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Page 1: 01_Day_1_Oxburgh

Policies, Politics and Policies, Politics and Greenhouse GasesGreenhouse Gases

Ron OxburghRon Oxburgh

Page 2: 01_Day_1_Oxburgh

Twentieth CenturyTwentieth Century

Developed world optimised to cheap, Developed world optimised to cheap, abundant fossil fuel & raw materialsabundant fossil fuel & raw materials

BUTBUT• The end of fossil fuel supplies coming into sightThe end of fossil fuel supplies coming into sight• Burgeoning world population needing fuelBurgeoning world population needing fuel• Anthropogenic greenhouse gases making Anthropogenic greenhouse gases making

planet inhospitable to current inhabitantsplanet inhospitable to current inhabitants

Page 3: 01_Day_1_Oxburgh

The ScienceThe Science

The link between anthropogenic The link between anthropogenic GHG and global warmingGHG and global warming

Short circuiting of part of the C-cycleShort circuiting of part of the C-cycle Endorsed by nearly all authoritative Endorsed by nearly all authoritative

scientific opinionscientific opinion Location and timing of detailed Location and timing of detailed

consequences less clear consequences less clear

Page 4: 01_Day_1_Oxburgh

The Practical ProblemThe Practical Problem

Prosperity of developed world Prosperity of developed world built on fossil fuelsbuilt on fossil fuels

Full replacement of fossil fuels Full replacement of fossil fuels not possible for some decadesnot possible for some decades

Ca. 30 years to bring GHG Ca. 30 years to bring GHG emissions under control?emissions under control?

Page 5: 01_Day_1_Oxburgh

Energy Policy DriversEnergy Policy Drivers PricePrice Energy securityEnergy security Environmental securityEnvironmental security

To some extent these push To some extent these push in the same directionin the same direction

Page 6: 01_Day_1_Oxburgh

ResponsesResponses

EconomiseEconomise Greater efficiencyGreater efficiency Change fuel mix Change fuel mix Substitute renewables for fossil fuelsSubstitute renewables for fossil fuels NuclearNuclear Carbon capture and storageCarbon capture and storage

Page 7: 01_Day_1_Oxburgh

The Challenge of InfrastructureThe Challenge of Infrastructure

Value of hundreds of Value of hundreds of trillions of dollarstrillions of dollars

Very slow renewal of Very slow renewal of existing infrastructure existing infrastructure geared to cheap fuelgeared to cheap fuel

For 2025 we have only For 2025 we have only today’s technologytoday’s technology

Cars 10 -15 yrsCars 10 -15 yrs Aircraft 20 -30 yrsAircraft 20 -30 yrs Wind turbines 25 Wind turbines 25

yrsyrs Pwr. plants 40+yrsPwr. plants 40+yrs Trains 30+ yearsTrains 30+ years Elec. distribn Elec. distribn

40+yrs40+yrs Houses 70+ yearsHouses 70+ years

Page 8: 01_Day_1_Oxburgh

Implication of Infrastructure ‘Drag’Implication of Infrastructure ‘Drag’

Major change feasible and affordable if, and only if, carried out as part of life cycle replacement or expansion new-build over a long period

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Expansion in Energy Expansion in Energy DemandDemand

We are aiming at a moving targetWe are aiming at a moving target World population is growingWorld population is growing Every population uses more energy Every population uses more energy

as its becomes more prosperousas its becomes more prosperous

Page 10: 01_Day_1_Oxburgh

GDP & Energy use GDP & Energy use – various countries 2001– various countries 2001

0

50

100

150

200

250

300

350

400

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000

GDP per capita, US$ 1995 ppp

Ene

rgy

Use

, GJ

per

capi

ta

Canada

Russia

USA

UK

Page 11: 01_Day_1_Oxburgh

Increase in Energy Use vs GDPIncrease in Energy Use vs GDP1971-2001, Malaysia & Korea1971-2001, Malaysia & Korea

0

20

40

60

80

100

120

140

160

180

$0 $2,000 $4,000 $6,000 $8,000 $10,000

$12,000

$14,000

$16,000

GDP per Capita

Pri

ma

ry e

ne

rgy

Pe

r C

ap

ita

KOREA

MALAYSIA

1971

Page 12: 01_Day_1_Oxburgh

Primary Energy / CO2Primary Energy / CO2

0

10

20

30

40

50

60

70

0 200 400 600 800 1000 1200

GJ primary energy per person

Ton

nes

CO

2 pe

r per

son

IcelandSw

N

Kuw

Page 13: 01_Day_1_Oxburgh

People and EmissionsPeople and Emissions

0

50

100

150

200

250

300

0.0 2000.0 4000.0 6000.0 8000.0 10000.0

Millions of people

Gj p

er h

ead

per y

ear

Developed

Emerg

ing

Developing

Poor

est

2002

6.2 B

2050

9.2 B

Page 14: 01_Day_1_Oxburgh

Implications of a larger and more Implications of a larger and more prosperous world populationprosperous world population

If climate change is to be If climate change is to be contained the emissions of the contained the emissions of the developing and emerging developing and emerging countries have to be managed at countries have to be managed at least as carefully as those of the least as carefully as those of the developed world.developed world.

