MIT Joint Program workshop explores economic and environmental impacts of scaling up low-carbon energy.
When the Paris Agreement was launched in 2015, nearly 200 nations pledged to enact and continually strengthen policies aimed at keeping the rise in global average surface temperature since pre-industrial times to well below two degrees Celsius. Meeting that ambitious goal will require a dramatic decarbonization of the world’s energy system over the course of the 21st century. Critical to this collective effort will be the deployment of low-carbon energy sources at a very large scale. How might such a massive energy transition be achieved in an economically viable way, and what long-term economic and environmental impacts are likely to result?
Drawing upon many years of leading-edge work identifying challenges, hazards and potential barriers to low-carbon options deployed at continental to global scales—including knowledge generated in MIT’s ongoing Energy-at-Scale project—researchers at the MIT Joint Program on the Science and Policy of Global Change hosted a workshop on June 4 on the MIT Campus focused on challenges and opportunities in large-scale, low-carbon energy technology deployment.
The second in a series of Joint Program workshops aimed at providing decision-makers with actionable information on key global change concerns, the event featured five panels of researchers from or affiliated with the Joint Program. Panelists shared their expertise on the science, technology and policy of decarbonization in one-to-two-slide presentations, and in conversation with invited sponsor representatives and other energy industry stakeholders. Discussions underscored the potential of unique Joint Program assessment strategies and tools to quantify the economic and environmental impacts of large-scale decarbonization and support investment and policy decisions in this space.
Low-Carbon Options in Power Generation and Industry
The first session explored the likely impact of the growing demand for decarbonization on the electric power and industrial sectors.
Karen Tapia-Ahumada, a research scientist with the MIT Energy Initiative who is collaborating with the Joint Program on the Energy-at-Scale project, highlighted the development of a decision-support tool (EleMod) designed to model both electricity dispatch decisions at an hourly resolution and longer-term power generation capacity expansion. The model is well-suited to study the long-term, large-scale penetration of renewable energy technologies within the U.S. electric power sector under various climate and energy policies such as regional renewable energy portfolio standards (RPS) policies and carbon-pricing scenarios. Part of this effort is to assess the role of different technologies, from grid-scale storage to advanced nuclear to flexible technologies, in integrating renewable energy resources that are limited by their intermittency.
Illustrating how she has used the Joint Program’s USREP model to study the revenue implications of a carbon tax in the U.S., Joint Program Research Scientist Mei Yuan shared her finding that a $40 carbon tax starting in 2018 would compensate for the revenue gap of the new federal tax plan over the next 10 years. Yuan also described her progress in enhancing USREP to study pathways for the cost-effective development of renewables; to assure that particular policies such as a carbon tax will achieve desired emissions reductions, and to better represent renewable intermittency, labor dynamics and policy changes. For these tasks, she integrated USREP with EleMod.
Christoph Tries, a Joint Program research assistant who just earned a Master’s degree in MIT’s Technology and Policy Program (TPP), discussed his work on pathways for generation capacity expansion in the New England power sector under decarbonization and transmission expansion scenarios. He showed that based on a decarbonization scenario modeled in EleMod, the implementation of the Clean Energy Standards (that include all low-carbon options) in New England states leads to substantial cost savings in comparison to renewable portfolio standards (RPS) (that include only hydro, wind and solar). Tries observed that carbon capture and storage (CCS) would likely play a major role in enabling decarbonization in the region if Clean Energy Standards are adopted. His research also indicated that expanding transmission capacity to Canada and among the states of New England could provide a 40 percent cost savings over no expansion.
Jessica Farrell, a fellow Joint Program research assistant and recent TPP Master’s degree recipient, described her work in enhancing the Program’s Economic Projection and Policy Analysis (EPPA) model to improve representation of CCS technologies. Farrell showed how CCS provides a viable, cost-effective opportunity to reduce emissions in the industrial sector. In an assessment based on the cement production process, CCS would remove 90 percent of carbon dioxide emissions in the energy-intensive industrial sector at a 24 percent cost increase. Farrell plans to further this work by analyzing iron and steel plants and refineries, and disaggregating the industrial sector to provide better overall representation in the EPPA model.
Reducing Emissions in Transportation
Panelists in the second session examined challenges and opportunities in lowering transportation sector emissions, from bringing low-carbon, alternative fuels online to containing the explosive growth of private car ownership.
Abbas Ghandi, a post-doctoral research associate in transportation economics at the Joint Program, highlighted his use of the EPPA model to project the likely penetration of battery-electric and plug-in hybrid-electric vehicles in the transportation sector between now and midcentury. He also outlined obstacles that hydrogen will need to overcome to become an economically viable transportation fuel option, including the manufacture of fuel cell vehicles, deployment of refueling stations and development of hydrogen production pathways.
Joint Program research assistant Paul Kishimoto, a PhD candidate in Engineering Systems in the MIT Institute for Data, Systems and Society, showcased his work to systematically analyze the impact of rising household income in China on demand for private vehicle ownership, and how emissions can be reduced through strategic urban design, alternative fuel choices and transportation policies. The results of his analysis will be useful for better calibration of energy-economic models such as EPPA.
Drawing on EPPA model assessments, Joint Program Deputy Director Sergey Paltsev explored the timing of scaling up low-carbon transportation technologies over the course of the century, and the challenges that each technology faces in achieving critical mass. Two key challenges are affordability and the need for massive refueling or recharging station infrastructure. Paltsev emphasized that for decarbonization to meet the goals of the Paris Agreement, it will need to apply not only to private cars but also to heavy-duty road vehicles, air travel and shipping.
