Stuck in the Past: Old Models Stymie Clean Energy Transition

With the upcoming COP 24 session in Poland, I recently published a post that looks at the progress that has been made since COP 21. COP 21 is when we saw the drafting of the Paris Agreement. COP 24 is the opportunity to truly put together implementation strategies for countries to meet their greenhouse gas reduction goals. There are several market sectors that are impacted by the Paris Agreement. Here I want to take a quick look at the electric power sector and the slow transition to more clean energy power systems.

What’s the Hold Up?

One uncertainty ahead for renewable energy is how investors will take to the coming period in which project revenues have less government price support, and instead depend on private sector power purchase agreements or merchant power prices.

Why can’t this transition happen more quickly, particularly in regards to electric power generation and consumption. When countries submitted their INDCs in 2015, the energy world was a bit different than today. One of the most significant differences from then to today is the price of clean energy resources, particularly solar, wind and batteries.

With significantly lower costs for clean energy power generation since the Paris Agreement shouldn’t we be seeing a more rapid transition. A key  argument has been that the higher costs of renewable energy was a key barrier. It is very difficult to make the same argument today. As demonstrated by the most recent levelized cost of energy studies.

Economics are there for clean energy

According to the Lazard Levelized cost of energy report, in 2015 combined cycle gas plants and utility solar were pretty much event in cost per kWh. Solar was a bit cheaper at $64 and Gas combined cycle was $65. Wind was less expensive than both at $55. If we look at the most recent Lazard report for 2017, prices have continued to drop for all technologies, but solar and wind by considerably more. In 2017 wind was $15 less than gas at $45 and solar was $10 less than gas at $50. Solar made the largest gains in price reduction per square foot and closed the gap on wind. There is now only a $5 difference between wind and solar applications.

The other argument has been that renewable energy is intermittent and too much renewable energy on the grid would hurt grid reliability. This argument appears to be losing some of its validity. One would expect that with early deployment, there was not the diversity of resources, solar and wind, nor the geographic disbursement of these systems to ensure grid stability. However, as we see greater deployment of solar and wind, we see the complementary nature of these resources and how they are better able to support the overall grid when coupled together. Throw in batteries and you really solve the intermittency issue. Granted, solar and batteries is still a bit more expensive, than your base load combined cycle natural gas plants, but not by much.

Texas Not Showing the Way

A recent decision by the Texas Public Utility Commission (PUCT) on AEPs Wind Catcher facility is a good example of how developers may not be using the appropriate assumptions for their models and how the PUCT is slow to adjusting to the clean energy transition. What this means for both the developers and the regulators is that they have not been able to properly model the long-term benefits of clean energy resources and future risks of a fossil-fuel based power grid.

The AEP’s Wind Catcher would have been a 2 GW wind farm in the Oklahoma Panhandle. The largest wind farm in the United States. AEP argued that customers would receive significant benefit due to the expected fuel savings of the project. Because power would be provided to Texas, the PUCT had a say on whether the project was seen as beneficial to Texas customers. The PUCT denied the project on grounds that it placed too large a burden on rate payers.

What has changed in the market?

The clean energy market is tougher place to be than it was a year ago. Three key factors a lower federal tax rate, low natural gas prices and in Texas the fact that the renewable portfolio standard has long been met and provides no requirement for utilities to take on additional clean energy.

Because the renewable energy standard goals of Texas have been met, AEP had to demonstrate that the costs of the plant were competitive and provided cost savings to customers. Another strike against the project was when first conceived, the federal tax rate was higher. Higher tax rates provides a greater benefit to projects looking to participation in the federal production tax credit. When taxes go down, less tax burden and less benefit via this credit. AEP saw a $245 million decrease in tax benefit with reduction in federal taxes.

Old Way of Thinking Continues

Those are two valid concerns that have a material effect on the value of this project. There are two concerns expressed by the PUCT that are more difficult to accept. The first is that the PUCT does not feel there will be a carbon tax or any other climate regulation supporting clean energy investment in the near to mid-term. However, that is likely to be only as long as the current administration stays in power. Looking beyond 2020, we should anticipate a swing back toward carbon related regulations which would get the US back in line with the rest of the world.

