Integrated Assessment Models of Global Climate Change

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Effect of Government Actions on Effect of Government Actions on Environmental Technology Innovation:Environmental Technology Innovation:

Applications to the Applications to the Integrated Assessment of Integrated Assessment of

Carbon Sequestration TechnologiesCarbon Sequestration Technologies

E.S. Rubin, D.A. Hounshell and M. TaylorCarnegie Mellon University

Pittsburgh, PA 15213

July 20, 2000

Integrated Assessment Models of Integrated Assessment Models of Global Climate ChangeGlobal Climate Change

Assumptions about technology innovation and diffusion are among the most important uncertainties in current IA modelsMost models use simple metrics/assumptions; a few treat technological change endogenouslyResults are highly dependent on these (and other) assumptions

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Carbon Sequestration Technologies Carbon Sequestration Technologies for Electric Power Plantsfor Electric Power Plants

CO2 separation, capture, and storage could become viable carbon management options, allowing continued use of fossil fuels with no/low atmospheric emissionsIA models must be capable of representing these options, and the potential for technology innovations to improve performance and reduce costs in the future

Carbon Sequestration Technologies Carbon Sequestration Technologies ((contcont’’dd))

As with other environmental technologies, future markets for CO2 sequestration technologies will be driven mainly by government requirements and incentives to control greenhouse gas emissionsModels of technology innovation and diffusion in this domain can benefit from the study of other environmental technologies now in use

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Study Scope and ObjectivesStudy Scope and Objectives

Develop new tools and techniques to elucidate role of government actions on future innovations in carbon sequestration technologyDraw upon and extend results of recent work by M.Taylor, et al. focused on innovations in SO2control technology over the past 30 yearsIncorporate study findings and models into IA frameworks at IIASA and elsewhere to examine role of carbon sequestration technologies over a range of scenarios

Case Study Nearing Completion: Case Study Nearing Completion: SOSO22 Control IndustryControl Industry

Primary Source of SO2: Coal-fired power plantsLegislation/Regulation

Clean Air Act Amendments 1970, 1977, 1990New Source Performance Standards 1971, 1979

R&D Funding / Financial IncentivesEPA multi-million $ research budget in 1970sDOE Clean Coal Technology Program starts 1985

– $2.5 billion government cost-sharing for advanced technology demonstrations (over 14 years)

Facilitating Technology TransferThe SO2 Control Symposia start in 1969EPA is initial sponsor; later EPRI and DOE co-sponsor

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TerminologyTerminology

Government actions include regulation, research funding, financial incentives, and facilitation of technology transfer.Technological change refers to the entire innovative process, from invention to adoption and diffusion in the marketplace.Environmental technology consists of a wide range of products and processes that combat an environmental problem, often in fulfillment of legislation.

ExistingEmission cap w/ trading of emission credits

40% over 10 years, 2 phases(On top of any previous reductions)

1990 CAAA

New & Modified

Technology-based standard

70-90%Independent of fuel sulfur content

1977 CAAA1979 NSPS

New & Modified

Performance standards

1.2 lbs/MBtu heat input (0-70% removal, depending on fuel sulfur content)

1971 NSPS

AFFECTED SOURCES

IMPLEMENTING MECHANISM

SO2 REDUCTION REQUIREDAND TIMETABLE

LEGISLATION/ REGULATION

Characteristics of Characteristics of Legislation/RegulationLegislation/Regulation

1970 CAAA As needed to achieve NAAQSwithin 5 years SIPs Existing

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Potential Industry ActionsPotential Industry Actions

Plant shut-downReduce generation Switch to low-sulfur fuelsInstall control technologyTrade SO2 allowances (since 1990)

Technology ResponsesTechnology Responses

Pre-combustion: Coal cleaning (<30% removal)During combustion: Sorbent injection (<50%)Post-combustion: Flue gas desulfurization (FGD)

– Wet Systems: Lime/limestone scrubbers (90-98%)– Dry Systems: Lime spray dryer scrubbers (70-90%)

Sorbent injection processes (<50%)

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Schematic of a Power PlantSchematic of a Power PlantSOSO22 Removal SystemRemoval System

Atop an SOAtop an SO22 AbsorberAbsorber

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Evaluating Technology InnovationEvaluating Technology Innovation

Approach: Integrate several complementary evaluation methods and apply to an environmental industry or technological system defined by a single pollutant: sulfur dioxide (SO2)Rationale: The interaction between government, industry, and technological change is complex. By evaluating this interaction from different perspectives, a more realistic understanding can be developed while weaknesses in individual measures can be counteracted.

Technology ActorsTechnology Actors

Equipment vendorsArchitect & engineering firmsIndividual utilitiesResearch Sponsors

Government (DOE, EPA)Utilities (EPRI)

Universities

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GOVERNMENT ROLE?GOVERNMENT ROLE?

