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  • patneuman2000
    ... wrote: Beyond Kyoto By John Browne From Foreign Affairs, July/August 2004 Summary: Global warming is real and needs to be addressed now.
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      --- In fuelcell-energy@yahoogroups.com, "janson2997"
      <janson1997@y...> wrote:

      Beyond Kyoto
      By John Browne

      From Foreign Affairs, July/August 2004
      Summary: Global warming is real and needs to be addressed now. Rather
      the small steps to reduce carbon dioxide emissions today that can make
      a big difference down the road. The private sector already understands
      this, and its efforts will be crucial in improving fossil fuel
      efficiency and developing alternative sources of energy. To harness
      business potential, however, governments in the developed world must
      create incentives, improve scientific research, and forge
      international partnerships.

      Lord Browne of Madingley is Group Chief Executive of BP plc.


      of a coordinated international response to global warming. The
      provisional agreement they reached appeared to mark a significant step
      meet their commitments. And the United States has withdrawn from the
      agreement entirely. Those concerned with the sustainability of the
      earth's climate could be forgiven for feeling depressed.

      motion a process that led to the establishment of the General
      have improved, if still imperfect, knowledge of the challenges and
      uncertainties that climate change presents, as well as a better
      understanding of the time scales involved. Third, many countries and
      companies have had experience reducing emissions and have proved that
      such reductions can be achieved without destroying competitiveness or
      the developed world but all around the globe.

      reduction of greenhouse gas emissions is a soluble problem, and that
      the mechanisms for delivering the solutions are within reach. In that
      Kyoto debate.


      Before considering new approaches, it is necessary to distill some
      basic facts from the voluminous, complex, and incomplete scientific
      work on global warming.

      Global temperatures have risen by about 0.6 degrees Celsius since the
      nineteenth century. Other measures of climate bolster the theory that
      the world is getting warmer: satellite measurements suggest that
      spring arrives about a week earlier now than in the late 1970s, for
      example, and records show that migratory birds fly to higher latitudes
      earlier in the season and stay later. According to the UN's
      Intergovernmental Panel on Climate Change (IPCC) -- by far the most
      authoritative body of scientists working on this issue -- humans are
      probably not responsible for all the measured warming. But the trend
      is undoubtedly due in large part to substantial increases in carbon
      dioxide emissions from human activity. Since the middle of the
      nineteenth century, the average concentration of carbon dioxide -- a
      so-called greenhouse gas -- in the world's atmosphere has risen from
      some 280 parts per million (ppm) to around 370 ppm. Burning fossil
      fuels account for about three-quarters of human emissions, with
      deforestation and changes in land use (mainly in the tropics)
      accounting for the rest.

      There are two main reasons why it has been hard for societies to
      tackle climate change. First, carbon dioxide has a very long life
      span: it exists for hundreds of years in the atmosphere, making this a
      multigenerational issue. Second, reducing carbon dioxide in the
      atmosphere can be done only on a truly global basis, since emissions
      mix throughout the atmosphere much quicker than individual processes
      can limit their impact.

      Beyond these known facts, the picture becomes murkier. For instance,
      nobody knows how rapidly emissions of carbon dioxide and other
      greenhouse gases will rise in the future. That outcome depends on the
      pace of global economic growth and on the impact of technology on the
      ways society generates and deploys useful energy. Equally, it is
      impossible to determine precisely how the climate will respond as
      greenhouse gases accumulate to ever-higher concentrations in the
      atmosphere. The brightness and altitude of clouds, for example,
      determine whether warming is amplified or diminished, yet it is not
      known how exactly climate change will affect cloud patterns. Nor is it
      known how the world's carbon cycle will respond. A warmer climate
      might make the planet greener -- which would mean more carbon dioxide
      would be sucked from the atmosphere. Alternatively, climate change
      might impose such severe stress on the biosphere that nature's
      processes for removing carbon dioxide from the atmosphere would become
      less efficient than normal.

      The most recent IPCC assessment, published in 2001, concludes that if
      no precautionary action is taken, carbon dioxide concentrations will
      rise by 2050 to between 450 and 550 ppm and will continue to increase
      throughout the twenty-first century. The IPCC estimates that
      temperatures will rise by between 0.5 degrees Celsius and 2.5 degrees
      Celsius by 2050, with an increase of 1.4 degrees to 5.8 degrees
      possible by 2100.