Further, as we continue to see greater climate related extreme weather activity, it is increasingly likely that more interest will be paid in mitigating climate risk through the development of policies for more clean energy resources. This could be done through a “punctuated equilibrium” event such as an extreme long-term drought or the largest fire in California’s history, that would mobilize voters for more climate focused policies. Not only may a large event drive policy change, think Fukishima, but so would current state and local efforts. We are seeing a significant horizontal diffusion across states and communities of climate policies. As this builds, we could very well see a vertical diffusion, a snowball effect that drives action at the federal level. We see from COP 23 that a sizable portion of US cities and states are “still in.” To not take into account, the possibility of future climate regulations is short-sighted energy planning that goes against many of the indicators that would suggest otherwise.

Natural Gas Prices to Remain Flat for 30 years?

The second argument by the PUCT against the Wind Catcher project was that natural gas prices are low and will remain low for the foreseeable future.  With such low natural gas prices, wind is not believed to be competitive and would increase cost burden to customers.

The analysis by the PUCT does not take into account the ongoing decrease in wind energy prices. As mentioned earlier, according the most Lazard report, the LCOE of wind is less than natural gas combined cycle plants. A recent Rocky Mountain Institute (RMI) report finds that an “optimized clean energy portfolio” is cost competitive with natural gas at $5 MMBtu gas now and with $3 MMBtu gas in the next 15 years. The study also looks at a Texas case study.  When comparing a combined cycle plant with a clean energy portfolio which includes energy efficiency, solar, wind, demand response, etc., the clean energy portfolio has a 25% savings over the cap ex of a the combined cycle plant.

The Chairperson of the PUCT, DeAnn Walker, stated that one of the key problems with the project is that “the costs are known…the benefits are based on a lot of assumptions that are questionable.” However, looking at the decision of the PUCT, one should ask the same thing of the PUCT assumptions of low natural gas prices. Natural gas prices are historically volatile. To base the conclusions on the premise that natural gas prices are going to remain stable and flat over the next couple of decades indicates that the PUCT has not learned from history. By assuming that natural gas prices will follow a very stable, minor increase for the next thirty years does not reflect the reality of the last 30 years. This false assumption puts energy consumers at greater risk.

Here is the PUCT’s assumption – natural gas prices is the orange line.

Here is the historic reality of natural gas price volatility.

There were some other strikes against the Wind Catcher project, particularly the additional costs of transmission construction to interconnect the system. Further, AEP should have done a better job on how it presented its analysis and assumptions with the more recent changes in the natural gas market and regulatory environment.

That being said, AEP and other developers should learn from this project. One key area that has yet to be touched to the degree necessary is future climate risk and the increasing likelihood of climate regulations. Energy planning models are not properly taking into account either of these risks. By not doing so, models will not adequately value clean energy projects and limit opportunities for speeding up the energy transition. More to come on energy planning in the next post.

 

Advertisements

Paris Agreement: The Slow Walk Continues

COP 24 is quickly approaching. This COP will be held in Katowice, Poland. The intent of the 24th Council of Parties is to facilitate and adopt a set of strategies that will lead to the full deployment of the goals expressed during COP 21, i.e. the Paris Agreement. There will also be greater focus at this COP to identify not only mitigation strategies, but also more carbon sequestration strategies via improved land-use practices.

 

A Quick Review of Paris Agreement

In 2015 all of the countries of the world convened at COP 21. The 21st meeting of the UN’s Council of Parties. The goal of COP 21, aka 2015 Paris United Nations Framework Convention on Climate Change  (shortened to the Paris Agreement), was to identify the strategies that would help countries, and the globe at large, to reduce greenhouse gas emissions. The expectation was that by countries cooperating and coordinating on a variety of emission reduction and carbon sequestration efforts, we would decrease the likelihood of the planet warming more than 1.5 degrees. 1.5 degrees being the threshold that was set by climate scientists to be the maximum amount the plant can warm beyond the pre-industrial revolution baseline of the late 19th century. Beyond 1.5 degrees, and it is expected the earth would see some pretty catastrophic impacts. This would largely be an increase in number and intensity of extreme weather events, both short-lived such as hurricanes and of longer duration, such as droughts.