Environmental Equipment Suppliers



Byproduct Pollution Producers

Byproduct Pollution Producers

An Environmental Industry An Environmental Industry Inside a Black BoxInside a Black Box

Research Methods to Evaluate Research Methods to Evaluate Technology InnovationTechnology Innovation

Analysis of Patents Filed in the U.S. and EuropeInventive activity, linkages to adoption and diffusionIdentify key agents

Analysis of Technological “Learning”Technological change attributed to experienceTechnological change attributed to generational improvements

Analysis of Technical ConferencesInventive activity, linkages to adoption and diffusionIdentify key agents, industry structure, alliances, knowledge flows

Retrospective Analyses by Key AgentsInnovative inputsOrganizational context and constraintsImportance of patents, conferences to industry and technologyElicitation of learning curves, expert opinion of patenting trends

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InventiveActivity

Adoption &Diffusion

Knowledge Gained from Operating Experience

R&D• Goal-setting• Funding priorities• IP protection• Alliances

Marketing

Learning by Doing

• Product introduction• Advertising• Customer relationsThe Black Box

of Technological

ChangeRole of Government?

Technological InnovationTechnological Innovation


Marketing

Learning by Doing

• Product introduction• Advertising• Customer relations

Patents and Activity in Technical Conferences

Learning Curves Expert Interviews

The Black Box of

Technological Change

Role of Government?

Measuring InnovationMeasuring Innovation

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Data Contained in a PatentData Contained in a Patent

0

20

40

60

80

100

120

140

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

Year Filed

Num

ber

of P

aten

ts F

iled

CAA/NSPS CCT CAA-Try CAACAA/NSPS

Total U.S. Inventive Activity: Total U.S. Inventive Activity: Patents by ExaminerPatents by Examiner--Based MethodBased Method

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• Obtained patent lists from companies occupying a significant portion of the U.S. scrubbing market in 1973-93

Company A Commercially

Successful Patents (16)

Company B Commercially


Company C Commercially


Total Patents

from the 3 Portfolios

Patent Examiner Class-Based Filter

56% 46% 87% 54%

U.S. Patent Methodology:U.S. Patent Methodology:Linking Patents to Commercial SuccessLinking Patents to Commercial Success

Company A Commercially


Company B Commercially


Company C Commercially


Total Patents

from the 3 Portfolios

My Abstract-Based Filter Set Finds:

64% 71% 100% 75%

Patent Examiner Class-Based Filter Set Finds:

56% 46% 87% 54%

Linking Patents to Commercial Linking Patents to Commercial Success: AbstractSuccess: Abstract--based Methodbased Method

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0

10

20

30

40

50

60

70

80

90

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

Year Filed

Num

ber

of P

aten

ts F

iled

CAA/NSPS CCT CAA-Try CAA

Total U.S. Inventive Activity: Total U.S. Inventive Activity: AbstractAbstract--Based PatentsBased Patents

0

10

20

30

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

Year Filed

Num

ber

of P

aten

ts F

iled

CAA/NSPS CCT CAA-Try CAA

Patent Activity by Technology Type:Patent Activity by Technology Type:PrePre--Combustion ControlCombustion Control

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0

50

100

150

200

250

300

35019

73

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

Year of Conference

# of Papers# of Affiliations# of CoAuthors

Group 1 Group 2 Group 3

Social Networks and Tech Transfer: Social Networks and Tech Transfer: Conference PresentationsConference Presentations

Alliance Changes Over Time

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Marketing

Learning by Doing

• Product introduction• Advertising• Customer relations

Patents and Activity in Technical Conferences

Learning Curves Expert Interviews

The Black Box of

Technological Change

Role of Government?

Measuring InnovationMeasuring Innovation

Learning Curve for an Existing Learning Curve for an Existing FGD SystemFGD System

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Realized Improvements in FGD Realized Improvements in FGD Technology PerformanceTechnology Performance

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90

Cumulative 1000 MWe Wet Scrubbed

% S

ulfu

r R

emov

ed

0

50

100

150

200

250

300

0 20 40 60 80 100

Cumulative Capacity for Wet Scrubbers (1000 MW)

Cap

ital C

osts

( 1

977$

/ kW

)

1976 19801982

19901995

1976 19801982

19901995

Realized Improvements in FGD Realized Improvements in FGD Technology CostTechnology Cost

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Extension to IA of Carbon Extension to IA of Carbon Management: Management: Research TasksResearch Tasks

Phase I: Refine current models of technology innovationin the SO2 domain

Phase II: Apply study methods to innovations in powerplant NOx controls

Phase III: Extend methods and models to carbonsequestration technology

Phase IV: Implement findings in large-scale IA models(IIASA, others) to assess role of alternative carbon management options

Integrated Assessment Models of Global Climate Change

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