When it comes to carbon capture, innovative technology exists, but the financial and policy support needed to accelerate its deployment is lacking.
At a recent Carbon Capture, Utilization & Storage (CCUS) Conference attended by leaders of industry, federal and state agencies, and environmental organizations, one theme that emerged is the importance of policy parity with other low- and zero-carbon energy technologies like wind and solar to advance widespread deployment of CCUS technology.
We know that CCUS technology is essential to meet our mid-century climate goals. In fact, without CCUS, mitigation costs will rise by 138 percent.
Exchange Monitor, the organizer of the CCUS conference, noted that it is “an extremely important technology, enjoying a bit more spotlight on the heels of the Paris climate change agreement.” Many nations specifically referenced CCUS technology in their Nationally Determined Contributions to the agreement, including Canada, China, Norway, Saudi Arabia, the United Arab Emirates, and the United States.
Even as nations diversify their energy portfolios, fossil fuels are expected to serve 78 percent of the world’s energy demand in 2040. The most recent Energy Information Administration analysis suggests that global energy consumption is expected to rise 48 percent over the next 30 years.
Clearly, there will be a need for CCUS technology to be widely deployed, in both the power and industrial sectors. Industry, including refining and chemicals, steel, and cement production, contributes roughly 25 percent of global emissions and there are no practical alternatives to CCUS for achieving deep emissions reduction in this sector.
CCUS project development is not on track, however. The most recent International Energy Agency (IEA) Tracking Clean Energy Progress report notes: “No positive investment decisions were taken on CCUS projects, nor did any advanced planning begin in 2015, resulting in a fall in the total number of projects in the development pipeline.”
Since a project can take five to 10 years from conception to operation, financial and policy support is critical now, the EIA adds. The report concludes: “As with other low-carbon technologies, the market for CCS projects in most regions will be created by policy and regulation.”
That conclusion was echoed at the conference by Dr. Julio Friedmann, the Senior Advisor for Energy Innovation at the Lawrence Livermore National Laboratory and former Principal Deputy Assistant Secretary for Fossil Energy at the U.S. Department of Energy. He said the financing challenge for CCUS projects “is fundamentally a policy issue; this is not a technology issue.” Barry Worthington, Executive Director of the U.S. Energy Association, emphasized at the conference that “providing identical fiscal tools for all no-carbon/low-carbon technologies reduces market distortion.”
Policies that would accelerate the deployment of CCUS technology include:
- Stronger federal and state incentives for carbon dioxide enhanced oil recovery (CO2-EOR)
- The inclusion of CCUS technology in state clean energy standards
- Funding for continued CCUS research, development, and demonstration
- A price on carbon
These policies would help overcome the barriers that innovative CCUS projects face, such as higher cost and higher perception of risk by investors. The cost reductions and performance improvements experienced by the wind and solar energy industries demonstrate that these kinds of policies (tax incentives, renewable portfolio standards, etc.) can accelerate the deployment of low- and zero-carbon energy technologies.
What policy parity means is sustained public sector support through the process of achieving a declining cost curve: from deploying initial first-of-a-kind CCUS technologies in both power and industrial applications to driving deployment of next-of-a-kind projects. It also means sustaining R&D on CCUS technologies so that low- and zero-carbon energy technologies are ultimately competitive without incentives.
As more CCUS projects come online, opportunities for cost reductions become apparent. SaskPower estimates it can save up to 30 percent on future CCUS units at the Boundary Dam power plant.
Finally, there is significant support for accelerated deployment of CCUS technology. C2ES co-convenes the National Enhanced Oil Recovery Initiative, which is a broad and unusual coalition of executives from the electric power industry; state officials; and environmental and labor representatives, all of whom support improved policy for CCUS technology in the United States. Based on our experience, and as expressed at the conference, policy parity needs to be an essential component of future federal and state efforts on climate to meet our agreed-upon goals and to match the growing need for CCUS technology.
Separately, cities and businesses have been showing tremendous leadership in reducing the emissions responsible for climate change and building resilience to climate impacts.
Imagine what they can do together.
By sharing research and analysis, building crucial connections, and fostering innovative partnerships, cities and businesses can accelerate progress toward our climate goals – progress we sorely need.
That’s why the Center for Climate and Energy Solutions (C2ES) and The U.S. Conference of Mayors are teaming up to create the new Alliance for a Sustainable Future. This alliance will help mayors and business leaders develop concrete approaches to reduce carbon emissions, speed deployment of new technology, and implement sustainable development strategies.