      One of the most likely effects of global warming is a rise in sea
      level, as glaciers melt and warmer water expands in the oceans. The
      best projections suggest seas of between 5 centimeters and 32
      centimeters higher by 2050; the outer limit projected for 2100
      approaches one meter. These numbers seem small, but coastlines are
      shallow slopes, not firm walls, so a rise in water levels of just tens
      of centimeters would erase kilometers of wetlands and beaches.

      Industrialized countries will probably be able to handle rising water
      levels, at least in the next few decades. London and cities in the
      Netherlands, for example, already have defenses to hold back surging
      seas. And farmers in wealthy countries can respond to changes in
      climate by adjusting irrigation and varying the crops they plant, in
      many cases with government financial support. But the developing
      world, home to four-fifths of humanity, is likely to fare considerably
      worse on both fronts. Hundreds of thousands of people have already
      been displaced by periodic flooding in Bangladesh, and subsistence
      farmers -- who are far less adaptive than their richer counterparts --
      are already struggling at the climatic margin.

      The most dramatic scenarios, although unlikely, would have grave
      consequences for humanity and ecosystems. Rapid changes in climate
      could upset the circulation of the North Atlantic, for example --
      which, ironically, would cause much colder regional temperatures in
      northern Europe by weakening the heat-rich Gulf Stream. The Amazon
      rain forest could deplete dramatically due to drying in the
      atmosphere, in turn releasing huge volumes of carbon that is stored in
      trees. And an accelerated rise in sea level from melting ice in
      Antarctica could occur. These uncertain consequences do not lead to
      crisp timetables for policy. But they mean that precaution and
      improvements in measurement and learning will be crucial.

      A sober strategy would ensure that any increase in the world's
      temperature is limited to between 2 or 3 degrees Celsius above the
      current level in the long run. Focused on that goal, a growing number
      of governments and experts have concluded that policy should aim to
      stabilize concentrations of carbon dioxide in the atmosphere in the
      range from 500 to 550 ppm over the next century, which is less than
      twice the pre-industrial level.

      On the basis of known technology, the cost of meeting this goal would
      be high. But the track record of technological progress in other
      fields indicates an enormous potential for costs to fall as new ideas
      are developed and applied. In the energy industry, for example, the
      costs of deep-water oil and gas development have fallen by a factor of
      three over the last 15 years, dramatically extending the frontier of
      commercial activity. There is no reason to think that research and
      development in the area of benign energy systems would be less
      successful. Predicting where that success might come will not be easy
      -- but that means progress must be made on multiple fronts.

      Many people believe that the 500-550 ppm goal would help avoid the
      worst calamities. But we must recognize this assessment for what it
      is: a judgment informed by current knowledge, rather than a confirmed
      conclusion to the story. Taking that judgment as the starting point,
      the two figures on the following page reveal the magnitude of the task
      ahead. Figure 1 shows an anticipated projection for emissions from
      industrialized and developing countries -- a "business as usual"
      pathway that reflects the normal improvements in efficiency, the shift
      away from carbon-heavy fuels such as coal to carbon-light natural gas,
      and the expected increase in use of zero-carbon energy sources such as
      nuclear and wind power. Figure 2 shows the total world emissions from
      that business-as-usual pathway along with a "path to future stability"
      -- an optimistic but realistic projection of what it will take to
      stabilize the atmosphere at 500-550 ppm by around 2100. The large gray
      shaded area is the difference: the wedge of emissions that must be

      Almost every sensible analysis of the effort needed to stabilize
      carbon dioxide concentration arrives at a hump-shaped trajectory like
      the path to future stability in Figure 2. In other words, the
      long-term target of 500-550 ppm is reachable even if levels of
      emissions continue to rise in the short term -- as long as emissions
      start declining thereafter. (Emissions must be progressively curtailed
      beyond a certain point because previously emitted carbon dioxide
      lingers in the atmosphere for hundreds of years.) The implication of
      Figure 2 is that we still have time to take measured steps. But if we
      are to avoid having to make dramatic and economically destructive
      decisions in the future, we must act soon.


      Both the exact level of the peak in global carbon dioxide emissions
      over time and the subsequent decline are unknown. We can safely
      assume, however, that emissions from developing countries will keep
      rising as economic activity and incomes grow, as shown in Figure 1.
      This means that leadership must come from the industrialized world.

