REM 350: Sustainable Energy & Materials Management

1. REM 350:Sustainable Energy & Materials Management Defining & Measuring Sustainability Mark Jaccard Energy and Materials Research Group School of Resource and Environmental Management Simon Fraser University Jaccard-Simon Fraser University

2. Coverage Defining sustainability Resource scarcity concerns Waste toxicity concerns Other sustainability concepts Jaccard-Simon Fraser University

3. Defining sustainability “..development that meets the needs of the present without compromising the ability of future generations to meet their own needs” - World Commission on the Environment and Development, 1987 Jaccard-Simon Fraser University

4. Requirements of sustainability The human economy, like the human body, is an energy and materials transformation system. It uses resource inputs and produces waste outputs: the two threats to sustainability. Resource input endurance – energy and material inputs must be able to sustain or improve services they provide to humans; these resources or available substitutes will endure without decreasing the services they provide to humans (at constant or falling costs). Non-toxicity of waste output – energy and material outputs must be benign to the receiving environment, or recycled within the human economy, or captured and permanently stored. Jaccard-Simon Fraser University

5. Environment Resources: energy & materials Economy: energy & material transformation Wastes: energy & materials Sustainability threats: resource scarcity & environmental harm Oil depletion concern Jaccard-Simon Fraser University

6. Whither the price of oil? What is the most likely average price of oil during the decade 2020 to 2030? $80-120 $120-150 $150-200 $200-250 >$250 Jaccard-Simon Fraser University

7. Peak oil (also called Hubbert’s peak) Discovery and exploitation of a finite resource to follow a bell-shaped curve over time – applies to all finite resources, such as oil Peak oil Quantity Time Jaccard-Simon Fraser University

8. Peak oil global analysis Jaccard-Simon Fraser University

9. Peak oil and its presumed consequences • The theory: • As we pass the global peak in the production of oil, energy prices will rise and stay high. • The consequences: • rapid decline of suburbia, • rapid decline of long-distance trade, • rapid decline of long-distance travel, • reduction or complete halt to GDP • conflicts over scarce resources Jaccard-Simon Fraser University

10. Does peak oil accurately depict the dynamics of oil production and price? Oil is finite – but its exact quantity is unknown. Rising prices motivate exploration and innovation, increasing oil reserves. Definition of oil keeps changing. It has expanded since 1970 to include resources we have long known about: • deeper offshore oil, • enhanced oil recovery, • tight oil, • oil sands, • heavy oil, • shale oil. From oil we make products like gasoline and diesel. But these can also be produced from natural gas and coal – quite cheaply. Energy economists have explained this dynamic since the 1970s (Odell, Tussing, Adelman, Watkins, etc.) Jaccard-Simon Fraser University

11. Dynamic of reserves & resources: McKelvey box Jaccard-Simon Fraser University

12. Dynamics: oil response to price increase Ignores feedback relationship between price, exploration effort, technology and the discovery-development of conventional oil – reserves vs resource. Rising price shifts curve to right and peak upward Quantity Time Jaccard-Simon Fraser University

13. What are the production costs of fossil fuel substitutes for conventional oil? Potential increasing and cost falling with innovations Potential increasing with shale gas Peak oil focus Source: Farrell and Brandt, Berkeley, 2008 Jaccard-Simon Fraser University

14. Will there ever be a peak?Global Energy Assessment If we included natural gas and coal substitutes? Estimate in 2012 by Global Energy Assessment Estimate by geologist – Campbell: peak oil today! Jaccard-Simon Fraser University

15. Fossil fuel and uranium resource & reserves: GEA Jaccard-Simon Fraser University

16. Speed of substitution for vehicle fuels? All taps are already open – commercial scale production. How fast can they be opened further and how far? Unconventional oil Coal-to-liquids Gas-to-liquids Biofuels Jaccard-Simon Fraser University

