Entrepreneur and former Democratic presidential candidate Andrew Yang, quoted in Vox.com post by Zack Beauchamp, Andrew Yang said the smartest thing about Biden at the DNC, Aug. 20.
This guest post is by Daniel Ambrosio, a development finance professional working in New York.
The European Union’s massive new economic recovery plan “is notable,” says Harrisburg University engineering professor Arvind Ravikumar, “for its focus on climate action, sustainable investments, and a just transition fund.” Writing in MIT Technology Review, Ravikumar applauds the EU’s €1.8 trillion ($2.1 billion) Covid stimulus package for putting climate policy front and center. Yet he takes aim at the Carbon Border Adjustment Mechanism that is a key component of the plan.
Ravikumar’s article, Carbon border taxes are unjust, calls Carbon Border Adjustments “colonial” and “a form of economic imperialism” because they reinforce the West’s historic irresponsibility in generating emissions both at home and abroad. In his view, carbon border taxes also fortify Western-based corporations’ ongoing, destructive investment in extractive fossil fuel infrastructure throughout the less-developed world.
It is true that by themselves Carbon Border Adjustments do not address these issues. But does that omission disqualify them? Must correcting historic inequities be a requirement for any and every aspect of climate policy?
Carbon Border Adjustments
A Carbon Border Adjustment is a tax on imports based on the carbon emissions of their production — more precisely, based on the difference between respective carbon tax rates in the importing country and the producing country. If an importing country is taxing its own carbon emissions at, say, $100 per ton of CO2 while the producing country’s tax is just $20, the importing country may impose a Carbon Border Adjustment of $80 on each ton of CO2 ascribed to manufacture of the imported product.
In effect, Border Adjustments supplement a local tax on carbon emissions “production” with a tax on local emissions “consumption” produced abroad. A properly designed (and WTO-compliant) border adjustment thus holds local and foreign producers to a common standard. As both Ravikumar and the EU note, this is necessary to prevent “leakage” of industrial emissions production to untaxed jurisdictions.
Leakage risks are not hypothetical. As Ravikumar notes, “globalization helped the developed world shift manufacturing and outsource its associated pollution burdens to China and other developing countries.” Systematic exemption from Western regulatory regimes for pollution, health and safety and social safety nets powerfully abetted concentration of carbon pollution in the developing world, with myriad local air and water pollution impacts. Yet Ravikumar’s article makes no mention of the possibility that developing countries might foster their own energy transition with carbon taxes, at which point EU border adjustments on imports from these countries would be moot.
A carbon tax on a marginal ton of CO2-equivalent emissions reflects historic untaxed emissions. In other words, because emissions have only just begun to be taxed, returning atmospheric concentrations to pre-industrial levels (or at least capping their rise, as is the EU’s aim, i.e., net carbon-neutral by 2050) requires a tax which internalizes not the damage of a ton of CO2 in isolation, but the damage of that additional ton in the specific context of atmospheric concentrations as they are and the distance needed to travel to meet targets.
Criticism of this approach is correct in that it is blind to 1) who caused the damage to this point, 2) how well situated an individual, firm or nation is to cope with the cost internalization, and 3) the degree of agency these individuals, firms and nations have over their emissions levels. However, the incidence of this taxation — who ultimately bears its burdens — is only one facet of how the costs are ultimately borne.
Disentangling Price Signals and Climate Justice
Many carbon tax proposals and implementations are committed to revenue neutrality. The intent is to price emissions and thus create an economy-wide impetus for behavioral and structural changes while holding average cost of living in place. And while revenue-neutrality does not directly address the international legacy emissions problem, it at least does not exacerbate it.
Global inequity can be addressed through use of carbon border revenues or separate climate reparations such as wealth transfers, technology transfers, concessional financing, and reduced trade barriers. Ravikumar notes, “The Green Climate Fund — established as part of the Paris [climate agreement] — is a good start, but it is not sufficient, nor has it been fully endowed.”
Revenues from carbon border adjustments could fill the funding gap. The broader point is that imposing carbon border adjustments does not preclude addressing international climate justice. Putting a price on carbon that limits regulatory arbitrage and thus discourages emissions leakage is the single most equitable way to distribute the price signals that drive low-carbon investment and behavior. It is also almost certainly a sine qua non to overcome trade-union and other worker-based opposition to carbon taxing in the U.S. and other industrial nations.