      In the short term, the developed world can use energy much more
      efficiently and profitably. With a clear impetus for change, business
      could put new technologies and services to use: cautiously at first,
      but more aggressively as the best systems are identified and put into
      practice with the normal turnover of capital.

      Business has already found that it is possible to reduce emissions
      from its operations. Counterintuitively, BP found that it was able to
      reach its initial target of reducing emissions by 10 percent below its
      1990 levels without cost. Indeed, the company added around $650
      million of shareholder value, because the bulk of the reductions came
      from the elimination of leaks and waste. Other firms -- such as
      electricity generator Entergy, car manufacturer Toyota, and mining
      giant Rio Tinto -- are having similar experiences. The overwhelming
      message from these experiments is that efficiency can both pay
      dividends and reduce emissions.

      Yet reducing emissions by the gray area in Figure 2 -- a reduction
      that amounts to around 25 billion tons per year in 2050 -- will
      require more than just efficiency improvements. Given the world's
      rising demand for energy, we must also transform the energy system
      itself, making fuller use of low-carbon fuels as well as carbon-free
      energy systems. Paradigm shifts must occur across the economy:
      transportation accounts for 20 percent of total emissions, industry
      contributes another 20 percent, the domestic and commercial sectors
      emit around 25 percent, and power-generation accounts for another 35
      percent. A wide-ranging set of policies is thus called for.

      In power generation, options include switching from coal to
      less-carbon-intensive natural gas. For example, 400 new gas plants,
      each generating 1,000 megawatts, would reduce emissions by one billion
      tons per year. Such a reduction would be difficult within the
      parameters of today's electricity systems -- 400,000 megawatts is
      roughly equal to all of China's electric power capacity, or half the
      installed capacity in the United States. Zero-carbon fuels would also
      help reduce emissions. If 200,000 megawatts of coal-generated power
      were to be replaced with nuclear power, carbon dioxide emissions would
      be reduced by one billion tons per year. Progress on the nuclear front
      will demand investment in new technologies, as well as a viable plan
      for locating reactors that ensures that radioactive materials are kept
      out of the environment and beyond terrorists' reach.

      gasify the fuel and then generate power while stripping away the
      carbon for sequestration underground. Coal gasification could become a
      huge growth industry. China is among the top investors in this
      technology, not just because these plants are much cleaner, but also
      because they could be keystones in a program to synthesize clean
      liquid fuels for transportation needs.

      More efficient buildings would also result in large energy savings,
      since over one-third of today's energy is used indoors. Given that
      electrification is a central feature of industrial and postindustrial
      societies, innovators must tap the potential for ultra-efficient
      electrical appliances. Investment in a digitally controlled power grid
      could aid this effort by allowing major appliances to "talk" directly
      with power generators so that the whole system operates closer to its
      optimum potential. Such a "smart grid" would reduce losses in
      electricity transmission while also allowing fuller use of waste heat
      from power generators in factories and homes.

      There are efficiency savings to be made in transportation too. Given
      the massive advantages of gasoline over rival fuels -- both in terms
      of its power density and its ease of storage -- transport is unlikely
      to switch to new fuels in the near future. More promising approaches
      will focus on making transportation more efficient, while meeting the
      ever-stricter limits on other emissions that cause air pollution. For
      example, running 600 million diesel or gasoline cars at 60 miles per
      gallon (mpg) instead of 30 mpg would result in a billion fewer tons of
      carbon dioxide per year. Advanced ultra-efficient diesel engines,
      meanwhile, are so clean that even the strictest regulatory body in the
      world -- the California Air Resources Board -- is taking a second
      look. Advanced techniques for gasoline injection also hold promise, as
      do hybrid electric-gasoline cars already on the road. Such vehicles
      have the potential to get more than twice the mileage per gallon of
      their conventional counterparts. Given the increasing consumer demand
      for speed and flexibility in air travel, policymakers should also
      focus on the opportunities for cutting emissions from aircraft.

      All of these efforts will require major investments. Some will also
      require new infrastructures. But we must begin to build and test such
      systems. Only with evidence from actual experience can we decide how
      best to direct our efforts.


      The role of business is to transform possibilities into reality. And
      that means being practical, undertaking focused research, and testing
      the different possibilities in real commercial markets. The energy
      business is now global, which offers a tremendous advantage:
      international companies access knowledge around the world and apply it
      quickly throughout their operations.

