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13. Decarbonization as a long-term energy strategy

Nebojsa Nakicenovic

The possibility of less carbon-intensive and even carbon-free energy as major sources of energy during the next century is consistent with the long-term dynamic transformation and structural change of the energy system. Natural gas seems the likely transitional fuel that would enhance the reduction in other adverse impacts of energy use on the environment as well as substantial reductions in carbon dioxide (CO2) emissions. Natural gas could be the bridge to carbon-free energy sources such as hydrogen (Nakicenovic, 1993a).

Global primary energy use has evolved from reliance on traditional energy sources to being based on fossil fuels, first coal and steam then oil and natural gas, and more recently (but to a lesser extent) on nuclear and hydro-energy. Figure 13.1 shows the competitive struggle among the five main sources of primary energy as a dynamic substitution process. Fuelwood and traditional energy sources dominated primary energy until 1880. Coal, the major energy source between 1880 and 1960, was the basis for the massive expansion of railroads and the growth of steel, steamships, and many other sectors. Since 1960, oil has assumed a dominant role at the same time as the automotive, petrochemical, and other industries have matured. The current reliance on coal in many developing countries illustrates the gap between the structure of primary energy supply and actual final energy needs.

Fig. 13.1 Global primary energy substitution, 1860-1980, and projections to 2050 (expressed in fractional market shares, f. Note: Smooth lines represent model calculations and jagged lines are historial data. "Solfus" is a term employed to describe a major new energy technology, for example solar or fusion)

During the past two centuries, global consumption of primary energy has increased about 2 per cent per year, doubling on average about every 35 years. As a result, emissions and other environmental effects of energy conversion and end-use have also increased. Current annual emissions are about 6 gigatons (billion tons) of carbon or more than 20 gigatons of CO2. Most of the anthropogenic atmospheric CO2 is due to fossil energy use and deforestation. Fossil energy consumption contributed more than two-thirds of all human sources of CO2. The largest single source of energy-related carbon emissions is coal (about 43 per cent), followed by oil (around 39 per cent) and gas (less than 18 per cent).

In general, the instrumental determinants of future energy-related CO2 emissions can be described by the Kaya identity. The Kaya identity establishes a relationship between population growth, per capita value added, energy per unit of value added, and CO2 emissions per unit of energy on one side of the equation, and total carbon dioxide emissions on the other (Yamaji et al., 1991).

CO2 = (CO2/E) X (E/GDP) x (GDP/P) x P.

where E represents energy consumption, GDP the gross domestic product or value added, and P population. Changes in CO2 emissions can be described by changes in these four factors. Two of these factors are increasing and two are declining at the global level.

At present, the world's global population is increasing at a rate of about 2 per cent per year. The longer-term historical growth rates since 1800 have been about 1 per cent per year. Most of the population projections expect at least another doubling during the next century (see UN, 1992; Vu, 1985). Productivity has been increasing in excess of global population growth since the beginning of industrialization, and thus has resulted in more economic activity and value added per capita. CO2 emissions per unit of energy and energy intensity per unit of value added have been decreasing since the 1860s in most countries.

The decarbonization of energy and decreases in the energy intensity of economic activities are a pervasive and almost universal development (Nakicenovic, 1993b). Since 1860, the ratio of average CO2 emissions per unit of energy consumed worldwide has been decreasing, owing to the continuous replacement of fuels with high carbon content, such as coal, by those with lower or zero carbon content. Figure 13.2 shows the historical global decarbonization of energy, expressed in tons of carbon (tC) per kilowatt year (kWyr). The reduction in the carbon intensity of the world economy, historically about 1.3 per cent per year, has been overwhelmed by growth in economic output of roughly 3.0 per cent per year. The difference, 1.7 per cent, parallels the annual increase in CO2 emissions, implying a doubling before 2030 in the absence of appropriate countermeasures and policies.

Analysis of energy decarbonization requires the energy system to be disaggregated into its three major constituents: primary energy requirements, energy conversion, and final energy consumption. The carbon intensity of primary energy is defined as the total carbon content of primary energy divided by total primary energy requirements (consumption) for a given country. As such it is identical to the ratio used to define the carbon intensity of primary energy in the world given in figure 13.2. The carbon intensity of final energy is defined as the carbon content of all final energy forms consumed divided by total final energy consumption. Various final energy forms that are delivered to the point of final consumption include solid fuels (such as biomass and coal), oil products, gas, chemical feed stocks, electricity, and heat. Electricity and heat do not contain any carbon. Thus it is evident on an a priori basis that the carbon intensity of final energy should generally be lower than the carbon intensity of primary energy. In addition, its rate of decrease should exceed that of primary energy decarbonization because of the increasing share of electricity and other fuels with lower carbon content, such as natural gas, in the final energy mix. The carbon intensity of energy conversion is defined as the difference between the two intensities.

Fig. 13.2 The global decarbonization of primary energy, 1860-1980

Figures 13.3,13.4, and 13.5 show the carbon intensities of primary energy, final energy, and energy conversion for selected countries, expressed in tons of carbon per ton of oil equivalent (toe). In figure 13.3 the higher carbon intensities of China and India result from higher reliance on coal and traditional sources of energy, which are assumed also to result in net CO2 emissions owing to deforestation and, in general, unsustainable exploitation. The steep decline in carbon intensity during the 1980s in France is a direct result of its vigorous introduction of nuclear energy.

Figure 13.4 shows the carbon intensities of final energy. The figure indicates a continuous and smooth transition toward lower-carbon and zero-carbon energy carriers, in particular toward increasing shares of high-quality, exergetic fuels such as natural gas and, above all, electricity.