City and business action and input are vital as states consider how they will implement the Clean Power Plan, and as the U.S. works toward its Paris Agreement goal to reduce emissions 26-28 percent by 2025.
Through the Alliance, we plan to:
- Improve city and business engagement with state climate planning to add to our overall emissions-cutting efforts.
- Provide a forum for problem solving among cities, businesses, and states, and build platforms for more public-private partnerships on climate and sustainability.
- Identify best practices for coordinated action by cities, businesses, and states to reduce greenhouse gas emissions and deal with the consequences of climate impacts.
About the alliance
C2ES has long been a voice for pragmatic policy and a catalyst for constructive business engagement on climate change. Our Business Environmental Leadership Council, created in 1998, brings together industry-leading, mostly Fortune 500 companies across a range of sectors that are committed to climate action and support mandatory climate policy. C2ES has also been working closely with states and cities, including on implementation options for the Clean Power Plan.
The U.S. Conference of Mayors has long been a leader on climate change. In 2005, more than 1,000 mayors signed the Mayors’ Climate Protection Agreement, a landmark pledge to take local action to reduce carbon emissions. That pledge was updated in 2014 to also focus on making cities more resilient to climate impacts. The U.S. Conference of Mayors has encouraged federal and state cooperation with mayors to accelerate clean energy and energy efficiency.
Cities and companies in action
As the Alliance’s co-chair, Santa Fe Mayor Javier Gonzales, said: “Cities are our nation’s economic powerhouses, making them a key proving ground for policies to increase energy efficiency, deploy clean energy, and foster clean transportation.”
Cities are taking the lead in advancing more energy-efficient buildings; tracking electricity and water use, setting emissions reduction targets, and promoting electric vehicles. These programs make for stronger and more resilient communities and economies.
A number of cities, including Los Angeles, are even setting a goal of being powered by 100 percent renewable energy.
Companies are investing in clean energy projects, reducing emissions throughout the supply chain, establishing internal carbon pricing, and helping customers reduce their carbon footprint. More than 150 companies have signed the American Business Act on Climate Pledge, committing to steps such as saving energy and reducing water usage.
These steps, over and above regulatory requirements, could produce greater emission reductions than we can foresee.
Taking the next step
Climate change is global, but the impacts are local, and our communities are already experiencing them, including more frequent and intense heat waves, heavy downpours, and rising sea level. How we reduce climate-altering emissions will have implications for economic development, public health, and community wellbeing, especially for our most vulnerable populations.
Cities and businesses both have a strong interest in cost-effective approaches. Local-level and business innovation is critical to the success of the Clean Power Plan and other state and federal policies to shrink our carbon footprint. And these successes will point the way to a national strategy to help us transition to a clean energy future.
Separately, cities and businesses have already been demonstrating climate leadership. Together, we can put our foot on the accelerator and reach our goals.
June 21, 2016
Alliance for a Sustainable Future Announced
The U.S. Conference of Mayors and C2ES will bring together city and business leaders to focus on reducing power sector emissions and spurring sustainable development
WASHINGTON -- The U.S. Conference of Mayors (USCM) and the Center for Climate and Energy Solutions (C2ES) today announced a new alliance to spur public-private cooperation on climate action and sustainable development in cities.
The USCM-C2ES Alliance for a Sustainable Future will create a framework for mayors and business leaders to develop concrete approaches to reduce carbon emissions, speed deployment of new technology, and implement sustainable development strategies as a part of implementing the Clean Power Plan and responding to the growing impacts of climate change.
City and business leaders will identify barriers to action and share research and analysis on climate and sustainable development solutions. By building crucial links between cities and companies, the alliance aims to spur innovative partnerships and increase participation in state and national climate efforts.
“Since 2005, USCM has been leaders on climate change and reducing greenhouse gas emissions. Mayors and businesses must work together to develop sustainable solutions,” said Baltimore Mayor Stephanie Rawlings-Blake, The U.S. Conference of Mayors President. “The Clean Power Plan is the cornerstone of the nation’s strategy to achieve these reductions, which are becoming more and more important as the effects of climate change are upon us.”
“This alliance brings together mayoral political leadership and the pragmatic policy expertise of C2ES to advance climate change action and sustainable development, including by working with states to implement the Clean Power Plan” said Tom Cochran, CEO and Executive Director of The U.S. Conference of Mayors. “It is time for more concerted action and cooperation to spur ingenuity and expedite solutions.”
