11

Global Warming and

Federal PolicyOr

What Should the Next President Do?

Elton Sherwinesherwin@ridgewoodcapital.com

Notes for an upcoming bookCopyright © 2008 by Elton B. Sherwin

Please do not distribute outside of Stanford Community without contacting the author

22

Ridgewood Capital & Ridgewood Energy

Energy tech investmentsComverge

Renewable projectsLandfill natural gas

Offshore natural gas

33

“What You Can Do” About Global Warming

Outline:Individuals can do

Core issuesEasy projectsHard projectsExpensive projects

What the President needs to doWhat the Governor needs to do

Prior Book

44

Today’s Agenda

Federal policy objectivesBrief overview

Risks to America Federal action plan

TargetsSimple 8 point plan

55

Disclaimer

Not been endorsed by any organizationDo have investments impacted by global warming

66

Policy ObjectivesSafe climate

Maximum another 1 degree Already in danger zoneFlexibility to go back to 1970 temperaturesPhase out traditional coal plants world-wide

Over 75%- 90% reduction per capita in AmericaGet energy independence natural side-effect Doesn’t raise gasoline taxesPromotes economic growth

Increase standards of living world-wide1 to 2 billion people out of poverty this century

Ensure dramatic changes ChinaMinimally sufficient solution

77

Agenda

Policy ObjectivesBrief Overview

Risks to America Federal Action Plan

88

Muir & Riggs Glaciers

Alaska

Over 90% of the World’s Glaciers

are Shrinking

National Snow and Ice Data Center

USGS

http://www.globalwarmingart.com/wiki/Image:Muir_Glacier_jpg

99

“Himalayan Glaciers Melting Fast”

Feed the great Indian and Chinese riversFeed hundreds of millions of peopleIf their summer flows disappear

Famines in IndiaMany will starveChinese will buy food on the world marketPrice of food will increase everywhere

World-wide impact

BBC & WWF

IPPC & Lester Brown, Earth Policy Institutephoto: Pavel Novak from Wikipedia

1010

North Pole’s Summer Ice is Disappearing

Original Estimate:Disappear during summers starting about 2070

NASA Goddard Space Flight Center.From data collected by the Defense Meteorological Satellite Program

1111

The North Pole is Disappearing

2007 Surprised Everyone

Something is Very Wrong

NASA image created by Jesse Allen, using AMSR-E data courtesy of the National Snow and Ice Data

1212

NASA satellite images Of Arctic summer sea ice coverage in 2005 and 2007

1313

If Greenland Collapses

Consequences are Huge

20 Feet of Ocean Rise

“Greenland Ice Loss

Doubles in Past Decade”

NASA

1414

20 Feet, When?The last time the Arctic and Antarctic were 3 degrees Celsius warmer was roughly 125,000 years agoSea levels rose by 20 feet From the melting of the Greenland ice sheet. Debate about how quicklyCurrent course and speed, 3 degrees is inevitable

Climate Change Verdict: Science Debate Ends, Solution Debate BeginsBy David Biello, Scientific American

1515

A Dangerous Course

XSpeeding on Bald Tires

Time is our enemyHard to predict whenHard to predict the exact disasterOutcome will not be good

1616

The Egg Analogy

An Egg rolls toward the edge of a kitchen counter

Easily stoppedRolls off the edge

Takes quick reflexes to catchHits the floor

Beyond repairOur climate is at the edge of the kitchen

counter or has just started to fall.

1717

Our World is Sending Us a Frightening Warning

North PoleGreenlandAlaska & SiberiaSouth Pole

NASA

NASA

1818

Last 10 Years Have Seen…

Greenland MeltingSouth Pole showing signs of distressOcean becoming more acidicSummers are getting longer everywhereTropical diseases are moving NorthMost climate scientists very worried about their children & grandchildren

1919

Things Are Starting to Move Quickly

Next few decades, America will see:Stronger Hurricanes in the SouthBigger fires in the WestLonger droughts in America's heartland

Farmers are likely to be among the hardest hitPossibly stronger tornadoes Beginning of coastal flooding

NASA Study Predicts More Severe Storms With Global Warming http://www.nasa.gov/centers/goddard/news/topstory/2007/moist_convection.html

2020

If We Act Too Slowly

Lose large parts of FloridaDikes around ManhattanAmerican agriculture will be irreparably damagedOur children and grandchildren will inherit a very different world

2121

It is Time to Act

South Pole North Pole

GreenlandNASA Terra/MODIS image& Global Warming Art project NASA

2222

Background

2323

1751-2006 Cumulative Fossil Fuel CO2 Emissions

Jim Hansen Cct 3 2007 presented at Heating Up the Energy Debate, Gustavus Adolphus College

