Macroeconomic Perspectives on a Renewable Energy Transition

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Macroeconomic Perspectives on a
Renewable Energy Transition
Jonathan M. Harris
http://ase.tufts.edu/gdae
Copyright © 2014 Jonathan M. Harris
Can Renewable Energy Provide a Solution
to Climate Change?

Long-term link between economic grwoth and
carbon emissions

Need to “decouple” economic activity from
carbon emissions

An end to growth, or a new kind of energy
economy? Or both?
Growth in Population, Agricultural Production,
and Energy Use, 1961-2010
Sources: Population and Agriculture,FAO, 2012; GWP, IMF ww.imf.org; Energy, EIA www.eia.gov
World GDP 1870-2003
45
40
GDP (Trillion)
35
30
25
20
15
10
5
0
1860
1910
1960
Year
Source: Maddison, Historical Statistics for the World Economy, 2008.
2010
Carbon Dioxide Emissions from
Fossil Fuel Consumption, 1860-2008
Source: Carbon Dioxide Information Analysis Center (CDIAC), http://cdiac.ornl.gov/
World Carbon Dioxide Emissions,
Historical and Projected
Source: U.S. Department of Energy, 2012.
Per Capita Emissions of CO2 by Country
Source: U.S. Energy Information Administration, ww.eia.gov, accessed 2013.
Global Energy Consumption by Source, 2012
Biomass 10.0%
Wind, solar,
geothermal
1.0%
Hydropower
2.3%
Nuclear 5.1%
Oil
31.5%
Natural Gas
21.3%
Coal
28.8%
Source: International Energy Agency (IEA 2013)
Availability of Global Renewable Energy
Wind
Total Global
Availability (trillion
watts)
1700
Availability in LikelyDevelopable Locations
(trillion watts)
40 – 85
Wave
> 2.7
0.5
Geothermal
45
0.07 – 0.14
Hydroelectric
1.9
1.6
Tidal
3.7
0.02
Solar photovoltaic
6500
340
Concentrated solar power
4600
240
Energy Source
Total global energy use in 2006: 15.8 Trillion Watts
Source: Jacobson and Delucchi (2011); U.S. Energy Information Administration;
Stanford Engineering News, http://engineering.stanford.edu/news/wind-could-meet-many-times-world-total-power-demand-2030-researchers-say
Infrastructure Requirements for Supplying All Global
Energy in 2030 from Renewable Sources
Energy Source
Wind turbines
Wave power plants
Geothermal plants
Hydroelectric plants
Tidal turbines
Rooftop solar PV systems
Solar PV power plants
Concentrated solar power
plants
TOTAL
Percent of 2030
Global Power
Supply
50
1
4
4
1
6
14
20
Number of
Plants/Devices Needed
Worldwide
3,800,000
720,000
5,350
900
490,000
1.7 billion
40,000
49,000
100
Land requirement: about 2% of total global land area.
(Can be combined with agricultural uses)
Source: Jacobson and Delucchi (2011).
Global Potential for Energy Efficiency
Source: Blok et al. (2008)
Projected 2035 Global Energy Demand, by Source
Business As Usual Scenario
Total Demand: 18,048 Mtoe
Hydropower
3%
Aggressive Climate Change
Scenario Policy
Total Demand: 14,920 Mtoe
Non-Hydro
Renewables
12%
Nuclear
6%
Oil
28%
Natural
Gas
22%
Hydropower
3%
Non-Hydro
Renewables
23%
Nuclear
11%
Coal
29%
Source: International Energy Agency, 2011
Natural
Gas
20%
Oil
26%
Coal
17%
Growth of Solar PV and Wind Installations (2003-2012)
Source: Worldwatch Institute (2014).
Declining Energy Intensity in Industrial Economies
Declining Energy Intensity in
Industrial Economies, 1991-2008
Energy Intensity- Btu per Year 2005 U.S. Dollars (1991 base year)
1.1
1.05
1
0.95
Canada
0.9
United States
Germany
0.85
United Kingdom
France
0.8
Italy
Japan
0.75
0.7
0.65
0.6
1991
1993
1995
1997
1999
Year
2001
2003
Source: US Energy Information Administration (EIA), 2011.
2005
2007
Source: EIA 2013.
Developing Countries Energy Intensity
1.400
1.300