      But the business sector cannot succeed in isolation. Harnessing
      business potential requires fair and credible incentives to drive the
      process of innovation and change. In responding to global warming,
      that role must fall to the government. Neither prescriptive
      regulations nor fiscal interventions designed to collect revenue
      rather than to alter behavior provide the answer. Rather, governments
      must identify meaningful objectives and encourage the business sector
      to attain them by using its knowledge of technology, markets, and
      consumer preferences.

      Recent experience suggests that emissions trading regimes -- whereby
      government sets a binding cap on total emissions, dividing the total
      into "emission credits" that are given to those who emit carbon
      dioxide -- are the best policy for encouraging business. Policymakers
      (notably in the United States) have demonstrated that it is possible
      to design such systems for other pollutants, such as sulphur dioxide,
      thereby harnessing the power of innovation and the flexibility of the
      market to protect the environment, while avoiding crippling costs. The
      same insights should apply to carbon dioxide. A well-designed trading
      regime would include a strictly enforced cap, which would make carbon
      dioxide emission credits scarcer (and thus more valuable) and would
      thereby increase the incentive for business to control emissions. Such
      a system would also allow firms and households the flexibility to
      apply resources where they have the greatest impact, which is
      essential, because the best measures for controlling carbon dioxide
      are hard to anticipate with precision and are widely dispersed across
      the economy. And a credible emission trading system would create
      incentives to invest in radical new technologies, the kind that will
      be crucial in building a carbon-free energy system in the future.

      Emissions trading systems need not be identical in every country, nor
      be applied universally from day one. The political reality is that we
      are unlikely to see the sudden emergence of a single regime; in scope
      and ambition, that would be comparable to the emergence of a single
      global currency. Instead, progress is much more likely to come through
      the gradual process of knitting together diverse national and regional
      efforts on the basis of their track records of experience and
      achievement. The key task today is to find practices that will lead to
      a system that will enable today's diverse and fragmented reduction
      efforts to be valued on a common basis. The history of trade
      liberalization over the second half of the twentieth century shows
      that gradualism can yield impressive results.

      At present, the nascent European emission trading system -- which will
      start running on a trial basis in 2005 -- is the most advanced
      example. Built on sound monitoring and verification policies, the
      system is the centerpiece of the European effort to implement the
      commitments adopted at Kyoto. Yet there are still hurdles to be
      cleared if it is to be fully operational by 2008, as planned. The
      process for allocating emission credits is not yet complete. And the
      system will cover only about 40 percent of Europe's emissions as it
      stands -- mainly those from industry. The potential for extending the
      scope of the trading base is indeed considerable, not least through
      the incorporation of effective incentives that will reward businesses
      whose investments reduce emissions outside Europe, such as in Russia
      and the emerging market economies of Asia -- where large and
      relatively low-cost reductions of emissions are possible.

      Markets are emerging in other regions as well. The Chicago Climate
      Exchange, opened in December 2003, involves 19 North American entities
      that have agreed to reduce their emissions by one percent per year
      over four years. Canada may yet create a market for carbon dioxide as
      it aims to meet the Kyoto targets. And U.S. states have become
      laboratories for innovation and change. For example, Massachusetts,
      New York, and New Hampshire are adopting rules that will spur the
      creation of market-based emission trading systems. Voluntary systems
      for measuring emissions -- such as one being crafted in California --
      may also provide further foundations for emission trading. There is a
      strong argument for linking these efforts. U.S. policymakers should
      also consider establishing a transatlantic partnership to work toward
      a common market-based trading system.

      Offering positive incentives is one key contribution that government
      can make to stimulate business. Another is organizing research. It is
      crucial to extend our understanding of the science of climate change:
      monitoring key variables with sufficient precision to understand both
      natural variability and the climate's response to human activity. A
      key target of such work must be to understand the precise connection
      between the concentration of carbon dioxide in the atmosphere and
      changes in climate. Such research must also advance our knowledge of
      available choices: with the clock ticking, we cannot wait for definite
      answers before we take action.

      Government intervention must take other forms too. Transforming the
      energy system will require new technologies with risks that will be
      too high (and benefits too remote) for private firms to provide all
      the needed investment. This is one area in which the United States,
      with its outstanding technical capacity, should take a leadership
      role. Innovation will require an across-the-board infusion of
      resources for basic science and technology, as well as the development
      of a portfolio of key demonstration projects. The priorities for such
      work might include photovoltaic cells (which convert sunlight into
      electricity), fission reactor technology, energy from biomass, and the
      use of hydrogen.