2424

Per Capita Carbon Emissions

Jim Hansen Cct 3 2007 presented at Heating Up the Energy Debate, Gustavus Adolphus College

2525

Federal Policy

2727

“We have to move at warp speed to stop using fossil

fuels…

…We should never build another coal plant”

Ted Turner

Remarks at Solar Power 2007 conference

2828

Easier Said Than Done

2929

I Once BelievedConservation and

Renewables Could Save Us

11 MW Serpa solar power plant in Portugal image from Wikipedia

3030

The Harsh Reality Is

They Can’t

3131

Proceedings of the National Academy of Science

“We conclude that global warming of more than 1°C, relative to 2000, will constitute ‘‘dangerous’’ climate change as judged from likely effects on sea level and extermination of species.”

Global temperature changeJames Hansen, Makiko Sato, Reto Ruedy, Ken Lo, David W. Lea, and Martin Medina-Elizade

3232

No Amount of Conservation Plus Solar Plus Wind

And NuclearCan Stop Another 1 degree

3434

Woods Hole Research Center Summary of IPPC 2nd Report

“ Scientific modeling suggests that the surface temperature will continue to increase beyond the year 2100 even if concentrations of greenhouse gases are stabilized by that time.”

http://www.whrc.org/resources/online_publications/warming_earth/potential_outcome.htm

3535

We are on Dangerous Ground

“the Earth is now within 1°C of its maximum temperature in the past million years”

Close to Edge of the Cliff

Global temperature changeJames Hansen, Makiko Sato, Reto Ruedy, Ken Lo, David W. Lea, and Martin Medina-ElizadeProceedings of the National Academy of Science

3636

Martha Krebs, Ph.D. Deputy Director for R&D California Energy Commission. Presented Global Climate and Energy Project Annual Research SymposiumStanford, Oct 1, 2007

3737

Federal Policy Eight Point Plan

1. Testing Climate EngineeringArctic, Greenland and North Atlantic

3838

World’s Future

Annual mean

temperature change

Areas Hit Hardest• Arctic & Antarctic• Siberia• Greenland

560 ppm CO2• 2 x Pre industrial • Inevitable this century • Possible by 20652007 Levels were 380 ppm

Models & Image from Caldeira et al., in prep, 2007, Carnegie Institute at Stanford Univ.

0 2 4 6-6 -4 -2ºC

3939

Climate Engineering

2 x CO2 and 1.8% reduction in solar intensity

Caldeira et al., in prep, 20070 2 4 6-6 -4 -2ºC

World’s Future

2 x CO2 560 ppm

4040

Mt. Pinatubo

Erupted in 1991‘Small’ amounts of high altitude sulfatesReflected sunlight back into spaceLowered earth's temperatureSulfates had no significant side effects

More colorful sunsets

4141

High Altitude Aerosols

One football stadium of sulfur per yearEquivalent to 7 to 10s day sulfur coal plantsSmall number of jets

Released into stratosphereGood data from Mt. Pinatubo and El Chichon

For more info on Climate Engineering see:

http://globalecology.stanford.edu/DGE/CIWDGE/labs/caldeiralab/Caldeira_Research_georefs.html

4242

Test in Arctic North

2 x CO2 and 10% solar reduction north of Anchorage

Caldeira et al., in prep, 20070 2 4 6-6 -4 -2ºC

2 x CO2 560 ppm

Take pressure off the areas most worried about in the short-termGreenland, Siberia & north pole,some help world-wide

4343

Climate Engineered

Temperature Change

Phase 21.8% reduction in solar intensityworldwide

Caldeira et al., in prep, 20070 2 4 6-6 -4 -2ºC

Phase 110% solar reduction north of Anchorage

4444

Reducing CO2 Does Not Solve the Immediate Problem

Achieve Our Short Term Objectives:1. Keep frozen methane frozen

Prevent Melting of the arctic tundra 2. Save Northern Ice

Greenland North Pole

3. Deal with effects of global warming we cannot stop

Need to do more than reduce CO2

4545

Reflect Sunlight into Space

Mitigate much of warmingProtect the polar ice and GreenlandMaintain today's temperaturePrevent much of the ocean risePrevent much of the species extinction

Not a panaceaOcean still gets acidicWe enter uncharted era

Lowers overall risk

4646

Ranked

1. High altitude aerosols front runner2. Jet contrails3. Man-made clouds

• Arctic Summer

4. Balloons5. Airborne aluminum6. Man-made snow7. Space-based mirrors8. Ground-based mirrors

4747

National Academy of Science

Inference of imminent dangerous climate change may stimulate discussion of ‘‘engineering fixes’’ to reduce global warming The notion of such a ‘‘fix’’ is itself dangerous if it diminishes efforts to reduce CO2 emissions, …