17. Is the supply cost info for oil and its substitutes reliable? Why is the current oil price so far up its curve at $90-$100? Bottlenecks, market power, speculation, expectations. Could the oil price spike up for several years? Yes – war, rapid demand increase, weather, etc. Would it be higher if local impacts were priced or prevented? Not much – increase costs by a few percent Will the price of fossil fuel supply shift upward over time? Maybe – but just as likely downward with innovation. Jaccard-Simon Fraser University

18. If not peak oil, peak phosphorus? Jaccard-Simon Fraser University

19. Environment Resources: energy & materials Economy: energy & material transformation Wastes: energy & materials What about the other sustainability threat? Toxicity of wastes Jaccard-Simon Fraser University

20. Toxicity of wastes concern: local and regional impacts Environment Resources Local wastes Economy Global wastes Jaccard-Simon Fraser University

21. Deaths from air pollution & other energy-related causes: 2005 DALY = disability-adjusted life-year (life-years lost to disease) Jaccard-Simon Fraser University

22. Tar sands: an example of local environmental impact “Temporary” land alienation (multiple decades) “Permanent” land alienation leading to loss of natural habitat – possible loss of biodiversity, reduction of biological activity, disruption of fluvial-geological processes. Gradual dispersion of toxins into water and soils. Risk of extreme events – failure of settling ponds, pipeline rupture, major wildlife incident, major fire, etc. Jaccard-Simon Fraser University

23. Toxicity of wastes concern: global impacts Environment Resources Local wastes Economy Global wastes Jaccard-Simon Fraser University

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25. IEA: CO2 history and forecast Jaccard-Simon Fraser University

26. We are living a global tragedy of the commons The atmosphere is a global common property resource that we are exploiting with carbon pollution to cause global warming and other harms like ocean acidification. Preventing this tragedy of the commons is difficult because: - human institutions are weak for tackling global challenges - powerful vested interests are driving the carbon pollution path - we are good at delusion (each project a small % of huge problem) But the reality is simple: - if we help or permit more carbon pollution, we cause the tragedy

27. What does economics tell us? Economists do cost-benefit analysis. Burning fossil fuels (carbon pollution) has benefits and costs. Most prominent climate economist, Bill Nordhaus, argued in 1990 that high carbon pollution and high temperatures were “optimal.” Now even he says 2 - 3 C limit is probably “optimal,” closer to 2 C if worried about catastrophe. So leading scientists and economists now saying about the same.

28. The 2 C carbon budget Remaining carbon budget Unburnable carbon

29. The challenge: our current global path Current path CO2-free =15% CO2 emitting = 85%

30. Diverting from a hotter, unstable world Must start declining this decade 60 Current path to soon lock-in to 4C, then 6C, etc 40 Emissions path for 50/50 chance of not exceeding 2° C Annual Global Emissions (Gigatonnes CO2 equivalent) 20 2015 2000 2050 2100 50 – 75% decline by 2050

31. Actions and policies to prevent the tragedy Loss of forests and some agricultural practices increase GHGs Especially important to reduce CO2 emissions from fossil fuels: - energy efficiency, - fuel switching to renewables, perhaps nuclear, and - carbon capture and storage when using fossil fuels These actions only happen with policies that price emissions or regulate the technologies and fuels that cause emissions. Policies Actions

32. Global energy system – 40 year, 2 C path 50% reduction from growing system requires 80% CO2-free globally Only possible if virtually all long-lived energy investment is CO2-free from today 15% in 2010 50% in 2030 80% in 2050 CO2-free energy share = renewables + nuclear + fossil fuels with carbon capture & storage

33. What must happen to energy technologies and fuels? Electricity generation - 90% CO2-free by 2050 in developed countries, slower in developing (renewables, biofuels, fossil fuels with carbon capture and storage, nuclear). Buildings - 85% CO2-free by 2050 in developed countries (heat pumps, passive solar, biofuels, photovoltaics, solar hot water) Vehicles - 80% CO2-free by 2050 in developed countries (electric, biofuels, hydrogen) Jaccard-Simon Fraser University