Fig. 13.3 The carbon intensity of primary energy in China, France, India, Japan, and the United States, 1960-1991

Fig. 13.4 The carbon intensity of final energy in China, France, India, Japan, and the United States, 1960-1991

The carbon intensities of conversion shown in figure 13.5 present a different picture, with a variety of energy systems and development strategies, despite convergence in the final energy mix. In the developing countries, carbon intensity increases over time, whereas in the industrialized countries it decreases at various rates, most rapidly in France. Should China and India continue to rely heavily on coal, it may not be possible to reduce carbon intensity in these countries. This means that some time in the twenty-first century a trend reversal may be expected, in the carbon intensity of either final energy or primary energy or both. The only bridge between these opposing trends could be even higher shares of electricity. The other alternative is that the future energy system restructures towards natural gas, nuclear energy, biomass, and other zero-carbon options. This would bring the energy systems of these two developing countries in line with those of the more industrialized ones.

Fig. 13.5 The carbon intensity of energy conversion in China, France, India, Japan, and the United States, 1960-1991

Generally, the carbon intensities of primary energy and energy conversion are due to the energy system itself, whereas the carbon intensity of final energy is due to the actual energy required by the economy and individual consumers. Therefore, the former is a function of the specific energy situation in a given country whereas the latter is a function of the economic structure and consumer behaviour. The difference between the two provides deeper insight into the carbon emissions that result from energy and economy interactions and those that are determined by the nature of primary energy supply, conversion, and distribution.

Some degree of decarbonization has also been accompanied by lower energy intensities. Energy intensity measures the primary energy needed to generate a unit of value added and is usually measured in terms of gross domestic or national products (GDP or GNP). Energy conversion has fundamentally changed and improved with the diffusion of internal combustion engines, electricity generation, steam and gas turbines, and chemical and thermal energy conversion. Improvements in energy efficiency have reduced the amount of energy needed to convert primary energy to final and useful energy. Figure 13.6 shows declining envelopes of energy intensity, expressed in kilograms of oil equivalent energy per US$ GDP in constant 1985 dollars (kgoe/$(1985)GDP), and decarbonization, expressed in kilograms of carbon per kilogram of oil equivalent energy (kg C/kgoe), in selected nations. It illustrates salient differences in the policies and structures of energy systems among countries. For example, Japan and France have achieved the highest degrees of decarbonization; in Japan this has been largely through energy efficiency improvements over recent decades, while in France it has been largely through substitution of fossil fuels by nuclear energy. In most developing countries, commercial energy is replacing traditional energy forms so that total energy intensity is diminishing while commercial energy intensity is increasing.

Fig. 13.6 Global decarbonization and de-intensification of energy, 1870-1988

Although decarbonization and energy de-intensification are responsible for relative reductions in energy emissions, they are not enough to offset the absolute emissions increases and projected emissions associated with the world's energy needs, especially those required for further economic development. Structural changes in energy systems toward carbon-free sources of primary energy are needed for further carbon intensity reductions. Analysis of primary energy substitution, shown in figure 13.1, suggests that natural gas could become the next dominant energy source and would enhance the reduction of the adverse impacts of energy use on the environment, especially CO2 emissions.

Natural gas is a very potent greenhouse gas if released into the atmosphere but, after combustion occurs, the amount of CO2 is much smaller compared with other fossil energy sources. Consisting mostly of methane, natural gas has the highest hydrogen to carbon atomic ratio and the lowest CO2 emissions of all fossil fuels, emitting roughly half as much CO2 as coal for the same amount of energy. The historical transition from wood to coal to oil and to gas has resulted in the gradual decarbonization of energy or to an increasing hydrogen to carbon ratio of global energy consumption. Natural gas is also desirable regionally because of its minimal emissions of other air pollutants. Regional assessments suggest that gas resources may be more abundant than was widely believed only a decade ago. New discoveries have outpaced consumption. Additionally, gas hydrates and natural gas of ultra-deep origin indicate truly vast occurrences of methane throughout the Earth's crust.

The methane economy offers a bridge to a non-fossil energy future that is consistent with both the dynamics of primary energy substitution and the steadily increasing carbon intensity of final energy. As non-fossil energy sources are introduced in the primary energy mix, new energy conversion systems would be required to provide other zero-carbon energy carriers in addition to growing shares of electricity. Thus, the methane economy would lead to a greater role for energy gases and later hydrogen in conjunction with electricity. Hydrogen and electricity could provide virtually pollution-free and environmentally benign energy carriers. As the methane contribution to global energy saturates and subsequently declines, carbon-free sources of energy would take over and eliminate the need for carbon handling and storage. This would then conclude the decarbonization process in the world.

The issue of climate warming is a major planetary concern along with the need to provide sufficient energy for further social and economic development worldwide. Methane and later hydrogen offer the possibility for reconciling these objectives. The evolutionary development of the global energy system toward a larger contribution by natural gas is consistent with the dynamics of the past 130 years. The current phase in the development of the global energy system may be just midway through the hydrocarbon era. Decarbonization in the world can continue as methane becomes the major energy source. From this perspective, methane is the transitional hydrocarbon, and the great energy breakthrough will be the production of hydrogen without fossil fuels. In the meantime, the natural gas share in total primary energy should continue to grow at the expense of dirtier energy sources (coal and oil). This transition to the methane age and beyond to carbon-free energy systems represents a minimum-regret option because it would also reduce emissions from economic and energy interactions, especially CO2 emissions.


Some results given in the paper are based on joint research with Gilbert Ahamer and Arnulf Grübler, both from the International Institute for Applied Systems Analysis. Laxenburg, Austria.


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