Climate Change Information Sheet 25

New energy technologies and policies

• The production and use of energy is the leading source of humanity's greenhouse gas emissions. The combustion of coal, oil, and natural gas accounts for roughly three quarters of all carbon dioxide emissions, or some six billion metric tonnes of carbon annually (as of 1992). Extracting and using fossil fuels emits almost one-fifth of all humanity's methane, some carbon dioxide, and large quantities of carbon monoxide and other air pollutants. The industrial sector accounts for more than a third of the global CO₂ emissions from fossil-fuel combustion (excluding the power generation sector), the residential and commercial sector 32%, and the transport sector a bit over 21% (and growing rapidly). These energy-related emissions could be significantly reduced through a combination of new technologies and policies.
• Leaks and spills during the extraction and transport of fossil fuels can be minimized. New "integrated recovery" techniques can cut methane emissions from coal mines by up to 80–90% compared to standard practices. Technologies available today can reduce methane emissions from natural-gas distribution systems by up to 80% (compared to the world average). In oil fields where natural gas is flared off or vented because its sale is uneconomic, small on-site power generators can be introduced to make electricity for local use, or the gas can be compressed or converted for use by transport or near-by industries. These and many other technologies could together reduce total fugitive emissions from energy extraction and fuel transport by 50–90%.
• Fiscal and tax policies can encourage the early introduction of new technologies. By the year 2100, the entire capital stock of the world's current commercial energy system will be replaced at least twice. Incentives for investing in more cost-effective and energy-efficient technologies could maximize the opportunity this replacement offers for reducing emissions. Taxing emissions or the carbon content of fuels can steer investments toward lower-emissions technologies. Economists estimate that a worldwide phase-out of fossil-fuel subsidies would cut global emissions by 4–18% while boosting real incomes.
• The conversion efficiency of electric power plants can be raised. The world-average conversion efficiency of 30% could be more than doubled in the longer term. The best available coal- and natural gas-fired power plants already convert fuel into useable energy with an efficiency of 45% and 52% respectively. One promising new technology is combined cycle power plants, where heat from the burning fuel drives steam turbines while the thermal expansion of the exhaust gases drives gas turbines. Another is cogeneration, or combined production of heat and power, which could increase the amount of useful energy produced to approximately 80–90% of the heat energy in the fuel; this is much higher than what could be achieved with separate electricity and heat production plants, although users needing cooling or heat must exist nearby. Raising the efficiency of a typical coal-fired plant from 40% to 41% would cut the plant's CO₂ emissions by 2.5%.
• Power-plant emissions can also be reduced by switching from coal to less carbon-intensive fuels. Switching from coal to natural gas can reduce emissions by up to 40–50%. (A possible constraint is that estimated coal reserves far exceed those of natural gas.) The efficient use of biomass in steam and gas-turbine cogeneration systems can reduce emissions; these systems have already shown themselves to be commercially feasible for certain pulp and paper and agricultural applications in some developing regions. Renewable energy technologies such as wind, solar, and small hydro can also reduce emissions while distributing electricity more flexibly "off the grid".
• Industry can further reduce its energy intensity while cutting production costs. During the last two decades, fossil-fuel emissions from industry have declined or remained constant in developed countries due to technological trends and structural changes in the economy. These countries could reduce their industrial CO₂ emissions by 25% or more relative to 1990 levels simply by replacing existing facilities and processes with the most efficient technological options currently available. If this upgrading of equipment occurred at the time of normal capital stock turnover, it would be a cost-effective way to reduce industrial emissions. At the global level, industrial emissions are projected to grow dramatically as developing countries industrialize; slowing their rate of emissions growth will require that they have access to the most efficient technologies available.
• The residential and commercial sectors can adopt energy-efficient technologies. Technologies with pay-back periods of five years or less are available for many types of equipment now used in buildings. They could cut CO₂ emissions 20% by 2010, 25% by 2020, and up to 40% by 2050 compared to the baseline scenario (in which energy efficiency improves gradually without any deliberate climate-related policy intervention). Buildings can be made more energy-efficient through market-based programmes in which customers or manufacturers receive technical support or financial incentives. Other options are mandatory or voluntary energy-efficiency standards, public and private research into more efficient products, and information and training programs. A combination of regulatory, information, and incentive programmes may offer the best approach to boosting the energy efficiency of these sectors.
• Non-fiscal policies can also promote low-emissions technologies. The spread of new technologies and practices is often blocked by cultural, institutional, legal, informational, financial, and economic barriers. Government policies can help to remove some of the blockages. Information-sharing and product-labeling programmes, for example, can help consumers to recognize the broader consequences of their decisions. Governments can also support carefully targeted research, development, and demonstration projects for technologies that can reduce emissions and improve efficiency. While they will want to avoid trying to pick technology "winners", governments can play a valuable role by lowering the barriers faced by innovators and promoting a balanced national portfolio of energy options and research programmes. Another option is to introduce emissions targets together with tradable emissions permits that companies can buy and sell.
• Deep reductions in greenhouse gas emissions from fossil fuels are possible over the next 50 to 100 years. A "thought experiment" based on several scenarios for a Low CO₂–Emitting Energy Supply System (LESS) finds that current and expected technologies could reduce global fossil-fuel-related CO₂ emissions from about 6 billion tonnes of carbon annually in 1990 to about 4 billion tonnes in 2050 and 2 billion in 2100. Technology innovation and an emphasis on renewable energy sources, particularly biomass, will be essential for achieving these goals, and some countries may also consider nuclear energy. Since many different combinations of technologies could be used, this future energy-supply system could be constructed in any number of ways. In the short-term, however, with the global demand for energy certain to rise, actions to reduce emissions must continue to include improvements in energy efficiency.