So what does the future hold for carbon capture? According to the great American philosopher and baseball player Yogi Berra, “It’s tough to make predictions, especially about the future.” Taking this sage advice, I will avoid outright predictions and instead explore the key determinants for the future of carbon capture, specifically the evolution of climate policy and the evolution of energy technology.
Climate Policy in the Twenty-First Century
Many people think of carbon capture as a fossil fuel technology. I strongly disagree with that perception. More than anything, carbon capture is a set of technologies for addressing the problem of climate change. As such, the fate of carbon capture is very much intertwined with how we address climate change. The more aggressive we are in dealing with climate change, the more opportunities will arise for deploying carbon capture.
The international community’s vehicle for addressing climate change is the Paris Agreement (see chapter 1). Its great achievement is that 194 countries pledged to work for the goal of limiting the global temperature rise to less than 2°C. In addition, countries made specific pledges to reduce greenhouse gas emissions by the 2025–2030 timeframe, termed “the first commitment period.” However, these pledges are only a first step on a long road, as illustrated by figure 7. In this figure, the No Climate Policy line is the reference case, projecting CO2 emissions out to 2100 (assuming no climate policy). The Paris Forever line shows the emissions trajectory if all countries delivered on their commitments under the Paris Agreement, but enacted no further policy. Finally, the 2°C line shows the trajectory required to meet the stabilization goals of the Paris Agreement. This graph tells us that if all countries live up to their targets, this will only provide about 28 percent of the emissions cuts required for stabilization. Future commitments will need to provide for over two and a half times as many cuts in CO2 emissions as already pledged. This task is even more daunting given that it looks like many countries will fail to deliver on their initial Paris commitments. The United States has become the poster child for this, with the Trump administration signaling its intent to withdraw from the Paris Agreement and abandon the Clean Power Plan.
Figure 7 Three scenarios for CO2 emissions trajectories in the twenty-first century.
Source: Data from S. Paltsev et al., “Scenarios of Global Change: Integrated Assessment of Climate Impacts,” MIT Joint Program Report Series, report 291 (2016): 6. https://globalchange.mit.edu/publication/16255.
Since countries generally start with the low-hanging fruit, the emissions cuts required for the first commitment period are the easiest and cheapest. The next commitment period will be harder and more expensive, and subsequent commitment periods even harder and costlier. Carbon capture is not necessary to achieve the pledges made for the first commitment period; strategies like increased energy efficiency, more deployment of renewables, and replacing coal-fired power with gas-fired power can produce most of the emissions reductions. It is the subsequent commitment periods where carbon capture has a big role to play.
Most countries are not looking past the initial commitment period of 2025–2030. They are neither making the investments nor implementing the policy necessary for developing the technologies—like carbon capture—that will be needed for future commitment periods. This is hurting the development of carbon capture in the short-term. Without adequate governmental policies, demonstration and deployment activities like those described in chapter 5 have slowed. By not creating shorter-term markets for carbon capture, industry participation has markedly decreased, because it is hard to justify large investments today in technology development and deployment for markets that will not develop until after 2030.
Some mechanisms in the Paris Agreement try to address longer-term needs. Starting in 2018, there will be a “stocktaking” every five years to evaluate how well the world is doing on meeting the goals of the Paris Agreement. However, since the agreement is voluntary, it is unclear what actions can be taken to remedy the situation if the stocktaking indicates that we are falling behind, which seems likely. In 2020, pledges will start coming in for the second commitment period. Just how ambitious these new pledges will be, along with the results of the stocktaking, will illuminate just how fast climate policy will ratchet down CO2 emissions, which is a necessary condition for carbon capture to grow.
Energy Technology in the Twenty-First Century
A grand experiment is taking place in Germany’s energy system. This Energiewende, or energy transition, is aiming to reduce greenhouse gas emissions by 80 to 95 percent relative to 1990, and having renewable energy supply 80 percent of their electricity, all by 2050. Calling this ambitious is an understatement. Since 1990, Germany has achieved about a 30 percent reduction in greenhouse gas emissions, but it looks like their interim target of a 40 percent reduction by 2020 is in jeopardy.1 Renewable energy sources currently produce about one-third of German electricity, but recently their growth rate has slowed significantly. Examining what is happening in Germany provides insight into twenty-first-century energy systems.
