Climate Compass Blog

Year Ahead: We must strengthen climate action wherever possible

When I wrote a blog a year ago taking stock of the strengthening climate change effort, I reflected on a year of unprecedented progress, capped by the Paris Agreement, and outlined ways we could build on those successes.

At the beginning of the new U.S. administration, the outlook is unfortunately far different.  Now, our challenge is to preserve as much of this progress as we can, and to devise new strategies to continue strengthening climate action wherever possible.

Despite coming setbacks, it’s worth reminding ourselves that we have a solid base to work from. Thanks in part to strong policies, but also to growing market forces, the U.S. is on the path to a clean-energy transition, and the continued momentum is strong.

A few examples, just since the election:

·      Some of the world’s wealthiest entrepreneurs, including Bill Gates, Richard Branson, and Mark Zuckerberg, launched a billion-dollar fund to invest in cutting-edge clean energy technologies.

The new policy landscape won’t be clear for some time and is likely to evolve. But as we monitor the early signs, and take soundings with policymakers and stakeholders around the country and around the world, we are coming to a clearer view of immediate imperatives, and of opportunities that may lie ahead.

One imperative is ensuring that the United States remains a reliable partner in the global climate effort – by staying in the Paris Agreement, and by working constructively with other countries to establish sound rules for its implementation. 

We were encouraged to hear Secretary of State nominee Rex Tillerson note the importance of the United States staying at the table. Indeed, the Paris Agreement reflects long-standing bipartisan principles. It fully preserves national sovereignty while providing a means of holding other countries accountable. U.S. businesses benefit from full access to the clean energy markets the agreement helps drive.

We were encouraged also to hear EPA Administrator nominee Scott Pruitt express respect for the “endangerment finding” underpinning the regulation of greenhouse gases under the Clean Air Act. What is critical is how EPA chooses to fulfill the inherent legal obligation to regulate emissions, starting with the power sector.

While the Clean Power Plan appears unlikely to survive, decarbonization of the power sector is already underway. Thanks to improved energy efficiency and a more diverse energy mix, emissions dropped more than 20 percent over the last decade. Last year was the third in a row that renewables accounted for more than half of new U.S. power capacity.

Continued tax credits enjoying strong bipartisan support will help sustain that growth.  State-level conversations on lower carbon energy policies are continuing as states, cities and utilities find economic opportunity in modernizing the power sector. But the imperative remains: We need an overarching federal framework to deliver sustained, cost-effective emission reductions. We urge the new administration and Congress to get on with the job.

In the near term, we see opportunities for bipartisan steps that benefit both the climate and the economy and strengthen the foundation for a longer-term clean energy transition. These include:

Incentivizing carbon capture, use and storage.

Carbon capture technologies like those deployed this month in Texas are essential to meeting the climate challenge. Senate Majority Leader Mitch McConnell was among the bipartisan sponsors of a bill last year to help advance these technologies by supporting the use of captured CO2 in enhanced oil recovery, as recommended by a coalition of industry, labor, and environmental groups we help lead. We expect similar legislation in this Congress.

Advancing nuclear energy.

Bipartisan bills have already been introduced in the House and Senate to spur advanced nuclear technologies. Nuclear is our largest source of zero-carbon energy and the only one that provides continuous baseload power. It will have to play a significant role in any realistic long-term climate strategy.

Modernizing our infrastructure.

A viable infrastructure package could open significant opportunities to address climate change while creating jobs and growth. Examples include:

  • A modernized electric grid that can better distribute renewable power and is more climate-resilient.
  • Expanded charging and refueling networks for electric, natural gas and hydrogen vehicles.
  • Roads and bridges that can better withstand more frequent extreme weather.

One reason we’re confident of continued momentum is that the vast majority of the American people support it. In a Yale survey conducted after the election, nearly 70 percent favored staying in the Paris Agreement. And 70 percent – including a majority of Republicans – supported strict carbon limits on existing coal plants.

Business leaders, too, recognize the growing risks of climate impacts, and the opportunities to create new products, services and jobs.

And a growing number of cities are finding they can save money and create jobs by encouraging energy efficiency and clean energy and transportation.

At C2ES, while we are bracing for setbacks, and are prepared to defend against reversing course, we also will continue working as hard as ever to bring diverse interests together to make progress wherever we can. We face significant new challenges. But from the local to the global level, we’ve got strong momentum. And we can’t turn back.