Btu per (2000) US Dollar, 100-based
1.200
1.100
1.000
India
China
0.900
Brazil
Mexico
0.800
Indonesia
0.700
0.600
0.500
0.400
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Year
Source: Energy Information Administration, International Energy Annual 2004
2004
Energy Intensities, Selected Countries
70,000
Energy Consumption (BTU) per dollar GDP
60,000
50,000
United States
France
Germany
40,000
United Kingdom
India
China
30,000
Brazil
Mexico
Indonesia
20,000
10,000
0
1990
1992
1994
1996
1998
2000
2002
2004
Year
Source: Energy Information Administration, International Energy Annual 2004
2006
Energy Intensity, PPP GDP
Source: Energy Information Administration, 2011
World average energy intensity, 2011: 9885 BTU/GDP$
Source: Energy Information Administration, 2011
Growth and Efficiency
Economic
Growth
Energy Intensity
Rate of Change
(BAU)
Energy Intensity
Rate of Change
(HI-EFF)
Population
1%
Shift to Services
-1%
Shift to Services
-2%
Per capita GDP
2%
Increased Efficiency
-1%
Increased Efficiency
-2%
Total
3%
Total
-2%
Total
-4%
Net Change in
Energy Use 1%
Net Change in Energy
Use -1%
Business as Usual Scenario
2034
2014
~1% p.a. growth in energy demand
120 units total
100 units total
Renewables
10 units
90 units
carbon-based
Renewables
20 units
100 units
carbon-based
Copyright © 2011 Jonathan M. Harris
Services, Efficiency, & Renewables Scenario
2034
2014
~1% p.a. decline in energy demand
100 units total
10 units
80 units total
Renewables
20 units
90 units
carbon-based
60 units
carbon-based
Based on modest investment in services, efficiency, renewables, with no
loss in employment (probably a gain)
Copyright © 2011 Jonathan M. Harris
Examples of “Green” Macro Policy: U.S.
•
$787 billion dollar stimulus package included about $71 billion for specifically
“green” investments, plus $20 billion in “green” tax incentives.
•
•
•
•
•
•
•
•
•
•
Energy efficiency in Federal buildings and DoD facilities -- $8.7 billion
Smart-grid infrastructure investment -- $11 billion
Energy and conservation grants to state and local governments -- $6.3 billion
Weatherization assistance -- $5 billion
Energy efficiency and renewable energy research -- 2.5 billion
Advanced battery manufacturing -- $2 billion
Loan guarantees for wind and solar projects -- $6 billion
Public transit and high-speed rail -- 17.7 billion
Environmental cleanup -- $14.6 billion
Environmental research -- $6.6 billion
Aggressive Federal policy action including “green” investments “probably
averted what could have been called Great Depression 2.0 . . . without the
government’s response, GDP in 2010 would be about 11.5% lower, payroll
employment would be less by some 8 ½ million jobs, and the nation would
now be experiencing deflation.” (Blinder and Zandi, “How the Great Recession
was Brought to an End”, 2010).
Examples of “Green” Macro Policy: Portugal
• Portugal government-led transition from fossil fuels towards
renewable power, with the percentage of renewable supply in
Portugal’s grid up from 17 percent in 2005 to 45 percent in 2010.
• $22 billion investment in modernizing electrical grid and developing
wind and hydropower facilities.
• Portugal will recoup some of its investment through European
Union carbon credits, and will save about $2.3 billion a year on
avoided natural gas imports.
“Portugal Gives Itself a Clean-Energy Makeover,” New York Times August 10, 2010.
Decline since 2007: 12%
Source: US Department of Energy, 2013
ACCESSED AT: http://www.eia.doe.gov
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