Cheap, clean, and reliable are three key criteria used to grade an electricity system. So how is Germany doing? Is it cheap? Germany has some of the highest electricity rates in the world, about three times the rates in the United States.2 About a quarter of the electricity bill goes to pay for a renewable energy surcharge. Is it clean? Carbon emissions have come down, but the decrease has recently stalled. This is because unabated coal-fired power balances out the intermittent generation of renewables. Proposed projects to build coal-fired power with CCS in Germany were canceled due to opposition creating a hostile regulatory environment. The proposed phase-out of all nuclear plants in Germany by 2022 will only exacerbate this problem. Is it reliable? Despite having grid connections with neighboring countries to help deal with intermittency, there have been some narrow escapes regarding reliability. A particularly close call occurred on January 24, 2017. On that day, which had little wind and little sun, “the country’s power grid was strained to the absolute limit and could have gone offline entirely, triggering a national blackout, if just one power plant had gone offline.”3
Why has this much-ballyhooed Energiewende led to high prices, increased grid instability, and a plateau in CO2 emissions reductions? First, one has to realize that not all electricity generation is equal. Fossil fuel and nuclear and hydroelectric power plants produce dispatchable energy, meaning that we can control when a power plant is producing electricity. Some sources, primarily wind and solar, are intermittent; they only produce energy when the sun is shining or the wind is blowing. In Germany, in 2016, wind produced about 14 percent of the electricity and solar about 7 percent.4 Note that biomass (9 percent) and hydroelectricity (4 percent), which are dispatchable, were the other renewable energy sources. However, these are just yearly averages. There were times renewables provided nearly a hundred percent of the electricity generation, but at other times it was near zero. These swings put strains on an electricity system, adding costs and increasing reliability risks. Furthermore, relying on unabated coal to be the primary dispatchable generation for balancing the system limits the amount of achievable CO2 emissions reductions.
A big lesson from the German experience is the distinction between a renewable energy policy and a climate mitigation policy. The major thrust in the Energiewende is to increase the amount of renewable energy used in Germany. By this measure, it has been a great success. However, that does not necessarily make it a good climate policy—the two are not synonymous. If one is interested in addressing climate change, then the primary goal is decreasing greenhouse gas emissions, not necessarily increasing renewable generation.
This distinction between renewable energy policy and climate policy is very controversial. On one side is the camp that thinks the solution to climate change is renewable energy, period. On the other side are the proponents of the “all of the above” strategy. Mark Jacobson of Stanford University articulates the “renewables can do it all” camp in a paper which states that “[t]he large-scale conversion to 100% wind, water, and solar (WWS) power for all purposes (electricity, transportation, heating/cooling, and industry) is currently inhibited by a fear of grid instability and high cost due to the variability and uncertainty of wind and solar. This paper … provide[s] low-cost solutions to the grid reliability problem with 100% penetration of WWS across all energy sectors in the continental United States between 2050 and 2055.”5 A response from the “all of the above” camp by Christopher T. M. Clack of National Oceanic and Atmospheric Administration and twenty coauthors states, “In this paper, we evaluate that [Jacobson] study and find significant shortcomings in the analysis. In particular, we point out that this work used invalid modeling tools, contained modeling errors, and made implausible and inadequately supported assumptions. Policy makers should treat with caution any visions of a rapid, reliable, and low-cost transition to entire energy systems that relies almost exclusively on wind, solar, and hydroelectric power.”6
It is not my intention to referee this debate. My point is that there is a wide range of difference about how low carbon energy systems will evolve in the twenty-first century. I am definitely in the “all of the above” camp. The experience in Germany shows the difficulty of a narrow renewables policy as opposed to a broader climate policy.
This book has frequently referenced the power of technological change and the surprises it can bring. Technological change will be a major driver in the evolution of our energy systems, but it is extremely difficult to predict. For example, one solution to make large-scale wind and solar power feasible is battery storage, so a key question is whether there will be a breakthrough in battery technology. In the literature, one can find many optimistic articles. However, Bill Gates—generally a technology optimist—said in an interview in MIT’s Technology Review: “I’m in five battery companies, and five out of five are having a tough time. … When people think about energy solutions, you can’t assume there will be a storage miracle.”7
Since technological change is so hard to predict, a good approach is to support a diverse portfolio of technologies, in the way people manage their money by having a diverse portfolio of investments. Arguing that renewables can do it alone is a very risky proposition. Do we want to put all of our eggs in one basket? The magnitude of the climate challenge is so large, we need as many options as possible, including renewables, nuclear, and carbon capture.
