Greenhouse gas reduction should be based on consumption rather than production

Analysed in the context of cost and availability of alternative large-scale power generation technologies

Vincent Ashikordi

25 August 2012


As global climate change continues to pose a serious threat and “with firm evidence of shifting climate patterns, melting ice-caps and rising sea levels” (National Energy Foundation 2006), governments around the world are now required to reduce greenhouse gas (GHG) emissions. One of the challenges facing policy makers is how greenhouse gas emissions can be quantified and accounted for so that measures can be put in place to stabilise emissions and monitor progress (Boitier 2012). With the world’s economies integrating and with developing nations now making significant progress towards industrialisation, it has become imperative to have a streamlined monitoring framework and “an immediate concerted global effort to reduce GHG emissions” (Enkvist et al. 2007).

The Kyoto Protocol set “legally binding targets” (Hediger et al. 2005), requiring committed countries to reduce GHG emissions at an average of 5% below 1990 levels between 2008 and 2012. A criticism of this framework is that GHG inventories are based on production¹ — which does not account for carbon leakage, GHG imports and exports, international transportation, and carbon capture and storage (Peters & Hertwich 2007). Experts now call for post-Kyoto protocols to place greater emphasis on consumption-based GHG inventories to ensure “long-term stabilisation of GHG concentrations” (Peters & Hertwich 2007).

As the global economy continues to slow down, a challenge for committed countries is sustainably meeting the immediate energy demand needed for economic recovery. Production-based GHG accounting requires committed countries to “reduce energy-intensive activities and invest in clean technologies” (Hediger et al. 2005). This has the potential to slow down economic recovery in the short-term and put committed countries under pressure to make drastic infrastructural and costly changes.

With alternative large scale power generation technologies still in the fledgling stage in certain parts of the industrialised world when compared with the established existing power generation technologies, there is no clear indication that the currently available alternative power sources such as solar, biomass, geothermal, tide and wind can be solely relied upon for power generation in the short-term.

Although alternative large-scale power generation technologies are now more available when compared to 1973 figures², for instance, coal, natural gas, nuclear and oil still remain the main sources of power for many homes in many of the countries committed to the Kyoto Protocol. In the 2010 International Energy Agency Key World Energy Statistics report, hydropower, which is capable of generating electricity on a large scale, was the only exception in the renewable category, accounting for over 15% of the total global power generation in 2008. Hydropower, though clean, the cheapest³ and one of the most efficient⁴ means of generating electricity (NEED 2011), is unattractive to investors in the private sector due to high upfront construction costs, “long payback periods” (Donnelly et al. nd), expensive negative environmental and socio-economic impacts and the lengthy and expensive licensing and re-licensing processes associated with large-scale hydropower plants (NEED 2011).

Time is a critical issue when commissioning new large-scale power projects. In the United States, for example, it takes between 3 to 7 years to obtain a licence to build a hydropower plant (NEED 2011). In the McKinsey & Company 2009 Global Greenhouse Gas Abatement Cost Curve report, it was estimated that delaying GHG abatement by 10 years would mean missing the 2 degrees Celsius target for 2030.

Renewable alternative power generation technologies such as wind and solar have little or no negative impact on the environment but are intermittent and are not readily available when compared to coal and nuclear, which can deliver energy in vast amounts and on demand (EPRI 2010).

To be able to meet emissions targets while meeting energy demand in a manner that is sustainable, affordable, and reliable, it is imperative to employ a “diverse array of technologies” (EPRI 2010) together with consumption-based GHG accounting.

Emphasis could be placed on sustainable use of energy by aiming at reducing consumption, and working towards efficient power generation and transmission. Monitoring consumption could help reduce demand, in turn alleviating the pressure on electricity grids and power stations. If demand is managed via “peak time electricity pricing and load management” (Morey 2006), the urgent need for power supply, leading to the burning of more fossil fuels could be abated. GHG abatement technologies such as carbon sequestration⁵ could be used to clean up the existing established power generation technologies/systems while alternative technologies are developed and made more reliable and cost-effective.


Endnotes

¹ According to Peters & Hertwich, basing GHG reduction on production pays more attention to GHG emissions within a country’s geographic territory rather than on its economic activities. For example, if country A generates power well above national demand and decides to sell the excess to country B, country A’s GHG emissions would be calculated based on total power generated within its territory without accounting for its net export of electricity — the argument is that with consumption based GHG accounting, GHG emissions attributable to the imported electricity should be borne by country B.

² In 2008, renewable sources other than hydropower accounted for 2.8% of the world's electricity generation compared to the 1973 figure which was 0.6%. Source: International Energy Agency, 2010. Key World Energy Statistics, p. 24.

³ In the U.S., a typical hydropower plant generates electricity at a cost of less than 1 cent per kWh compared to coal and nuclear which generate electricity at a cost of 4 and 2 cents respectively. Source: The NEED Project, 2011. Hydropower, p. 26.

⁴ According to experts, hydropower is the most efficient way to generate electricity. It is estimated that modern hydropower turbines have a 90% electricity conversion efficiency. Source: Energy and Resources Group, Renewable and Appropriate Energy Laboratory (RAEL), University of California, Berkeley, USA. Renewable Energy Sources, p. 40.

⁵ According the IPCC, Carbon sequestration is the capture of substances that contain carbon such as CO2 in a reservoir.


References

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Donnelly, C., Carias, A., Morgenroth, M., Ali, M., Bridgeman, A., Wood, N. An assessment of the life cycle costs and GHG emissions for alternative generation technologies, p. 2, [online] Available at <http://www.worldenergy.org/documents/congresspapers/482.pdf> [Accessed 20 August 2012]

Electric Power Research Institute, 2010. Choosing electricity generation technologies, [online] Available at <http://mydocs.epri.com/docs/CorporateDocuments/SectorPages/GEN/ReferenceCard.pdf> [Accessed 23 August 2012]

Enkvist, P., Nauclér, T., Rosander, J., 2007. A cost curve for greenhouse gas reduction, p. 1, [online] Available at <http://www.epa.gov/oar/caaac/coaltech/2007_05_mckinsey.pdf> [Accessed 19 August 2012]

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