Ravikumar’s article advances its own intriguing proposals for climate equity:
Reforms to WTO rules should allow developing countries to grow a domestic green manufacturing sector without triggering a WTO dispute. Developed countries and global financial institutions should extend access to low-interest financing, as well as to technology transfer and bilateral trade and exchange programs that help build capacity for climate mitigation and adaptation in developing economies.
None of these is incompatible with a carbon taxing and border adjustment scheme. Nevertheless, given how repeatedly the article decries “colonialism,” it is worth nothing that each of Ravikumar’s proposals reflects a top-down approach likely to advantage firms with political clout, at least compared to the impartial approach of broad carbon pricing.
The article does bring to the surface a number of important considerations as the EU develops its Carbon Border Adjustment Mechanism through consultations. However, its animus toward Border Adjustments appears misplaced.
As in 2016, Democrats appear poised to capture the White House and perhaps the Senate while retaining the House. Let’s explore what a Democratic presidency and Congress might mean for climate policy and carbon taxing.
Caveats first. We offered a similarly rosy prediction in 2016, a month before Election Day. In a post on Oct. 9, The Political Meltdown That Could Save the Climate, we said that the “Access Hollywood” tapes were leading “shell-shocked Republicans to abandon the Trump ship.” Little did we know that the Trump campaign was already detonating a wave of counterattacks that would culminate in FBI director James Comey’s catastrophic Oct. 28 letter to Congress dredging up Hillary Clinton’s emails. Nor did we imagine that most swing-state voters who disliked both candidates would pivot sharply from Clinton, or that her seemingly impregnable lead was partly an artifact of pollsters’ under-representation of Trump’s top demographic, non-college white voters.
Even more wild cards abound this time: possible election intimidation and interference, Covid-related voting reluctance, and of course Trump’s proven willingness to say and do almost anything to hold onto power. Plus, the election is still 16 weeks away — “an eternity in politics.” Nevertheless, Biden’s position today looks stronger than Clinton’s four years ago.
With Democrats rallying solidly around Biden, the trifecta of Covid, economic privation, and revulsion at white supremacy may be too much for the incumbent to overcome. At this writing (July 14), FivethirtyEight.com has Biden leading by at least 7 points in the three states that tipped the 2016 election to Trump. As for the Senate races, though polling is thinner, Democrats are being given the edge in a majority of the eleven most competitive races; they need only take five to gain the majority (four if Biden wins).
So let’s make the optimistic assumption that the party of climate denial, tax inequality and All Lives Matter is trounced this November. What’s in store for climate and carbon pricing?
Tackling Inequality and Climate Change
New York Times columnist David Leonhardt last week singled out the Democrats’ agenda’s “two defining features”:
The first is reducing inequality — through higher taxes on the rich, greater scrutiny of big companies, new efforts to reduce racial injustice and more investments and programs for the middle class and poor, including health care, education and paid leave. The second is acting on climate change. (From It’s 2022. What Does Life Look Like?, July 10; emphases added)
Those two elements overlap with the three building blocks we articulated for climate progress in our Dec. 2019 post, A New Synthesis: Carbon Taxing, Wealth Taxing & A Green New Deal.
Leonhardt contends that while “[Joe] Biden may not seem like a history-altering figure, certainly like less of one than Barack Obama did. . . he could wind up presiding over a larger scale of political change than Mr. Obama did, for reasons largely independent of the two men themselves.” One reason is that unlike the start of Obama’s presidency, which coincided with the onrush of the 2008 financial meltdown, “today, by contrast, progressives have spent years working through the details of plans on climate change, high-end tax increases, antitrust policy and more.”
“There is a whole vision that I think is ready,” says economist Heather Boushey, who runs the progressive-leaning Washington Center for Equitable Growth, and whom Leonhardt quotes. “And there is a lot more runway,” she told him, contrasting the ten or so months Biden’s team will have had to lay out their plans with the mere two months available to Obama.
The other factor militating for potentially sweeping legislative change under Biden, in Leonhardt’s view, is the vast scope of disruption in the past two decades. This period includes “the biggest two economic crises since the Great Depression, the worst pandemic in more than a century and the election of two presidents unlike any before them — and diametrically unlike each other.” He could also have mentioned the breadth and militancy of the resurgent U.S. left, which has served notice that it has no intention of letting up or bargaining down during a Biden presidency — a perspective that suffuses another, more visionary essay that the Times published alongside Leonhardt’s, The Left Is Remaking Politics, by Ohio State University law professor Amna A. Akbar.
Standards-Investment-Justice: an emerging Democratic Party alignment on climate
In late May, Vox climate writer David Roberts published At last, a climate policy platform that can unite the left, a monster (6,000-word) post drawing on his decade covering U.S. energy and climate policy and politics.