 

How about using that captured carbon?

carbon shoes

These "shoes without a footprint" were made from carbon that was captured from power production.

Photo courtesy NRG

Imagine if the carbon dioxide (CO2) that emerges from smokestacks at coal- and natural gas-fired power plants and steel and cement facilities could actually be used for something.

Some innovators are imagining just that.

For even more creative ideas, just look at the semi-finalists for the $20 million NRG COSIA Carbon X Prize.

Research teams from around the world submitted ideas for using CO2 in building materials, paint, fertilizers, plastics, and even toothpaste. Other ideas include CO2-based fuels and carbon nanotubes that could be used to make environmentally sustainable lithium-ion and sodium-ion batteries. The prize will be awarded in 2020 after the top ideas are tested in real-world conditions.

Carbon dioxide from burning fossil fuels is contributing to a changing climate that is bringing more frequent and intense heat waves, downpours, and drought and rising sea levels. Capturing CO2 from power plants and industrial sources will help reduce these harmful emissions.

In the U.S., we have been capturing CO2 from manmade sources such as commercial-scale natural gas processing plants since the early 1970s. We can offset the costs of capturing and storing carbon dioxide and increase the number of carbon capture projects if we put the CO2 to work.

One way this is already being done is with carbon dioxide enhanced oil recovery (CO2-EOR), where pressurized CO2 is pumped into already developed oil fields to get out more of the oil. CO2-EOR boosts domestic energy production, makes use of already developed oil fields, and stores carbon dioxide underground.

C2ES co-convenes a coalition of industry, labor, and environmental groups encouraging greater deployment of carbon capture technology for CO2-EOR. There’s bipartisan support for incentivizing technologies to capture carbon dioxide from manmade sources and put it to use in marketable ways.

The U.S. produces 300,000 barrels per day, or nearly 3.5 percent of our annual domestic oil production, through CO2-EOR. But we’re mostly using CO2 that isn’t from manmade sources.

For every barrel of oil produced using manmade CO2, there is a net CO2 storage of 0.19 metric tons even considering the emissions from the oil, according to the International Energy Agency and Clean Air Task Force. In other words, EOR using power plant CO2 results in a 63 percent net reduction of the total injected volume of CO2 or a 37 percent reduction in the life cycle emissions from oil.

At the end of 2016, NRG completed construction on Petra Nova, the first American retrofit of a coal-fired power plant to capture CO2 emissions, which are then used for EOR. The Texas project was on schedule and on budget. It’s capturing more than 90 percent of the CO2 from a 240 MW slipstream of flue gas from an existing coal unit at the WA Parish plant. It’s now the largest project of its kind in the world.

Finding more ways to turn carbon dioxide from an energy and industrial sector waste product to a useful commodity could spur the development of new technologies and products while limiting climate-altering pollutants. There’s promise, but also scientific, regulatory, and market challenges.

The Global CO2 Initiative, which advocates a mix of policy, research funding, collaboration, and infrastructure improvements to accelerate commercial deployment, estimates that the size of the global CO2 non-EOR utilization market could be as large as $700 billion by 2030. Aside from EOR, we could be using 7 billion metric tons of CO2 per year for fuels, concrete, polymers and more. That’s about 15 percent of current global CO2 emissions.

The new administration and new Congress need to consider how best to incentivize continued research, development, and commercial-scale application of CO2 utilization. With the right policy incentives, the U.S. can take a leadership role in this vital technology.

Financing carbon capture: Corporate partners lead the way

Addressing climate change will require tremendous investment in low- and zero-carbon energy technologies. Estimates are as high as $1 trillion per year through 2030.

Some of that investment must be in carbon capture technology, which can reduce emissions from both the power and industrial sectors. Carbon capture could provide 13 percent of global emissions reductions through 2050.

Innovative corporate partnerships will play a critical role in launching this investment. That’s because partnerships can bring together the right combination of resources, talent, and experience and combine technical knowhow with business-oriented analyses of commercial viability. To solve our emissions challenges, innovation will be key, not just in technology, but also in investment models and business partnerships.

NET Power

One example of an innovative corporate partnership that is bringing carbon capture technology into the field is the NET Power demonstration project in La Porte, Texas.

The NET Power project, which is expected to come online in 2017, will be the first in the world to use supercritical CO2 (when the gas has the density of a liquid), instead of steam, to drive a turbine. It will make electricity from natural gas using patented technology that captures almost all carbon- and non-carbon emissions at no additional cost: it has equipment costs and fuel usage that are equivalent to or better than best-in-class conventional natural gas combined cycle power plants without carbon capture.  The technology is also capable of very low or no levels of water usage.