To establish the Paris Agreement, all countries worked to provide Intended Nationally Determined Contributions (INDC) for mitigation. These are largely the sectors countries will focus on to reduce their greenhouse gas emissions. This includes the energy sector; agriculture; land-use; waste; transportation, etc. By April 2016, 97% of all participants, 190 of the 196 possible participants, in the United Nations Framework Climate Change Covenant (UNFCCC) had submitted INDCs. This covered about 94.6% of all carbon emissions.

What has happened since the Paris Agreement?

What happened between COP 21 and COP 24? Some would argue progress was made, but largely not enough progress to adequately address the extreme risk we face with a rapidly changing climate. Some progress is better than no progress. We did see advancements in commitment for financing and funding both mitigation and adaptation activities; greater focus on supporting indigenous populations; and the development of additional coordination mechanisms that facilitate dialogues across countries, as well as between the public and private sector.

There was COP 22 in Morocco. This was largely a follow-up to COP 21 to demonstrate that countries are on board . A joint statement was issued to this effect demonstrating that countries are committed to the goals they established in COP 21. The COP did ask for not only ongoing commitment but also a willingness by countries to increase their financial contributions to this effort, both internally and to countries in need of greater financial support. It also recommended that countries up their goals a bit, as there was a increasing realization that the goals set during COP 21 were not sufficient to meet the 1.5 degree threshold.

There was then COP 23, held in Bonn, Germany and led by the country of Fiji. The focus of COP 23 was to further develop implementation strategies for COP 21 goals, as well as further develop a facilitative dialogue known as the Talanoa Dialogue. The intent of this dialogue is to build trust among participating countries. With greater trust, it is believed there will be improved knowledge sharing, as well as increased likelihood of greenhouse gas reduction strategies being implemented. Some other highlights includes United States’ cities and states recommitting after the US federal government pulled out of the Paris Agreement.  With Fiji taking the lead, there was also significant focus and progress on indigenous populations, particularly those that are most at risk to sea-level rise and other climate risks.

Where do things stand?

We have all of this improved coordination and cooperation happening across countries, as well as with greater public/private partnership efforts. Further, we have greater investment in mitigation and adaptation efforts. However, we still are very much falling short. In October 2017 the UN Environment’s Emissions Gap report was issued. The report was issued prior COP 23 in Bonn. It assesses the INDCs and the progress countries are meeting. The conclusion was not great. The INDCs meet only about 1/3rd of what needs to be done to keep under the 1.5 degree threshold and those pledges that have been made are not all reducing emissions as quickly as anticipated.

As a planet, we are way behind where we need to be to decrease the likelihood of hitting the 1.5 degree threshold. In the next blog post, I discuss the electric power transition and the current barriers that are slowing it down and the ways in which to reduce these barriers.

Rolling Blackouts in Texas? One Easy Cure

Will the lights stay on in Texas this summer? With record energy demand and even higher energy demand this week, there are some doubts. What may be a solution? Greater focus should be placed on energy efficiency to reduce near and long-term risk.

Soaring Demand for Power

The Texas electricity market continues to hit record power demand highs. The most recent record high was 73,259 MW on Thursday. Demand is expected to go as high as 75,596 MW some time in the next few days as record temperatures hit the area. This will be close to 6,000 MW higher than average over the last few years, about an 8% increase from the previous year.

More importantly, this is almost 3,000 MW higher than was anticipated April 2018 when ERCOT made its last summer peak demand prediction for the summer of 2018.  With a generation capacity of 78,000+ MW ERCOT had planned for a reserve capacity of 5,428 MW during the 2018 summer peak. If the new prediction for this week of a peak demand of 75,529 MW happens, that reserve capacity goes down to 2,588 MW.

