The Carbon Crunch- why has so little been achieved?
Edinburgh University Business School Business and Climate Change Series, November 14th 2012
Professor Dieter HelmUniversity of Oxford
10/04/2023 Professor Dieter Helm
The Questions
• What are the causes of global warming?– Facing up to some inconvenient facts
• Why has so little been achieved?– Recognising current failures
• How do we make progress?– Delivering effective climate mitigation
10/04/2023 Professor Dieter Helm
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010330
340
350
360
370
380
390
400
An ever-upward pathAtmospheric CO2 (ppm)
Source: US Department of Commerce National Oceanic & Atmospheric Administration (NOAA)
10/04/2023 Professor Dieter Helm
What causes global warming?
• The role of coal• China • Population growth• Carbon consumption, not production
10/04/2023 Professor Dieter Helm
Historical coal burn vs atmospheric CO2 (mt & ppm)
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
0
1000
2000
3000
4000
5000
6000
330
340
350
360
370
380
390
400
Coal consumptionAtmospheric CO2
Coal
con
sum
ption
(mill
ion
tonn
es o
f coa
l equ
ival
ent)
Atm
osph
eric
CO
2 (p
pm)
Source: US Department of Commerce National Oceanic & Atmospheric Administration (NOAA), BP statistical
review of world energy 2011
10/04/2023 Professor Dieter Helm
World coal demand scenarios to 2035 (mt)
1980 2009 2020 20350
1000
2000
3000
4000
5000
6000
7000
8000
9000
New policies Current policies450 scenario
Mill
ion
tonn
es
Source: OECD/IEA World Energy Outlook 2011
10/04/2023 Professor Dieter Helm
Population growth – the projections
Source: United Nations
10/04/2023 Professor Dieter Helm
What is likely to happen before 2020?
By 2020:• China X 2 GDP• India X 2 GDP
• 400 – 600 GWs new coal (if 12th 5 year plan implemented in China)
• No further action following Durban
10/04/2023 Professor Dieter Helm
Why has so little been achieved?
• Kyoto is production-based• Europe has been de-industrialising• Current renewables are expensive and
contribute little• Nuclear is reducing across Europe
(especially in UK and Germany) + being replaced by coal in Germany
10/04/2023 Professor Dieter Helm
EU Climate Change Package
• 2020 – 20 – 20 It all adds up to 20!!!!• World leadership – offering 30% at
CopenhagenAnd then….• Nuclear exit• More coal• 2050 Roadmap and 2030 targets
10/04/2023 Professor Dieter Helm
Europe: an unviable position
Competitiveness
Consumptionof carbon
Current renewables policies
Costs
• Current renewables cannot make much difference to global climate change– land & shallow sea areas just not big enough
• Energy efficiency – good idea but does not necessarily reduce energy demand
10/04/2023 Professor Dieter Helm
How do we make progress?
• Carbon pricing• Carbon consumption and border
adjustments• Coal gas substitution
And then….• Enormous scope for new technologies –
future renewables
10/04/2023 Professor Dieter Helm
Carbon taxes v. EU ETS
22/0
4/20
05
22/0
4/20
06
22/0
4/20
07
22/0
4/20
08
22/0
4/20
09
22/0
4/20
10
22/0
4/20
11
22/0
4/20
120
5
10
15
20
25
30
35
Ca
rbo
n p
rice
EU
R
Source: Bloomberg
A carbon tax alternative
EU ETS futures prices
10/04/2023 Professor Dieter Helm
Coal gas for the transition
Fossil fuel emissions
Coal (av-erage)
Fuel oil Natural gas0
200
400
600
800
1000
Approximate CO2 emissions: grammes of CO2 per KwH of electricity generatedSource: International Energy Agency "CO2 emissions from fuel combustion highlights 2011"
10/04/2023 Professor Dieter Helm
The new technologies – future renewables, active grids and more…
• Next generation solar• Smart Meters• Storage and batteries• Electrification of transport• Biotechnologies• Nuclear: PRISM, Fast-breeders• Carbon Capture and Storage
10/04/2023 Professor Dieter Helm
Conclusions
• European leadership has failed• 2020 – 20 – 20 has probably made matters
worse• Durban will probably lead to 450ppm ++
EITHER:• Change tack now• Admit defeat
10/04/2023 Professor Dieter Helm
YALE U.P.
10/04/2023 Professor Dieter Helm
www.dieterhelm.co.uk
• The economic analysis of biodiversity: an assessment, with Cameron Hepburn, Oxford Review of Economic Policy (2012) 28(1): 1-21
• European Energy Policy, in: The Oxford Handbook of the European Union Edited by E Jones, A Menon, and S Weatherill, OUP, August 2012.
• The UK’s new dash for gas, Prospect, 20th September 2012.• Trade, climate change and the political game theory of border carbon adjustments,
with Cameron Hepburn and Giovanni Ruta, May 2012, Grantham Research Institute on Climate Change and the Environment, Working Paper No. 80.
• Surprise – the oil price isn’t higher, Prospect, April 2012.• The sustainable borders of the state, Oxford Review of Economic Policy, Volume 27
no 4, winter 2012.• What next for EU energy policy?, in Green, safe, cheap: Where next for EU energy
policy? edited by Katinka Barysch, Centre for European Reform, 2011.• The Economics and Politics of Climate Change, Helm, D. R. and Hepburn, C. (eds),
(new edition 2011), Oxford University Press.