Roberts posits, and offers as his post’s subhead, that “the factions of the Democratic coalition have come into alignment on climate change.” “For the first time in memory,” he writes, “there’s a broad alignment forming around a climate policy platform that is both ambitious enough to address the problem and politically potent enough to unite all the left’s various interest groups.”
Roberts quotes Maggie Thomas, former campaign aide to Jay Inslee and Elizabeth Warren, now with the climate mobilization group Evergreen Action: “All of those people who ran for president … had a much more expanded vision on climate by the end of their campaigns than when they started,” and then offers sections entitled Net-zero emissions by 2050 is the new baseline, Republicans aren’t going to help, and Carbon pricing has been dethroned (we’ll have more on that in a bit), before unveiling his synopsis of this emerging Democratic climate alignment:
- Standards: “[E]lectricity, cars, and buildings together … make up close to two-thirds of US emissions. The core of any aggressive 10-year mobilization on climate must be to target them, not sideways through a carbon price, but directly, through sector-specific performance standards and incentives, to drive out the carbon as quickly as possible.” Details vary among various (former) candidates’ platforms and advocacy groups’ programs, Roberts, notes, “but there is a strong common core: performance standards and incentives for the three biggest emitting sectors, aimed at making rapid, substantial progress on emissions in the next 10 years [with] the ultimate vision a carbon-free electricity sector powering an electrified, emission-free vehicle fleet and building stock.”
- Investment: The idea of “large-scale public investment,” says Roberts, “is not new, but something about the moment — the rising danger of climate change, the growing influence of Sanders-style democratic socialism, the pent-up public need after decades of austerity politics — made it resonate.” “The investment ideas cover a wide range, e.g., rural electrification, universal broadband, long-distance electricity transmission, and electric vehicle charging infrastructure [though public transit goes unmentioned here], but the focus in all of them is supporting green industries, manufacturing, and research, and, above all, creating jobs.”
- Justice — “for unions, fossil fuel workers, and front-line communities,” per Roberts’ summary. “Putting justice first,” which the emergent alignment does, “represents the most notable shift in green thinking and strategy over the past decade,” in Roberts’ estimation. And I believe he’s right. Whereas “climate justice” has been construed primarily as remediation and protection for marginalized constituencies that are predominantly Indigenous or communities of color, it is now extended and broadened to encompass workers in obsolescent fossil-fuel industries, the regions burdened by energy extraction and processing, and under-employed people.
Is “Standards-Investment-Justice” reconcilable with CTC’s “Taxing Carbon and Wealth for a Green New Deal”?
While the Standards-Investment-Justice moniker is largely Roberts’ formulation, the idea it encapsulates has been in the air for a year or more and is now trending. It’s easy to see why. Performance standards are broadly accepted in the U.S., if not by Fox News mouthpieces then by an impressively broad spectrum from environmental groups to appliance manufacturers. (The standards rubric also includes state-level clean-electricity standards that many credit with priming the wind and solar power pumps for the past one or two decades.) Investment is newly resonant for the reasons Roberts notes, with credit also due Green New Deal proponents including the Sunrise Movement for their constant invocations of FDR’s presidency (minus the racist exclusions). Justice, a bedrock human ideal, here becomes a rubric to unite two factions that are vital yet have rarely been joined politically: the environmental justice left and the more traditional labor center.
“S-I-J” strikes us, then, as empowering and vital. But what about “P” for pricing — carbon pricing? Recall that Roberts dissed it, in the Carbon pricing has been dethroned section of his post. Here’s how he put it:
Carbon pricing — long treated as the sine qua non of serious climate policy — is no longer at the center of these discussions, or even particularly privileged in them. For one thing, there’s the political economy: Raising prices is unpopular, and raising prices enough, fast enough, to hit the 2050 [net-zero emissions] target will be an almost insuperable political challenge. Cap and trade is still in the reputational toilet. Carbon taxes never saw the bipartisan support their backers always promised. The politics of carbon pricing just don’t seem to be going anywhere.
Roberts is right on several counts: Carbon pricing is no longer centered in climate policy. Raising prices is politically difficult. Cap and trade is toxic. And carbon taxing has lacked bipartisan support since the 2009 Tea Party insurrection (the occasional Republican mild pats-on-the-back for token carbon taxes don’t really count).