The Razor’s Edge

2,500 MW of reserve capacity is not a lot to play with when you start looking at the possible generation outage scenarios, such as natural gas plants have mechanical difficulties or the wind slows down in west Texas. ERCOT looked at a bunch of different scenarios to determine the potential risks that could eat into the reserve margin. When the reserve was north of 5,000 MW ERCOT saw that there were three scenarios where the reserve margin would be used. With the new possible reserve margin, all risk scenarios show inadequate capacity.

When there is inadequate capacity, we may begin to see brown outs and rolling black outs. Some of this threat is limited by demand response and load management programs that allows for voluntary reduction of loads by large energy users. This does not provide a lot of comfort because the demand response and emergency response service only gives us about 2,300 MW of spare capacity.

To sum up, Texas is running on a razor thin amount of reserve power this summer and there is not much that can be done in the short term to increase generation capacity. Due to such low electricity prices in Texas there is no appetite to build new merchant generation plants in Texas. Operators cannot make money in the current market due to such low prices throughout the year. Operators only get paid when they run. ERCOT is not a capacity market where generators get paid to have additional capacity onsite and standing by. After this summer, if peak prices get high enough for long enough period of times, and these higher summer prices appear as if they are here to stay, we may see some entering the market. But don’t hold your breath.

What to do? What to do?

There is one relatively easy solution. It doesn’t get the attention of a lot of people because it is not a shiny solar panel or a big turbine. Typically, most people never see it or know it is there. It is energy efficiency. Unfortunately, the state of Texas is a laggard at energy efficiency.

How Texas Compares to Other States in Regards to Energy Efficiency

I am not saying utilities responsible for energy efficiency programs run bad programs. They are very efficient operators of their efficiency programs. They do good work. The problem is that they don’t have to try to hard. The energy efficiency requirements for utilities is very low in Texas. We have the lowest energy efficiency goals by far across the entire United States. These goals are set by the energy efficiency resource standard (EERS). The state of Texas was the first state to adopt an EERS in 1999. We then quickly became laggards and fell of the pace. The image below, although a couple of years old, shows how far Texas lags behind other states in energy efficiency savings goals by utilities.

Everyone in the ERCOT market pays for energy efficiency. You may see it on your bill as the energy efficiency cost recovery factor (EECRF). You may not have noticed it because it is either bundled with other costs on your bill. Even if it was listed it is such an inconsequential piece of your bill you wouldn’t notice it anyway.

Saving Energy is Cheaper than Making Energy

Energy efficiency continues to be on of the cheapest ways to increase the amount of generation capacity in Texas. Solar and wind have come down in price significantly, that is for certain. However, energy efficiency should not be set aside. The United States wastes a lot of energy. If we waste less through energy efficiency programs, we put less stress on the grid and we will not have to be as concerned as to whether we have enough electricity to keep the lights on.

Energy Efficiency Simply Done

It doesn’t take a lot of time and requires minimal disruption to a business or household. It can be as simple as some behavioral change, such as not having every TV on in the house that no one is watching because they are on their IPad or Nintendo Switch.  Other simple things to do would be to buy new high efficiency LED light bulbs ( the light quality is excellent, they last forever and are really not that expensive anymore); adding insulation to your attic and walls; adding weather stripping and caulking to windows and doors; installing ceiling fans and finally, upgrading to a new high efficiency air conditioning system. A lot of options and there are ways to find out what you can do.

A very well kept secret is that utilities provide free residential energy audits. In Texas, call up your utility, not your retail electricity provider (although some are now offering these services) and see who their providers are. We had our house done a few years ago. They came in, did and audit, and on the same day, installed new light builds, added weather stripping, sealed leaks in the A/C duct work and added insulation. You are paying for it with your EECRF so why not take advantage of it. Businesses should do the same thing. There are a large number of energy efficiency programs to take advantage of, but act fast the dollars go very quickly. Which gets me back to one of my pain points, Texas as a state sucks at energy efficiency. Not because of the work of the programs, the utilities do good work, but because of the lack of funding provided to these programs.

Regulators and Legislators Lack Sense of Urgency

Our legislators and regulators have not been convinced that energy efficiency is a priority for the state. The PUCT has actually put a pretty restrictive cap on what utilities can spend on energy efficiency.  If the state, marginally increased its energy efficiency goals under the EERS, and just brought Texas up to the state that is second to last, the amount of dollars would be significantly higher. SPEER, a state-wide energy efficiency organization finds that with modest tweaks to our energy efficiency goals, we should expect about a 10% decrease in energy consumption. That is a significant reduction and impact when we are playing so close to the margins.

