in detail,
and estimates for the cost per tonne of CO2 are provided.
References
Clora, F.
and Yu, W., 2021, “GHG emissions, trade balance, and carbon leakage: insights
from modeling thirtyone European decarbonization pathways towards 2050”,
conference paper, online, accessed online 21 May 2022, https://www.gtap.agecon.purdue.edu/resources/download/10453.pdf
Creutzig, F.
et al., 2021, “Demand-side solutions to climate change mitigation consistent
with high levels of well-being” Nature
Climate Change, online, accessed
20 May 2022,
https://www.nature.com/articles/s41558-021-01219-y
Das, K. et
al., 2020, “Understanding subjective well-being: perspectives from psychology
and public health”, Public Health Reviews, online, accessed online 31 May 2022,
https://publichealthreviews.biomedcentral.com/articles/10.1186/s40985-020-00142-5
Jenkins, S.
et al., 2021, “Upstream decarbonization through a carbon takeback obligation:
An affordable backstop climate policy”, Joule,
summary accessed online 21 May 2022,
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