Assessing innovative national policy options and roles for CCS in a post-kyoto framework

Abstract

Abstract The highly contentious, complex negotiations over the past several years to establish a globally more-inclusive, post-Kyoto Framework illustrate the daunting complexity and diversity of interests, which had to be accommodated. Notwithstanding the many challenges, a “Copenhagen Accord” was reached at the December 2009 15th Conference of Parties (COP 15) of the United Nations Framework Convention on Climate Change (UNFCCC) held in Copenhagen, Denmark. That Accord provided the basis for subsequent delineation of the post-Kyoto Framework in 2010 at the meetings in Mexico City, Mexico. Adoption of more flexibility in the approaches nations can employ to achieve significant, verifiable emissions reductions is among the many critical and necessary accommodations made to achieve more inclusive participation from developing economies and other large economies that did not adhere to the Kyoto Protocol. Negotiations also had to address trade and national sovereignty issues as well. This flexibility is an essential recognition of national and cultural differences including differences in levels of national and sub-national economic wealth and growth, status of energy infrastructure development, and national energy resource endowments. This paper presents research findings from a project using a step-by-step methodology. The first step was defining a set of generic, guiding principles for economically efficient and effective national emissions reduction programs. These were employed to design a comprehensive portfolio of innovative national policy and technology strategies that could be adopted by large, developed economies as well as some large developing economies. A specific example is presented using the United States as the test case. The cost-effectiveness of the innovative policy and technology portfolio is assessed for the test case based on a number of effectiveness measures, including: projected economic impacts and emissions reductions, national security impacts, energy-related impacts on water use and other environmental aspects, and regional economic equity. The assessment methodology employs a Reference Case Scenario (RCS), based on the Annual Energy Outlook 2010 energy projections (AEO 2010) of the U.S. Energy Information Agency (EIA), extended through 2050. The EIA energy projections are a widely used basis for projecting future energy demand, supply, and prices in the United States. They provide a comprehensive economy-wide reference data set. Particular attention is given to the electric generation, transportation, and industrial sectors, which account for the majority of energy production, demand, and emissions. A Policy and Technology Innovations Scenario (PTIS) is constructed covering all sectors of the energy economy with special attention as described above. The case specifications include new Federal and State legislative innovations and modifications to existing laws, regulatory reforms and innovations, and enhanced low-carbon technology innovation programs. Based on the PTIS case specifications, the incremental energy, economic, emissions, and other impacts from successful adoption and implementation of the PTIS case are projected as changes to the Reference Case Scenario using transparent techno-economic modeling approaches. The enhanced, low-carbon energy technology innovations programs included in the PTIS case cover a broad spectrum of energy supply and demand innovations. Particular attention is given to innovations that increase energy efficiency in both production and uses of energy in all economic sectors. Recognizing the extremely large energy infrastructure and imbedded capital investments already existing in the United States, special attention is given to innovations to transform and expand that infrastructure to meet future clean energy needs. The latter is a key strategy for making the transition affordable. One focus of attention is innovative opportunities for Carbon Capture and Sequestration (CCS). These are described along with the policy, regulatory, and technology improvements necessary to enable those contributions. The quantitative and qualitative differences between the two Scenarios are compared using the effectiveness measures adopted. These comparisons confirm that a portfolio such as that modeled in this project can lead to significant, affordable emissions reductions in the near term, and establish a pathway to a future energy economy with much larger reductions in energy use and emissions than the Reference Case in the longer term. Other key insights and conclusions from the assessment are described. The national and sub-national political, economic, and regulatory barrier and constraint challenges to successful implementation of a PTIS case are presented along with options for overcoming those challenges.