There is a pretty clear path to reducing the likelihood of blackouts. The 2019 legislative session is coming up. Let your representative know that you don’t want black outs, you see energy efficiency as a simple fix and you want more funds to support it.

More funds would mean more energy efficiency, which means improved reserve margins which means a much lower likelihood of the lights going out in Texas. Plus your house or business will see lower power costs and probably be a lot more comfortable.

.

 

Why Nations Will Meet Paris Climate Agreement Goals

Paris Agreement and Climate Change Risk:

The Paris Agreement was the first time all countries came together to work toward a reduction in global greenhouse gas emissions in an effort to mitigate climate change. In a 2015 study published in Nature if the world was able to maintain its commitments toward meeting the Paris Agreement goals then it could be expected that:

  • A third of oil reserves
  • Half of gas reserves
  • 80% of known coal reserves

will stay in the ground. Although this would be good for the overall health of the planet by reducing impact of climate change, it would be disastrous for resource extraction based companies. However, with recent reports, companies that work on the extraction of oil, gas and coal may not have much to worry about if current trends continue. Even with the Paris Agreement accords we see many countries not meeting their goals and actually increasing their emissions. Globally, we see more coal plants coming online to support developing countries appetite for growth. Also, we continue to see increases in emissions from the transportation sector.

Is this growth in emissions a hiccup and expected to be short lived? Some would argue that it is.

Why could this be just a hiccup?

Due to growing global climate change risk countries and companies continue to take steps to transition from the burning of fossil fuel. With decreasing costs of fossil free alternatives, the effort to debarbonize is becoming much easier.

The most recent levelized cost of energy studies, show all PV solar and wind to be cost competitive with natural gas and coal fired power plants. This was not necessarily the case at the signing of the Paris Agreement. Costs will continue to decrease for these generation assets and it will be more difficult to fund more expensive fossil-fuel alternatives. Further, as more renewable energy facilities are built out, the diversity of locations for these systems will reduce the intermittency issues that have been a concern for power grid operators. Not only the number of systems and the diversity of location are a benefit, but so is the significant ongoing decrease in the price of battery storage. On a regular basis, new reports are published on the ongoing decreasing cost of battery storage.

The technology is coming quickly and is ready for deployment. Much of the barrier is now political. Globally, risk adverse elected officials responding to very powerful fossil fuel interests, has resulted in an unlevel playing field with markets and regulations not properly accounting for and allowing new clean energy technologies.

What happened after the Paris Agreement?

 It was expected that when the Paris Agreement was signed  everyone was ready to go and begin to implement all these climate change mitigating measures. The fact of the matter is that there were many well meaning pledges, but the economic and political reality was not yet there for many parts of the world. Although we needed these goals to be met sooner rather than later, it takes time.

Technologies needed to be further developed and costs had to continue to decline. The financial markets and capital providers had to become more comfortable with valuing and funding these new technologies. Government regulators and policy makers had to better understand the barriers to deploying these systems and start making the appropriate changes that would not hinder the deployment of clean energy systems. Finally, the clean energy sector needed more allies and a bigger voice to compete with the more powerful fossil fuel lobby. 

Winds of Change

Financing and Investment in Clean Energy

Things are looking up. Specific to investing in clean energy, in 2017, clean energy investment outpaced fossil fuel investment by a significant amount, $333 billion vs $144 billion, respectively.  A specific funding instrument growing in popularity are green bonds. They are becoming one of the largest investment vehicles for energy efficiency and renewable energy investments. In 2018, it is expected that there will be $250 billion in green bond new offerings. This is 60% higher than 2017, which was $155 billion.  2017 saw a 60% increase in investment from 2016 (See graph below).

