230989501B
POLICY OPTIONS FOR STABILIZING GLOBAL CLIMATE
\
DRAFT
REPORT TO CONGRESS
Volume II: Chapters VII-IX
United States Environmental Protection Agency
Office of Policy, Planning, and Evaluation
February 1989
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POLICY OPTIONS FOR STABILIZING GLOBAL CLIMATE
DRAFT
REPORT TO CONGRESS
Volume II: Chapters VII-IX
Editors: Daniel A. Lashof and Dennis A. Tirpak
United States Environmental Protection Agency
Office of Policy, Planning, and Evaluation
February 1989
U.S. Environmental Protection Agency
Region 5, Library (5PL-16)
230 S. Dearborn St -set, Room 1670
Chicago, IL 60604
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DISCLAIMER
This draft is being circulated for review and comment and does not
necessarily reflect the official position of the U.S. Environmental Protection
Agency. Mention of trade names does not constitute an endorsement.
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SUMMARY TABLE OF CONTENTS
EXECUTIVE SUMMARY (Bound under separate cover)
VOLUME I
CHAPTER I: INTRODUCTION 1-1
CHAPTER II: GREENHOUSE GAS TRENDS II-l
CHAPTER III: CLIMATIC CHANGE III-l
CHAPTER IV: HUMAN ACTIVITIES AFFECTING TRACE GASES AND CLIMATE IV-1
CHAPTER V: THINKING ABOUT THE FUTURE V-l
CHAPTER VI: SENSITIVITY ANALYSES VI-1
VOLUME II
CHAPTER VII: TECHNICAL OPTIONS FOR REDUCING GREENHOUSE GAS EMISSIONS . VIM
CHAPTER VIII: POLICY OPTIONS VIII-1
CHAPTER IX: INTERNATIONAL COOPERATION TO REDUCE GREENHOUSE
GAS EMISSIONS IX-1
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DETAILED TABLE OF CONTENTS
EXECUTIVE SUMMARY
(Bound under separate cover)
INTRODUCTION 1
Congressional Request for Reports 1
Previous Studies 2
Goals of this Study 4
Approach Used to Prepare this Report 6
Limitations 9
HUMAN IMPACT ON THE CLIMATE SYSTEM 11
The Greenhouse Gas Buildup 11
The Impact of Greenhouse Gases on Global Climate 17
SCENARIOS FOR POLICY ANALYSIS 19
Defining Scenarios 19
Scenarios with Unimpeded Emissions Growth 22
The Impact of Policy Choices 29
Sensitivity of Results to Alternative Assumptions 45
EMISSIONS REDUCTION STRATEGIES BY ACTIVITY 54
Energy Production and Use 56
Industrial Activity 66
Changes in Land Use 71
Agricultural Practices 75
THE NEED FOR POLICY RESPONSES 77
A Wide Range of Policy Choices 78
The Timing of Policy Responses 79
FINDINGS 83
I. Uncertainties regarding climatic change are large, but there is a growing consensus
in the scientific community that significant global warming due to anthropogenic
greenhouse gas emissions is probable over the next century, and that rapid climatic
change is possible 83
II. Measures undertaken to limit greenhouse gas emissions would decrease the magnitude
and speed of global warming, regardless of uncertainties about the response of the
climate system 85
III. No single country or source will contribute more than a fraction of the greenhouse
gases that will warm the world; any overall solution will require cooperation of many
countries and reductions in many sources 87
IV. A wide range of policy choices is available to reduce greenhouse gas emissions while
promoting economic development, environmental, and social goals 89
iii
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DETAILED TABLE OF CONTENTS (Continued)
VOLUME I
CHAPTER I
INTRODUCTION
INTRODUCTION 1-2
The Earth's Climate and Global Change 1-2
CONGRESSIONAL REQUEST FOR REPORTS 1-3
Goals of this Study 1-4
Report Format 1-5
THE GREENHOUSE GASES 1-8
Carbon dioxide 1-9
Methane 1-9
Nitrous oxide 1-12
Chlorofluorocarbons 1-12
Other gases influencing composition 1-13
PREVIOUS STUDIES 1-13
Estimates of the Climatic Effects of Greenhouse Gas Buildup 1-14
Studies of Future CO2 Emissions 1-15
Studies of the Combined Effects of Greenhouse Gas Buildup 1-20
Major Uncertainties 1-22
Conclusions From Previous Studies 1-23
CURRENT NATIONAL AND INTERNATIONAL ACTIVITIES 1-26
National Research and Policy Activities 1-26
International Activities 1-27
REFERENCES 1-29
CHAPTER II
GREENHOUSE GAS TRENDS
FINDINGS II-2
INTRODUCTION II-5
CARBON DIOXIDE n-7
Concentration History and Geographic Distribution II-7
Mauna Loa 11-8
Ice-core Data II-9
GMCC Network 11-10
IV
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DETAILED TABLE OF CONTENTS (Continued)
Sources and Sinks 11-14
Fossil Carbon Dioxide 11-14
Biospheric Cvcle ' 11-16
Ocean Uptake 11-17
Chemical and Radiative Properties/Interactions 11-18
METHANE 11-22
Concentration History and Geographic Distribution 11-22
Sources and Sinks 11-24
Chemical and Radiative Properties/Interactions 11-29
NITROUS OXIDE 11-30
Concentration History and Geographic Distribution 11-30
Sources and Sinks 11-32
Chemical and Radiative Properties/Interactions 11-35
CHLOROFLUOROCARBONS (CFCs) 11-36
Concentration History and Geographic Distribution 11-36
Sources and Sinks 11-37
Chemical and Radiative Properties/Interactions 11-39
OZONE 11-40
Concentration History and Geographic Distribution 11-40
Sources and Sinks 11-43
Chemical and Radiative Properties/Interactions 11-44
OTHER FACTORS AFFECTING COMPOSITION 11-45
Global Tropospheric Chemistry 11-46
Carbon Monoxide II-47
Nitrogen Oxides 11-48
Stratospheric Ozone and Circulation 11-49
CONCLUSION 11-50
REFERENCES 11-59
CHAPTER III
CLIMATIC CHANGE
FINDINGS IH-2
INTRODUCTION III-4
CLIMATIC CHANGE IN CONTEXT ffi-6
CLIMATE FORCINGS III-8
Solar Luminosity Ill-12
Orbital Parameters Ill-13
Volcanoes 111-13
Surface Properties Ill-14
The Role of Greenhouse Gases Ill-14
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DETAILED TABLE OF CONTENTS (Continued)
Internal Variations 111-15
PHYSICAL CLIMATE FEEDBACKS 111-15
Water Vapor - Greenhouse 111-17
Snow and Ice 111-17
Clouds IIM9
BIOGEOCHEMICAL CLIMATE FEEDBACKS HI-20
Release of Methane Hydrates IH-20
Oceanic Change 111-22
Ocean Chemistry 111-23
Ocean Mixing 111-23
Ocean Biology and Circulation 111-24
Changes in Terrestrial Biota 111-25
Vegetation Albedo 111-25
Carbon Storage 111-26
Other Terrestrial Biotic Emissions 111-26
Summary 111-27
EQUILIBRIUM CLIMATE SENSITIVITY 111-28
THE RATE OF CLIMATIC CHANGE 111-31
CONCLUSION IH-35
REFERENCES IH-37
CHAPTER IV
HUMAN ACTIVITIES AFFECTING TRACE GASES
AND CLIMATE
FINDINGS IV-2
INTRODUCTION IV-5
HISTORICAL OVERVIEW OF POPULATION TRENDS IV-5
Global Population Trends IV-7
Population Trends by Region IV-7
IndustrialiTfid Countries IV-10
Developing Countries FV-10
ENERGY CONSUMPTION IV-12
History of Fossil-Fuel Use IV-D
Current Energy Use Patterns and Greenhouse Gas Emissions IV-18
Emissions bv Sector FV-20
Fuel Production and Conversion IV-25
Future Trends IV-27
The Fossil-Fuel Supply IV-29
Future Energy Demand IV-29
VI
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DETAILED TABLE OF CONTENTS (Continued)
INDUSTRIAL PROCESSES IV-31
Chlorofluorocarbons, Halons, and Chlorocarbons IV-33
Historical Development and Uses IV-33
The Montreal Protocol IV-37
Landfill Waste Disposal IV-40
Cement Manufacture IV-43
LAND USE CHANGE IV-45
Deforestation IV-47
Biomass Burning IV-50
Wetland Loss IV-51
AGRICULTURAL ACTIVITIES IV-55
Enteric Fermentation In Domestic Animals IV-55
Rice Cultivation IV-56
Use of Nitrogenous Fertilizer IV-61
IMPACT OF CLIMATIC CHANGE ON ANTHROPOGENIC EMISSIONS IV-63
REFERENCES IV-67
CHAPTER V
THINKING ABOUT THE FUTURE
FINDINGS V-2
INTRODUCTION V-4
APPROACH TO ANALYZING FUTURE EMISSIONS V-5
Production V-7
Consumption V-ll
SCENARIOS FOR POLICY ANALYSIS V-B
Scenarios with Unimpeded Emissions Growth V-17
Scenarios with Stabilizing Policies V-21
ANALYTICAL FRAMEWORK V-22
Energy Module V-25
Industry Module V-26
Agriculture Module V-26
Land Use and Natural Source Module V-27
Ocean Module V-27
Atmospheric Composition and Temperature Module V-28
Assumptions V-29
Population Growth Rates V-29
Economic Growth Rates V-29
Oil Prices V-30
Limitations V-30
vu
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DETAILED TABLE OF CONTENTS (Continued)
SCENARIO RESULTS V-33
Energy Sector V-33
End-use Consumption V-33
Primary Energy Supply V-39
Greenhouse Gas Emissions From Energy Production and Use V-44
Comparison to Previous Studies V-45
Industrial Processes V-56
Halocarbon Emissions V-56
Emissions From Landfills and Cement V-59
Changes in Land Use V-60
Agricultural Activities V-63
Total Emissions V-64
Atmospheric Concentrations V-71
Global Temperature Increases V-76
Comparison with General Circulation Model Results V-81
Relative Effectiveness of Selected Strategies V-82
CONCLUSIONS V-82
REFERENCES V-87
CHAPTER VI
SENSITIVITY ANALYSES
FINDINGS VI-3
INTRODUCTION VI-12
ASSUMPTIONS ABOUT THE MAGNITUDE AND TIMING OF GLOBAL
CLIMATE STABILIZATION STRATEGIES VI-12
No Participation by the Developing Countries VI-13
Delay in Adoption of Policies VI-17
ASSUMPTIONS AFFECTING RATES OF TECHNOLOGICAL CHANGE VI-18
Availability of Non-Fossil Technologies VI-18
Cost and Availability of Fossil Fuels VI-22
High Coal Prices VI-22
Alternative Oil and Natural Gas Supply Assumptions VI-24
Availability of Methanol-Fueled Vehicles VI-29
ATMOSPHERIC COMPOSITION: COMPARISON OF MODEL RESULTS TO ESTIMATES
OF HISTORICAL CONCENTRATIONS VI-30
ASSUMPTIONS ABOUT TRACE-GAS SOURCES AND STRENGTHS VI-34
Methane Sources VI-35
Nitrous Oxide Emissions From Fertilizer VI-38
Anhydrous Ammonia VI-38
N2O Leaching From Fertilizer VI-39
N2O Emissions From Combustion VI-39
vm
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DETAILED TABLE OF CONTENTS (Continued)
UNCERTAINTIES IN THE GLOBAL CARBON CYCLE VI-41
Unknown Sink In Carbon Cycle VI-43
Amount of CO2 From Deforestation VI-44
Alternative CO2 Models of Ocean Chemistry and Circulation VI-47
ASSUMPTIONS ABOUT CLIMATE SENSITIVITY AND TIMING VI-50
Sensitivity of the Climate System VI-50
Rate of Heat Diffusion VI-53
ASSUMPTIONS ABOUT ATMOSPHERIC CHEMISTRY: A COMPARISON OF MODELS . . . VI-54
Model Descriptions VI-56
Assessment Model for Atmospheric Composition VI-56
Isaksen Model VI-57
Thompson et al. Model VI-58
Results from the Common Scenarios VI-59
EVALUATION OF UNCERTAINTIES USING AMAC VI-67
Atmospheric Lifetime of CFC-11 VI-67
Interaction of Chlorine with Column Ozone VI-69
Sensitivity of Tropospheric Ozone to CH4 Abundance VI-69
Sensitivity of OH to NOX VI-71
BIOGEOCHEMICAL FEEDBACKS VI-72
Ocean Circulation VI-72
Methane Feedbacks VI-73
Combined Feedbacks VI-75
REFERENCES VI-78
VOLUME II
CHAPTER VII
TECHNICAL OPTIONS FOR REDUCING GREENHOUSE GAS EMISSIONS
PART ONE: ENERGY SERVICES VII-27
TRANSPORTATION SECTOR VII-32
Near-Term Technical Options: Industrialized Countries VH-36
Light-Duty Vehicles * VH-38
Freight Transport Vehicles VII-49
Aircraft VH-52
Control of NOX and CO Emissions from Mobile Sources VII-53
Near-Term Technical Options: Developing Countries VII-55
Fuel-Efficiency Improvements VII-57
Improving Existing Vehicles VII-58
Alleviating Congestion and Improving Roads VII-58
Alternative Modes of Transportation VII-59
Alternative Fuels VII-60
Near-Term Technical Options: Soviet Bloc Countries VII-61
ix
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DETAILED TABLE OF CONTENTS (Continued)
Summary of Near-Term Technical Potential in the Transportation Sector VII-62
Long-Term Potential in the Transportation Sector VII-63
Urban Planning and Mass Transit VII-63
Alternative Fuels VII-65
Expanded Use of Emerging Technologies VII-66
RESIDENTIAL/COMMERCIAL SECTOR VII-67
Near-Term Technical Options: Industrialized Countries VII-71
Improvements in Space Conditioning VII-71
Indoor Air Quality VII-80
Lighting VII-81
Appliances VII-83
Near-Term Technical Options: Developing Countries VII-83
Increasing Efficiency of Fuelwood Use VII-85
Substituting More Efficient Fuels VII-87
Retrofit Efficiency Measures for the Modern Sector VII-88
New Homes and Commercial Buildings VII-89
Near-Term Technical Options: Soviet Bloc Countries VII-90
Summary of Near-Term Technical Potential in the Residential/Commercial Sector .... VII-91
Long-Term Potential in the Residential/Commercial Sector VII-92
INDUSTRIAL SECTOR VII-93
Near-Term Technical Options: Industrialized Countries VII-98
Accelerated Efficiency Improvements in Energy-Intensive Industries VII-98
Aggressive Efficiency Improvements of Other Industries VH-100
Cogeneration VII-101
Near-Term Technical Options: Developing Countries VII-102
Technological Leapfrogging VII-103
Alternative Fuels VH-104
Retrofit Energy Efficiency Programs VII-105
Agricultural Energy Use VII-106
Near-Term Technical Options: Soviet Bloc Countries VII-107
Summary of Near-Term Technical Potential in the Industrial Sector VII-111
Long-Term Potential in the Industrial Sector VII-112
Structural Shifts VII-112
Advanced Process Technologies VII-113
Non-fossil Energy VH-115
PART TWO: ENERGY SUPPLY VH-116
FOSSIL FUELS VII-117
Refurbishment of Existing Powerplants VII-121
Clean Coal Technologies and Repowering VII-122
Cogeneration VH-123
Natural Gas Substitution VII-124
Natural Gas Use At Existing Powerplants VII-124
Advanced Gas-Fired Combustion Technologic.^ VII-125
Natural Gas Resource Limitations VII-127
Additional Gas Resources VII-130
Emission Controls VII-132
NOX Controls VII-132
CO2 Controls VII-133
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DETAILED TABLE OF CONTENTS (Continued)
Emerging Electricity Generation Technologies VII-134
Fuel cells VII-134
Magnetohvdrodvnamics (MHD) VII-136
BIOMASS VII-137
Direct Firing of Biomass VII-138
Charcoal Production VII-140
Anaerobic Digestion VH-141
Gasification VII-142
Liquid Fuels From Biomass VII-143
Methanol VII-143
Ethanol VII-145
Other VII-146
SOLAR ENERGY VII-146
Solar Thermal VII-147
Parabolic Troughs VII-147
Parabolic Dishes VII-149
Central Receivers VII-149
Solar Ponds VII-150
Solar photovoltaic VII-150
Crystalline Cells VII-152
Thin-Film Technologies VII-153
Multi-Junction Technologies VII-154
ADDITIONAL PRIMARY RENEWABLE ENERGY OPTIONS VII-155
Hydroelectric Power VII-155
Industrialized Countries VII-155
Developing Countries VII-157
Wind Energy VII-158
Geothermal energy VH-159
Ocean Energy VII-162
NUCLEAR POWER VTI-165
Nuclear Fission VII-165
Nuclear Fusion VII-170
ELECTRICAL SYSTEM OPERATION IMPROVEMENTS VII-171
Transmission and Distribution VII-171
Superconductors VII-172
Storage Technologies VII-173
Types of Storage Technologies VH-174
HYDROGEN VII-176
PART THREE: INDUSTRY VII-178
CFCs AND RELATED COMPOUNDS VII-178
Technical Options For Reducing Emissions VII-182
Chemical Substitutes VII-182
Engineering Controls VH-184
Product Substitutes VH-185
xi
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DETAILED TABLE OF CONTENTS (Continued)
Summary of Technical Potential VII-187
METHANE EMISSIONS FROM LANDFILLS VII-187
Methane Recovery VII-190
Recycling and Resource Recovery VII-192
CO2 Emissions From Cement Production VII-193
PART FOUR: FORESTRY VII-195
FORESTS AND CARBON EMISSIONS VII-195
DEFORESTATION VII-197
TECHNICAL CONTROL OPTIONS VII-202
Reduce Demand for Forest Land and Products VII-206
Option 1: Slow Deforestation by Introducing Sustainable Forest Use Systems . . . VII-209
Option 2: Substitute Sustainable Agriculture for Swidden Forest Practices VII-210
Option 3: Reduce Demand For Other Land Uses That Have Deforestation
As A Byproduct VII-217
Option 4: Increase Conversion Efficiencies Of Technologies Using Fuelwood . . . VII-218
Option 5: Decrease Production of Disposable Forest Products VII-218
Substitute durable wood or non-wood products for high-volume disposable
uses of wood VII-219
Expand recycling programs for forest products VII-220
Increase Supply of Forested Land and Forest Products VII-220
Option 1: Increase Forest Productivity: Manage Temperate Forests For
Higher Yields VII-220
Option 2: Increase Forest Productivity. Improve Natural Forest Management
of Tropical Little-Disturbed And Secondary Forests VII-222
Option 3: Increase Forest Productivity: Plantation Forests VII-224
Option 4: Improve Forest Harvesting Efficiency VII-228
Option 5: Expand Current Tree Planting Programs in the Temperate Zone .... VII-229
Option 6: Reforest Surplus Agricultural Lands VII-231
Option 7: Reforest Urban Areas VII-234
Option 8: Afforestation for Highway Corridors VII-235
Option 9: Reforest Tropical Countries VII-236
Obstacles to Large-Scale Reforestation in Industrialized Countries VII-241
Obstacles to Reforestation in Developing Countries VII-243
Summary of Forestry Technical Control Options VII-244
PART FIVE: AGRICULTURE VH-249
RICE CULTIVATION VH-252
Existing Technologies and Management Practices VII-253
Emerging Technologies VII-257
Research Needs and Economic Considerations VII-258
USE OF NITROGENOUS FERTILIZER VII-259
Existing Technologies and Management Practices VII-260
Management Practices That Affect N^O Production VII-260
Technologies that Improve Fertilization Efficiency VII-262
xii
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DETAILED TABLE OF CONTENTS (Continued)
Emerging Technologies VII-263
Research Needs and Economic Considerations VII-264
ENTERIC FERMENTATION IN DOMESTIC ANIMALS VH-265
Methane Emissions from Livestock VII-268
Existing Technologies and Management Practices VII-269
Emerging Technologies VII-272
Research Needs and Economic Considerations VII-273
CHAPTER VIII
POLICY OPTIONS
FINDINGS Vm-2
INTRODUCTION VBI-6
INTERNALIZING THE COST OF CLIMATE CHANGE RISKS Vffl-8
Evidence of Market Response to Economic Incentives: Energy Pricing Vm-9
Financial Mechanisms to Promote Energy Efficiency Vffl-14
Creating Markets for Conservation VIII-16
Limits to Price-Oriented Policies Vffl-18
REGULATIONS AND STANDARDS VHI-22
Existing Regulations that Restrict Greenhouse Gas Emissions VIII-23
Regulation of Chlorofluorocarbons Vm-24
Energy Efficiency Standards Vni-25
Air Pollution Regulations Vni-28
Waste Management VHI-29
Utility Regulation Vffl-31
Existing Regulations that Encourage Emissions Reductions VIH-35