Each partner in the project brings a unique competency: 8 Rivers is the technology expert, contributing its invention and engineering oversight capabilities. Exelon Corporation contributes its sizeable network of business contacts, financial resources, project development support, and operations and maintenance expertise and may adopt the technology for commercial use in its operations. CB&I provides engineering, procurement and construction services, as well as financial assistance and experience with sales. Finally, Toshiba provides specialized expertise in high-pressure turbines.

During a recent C2ES webinar on financing carbon capture, some of the partners explained why the collaboration model works better than the venture capital model of investment in this case.

From the investor perspective, corporate partnerships are viewed as more mature transactions “both as an investment opportunity, but also as a technology that we think is ready for us to deploy when the time comes,” said David Brown, senior vice president of federal government affairs and public policy at Exelon.

From the developer perspective, NET Power CEO Bill Brown said, “Normally, too many startup firms don’t have market definition as a critical part of their first stage. They should. By reaching out to the customers [like Exelon] to begin with, we were able to get a very good focus on the market.”

What’s Next

More capital is being committed to a low-carbon future:

  • A year ago, 20 nations launched Mission Innovation to double their cumulative annual spending on clean energy research from $10 billion to $20 billion, with CO2 capture utilization and storage being one of the “R&D Focus Areas.”
  • As a complement, leading entrepreneurs launched the Breakthrough Energy Coalition and pledged to invest billions in early-stage clean energy technology.

On Nov. 4, the CEOs of 10 oil and gas companies announced the Oil and Gas Climate Initiative which aims to direct $1 billion over the next decade to accelerate the development of technologies that could reduce greenhouse gas emissions on a significant scale, including carbon capture, use and storage.
As this private capital is mobilized, innovative corporate partnerships can combine business experience and commercial viability with government contributions to research and development to advance the commercial deployment of clean energy technology quickly.

The potential benefits for accelerated clean energy technology deployment are substantial. By reducing the cost of capture, the NET Power project may create an opportunity for U.S. innovation to help achieve emissions reductions globally.

Also, reducing the cost of capture lets us explore re-use of CO2, an area of increasing focus. Launched in January, the Global CO2 Initiative aims to enable the capture and re-use of 10 percent of annual global CO2 emissions by converting them into useful products. Its new roadmap highlights the potential for CO2 reuse in concrete, fuels (methane and liquid fuels), carbonate aggregates, polymers, and methanol.

To solve our emissions challenges, innovation will be key, not just in clean energy technology, but also in investment models and business partnerships.

NET Power demonstration project in La Porte, Texas, expected to come online in 2017.

An American in Marrakech

For 10 exhausting days, from the moment I arrived in Marrakech for the latest U.N. conference on climate change, I found myself thrust into the uneasy role of unofficial emissary for a country transformed overnight.

COP 22 had started on a high note, as thousands from around the world celebrated the remarkably swift entry into force of the Paris Agreement just days earlier. But then in a flash, with news of Donald Trump’s surprise victory, the historic gains of Paris seemed suddenly at risk of unraveling.

By the time I touched down in Marrakech two days after the election, the initial shock had given way to deep anxiety, with rumors swirling that president-elect Trump would proclaim at any moment that he would pull the United States from the Paris Agreement.

As a strictly nonpartisan organization, C2ES has worked closely over the years with Democrats and Republicans alike. Before and after the election, we made clear our willingness to work with the next administration and others to build common ground.

On the ground in Marrakech, like other veteran COP-goers from the United States, I found myself besieged by delegates desperate for insight into what had happened and, more importantly, what would happen now. I had precious little to offer.

My first instinct was to note that one huge lesson of the entire campaign was the utter unpredictability of political outcomes – and that would be true going forward as well.

True, the incoming president had declared climate change a hoax and vowed to “cancel” the Paris Agreement. But, I’d note, he’d also denied his climate denialism and, back in 2009, he’d signed an open letter in The New York Times supporting climate legislation.  Plus, there were already signs he was tempering his views on other issues like immigration and health care.

At two C2ES-sponsored side events, I was joined by major U.S. companies, a top California official and a Democratic staffer from the Senate (we’d invited a speaker from the Trump transition team but they had no one in Marrakech). We all made the case that the strong momentum in the United States toward a clean-energy transition is bound to continue.

