No pain, no gain is the message in a comprehensive paper by Dr Urjit R. Patel, President, Business Development, Reliance Industries Ltd, published by the Brookings Global Economy and Development Centre (Working Paper 39).
Called ‘Decarbonisation Strategies', the paper loomily predicts that a low-carbon future will probably cost double the initial estimates.
The paper argues that sectors such as power and transport are fundamental for reducing the energy-related emissions by half over the next four decades.
It is estimated that the power sector would account for over half the increase in emissions between over the next two decades.
So the world is going to need a broad set of technologies both new and proven. However, none of these will singly induce the majority of potential curtailment.
In other words, there is no “silver bullet” and a portfolio of options has to be looked at for a low-carbon outcome.
Novel idea
Possibly, the key lies in eliminating or curbing emissions from passenger vehicles. These are projected to increase by more than half by 2030 because the number of vehicles could double from the present 730 million to over 1.3 billion in the next two decades globally.
So we need battery-operated cars and though Governments may provide subsidies, eventually the users will have to pay, says Dr Patel.
One way of tackling the problem, he says, could be for service providers to invest in capital (the battery) and lock in energy costs through long-term power purchase agreements with the utilities and mediate the arbitrage to the consumer by billing for the service.
In effect, service providers will sell ‘miles' to consumer every time the electric vehicle plugs in to a charging device.
But it will not be enough if the change in transport sector is not accompanied by the decarbonisation of the power sector, aptly characterised as ‘well-to-wheel' path.
There is a need to make greater use of renewables such as hydro and wind, nuclear and to incorporate carbon capture and storage in thermal plants.
Not by cars alone
By 2030, the share of renewables (including hydro) in power generation would have to more than double to little less than 40 per cent and nuclear would have to increase to about a fifth for halving emissions from the global average of 540 g CO2 per kilo watt hour to 240 g CO2/kWh by 2030.
This would represent a major change from the business-as-usual scenario, as fossil fuel such as coal which accounts for two thirds generation, would bear the brunt with generation capacity cut by half. Within renewables, the trend towards hydro projects in country such as India is striking.
Quadrupling of hydro generation capacity by 2030 seems difficult given the allergy against big dams in the country on environmental and rehabilitation grounds.
Further, replacement of hydrocarbon-based electricity will be difficult even a decade down the line.
Though there is little technological and cost uncertainty with regard to hydro and nuclear, there are safety, roll-out capacity and environmental hurdles which are not wholly appreciated.
With regard to wind and solar, the intermittency basically makes them inadequate for base load generation.
Besides, the cost of reliable generation, transmission and supply from these sources makes their economics, even prospectively, much inferior when compared to other fuels.
Cheaper natural gas may turn out to be the bridge between base load coal generation and carbon-free sources. However, this would require positioning targets for carbon dioxide emitted per unit of electricity generated.
Even if one or more technology options analysed prove to be commercially unviable, then aggressive levels of technology performance and deployment would be necessary in the remaining areas to achieve the desired objective.
Global coordination
Further, the paper says that nature of carbon externality requires global coordination in some form or else mitigation efforts may be impacted.
The pace of technological change is endogenous to the price or tax on carbon dioxide and therefore it is essential to have dynamic long-term signals congruent with correcting the externality.
The private sector, on which considerable faith is being placed for establishing the sustained commercial efficacy of technologies, would be incentivised by secularly increasing the price of carbon, the paper argues. The developed nations have to pay for the mitigating the carbon emissions.
The $100-billion long-term Green Fund proposed by the developed countries in Copenhagen, to help the developing nations mitigate and adapt to climate change, has been a non-starter.
Pledges to the tune of $25 billion towards the Fast Track Finance Fund have remained on the paper.
It would be useful if the author could update the paper with the latest developments.