RESEARCH AND DEVELOPMENT VHI-39
Energy Research and Development VIII-40
Global Forestry Research & Development VHI-45
Research to Eliminate Emissions of CFCs Vffl-46
INFORMATION AND TECHNICAL ASSISTANCE PROGRAMS VHI-47
CONSERVATION EFFORTS BY FEDERAL AGENCIES VHI-50
STATE AND LOCAL EFFORTS Vffl-52
PRIVATE SECTOR EFFORTS Vffl-57
COMPLEMENTARY STRATEGIES TO REDUCE GREENHOUSE GAS EMISSIONS VHI-59
IMPLICATIONS OF POLICY CHOICES AND TIMING VHI-63
Xlll
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DETAILED TABLE OF CONTENTS (Continued)
SENSITIVITY TESTS OF THE EFFECT OF ALTERNATIVE POLICIES ON
GREENHOUSE GAS EMISSIONS: RISK TRADE-OFFS VIII-67
Policies That Increase Greenhouse Gas Emissions VIII-69
Policies Designed to Reduce Greenhouse Gas Emissions Vffl-76
Conclusions From the Sensitivity Tests VIII-78
REFERENCES VHI-83
CHAPTER IX
INTERNATIONAL COOPERATION TO REDUCE GREENHOUSE GAS EMISSIONS
FINDINGS IX-2
INTRODUCTION IX-4
THE CONTEXT FOR POLICIES INFLUENCING GREENHOUSE GAS EMISSIONS IN
DEVELOPING COUNTRIES IX-5
Economic Development and Energy Use IX-7
Oil Imports, Capital Shortages, and Energy Efficiency IX-13
Greenhouse Gas Emissions and Technology Transfer IX-17
STRATEGIES FOR REDUCING GREENHOUSE GAS EMISSIONS IX-18
International Lending and Bilateral Aid IX-20
U.S. Bilateral Assistance Programs IX-21
Policies and Programs of Multilateral Development Banks IX-24
New Directions IX-31
REDUCING GREENHOUSE GAS EMISSIONS IN EASTERN BLOC NATIONS IX-33
U.S. LEADERSHIP TO PROMOTE INTERNATIONAL COOPERATION IX-36
Restricting CFCs to Protect the Ozone Layer IX-36
International Efforts to Halt Tropical Deforestation IX-38
Ongoing Efforts Toward International Cooperation IX-42
REFERENCES IX-45
xiv
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LIST OF FIGURES
Executive Summary (bound under separate cover)
Page
1 Carbon Dioxide Concentrations at Mauna Loa and Fossil Fuel CO2 Emissions . . 3
2 Structure of the Atmospheric Stabilization Framework 8
3 Greenhouse Gas Contributions to Global Warming 12
4 Impact of CO2 Emissions Reductions on Atmospheric Concentrations 14
5 Atmospheric Concentrations 25
6 Realized Warming: No Response Scenarios 27
7 Realized Warming: No Response and Stabilizing Policy Scenarios 31
8 Stabilizing Policy Strategies: Decrease in Equilibrium Warming
Commitment 34
9 Rapid Reduction Strategies: Additional Decrease in Equilibrium Warming
Commitment 37
10 Share of Greenhouse Gas Emissions by Region 41
11 Increase in Realized Warming When Developing Countries Do Not
Participate 43
12 Increase in Realized Warming Due to Global Delay in Policy Adoption 44
13 Accelerated Emissions Cases: Percent Increase in Equilibrium Warming
Commitment 46
14 Impact of Climate Sensitivity on Realized Warming 48
15 Activities Contributing to Global Warming 55
16 Primary Energy Supply by Type 58
17 CO2 Emissions From Deforestation 73
VOLUME I
Chapter I
1-1
1-2
Carbon Dioxide Concentrations at Mauna Loa and Fossil Fuel CO2
Emissions 1-10
Impact of CO2 Emissions Reductions on Atmospheric Concentrations 1-11
Chapter II
2-1 Greenhouse Gas Contributions to Global Warming
2-2 Carbon Dioxide Concentration
2-3 CO2 Atmospheric Concentrations by Latitude
2-4 The Carbon Cycle
2-5 Gas Absorption Bands :
2-6 Methane Concentration
2-7 Current Emissions of Methane by Source
2-8 Nitrous Oxide Concentrations
2-9 Temperature Profile and Ozone Distribution in the Atmosphere
II-6
11-11
n-i2
11-15
11-20
11-23
H-25
11-31
11-41
xv
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LIST OF FIGURES (Continued)
Page
Chapter HI
3-1 Surface Air Temperature IH-7
3-2 Oxygen Isotope Record From Greenland Ice Cores HI-9
3-3 Carbon Dioxide and Temperatures Records From Antarctic Ice Core 111-10
3-4 Oxygen Isotope Record From Deep Sea Sediment-Cores III-ll
3-5 Global Energy Balance HI-16
3-6 Equilibrium Temperature Changes from Doubled CO2 111-18
3-7 Greenhouse Gas Feedback Processes 111-21
Chapter IV
4-1 Regional Contribution to Greenhouse Warming — 1980s IV-6
4-2 Regional Population Growth - 1750-1985 IV-8
4-3 Global Energy Demand by Type - 1950-1985 IV-14
4-4 COo Emissions Due to Fossil Fuel Consumption ~ 1860-1985 IV-16
4-5 Global Commercial Energy Demand by Region IV-17
4-6 1985 Sectoral Energy Demand by Region IV-19
4-7 Potential Future Energy Demand IV-32
4-8 Historical Production of CFC-11 and CFC-12 IV-36
4-9 CFC-11 and CFC-12 Production/Use for Various Countries IV-39
4-10 CO2 Emissions from Cement Production ~ 1950-1985 IV-44
4-11 Cement Production in Selected Countries - 1951-1985 IV-46
4-12 Net Release of Carbon from Tropical Deforestation - 1980 IV-48
4-13 Wetland Area and Associated Methane Emissions IV-53
4-14 Trends in Domestic Animal Populations - 1890-1985 IV-57
4-15 Rough Rice Production ~ 1984 IV-59
4-16 Rice Area Harvested ~ 1984 IV-60
4-17 Nitrogen Fertilizer Consumption ~ 1984/1985 IV-64
Chapter V
5-1 Total U.S. Energy Consumption per GNP Dollar - 1900-1985 V-8
5-2 Consumption of Basic Materials V-10
5-3 Population by Region V-19
5-4 Structure of the Atmospheric Stabilization Framework V-23
5-5 Geopolitical Regions For Climate Analyses V-24
5-6 End-Use Fuel Demand by Region V-34
5-7 End-Use Electricity Demand by Region V-35
5-8 Share of End-Use Energy Demand by Sector V-38
5-9 Primary Energy Supply by Type V-40
5-10 Share of Primary Energy Supply by Type V-41
5-11 Energy Demand for Synthetic Fuel Production V-42
5-12 Emissions of Major CFCs V-58
5-13 CO2 Emissions from Deforestation V-62
5-14 CO2 Emissions by Type V-66
5-15 Share of CO2 Emissions by Region V-68
5-16 CH4 Emissions by Type V-69
xvi
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LIST OF FIGURES (Continued)
Page
5-17 Share of CH4 Emissions by Region V-70
5-18 Atmospheric Concentrations V-72
5-19 Realized and Equilibrium Warming V-77
5-20 Relative Contribution to Warming by 2100 V-80
5-21 Stabilizing Policy Strategies: Decrease in Equilibrium Warming Commitment . . . V-83
Chapter VI
6-1 Increase in Realized Warming When Developing Countries Do Not
Participate VI-16
6-2 Increase in Realized Warming Due to Global Delay in Policy Adoption VI-19
6-3 Availability of Non-Fossil Energy Options VI-21
6-4 Impact of 1% Per Year Real Escalation in Coal Prices VI-23
6-5 Impact of Higher Oil Resources On Total Primary Energy Supply VI-26
6-6 Impact of Higher Natural Gas Resources on Total Primary Energy Supply VI-28
6-7 Realized Warming Through 1985 VI-32
6-8 Increase in Realized Warming Due to Changes in the Methane Budget VI-37
6-9 Change in Atmospheric Concentration of N2O Due to Leaching VI-40
6-10 Change in Atmospheric Concentration of N2O Due to Combustion VIT42
6-11 Impact on Realized Warming Due to Size of Unknown Sink VI-45
6-12 CO2 From Deforestation Assuming High Biomass VI-46
6-13 Impact of High Biomass Assumptions on Atmospheric Concentration of CO2 . . . VI-48
6-14 Comparison of Different Ocean Models VI-51
6-15 Impact of Climate Sensitivity on Realized Warming VI-52
6-16 Change in Realized Warming Due to Rate of Ocean Heat Uptake VI-55
6-17 Regional Differences for Urban Areas With Different Emissions of CO and
NO VI-64
6-18 OH and Ozone Perturbations in the Isaksen and Hov Model VI-66
6-19 Sensitivity of Atmospheric Concentration of CFC-11 to Its Lifetime VI-68
6-20 Change in Realized Warming Due to Rate of Interaction of CLx With
Ozone VI-70
6-21 Increase in Realized Warming Due to Change in Ocean Circulation VI-74
6-22 Increase in Realized Warming Due to Methane Feedbacks VI-76
6-23 Increase in Realized Warming Due to Change in Combined Feedbacks VI-77
xvu
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LIST OF FIGURES (Continued)
Page
VOLUME II
Chapter VII
7-1 Current Contribution to Global Warming VII-20
7-2 Global Energy Use by End-Use VII-28
7-3 Secondary Energy Consumption by Region VH-30
7-4 End-Use Energy Demand by Sector VH-33
7-5 Transportation Energy Use by Region VII-35
7-6 Components of Transportation Energy Use in the OECD: 1985 VII-37
7-7 U.S. Residential/Commercial Energy Use VH-68
7-8 Residential/Commercial Energy Use by Region VII-70
7-9 Industrial Energy Use by Region VH-97
7-10 Electricity Utility Demand by Fuel Type VII-118
7-11 Average Fossil Powerplant Efficiency W-120
7-12 Strategies for Improving Efficiency of Biomass Use VII-139
7-13 Basic Solar Thermal Technologies VII-148
7-14 Photovoltaic Electricity Costs VII-151
7-15 Nuclear Capital Costs VH-167
7-16 Industrial Process Contribution to Global Warming VH-179
7-17 Emissions of Major CFC's '. VH-180
7-18 CH4 Emissions by Type VII-188
7-19 Movement of Tropical Forest Lands Among Stages of Deforestation and Potential
Technical Response Options VII-198
7-20 Population Growth, Road Building, and Deforestation in Amazonia VII-201
7-21 Model Agroforestry Farm Layout, Rwanda VD-214
7-22 Agricultural Practices Contribution to Global Warming VII-250
7-23 Trace Gas Emissions From Agricultural Activities VII-251
Chapter VIII
8-1 Energy Intensity Reductions, 1973-1983 Vffl-11
8-2 U.S. Electricity Demand and Price Vin-15
8-3 Cost of Driving Versus Automotive Fuel Economy VIII-21
8-4 U.S. Carbon Monoxide Emissions , . VIE-SO
8-5 Changes in U.S. Renewable Energy R&D Priorities Over Time VHI-42
8-6 Cost of Potential Residential Electricity Conservation
in Michigan by 2000 VHI-55
8-7 U.S. Energy Consumption By Fuel Share Vffl-66
8-8 Atmospheric Response to Emissions Cutoff Vffl-68
8-9 Actual and Projected U.S. Coal Production VHI-70
8-10 Accelerated Emissions Cases: Percent Increase in Equilibrium Warming
Commitment Vffl-74
8-11 Rapid Reduction Strategies: Additional Decrease in Equilibrium Warming
Commitment Vffl-79
xvm
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LIST OF FIGURES (Continued)
Page
Chapter IX
9-1 Greenhouse Gas Emissions By Region IX-6
xix
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LIST OF TABLES
Executive Summary (bound under separate cover)
2
3
4
5
6
7
8
Approximate Reductions in Anthropogenic Emissions Required to Stabilize
Atmospheric Concentrations at Current Levels
Overview of Scenario Assumptions
Current and Projected Trace Gas Emissions Estimates
Scenario Results for Realized and Equilibrium Warming
Examples of Policy Responses by the Year 2000
Sensitivity Analysis: Impact on Realized Warming and Equilibrium Warming
Key Global Indicators for Energy and COj,
Major Chlorofluorocarbons, Halons, and Chlorocarbons: Statistics and Uses .
Page
15
21
24
33
39
50
61
68
VOLUME I
Chapter II
2-1 Radiative Forcing for a Uniform Increase in Trace Gases From Current Levels . . 11-21
2-2 Trace Gas Data H-51
Chapter IV
4-1 Regional Demographic Indicators IV-9
4-2 Emission Rate Differences by Sector IV-21
4-3 End-Use Energy Consumption Patterns for the Residential/Commercial
Sectors IV-24
4-4 Carbon Dioxide Emission Rates for Conventional and Synthetic Fuels IV-28
4-5 Estimates of Global Fossil-Fuel Resources IV-30
4-6 Major Halocarbons: Statistics and Uses IV-34
4-7 Estimated 1985 World Use of Potential Ozone-Depleting Substances IV-38
4-8 Refuse Generation Rates in Selected Cities IV-42
4-9 Land-Use: 1850-1980 IV-49
4-10 Summary Data on Area and Biomass Burned IV-52
4-11 Nitrous Oxide Emissions by Fertilizer Type IV-62
Chapter V
5-1 Overview of Scenario Assumptions V-14
5-2 Economic Growth Assumptions V-18
5-3 Key Global Indicators V-46
5-4 Comparison of No Response Scenarios and NEPP V-48
5-5 Comparison of Stabilizing Policy Scenarios and ESW V-49
5-6 Summary of Various Primary Energy Forecasts for the Year 2050 V-51
5-7 Comparison of Energy-Related Trace-Gas Emissions Scenarios V-55
5-8 Trace Gas Emissions V-65
5-9 Comparison of Estimates of Trace-Gas Concentrations in 2030 and 2050 V-75
xx
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LIST OF TABLES (Continued)
Page
Chapter VI
6-1
6-2
6-3
6-4
6-5
Impact of Sensitivity Analyses on Realized Warming and Equilibrium Warming
Comparison of Model Results to Concentrations in 1986
Low and High Anthropogenic Impact Budgets for Methane
Comparison of Emission Estimates for EPA #2, RCW and SCW Cases
Comparison of Results from Atmospheric Chemistry Models for the Year 2050
Compared to 1985
VI-7
VI-33
VI-36
VI-60
VI-61
VOLUME II
Chapter VII
7-1 Key Technical Options by Region and Time Horizon VII-19
7-2 High Fuel Economy Prototype Vehicles VII-39
7-3 Actual New Passenger Car Fuel Efficiency Vn-40
7-4 Summary of Energy Consumption and Conservation Potential With
Major Residential Equipment VII-84
7-5 Reduction of Energy Intensity In the Basic Materials Industries VII-95
7-6 Energy Intensities of Selected Economies VII-108
7-7 Innovation in Steel Proudction Technology Vn-110
7-8 Total U.S. Gas Reserves and Resources VH-128
7-9 COo Scrubber Costs Compared to SCs Scrubber Costs VH-135
7-10 Estimates of Worldwide Geothermal Electric Power Capacity Potential VH-160
7-11 Capacity of Direct Use Geothermal Plants in Operation - 1984 VII-163
7-12 Geothermal Powerplants On-Line as of 1985 VH-164
7-13 Major Forestry Sector Strategies for Stabilizing Climate Change VII-203
7-14 Potential Forestry Strategies and Technical Options to Slow Climate Change .... VII-207
7-15 Comparison of Land Required for Sustainable Swidden Versus Agricultural
Practices VII-212
7-16 Potential Carbon Fixation and Biomass Production Benefits from Agroforestry
Systems VII-216
7-17 Natural and Managed Tropical Moist Forest Yields VH-223
7-18 Productivity Increases Attributable to Intensive Plantation Management VII-227
7-19 Summary of Major Tree Planting Programs in the U.S VII-230
7-20 Estimates of CRP Program Acreage Necessary to Offset COo Production from
New Fossil Fuel-Fired Electric Plants, 1987-96, by Tree Species or Forest Type . . VII-233
7-21 Estimates of Forest Acreage Required to Offset Various CO? Emissions Goals . . VII-239
7-22 Comparison of Selected Forest Sector Control Options: Preliminary Estimates . . VII-245
7-23 Overview of Two Social Forestry Projects Proposed to Offset CO2 Emissions of
a 180-MW Electric Plant in Connecticut VII-248
7-24 Water Regime and Modern Variety Adoption for Rice Production in Selected
Asian Countries VH-256
7-25 Average Meat Yield Per Animal VH-267
Chapter VIII
8-1 Energy Intensity of Selected National Economies, 1973-85 Vffl-12
8-2 Payback Periods in Years for Appliances, 1972-1980 VIII-20
xxi
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LIST OF TABLES (Continued)
Page
8-3 Appliance Efficiency Improvements Required by Law VIII-26
8-4 Cogeneration Facilities VHI-34
8-5 Erodible Acreage Available to Offset CO2 Emissions From Electricity
Production VHI-37
8-6 Government Efficiency Research and Development Budgets in OECD Member
Countries, 1986 VIII-41
8-7 Federal Energy Expenditures and Cost Avoidance, FY1985-FY1987 VHI-51
8-8 Scenario Results for Realized and Equilibrium Warming VO-82
Chapter IX
9-1 1985 Population and Energy Use Data From Selected Countries IX-8
9-2 Efficiency of Energy Use in Developing Countries: 1984-1985 IX-10
9-3 Potential for Electricity Conservation in Brazil IX-12
9-4 Net Oil Imports and Their Relation to Export Earnings for Eight Developing
Countries, 1973-1984 IX-14
9-5 Annual Investment in Energy Supply as a Percent of Annual Total Public
Investment (Early 1980s) IX-15
9-6 World Bank Estimate of Capital Requirements for Commercial Energy in
Developing Countries, 1982-1992 IX-16
9-7 U.S. AID Forestry Expenditures by Region IX-23
9-8 World Bank Energy Sector Loans in 1987 IX-26
9-9 Expenditures of Multilateral and Bilateral Aid Agencies in the Energy Area .... DC-27
9-10 World Bank Energy Conservation Projects: Energy Sector Management
Assistance Program (ESMAP) Energy Efficiency Initiatives DC-30
9-11 Energy Use in the Soviet Union and Eastern Bloc IX-34
9-12 Countries Responsible for Largest Share of Tropical Deforestation IX-41
xxu
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ACKNOWLEDGEMENTS
This report would not have been possible without the tireless efforts of the primary chapter
authors:
Executive Summary Daniel Lashof
Dennis Tirpak
Chapter I. Introduction Joel Scheraga
Irving Mintzer
Chapter II. Greenhouse Gas Trends Inez Fung
Michael Prather
Chapter III. Climatic Change Daniel Lashof
Alan Robock
Chapter IV. Human Activities Affecting Trace Gases and Climate Barbara Braatz
Craig Ebert
Chapter V. Thinking About the Future Daniel Lashof
Leon Schipper
Chapter VI. Sensitivity Analyses Craig Ebert
Chapter VII. Technical Control Options Paul Schwengels (Energy Services)
Michael Adler (Renewable Energy)
Dillip Ahuja (Biomass)
Kenneth Andrasko (Forestry)
Lauretta Burke (Agriculture)
Craig Ebert (Energy Supply)
Joel Scheraga (Energy Supply)
John Wells (Halocarbons)
Chapter VIII. Policy Options Alan Miller
Chapter IX. International Cooperation to Reduce Greenhouse Gas Emissions Alan Miller
Jayant Sathaye
Appendix A. Model Descriptions William Pepper
Appendix B. Scenario Definitions Craig Ebert
Appendix C. Results of Sensitivity Analyses Craig Ebert
xxui
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Model integration was coordinated by William Pepper and Craig Ebert, with assistance from
Rossana Florez. Models and/or analysis were prepared by Irving Mintzer; Jayant Sathaye, Andrea
Ketoff, Leon Schipper, and Sharad Lele; Klaus Frohberg and Phil Vande Kamp; Richard Houghton;
Berrien Moore, Chris Ringo, and William Emmanuel; Michael Prather; Ivar Isaksen, Terje Berntsen,
and Sverre Solberg; and Anne Thompson.
Document integration was coordinated by Craig Ebert and Barbara Braatz. Editorial assistance
was provided by Susan MacMillan. Technical, graphics, and typing assistance was provided by
Courtney Dinsmore, Katey Donaldson, Donald Devost, Michael Green, Karen Zambri, Judy Koput,
Donna Whitlock, Margo Brown, and Cheryl LaBrecque.