But his insinuation that carbon pricing in isolation can’t get us to net-zero emissions by 2050 is a straw man; no carbon pricing advocate of any stature has posed it as a stand-alone measure for a long time. More importantly, the absence of bipartisan support shouldn’t disqualify carbon taxes from consideration by a Democratic White House and Congress, should that be the outcome of the November elections. With Democratic majorities, and assuming the newly Democratic Senate abolishes the filibuster, a meaningful carbon tax, e.g., one that begins at $15 or $20 per ton of CO2 and rises annually by $15 to reach $100 per ton within seven years, ought to be able to get through Congress and reach the White House.
Biden’s $2 Trillion Climate Plan
Yesterday, the Biden campaign released its climate plan. The Biden Plan To Build A Modern, Sustainable Infrastructure And An Equitable Clean Energy Future would invest $2 trillion over the next four years to build new infrastructure, boost clean energy, and repair and remediate communities historically damaged ecologically and socially by fossil fuel extraction and burning.
The Biden plan appears to embed carbon reduction in a broader framework of economic recovery, infrastructure revival, racial equity, and jobs — apt framing in light of the Depression that has enveloped the U.S. in the wake of the Covid-19 pandemic and the Trump administration’s largely business-as-usual stance, as well as the awakening of many Americans to the ongoing damage from persistent structural racism.
Release of the plan followed on the heels of the Biden-Sanders Unity Task Force’s policy recommendations on climate change issued last week (July 9), which in turn hewed fairly closely to the June recommendations of the House Select Committee on the Climate Crisis. The select committee’s “majority” report (from the Democratic conference), Solving the Climate Crisis: The Congressional Action Plan for a Clean Energy Economy and a Healthy and Just America, “calls on Congress to build a clean energy economy that values workers, centers environmental justice, and is prepared to meet the challenges of the climate crisis.”
We’ve read the Biden Plan’s write-up of its seven key elements, shown above — U-C Santa Barbara poli sci professor and climate savant Leah Stokes has an excellent Twitter thread on it, by the way — and have seen nothing about, or even hinting at, carbon taxing or carbon pricing of any stripe. On the other hand, another part of the Biden Campaign’s climate page, Biden’s Year One Legislative Agenda on Climate Change, includes language suggesting support for pricing carbon emissions:
This enforcement mechanism [to achieve net-zero emissions no later than 2050] will be based on the principles that polluters must bear the full cost of the carbon pollution they are emitting and that our economy must achieve ambitious reductions in emissions economy-wide instead of having just a few sectors carry the burden of change. (emphasis added)
That said, sifting various iterations of the Biden campaign’s climate platform doesn’t feel particularly useful. Whatever climate legislation (and executive action) emerges from a Biden administration and Democratic Congress is likely to be determined more by the demands of the climate movement this year and next than by Biden campaign statement. The implication is that carbon tax advocates would do better educating fellow climate campaigners on the need for carbon taxing — and, of course, organizing for electoral change this summer and fall — than bemoaning the absence of carbon taxing from current climate discourse.
We give the last word to the Times’ David Leonhardt, whose July 10 column we drew on, above:
“If there is a single lesson of the current era of American politics, it’s that change can happen more quickly than we imagined.”
NY Times columnist David Leonhardt, It’s 2022. What Does Life Look Like?, July 10.
I posted this on Streetsblog yesterday. It’s somewhat NYC-centric and doesn’t mention climate change, but it’s indicative of how fast opinion and, hence, policy can change, especially now, during the pandemic. — CK.
“Live long enough,” the saying goes, “and you’ll see everything.”
So it is. On Friday, we saw perhaps the first-ever NY Times link to “Banning Cars from Manhattan,” the seminal 1962 samizdat essay that suggested another urban world was possible. We also saw a 3,000-word essay revivify the truths in the classic 1980s underground sticker, “Ban cars from the city: They pollute, they kill people, they take up space.”
All this, and more, in a piece provocatively titled, “I’ve Seen a Future Without Cars, and It’s Amazing” by Times opinion columnist Farhad Manjoo — with a subtitle that dared to ask, “Why do American cities waste so much space on cars?”
To paraphrase jazz immortal Sun Ra, space is place for us urbanists. To me, what makes Manjoo’s essay so distinctive is its focus on the immense space cars and driving require. That, plus its conviction that New York and other cities can and must be transformed, now — during and post pandemic; plus that it appeared in the New York Times, automatically giving it currency and gravity.
Space — the word — appears 19 times in the essay. Its close cousin, land, shows up for 15. “If cars are our only option, how [after the pandemic] will we find space for all of them?,” Manjoo muses. Cities’ “worst mistake [was] giving up so much of their land to the automobile,” Manjoo declares:
Automobiles are not just dangerous and bad for the environment, they are also profoundly wasteful of the land around us: Cars take up way too much physical space to transport too few people. It’s geometry.
