1. AMBITIOUS TARGETS FOR ENERGY RD & D MEETING PLANETARY EMERGENCIES

2. OUTLINE 1.Summarize an exemplary effort (IEA) to set energy technology targets and analyze the cost of achievement 2.Outline the governance issues related to such an effort as well as financial 3.Propose an alternative or supplementary approach

3. IEA GLOBAL RD&D GAPS STUDY The study sets out a clear target: Reduce world CO2 emissions in 2050 to 14GT from 30GT (today) and from 62 GT (business as usual projected for 2050) Most impressively, required increases in energy RD &D are specified by technology type

5. Expenditures And Gaps Table by Wedge

6. Internal Costs of IEA Wedges IEA wedges reductions are policy induced and are likely to induce higher private costs borne by industry and individuals A possible exception is end use energy efficiency investment –Consumers are thought to under invest energy savings investments, so such policies can reduce costs –But even this will result in higher short run cost “No regrets” policies capture such benefits

7. Carbon Capture and Sequestration Not proven this technology can do as projected, but critical to carbon reduction –Capture and retention efficiency –Storage availability Less CCS means switching “fuel” to electric power less effective CCS cost starts with a 30% penalty with increased parasitic load

8. Renewables and Energy Efficiency Limits? Can very aggressive targets be met or will solar and wind cost curves given evolution of existing technology read a reach a limit (i.e. do we need new renewable technologies) Policy is projected to reduce economy wide energy intensity by twice the historical rate sustained indefinitely (Exceeds No Regrets cost gain?)

9. Summary of Essential Policy Efforts Impose CCS requirements for power and industrial coal combustion or strongly incent them Impose aggressive energy efficiency requirements so as to double the rate of decline in energy intensity Create aggressive incentives or requirements for renewable energy sources Impose aggressive requirements for carbon free vehicles Require fuel switching to reduce carbon Each of these will increase short run costs and most require increases in long run costs Each of these must be coordinated for at least the largest economies Attainment requires a substantial increase in RD & D

10. An Alternative Goal: Reduce Costs so as to Improve Human Welfare The last 200 years have witnessed a “miracle” of economic growth which has made huge contributions to human welfare Energy technology research and development has been a prime driver by reducing the cost of primary supply, and the cost of using energy Growth generating capital investment followed the lead of potential lower cost energy

11. Can Fossil Fuels Offer Further Gains? Clearly oil and gas supply requires recovery of more and more difficult resources Energy security costs attach to oil supply All fossil fuels, especially coal have substantial external costs (non GHG) –NOX, SOX, particulates, Hg Fossil fuel energy conversion technologies reach thermodynamic limits constricting future cost gains

12. A Lower Cost Future is Not Carbon Driven Low cost nuclear Low cost renewables, perhaps not now on the table Fusion

13. Can A Manhattan Style Project Create or Accelerate Development Some key characteristics –Theory formulated? –Extremely difficult engineering issues Huge resources committed –.4% of US GDP 1942-1945 –Today=$50 bil per year Low cost energy offers worldwide benefits –Worldwide GDP equivalent: $240 bil

14. Organize Multiple Manhattan Projects Senior scientists (i.e. Einstein’s and Szilard’s) and others as needed are gathered to select technology areas to drive toward lower cost energy target –First order of business: are there such technologies that want for funding and focus? –Technology areas identified Zero to six government “Manhattan” Projects: China, EU, India, Japan, Russia and the US are agreed to Each government and its Academy of Sciences (or other as appropriate) is given charge of organizing and funding one effort Periodically (every 3 years?) scientists reconvene to assess progress and prospects “No regrets” implementation is part of the deal Successful technologies are shared with an advantage to the developer

15. Advantages Ultimately provides tangible benefits as perceived directly by consumers around the world: focus on a first best result Lower cost energy alternatives will tend to be market implemented, no policy initiatives needed (except end use efficiency as part of “No Regrets” which should also improve welfare) Potentially addresses energy poverty Implementing agreements much simpler –Less costly, less at stake –Unified purpose: potential benefits for all

16. Science with a Mission Climate debate frames scientists as nags –Tend to become policy advocates rather than problem solvers – Very little influence, no power, not political –Hard case Science has an excellent record pursuing difficult goals