Literally hundreds of other people have contributed to this report, including the organizers and
attendants at four workshops sponsored by EPA to gather information and ideas, and dozens of
formal and informal reviewers. We would like to thank this legion for their interest in this project,
and apologize for not doing so individually. Particularly important comments were provided by,
among others, Thomas Bath, Deborah Bleviss, Gary Breitenbeck, William Chandler, Robert Friedman,
Howard Geller, James Hansen, Tony Janetos, Stan Johnson, Julian Jones, Michael Kavanaugh,
Andrew Lacis, Michael MacCracken, Elaine Matthews, William Nordhaus, Steven Piccot, Marc Ross,
Stephen Schneider, Paul Steele, Pieter Tans, Thomas Wigley, Edward Williams, and Robert Williams.
This work was conducted within EPA's Office of Policy Analysis, directed by Richard
Morgenstern, within the Office of Policy Planning and Evaluation, administered by Linda Fisher.
Technical support was provided by the Office of Research and Development, administered by Eric
Brethauer.
xxiv
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CHAPTER VII
TECHNICAL OPTIONS FOR REDUCING GREENHOUSE GAS EMISSIONS
FINDINGS VII-6
INTRODUCTION VII-15
The Relationship Between Technical Control Options and EPA's Modeling Results . VII-15
The Economics of Control Options VII-16
The Role of Long- and Short-Term Options VII-17
Control Techniques and Worldwide Emissions VII-18
Organization of this Chapter VII-18
Limitations .".... VII-23
PART ONE: ENERGY SERVICES VII-27
TRANSPORTATION SECTOR VII-32
Near-Term Technical Options: Industrialized Countries VII-36
Light-Duty Vehicles VII-38
Freight Transport Vehicles VII-49
Aircraft VII-52
Control of NC* and CO Emissions from Mobile Sources VII-53
Near-Term Technical Options: Developing Countries VII-55
Fuel-Efficiency Improvements VII-57
Improving Existing Vehicles VII-58
Alleviating Congestion and Improving Roads VII-58
Alternative Modes of Transportation VII-59
Alternative Fuels VII-60
Near-Term Technical Options: Soviet Bloc Countries VH-61
Summary of Near-Term Technical Potential in the Transportation Sector VII-62
Long-Term Potential in the Transportation Sector VII-63
Urban Planning and Mass Transit VII-63
Alternative Fuels VII-65
Expanded Use of Emerging Technologies VII-66
RESIDENTIAL/COMMERCIAL SECTOR VII-67
Near-Term Technical Options: Industrialized Countries VII-71
Improvements in Space Conditioning VII-71
Indoor Air Quality VII-80
Lighting VII-81
Appliances VII-83
Near-Term Technical Options: Developing Countries VII-83
Increasing Efficiency of Fuelwood Use VII-85
Substituting More Efficient Fuels VII-87
Retrofit Efficiency Measures for the Modern Sector VII-88
New Homes and Commercial Buildings VII-89
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Near-Term Technical Options: Soviet Bloc Countries VII-90
Summary of Near-Term Technical Potential in the Residential/Commercial Sector . VII-91
Long-Term Potential in the Residential/Commercial Sector VII-92
INDUSTRIAL SECTOR VII-93
Near-Term Technical Options: Industrialized Countries VII-98
Accelerated Efficiency Improvements in Energy-Intensive Industries VII-98
Aggressive Efficiency Improvements of Other Industries VII-100
Cogeneration VII-101
Near-Term Technical Options: Developing Countries VII-102
Technological Leapfrogging VII-103
Alternative Fuels VII-104
Retrofit Energy Efficiency Programs VII-105
Agricultural Energy Use VII-106
Near-Term Technical Options: Soviet Bloc Countries ...... VII-107
Summary of Near-Term Technical Potential in the Industrial Sector VII-111
Long-Term Potential in the Industrial Sector VII-112
Structural Shifts VII-112
Advanced Process Technologies VII-113
Non-fossil Energy VII-115
PART TWO: ENERGY SUPPLY VII-116
FOSSIL FUELS VII-117
Refurbishment of Existing Powerplants VII-121
Clean Coal Technologies and Repowering VII-122
Cogeneration VII-123
Natural Gas Substitution VII-124
Natural Gas Use At Existing Powerplants VII-124
Advanced Gas-Fired Combustion Technologies VII-125
Natural Gas Resource Limitations V1I-127
Additional Gas Resources VII-130
Emission Controls VII-132
NO Controls VII-132
CO, Controls V1I-133
Emerging Electricity Generation Technologies VII-134
Fuel cells VII-134
Magnetohydrodynamics (MHD) VII-136
BIOMASS VII-137
Direct Firing of Biomass VII-138
Charcoal Production VII-140
Anaerobic Digestion VII-141
Gasification VII-142
Liquid Fuels From Biomass VII-143
Methanol VII-143
Ethanol VII-145
Other VII-146
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SOLAR ENERGY VII-146
Solar Thermal VII-147
Parabolic Troughs VII-147
Parabolic Dishes VII-149
Central Receivers VII-149
Solar Ponds VII-150
Solar photovoltaic VII-150
Crystalline Cells VII-152
Thin-Film Technologies VII-153
Multi-Junction Technologies VII-154
ADDITIONAL PRIMARY RENEWABLE ENERGY OPTIONS VII-155
Hydroelectric Power VII-155
Industrialized Countries VII-155
Developing Countries ...... VII-157
Wind Energy .".... VII-158
Geothermal energy VII-159
Ocean Energy VII-162
NUCLEAR POWER VII-165
Nuclear Fission VII-165
Nuclear Fusion VII-170
ELECTRICAL SYSTEM OPERATION IMPROVEMENTS VII-171
Transmission and Distribution VII-171
Superconductors VII-172
Storage Technologies VII-173
Types of Storage Technologies VII-174
HYDROGEN VII-176
PART THREE: INDUSTRY VII-178
CFCs AND RELATED COMPOUNDS VII-178
Technical Options For Reducing Emissions VII-182
Chemical Substitutes VII-182
Engineering Controls VII-184
Product Substitutes VII-185,
Summary of Technical Potential VII-187
METHANE EMISSIONS FROM LANDFILLS VII-187
Methane Recovery VII-190
Recycling and Resource Recovery VII-192
CO, Emissions From Cement Production VII-193
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PART FOUR: FORESTRY VII-195
FORESTS AND CARBON EMISSIONS VII-195
DEFORESTATION VII-197
TECHNICAL CONTROL OPTIONS VII-202
Reduce Demand for Forest Land and Products VII-206
Option 1: Slow Deforestation by Introducing Sustainable Forest Use Systems VTI-209
Option 2: Substitute Sustainable Agriculture for Swidden Forest Practices . . VII-210
Option 3: Reduce Demand For Other Land Uses That Have Deforestation
As A Byproduct VII-217
Option 4: Increase Conversion Efficiencies Of Technologies Using Fuelwood VII-218
Option 5: Decrease Production of Disposable Forest Products .....'.... VII-218
Substitute durable wood or non-wood products for high-volume disposable
uses of wood VII-219
Expand recycling programs for forest products VII-220
Increase Supply of Forested Land and Forest Products VII-220
Option 1: Increase Forest Productivity: Manage Temperate Forests For
Higher Yields VII-220
Option 2: Increase Forest Productivity: Improve Natural Forest
Management of Tropical Little-Disturbed And Secondary Forests . . VII-222
Option 3: Increase Forest Productivity: Plantation Forests VII-224
Option 4: Improve Forest Harvesting Efficiency VII-228
Option 5: Expand Current Tree Planting Programs in the Temperate Zone VII-229
Option 6: Reforest Surplus Agricultural Lands VII-231
Option 7: Reforest Urban Areas VII-234
Option 8: Afforestation for Highway Corridors VII-235
Option 9: Reforest Tropical Countries VII-236
Obstacles to Large-Scale Reforestation in Industrialized Countries VII-241
Obstacles to Reforestation in Developing Countries VII-243
Summary of Forestry Technical Control Options VII-244
PART FIVE: AGRICULTURE VII-249
RICE CULTIVATION VII-252
Existing Technologies and Management Practices VII-253
Emerging Technologies VII-257
Research Needs and Economic Considerations VII-258
USE OF NITROGENOUS FERTILIZER VII-259
Existing Technologies and Management Practices VII-260
Management Practices That Affect NoO Production VII-260
Technologies that Improve Fertilization Efficiency VII-262
Emerging Technologies VII-263
Research Needs and Economic Considerations VII-264
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ENTERIC FERMENTATION IN DOMESTIC ANIMALS VII-265
Methane Emissions from Livestock VII-268
Existing Technologies and Management Practices VII-269
Emerging Technologies VII-272
Research Needs and Economic Considerations VII-273
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FINDINGS
Many technical changes are feasible at reasonable economic costs, which can reduce sources of
greenhouse emissions. No single technology or small set of technical options offers "a solution"
to greenhouse gas emissions. Only by aggregating the effects of many technical opportunities
over a long time can significant reductions in greenhouse gas emissions be achieved. This
chapter highlights options which appear to be "relatively cost-effective". Detailed analysis
necessary to quantify total costs of the measures assumed in the scenarios has not been
conducted.
Improvements in End-Use Energy Efficiency provide the best option for reducing CO2 emissions
over the next few decades. Reductions in energy use would also reduce emissions of CH4, N2O,
NOX, and CO. Examples of potential efficiency improvements are:
Transportation - 50 mile per gallon automobiles are technically feasible
with currently available technology. Further improvements could increase
fuel efficiency to more than 80 miles per gallon. In addition, major fuel
efficiency improvements in diesel trucks, rail transport and aircraft are
possible.
Residential and Commercial - Accelerated improvements in building shells,
lighting, space conditioning, and appliances could reduce energy consumption
per square foot by 75% below current levels by 2025 for residences and
50% for commercial buildings.
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Industrial Energy - Advanced industrial processes for energy intensive basic
materials, recycling of used basic materials - i.e., steel, aluminum, and glass,
cogeneration and improved electric motors can reduce industrial energy use
significantly. This is especially important for most developing countries and
Centrally Planned Europe where rapid industrial expansion is expected.
• Reforestation offers one of the most cost-effective technical options for reducing CO2 and other
gases. Preliminary estimates of the feasibility of large-scale reforestation suggest that with
aggressive reforestation programs the current deforestation trend could be reversed and that a
significant net increase in forest biomass is possible. An effective program should include both
programs to increase forest biomass - such as replanting marginal agricultural lands, improved
management of existing forests, tree plantations, and urban planting - and programs to reduce
demand for wood where resources are currently stressed. This could convert world forest
management practices from a net source to a net sink for 0.7 petagrams of Carbon/year, or
more, by the year 2025.
• Elimination of CFCs and related compounds over the next decade appears technically feasible
and cost-effective. Substitutes or process changes now available or under development have been
identified to reduce or eliminate almost all applications of CFCs and Halons. Key examples are:
Worldwide replacement of CFCs as an aerosol propellent with substitutes
already in use in the U.S., Canada and Sweden.
Replacement of CFC-12 with substitutes (such as HFC-134a or other
hydrochlorofluorocarbons) in mobile air conditioners.
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Replacement of CFC solvent use with aqueous cleaning in the electronics
industry.
Replacement of CFC-blown foam insulation with other materials or use of
alternative blowing agents.
• Several actions may be possible to reduce greenhouse gas emissions from agriculture. The
magnitudes of the agricultural sources as well as the potential effects of control measures are
difficult to quantify. Further detailed research and data collection will be required in order to
produce credible estimates. Major agricultural activities of interest are:
Methane emissions from livestock could be reduced through increases in
productivity of livestock systems, and use of methanogenesis inhibitors for
beef cattle.
Methane emissions from rice production may be reduced somewhat through
productivity increases, and removal of crop residues. In the long term,
improvements in varieties of rice, soil amendments and water management
practices could decrease methane emissions.
Biomass burning associated with agriculture produces N20, CO and CH4.
Changes in agricultural practices - sustainable agriculture, utilization of crop
residues, etc. - are technically feasible which could substantially reduce this
source.
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N2O emissions from fertilizer use could probably be reduced through better
placement of the fertilizer, nitrification inhibitors and fertilizer coatings,
which may also reduce farming costs and agricultural runoff problems.
• Near-term reductions in greenhouse gas emissions from electricity generation are possible
through:
Efficiency improvements - Improved fossil electricity generation technology,
such as advanced combustion turbines and cogeneration, can increase the
efficiency of using these fuels by up to 25%. More efficient transmission
and distribution, availability or capacity improvements at existing non-fossil
power plants (i.e., nuclear, hydro), and changes in electric utility system
operation (i.e., dispatching, wheeling across regions or even internationally)
can reduce CO2 emissions by a few percent per kWh of electricity delivered.
Fuel switching - Use of more natural gas to displace coal as a fuel for
generating electricity could reduce CO2 emissions by a substantial amount
in the near term. The potential of this option is largely dependent on
availability and cost of natural gas in the future. Wood, municipal waste,
wind, etc. could play a somewhat larger role than they currently play in the
near term.
• Alternative fuels that do not emit significant amounts of greenhouse gasses could make an
important contribution to reducing these emissions in the medium term and could virtually
eliminate many categories of emissions over the long term. For widespread use of alternative
fuels, important engineering, economic, environmental and social issues must be resolved.
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Hydroelectric power is already making a significant contribution to global
energy production. There is significant potential to expand this contribution
although environmental and social impacts of large scale projects must be
considered carefully.
Biomass energy is currently being extensively utilized, particularly in
developing countries. Current and emerging technologies could vastly
improve the efficiency of that use. More advanced technologies, especially
for conversion of biomass to gaseous and liquid fuels and electricity could
become economically competitive within a decade. Measures to increase
biological productivity are also under study. These advances would allow
biomass to provide a much larger share of global energy services over the
long term, particularly in developing countries. Environmental and social
issues of large scale biomass include land use, competition with food
production, particulate and organic emissions, etc.
Solar energy offers a large range of options. Direct use of solar thermal
energy either passively or in active systems is already commercially available
for water and space heating applications in many regions. These applications
could be expanded considerably in the near to medium term. Solar thermal
concentrating technologies are being widely tested for power generation or
industrial process heat. Solar photovoltaic (PV) cells are economically
competitive for some remote power generation needs, especially in
developing countries. If current research and testing succeeds in lowering
the cost in the next decade, solar electricity generation could play a major
role in meeting energy needs in the next century.
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Geothermal energy resources are extensive and widely distributed. Systems
are commercially available for electricity generation, and over 7 gigawatts
of capacity are currently in operation worldwide. Technologies are
improving and being demonstrated rapidly. It may be possible to expand
this energy source significantly in future.
Wind energy systems are currently commercial in some applications and
locations. In recent years engineering advances have resulted in reductions
in cost and improvements in performance. Assuming this trend continues,
wind energy can play a larger role in future energy production.
Nuclear fission is a technology which is currently widely used and growing
in its contribution to global energy supply, due to the completion of power
plants ordered during the 1970s. High cost and concerns about safety,
nuclear weapons proliferation and radioactive waste disposal have brought
new orders to a halt in most countries. It is technically feasible to expand
the contribution of this energy source beyond what is currently projected in
the future, if these problems are resolved.
Emission controls - Control technologies are currently available to reduce CO from automotive
and industrial sources and NOX produced by power generation at relatively low cost. Other
technologies are available which remove larger fractions of these pollutants but at higher cost.
Emerging control technologies and combustion technologies with inherently lower NOX emissions
are being tested and could reduce NOX emissions drastically at lower cost. In a few very limited
situations (i.e., enhanced oil recovery) CO2 recovery from power plant flue gas may be economic.
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• Methane emissions from coal seams, natural gas production and landfills can be reduced.
Currently minor emissions from coal production and landfills are projected to grow in future.
Natural gas (primarily methane) is sometimes vented and often flared in conjunction with oil
production. Technologies exist for economically recovering this methane and utilizing it for
energy production, thereby partially augmenting natural gas supply.
• Aggressive research programs may be the most important policy option for the long run.
Resolution of several key technical issues could vastly expand the economically attractive options
for reducing greenhouse gas emissions in the next century. Some important examples are:
Improved characterization of sources and control options in several areas
would allow better policy and research planning decisions to be made.
Sources of N20 and CH4 are poorly understood at present. Field
measurement and data collection work are needed to improve understanding
of the potential role reductions in these emissions could play in an overall
climate stabilization strategy. Detailed cost analysis is also needed for most
of the technical reduction options identified to support policy decisions in
future.
Solar photovoltaic technology has been improving rapidly over the last
decade. Continuing or accelerating this progress could bring this technology
into widespread commercial viability early in the next century.
Biomass conversion technologies currently exist which could make
substantially greater contributions. Commercial demonstrations of some
existing technologies and additional research on advanced biomass conversion
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technologies and improvements in biomass productivity could greatly expand
the role of biomass energy.
Nuclear fission does not currently appear viable in many countries because
of safety, waste disposal, proliferation and cost concerns. Research is
underway in several countries to develop and demonstrate "second
generation" fission technologies which reduce cost and safety concerns. The
establishment of waste disposal plans acceptable to society is also an area
of intense study in several countries already committed to nuclear fission.
Satisfactory resolution of these problems could expand the role of nuclear
fission hi future decades.
Energy storage technology could play a crucial role in integrating
intermittent technologies such as solar and wind into energy supply systems.
A number of promising concepts are currently under study. Accelerating
research and testing to reduce cost and improve performance of storage
technologies for electrical energy could greatly expand the potential roles of
some alternative energy sources.
Hydrogen energy systems offer a long term potential for reducing or
eliminating CO2 emissions, if the hydrogen is produced from non-fossil
energy inputs. Hydrogen is not a primary energy source but rather an
"energy carrier," an intermediate form like electricity. As an energy carrier,
it can help resolve some of the energy storage issues with renewables and
substitute in some existing fossil fuel applications. Research needs include
improved conversion processes using solar, hydroelectric, nuclear, wind, or
other renewable energy inputs. Additional concerns include transmission and
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storage, and applications to transportation, space heating, industrial process
and other end uses.
Selected research in energy efficiency could be helpful in accelerating the
rate of improvement. Industrial technology, for example, could be developed
to allow major increases in the standards of living in developing countries
and Centrally Planned Europe without the enormous increases in CO2
emissions which accompanied this development in the OECD. A major
cooperative research effort to adapt advanced technologies under
development in the OECD to the particular constraints and needs of the
rapidly industrializing areas could be effective.
Agricultural research to identify and develop alternative rice production
systems which reduce the production of methane could play a significant role
in a long term solution to the greenhouse problem. Similarly, improvements
in productivity and other technological options for reducing methane
emissions from domestic animals (cattle, sheep, etc.) are possible.
Concentrated research in these areas could make a major long term
contribution to greenhouse emissions reductions.
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INTRODUCTION
This chapter describes the substitute technologies and other means by which greenhouse gas
emissions could be reduced relative to the scenarios described in Chapter V. A range of policies
that might be used to promote such reductions are described in the next two chapters, which address
domestic and international issues.
The preceding chapters discuss the diverse sources and economic activities responsible for
greenhouse gas emissions. It should therefore not be surprising to find that there are an equally
diverse array of methods for reducing greenhouse gas emissions. The primary means of
accomplishing this goal is the development and use of technologies that reduce energy requirements
(i.e., improve energy efficiency), use less carbon-intensive fuels, or that replace or reduce emissions
of other greenhouse gases. In addition to this technological approach, there are also several areas
in which management strategies are the means of reducing greenhouse gas emissions, particularly
with respect to the buildup of gases resulting from some agricultural practices and forest resources.
The Relationship Between Technical Control Options and EPA's Modeling Results
As noted in Chapter V, the single most important determinant of greenhouse gas emissions is
the level of energy demand and the combination of sources used to supply that energy. Given the
dominance of fossil fuels as a source of greenhouse gas emissions, technologies to reduce use of
fossil fuels must play a central role in any effort to stabilize concentrations. Fossil-fuel-based
technologies supply over 70 percent of global primary energy needs in the No Response scenarios.
A major focus for policies to reduce emissions, as discussed in Chapters VIII and IX, must
accordingly be to promote demand-side measures that reduce total energy demand and supply-side
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measures that promote less carbon-intensive fuels. Technologies to achieve these goals are therefore
a major focus of this chapter.
The No Response scenarios assume substantial efficiency gains will occur due to technological
innovation and market forces, as discussed in Chapter V. The demand-side measures discussed in
this chapter illustrate how this assumed efficiency improvement might occur as well as improvements
incorporated into the Stabilizing Policy scenarios and more rapid improvements analyzed in
Chapter VIII.
