professor dieter helm: the carbon crunch: why has so little been achieved

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


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)


What causes global warming?

• The role of coal• China • Population growth• Carbon consumption, not production


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


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


Population growth – the projections

Source: United Nations


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


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


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


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


How do we make progress?

• Carbon pricing• Carbon consumption and border

adjustments• Coal gas substitution

And then….• Enormous scope for new technologies –

future renewables


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


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"


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


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


YALE U.P.


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.

professor dieter helm: the carbon crunch: why has so little been achieved

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