Mark Jaccard has intruiging ideas on 'sustainable' Fossil...           

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  GERAD 25th Anniversary Series ENERGY AND ENVIRONMENT, Ch4 Hybrid Energy-Economy Models and Technological Change 83

Jaccard, Mark says...

 Consider three hypotheses:

1) In this century, the global energy system can achieve near-zero emission energy while also reducing other impacts and risks, and more than doubling in size.

2) In achieving this profound change, final energy prices will average no more than 25 - 50% higher in real terms than today.

3)  There will, however, be substantial transitional costs, some of which are real financial costs while others relate to the risk, time

and quality preferences of businesses and consumers that economists include in the term welfare costs. These costs pose

a challenge for policy design and for the development of modeling tools that would assist the policy design process.

PK = Optimistic / depends on high management regime?

         >> have to overcome higher costs.

         >> Need to regulate total GHG emissions.

   Compelling evidence for the first two hypotheses is available from

recent surveys of the planet's available energy resources and their technological

and economic potential. The World Energy Assessment produced

for the United Nations Development Program (and the World

Energy Council) in 2000 and the Third Assessment Report of the Intergovernmental

Panel on Climate Change in 2001 provided substantial

evidence that humanity could meet all its growing energy service needs

at near-zero levels of the various emissions that currently affect interior

air quality, urban air quality, acidity of regional precipitation and atmospheric

concentrations of greenhouse gases (UNDP, 2000, IPCC, 2001).

In addition to a substantial contribution from energy efficiency, several

forms of renewable energy and nuclear power could satisfy global energy

needs almost single-handedly.

      Even fossil fuels, popularly thought to be rapidly depleting, could satisfy

global energy needs for centuries at current use rates. Exhaustion of

conventional crude oil and natural gas may mean little given the existing

technical capacity to produce gaseous and liquid fuels (synthetic natural

gas, synthetic gasoline, hydrogen, etc.) from any fossil fuel source including

unconventional oil and gas, oil sands, orimulsion, and coal (and

perhaps gas hydrates and deep geopressurized gas in future). 

CLEANING FOSSIL UP =PK 

Using conventional technologies, coal can be converted to electricity and hydrogen

at wholesale, plant-gate product prices of 5 - 76/kilowatthour and $8 -

10/gigajoule, including the costs of capturing and permanently storing

carbon dioxide and other undesired byproducts. The cost of carbon

control by this method is $60 - 80/per tonne of COa abated.

Evidence for the third hypothesis about high transitional costs has

accumulated from three decades of policy efforts to influence energy use,

initially from fears of impending oil shortages in the 1970s, then shifting

to concerns about electricity investment risk in the 1980s, and then to

a focus on energy-environment problems from the 1980s to the present.

Throughout this period, governments, and quasi-governmental entities

like utility commissions, tried to influence the direction of technological

innovation and the diffusion of new technologies among businesses

and consumers. They used subsidies, regulations, information programs

and, in rare cases, financial penalties. It is generous to say that these

efforts met with mixed success. While the magnitude of energy demand

and the character of energy using technologies are undoubtedly different

than they otherwise would have been, the energy system exhibited considerable

inertia, and researchers increasingly focus on this. In essence,

we have learned that while a more benign energy system is physically,

technically and economically feasible, we have also learned how difficult

it can be to turn the ship around. Our primary need is not more R&D to

invent new technologies; we already know of alternatives that can achieve

our objectives. Our critical need is to design policies that will foster the

dissemination of these technologies by overcoming the substantial transitional

costs associated with profound technological change, and to build

models that help policy makers ascertain which approach is likely to be

more effective in pursuit of this objective.