The Economics of Control Options
The uncertainties associated with many of the options described in this chapter preclude detailed
assessment of costs. The primary focus of this review is to identify techniques that appear promising
although for cost or other reasons, they may not be widely-accepted in today's markets. This is
necessary given that global climate change is a long-term problem that may require development of
new energy sources and other significant technological breakthroughs. Current prices also may be
a misleading basis for assessment since climate change is potentially a major cost not currently
reflected in the cost of goods and services;.as discussed in Chapter VIII, it may be desirable to
rectify the absence of a market price for the risk of climate change through the imposition of carbon
fees or other policies, in which case currently more expensive options may become more competitive.
The price of some options is also difficult to evaluate simply because the absence of a market
for reducing the risk of climate change has meant relatively little effort toward research and
development. The importance of creating a market incentive to improve technology and reduce costs
is demonstrated from the rapid recent development of substitutes for CFCs discussed in this chapter.
Until such time as it became apparent that environmental regulation would create a market for CFC
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substitutes, industry reported that there were few feasible options at any price. More recently, an
intensely-competitive race to commercialize substitutes has begun around the world.
While a detailed economic analysis of the options discussed in this report is impractical, it is
worth noting that many of the control options described in this report are economically justified or
nearly so today, even based on current costs. This is particularly true in the context of measures to
improve energy efficiency, where substantial opportunities for cost saving investments exist despite
recent progress, as discussed in Chapter VIII.
The Role of Long- and Short-Term Options
In the time frames considered in this report, long-term options become critical. In order to
substantially reduce the concentration of greenhouse gases, new sources of energy supply and
dramatic improvements in efficiency will have to assume a significant role. However, there is also
much that could be done to reduce greenhouse gas emissions over the next decade by improving
energy efficiency, making greater use of natural gas, reducing use of CFCs, and promoting
reforestation.
While this current generation of techniques will not be sufficient to stabilize greenhouse gas
emissions several decades hence, efforts to adopt such technologies are nevertheless likely to be
exceedingly valuable for several reasons. First, reducing the rate of growth in emissions now could
make it easier to stabilize concentrations in the future because of the long atmospheric life of these
gases. Second, short-term strategies are often intermediate steps toward long-term strategies, e.g.,
currently-available efficiency improvements will facilitate still greater future efficiency improvements.
Finally, the incentives necessary for longer-term strategies, such as emission fees on carbon-intensive
fuels, will generally be consistent with short-term strategies.
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Over the long term the most important options are advanced non-fossil energy technologies,
possibly combined with major breakthroughs in end-use technology that would drastically reduce
energy requirements. Also, changes in agricultural and forest management technologies could
become important. In addition to the incentives that may flow out of short-term strategies, it is
important in the short term to promote national research and development by governments and the
private sector toward identifying and advancing promising long-term technologies.
Control Techniques and Worldwide Emissions
As the modeling results make clear, the U.S. is likely to account for a declining share of future
greenhouse gas emissions. Stabilizing concentrations will require control options applicable to the
needs of other countries, particularly developing countries with very different resources. Some
technologies, such as more efficient lighting, are relevant to virtually all parts of the world, but other
needs vary considerably. This chapter therefore discusses improved cookstoves, strategies for
arresting tropical deforestation, and other options of particular relevance to developing countries.
Table 7-1 illustrates some of the promising options for various regions and time horizons.
Organization of this Chapter
Figure 7-la identifies the "greenhouse gases" and illustrates their estimated percentage
contributions to the greenhouse effect in the 1980s. All of these gases are produced through a
diverse range of human activities, which we have classified into five broad categories. Energy-related
activities have been broken down into two categories: "applications" of energy, that is, energy
services, or "end uses," and the production of energy, or energy supply. Other emissions-producing
activities are related to industry, which includes the use of chlorofluorocarbons (CFCs), forestry
(particularly deforestation), and agriculture. Often a single broad category of activity-fossil energy
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Chapter VII
Region
OECD
Developing
Countries
TABLE 7-1
Key Technical Options By Region and Time Horizon
Near Term (by 2010")
Energy Efficiency - autos,
lighting, space heating
CFC Controls
Reforestation
Technology Development
Energy Efficiency -
industrial processes,
transport
Low-Carbon Energy
hydroelectricity
biomass
natural gas
Reversing Deforestation
Long Term (All Regions)
Alternative Fuels
Biomass
Solar
Nuclear
Hydrogen
Agriculture
Rice Production
Animals
Centrally
Planned
Europe
Energy Efficiency -
industrial processes,
space heating, transport
Natural Gas
Nonfossil electricity
Forest Plantations
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Chapter VII
FIGURE 7-1
CURRENT CONTRIBUTION TO GLOBAL WARMING
(percent)
(a) By Trace Gas
Other(13%)
CFC-11&-12
(14%)
C02(49V.)
CH4(18%)
(b)
By Sector
Other Industrial (3%)
Forestry (9%)
Agriculture (14%)
CFCs<17%)
Energy(57%)
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consumption, deforestation, for example—contributes to several of the gases of concern. Figure 7-lb
shows the proportion that the major categories of human activity contribute to global warming.
Because of the enormous amount of information presented in this Chapter (in truth, a separate
chapter could be devoted to each major source category discussed here), we have departed somewhat
from the format used throughout the rest of this Report to Congress—to make it easier for the
reader to follow the discussion. Thus, the remainder of this chapter is divided into five parts.
Energy use causes, in different proportions, emissions of five important gases: carbon dioxide
(CO2), carbon monoxide (CO), methane (CH4), nitrous oxide (N20), and nitrogen oxide (NOX).
Energy use is integrally linked with virtually all forms of economic and recreational activity within
industrialized countries. In developing countries current biomass energy use contributes to
greenhouse gas emissions, and potential increases in commercial energy use could be the largest
source of increasing greenhouse gas emissions in the future.
Thus, evaluation of the options for reducing greenhouse gas emissions from energy use must
begin with a systematic analysis of all aspects of energy use. Although there are "end-of-pipe" control
options for removing some of the relevant emissions from energy use while leaving the basic process
intact, the potential impact of such approaches is very small relative to the magnitude of the overall
problem. A strategy designed to significantly reduce the warming potential of energy-related activities
must incorporate major reductions in fossil energy consumption.
Part One of this chapter reviews the basic applications for which energy is ultimately used and
the opportunities for reducing greenhouse emissions at the point of end use. Part Two reviews
energy supply and conversion activities and related opportunities for reducing emissions. This
includes improvements in efficiency in energy conversion and distribution, and potential for increasing
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supplies of non-fossil energy sources. Also discussed are reductions in emissions of CH4 from coal
mining and natural gas production and distribution.
In Part Three we discuss technical options for controlling emissions from industrial activities.
Non-energy industrial activities contribute to greenhouse warming in three significant ways. First, and
most important, industrial activities are the source of all CFC emissions. As discussed in Chapter IV
and IX, an international process is already underway to reduce global emissions of CFCs because
of their role in depleting the stratospheric ozone layer. This chapter discusses the technical potential
for reducing CFCs further than required under the current protocol.
A second source of industry-related emissions are landfills, which produce emissions of methane
(CH4). This source category represents a small portion of the total methane emissions, but
emissions from this source could increase rapidly in the future. Finally, production of cement
produces CO2 as a process emission (in addition to CO2 produced by energy consumption). This
again is a small component of total CO2 emissions currently, but the percentage contribution from
cement production has been growing rapidly in recent years.
In Part Four, we discuss options related to forest management practices (resulting in a net
annual loss of biomass), which account for a significant share of emissions of CO2 and CO as well
as some portions of other gases. It should be noted that the importance of forestry is greater than
its percentage share in Figure 7-1 implies. Forests are the only category that, over time, can be
shifted from a source to a major sink for carbon. It is technically possible, though by no means
simple, to reverse the long-term trend of global deforestation and to begin increasing the amount of
forested lands. There are several components to reforestation strategies that need to be considered.
For example, reductions in demand for forest products (e.g., fuelwood) in some areas may be
necessary to relieve the pressures that have caused deforestation in recent years.
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Agricultural activities are an important source of CH4, N2O, NOX, and CO. The principal
activities of interest are rice production, enteric fermentation in domestic animals (primarily cattle,
sheep, etc.), fertilizer use, and biomass burning. In the final section of this Chapter, Part Five, we
discuss the technical options for reducing emissions resulting from these activities. It is apparent that
considerable flexibility exists, particularly in the long term, to alter agricultural practices in the
specific categories that constitute the large emitters, but the technical potential is difficult to quantify.
In general, most of the research and analysis of agriculture to date has focused on opportunities
for improving productivity. Productivity improvements should automatically lead to some reductions
in greenhouse gas emissions per unit of output; however, this relationship is not well-quantified.
Additional options for reducing emissions, beyond productivity changes, can be envisioned for each
of the specific categories mentioned, though, again, very little work has been done as yet to quantify
their potential effects and costs.
Limitations
In this review the information presented, although somewhat detailed, can only begin to illustrate
potential technical options that currently appear most promising. The analysis also highlights the
uncertainties and need for further study of many options. In some areas, particularly techniques for
reducing emissions from agricultural sources, the impact of specific technologies cannot be estimated
at present. However, in general, the uncertainties that exist concerning the means of achieving
emission reductions are much less, or are likely to be much more easily resolved, than the
uncertainties that exist concerning the rate of warming, change in climate, and the ultimate effects
of an increase in greenhouse gas concentrations. While some currently emerging technologies may
not fulfill current expectations, the diversity of opportunities suggests we can emphasize the
development and use of technologies that are relatively less-intensive sources of greenhouse gas
emissions if we choose.
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The source of most of the uncertainties discussed in this chapter is the difficulty of predicting
future technological developments. Many of the options that may have the greatest impact on the
buildup of greenhouse gases, such as the development of new engine technology for cars, new designs
for nuclear plants, and the use of hydrogen as a substitute for liquid fuels, are long-term possibilities
that require substantial further research. It is important to recognize several key limitations:
• The discussion cannot deal exhaustively with the tremendous range of
technical options that have been identified for energy efficiency
improvements and fuel substitution and for industrial emissions reductions,
as well as for forest management and for implementing changes in
agricultural practices.
• Because of the limited information available, but even more because of the
extensive scope of this study-both in the range of emitting activities and the
global diversity of emissions-it was not possible to provide detailed
quantification of expected emissions reductions and costs for many of the
technical options discussed.
• Much data development and detailed analytical work remains to be done.
A more detailed technical assessment has been mandated by the congress.
This study is beginning now and will be completed in 1989 by the U.S.
Department of Energy and EPA.
• As discussed in Chapter V, scenarios are constrained by current expectations
about types of services and economic activities demanded by consumers.
The control options presented are intended to produce the same types of
goods and services-electricity, lighting, transportation, space heating, etc.-
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but with a lower level of greenhouse gas emissions. These technologies and
strategies are therefore generally consistent with current lifestyles and
consumer preferences. However, some of them are likely to increase or
lower costs that could lead to changes in demand. This may result in
underestimating the effects of some technical options and strategies on
future greenhouse gas emissions.
• The No Response scenarios used in this report assume a considerable
amount of efficiency improvement due to technological innovation and
market forces. As discussed in Chapter V, the energy use in these scenarios
is substantially lower than some other reference projections (e.g.,
DOE/NEPP; see CHAPTER V). If energy use is higher than reflected in
the No Response Scenario, then the impact of policies that promote energy
efficiency, such as those identified in this chapter, could be much more
effective hi reducing energy consumption than indicated here.
• Discussions of the potential performance of technical options in this chapter
are often based on engineering design calculations, prototype performance,
laboratory results, etc. Achievable performance in practice may be less since
mass production often requires some engineering compromises relative to
laboratory or prototype specifications. Also, performance of technology in
use often deteriorates somewhat from design or new product performance.
On the other hand, currently unforeseen developments may improve
performance beyond levels estimated today.
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• This chapter identifies and attempts where possible to quantify technical
potentials for reductions in greenhouse gas emissions. Even where technical
options appear economically attractive on a life-cycle basis, there are
generally institutional, behavioral, and policy constraints that currently
operate to limit their penetration. The portion of identified technical
potential that can be achieved in practice is largely a function of the
availability and effectiveness of policy options, as discussed in CHAPTERS
VIII and IX.
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PART ONE: ENERGY SERVICES
The services that energy provides (called end-uses), such as lighting and fuel-driven locomotion,
are an integral part of human society and, at the same time, the largest category of greenhouse gas
emissions. While the production and conversion of primary energy (e.g., coal, oil, gas) is the
immediate source of a large portion of energy-related greenhouse gas emissions, it is the applications
of this energy to provide specific services that justify this production and conversion. Thus,
minimizing the energy required in various end-uses or using non-fossil fuels in specific end-use
applications can reduce production- and conversion-related emissions as well.
For convenience, energy services are classified as belonging to one of three major sectors:
transportation, residential/commercial, and industrial (including agriculture). Each of these sectors
uses energy in distinctly different ways and offers different opportunities for reducing energy use
and/or shifting to alternative fuels. Figure 7-2 shows the relative contributions of the three sectors
to global energy use as of 1985. Figure 7-2a shows the secondary energy actually consumed at end-
use points. Figure 7-2b shows the energy use by sector in primary energy production equivalent
terms; that is, the production, conversion, and transmission losses are ascribed to the end-use sectors
based on the characteristics of the energy they use. Figure 7-2c shows the proportions that the
equivalent primary energy use for these three categories contributes to global greenhouse emissions
in the 1980s. The differences are due to the variations in unit contributions of different primary
energy sources to greenhouse gas emissions.
There are two time horizons that are useful in discussing technical options. Near-term options
refer to technologies currently available or expected to be commercially available by the year 2000.
These are the options about which information is available and which could also provide a basis for
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Chapter VII
FIGURE 7-2
GLOBAL ENERGY USE BY END USE
1985
(a) Secondary Energy Use (b) Primary Energy Equivalent
Transportation
27%
Residential/
Commercial
29%
Industrial Transportatio
44% 20%
Industrial
47%
Residential/
Commercial
33%
(c) Contribution to Warming
Agriculture
14%
Forestry
9%
Other Industrial
3%
Transportation Energy Use
20%
Industrial Energy
Use 22%
Residential/Commercial
Energy Use 15%
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near-term policy action. Long term refers to options that are not expected to be available until after
2000, in some cases well after.
An attempt is made to hypothesize about potential technological developments over the longer
term and to discuss the role research could play in accelerating the availability of advanced options.
Some of these technologies are speculative and require additional research. They are included in
the analysis because they have the potential to play major roles in the long run.
In discussing global energy use patterns, it is important to distinguish between modern and
traditional energy forms, particularly in understanding energy use in developing countries. In this
discussion modern or commercial energy is used to describe all fuels and energy forms that are
priced and sold in energy markets (or, in the case of centrally-planned economies, accounted for and
valued in national economic planning). In this category are virtually all of the fossil fuels, which are
the major source of greenhouse gases, as well as electricity from all sources. Readily-available
energy statistics deal almost exclusively with modern energy and accurately represent energy use
patterns in industrialized countries.
However, in developing countries the modern energy transactions alone can give a very
misleading picture of energy use. Traditional energy is used to mean fuels such as firewood,
agricultural waste, and animal waste that are gathered and used informally without being priced and
sold in commercial energy markets. In many developing countries this type of energy accounts for
a substantial fraction of the total energy used.
Technical options, especially in the near- to mid-term, vary substantially from region to region
and often among individual countries. We focus on the U.S. explicitly, and three blocs of countries:
the OECD, developing countries, and the USSR and Eastern Europe. Figure 7-3 shows the pattern
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Chapter VII
FIGURE 7-3
SECONDARY ENERGY CONSUMPTION BY REGION
sew
(Exajoules)
800
RCW
Developing
Countries
USSR/
E»tarn
Europe
20JS
SCWP
RCWP
Reduotlon
from
No Re*pon*e
Scenario
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of energy consumption for these blocs of countries over time under both the No Response Scenarios
(SCW and RCW) and the Stabilizing Policy Scenarios (RCWP and SCWP).
The industrial market economies, the members of the Organization for Economic Cooperation
and Development (OECD), have many similarities in terms of economic activities and resources, and
hence are discussed as a group. As shown in Figure 7-3, energy use in these countries is relatively
high but not expected to grow significantly; rising incomes are devoted increasingly to products that
do not require significant energy inputs.
The developing countries are vastly different from industrialized countries both in current levels
and types of economic activities and available resources. As shown in Figure 7-3, energy use in the
developing countries grows significantly in the scenarios, but there is great uncertainty about the
rate of growth. Depending on their rate of development, energy use in these countries increases
by a factor of 2.5 to 4 by the year 2025.
The USSR and Eastern Europe share with most developing countries a much greater emphasis
on government intervention in economic planning and industrial activities than do OECD countries.
On the other hand, these countries have massive and, in many ways, technologically-sophisticated
industrial infrastructures that are much more similar to those of the OECD countries than they are
to the industrial infrastructures of most developing countries. Energy use in Eastern Bloc countries
(and associated greenhouse gas emissions) has been growing rapidly and, as shown in Figure 7-3,
is projected to grow in the future. While less is known about the technical potential to reduce
emissions in these countries, it is generally believed that very substantial improvements can be made
in energy efficiency.
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Figure 7-4 shows how secondary energy use by end:use category changes in the No Response
scenarios (SCW and RCW) and the two Stabilizing Policy scenarios (SCWP and RCWP). Overall,
secondary energy use in 2025 is 13-15% lower in the Stabilizing Policy scenarios; one reason for the
limited reductions in energy use is that significant improvements in energy efficiency are assumed to
occur in the No Response scenarios. The Rapid Reduction Scenario described in Chapter VIII
illustrates some of the additional potential. In that case total secondary energy use was reduced by
20% from the RCW scenario by 2025. As discussed in this section, these are very conservative
reductions relative to the technical potential. In both policy scenarios, energy use in transportation
decreases the most as a result of the introduction of fuel-efficient, light-duty vehicles and the
relatively rapid turnover of the vehicle stock.
Residential/commercial energy savings are smaller, reflecting the longer turnover times. The
industrial sector represents the largest current component of energy use and the largest portion of
projected growth in the No Response scenarios. Despite this, the reductions in industrial energy
consumption in the Stabilizing Policy scenarios are relatively modest, a reflection primarily of the
diversity of the industrial sector and the difficulty in designing broad policy assumptions that will
affect this sector in the modeling analysis. There are clearly large opportunities for energy savings
in the industrial sector, as discussed below.
TRANSPORTATION SECTOR
Transportation currently consumes approximately 27% of global modern energy use. As shown
in Figure 7-4, it accounts for 20-30% through 2025 in the No Response Scenarios. Virtually all of
the energy used in transportation is derived from oil. In 1985 in OECD countries, energy used for
transportation accounted for about 23% of all energy consumed (27% in the U.S.), expressed as
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Chapter VII
FIGURE 7-4
END-USE ENERGY DEMAND BY SECTOR
(Exajoules)
SCW RCW
IMS 2000 2025 2060 2076 2100
SCWP
soo
1986 2000 2026 2060 207S 2100
RCWP
FUduotlon From
No
1986 2000
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primary energy equivalents. As a share of secondary energy consumption, transportation accounted
for about 34% in the OECD, about 97% of which was oil (U.S. DOE, 1987b).
As shown in Figure 7-5, global transportation energy use grows by 50-65% between 1985 and
2025 in the No Response scenarios. In the U.S. and the other OECD countries, hi both the Slowly
Changing and Rapidly Changing World scenarios, improvements in efficiency as a result of economics
and technological innovation slightly more than offset the relatively slow rate of growth in energy
services (i.e., miles travelled). The OECD accounts for over 65% of transportation energy use
currently, but their share declines in absolute terms and as a percentage of the total. In the last few
years, transportation energy efficiency has declined slightly in the OECD. If this trend were to
continue, OECD transportation energy use could be higher than indicated in the No Response
scenarios.
In the USSR and Eastern Europe, transportation energy use increases rapidly, more than
doubling by 2025 in the No Response scenarios. Transportation energy use in the developing
countries grows at a roughly equivalent rate in the SCW scenario, but at a much higher rate in the
RCW scenario, reaching 3.5 times its current level by 2025. In both the Soviet bloc and the
developing countries, freight transport and passenger mass transit (rail, bus) currently account for a
much larger share of total energy than in the OECD. The explosive growth in both regions,
however, is largely due to rapid expansion in the number and use of light-duty vehicles.
Figure 7-5 also illustrates the impact that Stabilizing Policies could have on transportation energy
use in 2025. Overall energy efficiency improves significantly in all regions, and energy use decreases
by a large percentage. While total energy demand decreases, alternative fuels are more heavily
utilized, thus reducing the amount of fossil fuels used to produce transportation services.