Source: Bloomberg

Political Winds are Changing

On the political side, at least outside of the US, we see a more robust shift to taking serious steps toward decarbonization and reducing climate change risks. The European Parliament is getting more serious in supporting plans to facilitate EU capital markets to meet long-term sustainability goals, which includes decarbonization, disaster resiliency and resource efficiency.

On May 29th the European Parliament adopted the sustainable finance resolution. Which includes:

  • Rules to orient financial markets towards environmental objectives
  • Policy framework to encourage investments into sustainable assets
  • Divestments from fossil fuels and unsustainable energies

The first two items are key areas that all countries must further develop to ensure Paris Agreement goals are met and exceeded. Without the proper market and regulatory framework in place, the investment community and companies will be less willing to transition to cleaner technologies. Item three, divestments are already happening. They will only become more rapid as the rules and frameworks around clean energy are developed.

Divestment Continues

What we are seeing in the market in regards to divestment should provide some hope for clean energy and concern for fossil fuel interests.

For example, hedge funds are seeing a 50% increase in demand for responsible investment offerings from current and prospective investors. This is according to a survey of about 80 managers from the Alternative Investment Management Association.

Another significant move was made by the state of New York and and New York City to actively divest from existing and future fossil based investments. To date, endowments and portfolios managing over $6 trillion are actively divesting from fossil fuel assets. Pension funds have come to the realization that they must protect their portfolios from climate change. Fossil fuels are not the future and their investments are at risk.

Stranded Assets Due to Climate Change

As divestment occurs, one of the primary concerns is the threat of fossil fuel stranded assets. These are largely reserves that will not be used as global markets move to clean energy resources.

What is a stranded asset? According to University of Oxford Smith School and Enterprise and the Environment, a stranded asset are “assets that have suffered from unanticipated or premature write-downs, devaluations, or conversion to liabilities and they can be caused by a variety of risks.”

At risk are assets listed on the financial statements of energy producers and a reduction in anticipated cash flows for future production which may be reflected in company stocks.

Risky Business

Oil and gas companies may see transitioning their business model to clean energy as risky. Some have made some initial transitions, Total, Statoil, Shell and BP for example. At this time, their clean energy investment is still minor compared to their overall fossil fuel investment strategies. For example, of Shell’s $30 billion investment budget only $2 billion goes to renewables.

Although this climate change transition may be risky, not paying serious attention and taking serious steps toward transitioning to clean energy assets may be even more risky. There is a lot of uncertainty as to the speed to which this transition will happen. A miscalculation in the speed of this trend could have dire consequences for fossil fuel companies. A recent report by the Oxford Institute for Energy Studies, “The Rise of Renewables and Energy Transitions,” lays out the significant risks of stranded assets that could be faced by those who do not choose wisely ( a little Indiana Jones reference). Moving to be an integrated energy company rather than an oil and gas pure play is probably the most appropriate choice in the current energy landscape. A recent study by Wood Mackenzie, finds that over the next 20 years renewables will be the fastest-growing primary energy source worldwide. They anticipate average annual growth rates of 6% for wind and 11% for solar. In contrast demand for oil, is anticipated to grow about 0.5% per year.

Growth in Renewable Energy vs. Fossil Fuels

Concerns over climate change risk are real and are being taken seriously by financial decision makers and policy makers. This would suggest that fossil fuel companies can no longer take a wait and see approach. The technology and markets are changing rapidly and for their own viability and of the communities they serve, they probably should get on board.

 

Book Review: Drawdown – The Most Comprehensive Climate Plan Ever Proposed to Reverse Global Warming

Title: Drawdown: The Most Comprehensive Plan Ever Proposed to Reverse Global Warming

Editor: Paul Hawken

Publisher: Penguin Books

Year Published: 2017

Price: $17.31

When this book arrived in the mail I was shocked. I was not expecting a book with coffee table dimensions. It is a wonderfully designed book. The solutions are well organized, the writing is accessible to all readers and the pictures are eye-catching.