Global temperature changeJames Hansen, Makiko Sato, Reto Ruedy, Ken Lo, David W. Lea, and Martin Medina-ElizadeProceedings of the National Academy of Sciencehttp://www.pnas.org/cgi/reprint/0606291103v1.pdf

4848

Federal Policy

1. Testing Climate EngineeringArctic, Greenland and North Atlantic

4949

Federal Policy

1. Testing Climate EngineeringArctic, Greenland and North Atlantic

2. Increase R&D Dollars

5050

National Academy of Science

Berrien Moore III, Ph.D. Co-Chair, Committee on Earth Science and Applications from Space National Research Council; The National AcademiesCongressional hearing

5151

Mars or Earth?

“Overall, maps of Mars are about 250 times better than maps of

earth’s ocean floor”

Wall Street Journal, August 31, 2007U.S. Draws Map of Rich arctic Floor Ahead of Big Melt

5252

Measure & Map & Model Everything

Space-based instrumentsOcean instrumentsArctic instrumentsTracking methaneCompute power

Cheap ToolsSmoke detectors & CAT scans of war on warming

NASA

NOAA/NSF

5353

Big & Controversial R&D

Three strategies carbon sequestration Ocean sequestration w/ limestone

Develop and testing technologies to save the polar ice caps and Greenland

Backup to high altitude climate engineeringManage hurricanes and other extreme climate events (intervene and down grade hurricanes)Enhanced and deep geothermal Restart ocean currents/conveyors Alternative nuclear approaches

5454

Mundane R&DRetrofit & upgrade existing buildings

Effective energy auditsResidential and commercial rankings & scorecards

Thermostat testing & field trialsMeters in kitchens, homes and businesses.

Where does all the power go? What is the best available technology, how do you motivate people to use it. Self-reporting, real-time breaker boxesReal-time gas meters

Field trials & scale-upFirefightingTropical diseases

5555

Federal Policy

1. Testing Climate EngineeringArctic, Greenland and North Atlantic

2. Increase R&D Dollars

5656

Federal Policy

1. Testing Climate EngineeringArctic, Greenland and North Atlantic

2. Increase R&D Dollars 3. Negotiate World-wide Carbon Tax

5757

All Human Consumption of Petroleum Products vs.

New Coal Plants

386

501

0

100

200

300

400

500

600

Oil past 250 Years Coal Plants Built in Next25 years

Bill

ions

of T

on o

f CO

2

Data from Global Warmng and the Future of Coal, The Path to Carbon Capture and Storage; Center for American Progress; Ken Berlin and Robert M. Sussman, May 2007; Chart by Author

5858

Simple, Gradually Increasing CO2 Fee

Start at $10 or $20 tonIncrease at $1 a year plus 10¢Initially, very small increase in electric ratesMakes coal non-competitive Universal, except:

Handle consumer vehicles with DMV fees and congestion taxes

5959

Solar Electricity Costs per kWh 2010 to 2050

0.00

0.05

0.10

0.15

0.20

0.25

Year

Pric

e pe

r kW

h

2% Price decline4% Price decline

Regardless of AssumptionsBy mid-centurySolar is below 10¢ kWh

6060

Cost of Electricity 2010 to 2050 Gradually Increasing Carbon Tax

0.00

0.05

0.10

0.15

0.20

2010 to 2050

$ pe

r kW

h modest declinehistorical declineCoalNatural Gas

Starting at $10 ton

solarcoal

6161

Cost of Electricity with a Gradually Increasing Carbon Tax

0.00

0.05

0.10

0.15

0.20

2010 to 2050

$ pe

r kW

h modest declinehistorical declineCoalNatural Gas

Starting at $20 ton

solarcoal

6262

Different Assumptions

Start at $10 ton or $20 tonIncrease prices quickly or slowlyGet same result

Coal becomes non- competitive

Cost of Electricity with a Gradually Increasing Carbon Tax

0.00

0.05

0.10

0.15

0.20

2010 to 2050

$ pe

r kW

h modest declinehistorical declineCoalNatural Gas

6363

Why Not Cap & Trade

Unpredictable pricingPrice speculationComplex rulesComplex to administerHard for utilities to plan

All of these might be fixed, except…

6464

“Developing economies have made clear they aren’t about to subject

themselves to emission caps”

September 22-23 2007

6565

Simple World-wide Carbon ‘Fee’