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Chapter VII
FIGURE 7-5
TRANSPORTATION ENERGY USE BY REGION
(Exajoules)
SCW
RCW
198S
SCWP
RCWP
Reduction
from
No Rtiponi*
2000
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In industrialized countries it is likely that the private automobile will continue to be the primary
means of transportation in the near future. Fortunately, there are near-term opportunities for
improving the efficiency of this mode of transportation. Near-term improvements in efficiency of
freight transport and aircraft will also be cost-effective over the next few decades. A few
industrialized countries (e.g., Canada, New Zealand) are also pushing ahead with major alternative
fuels programs in the near term.
Over the longer term, additional reductions in energy consumption may come from shifting to
more efficient modes of transportation and substitutes for transportation (e.g., advanced
communication technologies). Also, increasing the use of non-fossil-based fuels in the transportation
sector is essential in order to greatly reduce or eliminate greenhouse gas emissions (See PART
TWO: ENERGY SUPPLY).
In developing countries and the Soviet bloc, transportation currently accounts for* a smaller
percentage of total energy use. (In some African countries, however, the percentage is much
higher.) However, in the future, as economies expand and incomes rise in these regions, the
potential exists for explosive growth in transportation energy use.
Near-Term Technical Options: Industrialized Countries
Within the transportation sector, light-duty vehicles, mainly passenger cars, account for the bulk
(about 63%) of current energy use (Figure 7-6). Other major contributors are freight transport
vehicles (diesel trucks, ships, and railroads), accounting for about 25%, and aircraft, primarily those
used in passenger travel, accounting for 12% of transportation energy.
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Chapter VII
FIGURE 7-6
COMPONENTS OF TRANSPORTATION ENERGY USE
INTHEOECD: 1985
(Percent)
Diesel (Primarily
Trucks, 20%)
Gasoline (Primarily Passenger
Cars and Light Trucks, 63%)
Aircraft
(12%)
Railroads
(3%)
(OECO, 1987)
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Light-Duty Vehicles
A great deal of attention has been devoted to options for improving the efficiency of light-duty
vehicles in the past decade. Consequently, a number of very promising approaches have been
identified and well-documented (see, for example, Bleviss, 1988; Goldemberg et al., 1988, for more
extensive discussions of the technical options for improving fuel efficiency of light-duty vehicles).
These efficiency improvements must be considered hi the context of several other societal and
consumer concerns related to light vehicles, such as urban air quality, safety^ comfort, and
performance. These other goals also affect the patterns of vehicle technology development.
Fuel-Efficiency Improvements. A number of techniques for improving the fuel efficiency of
vehicles that use traditional petroleum-based fuels (i.e., gasoline and diesel fuel) are currently
available. Although average fuel efficiency for new cars in the industrialized countries is between
25 and 33 mpg (7.7-10 litre/100 km) (IEA, 1987), several vehicles that are roughly twice as efficient
are commercially available: the Ford Escort diesel, the Honda City and Civic, and the Chevrolet
Sprint all average greater than 50 miles per gallon (5 liters/100 km). As indicated in Table 7-2,
there are larger prototype vehicles currently being tested that are substantially more efficient. In
addition, a great deal of research on improving fuel efficiency is being conducted by the automobile
industry. Improvements are possible in several areas as outlined in Box 7-1.
Box 7-1 provides only a few examples of the many improvements already possible with current
technology. Research is proceeding rapidly and will undoubtedly yield further opportunities for
improved fuel efficiency in the next decade. It is clear that opportunities exist for major reductions
in light-duty fuel use by the end of this century. This is particularly true for the United States,
which is still lagging behind most other industrialized countries in the average fuel efficiency of new
cars sold (see Table 7-3), partly due to the preference for larger cars in the U.S.
DRAFT - DO NOT QUOTE OR CITE VII-38 February 22, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VII
BOX 7-1. TECHNOLOGIES FOR AUTOMOTIVE FUEL EFFICIENCY
Weight Reductions~Many of the most efficient cars substitute non-
traditional materials for steel to achieve weight reductions, which
contributes to their superior operating efficiency. Much greater weight
reduction appears possible by substitution of high-strength steels,
aluminum, plastics, ceramics, and composite materials (Bleviss, 1988).
Aerodynamic and Drag Improvements-fa 1979 the average "coefficient of
drag" (CD) for the U.S. was 0.48 and in Europe was 0.44. Currently,
some production models such as the Ford Sable and Taurus, Subaru XT
Coupe GL-10, and Peugeot 405 achieve a CD of 0.3 or less. An
experimental prototype, the Ford Probe V, has achieved a CD of 0.137
(Bleviss, 1988). Incorporation of some of the design features currently, in
prototypes could reduce drag for production vehicles significantly over the
next decade. Rolling resistance is being reduced with advanced radial
tires. General Motors has recently introduced a "fourth generation" radial
tire that reduces rolling resistance by 10-12% from the previous
generation. An Austrian company has developed a more advanced tire
concept, a liquid-injection-molded (LIM) potyurethane tire. Preliminary
tests indicate improvements in rolling resistance as well as tread mileage
(Bleviss, 1988).
Engine and Drive Train Improvements—Several researchers have identified
a number of improvements to conventional light vehicle propulsion
systems and transmissions that could dramatically increase efficiency (see
Bleviss, 1988; von Hippel and Levi 1983; Gray 1983; OTA 1982). One
interesting example is the use of continuously variable transmissions
(CVT), which eliminate some of the energy losses during shifting and
allow die engine to be operated closer to full load at varying speeds.
Another possible innovation is an engine-off feature with energy storage
capability during idle and coast. In addition, advanced engine designs
currently in prototype could be much more fuel efficient than current
technology. One example is the adiabatic diesel engine shown in Box 7-2.
Despite the fact that improvements have been identified, it is not clear whether, and at what rate,
new technology will be incorporated into automobile designs. Clearly, opportunities for dramatic
efficiency improvements exist, but costs associated with these opportunities must be considered. The
U.S. Office of Technology Assessment conducted a detailed analysis of the potential for and cost of
future automobile fuel efficiency improvements. The study included considerable interaction with
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automobile manufacturers and other experts on fuel efficiency measures, and concluded that it was
technically feasible to achieve average new car fuel efficiency levels in the range of 3.4-4.7 liters/100
km (50-70 miles per gallon) by 2000. It also found that "The consumer costs of fuel efficiency range
from values that are easily competitive with today's gasoline prices to values that are considerably
higher." (OTA, 1982, p.14).
OTA found that the cost of efficiency improvements varied greatly depending on the actual
performance of potential design changes, the success of developing production techniques that can
hold down the variable cost increases, and the value consumers place on future fuel savings. With
optimistic assumptions, OTA estimated the cost of fuel efficiency measures to be as low as $60-
$130/car during the 1985-2000 time period. With alternative assumptions, the cost of efficiency
improvements could be as high as $800-$2,300/car.
Von Hippel and Levi (1983) conducted a computer analysis of the cost of introducing a number
of specific measures that would improve fuel efficiency, beginning with the 1981 Volkswagen Rabbit
diesel. A package of specific improvements that would improve the fuel economy from 5.2 to 3.3
1/100 km (45 to 71 mpg) was estimated to cost about $500 per car.
Goldemberg et al. (1988) and Bleviss (1988) however, suggest that cost estimates toward the
lower end of the OTA range are more likely for several reasons. First, a number of other benefits
to the consumer would result from some of the efficiency improvements. Alternative materials, for
example, also may reduce maintenance costs. There is also some evidence that, contrary to popular
expectations, use of more plastics and plastic composites may in some cases increase passenger safety
(Bleviss, 1988). The inclusion of the engine-off feature may prolong engine life. If the value of
these other benefits is deducted from the cost of fuel-efficiency improvements, more rapid
improvements may be cost-effective.
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A second reason for lower cost estimates is that the cost of individual improvements may not be
additive. Some costs may be offset by the savings from combining measures and integrating a
number of related changes into ongoing production process changes. Vehicle manufacturers
periodically make major investments in design changes, incorporating style concerns as well as
engineering improvements. Chrysler recently conducted a study comparing the costs of producing
a conventional steel vehicle and an alternative made principally of composite plastics. Although the
composite material is more costly, its use allows a dramatic reduction in the number of parts and
hence, assembly costs. The study concluded that the number of parts might be reduced by as much
as 75%, and that the overall production costs for the composite vehicle would be only 40% of those
for the corresponding steel vehicle (Automotive News, 1986).
On the other hand, automobile manufacturers have recently expressed the view that further fuel
efficiency improvements may be more difficult and costly to achieve than estimates from the early
1980s suggest (Plotkin, 1989). Concerns raised by the manufacturers include the following:
• most of the cost-effective efficiency measures that are acceptable to
consumers have been implemented in the last decade;
• performance of actual production models incorporating design changes for efficiency
have fallen short of engineering calculations;
• there are major technical uncertainties and marketability problems associated with
many of the fuel efficiency technologies (e.g., advanced diesels, two-stroke engines)
• real trade-offs do exist between further fuel efficiency improvements and
environmental (particularly for NOX emissions) and safety standards.
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Alternative Fuels. A number of alternative fuels have been proposed for light-duty vehicles in
the past few years. In the U.S. these proposals have been driven primarily by concerns about the
effects of emissions on urban air quality and the impact of petroleum-based fuels on energy security.
Only recently have analysts focused attention on the greenhouse contributions of alternative fuels.
Near-term options of interest include the use of alcohols-both ethanol and methanol, as blends with
traditional fuels or as complete substitutes—and direct use of compressed natural gas. The discussion
below refers to dedicated alternative-fueled vehicles designed and optimized for the alternative fuel.
In the near term, however, "flexible fuel" vehicles may be produced that would be capable of burning
one or more of the alternative fuels as well as gasoline. In this case, because vehicles are not
optimized, energy efficiency may be less than optimal (and greenhouse gas emissions would be
higher).
Methanol, as well as ethanol, can be produced from biomass. If these resources are replaced
as they are used, then their combustion should not contribute to the global warming problem in the
long run. In the U.S. and globally, however, natural gas would be the most likely feedstock for
methanol in the near term. The estimated net contribution to greenhouse gases when gas is used
as a feedstock will be roughly equivalent to that from burning gasoline from petroleum. On the
other hand, greenhouse gas emissions from the use of coal-based methanol, measured over the entire
fuel cycle, are about double those from crude oil-derived gasoline (DeLuchi et al., 1987). A shift
from natural gas to coal in the long run could lead to large increases in greenhouse gas emissions.
Compressed natural gas (CNG) as a transport fuel produces fewer CO2 emissions per unit of
energy released than any other fossil fuel, and also seems to be among the cleanest fuels available
when considering its emissions of other gases that affect urban air quality (e.g., NOn CO, and VOCs,
although some questions remain about the level of NO, emissions from CNG vehicles). However,
leaks of natural gas, primarily methane (CH4), from the production, distribution, and refueling
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processes, could add to the concentrations of this greenhouse gas. Some researchers estimate that
this increase in methane could offset the advantage of lower CO2 emissions. The degree to which
methane releases would increase or could be controlled is highly uncertain.
CNG is currently used as a transport fuel in Canada and New Zealand, among other
industrialized countries. In New Zealand, CNG, LPG, and synthetic gasoline (from natural gas)
meet half of the total gasoline demand. Other industrialized countries have small alternative fuels
programs, mainly based on CNG, LPG, and methanol (Sathaye et al., 1988).
Ethanol is likely to be produced from biomass but is also likely to have difficulty competing
economically unless its production is heavily subsidized by government. Additionally, ethanol
production by means of current technologies relies on biomass feedstocks such as corn and
sugarcane, which are also food crops. This competition with food production raises concerns about
the long-run viability of this approach.
In summary, in the near term it appears that the technical potential for industrialized countries
to achieve reductions in greenhouse gas emissions from the use of alternative fuels is limited. The
CO2 reductions from alternative fuels in industrialized countries would not be enough to offset
projected growth in vehicle miles traveled. However, their use in combination with fuel efficiency
improvements may help alleviate other concerns related to urban air quality and energy security
without increasing the global warming commitment. As discussed later, in the longer term,
alternative fuels derived from renewable sources may play a key role in reducing greenhouse gas
emissions in the transportation sector.
Tradeoffs With Other Goals. The governments of many industrialized countries regulate light-
duty vehicles to reduce emissions of a number of air pollutants. In addition, consumers value
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performance attributes other than fuel efficiency, as well as comfort, safety, and cost in their choice
of automobiles. To the extent that proposed fuel-efficiency improvements or alternative fuels involve
tradeoffs against these other goals, or are perceived to require such sacrifices, they may be more
difficult to implement.
Safety is a major concern long associated with light-duty vehicles. Some industrialized countries
regulate the manufacture, sale, and maintenance of vehicles to improve safety. In the 1970s and
1980s, U.S. safety standards significantly improved vehicle safety. Some evidence exists of a
correlation between size and weight reductions and increases in injury and fatality for currently
available vehicles (OTA, 1982). Clearly, effects on safety must be considered in the evaluation of
technical alternatives for improving fuel efficiency.
Weight reductions to improve efficiency may in fact reduce the structural strength of vehicles,
thus making them less safe; however, it is not true that the use of lighter materials always reduces
safety. U.S. government crash tests on the Nova, for example, have consistently shown the car's
crash performance to be superior to other vehicles weighing as much as 50% more (Bleviss, 1988).
In addition, options for improving automobile safety, such as air bags, automatic seat belts, as well
as fundamental design changes, could improve both efficiency and safety if pursued as a national goal
by regulatory bodies and manufacturers.
Another major concern associated with automobiles is their emissions. Vehicles emit several
pollutants—particulate, volatile organic compounds (VOCs), carbon monoxide (CO), and nitrogen
oxides (NOJ-which contribute to urban air quality problems and indirectly to climate change. Some
options for increasing fuel efficiency (and thus reducing greenhouse gas emissions) have the potential
to worsen local air pollution problems. For example, diesel engines are more fuel efficient than
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gasoline-powered automobiles, but diesel engines .tend to produce much greater emissions of
participates (many of which are cancer-causing compounds) per mile travelled.
Another complicating factor is related to the way in which vehicle emissions standards are
defined. In most industrialized countries pollutant emission requirements for vehicles are applied
on a grams-per-mile (or kilometer) basis. One concern about this approach is that it may not
encourage development of technologies that would simultaneously improve fuel efficiency and reduce
emissions of urban air pollutants, even though such technological options exist (Bleviss, 1988). In
addition, as fuel efficiency improves, the marginal cost of driving would decline, assuming fuel prices
remain constant, which might induce vehicle operators to drive more than they otherwise would. If
this effect is significant (an unresolved empirical question), it would offset some of the expected
reductions in greenhouse gas emissions and could also result in a net increase in emissions of
conventional urban air pollutants.
Conversely, some of the options for reducing emissions of pollutants can lead to increases in
emissions of greenhouse gases. As noted above, switching to methanol fuels could increase
greenhouse gas emissions if the methanol is derived from coal. Similarly, use of electric cars could
result in large net increases in greenhouse gas emissions if the electricity were generated from fossil
fuels.
There are potential solutions to all of the problems illustrated. For example, new diesel cars
are much cleaner than earlier models. Mercedes Benz and Volkswagen have now developed emission
control devices that make it possible for their diesel cars to meet the strict California participate
standard of 0.2 grams/mile (Bleviss, 1988). In addition, emission standards could be modified (e.g.,
to grains per gallon in conjunction with higher efficiency standards, or direct regulation of CO2
emissions) to encourage fuel-efficiency improvements that would also benefit local air quality. Over
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the long term, it is important that options like methanol-fueled and electric vehicles are promoted
in conjunction with non-fossil (or at least non-coal) energy inputs.
Many consumers are concerned about sacrificing size, comfort, or driving performance to achieve
major improvements in fuel economy. For several years, however, analysts have demonstrated
possible design changes that would reduce fuel consumption while retaining the size and performance
of a large automobile (e.g., Forster, 1983).
Some of the prototype high-efficiency vehicles have already demonstrated that size and
acceleration do not necessarily have to be sacrificed. The Volvo LCP 2000, with an average fuel
efficiency of 3.9 1/100 km (65 mpg), accelerates from 0 to 60 miles per hour in 11 seconds--
compared with 13.1 seconds for the average acceleration of the U.S. new-car fleet (1986 models,
which averaged only 8.4 1/100 km, or 28 miles per gallon). Likewise, a recently developed Toyota
lightweight prototype car is designed to seat 5-6 passengers while achieving 2.9 1/100 km (80 mpg)
under urban driving conditions (Bleviss, 1988).
In summary, it appears technologically quite feasible to achieve, for example, a new-car average
fuel efficiency of 4.7 1/100 km (50 mpg) in the U.S. by 2000, while maintaining or improving current
standards of safety, air pollutant emissions, comfort, and engine performance. This would imply,
through vehicle turnover and continuing technical innovation, that fleet average efficiency would reach
about 4.7 1/100 km (50 mpg) by 2010. This achievement would require, however, a strong
commitment by government and industry. The reductions in energy (and greenhouse gas emissions)
from this improvement would be significant.
The U.S. Department of Energy (U.S. DOE, 1987c) has recently projected that automobile
vehicle mUes travelled (VMT) in the U.S. will increase over 50% by the year 2010 (from 1,315 to
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2,032 billion miles). In calculating future transportation energy use, the report also projects that
automobiles will average about 8.7 1/100 km (27 mpg) in 2010 (overall average of all operating
vehicles, not new-car average). If automobiles averaged 4.7 1/100 km (50 mpg), the energy consumed
would be reduced by over 45%, or more than 30 billion gallons of gasoline (3.8 EJ1) in 2010—more
than a 40% decline from the 1985 consumption level (as opposed to the 7% increase projected by
DOE). To achieve these results, it would be necessary for automobiles to perform at the specified
fuel efficiency over the life of the vehicle. Currently, there is considerable degradation in fuel
efficiency over the life of an automobile. This requires further study and could limit the expected
energy savings from fuel economy programs. In addition, the current trend in the U.S. toward light-
duty trucks as personal transportation vehicles could offset some of the efficiency gains if it continues
in the future. Efficiency improvements in light-duty trucks and/or programs to discourage personal
use of these vehicles could produce significant energy savings in the U.S. (The VMT and average
mpg assumptions in the DOE analysis are higher than in the No Response scenarios used in this
report, but illustrate the potential for improvement). Decreasing fuel use in the U.S. could also
support many important national goals such as reducing international trade deficits and improving
energy security. Improvements of this magnitude could be made for the OECD as a whole and
would undoubtedly also spill over to the non-OECD countries that produce vehicles for sale in the
OECD and/or import vehicles or technology from the OECD. Most light-duty vehicles currently in
production are derived from designs that originated in the OECD (Bleviss, 1988).
Freight TranspQrt Vehicles
Diesel trucks use about 14% of the oil consumed for transportation in OECD countries (von
Hippel and Levi, 1983). Improvements in efficiency in this sector could, therefore, have a noticeable
1 EJ = exajoule; 1 exajoule = 1018 joules
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effect on total energy use. Current prototype vehicles could reduce energy use per ton mile in the
U.S. by as much as 40% for truck transport (Automotive News, 1983). Goldemberg et al. (1988)
have estimated that further improvements on the order of 50% or better could be achieved with
existing technology and at reasonable cost. Box 7-2 describes one of the most promising advanced
diesel technologies. OECD truck fuel use for 1985 totaled about 5.3 EJ. A 50% improvement in
fuel efficiency over the next several decades seems feasible if aggressively pursued. As truck freight
ton miles are projected to grow in the future, this level of improvement could save at least 2.6 EJ
by 2010.
Both rail and water transport are much more efficient than trucks on a ton-mile basis. To the
extent that shippers could be encouraged to shift freight to these modes in the future, either through
price incentives or other policy mechanisms, net energy use for freight transport could be reduced.
One interesting approach is being testing by General Motors Corporation (GM). GM has developed
a new truck trailer that can also be easily converted to a rail car and connected to a freight engine.
This would allow loading of truck trailers at source points, truck hauling to the nearest rail terminal,
and conversion to rail without unloading/reloading. Likewise, near the destination, the transition
back to truck is simple. GM has estimated that for hauls of over 200 miles, this approach could
reduce energy use to 20% of current energy use for an all-truck haul or 50% of a conventional rail
shipment (Sobey, 1988).
Improvements in ship fuel efficiency are also possible. Using some of the same diesel engine
technologies identified for truck engines, 30-40% improvements in efficiency may be possible over the
next several decades. Wind-aided cargo ships may also improve efficiency somewhat in the future.
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Chapter VII
BOX 7-2. ADIABATIC DIESEL ENGINE TECHNOLOGY
The diesel engine is currently the most efficient power plant used in heavy duty and some
light duty vehicles. Little has changed in its basic design over the years. However,
motivated by the energy crises of the 1970s, engine designers began trying to improve the
fuel-efficiency of diesels even further. One of the most promising results of this research is
the adiabatic engine, which combines new structural ceramic materials and turbochargmg to
increase the effective use of the heat generated during combustion.