34. Climate economics: What will it cost? Abatement Costs 5% of GDP over 40 years Energy fuel and electricity costs in 2050 perhaps 30% higher than otherwise would be. Energy service cost in developed country household budget to increase from 6% today to 8% by 2050. Do Nothing Costs Character of impacts Biodiversity loss with higher temp. Extreme weather events (drought, hurricane, heat wave, flood) Ocean acidification Disease surprises Greater floods and coastal instability related to rising oceans Timing, magnitude and GDP cost Highly uncertain, but evidence we underestimate risks of extreme outcomes In 2050 – 20% of GDP lost? more? In 2100 – possibly catastrophic? Jaccard-Simon Fraser University

35. Effective climate policy and risk Source: Ronald Prinn, MIT Jaccard-Simon Fraser University

36. MIT focus on Canada’s oil sands “The niche for the oil sands industry is fairly narrow and mostly involves hoping that climate policy will fail.” - Chan et al., 2010 “The main reason for the demise of the oil sands industry with global CO2 policy is that the demand for oil worldwide drops substantially. … it can be met with conventional oil resources that entail less CO2 emissions in the production process.”

37. Oil demand and price under effective climate policy MIT forecast (no policy) – 6C path = $200 / barrel MIT forecast (35% CO2 drop) - 4C path = $100 Our new estimate: 50% drop – 2C path = $40 Jaccard-Simon Fraser University

38. Acting on environmental risk = reduction of oil scarcity risk Environment Resources Economy Wastes Jaccard-Simon Fraser University

39. Are oil sands in a 2 C future? X Source: Archer Jaccard-Simon Fraser University

40. Are new oil pipelines in a 2 C future? X Source: CERI Jaccard-Simon Fraser University

41. Huge challenge of acting on the climate change risk Global public good problem. • Virtually everyone’s contribution is small enough that individual initiatives are of little value. • Without compliance enforcement mechanism, incentive to free-ride. Delayed effects problem. • Action must be taken far in advance to avoid impacts, but human decision-making (individual, market, politics) often myopic. Who pays problem. • Perceptions of equity aligned with self-interest (polluter pays vs equal payment per capita or GDP vs historical responsibility) Uncertainty problem. • Complex earth-atmosphere system means ongoing uncertainty, but also substantial risk of catastrophic outcome Jaccard-Simon Fraser University

42. Other sustainability concepts: strong and weak sustainability Natural capital – the ability of the environment (the earth) to provide humans with resource inputs and waste assimilative capacity Human-produced capital – human-produced inputs (buildings, equipment, infrastructure, know-how, institutions) and waste treatment capacity (sewage treatment, emissions capture) Weak sustainability – the sum of natural capital and human-produced capital does not decline (assumes that natural capital can decline if compensated by increase in human-produced capital) Strong sustainability – natural capital does not decline Issue: How do we measure each type of capital? Jaccard-Simon Fraser University

43. Are natural and human-produced capital substitutes? Strategy A gives higher NPV than Strategy B. But A is not sustainable while B is. A could relate to a fish stock or even to all bioproductivity on earth. Strategy A Annual benefit $ Strategy B Year 200 Year 400 Year 600 Time Jaccard-Simon Fraser University

44. Decomposing causal factors of human impact (IPAT) Impact = Population x Affluence x Technology of which, Affluence = GDP/Pop, Technology = Impact/GDP *********************************************************************************** Another approach disaggregates options to reduce negative impact (harm) Factors to be influenced are: • Toxicity of M&E throughput = HARM/M&E • M&E intensity of human activity = M&E/GDP • Affluence = GDP/POP • Population Jaccard-Simon Fraser University

45. Options toward sustainability Control population Stop growth of GDP Reduce M&E intensity of GDP – dematerialization (E&M efficiency) (substantially reducing the average level of material and energy throughput per capita) Reduce toxicity of M&E – transmaterialization and detoxification (switching inputs and/or capturing wastes to ensure that M&E flows do not negatively affect the planet’s life-supporting biogeophysical attributes and processes, such as climate stability, stratospheric ozone, clean air, clean water, fertile top soil, biodiversity, etc.) Jaccard-Simon Fraser University