Carbon Capture in 2100
There is one prediction I am sure of: I will not be alive in 2100. But I hope that my grandchildren will be. What will the world we leave them look like? Will we have mitigated climate change? Will carbon capture be deployed on a large scale?
Let us start with climate change mitigation. It is extremely likely that the temperature rise will exceed 2°C in this century. We are not reducing our CO2 emissions fast enough to stay within the 2°C carbon budget (see chapter 2), and negative emissions technology will not save us (see chapter 6). Given the time it takes to deploy low carbon technologies on a large scale, the transition will take many decades, even if climate change mitigation is made a high priority. Given that it is not nearly high enough today, the transition will stretch out decades longer. This means that limiting the temperature rise to 3°C is in question, though exceeding 3°C may not occur until after 2100. Because we cannot repeal the laws of physics, the threats posed by climate change will not go away on their own. Therefore, at some point in time, humankind will have to realize that the only real choice is to make climate change mitigation a high priority, and to decarbonize our energy systems. The question is in the timing. The longer we wait, the more adverse the impacts from climate change will be.
Assuming we will be well along in decarbonizing our energy systems by 2100, what role will carbon capture play? Can it compete with the other low carbon technology options? It seems inconceivable that humankind will just leave trillions of dollars of fossil fuel assets in the ground, which is an extremely strong economic incentive to develop technology for exploiting those assets in an environmentally friendly way. That technology is carbon capture. Exactly how big a role carbon capture will play in a decarbonized world is impossible to predict. In some countries it may play a major role, while other countries may not adopt it at all. My educated guess is that carbon capture can provide 10 to 30 percent of the global solution. This would be a major contribution. As I have said, there are no silver bullets. The solution will be a combination of renewables, nuclear, improved efficiency, carbon capture, and others. We can consider any technology providing over 10 percent of the solution to be a major player.
In a decarbonized world, there are three major areas where carbon capture can have a significant role. One is in industrial processes like cement plants, fertilizer plants, and steel mills. For this sector, carbon capture is the primary option for decarbonization. The only realistic alternatives are to use carbon neutral biofuels, or just continue to emit CO2, but buy offsets. The bottom line is that carbon capture is well positioned for this application.
The second area is negative emissions used for offsets. As discussed in chapter 6, the leading option today for large-scale negative emissions is bioenergy with CCS (BECCS). There are issues to be worked out to make sure that the biomass is carbon neutral, but the need for these offsets will be great and BECCS looks like it can deliver at an affordable price.
The last area is in electricity production. This sector holds the biggest potential for carbon capture, but is also the most uncertain. There is competition with renewables and nuclear. A recent IEA report concludes that carbon capture can compete: “CCS is central to a 2°C pathway: As part of the least-cost portfolio for power and as an essential mitigation solution in industry. … Without CCS, the transformation of the power sector will be at least USD 3.5 trillion more expensive.”8 It is important to stress that the electricity system in 2100 will probably be much larger than it is today. The shift to electric vehicles is already underway, so the odds are high that electricity will be a major energy source for the transportation sector in 2100.
Technological change will have a profound effect on how the electricity system looks in 2100. Will there be a breakthrough in storage technology to compensate for the intermittency of wind and solar? If not, the best technology to help balance the intermittency of wind and solar seems to be natural-gas fired power plants with CCS. Will a new generation of nuclear be cheap enough and safe enough to compete? How will carbon capture technology evolve? Since specific technological changes are hard to predict, the best tactic is to take a portfolio approach and keep our options open. The more options we have, the greater the likelihood of technological breakthroughs.
As stressed throughout this book, technology is an important factor, but so is policy. Predicting future policies is no easier than predicting technological change. Will politics take some of the technological options off the table, as some countries are doing today with nuclear? Will climate policies be technology neutral? Alternatively, will politicians, pressured by special interests, try to pick winners and losers? Almost surely they will, but what will they pick? As discussed in chapter 7, I am a strong proponent of putting a price on CO2 emissions and letting the markets make the technology choices. This will lead to the most cost-effective solutions.
Although I think it is inevitable that we will exceed the 2°C temperature stabilization goal, I do think we will stabilize at some higher level. I remain a firm believer that technological change will be critical in achieving this stabilization. However, this change does not magically appear. It requires investments from government and industry, and policies to create the markets that provide the incentives to develop new technologies. What we are doing today is inadequate. We must pick up the pace and broaden the portfolio of options.
We cannot predict the future very well, but the decisions we make today will shape that future. Our grandchildren and their children will judge us by those decisions. What will be our legacy, and what type of world will we be leaving them?