Page 15: 01_Day_1_Oxburgh

CoalCoal

AbundantAbundant Widely distributedWidely distributed InexpensiveInexpensive Easily burnedEasily burned High in GHG emissionsHigh in GHG emissions

Page 16: 01_Day_1_Oxburgh

Coal is relatively abundant –Coal is relatively abundant –Energy Value of ReservesEnergy Value of Reserves

0

100

200

300

400

500

600

OIL Gas Coal

10^9

Tonnes o

il equiv

ale

nt

Data from BP Statistical Review

Page 17: 01_Day_1_Oxburgh

Coal can be dirty –Coal can be dirty –Kg CO2 / MJ energyKg CO2 / MJ energy

00.050.1

0.150.2

0.250.3

0.35

Hard

coal Oil

Coal I

GCCGas

Gas C

CGT

Coal I

GCCS

Hydro

etc.

Nucle

ar

CO

2, k

g/M

J

Energy produced depends on fuel and efficiency of conversion

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Main Exporters and Importers of oil Main Exporters and Importers of oil & gas& gas

0

20

40

60

80

100

120

Mid E Russia Africa S.& C.Am

China India N.Am

Billio

n To

nne

oil e

quiv

alen

t res

erve

s 20

03

oil

gasEXPORT IMPORT

Page 19: 01_Day_1_Oxburgh

Oil, Gas and CoalOil, Gas and Coal

0

20

40

60

80

100

120

140

Mid E Russia Africa S.& C.Am

China India N.AmBilli

on T

onne

Oil

Equ

ival

ent R

eser

ves

oil

gas

coal

Page 20: 01_Day_1_Oxburgh

Approximate real terms fuel price Approximate real terms fuel price ranges 1985 – ‘05 ranges 1985 – ‘05

0 10 20 30 40 50 60

$ / barrel oil equivalent

Oil

Gas

Coal

Page 21: 01_Day_1_Oxburgh

Implications of CoalImplications of Coal

Considerations of cost and security Considerations of cost and security of supply will make coal central to of supply will make coal central to world energy policies for at least world energy policies for at least three decadesthree decades

Because coal can be the most Because coal can be the most polluting fossil fuel there can be no polluting fossil fuel there can be no credible climate strategy that does credible climate strategy that does not have managing coal at its corenot have managing coal at its core

Page 22: 01_Day_1_Oxburgh

Where Next?Where Next? No silver bullet –’wedges’No silver bullet –’wedges’

Produce as little CO2 as Produce as little CO2 as possible and sequester as possible and sequester as cheaply as possiblecheaply as possible

CoalCoal

Global problem but poorest Global problem but poorest worst hitworst hit

The West caused the The West caused the problem – obligation to problem – obligation to help?help?

Science

Policy

PoliticsIndustry

Technology

Page 23: 01_Day_1_Oxburgh

The Way ForwardThe Way Forward Growth and GHG management can be compatible Growth and GHG management can be compatible

e.g. EU plan - start now with replacement and e.g. EU plan - start now with replacement and new buildnew build

Right regulatory/fiscal framework essentialRight regulatory/fiscal framework essential

But political vs action timescales?But political vs action timescales?

Credible strategy for the developing world?Credible strategy for the developing world?

Not Not badbad for business, for business, differentdifferent for business for business

Page 24: 01_Day_1_Oxburgh

Thank YouThank You

Page 25: 01_Day_1_Oxburgh

2002 Primary energy sources 2002 Primary energy sources EU 25EU 25

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0E

nerg

y E

J &

GT

CO

2 x

10^2

Transport

vehiclesair

Page 26: 01_Day_1_Oxburgh

2002 Emissions by Primary energy 2002 Emissions by Primary energy source – EU 25source – EU 25

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Ene

rgy

EJ

& G

T C

O2

x 10

^2

• Transport 50% oil use – 60% of oil emissions

• Coal more emissions per unit energy than oil

• Oil more emissions per unit energy than Gas

Total 1.3 GT pa

Page 27: 01_Day_1_Oxburgh

AssumptionsAssumptions

Per capita energy consumption of ‘the Per capita energy consumption of ‘the 25’ will over time rise to the average of 25’ will over time rise to the average of the ’former 15’the ’former 15’

Politically and socially impracticable to Politically and socially impracticable to reduce freedom of individuals to travelreduce freedom of individuals to travel

Infrastructure now needs to be re-Infrastructure now needs to be re-optimised to:optimised to:

Minimise use of fossil fuelsMinimise use of fossil fuels Minimise CO2 emissionsMinimise CO2 emissions Allow increase in overall energy consumptionAllow increase in overall energy consumption