US to leadEU and Japan joinChina can choose to opt in or outOpt in, you keep your carbon feesOpt out, US, EU & Japan tax at their borders, they keep fees

Simple tax based on value of import’s percent of GDP prorated against a country's total CO2 footprint

6767

China CO2 Emissions

from Fossil Fuels

US DOE

6868

When China Passes France CO2 emissions per Person

0 1 2 3 4 5 6 7

U.S.CanadaRussia

Germany

JapanU.K.Italy

FranceChina

G-8

Cou

ntrie

s pl

us C

hina

20 pound bags, per person, per dayRelative CO2 per person

6969

When China Surpasses France

Russia

Japan

Germany

Canada, U.K., France & Italy

China

U.S

Total Annual CO2 Emissions

G8 plus China

7070

When China Surpasses France

Russia

Japan

Germany

Canada, U.K., France & Italy

China

U.S

This could permanently change the world

7171

Conclusion

Need carbon tax that works for both US and ChinaSimpleFairPredictableStart slowNeeds to be able to kill coal

7272

It Is In the Chinese Self Interest

Spending too much on energy per unit of output. They need to become more energy efficient. It will save them money. Lower their energy bill. Dramatically reduce pollution

7373

Federal Policy

1. Testing Climate Engineering2. Increase R&D Dollars 3. Negotiate World-wide Carbon Tax

7474

Federal Policy

1. Testing Climate Engineering2. Increase R&D Dollars 3. Negotiate World-wide Carbon Tax4. Focus Federal Highway dollars on CO2

reduction

7575http://www.ncpa.org/pub/ba/ba597/figure.gif

7676

Single Criteria Highway Fund

CO2 MitigationOperating funds or capitalParking garageShuttle busUpgrade to existing systemSmart stop lightsNew systemPilot or test

7777

Encourage State Registration Fees Align with CO2 Emissions

11 mpg truck DMV fees 4 times 44 mpg vehiclePrepay DMV fees for 3 years at time of purchase.Keep fees high, as long as vehicle is on road

7878

Federal Policy

1. Testing Climate Engineering2. Increase R&D Dollars 3. Negotiate World-wide Carbon Tax 4. Focus Federal Highway dollars on CO2

reduction

7979

Federal Policy

1. Testing Climate Engineering2. Increase R&D Dollars 3. Negotiate World-wide Carbon Tax 4. Focus Federal Highway dollars on CO2

reduction5. Strengthen Energy Star Program

8080

“…consumers in the U.S. spend over 4 billion dollars

on standby power every year”Lawrence Berkeley National

Laboratory

http://standby.lbl.gov/faq.html

8181

Sherwin Household

Real Work72%

Standby Power18%

Idle PCs10%

It Is More than Standby Power

Sherwin Household

8282

Strengthen the Energy Star Program

Make rules mandatoryInclude more productsRaise the barGet standby power below 1 wattMandate & certify & track PCsHuge effect in US and world-wide

8383

Sherwin Household

Real Work72%

Standby Power18%

Idle PCs10%

Can Cut Consumption at Least 50%

And it more than pays for itself

8484

Federal Policy

1. Testing Climate Engineering2. Increase R&D Dollars 3. Negotiate World-wide Carbon Tax 4. Focus Federal Highway dollars on CO2

reduction 5. Strengthen Energy Star Program

8585

Federal Policy

1. Testing Climate Engineering2. Increase R&D Dollars 3. Negotiate World-wide Carbon Tax 4. Focus Federal Highway dollars on CO2

reduction 5. Strengthen Energy Star Program6. Building codes reduce CO2 by 90%

8686

PassivHaus vs. US Code

0

20

40

60

80

100

120

140

Average USHome

Current Codein US

LEED/EnergyStar

PassivHausHome

Data from http://sunhomedesign.wordpress.com/2007/06/

8787

85% Reduction Heating & Cooling

Image from Wikipedia

8888

European PassivHaus

85% reduction in heating and coolingEasily spend $50,000 to $150,000 to heat and cool an American home

50 year life of a houseBuilt to latest code

Add solar panels to PassivHaus, get a zero footprint homeMake this the Federal Policy

Phase inMonitor & certify

9191

Federal Policy

1. Testing Climate Engineering2. Increase R&D Dollars 3. Negotiate World-wide Carbon Tax 4. Focus Federal Highway dollars on CO2

reduction 5. Strengthen Energy Star Program6. Building codes reduce CO2 by 90%

9292

Federal Policy

1. Testing Climate Engineering2. Increase R&D Dollars 3. Negotiate World-wide Carbon Tax 4. Focus Federal Highway dollars on CO2

reduction 5. Strengthen Energy Star Program 6. Building codes reduce CO2 by 90%7. Congestion Taxes & Mass Transit

