THE CONTRIBUTION OF CCS

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1 THE CONTRIBUTION OF CCS Expert Workshop on Financing Carbon Capture and Storage (CCS) May 28, 2008 New Yorker Hotel New York Jonathan Pershing World Resources Institute p//

2 Conclusions First Climate science is robust: it indicates a need for urgent and very large scale change A portfolio of actions will be necessary: we do not have the luxury of dismissing any promising mitigation options CCS will be part of the policy set: overcoming challenges of cost, gaining public acceptability, and scaling globally ll will be critical i Policy will be needed to meet these challenges

3 Climate science is robust

4 Change in GHG Concentrations Source: IPCC, AR4 Source: IPCC, 2007

5 The global energy system Source: PNNL, GTSP

6 U.S. Carbon Dioxide Emissions (Million Metric Tons) Coal- Fueled Power Plants Electric Power Total U.S. CO2 Emissions ,944 2,375 5, , ,677 6, ,927 3,338 7,950 Source: USEIA, Reference Case, 2007

7 Projected future temperature Source: IPCC, 2007

8 Projections of Surface Temperature Source: IPCC, AR4, 2007

9 We are on the A1 FI Path: Temperature in 2080 Source: UK Hadley Center, 2007 Source: UK Hadley Center, 2007

10 Drought Expectations The Palmer Index is most effective in determining long term drought a matter of several months and is not as good with short-term forecasts (a matter of weeks). It uses a 0 as normal, and drought is shown in terms of minus numbers; for example, minus 2 is moderate drought, minus 3 is severe drought, and minus 4 is extreme drought.

11 Change in Cereal Production (2X CO2) Source: Stern Report, 2006

12 Food Riots West Bengal Haiti Somalia Zimbabwe The World Bank estimates world food prices have risen 80 percent over the last three years and that at least thirty-three countries face social unrest as a result. In recent weeks, food riots have erupted in Haiti, Niger, Senegal, Cameroon and Burkina Faso; protests have flared in Morocco, Mauritania, Ivory Coast, Egypt, Mexico and Yemen.

people by 2050. Some areas of Europe are projected to lose up to 60% of their species by 2080.

13 Risks from Global Warming Water shortages harm up to 250 million in Africa by 2020 Certain agriculture yields in Africa may fall 50% by 2050 Decreased availability of fresh water in Asia might effect more than a billion people by Some areas of Europe are projected to lose up to 60% of their species by The Americas will see reduced snowpacks, leading to water supply problems by 2020 Source: Parry (2001), and IPCC WG 2, April

14 Targets: The IPCC CO2 Concentration at Stabilisation (2005=379 ppm) CO2-equivalent Concentration at Stabilization (includes aerosols; 2005=375 ppm) Year in which global emissions peak Global average temperature above preequilibrium Change in global CO2 emissions in 2050 (% of 2000 emissions) ºC to ºC -30 to ºC +25 to +85 Source: IPCC AR4

15 A portfolio of actions will be necessary

Technology Opportunities Today s Technology Coal

Wind Actions that t Provide 1 Gigaton/year of

with zero-emission power plants Install 3,500

plants Deploy 1 billion cars at 40 mpg instead of

16 Technology Opportunities Today s Technology Coal Plants Geologic Sequestration Nuclear Efficiency Wind Actions that t Provide 1 Gigaton/year of Mitigation Replace1,000 conventional 500- MW plants with zero-emission power plants Install 3,500 Sleipners, at 1 Mt of CO 2 per year Build GW plants Deploy 1 billion cars at 40 mpg instead of 20 mpg Install 750 x current Source: Pacala and Socolow, Science, 2004

17 Filling the Wedges 650 ppm 550 ppm 450 ppm Source: van Vuuren, den Elzen, Lucas, et al. 2006

EU and US Abatement Curves Cost of abatement EUR/tCO 2 e 40 30 20 10 0-10 0-20 -30-40 -50-60 -70-80 -90-100 -110-120 -130-140 -150-160 1 Industrial feedstock substitution Livestock/soils Forestation

Nuclear Air Conditioning Lighting systems Fuel efficient comm ercial vehicl Insulation es improvement s Soil 2030 Coal-to-Avoigas shift deforestation CCS; Asia coal Waste retrofi t 2 3 4 5 6 7 8 9 10