Cars wasting space is old hat to anyone who spends much time biking in New York City. And the hopeless geometry of cars in cities has been a thing on “Transit Twitter” for some time. But I’ll bet Manjoo’s message struck Gray Lady readers as fresh and new. Even if they’re now schooled in tailpipes and carbon and crashes, most “normies” probably haven’t thought that “as roads become freer of cars, they grow full of possibility.”
Manjoo is speaking to this car-cocooned majority, sagely anticipating their objections and trying to help them get over, with passages like this:
What’s that you say? There aren’t enough buses in your city to avoid overcrowding, and they’re too slow, anyway? Pedestrian space is already hard to find? Well, right. That’s car dependency.
Without cars, Manjoo explains, “Manhattan’s streets could give priority to more equitable and accessible ways of getting around.” Crucially, these better ways aren’t ride-hails or Teslas or self-driving cars. Indeed, one of the essay’s notable feature is its kiss-off to digerati fantasies of melding technology, automobiles and cities. (Manjoo, a former reporter, covered Silicon Valley.)
No faux disrupter, Manjoo is going sustainable and long, urging bike superhighways and bus rapid transit and congestion pricing and ample sidewalks — elements of a wholesale repurposing of the vast space taken up by moving cars, parked cars, cruising-for-parking cars, stuck-in-traffic cars, refuel stations and the like.
In Los Angeles, “land for parking exceeds the entire land area of Manhattan, enough space to house almost a million more people at Los Angeles’s prevailing density.” And just in Manhattan, “nearly 1,000 acres … is occupied by parking garages, gas stations, car washes, car dealerships and auto repair shops.” (Central Park covers 840 acres.)
“The amount of space devoted to cars in Manhattan is not just wasteful, but, in a deeper sense, unfair to the millions of New Yorkers who have no need for cars,” Manjoo writes, before teeing up this killer quote from urban planner Vishaan Chakrabarti: “It really does feel like there is a silent majority that doesn’t get any real say in how the public space is used.”
Chakrabarti, whose Practice for Architecture and Urbanism firm provided underpinning for Manjoo’s column, here joins the Regional Plan Association in demanding that politicians stop coddling the pro-car NIMBY’s who overpopulate city community planning boards and problematize virtually every measure that might take space from cars.
“Cars aren’t just greedy for physical space,” Manjoo writes, “they’re insatiable,” calling out the true meaning of induced demand: “an unwinnable cycle that ends with every inch of our cities paved over” (an outcome sadly familiar to aficionados of Streetsblog’s Parking Madness tournaments).
“Cars make every other form of transportation a little bit terrible,” Manjoo adds, perhaps understating. “The absence of cars, then, exerts its own kind of magic — take private cars away, and every other way of getting around gets much better.” That goes for walking, biking, scootering, even taxis and Ubers, Manjoo notes, but, above all, for buses, as the graphic at right showing time savings from removing Manhattan car traffic makes clear.
I posted that graphic on Twitter in response to concerns that barring most private autos from Manhattan and upgrading bus service to BRT, as Manjoo suggests, “wouldn’t serve equity.”
“On what planet,” I asked, “is cutting super-double-digit minutes off bus commutes in/around NYC not a win for equity?”
Of course, a win for equity like humane and efficient buses is a poor stand-in for an across-the-board commitment to equity, as was pointed out in response.
“A true commitment to equity changes the power structure for making decisions,” added another commenter — and I fully agree.
But I don’t think it’s helpful to fault Manjoo’s article, or their vision, for failing to confront power structures that enforce economic inequality or white supremacy. Dismantling those structures is the paramount work of our time, in my view. And I want no part of any measures that would further entrench them. Yet making New York and other cities safe, sustainable and habitable for their hundred million or more inhabitants is also vital. I’ve seen nothing suggesting that aggressively reducing car dependence along the lines urged by Manjoo will either interfere with that work or worsen conditions for communities of color and other underserved constituencies.
The 2021 races for mayor, public advocate, comptroller and city council are fast approaching, and Manjoo has sent NYC livable-streets advocates a clear signal to elevate our game. The signoff from their column gets the last word (emphases added):
Many of the most intractable challenges faced by America’s urban centers stem from the same cause — a lack of accessible physical space. We live in a time of epidemic homelessness. There’s a national housing affordability crisis caused by an extreme shortage of places to live. And now there’s a contagion that thrives on indoor overcrowding. Given these threats, how can American cities continue to justify wasting such enormous tracts of land on death machines?