“Separately, cities and businesses have already been demonstrating climate leadership,” said C2ES President Bob Perciasepe. “Together, we can put our foot on the accelerator and reach our emissions-cutting goals.”
Santa Fe Mayor Javier Gonzales has been appointed by Mayor Rawlings-Blake to lead the effort for The U.S. Conference of Mayors, which will be approaching business partners with C2ES following the mayors' 84th Annual Meeting, June 24-27 in Indianapolis.
“Cities are our nation’s economic powerhouses, making them a key proving ground for policies to increase energy efficiency, deploy clean energy, and foster clean transportation,” said Mayor Gonzales. “Cities and companies have an opportunity to develop best practices to reduce greenhouse gas emissions and deal with the consequences of climate impacts.”
About The U.S. Conference of Mayors: The U.S. Conference of Mayors is the official nonpartisan organization of cities with populations of 30,000 or more. There are nearly 1,400 such cities in the country today, and each city is represented in the Conference by its chief elected official, the mayor. Learn more at www.usmayors.org.
About the Center for Climate and Energy Solutions: C2ES is an independent, nonprofit, nonpartisan organization that brings policymakers, business, and other diverse interests together to forge practical solutions to the pressing challenge of global climate change. Learn more at www.c2es.org.
Cities and states on the West Coast are teaming up to tackle one of the biggest sources of urban emissions: energy use in buildings.
Three governors, six mayors, and the environment minister of British Columbia adopted the Pacific North America Climate Leadership Agreement this month at the Clean Energy Ministerial in San Francisco. The leaders of British Columbia, California, Los Angeles, Oakland, Oregon, Portland, San Francisco, Seattle, Vancouver, and Washington state agreed to work together to address the energy use and greenhouse gas emissions from buildings.
Energy use in buildings is one of the largest sources of emissions in most cities. Buildings account for 52 percent of emissions in San Francisco, and 33 percent in Seattle. Even in smaller cities, the building sector remains a significant source of emissions. If cities can cut energy use in buildings, it can help them deliver on their ambitious climate mitigation commitments.
Since cities are already filled with buildings, improvements must be made to those that are already in use, rather than waiting for newer, more efficient buildings to be constructed.
A place to start is with benchmarking and disclosure policies, which are in place in 15 cities. Cities require building managers to record and report their energy use with the help of EPA tools. The resulting database can help identify opportunities for reducing energy use. And city officials can use the information to guide policy and create long-term strategies to reduce energy use and emissions.
To ensure that buildings achieve reductions in energy use, cities are complementing benchmarking and disclosure policies with additional actions, including: retro-commissioning, a process that assesses buildings to uncover low-cost operational improvements; supporting buildings through retrofit processes; and ensuring that buildings undergoing major renovations are brought up to current code.
Examples of these policies can be found throughout the West Coast and the U.S. at large. Seattle recently required commercial buildings 50,000 square feet or larger to undertake retro-commissioning processes every five years. Los Angeles is supporting property owners and managers to execute building performance upgrades to achieve 20 percent reductions in energy usage. And Washington, D.C., like many cities, requires major upgrades to existing buildings to meet current, more energy-efficient building codes.
With a comprehensive suite of policies aimed at commercial building efficiency, cities can take action to address one of their largest sources of emissions. We are heartened to see that the Western states and cities have committed to work together on this challenge, and look forward to seeing the local progress that might be accelerated with supportive state policies. By working together, cities and states can help shape policy, investment, and behavior change strategies that can become models for broader action.
Policy Considerations for Emerging Carbon Programs
With climate action gaining momentum around the country, policymakers at the city, state, and federal level are all considering policy tools they can use to achieve their goals. Many market-based options exist that can deliver differing co-benefits. Discussions and collaboration with other jurisdictions and with affected businesses can also improve the policy outcome.
What if you held a sale and customers bought hardly any of your product? You might conclude that your product wasn’t very popular. If your product happened to be carbon allowances, essentially permission slips to emit carbon pollution, that lack of popularity sounds like a good thing for the climate.
This is essentially what happened last week when California and Quebec, who have joined their carbon markets, announced the results of their most recent auction of allowances. Companies who must buy allowances decided they didn’t need the full amount being offered, presumably because their emissions are declining.
California and Québec began their carbon markets in 2013, and the partners have held joint auctions of allowances every three months since November 2014. Each jurisdiction sets a limit on nearly all fossil fuel combustion at an amount that declines each year (the cap). Businesses responsible for that fossil fuel combustion have to buy allowances at auction to cover their emissions.
