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,

https://www.cell.com/joule/fulltext/S2542-4351(21)00489-X

Comments

Popular posts from this blog

Energy maps and calculators

Carbon Capture, Utilization and Storage

Footprints and Offsets