New Yorker staff writer Philip Gourevitch (@PGourevitch), on Twitter, July 2.
World solar and wind electricity production data for 2019 have just been released, and they appear to confirm the trend we discerned in our June 9 post, How fast can solar push out fossil fuels?. Exponential growth appears to be finished for both of these pillars of renewable energy.
In this post we show that the linear growth pattern into which solar and wind have apparently settled, while impressive on many counts, isn’t steep enough to displace fossil fuels fast enough to avert climate catastrophe.
There’s no question that solar and wind have grown rapidly worldwide, stimulating hopes that these technologies represent a transformational juggernaut that can carry us into a fossil fuel-free future. Between 2000 and 2016 global solar electricity production grew at an average rate of 44% per year while wind electricity production, starting from a larger base, grew at 25% per year, according to the BP Statistical Review of World Energy, 2020.
A consistent increase by a constant percentage represents exponential growth. Continuation of the 2000-2016 percentage growth rates would lead to enough energy production to blow fossil fuels out of the picture within several decades. But a closer look reveals that solar and wind’s worldwide percentage growth rates have recently been declining. Figures 1 and 2 above show actual growth to 2016. Figures 3 and 4 add production that would have been expected through 2019 and this year as well if exponential growth had persisted, with the yearly growth percentages to 2016 remaining constant.
The takeaway from Figures 3 and 4 is that solar and wind appear to be transitioning from their early, exciting, exponential growth phase into a more settled linear pattern. In each year from 2016 to 2019 global solar electricity grew only by approximately the same absolute amount per year, not by over 40% per year as it had earlier. A straight line fits this recent trend well, indicating a linear (i.e., additive), not exponential (i.e., percentage) rate of increase. The same applies to wind.
That solar and wind growth should transition from exponential to linear shouldn’t come as a surprise. As I noted in my June 9 post, maintaining exponential growth over long periods of time is extremely challenging. Most technologies, after an initial exponential growth spurt, tend to grow in a linear manner, adding a more-or-less constant increment each period. This pattern fits U.S. automobile ownership, railroad track mileage and electricity production — despite consistent technological improvements — to name just a few technologies, and natural systems as well.
If the solar and wind transition to linear growth is confirmed over the next few years, how much electricity production are they likely to contribute by 2040? Linear growth would represent more-or-less steady production of a constant amount of new capacity each year, with the amount being a function of manufacturing capacity and other constraints such as siting and financing. Based on their 2016-2019 growth, the upper limits of future annual growth are 161 TWh/y for solar and 216 TWh/y for wind. (These are upper limits, at the 95% confidence level; mean growth rates for 2016-2019 were 132 TWh/y for solar and 153 TWh/y for wind.) Solar would then provide about 4,000 TWh to world electricity supply in 2040, and wind approximately 6,000 TWh, as Figures 5 and 6 show.
To put these future productions levels in context, we need to look at how much electricity production will be required. World electricity production last year totaled about 27,000 terawatt hours. That figure will almost certainly grow not only to spread prosperity to the one to two billion people who currently use little or no electricity, but to shift provision of transportation, heating and factory production to electricity from petroleum fuels on account of climate concerns.
In a recent report, Global Energy Outlook, the U.S. NGO Resources for the Future (RFF) reviewed and compared projections from some of the world’s leading energy institutions. Because many of the projections used different assumptions, RFF “harmonized” them to bring them into an apples-to-apples alignment. An approximate average of these projections is that world production of electricity will grow by 2040 to about 40,000 TWh. I myself derived a considerably higher figure for the same year, around 70,000 TWh, when I used the En-ROADS simulation tool developed by Climate Interactive, Ventana Systems and MIT Sloan School and set electrification of transportation, buildings, and industry to a maximum level. (Projections this far into the future are fraught with uncertainty but are nevertheless useful in framing the discussion.)
In a non-climate-challenged world, steady linear growth leading to a total 10,000 TWh of production from these two renewable sources by 2040 would be a worthy achievement. But it’s barely a third of today’s electricity consumption, and just one-fourth or less of the expanded generation that’s likely to be needed in that year. Without major changes that significantly accelerate development of low- and zero-carbon power sources, or that drastically reduce the need for energy, the “missing” electricity will come from fossil fuels, exacerbating the already ominous impacts of climate change.