Historically, businesses have bought more than 90 percent of the allowances offered. But at the most recent auction, only about 10 percent of the allowances were sold.
This is great news. It means that carbon emissions are going down, and at a faster rate than the policy requires. If emissions were going up, prices at auction would be high. If emissions were going down at the same rate as the cap, then prices might be low but the auction would still sell out.
Market forces, like declining costs of renewable power, are part of the reason why emissions are declining. Businesses can use cost-effective alternatives to fossil fuels in their operations.
Also factoring into the results are the numerous other policies California and Québec have in place to drive down emissions, including ones aimed at increasing energy efficiency. That means businesses use less energy overall.
Is there any reason this might be considered bad news? Well, if you were counting on the money from the sale, it’s a problem.
California has anticipated generating billions in revenue through 2020 from the allowance auctions. But with few allowances sold, that state revenue source drops dramatically. California’s auction revenue is directed to various clean energy programs across the state, which means those programs could be in jeopardy if auction sales remain low.
So, is this an example of cap-and-trade working or not working? I would argue this is how cap-and-trade is supposed to work. The government sets a cap based upon its climate goals, the cap creates a price in the market, and companies incorporate the carbon price into their business decisions. If emissions are low (more accurately, if they are lower than the cap), then businesses don’t buy carbon allowances, pure and simple. Both California and Québec agreed upon rules for handling unsold allowances before their programs started, so businesses know what to expect.
A larger and more difficult question is whether this is an example of carbon pricing working. In both jurisdictions, the cap-and-trade program is only one of many policies aimed at reducing emissions. It’s unclear at the moment to what extent the carbon price is driving down emissions (and allowance demand) versus other policies. A sophisticated statistical analysis is required to answer that question, and as the cap-and-trade program continues there will be observations to enable just such an analysis.
There is often a heated debate around implementing new policies, and it is not unusual to hear predictions that regulating carbon emissions will cause economic doom. But time and again, experience has shown that businesses adapt quickly to new conditions and keep doing what they’re good at – giving us the products and services we want to buy. That they’re doing this while keeping their carbon emissions below a set level is something to celebrate.
Innovation is an essential component to meet the challenges of climate change. Better ways to produce, store, conserve, and transmit energy will help the U.S. and other nations meet the ambitious goals set at the United Nations climate change conference held in Paris in December 2015.
Join the Director of the U.S. Patent and Trademark Office, Michelle K. Lee, and a panel of technology, energy, and climate experts for a discussion on how present and future innovation can change the course of our planet’s future. Questions to explore will include:
- What do we need do more, do differently, do faster, to change course and evolve our energy system to be clean, efficient, accessible, dependable and low-carbon?
- Where do we need breakthroughs in technology to really make a difference?
- What policies would help drive the innovation we need? What business model innovation is needed?
June 29, 2016
1:00 - 3:00 p.m.
Carnegie Institution for Science Auditorium
1530 P St. NW Washington , DC 20005
Hon. Michelle K. Lee
Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office
Dr. B. Jayant Baliga
Director, Power Semiconductor Research Center, North Carolina State University
National Inventors Hall of Fame Inductee, 2016, Insulated Gate Bipolar Transistor
Chief Sustainability & Social Impact Officer, HP
Dr. Kristina Johnson
Chief Executive Officer, Cube Hydro Partners National Inventors Hall of Fame Inductee, 2015, Polarization Control Technology
President, Center for Climate and Energy Solutions
Moderator: Amy Harder
Energy Reporter, The Wall Street Journal
See full bios of speakers
After witnessing the historic signing of the Paris Agreement by 175 nations, we now need to turn our attention to fulfilling its promise.
As its nationally determined contribution to the agreement, the United States set a goal of reducing net greenhouse gas emissions 26 to 28 percent below 2005 levels by 2025. In a new paper, C2ES outlines how expected and in-place policies could get us close to the goal line -- reducing emissions by as much as 22 percent. Getting the rest of the way can likely be achieved through a mix of additional policies, city and business action, and technological innovation.
First, let’s look at how we can get to a 22 percent reduction.
U.S. net emissions are already down more than 9 percent from 2005 levels due to market- and policy-related factors, including a shift in electricity generation from coal to natural gas, growth in renewable energy, level electricity demand, and improved vehicle efficiency.
The C2ES business-as-usual forecast, drawn from a number of analyses, projects an additional 5.6 percent reduction in net emissions through such policies as greenhouse gas standards for vehicles and the Clean Power Plan.
