REM 650 : Sustainable Energy & Materials Management

1. REM 650: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. Peak oil image Jaccard-Simon Fraser University

11. 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

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

13. 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

14. 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

15. 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

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

17. Renewables potential: GEA Jaccard-Simon Fraser University

18. Speed of substitution? 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

19. What happens to long-run price of fuel? Jaccard-Simon Fraser University

20. Is the supply cost info for oil and its substitutes reliable? Why is the current oil price so far up its curve at $80-$90? Bottlenecks, market power, speculation, expectations. Could the oil price spike up for several years? Yes – war, rapid demand increase, weather, etc. Does the supply cost include falling energy return on energy invested? Yes – extra capital and energy inputs explain rising costs Would it be higher if oil-favoring subsidies were removed? Not much – they are mostly on consumption 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

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

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

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

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

25. 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

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

27. What thresholds for global warming impacts? • Today • Current path • Tipping point Jaccard-Simon Fraser University

28. Jaccard-Simon Fraser University

29. Fossil fuels Jaccard-Simon Fraser University

30. What emissions path avoids disaster? Must decline in this decade; need peak of emissions long before peak oil 60 Current emissions path 40 Emissions path for 50/50 chance of not exceeding 2° C Annual Global Emissions (billion metric tons CO2 equivalent) 20 2015 2000 2050 2100 50% drop by 2050 Jaccard-Simon Fraser University

31. What must happen to global energy? 50% reduction from growing system requires 80% CO2-free globally Only possible if all energy investment is CO2-free from today 15% in 2010 50% in 2030 80% in 2050 CO2-free energy share = biomass + other renewables + nuclear + fossil fuels with CCS Jaccard-Simon Fraser University

32. 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

33. 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

34. Communicating risks Source: Ronald Prinn, MIT Jaccard-Simon Fraser University

35. Actions and policies for greenhouse gas reduction Actions by households and firms • Energy efficiency (if using fossil fuels) • Fuel switching (away from fossil fuels) • Emissions capture and storage • “The rest” (industrial processes, landfill management, agriculture, forestry) -------------------------------------------------------------------- Policies by government to drive actions • Information • Subsidies • Regulations (command-and-control) • Regulations (market-oriented, e.g. cap and trade) • Emissions charges (carbon tax) Jaccard-Simon Fraser University

36. What type of policies are effective? climate policy compulsory non-compulsory • information • labels • subsidies standards emissions pricing cap-and-trade carbon tax Jaccard-Simon Fraser University

37. 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? 50%? In 2100 – possibly catastrophic? Jaccard-Simon Fraser University

38. What policy package is essential? Jaccard-Simon Fraser University

39. What do credible sources say? • 2008 - 2012 – Several NRTEE reports say emissions pricing (cap-and-trade or carbon tax) the best way for government to keep its promises. (Government eliminates NRTEE in 2012.) • 2010 – International Energy Agency report shows oil sands expansion and new pipelines not part of 2 C limit. • 2012 – MIT study shows oil sands expansion and new pipelines not part of 4 C limit (35% global reduction). • 2012 – Auditor General of Canada (Environment Commissioner) says government not implementing policies to keep 2020 promise. Jaccard-Simon Fraser University

40. 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

41. Is unconventional oil in a 2 C future? Jaccard-Simon Fraser University

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

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

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

45. 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

46. 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

47. Decline in Harm/GDP? If so, how? Jaccard-Simon Fraser University

48. Ecological footprint Compares human demand on nature with the biosphere's ability to regenerate resources and provide services. It does this by assessing the biologically productive land and marine area required to produce the resources a population consumes and absorb the corresponding waste, using prevailing technology. Again, the issue is resource inputs and waste assimilation. Key measures are: Natural system – bioproductivity (photosynthesis) and waste assimilation (material cycles and heat dissipation). Human system – resource inputs and waste outputs. Comparison determines if a group of people (city, region, country) need an area larger than it controls – using resources of other areas and/or degrading the biosphere. Jaccard-Simon Fraser University

49. Ecological Footprint, Overshoot Jaccard-Simon Fraser University

50. Issues with ecological footprint Is E&M exchange between regions sustainable? Are cities “ecological black holes?” How do we respond to an indication of overshoot? ************************************************************* What is Factor 4? What is Factor 10? Jaccard-Simon Fraser University