Getting Real on Climate Change

Transcription

1 Getting Real on Climate Change Eleventh Biennial Asilomar Conference on Transportation and Energy Policy August 22, 2007 Peter Schwartz Chairman, Global Business Network TMN-059 /

2 The Problem The world s economic and geophysical systems have enormous momentum, and only great force over a long time can change its direction significantly. Because it is perceived that climate change is very long term, the pressure to act is inadequate. Therefore, some climate change is going to continue to happen and worsen. And it is very urgent to take aggressive action to reduce human-induced climate change. TMN-059 /

3 Economic Realities The world is getting richer More subsistence high impact societies TMN-059 /

4 Relative increase in Real GDP vs The world is growing richer 5 Growth in Total Global GDP: In 35 years, global wealth increased 3.5x Source: IMF World Economic Outlook, 2007 TMN-059 /

5 Relative increase in Real GDP vs The world is growing richer Change in Global GDP per capita: In 35 years, wealth per capita doubled Source: IMF World Economic Outlook, 2007 TMN-059 /

6 Size matters History matters Density matters Geographic Realities TMN-059 /

7 Population (Billions) Which countries are growing/shrinking? Population Size of Major World Areas (2000, 2050) 3 +64% % +49% +16% 1 +58% -13% % N. America Latin America Africa Europe India China Rest of Asia Note: Medium Scenario Projections Source: UN: Long-range World Population Projections TMN-059 /

8 Cultural Realities People want a higher standard of living, especially those at the bottom Movements to simplify have not taken hold Even gains are often taken as amenity TMN-059 /

9 Not All Hybrids Are Created Equal Toyota Prius Lexus RX400H 60 mpg city* 51 mpg highway* 32 mpg city* 27 mpg highway* Note: * EPA rating TMN-059 /

10 Transportation Realities MORE MORE MORE MORE. More and bigger cars, more miles More transit More freight More flying TMN-059 /

11 Converging Technology Markets Today electricity and transport fuels live in very separate worlds, with little interconnection Over time, these two markets may converge as transport comes to rely on electricity For charging vehicle batteries For producing hydrogen as a vehicle fuel TMN-059 /

12 Best Transportation Case Movement toward an all electric ground transport environment to concentrate pollution control batteries or some form of hydrogen Hydrocarbons for hard-to-replace applications like aviation fuel, even then perhaps better biofuels TMN-059 /

13 Technology Realities All the supply technologies are needed, but efficiency has the highest near term leverage All technologies have major issues All supply improvements will be slow to have major impacts TMN-059 /

14 Technology Options 1. Efficiency 2. Hybrids Vehicles 3. Electrics 4. Biofuels 5. Hydrogen Electricity 6. Clean coal 7. Renewables 8. Nuclear Source: The Economist TMN-059 /

15 Energy Realities: The real surprise-free scenario High-demand growth, even with major efficiency improvements Higher and volatile prices Alternatives to conventional hydrocarbons are slow to scale up More hydrocarbons, especially conventional coal TMN-059 /

16 World Oil Price Scenarios Three theories on oil supply $/bl World Oil Prices SUPER SPIKE MAXWELL CERA TMN-059 /

17 Quadrillion Btu The Real Surprise-Free Scenario: Much More Coal World Energy Consumption By Type Oil Natural Gas Coal Nuclear Other TMN-059 /

18 GW 1600 BAU Means Carbon Lock-In IEA New Coal Forecast BAU CCS schedule won't produce usable results before Result: 1205 out of 1391 GW of forecast new coal plants will likely be built with conventional coal technology. CCS? Conventional Coal year New Coal--BAU CCS Coal--BAU TMN-059 /

19 New Coal Plant Emissions Equal All Historic Coal CO % of remaining budget for 450 ppm Total Coal Billion tonnes Carbon New Coal Plants Lifetime Emissions 0 Source: ORNL, CDIAC; IEA, WEO 2004 TMN-059 /

20 Climate Realities Climate change is underway now not an uncertain, distant prospect Increasing frequency extreme events High impact on vulnerable societies TMN-059 /

21 Abrupt Climate Change TMN-059 /

22 The Climate Will Be increasingly Variable and Extreme TMN-059 /

23 The Climate Will Be increasingly Variable and Extreme TMN-059 /

24 The Climate Will Be increasingly Variable and Extreme TMN-059 /

25 Policy Realities Like the climate, policy is chaotic, inconsistent and variable Policy needs to be coherent, effective and global TMN-059 /

26 Big Surprises 1. Carbon not an issue Climate change not an issue short-term cooling Something else implicated CO 2 is good for you? 2. Technology surprise clean cheap energy 3. Nuclear revival TMN-059 /

27 Where Are We Headed? No real consensus on reality and the need to act no policy consensus Increasing wealth across many industries Slow implementation of new energy technologies Continued growth in ghgs carbon caps don t really cap Increasing climate change TMN-059 /

28 Where Should We Be Headed? Increasing wealth based on accelerating technological change toward clean technologies Perceived urgency of climate change and the need to act...strong policy consensus Broad and rapid implementation of many new energy technologies Decoupling ghgs and economic growth Slowing climate change TMN-059 /

29 What Can We Do? Improve the science of climate change Improve the performance of the technology options Move toward all electric ground transport Regulate downward ghg emissions, create a global-carbon pricing system and rapidly raise the price of carbon Create a global EPA TMN-059 /