FEEM Research Seminar on “How New Carbon Removal Technologies Could Transform the Global Energy Sector: Quantitative Explorations of Economically Efficient Paths to a Stabilized Climate”
12:30 - 14:00
The mounting number of diverse signs of the possible onset of “runaway global warming” have encouraged scientists to draw attention to the need for technically effective and economically attractive methods of actively removing carbon dioxide from the atmosphere — more specifically, to a particular class of technologies currently referred to as “direct air carbon capture” (DACC). Indeed, according to the Intergovernmental Panel on Climate Change’s Fifth Assessment Report the need for such techniques has now emerged as a pressing concern:
“Scenarios that are more likely than not to limit temperature increase to 2°C had grown increasingly challenging, and most of these include a temporary overshoot of the [atmospheric CO2] concentration goal requiring net negative CO2 emissions after 2050 [emphasis added] and thus large-scale application of carbon dioxide removal (CDR) technologies.” [IPCC AR5, 2014: p. 191]
Since that report, the recent COP-21 Paris Agreement on climate change expressed an aspiration to limit the Earth’s stabilized global mean surface temperature (GMST) to 1.5o C above pre-industrial levels. The IPCC’s assessment, however, reflected its survey of the pre-existing scientific and climate engineering literature, which had not kept pace with the latest research on CDR methods. In particular, it did not take notice of the emergence during the past five years of rapid technological advances that permit direct capture of CO2 from ambient air or industrial flues at low energy input cost, and extraction or either the gas or pure carbon that have an economic value as inputs to industrial processes. [Eisenberger, Cohen, Chichilnisky et.al. (2009), Chichilnisky and Eisenberger (2009), Damiani et al (2011), Budzianowski, (2012), Lackner et al (2012), Choi, Drese, Eisenberger, et al (2015), Gasser (2015] Moreover, these technical developments have passed the “proof of concept” stage, and a number of start-up companies have attracted financing and the attention of the business press as being among the “top innovators” in the energy sector. Rapid, practical advances in the development of new chemical methods for direct air capture of CO2 have taken place since 2010, and are attracting notice in scientific and engineering communities.
Lately, there also are signs of growing recognition among climate policy experts that these innovations’ may well make important contributions to reducing the economic and social costs of a timely transition to a decarbonized global production regime – thereby making possible the practical realization of aspirations expressed by the COP 21 (Paris) Agreement announced in December 2015. Nevertheless, to date, economic analysis of this new class of CDR technologies— or “negative carbon technologies” (NCTs) —and the discussion of the requirements and impacts of their widespread deployment remains at best peripheral in the economic and engineering treatment of timely policy responses to global warming. Furthermore, there is an obvious need for careful analysis of the complex interactions that such a redirection of climate stabilization policy could set in motion — including the consequences of shifts in expectations about the future course of carbon prices and the value of fossil reserves, as well as the social rates of return to investments in tangible capital embodying renewable energy technologies.
The DIRAM (Dynamic Integrated Requirements Analysis Modelling) framework, developed in Paul David’s previous papers, lends itself naturally to analysis of these issues, because that planning framework’s novel feature include a parametrically varied carbon budget and multiple technologies that require embodiment in produced capital-goods. NCTs also require embodiment in tangible capital, and their direct effect is transform a hard “carbon budget” constraint on the optimal path of transition to a stabilized climate into one that is flexible and subject to welfare optimizing modifications. [Background papers on DIRAM are available at: http://siepr.stanford.edu/sites/default/files/publications/15-002_0.pdf; http://siepr.stanford.edu/sites/default/files/publications/15-003_0.pdf].