18 EU and US Abatement Curves Cost of abatement EUR/tCO 2 e Industrial feedstock substitution Livestock/soils Forestation Cellulose CCS EOR; ethanol Wind; New coal Stand-by losses low Forestation pen. Nuclear Air Conditioning Lighting systems Fuel efficient comm ercial vehicl Insulation es improvement s Soil 2030 Coal-to-Avoigas shift deforestation CCS; Asia coal Waste retrofi t Sugarcane Industrial Avoided Industrial biofuel non-coco-firing CCS; deforestation CCS 2 Biodiesel new coal biomass America Fuel efficient vehicles Abatement Industrial motor GtCO 2 Water heating systems e/year ~27 Gton CO2e below 40 EUR/ton (-46% vs. BAU) ~7 Gton of negative and zero cost opportunities Source: McKinsey, 2007

19 A successful global CCS regime requires overcoming challenges: Cost Scale Public acceptability

20 Estimated Costs of Electricity ($/MWh) Pulverized Coal w/o Capture Pulverized Coal w Capture IGCC w/o Capture Rubin et EPRI MIT S&P al *-96** IGCC w Capture *-79** * Assuming EOR storage **Assuming saline aquifer storage

21 Estimated Costs of CO 2 Avoided ($/ton CO 2 ) EPRI MIT S&P Rubin et al Pulverized Coal *-61** IGCC * 32** NGCC *-72** * Assuming EOR storage **Assuming saline aquifer storage

22 Suitable CCS sites are global Source: Jim Dooley, PNNL, Univ Maryland

23 with large storage potential Source: PNNL, GTSP

24 CO2-EOR Projects Sequestering US U.S. Anthropogenic CO2 Source: Pew Climate Center, 2007

25 Public acceptability

26 WRI Guidelines Inform emerging regulatory and best practice development Transparent forum, diverse stakeholders Build consensus on key issues and develop a comprehensive set of CCS guidelines Provide context and rationale behind each recommendation Public acceptability Web site:

27 WRI CCS Guiding Principles 1. Protect human health and safety 2. Protect ecosystems 3. Protect t underground d sources of drinking water and other natural resources 4. Ensure market confidence in emissions i reductions through proper GHG accounting 5. Facilitate cost-effective, timely deployment

28 Public Acceptance: Capture, Transport Capture: Existing power plant regulation likely adequate; may require additional oversight (and monitoring) for inclusion on trading regimes Transport: existing pipeline regulation Issues: eminent domain, classification of, CO2, ownership

29 Public Acceptance: Storage Leakage Issues: Groundwater contamination; induced seismicity; catastrophic or slow release; property damage Manageable through careful siting, long term monitoring program Long term liability During operations and closure phase and over longer term (>30-50 years) Likely to require government assumption of liability (and therefore considerable confidence in robustness of reservoir)

30 Policy will be needed to meet these Policy will be needed to meet these challenges

31 CCS Support Programs United States DOE (Regional Partnerships, R&D, Futuregen, CSLF) EPACT (Tax Guarantees) State Incentives (e.g. NY, Illinois, Wyoming) Federal Legislation Europe EU Directive on CCS Consideration of inclusion of CCS in the EU- ETS - Incentives by member states China R&D platforms: CSLF UK China near Zero Emissions Coal Project Greengen Project Shenhua CTL plant

32 Congressional Action

33 Lieberman Warner Bill: Allocations (As reported out from Senate EPW Jan 23, 2008) 100.0% 90.0% Note: Dashed color: direct allowances; Solid colors: Auction revenues Transportation Technology (vehicles and fuels) 80.0% Renewable and Low-Carbon Power Generation 70.0% 60.0% Advanced Coal Technology International Worker Training & "Green Collar" Jobs 50.0% Carbon Capture and Storage Bonus Pool Wildlife & Natural Resources 40.0% 30.0% 20.0% Early Action CCS Consumers (auction) Consumers (via energy distribution companies) 10.0% 0.0% Regulated Industry Sinks & methane bonus reductions States and Tribes Note: revised bill has ~1.75 percent of allowances through 2030 Source: National Wildlife Federation

34 Conclusions Reprised Climate science is robust: it indicates a need for urgent and very large scale change A portfolio of actions will be necessary: we do not have the luxury of dismissing any promising mitigation options CCS will be part of the policy set: overcoming challenges of cost, gaining public acceptability, and scaling globally ll will be critical i Policy will be needed to meet these challenges

35 Jonathan Pershing World Resources Institute

NAMAs: Sector Approaches to a Post-2012 Agreement. Workshop on Where development meets climate The Hague, The Netherlands September 2008

NAMAs: Sector Approaches to a Post-2012 Agreement Workshop on Where development meets climate The Hague, The Netherlands September 2008 Key Messages Climate change will create enormous damages, particularly