But we could offer no solid assurance that our collective efforts had not just suffered a real blow.

Against that uncertainty, it was heartening to hear country after country reaffirm its commitment to the Paris Agreement and to a low-carbon future. The negotiations, now focused on filling in the details of the new Paris architecture, continued. And in the end they achieved the same outcomes they likely would have.

So for the moment, at least, the world is pressing ahead. But as we all head home from Marrakech, the uncertainty still looms. Should President-elect Trump make good on his campaign promise to withdraw from Paris, there is no denying that the consequences could be grave.

The Paris Agreement is a remarkable achievement. Its pragmatic approach preserves the full sovereignty of nations to decide their own paths forward, while also providing them the means to hold one another accountable. It is precisely the sort of agreement U.S. lawmakers on both sides of the aisle have long advocated.

But the agreement will only achieve its full promise if the more detailed rules being negotiated over the next two years are sound. The best way to ensure that is for the United States to remain at the table, honoring its commitments, and providing the kind of leadership that only it can.Flags at COP 22

Lessons learned from climate transparency

One of the key issues at COP 22 in Marrakech was how to implement the transparency provisions of the Paris Agreement through which countries can hold one another accountable for their promises.

The agreement requires that this “enhanced transparency framework” build on parties’ experiences with existing transparency processes under the U.N. Framework Convention on Climate Change (UNFCCC). A new C2ES brief highlights some of the key lessons countries are drawing from their experiences – lessons underscored by many parties in Marrakech.

The Paris Agreement requires all countries to report regularly on their greenhouse gas emissions and their efforts to reduce them. Their reports will be subject to two levels of international review – first, a review by technical experts, then a “multilateral consideration of progress” where countries put questions to one another. The new system is to provide “built-in flexibility” for developing countries with limited capacity. 

Under the existing system, which sets different requirements for developed and developing countries, the latter have only recently begun to undergo any form of international review. While many initially approached that prospect with trepidation, they’ve discovered more to be gained than feared.

One of the most important lessons shared by both developed and developing countries is that fulfilling their international transparency requirements has produced significant domestic benefits. Collecting the information needed for reporting starts important conversations across sectors and actors, between different levels of government, and among relevant stakeholders. Transparency as a government-wide effort can help identify mitigation opportunities and challenges as well as track and inform domestic policy implementation.

Another lesson is that the processes’ facilitative approach has helped parties overcome apprehensions about reporting and review. The process is more of a technical dialogue than an interrogation where experts judge or criticize parties. This friendly exchange helps parties learn and improve each time they go through technical analysis, since mistakes actually lead to identifying obstacles and areas for improvement as well as capacity-building needs.

Parties also have stressed that building stronger in-country capacity is crucial to effective developing country participation in transparency. Episodic project funding for the preparation and submission of greenhouse gas inventories makes it hard for developing countries to continuously collect data or provide regular training to their inventory experts. In-country capacity helps incentivize key players and institutions and establish a sense of ownership at the national and institutional level.

In Marrakech, seven developing countries went through their first Facilitative Sharing of Views (FSV) workshop under the existing International Consultation and Analysis (ICA) process. FSV is essentially a Q&A between the party or parties being assessed and other parties on the basis of their biennial update reports. 

At a side event, several parties, a technical expert and the secretariat reflected on further lessons from the ICA process. Namibia and Tunisia both said the process helps them improve the quality of their reports and promotes the institutional arrangements needed to form the basis for a national measurement, reporting and verification system. The secretariat noted that even it has capacity issues: with its supplementary budget depleted, its ability to undertake technical analysis is limited.

Like the FSV, the multilateral assessment is another peer review forum where parties are free to ask questions of a party on its biennial report. At COP 22, 24 developed countries went through a second round of Multilateral Assessment based on their second biennial reports under the International Assessment and Review process.

The Paris Agreement established a Capacity-building Initiative for Transparency (CBIT), which will strengthen the institutional and technical capacities of developing countries to meet the enhanced transparency requirements and to improve over time. The CBIT just approved its first set of projects in Costa Rica, Kenya, South Africa, and 11 donors announced pledges totaling nearly $55.3 million. Other countries like Japan have declared their intention to support the fund.

Although no final decisions on transparency were taken in Marrakech, parties have made initial progress in negotiating the details of the Paris transparency framework. If all goes as planned, parties will wrap up their work on these decisions in 2018, to be adopted by the first meeting of the parties to the Paris Agreement.