9393

Americans Love to Drive

www1.eere.energy.gov

9494

Drive More, and There Are More Vehicles

www1.eere.energy.gov

9595

Use More Fuel

NHTSA

9696

Congestion Fees

Good examples: London, Stockholm & SingaporeStart easy cities: SF, NY$10 to $20 bring car into congested cityExpand to any congested interstateMost vehicles use RFID tagsUse proceeds fund enhanced transportation options

9797

Federal Policy

1. Testing Climate Engineering2. Increase R&D Dollars 3. Negotiate World-wide Carbon Tax 4. Focus Federal Highway dollars on CO2

reduction 5. Strengthen Energy Star Program 6. Building codes reduce CO2 by 90%7. Congestion Taxes & Mass Transit

9898

Federal Policy

1. Testing Climate Engineering2. Increase R&D Dollars 3. Negotiate World-wide Carbon Tax 4. Focus Federal Highway dollars on CO2

reduction 5. Strengthen Energy Star Program 6. Building codes reduce CO2 by 90% 7. Congestion Taxes & Mass Transit8. Tighten regulations on SUVs and Trucks

9999

Light Trucks & SUVs Emit too much CO2

http://www1.eere.energy.gov

100100

CO2 Emissions over Life of Vehicle

020,00040,00060,00080,000

100,000120,000140,000160,000180,000

F150

or S

uburb

anAcu

ra M

DXHon

da O

dyss

ey

BMW 32

8ci

VW Je

tta

Escap

e 4W

D Hyb

rid

Escap

e 2W

D Hyb

rid

Prius

CO2

in P

ound

s

2008 revised EPA gasoline mileage; Expected life of 120,000 miles; All 2WD except Acura and Escape 4WD

Less is BetterHybrid

101101

Big Gains Are in the Below 25mpg Vehicles

Gallons of Fuel Saved over the Lifetime of One Vehicle; 2 mpg

improvement vs. 10% improvement

01,0002,0003,0004,0005,000

0 10 20 30 40 50Vehicle mpg

Gal

lons

of F

uel S

aved

2mpg savings10% savings

102102

Federal Policy

1. Testing Climate Engineering2. Increase R&D Dollars 3. Negotiate World-wide Carbon Tax 4. Focus Federal Highway dollars on CO2

reduction 5. Strengthen Energy Star Program 6. Building codes reduce CO2 by 90% 7. Congestion Taxes 8. Tighten regulations on SUVs and Trucks

103103

‘CO2 First’ Policy

CO2 and GHG reductions are primary decision criteria

a) Transportation expenditures b) Foreign aid c) EIRsd) Building codes e) Government purchases

104104

Efficiency Saves Money and

Drives Economic Growth

Creates Wealth

105105

Cost of Power for Ten Years

$2.55 Gasoline & $0.14 Electricity

75 Watt Spot $131Pool Pump $5,589VW Jetta $21,250Chevy Suburban $31,875New Home $30,000

106106

This is Wasted Money

75 Watt Spot $131Pool Pump $5,589VW Jetta $21,250Chevy Suburban $31,875New Home $30,000

107107

Efficiency is Good for Environment Good for Economy Good for Consumer

75 Watt Spot $131Pool Pump $5,589VW Jetta $21,250Chevy Suburban $31,875New Home $30,000

$40$1,500

$5,500

$8,000$7,500

$22,540$88,845

108108

Can Build the Country We Want

Cut per capital CO2 by more than 75%Build efficient PCsBuild efficient homesGet urban mass transit rightBullet trains on I-5 and I-95 corridorsBuild efficient cars

112112

Proceedings of the National Academy of Science

“…sea level was 25–35 M (80 to 115 feet) higher the last time that the Earth was 2–3°C warmer than today…”*

This was about three million years ago.

Our objective is to prevent this from happening

*Global temperature changeJames Hansen, Makiko Sato, Reto Ruedy, Ken Lo, David W. Lea, and Martin Medina-ElizadeProceedings of the National Academy of Science

113113

Need to Get Going Soon Simple Eight Point Plan

1. Testing Climate Engineering2. Increase R&D Dollars 3. Negotiate World-wide Carbon Tax 4. Focus Federal Highway dollars on CO2

reduction 5. Strengthen Energy Star Program 6. Building codes reduce CO2 by 90% 7. Congestion Taxes & Mass Transit8. Tighten regulations on SUVs and Trucks

114114

Global Warming and

Federal Policy

Send Comments to:

esherwin@ridgewoodcapital.com

Notes for an upcoming book

Copyright © 2008 by Elton B. Sherwin