* Adiabatic design, which means "without heat loss," increases efficiency by
retaining heat in the combustion chamber instead of losing it to exhaust
gases and the engine coolant, harnesses the high pressure exhaust gases,
and reduces weight and parasitic power losses by eliminating the normal
cooling system.
• As shown in the figure below, turbocompounding increases the pressure of
gases in the combustion chamber using a turbocharger and then harnesses
the extra pressure of the exhaust gases with a turbine connected to the
engine crankshaft. Structural ceramics, which are being developed to
withstand temperatures and pressures reaching 1000°C and 2000 psi,
respectively, will be used to insulate the combustion chamber, allowing
greater thermal efficiency.
* Cummins Engines and Adiabatics in the U.S., as well as Japanese
automakers, are at the forefront of introducing the adiabatic engine both
for heavy duty tracks and passenger vehicles. A Ford Tempo with an
adiabatic engine is projected to be able to have a fuel economy of 80
mpg. Along with the consequent reduction in CO2, additional
improvements are expected in hydrocarbon, CO, and NC« emissions, and
particulates are expected |o be reduced by as much as 60-80% over
current diesel technology.
Source:
Kama 1987.
Turbochtrg«r
Aerodynamic
Exhaust Syatefli
Power Turbine
High Sperd
Reduction Glaring
Vibration Isolation
(FMd Coupling)
Power Transfer
To Crankshall
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February 22, 1989
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Aircraft
Dramatic improvements in fuel efficiency have been achieved in the airline industry over the past
decades. From 1970 to 1980 fuel use per passenger mile in the U.S. declined by over 40%
(Holcomb et al., 1987). Nevertheless, by 1980 energy still accounted for about 30% of total operating
costs for commercial airlines in the U.S. (Goldemberg et al., 1988). Since 1980, energy intensity has
continued to decline due to some additions of more efficient aircraft and continued improvements
in load factors (revenue passenger miles divided by available seat miles - U.S. DOT, 1988), but at
a slower rate (from 1980 to 1984 the improvement was about 4% - Holcomb et al., 1987). The
decline in the rate of efficiency improvement is highly correlated with declining energy costs. For
example, between 1980 and 1987, nominal fuel prices declined by nearly 40% (U.S. DOE, 1988b),
reflecting a drop of more than 50% in real terms. Combined with some efficiency improvements,
this has resulted in energy costs being reduced to a much smaller percentage, 10-15%, of total
operating costs. Thus, the economic incentive to reduce energy intensity has been greatly reduced.
Because of the historical importance of fuel costs, however, a great deal of research has been
conducted and within the industry to identify opportunities for improvements in efficiency. Currently,
commercially-available new planes are more than 25% more efficient than the 1980 fleet average
(Smith, 1981 for 1980 average, Ropelowski, 1982 for test results of new 757 and 767 models). Already
improvements have been identified which, if incorporated into aircraft design, could reduce fuel use
per passenger mile to less than one-third of the current average (Maglieri and Dollyhigh, 1982; Smith,
1988). It may be technically possible to reduce fuel use per passenger mile to 50% of the current
average by the year 2010.
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The rate at which airline passenger miles will increase in the future is, however, a matter of
considerable uncertainty. Some industry sources are projecting very high rates of growth in the next
few decades, which could offset the projected gain due to improvements in energy per passenger mile.
Kavanaugh (1988), for example, projects increases in global jet fuel use of 60 to 120 percent by the
year 2025 despite assuming significant substitution of more fuel-efficient aircraft during the same
period.
Control of NQ_ and CO Emissions from Mobile Sources
The United States and most other OECD countries currently regulate the emission of
hydrocarbons (HC), carbon monoxide (CO), nitrogen oxide (NOJ, and participate matter (PM) on
a gram per kilometer basis. Many developing countries have recently adopted some emission control
standards as well. The standards vary for the weight class of the vehicle as well as by the type of
engine.
International comparisons of emissions standards are difficult because test procedures vary, but
it is generally recognized that U.S. standards are among the most stringent in the world. For light-
duty gasoline vehicles (which constitute a majority of the U.S. fleet), the U.S. standards are 2.1, 0.25,
0.62 g/km for CO, HC, and NO,,, respectively. Emission standards in most European countries are
significantly less stringent than in the U.S. (OECD, 1988). Many developing countries have much
less stringent standards, or none at all.
Vehicles sold in the United States control emissions in two steps. The first step is to control
the amount of pollutants formed during the combustion process. During combustion, the prime
determinant of the amount of carbon monoxide formed is the air/fuel mixture. As the air/fuel ratio
increases, CO emissions fall. On the other hand, NOX emissions increase as the air/fuel ratio rises,
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a result of the concurrent increase in combustion temperatures, the primary determinant of NOX
formation. Higher combustion temperatures are often associated with increased power. An engine
designed for greater power will generally produce higher "engine-out" NO, emissions than a engine
designed for fuel economy. Electronic engine management systems have, however, been able to
minimize these tradeoffs, since many of the critical engine parameters (like the air/fuel ratio) can
be controlled much more precisely (NAPAP, 1988; OECD, 1988).
The second step is to treat the "engine-out" exhaust after combustion to reduce emissions to the
acceptable standard. To control the "engine out" emissions, both catalysts and exhaust gas
recirculation (EGR) are used on virtually all new U.S. (and Japanese) passenger cars, usually in
conjunction with electronic engine management systems. Since 1981, the primary catalyst system used
on U.S.-bound cars has been the three-way converter-named for its ability to reduce emissions of
HC, NOW and CO, as opposed to just one or two of the gases. Some cars also use a second
oxidation catalyst to catch additional HC and CO. Catalysts use a variety of precious metals,
including platinum, rhodium, and palladium, to breakdown or reduce the unwanted emissions without
causing the metals themselves to react (Automotive News, 1988; OECD, 1988; White, 1982). Exhaust
gas recirculation reduces NOX emissions by reinjecting a portion of the inert exhaust into the engine's
incoming air. The inert exhaust gas cannot react in the combustion process and reduces peak
temperatures during combustion. As a result, less NOX is formed. Today, all U.S. light-duty vehicles
have EGR systems (Husselbee, 1984).
Some tightening of existing U.S. standards has been considered and determined to be technically
feasible, although expensive (NAPAP, 1988). More significant improvements in global emissions of
NOX and CO would result from the extension of U.S. standards to the rest of the OECD and
ultimately, to the rest of the world. These extensions are assumed over time in the Stabilizing Policy
scenarios.
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Current technologies for compliance with U.S. emissions standards have added substantially to
the cost of new vehicles, although improving technology may reduce the incremental cost in the
future (U.S. EPA, 1985, NAPAP, 1987). Also, with existing technologies a modest tradeoff has been
documented between emissions control, and fuel efficiency and performance, at the current level of
U.S. emissions standards (White, 1982, OECD, 1988). Tradeoffs and cost for tighter standards,
however, would depend on the stringency of the standards and the level of technology, as well as the
demand for other characteristics like performance.
Near-Term Technical Options: Developing Countries
Transportation energy use is a serious concern in developing countries for several reasons.
Worldwide, energy used for transportation is almost exclusively oil. From 1973 to 1986 oil use by
developing countries increased by 60%. During this same period, oil use by OECD countries
declined by 13%. Recent projections by the Department of Energy (U.S. DOE, 1987c) indicate
that the overwhelming majority (86%) of growth in oil consumption in the "free world" (defined by
DOE to exclude the centrally-planned economies of Eastern Europe, the Soviet Union, China, Cuba,
Kampuchea, North Korea, Laos, Mongolia, and Vietnam) through the year 2010 could come from
developing countries. The largest component of the dramatic increases in oil use in developing
countries during the last decade is in the transportation sector. For 15 of the largest developing
countries, about 50% of the growth in oil consumption in the 1970-1984 period has been in
transportation applications (Meyers, 1988). Thus, indications are that energy use for transportation
has been growing at a very rapid rate in recent years in developing countries, and this high rate of
growth is projected to continue in the future.
Although some developing countries have been successful in implementing programs to reduce
fossil-fuel use (or at least oil use) in other sectors, very little attention has been paid to the
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transportation sector, either by these countries themselves or by international development assistance
agencies (with a few notable exceptions, e.g., Brazil and, more recently, several other countries,
including the Philippines). There are a number of reasons why it is difficult for developing countries
to implement the technical options that have been relatively effective to date in the industrialized
countries.
First, information about transportation energy use is limited in many developing countries. It
is very difficult to estimate, for example, what portion of the fuel is used in new versus old vehicles,
light trucks versus heavy trucks, two- and three-wheeled vehicles, etc. The information that is
available, however, suggests other problems.
Road vehicles tend to be kept in service far longer in developing countries and often are used
for purposes other than what they were originally designed for. There is some evidence that aging
vehicles are often poorly maintained in developing countries. Poor roads also often contribute to
increased energy use per vehicle kilometer of travel (VKT). Urban congestion can also have this
effect, although in some cases it may also act as a deterrent to increases in VKT. Although heavily
utilized, mass-transit systems in developing countries are generally poorly developed and are also
affected by poor or congested road systems.
Thus, the approaches that have been successful in slowing the growth of transportation energy
use in the industrialized countries over the past 15 years may not be as effective in many developing
countries. Industrialized countries have been able to significantly reduce the average consumption
of fuel per highway mile by replacing existing vehicles with more efficient newer models and
developing or expanding mass transit in urban areas. The effectiveness of both strategies in most
developing countries is much more limited because of the slower turnover of vehicles and lack of
capital to invest in infrastructure improvements.
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On the other hand, it is expected that as developing countries reach a certain per capita income,
they will experience a rapid explosion in the demand for personal vehicles that will dramatically
increase transportation energy use (Sathaye et al., 1988). The fuel efficiency of new vehicles available
during that period can have a significant effect on future transportation energy use.
Those developing countries that do not have domestic oil resources are concerned that increasing
their imports of oil will diminish the already-limited foreign exchange available to finance development
and hence, limit long-term growth. Thus, there is great interest emerging in limiting oil use for
transportation. Efficiency improvements, though often more difficult to achieve than in industrialized
countries, clearly are part of the solution. Biomass-based alternative fuels are very important for
some developing countries (Brazil, for example) in the near term. Other developing countries (like
some industrialized countries) may have natural gas that can be used for transportation or other types
of biomass-based options. Generally, the transportation energy solutions that would be attractive to
developing countries for the purpose of reducing oil imports - efficiency improvements and alternative
fuels - are also beneficial in reducing greenhouse gas emissions. One exception is the use of coal
as a rail fuel, which occurs in China and India and results in both lower energy efficiency in rail
transport and in more CO2 per unit of fuel consumed. However, this option may appear attractive
to countries concerned primarily with minimizing oil imports.
Fuel-Efficiency Improvements
As individual developing countries reach a certain level of economic activity and per capita
income, it is expected that the demand for personal vehicles will "take off," as occurred historically
in several more-industrialized countries. Currently, gasoline prices are higher in many developing
countries and oil imports frequently make up a large fraction of total imports in developing countries.
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Therefore, improvements in the efficiency of new vehicles, both light- and heavy-duty, should be very
attractive in developing countries to reduce fuel costs.
Improving Existing Vehicles
Because of capital scarcity, all types of vehicles are kept in service far longer than they are in
industrialized countries. Certainly for some developing countries, programs to improve the quality
of maintenance or accelerate retirement of older vehicles may be very useful in reducing oil
consumption (and greenhouse gas emissions).
For the same reason that aging vehicles are kept in service, new classes of intermediate vehicles,
often used as low-cost transport vehicles, have emerged in developing countries. These are generally
produced locally, often by small companies or even a single individual. Some alternative vehicles,
notably the Chinese tractor converted for passenger transport, are adaptations of vehicles designed
for other purposes. India also does a significant amount of road transport in rural areas with
tractors. As a means of passenger or freight transport, many of these vehicles are very energy-
inefficient. The Chinese tractors, for example, are estimated to use 75% more fuel than would a
four-ton truck while carrying only one ton; these tractors account for 27% of the total diesel fuel use
in China (World Bank, 1985). Programs to improve the efficiency of these vehicles or to replace
them with more efficient alternatives may be very effective in the near term in some developing
countries.
Alleviating Congestion and Improving Roads
In rural areas of many developing countries, roads are so poor that traffic must move much
more slowly than is customary for intercity travel in industrialized countries. Frequent stops and
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starts are also a problem in these areas. These conditions inevitably lead to reduced energy efficiency
regardless of the quality of the vehicles themselves. A recent study has concluded, however, that poor
road condition^ do not appear to act as a deterrent to increased vehicle ownership in rural areas of
developing countries (Meyers, 1988). Thus, carefully planned highway improvements could result in
net reductions in fuel use in some countries. In addition to reducing fuel use in the existing mix of
vehicles, better roads may allow "upsizing" of some of the existing traffic to larger trucks and buses
that are much more efficient on a passenger- or ton-km basis. Encouraging the use of more efficient
modes, such as rail transport, may also be possible in some cases.
In urban areas, congestion is already clearly a major problem in many developing countries (as
it is in many industrialized countries) and is likely to become more severe as rapid urbanization
continues in many developing countries. Although congestion, as already mentioned, reduces
efficiency in fuel use, it may also act as a deterrent to increased vehicle use, promoting the
widespread use of more efficient alternatives to personal automobiles, such as motorcycles and mass
transit. The degree to which congestion functions as a deterrent to increased transportation energy
use is uncertain and needs further investigation.
Thus, it is important to carefully evaluate local conditions in designing improvements to urban
road systems, including more extensive roads, but also better road maintenance and better planned
roads. It may also be important to combine road improvements with other measures such as mass
transit to achieve overall improvements in energy efficiency.
Alternative Modes of Transportation
In addition to encouraging expansion of urban mass transit, developing countries may wish to
promote alternatives to highway transport in both rural and inter-city travel. Because major
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investments may be required to develop or improve highways for these types of travel, it may be
more economically attractive to direct this investment into improved rail systems, for example, which
move passengers and freight more efficiently. If highway improvement programs are carried out,
however, they may be combined with the introduction of efficient bus systems, which would offer an
attractive alternative to personal vehicle ownership and use.
Alternative Fuels
Alternative fuels based on locally-available resources may be economically viable and important
options in developing countries much sooner than is the case for industrialized countries. In countries
like Brazil, which have abundant agricultural land, commercial technologies to convert crops, such as
sugarcane or corn, to produce ethanol may make sense (see PART TWO: ENERGY SUPPLY, for
more detailed discussion of the Brazilian ethanol program). A fuels program based on sustainable
biomass production is extremely beneficial in reducing net CO2 emissions. Most developing countries
would have difficulty, however, in diverting significant amounts of biomass, which is currently used
for food, to energy purposes. Converting agricultural residues or forest products to fuel may make
more sense if the conversion processes can be made economically attractive.
In other countries locally available natural gas may be readily converted to compressed natural
gas (CNG), which would reduce emissions of CO2 as well as many other air pollutants and also
reduce oil imports. A recent review of international programs noted that most Asian countries and
many Latin American countries that have domestic gas resources are conducting feasibility studies
of CNG use and many have pilot programs in place (Sathaye et al., 1988). Where natural gas is
currently vented or flared as a by-product of oil production, (e.g., in the Middle East), the availability
of cheap local oil discourages investments in natural gas distribution and utilization systems.
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A final fuel-switching option that could be helpful in the near term is replacing coal with diesel
fuel or electricity in rail transportation systems. Coal use as a rail fuel has virtually disappeared in
industrialized countries-primarily because coal-fired rail systems are markedly less efficient than the
alternatives. In energy consumed per mile travelled, diesel trains are more than 3.5 times as efficient,
and electrified rail is 13 times more efficient (compared on the basis of secondary energy consumed).
If electricity is generated from coal, primary energy consumed and CO2 emissions would be 3 times
greater than the end-use energy consumed. Electric rail in this case would be about 4 times more
efficient than coal-fired rail in primary energy consumption. However, a few developing countries
with abundant coal resources and extensive rail systems-notably India and China-still use coal in rail
transport. Although considerably less efficient, this option may be appealing from the perspective of
minimizing oil imports. India has a program of gradual replacement underway, which is expected to
eliminate coal use in rail systems by the year 2000. A shift to diesel fuel should reduce the CO2
emissions from this source by a factor of five.
Near-Term Technical Options: Soviet Bloc Countries
In the USSR and Eastern Europe, transportation makes up a much smaller proportion of total
energy use than is the case in industrialized countries-primarily because there are many fewer
automobiles and trucks. However, that number is growing rapidly: from 1970 to 1980 the number
of automobiles in the Soviet Union increased from 1.6 to 6.9 million (a rate of 15%/year), and the
number of trucks rose from 3.2 to 5.1 million (4.7%/year).
On the other hand, fairly significant improvements have been made in recent decades in the
efficiency of freight transport, primarily transport by rail. From 1960 to 1975, ton-kilometers of
freight hauled by all forms of transport in the Soviet Union increased by 276%, while fuel use
increased by 2.4% and electricity use increased by 418% (from a very small base). Overall, this
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represents a significant increase in energy efficiency due primarily to the replacement of coal
locomotives by much more efficient diesel and electric engines (Hewett, 1984).
Given the rapid growth in the numbers of automobiles and trucks in the recent past, and in the
number projected in the scenarios developed for this report, it appears that an important option for
these countries will be to increase the efficiency of new highway vehicles. In addition, because of the
large natural gas resources available in the Soviet Union (discussed in PART TWO: ENERGY
SUPPLY), the feasibility of using compressed natural gas as a vehicle fuel may deserve further
investigation.
Summary of Near-Term Technical Potential in the Transportation Sector
With aggressive programs to improve transportation energy efficiency across the board in
industrialized countries, it appears that significant overall reductions could be made over time.
Improvements in the efficiency of light-duty vehicles and freight transport could result in reductions
of energy use on the order of 7 EJ of transportation energy from the No Response scenario levels
by 2010 in the OECD. If the same efficient technologies were transferred to developing countries
and the Soviet bloc, even larger reductions could be achieved below scenario levels because of the
rapid expansion of vehicle stock in those areas. This suggests that the technical potential may exist
to reduce energy use by 25 EJ by 2010. This estimate is higher than that assumed in the climate
policy scenarios, where the maximum transportation energy reduction is about 32 EJ by the year 2025.
Furthermore, it appears that there are fuel-switching options that could be implemented during this
time period, which could reduce the greenhouse gases emitted per unit of energy consumed in
transportation. The overall potential of these options has not been quantified.
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Long-Term Potential in the Transportation Sector
Over the long term, technical possibilities for reducing greenhouse emissions from transportation
greatly increase. The range of options runs from further improvements in highway vehicles and
expanded use of alternative fuels, to alternative transportation modes, to measures that would reduce
the need for transportation. All of these options are somewhat speculative and very sensitive to
assumptions about the nature of society in the long term. The discussion here is intended to
illustrate possible options rather than to suggest which choices should be made. Considerably more
systematic and detailed analysis is required before useful comparisons can be made.
Urban Planning and Mass Transit
A major concern in many urban areas throughout the industrialized countries (and in many
developing countries as well) is increasing traffic congestion. When vehicles spend an increasingly
greater proportion of their time idling in stop-and-go traffic, they use more fuel and emit more air
pollutants per mile travelled. In the near term, solutions to urban congestion problems are extremely
difficult. For the long-term, however, alternative approaches to alleviating this problem will tend to
incidentally benefit the climate warming problem. Mass transit systems not only reduce highway
commuter traffic but the energy used per passenger mile is much lower. The energy intensity of one
person commuting alone by car is over 4.5 MJ/km.2 Average intensities (over all time periods) for
bus and rail transit are reported to range from about 2.0-2.5 MJ/passenger-km (Holcomb et al.,
1987). At normal commuting times transit systems tend to be much closer to fully-loaded, however,
so that the energy intensities per passenger-mile would be even lower. The energy intensity of one
person commuting alone by car is over 4.5 MJ/km (7,000 Btu/mile). Average intensities (over all
MJ = megajoule = 106 joules.
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time periods) for bus and rail transit are reported to range from about 2.0-2.5 MJ/passenger-km
(Holcomb et al., 1987). At normal commuting times transit systems tend to be much closer to fully-
loaded, however, so that the energy intensities per passenger-mile would be even lower. Similarly,
efforts to encourage carpooling can relieve congestion and reduce fuel use at the same time.
Another possibility is shifting to smaller, commuter vehicles. General Motors Corporation is
testing a three-wheeled, one- or two- passenger, narrow commuter car, which is essentially more like
a covered motorcycle than a traditional automobile. Because the vehicle is much narrower than a
normal passenger car, a standard traffic lane could be split in half to double the carrying capacity
of existing roads. Because the vehicle is small and aerodynamically-designed, it would also be much
more fuel efficient than today's cars, achieving over 100 miles per gallon (Sobey, 1988). Clearly,
some safety issues and other complexities in integrating such vehicles into current urban traffic
patterns remain to be worked out.
