Preventing Carbon Lock-in

David G. Hawkins, NRDCRobert H. Williams, Princeton

January 2005

2

Investments Today Drive Impacts Tomorrow

• Temperature forcing drives impacts

• Concentrations drive forcing

• Emissions drive concentrations

• Investments drive emissions

3

Carbon Deficit Spending—Do the Math

• Energy carbon emissions in year 2000 = 6.3 billion metric tons

• Removal to oceans, soils, trees = 3.1 billion metric tons

• Net buildup in air = 3.2 billion metric tons

0

2

4

6

8

CarbonIn

CarbonOut

CarbonDebt

Annual Carbon Debt

4

Emissions Drive Concentrations

0

200

400

600

800

1000

1200

1400

1600

450 550 650 750

ppm

Billion

ton

nes C

arb

on

19

00

-21

00

5

The Budget is Disappearing

Cumulative carbon emissions 1900-2100 (GtC)

Budget for 450 ppm Stabilization

Today

531283

2010

375 439

2020

322492

2030

638 176

2040

809 5

Spent

Remaining

6

Biggest Emitters 2000-2025

24%

15%

12%6%4%

4%

35%USAChinaWest EuropeRussiaI ndiaJ apanOther

Top six = 66%

Cumulative CO2 Emissions 2000-2025, EIA, IEA 2002

7

Carbon Lock-inNew Fossil Units 2003-2030

1,391

1,883

237

0

500

1,000

1,500

2,000

GW

Coal Gas Oil

Source: IEA, WEO2004

Lifetime CarbonCoal = 145 GtCGas = 63 GtCOil = 2 GtC

8

New Fossil Plant EmissionsRival Historic Totals

210

149134

0

50

100

150

200

250

1751-1974 All Sources

1975-2000 All Sources

New FossilPlants

LifetimeEmissions

Billion tonnes Carbon

Source: ORNL, CDIAC; IEA, WEO 2004

9

New Coal Build by Decade

0

200

400

600

800

GW

Coa

l

Other Developing 43 90 128

India 16 48 79

China 150 168 226

Transition 1 11 19

OECD 12 184 218

2003-2010 2011-2020 2021-2030

Source: IEA,WEO 2004

221

500

670

Incremental new coal capacity by decade

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Fund CCS for New Coal in Developing Countries

• Industrialized countries (Annex II, OECD, G8, G8+) agree to finance incremental costs of IGCC with CCS for 10 years (2011-2020) in developing countries.

• Ramp in coverage: 2011=20% of new build; 20% increase each year.

• Cover full incremental cost of electricity (levelized capital and operating costs) for IGCC/CCS to 2020.

11

Funding CCS for New Coal in Developing Countries

0

5

10

15

20

25

30

35

40

GW

Conventional PC

I GCC/ CCS

New CoalCapacity fromIEA, WEO 2004

251 GW out of306 GW usesCCS with fund

12

Costs of CCS Fund• Levelized discounted costs = $6.2 billion/yr• Compare 2003 G7 ODA = $50 billion• But compare GEF = $3 billion for four yrs.

Costs derived from Foster Wheeler Study for IEA GHG Programme, May 2003

0

2

4

6

8

10

12

14

16

18

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bil

lio

n $

/year

Annual Outlays Levelized Discounted Payments

13

What About Industrialized Countries?

Applying the same CCS deployment schedule in industrialized countries results in 160GW of CCS capacity (out of 200GW coal forecast) with added costs of $3.9 billion per year.

14

Costs in Context• $6.2 billion per yr = 0.5 mills/kwh if applied

to OECD generation. ($10.1 billion global program = 0.8 mills/kwh)

• Combining CCS fund with efficiency initiative can reduce costs and emissions more. If demand growth is cut from 3%/yr to 2.5%, CCS LDC program costs drop to $5.1 billion per yr.

• Enables avoidance of 36 billion tonnes carbon emissions just from initial covered capacity; much more with spillover benefits.

15

Warming Won’t Wait. Will We?