"Power Window: Carbon Loaded," Feature Article, April 2007

power window:

carbon loaded

by Jeffrey Winters, Associate Editor

it's been respectable, if not entirely fashionable, to dismiss the possibility of global warming, or at least the potential that it was being caused by carbon dioxide generated by burning fossil fuels. That seems no longer to be the case. Over the past year, oil companies, utilities, and the Bush administration have come around to the idea that global warming is real. And a consortium of U.S. companies—including PG&E, Duke Energy, and Alcoa—has reportedly asked for congressional action to control carbon emissions.

For anyone wanting to keep up the fight, there's always the fallback position that, sure, the world might be warming, but it's not a big deal. That position, in essence, was put forward most prominently by the Danish economist Bj¿rn Lomborg. His calculations suggested that money devoted to staving off global warming would be better spent tackling other global ills, such as malaria or malnutrition.

But many of those comforted by Lomborg's analysis must assuredly have been alarmed by the report released late last year by the British economist Sir Nicolas Stern. Tallying up the economic impact of an increase in the global temperature this century—everything from crop failures and droughts to the loss of coastal real estate—Stern found that continuing the present course would cause a cut in the global standard of living by more than 20 percent. Indeed, every ton of carbon dioxide we emit today will do $85 worth of damage by century's end.

But if the United States actually moves from talking about global warming to doing something about it, what will that mean for the energy industry? The chart below shows in great detail the carbon dioxide (and equivalent warming from other gases) emitted across the entire United States economy, as determined by a draft report of the U.S. Environmental Protection Agency released in February. Each square represents 10 million tons of carbon dioxide emissions and there are 726 of them.

A quick glance shows that huge amounts of carbon dioxide are produced from the burning of coal in thermal power plants and the burning of gasoline and diesel fuel in the engines of cars and trucks. In fact, the amount of carbon released on the roads of the United States is greater than the entire carbon emissions of Japan. And while such diverse activities as burying trash and feeding cattle put greenhouse gases in the atmosphere, the primary culprit by far is burning fuel for heat and power.

The trends aren't comforting, either. Emissions from what the EPA calls the industrial sector are trending downward, to be sure, though that's likely due more to the state of manufacturing in the United States than anything else. The commercial and residential sectors, taken together, have been increasing their emissions, but at less than 0.4 percent a year, below the rate of increase of CO₂ in the atmosphere.

The real problem area is transportation and electric power generation: Both are more than 30 percent above where they were in 1990, the level to which the ill-fated Kyoto Protocol stated we should return.

It has been suggested that rather than measure raw carbon emissions, the United States ought to aim for reducing the intensity of its emissions— essentially, wringing more economic production per pound of gas emitted. But even by that score, the U.S. trails among nations. The table above ranks 20 representative nations in GDP per ton of CO₂ emission. The range is extraordinary. And looking at the international table also gives lie to those who would claim that the cost of the greenhouse gas efficiencies needed to avoid catastrophic global warming will be economically crippling. Those nations at the top of the charts do not suffer for lack of standard of living, nor are those at the bottom ones immigration magnets.

Indeed, Switzerland, Sweden, Japan, and France are often seen as models of Western society. It must be said, however, that they owe their position to a few factors, some of which may be emulated, and some of which are geographical accidents. Hydropower figures large in the energy grid of Switzerland and Sweden, but it seems unlikely that a large build-out in hydroelectric dams will be possible in the coming decades. Quite simply, all the best sites have been taken.

All four nations have something else in common: a reliance on nuclear power. No country took that course with greenhouse emissions as a consideration. Rather, they were looking to reduce their dependence on imported petroleum, which at one time was a leading fuel for electric power generation. By adopting a petroleum-free energy source, these nations embraced an emissions-free one as well.

Some have argued that this is a course that the United States must take as well. Certainly, some 20 percent of U.S. electrical power generated by nuclear facilities creates little in the way of carbon emissions. The common counter-argument is that nuclear power is economically unattractive, with its huge capital costs and the unsettled question of how to deal with spent fuel and irradiated waste.

But if avoided carbon dioxide emissions have a real benefit—maybe not $85 a ton, but something far greater than zero—then this might tip the balance in favor of nuclear power, as well as a myriad of other technologies still being developed. It might also put the emphasis on efficiency in ways never before seen. Were the U.S. to meet the Kyoto targets by 2020, assuming that economic growth continues as it has, the country will have to generate a whopping $2,410 of GDP for every ton of carbon dioxide produced.

That level of efficiency is high, but not unheard of. The question is whether the nation will be willing to make the changes necessary for it to happen.