The technical potential exists to design and construct urban areas that are much more energy
efficient in terms of then- transportation requirements (as well as in their energy requirements for
other end uses). By comparing cities whose transportation energy use is very low, relative to global
averages, with cities whose energy use in this sector is high, it is possible to identify differences in
location patterns, mass transit systems, and other factors that can partially explain the differences in
energy demands. In theory, it should be possible to introduce incentives that will cause the cities
to developed similarly to the low energy examples over time. This may be especially important in
developing countries where populations, especially urban populations, are growing rapidly.
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Alternative Fuels
Use of alcohol fuels as an alternative to gasoline in highway vehicles is an option that is already
receiving considerable interest for a number of reasons, as described earlier. Technologies currently
exist for producing ethanol and methanol from various types of biomass. Further research, testing
and commercial demonstrations could be helpful in improving performance and lowering cost. In
the long run it appears that methanol may be preferable because the biomass feedstock does not
necessarily have a food value and therefore is not in direct competition with food production.
Technologies currently exist for operating highway vehicles with hydrogen fuel. Such vehicles
are not currently viewed as commercial, primarily because of the high cost of hydrogen fuel and
difficulties in storing enough hydrogen on board for highway driving. A hydrogen-powered automobile
built by Daimler-Benz of West Germany and a hydrogen-powered bus built by the Billings Energy
Corporation of Provo, Utah, are examples of currently-operating test vehicles. These two vehicles
use metal hydride storage tanks, one promising approach to the storage problem (Ogden and
Williams, 1988). In addition, if the fuel-efficiency improvements described above are incorporated,
future vehicles may be able to achieve driving ranges comparable to today's vehicles while carrying
much less fuel on board. The possibilities for producing hydrogen at competitive costs are also
improving with the development of solar photovoltaic technology (see PART TWO: ENERGY
SUPPLY). Another attractive feature of hydrogen vehicles is that the engines and internal structure
required are very similar to what CNG-powered vehicles would require. CNG is already being used
in fleet applications in some countries and will be more widely-used in the future. This could provide
a market for the initial transition to hydrogen when and if the cost and storage problems are
resolved.
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Electric-powered vehicles have been discussed for many years as an option for reducing oil use
and/or urban pollution. As with hydrogen, the problem of storing enough energy on board to
provide a reasonable driving range is an as-yet-unresolved obstacle. In addition, vehicle cost and
performance ability comparable to the cost and performance of today's vehicles have not yet been
realized. Concerns about higher future electricity costs could also retard penetration of electric cars,
even if other problems were resolved.
The source of primary energy for both electric and hydrogen-powered vehicles, will determine
whether a switch to these fuels increases or decreases greenhouse gas emissions. Use of non-fossil
sources of electricity, such as solar or nuclear, would decrease emissions of CO2 and other greenhouse
gases. Conversely, use of coal-fired generating capacity as the primary source of electricity or
hydrogen would lead to increases in greenhouse gas emissions.
Expanded Use of Emerging Technologies
Telecommunications may substitute for many transportation services in the future.
Teleconferencing is already replacing some types of business travel, although the magnitude of this
substitution has not been quantified in energy terms as yet. In the future, as video conferencing
equipment improves and is more widely available, this option could become more important,
particularly if higher transportation costs and congestion act as incentives. Catalogue shopping,
electronic mail, electronic advertising, and electronic banking are other applications of
telecommunications that are beginning to replace specific transportation needs. A recent analysis
projects that transportation energy use may decline in OECD countries because of these substitutions.
As is the case with many energy efficiency improvements, the motivation for this substitution has
very little to do with energy use. These substitutions are taking place because consumers and
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businesses perceive advantages in convenience, time saving, access to wider selections, and cost savings
(Schipper, et al., 1989).
Fuel cell technology has many potential applications (described briefly in PART TWO: ENERGY
SUPPLY). Two appealing characteristics of fuel cells are that cost-effectiveness is not fundamentally
a function of size, as with many energy technologies, and that they are virtually pollution-free at the
point of use (Jessup, 1988). Because of these characteristics, one possibility is to use small fuel cells
to power highway vehicles. Input fuel can be derived from natural gas, coal,, or, ultimately,
renewables-based hydrogen. Several different fuel-cell approaches are being researched and tested
currently. If they prove economic, the fuel cell could provide very efficient and clean power for
mobile sources at some point in the future.
High-speed rail systems are currently in commercial use hi Japan and France. They compete
well with aircraft or automobiles on a performance basis for some intercity travel. Energy consumed
per passenger-kilometer is significantly lower than with automobile or air travel alternatives. As
technologies develop in the future (e.g., superconductors), these systems could become more efficient
and economically attractive. The primary constraints appears to be cost of constructing the systems
and concerns about safety and rights of way.
RESIDENTIAL/COMMERCIAL SECTOR
In the United States residential and commercial energy services consumed 17 EJ in 1985, or
about 29% of total secondary energy (36% of equivalent primary energy). For the OECD as a
whole, the picture is quite similar, with residential and commercial energy use amounting to about
30% of the total secondary energy. Figure 7-7 shows the distribution of energy use within this
category in the U.S. The largest component (more than a third) of residential/commercial energy
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FIGURE 7-7
U.S. RESIDENTIAL/COMMERCIAL ENERGY USE
Space Heating
10 EJ
(Exajoules)
Refrigeration
2.1EJ
Hot Water Heating
3.2 EJ
Air Conditioning
and Ventilation
5.3 EJ
Lighting
4.2 EJ
U.SDOE, 1987a.
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use is for space heating; combined with air conditioning and ventilation, the overall use of energy
for space conditioning accounts to more than hah7 (54%) of all residential and commercial energy
use. Lighting accounts for another 15%, hot water heating, 11%, refrigeration, 1%, and the
remaining energy (13%) is divided among all of the other appliances and equipment used in
residences and commercial establishments (U.S. DOE, 1987b).
As shown in Figure 7-8, global energy use in the residential and commercial sectors in the No
Response scenarios grows by 29-65% by the year 2025. The relatively-wide range is. apparent in all
regions and reflects alternative assumptions about the rate of investment in buildings and in
population growth. In addition, a shift toward electricity for a higher percentage of energy use in
these sectors results in increases in end-use efficiency, but implies that primary energy required
(accounting for losses in electricity generation) is growing more rapidly.
In the scenarios, the percentage of total energy used in the industrialized countries declines
significantly over time. Residential/commercial energy use in 2025 for the OECD in the No
Response scenarios ranges from slightly higher than today's levels to slightly lower. This reflects the
slow rate of population growth and the technological advances that are already increasing energy
efficiency in these countries.
In contrast, residential and commercial energy use in developing countries for 2025 ranges from
a doubling to more than a tripling of current levels in the No Response scenarios. It is expected
that economic growth in these countries in the future will rapidly translate into increasing demands
for energy-related amenities in homes and commercial buildings. In the Soviet Bloc increases are
on the order of 50-75% for similar reasons.
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FIGURE 7-8
RESIDENTIAL/COMMERCIAL ENERGY USE BY REGION
sew
(Exajoules)
RCW
SCWP
RCWP
1SO
Reduction
from
No Rafpon
Soarwto
2000
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Major technical improvements demonstrated in recent years offer the possibility that new
residential and commercial buildings built in the future could require substantially less energy for
heating and cooling. Because the stock of buildings turns over so slowly, it is also important to
focus on retrofitting, which could reduce air conditioning and heating needs in existing buildings.
Dramatic improvements in efficiency are also possible in lighting, particularly in commercial buildings,
where lighting may account for a large share of the electrical energy used. Improvements in lighting
efficiency also frequently have the added benefit of reducing the amount of waste heat produced by
the lighting system and thus reducing the air conditioning requirements as well.
Options for reducing energy use in the residential and commercial sectors are fairly well
characterized, at least in the OECD. As discussed below, potentials are very great, but due to the
long turnover time of building stock, improvements may have to be phased in over a long time
period. Figure 7-8 also indicates reductions of 5-16% in secondary energy use in these sectors by
2025 in the Stabilizing Policy cases. In addition, alternative fuels are introduced, particularly in
developing countries, which further reduces the greenhouse impact of energy use. As discussed
below, these reductions are small relative to the technical potential for improvements.
Near-Term Technical Options: Industrialized Countries
Improvements in Space Conditioning
Improved efficiency in space conditioning (heating and cooling) can be obtained in several ways.
First, the design of new buildings can be altered to improve their insulating qualities, thus reducing
losses in heating or cooling. Second, improved technologies can be applied to make existing buildings
more weathertight, requiring less energy for heating and cooling. Finally, advanced technologies for
heating and cooling equipment can be dramatically more efficient than devices currently in wide use.
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A number of very thorough and high-quality reviews of the potential for energy efficiency
improvements in buildings have been produced in recent years (see, for example, Hirst et al., 1986;
Schipper et al., 1985). The discussion below draws on the extensive published literature to illustrate
the technical potential for improvement.
New Residences. The potential for improving energy efficiency in new homes is very significant.
Simply by modifying the building shell to improve its insulating capabilities, space heating energy
requirements can be reduced dramatically. Current new homes in the U.S. require, on average,
almost 40% less energy to achieve the same level of heating as the average existing house in the U.S.
(See Box 7-3, which illustrates the range of energy requirements for space heating on a per unit of
floor space basis). What is even more interesting is that the most efficient new houses built currently
are 50% more efficient than the average new home. (It should be pointed out, however, that
relatively few of these extremely-efficient homes are being built currently.) Very advanced prototypes
and design calculations indicate that it is technically possible to build homes whose heating energy
requirements would range from 15 to 20 kJ per square meter per degree day, or 10-12% of the
average requirements for today's homes.3
In addition to the potential for improving the thermal properties of building shells, equally
important advances have been made in developing high-efficiency equipment for both space heating
and cooling. Already being marketed in the U.S. and in Europe are high-efficiency gas and oil
furnaces that are about 95% efficient, compared with the average (about 75% efficient) for new
furnaces in the U.S. (Geller 1988).
Substantial energy savings are possible in electrically-heated (and cooled) homes with recent
efficient heat pump designs. The most efficient designs on today's market are about one-third more
kJ = kilojoule, 1 kilojoule = 103 joules.
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BOX 7-3 IMPROVING ENERGY EFFICIENCY IN SINGLE FAMILY HOMES
Space Heat Requirements in Single-Family Dwellings
(Kilojoules per square meter per degree day)
United States^
Average, housing stock 160
New (1980) construction in U.S. 100
Mean measured value for 97 houses in Minnesota's
Energy Efficient Housing Demonstration Program 51
Mean measured value for 9 houses built in Eugene, Oregon 48
Calculated value for a Northern Energy Home, New York area 15
Sweden
Average, housing stock 135
Homes built to conform to the 1975 Swedish Building Code 65
Mean measured value for 39 houses built in Skane, Sweden 36
House of Mats Wolgast> in Sweden 18
Calculated value for alternative versions of the prefabricated
house sold by Faluhus 83
Version #1 83
Version #2 17
Source: Goldemberg, 1988.
The striking reduction, up to 90%, that is possible between the average home and new "low
energy" homes, as illustrated by the figures above, is achieved through the use of state-of-the-
art construction and design techniques and technologies; a few of the areas where significant
changes have occurred include;
• Building Envelope - Larger wall and ceiling cavities, allowing for significantly
more insulation, have been obtained with new construction materials and
designs, such as "I-beam" framing members, raising R-values to as high as
R-38 in some low-energy homes. Polyethylene vapor /air barriers in external
walls reduce infiltration of outside air, one of the major sources of heat loss
in most homes. Windows are being triple and even quadruple glazed, and,
in some cases, incorporate low-emissivity films and inert gases, such as argon,
between the panes to improve their insulating quality.
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BOX 7-3 IMPROVING ENERGY EFFICIENCY IN SINGLE FAMILY HOMES
(continued)
* Mechanical - These include heating, cooling, and ventilating systems. In
addition to high efficiency furnaces, heat pumps and air conditioners, many
low-energy homes incorporate air-to-air heat exchangers. These are needed
to bring fresh air into the house, since natural infiltration is significantly
reduced, but they improve energy efficiency by extracting approximately half
the heat from the exhaust air and transferring it to incoming air. The
newest development in mechanical ventilation is the heat pump exhaust
system, which uses warm exhaust air to provide water heating.
* /^ive/Fassive Solar Design. Thermal Storage - Many different designs have
been developed to make better use of solar gain to provide heat. These
include use of south-facing windows, greenhouses, atriums, etc., and are often
combined with thermal storage systems that store heat collected during peak
daylight hours for redistribution when it is needed at other times. Storage
systems can also work in the reverse way, collecting cool air during the night
and circulating it during warmer hours.
efficient than average. Advanced designs (such as ground-coupled heat pumps) not yet commercially
available may provide even more efficient options over the next decade.
With super-insulated shells it may not be necessary to install a central heating system at all.
Some of the advanced designs require so little heat input that small electric resistance heaters may
be cost-effective in moderate climate areas. The greatly-reduced capital cost for this option may
offset the increased cost for the super-insulating features. In very cold regions, the added cost of
very efficient gas or oil furnaces would be justified. In regions where cooling is also required, the
advanced heat pumps would probably be the most economic choice.
If all options were used in combination, it appears technically quite feasible for advanced building
shells and efficient heating and cooling equipment to reduce space conditioning energy requirements
in new homes to less than 10 percent of current average use.
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Existing Residences. It is expected that the net growth in housing stock will be slow in the
future in industrialized countries because of the extensive existing stock and low population growth.
In addition, existing housing stocks have very long lifetimes. Therefore, existing stocks will dominate
the residential sector for many decades. Thus, it is extremely important to focus on opportunities
for reducing energy requirements in existing buildings. Many of the advances that have made possible
the enormous potential energy savings for new homes are to some extent applicable to existing
homes.
In general, retrofit improvements are less effective and more costly than those incorporated in
the initial design of a new home. Nonetheless, cost-effective technical options exist for substantially
reducing energy requirements of existing homes. Storm windows, added insulation, clock thermostats,
and retrofit heating system improvements have been considered conventional conservation measures
for several years. Programs to encourage consumers to implement these conservation options have
been carried out in a number of areas and have shown considerable success. One study of 40,000
retrofits monitored by U.S. utility companies in the early 1980s showed that energy consumption fell
by 25% on average, and homeowners received a 23% return on their investments (Goldman, 1984).
Despite the favorable economics of some retrofit conservation measures, only a small portion of
the potential energy savings from conservation retrofits has been realized to date. This is especially
true in rental housing where the landlords do not perceive a financial interest in investing in retrofits.
Also, low-income families, even if they own their homes, often lack the information or upfront capital
to carry out cost-effective conservation measures. If conventional retrofit programs could be extended
to larger percentages of existing housing stock, energy savings could be substantial.
Beyond conventional conservation programs, there are now more sophisticated options for
improving the retrofit savings. Detailed measurements since the late 1970s have shown that existing
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homes have obscure defects in their thermal envelopes, leading to very large heat losses.
Conventional walk-through energy audits are unlikely to identify these defects, nor would subsequent
conservation retrofits correct them. New instrumented analysis procedures developed over the last
few years can locate these defects quickly, but these instrumented audits are expensive compared with
the standard energy audits now provided by many utilities.
On the other hand, many of the "hidden" defects, once detected, can be easily corrected at small
cost. This has led to the development of the "house-doctor" concept as an alternative to traditional
audits. For this type of audit a team of technicians conducts an instrumented audit and repairs many
of the defects on the spot. One test of this concept showed average immediate energy savings of
19% from one-day "house-doctor" visits. Subsequent conservation retrofitting done at the
recommendation of the house doctors increased the average energy reduction to 30%. The average
cost of all retrofit measures was $1300 and the average real internal rate of return in fuel savings was
20% (See Goldemberg et al, 1988).
Another approach to improving residential and commercial energy efficiency has been proposed
recently by researchers at Lawrence Berkeley Laboratory. Their approach is a reworking of the age-
old concept of using shade trees to assist in cooling residential buildings. In their analysis the authors
point out that in addition to the direct benefit in terms of reducing air conditioning loads at each
house, the indirect effect of planting trees throughout an urban or suburban area can reduce the "heat
island" effect, lowering ambient temperatures and further reducing air conditioning loads. In addition,
of course, the trees directly remove CO2 from the atmosphere, although the CO2 reductions due to
reduced cooling loads from well-placed trees are probably much greater than the CO2 absorption by
the trees (see Rosenfeld, 1988; Akbari et al., 1988). Los Angeles has announced a program to do
this.
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The advanced furnaces and heat pumps available for new homes could also provide significant
benefits in the retrofit market. Economics of efficient equipment are generally more favorable as
retrofits. Even after a retrofit shell improvement program, including the house-doctor approach,
energy use in existing homes will remain well above the best levels achievable for new super-insulated
homes. Thus, the added expense of sophisticated advanced heating and cooling equipment will be
paid back much faster in energy savings.
In one example, existing homes that had already been visited by house doctors and had received
associated shell improvements were evaluated for improved furnaces. Shell improvements were shown
to have reduced gas use for space heating to about 70% of the previous requirement. Researchers
estimated that retrofit of advanced condensing gas furnaces would further reduce space heating energy
use to 44% of the original requirement. The estimated incremental investment (to replace a worn-
out furnace with the 95% advanced furnace rather than a conventional 69% model) was estimated
to average $1000 and result in fuel savings that correspond to a real rate of return of 15%
(Goldemberg et al., 1988).
Commercial Buildings. Like residences, commercial and institutional buildings currently use
significant amounts of energy, particularly for space conditioning and lighting. Opportunities for
efficiency improvements also appear significant. Commercial buildings in recent years in the U.S.
have used about 3.6 EJ of fossil fuels (mostly gas in the U.S. ~ other OECD countries continue to
heat a significant percentage of buildings with oil) and about 2.6 EJ of electricity (equivalent to about
8 EJ of primary energy) (Rosenfeld and Hafemeister, 1985).
Some progress is already being made in improving energy efficiency in commercial buildings.
While surveyed commercial space in the U.S. increased by almost 10% between 1979 and 1983, total
energy consumption actually declined by about 4%. Electricity consumption, however, increased in
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absolute terms as well as in share of total commercial energy use. Thus, the primary energy
equivalent of commercial end-use energy consumption has increased (U.S. DOE, 1987a).
While progress has been made, it is evident that commercial energy use in the U.S. could still
be reduced significantly with cost-effective efficiency measures. Estimated commercial energy use in
the U.S. was about 3.0 gigajoules (GJ) 4 per square meter per year in 1980 (expressed as equivalent
primary energy production). This figure is down from 5.7 GJ in 1973, but could still be greatly
improved (Flavin and Durning, 1988.) One recent analysis estimated that energy use in standard new
commercial buildings could be reduced by more than 50% below the current averages (Rosenfeld and
Hafemeister, 1985).
As in the residential sector, traditional conservation measures, such as added insulation and
window glazing, reductions in infiltration rates of outside air, passive solar energy concepts, and heat
exchange between exhaust and incoming ventilation air are effective although less important. The
traditional approach of tree shading, with its indirect heat island and CO2 removal benefits, as
discussed above, can also be applied to commercial buildings.
In addition, some more sophisticated techniques are cost effective for larger commercial buildings.
New commercial building are being designed with "smart" energy management systems. These
computerized systems monitor outdoor and indoor temperatures, levels of sunlight and location of
people in the building. The system can then allocate heating, cooling and ventilation efficiently
(Brody, 1987).
4 GJ = gigajoule, 1 gigajoule = 10* joules.
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Another advanced technique being applied for commercial energy efficiency is thermal storage.
In this case, some storage medium, such as a body of water, is used to store heat or cooling when
it is readily-available and then release the warm or cool air later when it is needed. This concept
has been used in new commercial buildings in Sweden, storing heat energy from people and
equipment, and in Nevada to chill water with cool night air and use the chilled water to offset the
need for air conditioning during the day (Rosenfeld and Hafemeister, 1985).
Window technology is also improving rapidly. A special "heat mirror" film, which doubles the
insulation value of windows, is now commercially available. The film is designed to let light in
without allowing heat to escape. Another available technology is to create a vacuum in the space
between two panes, creating a "thermos" effect. These and other advanced technologies may allow
commercially-available windows in the 1990s to have the same insulating value as ordinary walls
(Brody, 1987; Selkowitz, 1985).
As was the case with residences, many of the advances in energy efficiency for new commercial
buildings are transferable to retrofit applications to a lesser degree. A study conducted some years
ago attempted to estimate the potential energy savings available from retrofits of existing commercial
buildings. The conclusion drawn from a survey of several experienced engineers and architects was
that a target of a 50% reduction in energy use in U.S. commercial buildings by the year 2000 was
reasonable (SERI, 1981).