Page 28: 01_Day_1_Oxburgh

Reactions to Climate ThreatReactions to Climate Threat

Denial of the phenomenon & Denial of the phenomenon & the sciencethe science

Acceptance of science but:Acceptance of science but:• ““Effective action impossible”Effective action impossible”

oror• ““Protect ourselves with Protect ourselves with

technology”technology” ““The Kyoto response”The Kyoto response”

Page 29: 01_Day_1_Oxburgh

A strategy to 2025 - TransportA strategy to 2025 - Transport

ExpectExpect Vehicle fleet increases 220 to 300 millionVehicle fleet increases 220 to 300 million Annual distance per vehicle declines 16,000 km to Annual distance per vehicle declines 16,000 km to

14,000 km14,000 kmRequireRequire Bio content of fuel increases to 8%Bio content of fuel increases to 8%** Vehicle fleet achieves hybrid efficienciesVehicle fleet achieves hybrid efficiencies**

(i.e. improves from 9.7 l/100km to 6.5l/100km)(i.e. improves from 9.7 l/100km to 6.5l/100km)

Outcome:Outcome: ~30% fall in vehicle emissions ~30% fall in vehicle emissions & ~20% rise in distance driven& ~20% rise in distance driven

Page 30: 01_Day_1_Oxburgh

Electricity – Approximate Installed Electricity – Approximate Installed CapacityCapacity

FUELFUEL 20022002 20252025 Coal: Coal: 130 130 130 GW130 GW Clean coal : Clean coal : 0 0 45 GW 45 GW Oil: Oil: 40 40 CCGT: CCGT: 90 90 255 GW255 GW

Nuclear: Nuclear: 130 130 150 GW150 GW Wind: Wind: 5 5 80 GW 80 GW Hydro/Geoth etc.: 50 Hydro/Geoth etc.: 50 70 GW 70 GW

TOTALTOTAL 450450 730 GW 730 GW

Increase electricity generation by ~60%Increase electricity generation by ~60%Decrease emissions by ~8%Decrease emissions by ~8%

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The Balance Sheet – Final UseThe Balance Sheet – Final Use(rounded figures)(rounded figures)

20022002 20252025 20022002 20252025

GWGW GWGW G tonnesG tonnes CO2CO2

ElectricityElectricity 450450 730730 0.740.74 0.680.68

           

EJEJ EJEJ      

VehiclesVehicles 1010 88 0.240.24 0.160.16

           

Air, sea, chems Air, sea, chems etc.etc. 1414 1010 0.320.32 0.20.2

TOTALTOTAL 1.31.3 1.041.04

Page 32: 01_Day_1_Oxburgh

OIL

GAS

0

20

40

60

80

Biomass

Renewables

Nuclear

Gas

Oil

Coal

COAL

-1.4

-1.2

-1

-0.8

-0.6

-0.4

-0.2

2002 2025

Sequestration

Transportchanges

Gas for powergeneration

More windand solar

Ca

rbon

em

iss i

on

s , G

TE

ner

gy ,

EJ

EU-25 Energy and Carbon Changes to 2025

20% emissions reduction

Page 33: 01_Day_1_Oxburgh

The TransitionThe Transition

The relevant technologies already The relevant technologies already existexist

At present no business case - who At present no business case - who wants them?wants them?

There must be credible a There must be credible a regulatory/fiscal frameworkregulatory/fiscal framework

Change affordable as part of the Change affordable as part of the natural plant replacement cycle (30+ natural plant replacement cycle (30+ years), or as new buildyears), or as new build

Page 34: 01_Day_1_Oxburgh

The PoliticsThe Politics

International International competition – level competition – level playing fields?playing fields?

Continuing political will Continuing political will in developed world?in developed world?

Cooperation in the Cooperation in the Developing World?Developing World?

Page 35: 01_Day_1_Oxburgh

Energy Use in ‘the 25’Energy Use in ‘the 25’

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

450.00

$0 $10,000 $20,000 $30,000 $40,000 $50,000

GDP per cap

GJ

pe

r c

ap

pe

r a

nn

um

Series1

Accession

Countries

Page 36: 01_Day_1_Oxburgh

ConclusionsConclusions

Emissions reduction is compatible with Emissions reduction is compatible with economic growth and securityeconomic growth and security

IF there is a global political will to do soIF there is a global political will to do so IFF it is done in a planned and gradual wayIFF it is done in a planned and gradual way IFF it is done as new build and life-cycle IFF it is done as new build and life-cycle

replacementreplacement IFF a plan IFF a plan and and consequential regulatory changes consequential regulatory changes

are agreed soonare agreed soon IFF industry is given time to respond IFF industry is given time to respond

appropriatelyappropriately

Coal is so important that sequestration will Coal is so important that sequestration will be be essentialessential

Page 37: 01_Day_1_Oxburgh

Populations and EmissionsPopulations and Emissions

050

100150200250300

0.0 2000.0 4000.0 6000.0 8000.0 10000.0

Millions of people

Gj p

er h

ead

per y

ear

Developed

Emerging

Developing

Poorest