      Given the costs and risks involved in such investment, governments
      with common interests and common views of the future have every
      incentive to combine their efforts and resources. Fortunately, there
      are many precedents of international partnerships in innovation --
      from high-energy physics to astronomy and nuclear fusion. The global
      warming challenge is different, in that it involves not only basic
      science but also the application of novel techniques through products
      that must withstand the test of competition. But that is why the
      program of research and development work should involve collaboration
      not just between different countries but also between governments and

      There are examples of such collaborative work already underway. In
      November 2003, a ministerial-level meeting held in Washington, D.C.,
      began the process of building international partnerships for research
      on the potential of the hydrogen economy. The United States has
      already pledged $1.7 billion over the next five years for work in this
      area. A similar collaboration -- the International Carbon
      Sequestration Leadership Forum -- is built around the concept of
      capturing carbon and storing it geologically. Again, this scheme
      complements programs in the United States, such as FutureGen, a $1
      billion public-private partnership to promote emissions-free
      coal-fired electricity and hydrogen production. These research efforts
      are a good start, but they must go hand-in-hand with the creation of
      credible caps on emissions and trading systems, which will create the
      incentives to transform the energy system.


      It would be morally wrong and politically futile to expect countries
      struggling to achieve basic levels of development to abandon their
      aspirations to grow and to improve their people's living standards.
      But it would be equally wrong to ignore the fact that by 2025,
      energy-related carbon dioxide emissions from developing countries are
      likely to exceed those from the member states of the Organization of
      Economic Cooperation and Development. Instead of being daunted by the
      scale of this challenge, policymakers must recognize the scale of the
      opportunity: developing countries have the potential to leapfrog the
      developed world's process of industrialization, thereby providing an
      enormous opportunity to improve energy efficiency and reduce

      So far, most international efforts to engage developing countries have
      focused on the Kyoto Protocol's Clean Development Mechanism (CDM) -- a
      scheme that would encourage investment by awarding emission credits
      for the quantity of emission reductions flowing from a particular
      project. In principle, the CDM was a good idea. In practice, it has
      become tangled in red tape and has required governments and investors
      to do the impossible: estimate the level of emissions that would have
      occurred in the absence of a project and then to calculate the
      marginal effect of their actions. The only projects that can meet this
      test are small and discrete: a steel mill that uses sustainably grown
      wood instead of coal for coke, for example, or a tiny hydroelectric
      dam that averts the need to build a coal-fired power plant. Such
      efforts are important, but they are hardly the stuff of radical

      There is no neat, off-the-shelf solution for engaging the developing
      world. But there are encouraging signs of the process of economic
      development acting as a force for modernization. In China and India,
      infrastructure necessary to substitute natural gas for coal is already
      being put in place. And in many of the oil-producing regions of the
      world, the spread of international technology is making it possible to
      capture and reinject the natural gas that is often associated with
      oil, rather than venting or flaring it into the atmosphere. Efforts to
      change the incentives that govern land use in the developing world are
      also encouraging. From the Congo Basin to the Amazon and the forests
      of Southeast Asia, practical partnerships of governments,
      nongovernmental organizations, and businesses are showing the way.
      Small amounts of money and skillfully designed incentives are stemming
      the tide of deforestation by creating a stake in protecting the

      These and other efforts reflect the determination of publics,
      governments, and business to transcend the harsh and unacceptable
      trade-off between the desire to improve living standards and allow
      people the freedom to use energy for heat, light, and mobility on the
      one hand, and the desire for a clean environment on the other.


      The appropriate response to the faltering Kyoto Protocol is neither
      dismay nor fatalism. A complete international agreement on a subject
      of such complexity and uncertainty is still a long way off. But as
      those who championed the cause of liberal trade found after that first
      meeting in 1946, great causes acquire lives of their own. Consolidated
      political agreements often follow, rather than lead, the realities on
      the ground.

      Taking small steps never feels entirely satisfactory. Nor does taking
      action without complete scientific knowledge. But certainty and
      perfection have never figured prominently in the story of human
      progress. Business, in particular, is accustomed to making decisions
      in conditions of considerable uncertainty, applying its experience and
      skills to areas of activity where much is unknown. That is why it will
      have a vital role in meeting the challenge of climate change -- and
      why the contribution it is already making is so encouraging.


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