The genesis of this book came from Hawken’s realization that there is not a comprehensive checklist of technologies and solutions for climate mitigation and climate adaptation. After several years of looking for this list and not finding one, he decided he would need to bring together and work with the top climate experts in the world to come up with a list of solutions that have the greatest potential of reducing emissions and sequestering carbon from the atmosphere. The outcome is the Drawdown organization and this book. The book is just the beginning. It is anticipated that this will be a living plan with regular analysis and updates from Drawdown and found at www.drawdown.org 

The Foreword is provided by Tom Steyer, Founder of NextGen Climate. Here he discusses the importance of identifying innovative solutions to climate change, and particularly not just technological solutions but solutions that work in tandem with natural systems. Steyer sees Drawdown as a roadmap with a moral compass that finally provides a vision that allows all of us to work together to build a cleaner and better world.

In the book over 80 solutions are identified and ranked based on the greenhouse gas reduction potential out to the year 2050. Of the top 20, reductions in the food, energy and the land-use sector are the most commonly seen. The number one solution identified is refrigeration. The problem is the proliferation of refrigeration using hydrofluorocarbons (HFC). HFCs were adopted to replace the ozone depleting chlorofluorocarbons (CFC), hydrochlorofluorocarbons (HCFC). In October 2016, in Kigali, Rwanda, the Montreal Protocol was amended to start the phase-out of HFC. However, with an anticipated 700 million air conditions being in circulation by 2030, many using HFC, this will be quite a monumental task to reign in the use of HFC.

The book provides a concise review of each of the 80 options taking into account reductions in GHG potential, net costs and the net savings of taking action. The authors do a nice job of bringing in real world examples of struggles, as well as success stories of communities and governments implementing these solutions. The solutions are broken into categories of energy, food, women and girls, buildings and cities, land-use transportation and materials. There is also a wish list presented at the end of the book of high value, but not yet fully scaled solutions such as smart highways, the hyperloop, marine permaculture and the artificial leaf.

Solutions are plentiful, both those that are already being implemented, as well as those that have some near-term potential of scaling. The book does a nice job by bringing together high impact solutions to one place for easy access and evaluation. That being said, I would not call the book a comprehensive plan. At the most a comprehensive list, but not a comprehensive plan. It is definitely a call to action. It is inspirational and provides hope and optimism that there is a way to salvage our planet through cost effective emission reducing solutions. But at the end of the book, I was still asking myself what is the plan? Maybe that is asking too much. This book takes a global approach to identify a list of solutions. We probably should not expect it to provide an actual plan to implement these measures at a national or sub-national level.

I believe the book does provide local planners and officials a better idea as to what solutions may be viable, but there still needs to be considerable work at the federal, state and local level to turn the list of solutions into a workable plan. Stakeholders must be engaged and priorities must be identified and set. Communities need to conduct cost benefit analysis to see what is economically practical. Regulations and policies must be changed that would allow for proper valuation and inclusion of these solutions and remove the barriers to their adoption. Finally, for any solution to work or plan to implemented, there needs to be funding. I was hoping this book would begin to present these funding solutions but none are identified. Fortunately, there is growing interest by institutional investors and the market in general to push more funds to climate solutions. 

To sum, it is a great list of solutions. It is well researched and well laid-out. It should be a must-read for any planner, government official or policy maker. For anything to happen in reducing greenhouse gases, it is vital that these solutions are known, quantified and ranked and the book does just that. Learn more at the image below.

Book Review: Drawdown – The Most Comprehensive Plan Ever Proposed to Reverse Global Warming

Title: Drawdown: The Most Comprehensive Plan Ever Proposed to Reverse Global Warming

Editor: Paul Hawken

Publisher: Penguin Books

Year Published: 2017

Price: $17.31

When this book arrived in the mail I was shocked. I was not expecting a book with coffee table dimensions. It is a wonderfully designed book. The solutions are well organized, the writing is accessible to all readers and the pictures are eye-catching.

The genesis of this book came from Hawken’s realization that there is not a comprehensive checklist of technologies and solutions for climate mitigation and climate adaptation. After several years of looking for this list and not finding one, he decided he would need to bring together and work with the top climate experts in the world to come up with a list of solutions that have the greatest potential of reducing emissions and sequestering carbon from the atmosphere. The outcome is the Drawdown organization and this book. The book is just the beginning. It is anticipated that this will be a living plan with regular analysis and updates from Drawdown and found at www.drawdown.org 

The Foreword is provided by Tom Steyer, Founder of NextGen Climate. Here he discusses the importance of identifying innovative solutions to climate change, and particularly not just technological solutions but solutions that work in tandem with natural systems. Steyer sees Drawdown as a roadmap with a moral compass that finally provides a vision that allows all of us to work together to build a cleaner and better world.