Environmental Impacts of Scaling Up Energy
The third session focused on methods and models designed to project the impacts of decarbonization on natural resources and critical infrastructure, and to minimize carbon emissions through strategic low-carbon technology deployment.
Joint Program Research Scientist Xiang Gao highlighted an internally consistent risk assessment modeling framework that could be used to project future water stress levels, climatic conditions, air quality and agricultural outcomes. In addition, she introduced a fast, inexpensive and reliable statistical method that she and Joint Program Deputy Director Adam Schlosser developed to project extreme weather events.
Schlosser showed how he and Gao have applied this method to project the risk of extreme heat events in the U.S. and their potential disruption of the electric power grid—under business-as-usual conditions as well as a climate mitigation policy. He also described a separate project that used models to assess wind and solar electricity generation and intermittency, and determined that linking wind and solar installations across the country could dramatically reduce intermittency.
Rich Swanson, a research affiliate of the Joint Program, described his work on Africa’s Energy Futures, a research program that investigated solutions to some of Africa’s energy needs in the face of climate change. Noting the continent’s spread-out population, concentrated energy sources and other challenges to low-carbon energy technology deployment, Swanson described the program’s efforts to model the optimized investment mix of generation and transmission infrastructure under different levels of trade and climate mitigation policies, identify opportunities for different countries to share solar and wind generation, and evaluate flexible designs of energy infrastructure under uncertainty.
Impacts of Policies to Reduce Emissions
The fourth session explored the development and application of models to study the impact of decarbonization policies on different regions, economic sectors and human health.
Noting the Joint Program’s USREP model’s capability to study the impacts of a carbon tax by region, income class and sector, Henry (“Jake”) Jacoby, a founding co-director of the Joint Program and emeritus professor of management at the Sloan School of Management, outlined a number of future research directions that the Program may pursue. These include comparing the economic impacts of a carbon tax versus emissions-reduction regulations, analyzing any special provisions in carbon tax proposals and determining how best to blend existing regional carbon-pricing policies with a national carbon tax.
Joint Program research assistant Kirby Ledvina, who starts a PhD program in Civil and Environmental Engineering at MIT in the fall, highlighted three projects in which she used the Joint Program’s economic models to analyze the impacts of emissions-reduction policies. She helped assess ASEAN and Latin American countries’ progress in meeting their nationally determined contributions under the Paris Agreement; improve the EPPA model’s representation of irrigable land so as to better understand the impact of climate policies and water availability on the agricultural sector; and assess the impact of a carbon tax on the large-scale deployment of bioenergy technology.
Joint Program research assistant Emil Dimantchev, who is pursuing a Master’s degree in Technology and Policy, summarized his work on quantifying the co-benefits of scaling up low-carbon energy. Using USREP in combination with air quality models and epidemiological studies, he has assessed the impact of different U.S. climate policies on the atmospheric concentration of health-hazardous PM2.5 particulates (those with a diameter less than 2.5 micrometers), per-person exposure to these particulates, and mortality rates and corresponding costs to the economy.
The Future of Oil, Coal and Natural Gas
The fifth session featured discussions of tools and studies aimed at determining the future of fossil fuels through mid-century and beyond.
Joint Program Research Scientist Jennifer Morris described some of the main advantages of the Joint Program’s Integrated Global System Modeling (IGSM) framework in projecting the future energy mix under energy policies ranging from business-as-usual to aggressive decarbonization. The EPPA model, which is the economic component of the IGSM, can assess the likely mix of energy technologies over the long term at global and regional levels, accounting for constraints on how quickly a given technology can expand in the energy marketplace. Using the IGSM, Morris noted that CCS has the potential to play an important role in the future electricity mix under strong policy. Morris also highlighted Joint Program work on uncertainty. In her work developing and applying new decision-making under uncertainty methods, she found that about 30 percent of electricity investment in the next 10 years should be carbon-free as a hedge against near-term policy uncertainty.
Joint Program Research Scientist Y.-H. Henry Chen shared his recent work on the application of the EPPA model in assessing energy, climate or trade policies. This includes economic modeling for the Joint Program’s upcoming 2018 edition of its biannual Food, Water, Energy and Climate Outlook, which projects likely pathways for these domains under existing and more aggressive decarbonization policies. Based on Chen’s assessment, maintaining current Paris Agreement pledges beyond 2030 will likely result in fossil fuels still accounting for 75 percent of energy consumption in 2050.
Sergey Paltsev concluded the session with a discussion of medium-term (up to 2040) and long-term uses of fossil fuels. Based on an analysis using the EPPA model, he noted that while renewables will expand considerably in the medium term, this growth is likely to halt as intermittency costs become more prominent. Paltsev added that a 2018 MIT study of a 2°C emissions path shows that oil and gas will likely retain a substantial energy market share through 2040, and remain competitive in the long term through non-energy applications such as petrochemicals and fertilizer.
“Decarbonization of the energy system under policy uncertainty is a long and complex process that can best be understood and managed through effective, reliable decision-support tools,” said Paltsev after the workshop, for which he served as lead organizer. “As our researchers at the Joint Program continue to develop and enhance our capabilities to analyze the myriad impacts of large-scale, low-carbon energy technology deployment, we welcome our invited guests and other stakeholders in industry, government and academia to explore potential areas for collaboration.”
“Achieving low-carbon goals requires strong interaction among decision-makers from different economic sectors and geographic locations who often must balance multiple objectives,” he added. “We can help them with our expertise to design the strategies that reach these goals in an efficient manner.”
Read this story at MIT Joint Program on the Science and Policy of Global Change.