The rest of the anticipated emissions reductions is expected to come from new, higher estimates of future carbon sequestration and additional measures under development, including steps to strengthen fuel economy standards for medium- and heavy-duty trucks, reduce methane emissions in the oil and gas sector, and reduce hydrofluorocarbons (HFCs).
Now, how will we address the remaining gap of at least 270 million metric tons carbon dioxide equivalent?
Additional federal policies would help. For example, greenhouse gas standards could be set for major industrial sectors under section 111(d) of the Clean Air Act, the same section that underlies the Clean Power Plan.
Technological advances that lower the cost of emissions reduction will also undoubtedly play an important role. Over the next five to 10 years, battery storage technologies are expected to improve by a factor of 10, which would support the integration of more renewable generation. A promising design for a natural gas power plant with nearly 100 percent carbon capture will enter the demonstration phase next year and could be commercialized soon after. And agricultural advances are leading to more sustainable crops able to sequester more carbon dioxide in their root systems.
Stronger efforts by cities will also be critical to filling the gap. A growing number of cities are working to improve the energy efficiency of residential and commercial buildings, which account for for 41 percent of total U.S. energy consumption. Greater adoption of Property Assessed Clean Energy (PACE) programs, which help finance energy efficiency and renewable energy projects, could significantly reduce city energy demand. Similarly, city programs to build out infrastructure to increase the adoption rate of electric vehicles will, in-time, appreciably lower transportation-related emissions.
Companies, too, will play a key role. Twelve leading companies signed the C2ES statement calling on governments to quickly join the Paris climate pact and pledging to work with countries toward the domestic measures needed to achieve their national emissions-cutting contributions. More than 150 U.S. companies with a combined market capitalization in excess of $7 trillion joined the American Business Act on Climate Pledge – committing to reduce emissions, increase renewable power, or finance climate efforts. And the White House is calling on more companies to join the initiative.
The United States has significantly reduced its greenhouse gas emissions over the past decade. Cutting emissions 26 to 28 percent below 2005 levels by 2025 is a challenging goal. But many options remain untapped, and concerted efforts across multiple fronts can get us across the goal line.
April 26, 2016
Contact: Laura Rehrmann, email@example.com, 703-516-0621
Microsoft joins C2ES Business Environmental Leadership Council
WASHINGTON -- The Center for Climate and Energy Solutions (C2ES) announced today that Microsoft Corp. has joined the C2ES Business Environmental Leadership Council and its efforts to address the world’s climate and energy challenges.
“Microsoft has been a proven leader in addressing climate change,” said C2ES President Bob Perciasepe. “By setting an internal price on carbon, improving energy efficiency, expanding its use of green power, and by working with its customers and partners to leverage technology and data to reduce energy and resource use broadly, Microsoft is setting a strong example for others to follow.”
The center's Business Environmental Leadership Council (BELC), which first formed in 1998, is the largest U.S.-based association of companies solely devoted to climate-related policy and corporate strategies. The council contains mainly Fortune 500 companies representing a diverse group of industries with combined revenues of over $2 trillion and more than 3.5 million employees.
“Individually and collectively, these companies are demonstrating that it is possible to take action to address energy and climate challenges while maintaining competitive excellence,” Perciasepe said.
Microsoft’s global operations have been 100 percent carbon neutral since June 2012. This has been achieved through increased operational efficiency, investments in renewable energy, and through an internal carbon fee that holds business groups accountable for their carbon emissions. In the first three years of the fee, Microsoft reduced its company-wide emissions by 7.5 million metric tons of carbon dioxide equivalent (mtCO2e), purchased more than 10 billion kilowatt hours of green power, and reached more than 6 million people through the purchase of carbon offsets from community projects around the world.
“Our partnership with C2ES is a reflection of our longstanding environmental commitment,” said Rob Bernard, Chief Environmental Strategist at Microsoft. “We believe that technology can empower people and organizations worldwide to achieve a more sustainable future. We look forward to engaging with C2ES and other businesses in the BELC to discover and implement innovative solutions to transition to a sustainable, low-carbon future for our planet.”
More on the C2ES Business Environmental Leadership Council.
C2ES and Microsoft host a discussion on Wednesday, April 27, 8:30-10 a.m. EDT, Beyond Paris: From Agreement to Action on Climate Change.
Watch the live video.
About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, non-profit, non-partisan organization promoting strong policy and action to address our climate and energy challenges. Learn more at www.c2es.org.
About Microsoft: Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world, and its mission is to empower every person and every organization on the planet to achieve more.