In the book over 80 solutions are identified and ranked based on the greenhouse gas reduction potential out to the year 2050. Of the top 20, reductions in the food, energy and the land-use sector are the most commonly seen. The number one solution identified is refrigeration. The problem is the proliferation of refrigeration using hydrofluorocarbons (HFC). HFCs were adopted to replace the ozone depleting chlorofluorocarbons (CFC), hydrochlorofluorocarbons (HCFC). In October 2016, in Kigali, Rwanda, the Montreal Protocol was amended to start the phase-out of HFC. However, with an anticipated 700 million air conditions being in circulation by 2030, many using HFC, this will be quite a monumental task to reign in the use of HFC.

The book provides a concise review of each of the 80 options taking into account reductions in GHG potential, net costs and the net savings of taking action. The authors do a nice job of bringing in real world examples of struggles, as well as success stories of communities and governments implementing these solutions. The solutions are broken into categories of energy, food, women and girls, buildings and cities, land-use transportation and materials. There is also a wish list presented at the end of the book of high value, but not yet fully scaled solutions such as smart highways, the hyperloop, marine permaculture and the artificial leaf.

Solutions are plentiful, both those that are already being implemented, as well as those that have some near-term potential of scaling. The book does a nice job by bringing together high impact solutions to one place for easy access and evaluation. That being said, I would not call the book a comprehensive plan. At the most a comprehensive list, but not a comprehensive plan. It is definitely a call to action. It is inspirational and provides hope and optimism that there is a way to salvage our planet through cost effective emission reducing solutions. But at the end of the book, I was still asking myself what is the plan? Maybe that is asking too much. This book takes a global approach to identify a list of solutions. We probably should not expect it to provide an actual plan to implement these measures at a national or sub-national level.

I believe the book does provide local planners and officials a better idea as to what solutions may be viable, but there still needs to be considerable work at the federal, state and local level to turn the list of solutions into a workable plan. Stakeholders must be engaged and priorities must be identified and set. Communities need to conduct cost benefit analysis to see what is economically practical. Regulations and policies must be changed that would allow for proper valuation and inclusion of these solutions and remove the barriers to their adoption. Finally, for any solution to work or plan to implemented, there needs to be funding. I was hoping this book would begin to present these funding solutions but none are identified. Fortunately, there is growing interest by institutional investors and the market in general to push more funds to climate solutions. 

To sum, it is a great list of solutions. It is well researched and well laid-out. It should be a must-read for any planner, government official or policy maker. For anything to happen in reducing greenhouse gases, it is vital that these solutions are known, quantified and ranked and the book does just that. Learn more at the image below.

Policy Snapshot: Understanding the Withdrawal from the Paris Climate Agreement

Earlier this week I posted about to what extent the withdrawal from the Paris Agreement matters. I wrote a separate blog post over at HARC, a sustainability focused research institute in The Woodland, TX.

 

Here is an excerpt…

 

On Thursday, June 1st, President Trump and his Administration withdrew the United States from the Paris Climate Agreement. The Agreement was signed December 2015 by 195 countries during COP 21 in Paris (the 21st meeting of the Conference of the Parties). The Agreement went into effect October 2016 with the ratification by the European Union. Currently, 147 countries have ratified the agreement.

The Trump Administration’s justification for the withdrawal was based on the argument that the Intended Nationally Determined Contributions (INDCs), i.e. carbon reduction goals, placed the United States at an economic disadvantage on the global stage. According to the Administration, the INDCs would require the federal government to adopt carbon-reducing policies and regulations that would limit economic growth. Further, the Administration argued that economic rivals, including China and India, would have an advantage over the United States because their specific pledges were significantly less onerous.

Finish the article at this link