Such major changes could include emergence of one or more disruptive new technologies, such as utility-scale storage cheap enough to ameliorate wind’s and solar’s intermittency, more efficient methods of harnessing solar, wind, and geothermal energy, a radically different, easily deployable version of nuclear power, or something else not yet above the horizon. The need for new low-carbon tech was underscored this week by the International Energy Agency, whose new Clean Energy Innovation report concluded that “Without a major acceleration in clean energy innovation, net-zero emissions targets will not be achievable.”
Another major change could be a revolutionary policy that dramatically accelerates progress in energy efficiency and funnels significantly more funding to R&D of new power sources. One policy that could catalyze that is a steadily increasing fee on emissions of carbon dioxide. Pricing carbon emissions so that uses of fossil fuels include their true climate costs would incentivize development of low- and zero-carbon power sources and encourage the full gamut of low-carbon alternatives from energy efficiency and conservation to more-efficient and less-carbon intensive factories, transport and electricity. This could be done in an income-progressive, revenue-neutral fashion, as in proposed legislation H.R. 763, the Energy Innovation and Carbon Dividend Act, introduced early last year by Representative Ted Deutch (D-FL).
But the time left to phase out fossil fuels and avoid the worst effects of climate change is dwindling fast. After three consecutive years of incontrovertibly linear (additive) growth — extrapolation of which leads to scenarios falling far short of what’s needed to meet the twin imperatives of prosperity and decarbonization — the onus should be on renewables advocates to demonstrate why the world’s hopes should continue to be placed largely on solar and wind.
Scranton, Pa. resident Kaitlin Ahern, 19, quoted in June 30 NY Times story, ‘I Can’t Focus on Abortion Access if My People Are Dying’, about younger U.S. women’s lower prioritization of abortion rights vis-a-vis other justice issues.
Five years ago, novelist and technologist Ramez Naam published a series of articles, collectively titled How Far Can Renewables Go? Pretty Darn Far, in which he wove empirical data into declining-cost curves for wind power, solar photovoltaic cells and battery storage that pointed, in his estimation, to prodigious future growth paths for renewables in the U.S.
Now, in a new post, Solar’s Future Is Insanely Cheap, Raam carries optimism about solar photovoltaics to a new height.
He demonstrates that costs of utility scale solar electricity in the U.S., China, India and the world as a whole have dropped by a factor of five since 2010, putting them at around $50 per megawatt-hour (5 cents per kWh), the low end of the cost range for new fossil-fuel generating plants. He points out that most forecasts, including his own, have underestimated the speed of decline in solar costs.
This 10-year record of plummeting solar PV costs is impressive and heartening. But what can it tell us about the next 10 or more years? To predict the cost of solar electricity going forward, Naam uses a “learning curve” approach based on Wright’s Law, a staple of industrial engineering that states that, for many technologies, each doubling of cumulative production leads to a constant percentage decline in the cost of that technology. (The decline rate varies across technologies but tends to be constant for each.)
By Naam’s account, Wright’s Law has been found to apply to at least sixty technologies. Naam demonstrates it via falling prices for Henry Ford’s Model T as its production grew steadily through the period 1909 to 1923. He then compares the cost of utility-scale electricity with global cumulative installed capacity of solar, and, just as Wright’s Law would predict, finds a smooth and steady decline, which he depicts in the chart at right, below.
By plotting these data on a log/log scale (not shown here), as befits “power laws” like Wright’s Law, Naam finds that the cost of utility-scale solar generating facilities has dropped by 30% to 40% for each doubling of installed capacity. This coefficient is at the high end of “doubling elasticties” in those sixty or so technologies that are said to conform to Wright’s Law.
If ever there was cause for optimism that solar power (and perhaps its renewable-power cousin, wind turbines) can keep getting cheaper at a fast enough rate to permit and justify massive deployment (which in turn will keep driving down costs), it is Raam’s May 2020 post. Think of it: just two more doublings in cumulative production (and installed capacity) will drive down costs by another one-half to two-thirds. Affordable, irresistible solar is coming to save us from fossil fuels and climate change.
There’s a problem with this approach, however. The solar costs that Naam has plotted are total installed costs. Thus, they include not only the cost of the solar panels (modules) but the costs of inverters, trackers, cabling, mounting systems, land and labor, not to mention the business relationships and contractual arrangements necessary to actually bring each job to fruition. These so-called balance of system (BoS) costs currently account for 2/3 of the cost of solar installations, by Naam’s admission. And while it is true that the “inertia” in BoS costs means that the costs of the modules themselves have fallen even faster since 2010 than the 80 percent overall drop in solar costs in that time (that’s the 5-fold drop we noted earlier), this same inertia seems almost certain to drag down the rate of cost decline going forward.
