The issue is whether governments, industry and consumers are willing to do what is required
By Adair Turner
Jonathan Adair Turner, Baron Turner of Ecchinswell (born 5 October 1955) is a British businessman and academic and was Chairman of the Financial Services Authority until its abolition in March 2013.
He is a former Chairman of the Pensions Commission and the Committee on Climate Change, as well as a former Director-General of the Confederation of British Industry. He has described himself in a BBC HARDtalk interview with Stephen Sackuras a ‘technocrat‘.
Fossil fuels have driven rising prosperity for more than 200 years and today provide 80 per cent of human energy needs. But carbon dioxide emissions from their use threaten potentially catastrophic climate change.
To avoid that we must achieve net zero emissions across the whole world by around 2060.
That may seem daunting. But it would be undoubtedly technically possible at very small economic cost, as a report from the Energy Transitions Commission makes clear. The issue is not feasibility, but whether governments, industry and consumers are willing to take the actions required to get there.
Achieving net zero emissions requires boosting the role of electricity.
The commission, which I chair, estimates its share of energy demand must grow from 20 per cent today to more than 60 per cent by mid-century.
Total generation would have to rise from 20,000 terawatt hours to up to 100,000 twh.
Nuclear power could play some role but most of this power must and can come from renewable sources, including wind, solar and water.
Less than 1.5 per cent of the global land surface area could produce all the renewable electricity the world needs: and it is physically possible to run grids that rely on intermittent renewables for 85 to 90 per cent of their power, while still delivering electricity whenever needed.
The real challenge is to get to this endpoint fast enough: that requires us to quintuple our annual investment in renewables capacity for the next 40 years.
Three other technologies are also essential.
First there must be a major role for hydrogen power: steel producers could potentially use it rather than coking coal as the reduction agent, and ammonia (produced from hydrogen) could be used as fuel for ships.
Hydrogen can result in zero-carbon emissions if produced via electrolysis using zero-carbon electricity.
Second, we must tap bioenergy to provide zero-carbon aviation fuel and as a feedstock for plastics production. But this step must be carefully managed to avoid harmful impacts on ecosystems and food production.
Third a relatively small but still vital role for technologies that capture CO2, particularly in cement production.
Some aspects of a zero-carbon economy will make consumers better off.
Within 10 years, electric cars will not only be cheaper to operate than diesel or petrol, but also cheaper to buy.
In heavy industry and transport, where it is harder to reduce CO2 emissions, some additional costs are unavoidable but often the consumer impact will be trivial: making cars from zero-carbon steel would add no more than 1 per cent to a typical car price. But in some specific sectors, material price increases may be unavoidable: if bio-based aviation fuel costs 50-100 per cent more to produce than conventional jet fuel, that would add up to 20 per cent to ticket prices.
Overall, the commission estimates that achieving zero emissions in heavy industry and transport by 2060 would make the global economy at most 0.5 per cent smaller than it would otherwise have been.
That figure could be reduced to less than 0.3 per cent if we increased the recycling and reuse of industrial materials.
That means that there are no unmanageable technological, resource or even cost barriers to impede our path to a zero-carbon economy. Still, without strong government intervention policies we will fail to achieve it.
Charging for carbon emissions is essential but must be designed to avoid unfair competition. Making steel zero carbon may add only trivially to car prices, but any steel producer facing a carbon price that adds $100 to the costs of producing a tonne of steel, would be severely disadvantaged if competitors in other countries did not have to pay similar taxes.
Ideally, we would strike international agreements, but we should not rule out imposing carbon-related tariffs on imports from non-co-operating countries. We should also consider unilateral domestic carbon prices in sectors such as cement, where international trade is limited. In some sectors, regulation may be more effective. Green fuel mandates requiring airlines to use a steadily rising percentage of zero-carbon bio or synthetic jet fuel would provide powerful incentives for innovation and large-scale production. Tight rules on the dismantling and disposal of discarded products will be essential to drive recycling.
Reaching agreement on many of these policies will of course be difficult. But it should at least be easier if we start with certainty that a zero-carbon economy is both technically feasible and affordable.
The writer, a former head of the UK Financial Services Authority, chairs the Energy Transitions Commission
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