And in fact since 2010, costs of modules have dropped approximately 10-fold; twice as much as solar installations as a whole, which means that the other parts of solar costs fell less impressively (see this and this). The slower learning rate for BoS solar costs suggests that while the modules, with their very high learning rate, might theoretically cost next to nothing, the inertia in at least some BoS costs could mean that, no matter how many megawatts and gigawatts of solar are installed here and globally, the full cost of solar electricity may level off and be unable to fall below a certain level.
Even if we assume as Naam does that a 30% to 40% learning rate applies more or less uniformly to all solar costs, including modules and BoS items, cumulative installed capacity will have to double to achieve each approximate 35% drop in cost. Successive doublings in generating capacity require larger and larger absolute increases. World solar generating capacity was about 1 gigawatt in 2000. It was over twice that in 2003, and twice that, about 4 gigawatts, in 2005. Today world solar generating capacity is about 600 gigawatts. Growing from 600 to 1200 gigawatts, and then again from 1200 to 2400 gigawatts, requires vastly more production of panels and other necessary materials than growing from 1 to 2 gigawatts and then from 2 to 4 gigawatts, etc.
In order for cumulative installed solar capacity to double and then double again by 2030, for example, solar’s rate of growth would have to maintain exponential growth in the range of 15% per year. Whether such a continued high rate of growth is at all feasible is a fair question.
Learning from History: Autos, Railroads, Electricity
U.S. solar growth has slowed of late, taking three years for its most recent doubling, from 2016 to 2019, which Naam refreshingly acknowledges, noting that “solar growth has very clearly slowed over the past few years.” This slowdown in solar’s growth in the face of continued dramatic declines in costs signals that other factors are involved than cost alone.
In short, cost declines following Wright’s law may not translate directly to increased deployment. Take Naam’s example of the Model T. U.S. motor vehicle ownership grew exponentially from around 1900 to 1920 but then settled into a long period or more of less linear growth, as indicated in the chart above. (In this figure and the two following it, exponential growth rates were selected that produce curves that approximately match actual data for the early years.)
Another example, shown at left, is U.S. railroad track mileage, which surged in the 1850s and 60s and then also settled into a long period of linear growth.
A third example, shown further below, is U.S. electricity generation. An exponential growth rate of about 9% per year is apparent from 1900 until the mid-1950s. Exponential growth slowed around then, and by 1970 growth had settled into a more-or-less linear pattern.
Few technologies — or natural systems, for that matter — grow in an exponential manner for long (Smil, 2014, Kramer & Haigh, 2009.) Instead, “growth curves” are characterized by an early exponential period that transitions to a linear phase, adding a more-or-less constant increment each period, which eventually levels off as constraints increasingly come into play and limit further growth.
Growth in both motor vehicle ownership and railroad track mileage became linear despite ongoing innovations in the technologies themselves and improvements in manufacturing methods as production continued to increase. A similar pattern is apparent with U.S. electricity generation; growth gradually transitioned from exponential to linear during the ‘60s and ‘70s, as decades of declining costs (which enabled utilities to discount rates for big users) ground to a halt. Since 2005 growth in electricity use has ceased altogether, primarily due to large-scale dissemination of energy efficiency (see reference to Komanoff analysis, below).
How fast will solar electricity production grow?
Naam’s discussion of solar electricity’s declining costs is important because it can shed light on how far and fast solar electricity generation is likely to grow. In particular, can solar output grow rapidly enough to displace enough coal and natural gas to help avert climate catastrophe?
To be sure, growth in solar electricity is already pushing out fossil fuel use in the United States and other countries. In the U.S., the roughly 100 TWh increase in solar electricity production since 2005 was great enough to avert burning coal and gas that would have emitted 74 million metric tons of carbon dioxide in 2019, according to an analysis released last month by Carbon Tax Center director Charles Komanoff.
Yet that accomplishment pales beside the 1,618 million metric tons actually emitted by U.S. power plants last year. And the need for large-scale electrification of transport and heating — in order to displace petroleum — only magnifies the growth required of solar (and wind), and perhaps from other advanced energy sources such as next-generation nuclear and enhanced geothermal, to fully decarbonize the economy.-
Unfortunately, Naam doesn’t venture to predict the pace of solar growth, either for the U.S. alone or for the world as a whole. That is probably wise, seeing as that at this point, and probably for some time to come, there is no way to divine whether to extrapolate past growth figures linearly or exponentially. We’ll revisit this issue in a follow-on post scheduled for the first week of July.