More recently, Amory Lovins and others at the Rocky Mountain Institute conducted a detailed
analysis of the retrofit potential of commercial buildings in the Austin, Texas, area. This study
identified potential savings in electrical energy that totaled 73% of the buildings' current energy use
(for lighting and other equipment as well as space conditioning). The cost of these measures was
estimated to be lower than the operating costs of existing powerplants (Rocky Mountain Institute,
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1986), although, there is some question as to what proportion of these savings could be achieved in
practice.
Indoor Air Quality
One of the concerns about increasing the energy efficiency of buildings is the increase in indoor
air pollution that can result, primarily from efforts to reduce air infiltration. Most homes in the U.S.
have air exchange rates, on average, of more than one change per hour, meaning all the air in the
house is replaced by outside air once each hour. As new homes are constructed more tightly and
some older homes are retrofitted with vapor barriers and better seals around doors and windows, the
air exchange rate drops. Without additional ventilation measures, concentrations of several harmful
pollutants, including radon gas, formaldehyde, combustion products from tobacco smoke and wood
stoves, and asbestos particles, can reach harmful levels.
Control strategies for these forms of indoor air pollution include air cleaning, local ventilation,
mechanical ventilation with heat recovery, and exhaust ventilation with heat pump heat recovery.
Heat recovery or air-to-air exchange systems have become more popular as homes have become
better insulated and more tightly sealed. These can ensure the generally-accepted minimum standard
of about 0.5 air changes per hour, while reducing heat loss by using the heated exhaust air to warm
the incoming fresh air. Unfortunately, the cost of these systems are high and studies in Canada
suggest that their efficiencies may be lower than manufacturers have claimed (Hirst, 1986). This may
be due in part to improper maintenance by homeowners. The systems, which usually draw air
continuously and can have problems with condensation forming in the heat exchanger, require more
routine maintenance than the average homeowner is accustomed to devoting to a major appliance.
The use of exhaust ventilation systems connected to an air or water heat pump is a new technological
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approach that may hold some promise for improving cost-effectiveness and improving some of the
maintenance issues. They are being developed primarily in Sweden.
Lighting
Lighting consumes about 20% of U.S. electricity use, most of it in residential and commercial
buildings. This end use offers some of the most cost-effective opportunities for saving energy. One
study has estimated that 40 large U.S. powerplants could be replaced by simply implementing
currently-available, cost-effective lighting efficiency improvements (Rosenfeld and Hafemeister, 1985).
Cutting electricity use for lighting in industrialized countries by three quarters has been proposed as
a reasonable goal (Flavin and Durning, 1988). Box 7-4 describes several key advanced lighting
technologies.
A number of currently commercial measures, implemented in combination, can achieve dramatic
energy reductions—over 75% in commercial/institutional settings. These measures include improved
controls, reflectors, spacing of lighting, and more efficient bulbs and ballasts. The University of
Rhode Island reported reductions of 78% in lighting energy after implementing such a program. The
cost of saved energy was calculated to be less than 1 cent per kilowatt-hour (New England Energy
Policy Council, 1987). An added benefit of lighting improvements in warm climates is that more
efficient lighting reduces waste heat and, therefore, air conditioning loads. The California Energy
Commission has estimated that in Fresno, every 100-watt savings in lighting reduces air conditioning
energy requirements by 38 watts (Rocky Mountain Institute, 1986).
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BOX 7-4 INCREASING LIGHTING EFFICIENCY
Research and development into energy efficient lighting and design features has produced a
constant stream of new products and advances. Below are brief descriptions of several of the
areas where major advances have taken place.
• Compact Fluorescent Lamps: Compact fluorescent lamps are designed to be
screwed into a standard light socket and thus have begun to compete directly
with incandescent bulbs. Because they are 60-70% more energy-efficient than
incandescent (Hirst, 1986) and are beginning to gain wider acceptance, they
represent potentially significant energy savings. If compact fluorescent
replaced all incandescent lighting, it is claimed that they could displace 7.5%
of total electrical consumption in the U.S. (Lovins and Sardinsky, 1988).
• High Intensity Discharge (HID) Lamps: These are designed primarily for
warehouses, factories, street lighting, etc. Three types of HID lamps are
currently in use: high pressure sodium, low pressure sodium and metal halide.
High pressure sodium and metal halide give approximately 45-60% savings
over mercury vapor or fluorescent lighting. Low pressure sodium is
somewhat more efficient, but its intense yellow light can be undesirable for
many applications. (Hirst et al., 1986).
• Electronic Ballasts: In conventional fluorescent lights the voltage required
for operation is provided by an electromechanical ballast which itself
consumes a portion of the energy used. New electronic ballasts reduce this
additional power consumption by 20-35% (Hirst et al., 1986), and, because
of their smaller size, are a key factor in the emergence of compact
fluorescent.
• Daylighting: Daylighting is a design approach which enhances the use of
natural light either from windows, sidelighting, clerestories, monitors and
skylights, or from the use of light pipes or optical fibers to transmit light to
the location needed. The use of light colored paints and light shelves helps
to distribute the light into the building interior.
* Additional Advances: Several other advances in lighting technology and
design deserve mention. One advance is specular ("mirrorlike") reflectors
which increase total reflectivity, direct the light in a more optically favorable
direction, and maintain their high reflectivity significantly longer. Lighting
controls, which include time clocks, scheduling controls, personnel or
occupancy sensors, and daylighting sensors, reduce power consumption by
turning off lights when they are not needed. Task lighting improves
efficiency by directing light onto the specific task area where it is needed
most, rather than lighting entire areas.
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Appliances
After space conditioning and lighting, remaining energy uses in residential and commercial
buildings are largely associated with large appliances. Opportunities for significant energy efficiency
improvements in this category have been well-documented. Table 7-4 illustrates some of these
opportunities. U.S.-made refrigerators, for example, currently average 1450 kilowatt-hours per year.
The best currently commercial model in the U.S. uses about half that much energy. A recent study
calculated that efficient new refrigerator freezers that would use about 200 kilowatt-hours per year,
or less than 15% of the current average use, could be cost-effectively produced (Goldstein and Miller,
1986). Water heaters also account for a large percentage of appliance energy use. The potential for
energy savings is significant through the use of the most efficient technologies and also by switching
from electricity to gas. Other energy-intensive appliances also provide opportunities for energy
savings. As shown in Table 7-4, the potential exists for advanced technologies that could be produced
in the 1990s that are at least 50% more energy efficient than the 1986 average for all major energy-
using residential appliances (Geller, 1988).
Near-Term Technical Options: Developing Countries
In developing countries markedly different strategies may be necessary to address residential and
commercial energy services. In many developing countries there are distinct modern and traditional
sectors. In the modern sector, energy-use patterns are very similar to those in industrial economies
(adjusted for climate differences). Commercially-marketed fossil fuels and electricity provide the
energy input for a similar mix of energy services: space conditioning, water heating, lighting, and
appliances for cooking, refrigeration, entertainment, etc. This modem sector, however, is often
smaller than the traditional sector, which exhibits completely different energy-use patterns.
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Chapter VII
TABLE 7-4
Summary of Energy Consumption and Conservation Potential
with Major Residential Equipment
Product
Refrigerator
Freezer
Central AC
Room AC
El. water heating
El. range
El. clothes dryer
Gas space heating
Gas water heating
Gas range
1986
Stock
UEC
1450
1050
3500
900
4000
800
1000
730
270
70
1986
New
UEC15
(kWh/yr or
1100
750
2900
750
3500
750
900
620
250
50
1986
Best
UEC"
therms/yr)
750
430
1800
500
1600
700
800
500
200
40
Advanced
technology
for 1990?
300-500
200-300
1200-1500
300-400
1000-1500
400-500
250-500
300-500
100-150
25-30
* Unit energy consumption per typical installation in the 1986 housing stock.
b Unit energy consumption for the typical model produced in 1986.
c Unit energy consumption for the best model mass-produced in 1986.
d Unit energy consumption possible in new models by the mid-1990s if further cost-effective
advances in energy efficiency are made.
Source: Geller, 1988.
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The energy sources in the traditional sector are largely "noncommercial" biomass, used primarily
for cooking and space heating in some colder or high-altitude regions of developing countries. Also,
fossil fuels (e.g., kerosene) are frequently used for lighting. (In China, unlike most other developing
countries, coal is also used for residential cooking and space heating hi the traditional sector.) The
task of development projects in these poorer sectors is to vastly increase the level of energy services
available for residential and commercial applications. Altruism and development objectives aside, this
approach can contribute significantly to solving the climate warming problem because many developing
countries have used fuelwood to such an extent that they have become net consumers of forests, and
global deforestation is one of the significant causes of increasing greenhouse gas concentrations. The
important issue from a climate perspective is to increase energy services without increasing
greenhouse gas emissions.
As the developing countries continue to increase their per capita energy use, the implications in
terms of energy use and greenhouse gas emissions are enormous. It is technically possible, however,
for developing countries to substantially increase per capita energy use without substantially increasing
fossil-fuel use. Emissions-reducing strategies similar to those proposed for industrialized countries
can be promoted in the modern sectors of the developing countries. However, strategies suitable for
the traditional, poorer sectors must be integrated into ongoing development programs if they are to
be accepted by the local population. Technical options for reducing greenhouse gas emissions must
not only be efficient, they must also be designed to increase energy services to these poorer sectors.
Increasing Efficiency of Fuelwood Use
The primary use of biomass energy in developing countries is in residential cooking, traditionally
done in inefficient and smoky conditions. The inefficiency of combustion exacerbates deforestation,
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and leads to increased time and effort devoted to gathering fuelwood (and fodder), and the smoky
combustion results in exposure to significant emissions of health-damaging air pollutants.
Recognition of these problems has focused a great deal of attention on improving the cookstove
as a low-cost solution. Existing cookstoves have efficiencies only on the order of 10%. Relatively
simple improvements in stove design can in theory reduce wood requirements by 35-70%
(Goldemberg, et al., 1987). However, getting people in developing countries to accept and use better-
designed stoves has proved difficult for a number of reasons (Miller, et al., 1986). In^pite of spirited
efforts by a number of groups and generous grants by international aid agencies, traditional cooking
stoves and practices have proved surprisingly difficult to dislodge. Traditional stoves come in a
bewildering variety of designs and materials and have evolved to suit local fuels and diets. They
perform a multitude of functions that were not considered by the early "improved" stove designers
and promoters. Failure of the newer designs on some of these dimensions often hampered their
acceptance. Current programs represent the third generation of improved designs (Smith, 1987).
There are currently half a dozen examples of successful dissemination efforts. Notable
dissemination programs are in place in West Africa, in Kenya and in Karnataka, India (Baldwin et.
al., 1985). Successful designs are backed by sound principles of heat transfer (Baldwin, 1987); are
targeted to a particular region, generally where cooking fuel is traded; require no substantial
behavioral modification from users; and are provided with follow-up support.
Fuel savings with improved stoves, predicted on the basis of laboratory water-boiling efficiency
tests, have invariably proved to be over-estimates for field conditions. If fuel savings observed in the
laboratory were directly transferable to the field, an improved stove with 40% efficiency would result
in a 75% fuel saving when it replaced a traditional stove with 10% efficiency. Yet only a few
programs have reported fuel savings, at best on the order of 20%, though greater savings could be
possible with better-run programs.
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Even with existing limited efficiencies, where fuelwood is traded the payback period is on the
order of a few months and therefore economically attractive (Manibog, 1985). As Williams (1985)
points out, the adoption of such stoves is a far more cost-effective method of dealing with the
fuelwood crisis than any "supply-oriented" solution to the problem that emphasizes growing trees for
fuel.
Widespread introduction of improved stoves, while reducing total emissions of oxides of carbon
per cooking task, will change the ratio of CO2:CO emitted. This ratio on a mass basis for traditional
stoves is perhaps close to 10:1, whereas for more efficient stoves, this could be reduced to 5:1
reflecting the more complete combustion in traditional stoves. Although CO is not a radiatively
interactive gas, it does interact with hydroxyl ions; as a result, its presence affects the concentration
of methane and ozone in the troposphere (See CHAPTER TWO).
Substituting More Efficient Fuels
In the traditional sectors of many developing countries, substitution of fossil-based end-use
technology for traditional biomass use may be desirable as part of a larger strategy even though it
may directly increase greenhouse gas emissions to a small degree. Gaseous fuels (natural gas, LPG,
etc.) are very attractive relative to fuelwood for severed reasons, including their vastly superior
convenience and controllability. In addition, a well-designed gas-fueled stove can be five to eight
times more efficient than traditional firewood stoves (Goldemberg et al., 1988). Thus, the shift to
gaseous cooking fuel can decrease the demand for fuelwood, which can slow the rate of deforestation,
or free up vast amounts of fuelwood for use as a feedstock for advanced biomass energy systems, or
both. In a few developing countries, such as China, coal is used for cooking and space heating; the
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advantages discussed above for gaseous fuels also apply as a replacement for coal (with associated
reductions in greenhouse gas emissions).
In the traditional sectors of many developing countries, lighting frequently is achieved with very
inefficient combustion technologies. In India, for example, it is estimated that 80% of the households
illuminate with kerosene lamps. The efficiency of illumination of these lamps is very low. Providing
the same level of illumination with incandescent electric bulbs would be 200 times more efficient at
the end use (Goldemberg et al., 1988). (Of course, the availability of electricity might actually allow
a much greater level of illumination in homes). Thus, even if the electricity production is only 30%
efficient, and is coal-fired (worst-case assumptions), the equivalent electric lighting would still produce
less net CO2. If the most efficient current compact fluorescent lighting were used, the benefit would
be even greater. Of course, the major constraint to substituting electricity for fossil fuels is the
limited availability of electricity in developing countries. Small-scale local generation based on
renewable technologies could make major contributions in this situation. These and other options
for increasing electricity in developing countries are discussed in PART TWO: ENERGY SUPPLY.
Retrofit Efficiency Measures for the Modern Sector
For those residential and commercial segments of developing countries that have similar
characteristics to industrialized countries, many of the same retrofit efficiency measures are
appropriate. In fact, it is likely that many retrofit measures would be more effective in developing
countries. As pointed out in a recent U.S. AID study (1988b), while "industrialized countries have
made major strides in using electricity more efficiently over the last decade, few achievements have
been made in developing countries in using electricity more efficiently. The opportunities for
improvements are tremendous, and the cost is only a fraction of the generation expansion option."
In addition, air conditioning requirements are generally heavier in tropical developing countries.
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Thus, improvements in building shells and air conditioning equipment could be very effective in
reducing electricity use. Similarly, the air conditioning benefit (due to less waste heat) of improved
lighting would also be greater in developing countries.
A recent study of Pakistan identified cost-effective efficiency improvements that could reduce
commercial sector electricity use by over 30%. Based on commercially available improvements in
lighting, air conditioning and fans, and thermal insulation, the study projected national savings of 1800
MW of generating capacity and 18,200 GWh of electricity generation (U.S. AID, 1988b). An analysis
in Brazil indicated the potential to reduce electricity use for lighting by 60% in many commercial
buildings (Geller, 1984).
New Homes and Commercial Buildings
It is expected that rapid expansion of the residential and commercial building stock will occur
in conjunction with economic development in the developing countries over the coming decades. Use
of the efficiency options discussed for industrialized countries, adapted to local conditions and
objectives, could minimize the increases in energy use associated with this growth. Obviously, since
the rate of construction of new building space (and distribution of appliances, etc.) will be much
higher in developing countries, the importance and potential impact of efficiency measures will be
proportionately greater as well.
Several recent studies have identified significant potential for reductions in energy use in new
commercial buildings in developing countries (see, for example, Turiel et at., 1984, Deringer et al.,
1987). Careful use of daylighting alone has the potential to reduce energy use by roughly 20%
relative to the current building stock in Singapore (Turiel et al., 1984). Other important
improvements include efficient lighting systems, external shading, and size and placement of windows.
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Near-Term Technical Options: Soviet Bloc Countries
Energy use in buildings in the Soviet Union is dominated by space heating. 25% of the
population live in a climate which experiences from 210 to over 300 heating days per year. An
additional 40% live in a climate characterized by a 180-280-day heating season (Tarnizhevsky, 1987).
Since the early 1970s, the Soviets have made dramatic progress in improving energy efficiency in
specific applications, "in large energy uses easily identified and controlled by the planning apparatus"
(Hewitt, 1984). The dominant approach advocated by Soviet researchers for space conditioning is
consistent with this experience. Centralized, or "district" heating systems, have been the preferred
approach to space heating for some time. By 1980, about 70% of residential and commercial heat
demand in cities and towns was provided by central systems. Sources of heat for these systems are
primarily cogeneration from both fossil-fueled and nuclear powerplants and some waste heat recovery
from large industrial process heat uses (e.g., ferrous metal, chemicals, and petrochemicals) (Tarvarshy
et al., 1985). Plans for improving energy efficiency include 1) further replacement of local heat
sources with district heat from cogeneration, 2) weatherization of buildings, and 3) reductions in heat
losses in distribution networks (Tarnizhevsky, 1987).
Electricity consumption in buildings is also growing in the Soviet Union, principally for lighting
and household appliances (including some electric ranges). The most significant sources of growth
from 1975-1985 were attributed to increasing proliferation of household applications associated with
improving living standards. One Soviet researcher estimated that significant electricity savings are
achievable through manufacture of more energy-efficient appliances and lighting, optimized use of
lighting, elimination of known losses or "wastes" of electricity, etc. (Tarnizhevsky, 1987).
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Summary of Near-Term Technical Potential in the Residential/Commercial Sector
In summary, it appears technically feasible with today's technology to reduce space conditioning
energy requirements in new homes to 50% of the current average for new homes. Retrofits of
existing homes could reduce space conditioning energy use by an average of 25% with the "house-
doctor" approach. Reductions of energy use in existing commercial buildings by at least 50% may
be technically feasible, and new commercial buildings could easily be 75% more efficient than the
average U.S. commercial building. In 1985 the U.S. consumed about 15.3 EJ of energy (primary
energy equivalent) in residential and commercial space conditioning (U.S. DOE, 1987a). Retrofits
to existing stock could save at least 4 EJ.
Projected estimates for the climate scenarios show residential and commercial energy use in the
U.S. and in the OECD as a whole remaining roughly constant through 2025. With rapid widespread
penetration of the most efficient new buildings, instead of gradual improvement, the growth in energy
consumption from new buildings could be greatly reduced.
Based on potential energy savings of more than 60% for almost all types of appliances, a 50%
overall reduction in appliance energy use by the year 2010 is technically feasible. To achieve this
reduction would require aggressive policy actions that would ensure that all appliances produced in
the next decade be as energy efficient as the best current technology can produce and that would
encourage rapid turnover of existing appliances. Current energy use from such appliances is in the
range of 7.4-8.4 EJ (expressed as primary energy equivalent).
With aggressive programs to improve energy efficiency in residential and commercial buildings,
it appears technically feasible to reduce projected U.S. energy use in this sector by at least 50% in
the year 2010. This is roughly equivalent to the reduction assumed hi the policy scenarios by 2025.
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The technical potential in the OECD as a whole is probably close to that of the U.S. Although more
detailed analysis is required, preliminary indications are that the technical potential to reduce
projected residential and commercial energy in the much more rapidly growing developing countries
and in the Soviet bloc countries is even greater than that estimated for industrialized countries.
Long-Term Potential in the Residential/Commercial Sector
In the long term, the potential for reducing energy use in buildings is considerable. The majority
of current per capita energy consumption in buildings could be eliminated over the long run by simply
incorporating the best currently-available building and equipment technologies into housing and
commercial building stock as it is expanded and replaced over the next 50-100 years. Further
efficiency improvements could come from emerging technologies and broader application of existing
technologies. In space conditioning, examples include "smart windows" which sense light and adjust
opacity to utilize solar heat and light most effectively, and new building materials which may provide
better insulating qualities at a reduced cost. Existing technologies for large buildings, such as use
of thermal storage and computer controls, could be applied to small buildings and residences as well.
As improved building and equipment technologies are incorporated over time, space conditioning
will probably become a much smaller component of total building energy use. Appliances and
information technologies (computers, telecommunications) may become more important determinants
of residential and commercial energy consumption. Advanced technologies may provide comparable
or improved services with less energy. For example, some experimental concepts have been
developed for storing food that might greatly reduce the need for refrigeration. As information
technology continues to evolve, it may well provide improved energy efficiency as a byproduct, as has
been the case in the evolution from vacuum tubes to semiconductors to integrated circuits.
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Alternative fuels could also play a more important role in buildings over the long term.
Advances in solar photovoltaic technology may make it economic to generate most or all of the
needed electricity locally. Hydrogen may become an energy option for building energy needs utilizing
or adapting existing infrastructure for distribution of natural gas (See PART TWO: ENERGY
SUPPLY).
INDUSTRIAL SECTOR
Industrial end uses account for the largest single component of energy use in the industrialized
countries-almost 43% of the energy consumed in the OECD in 1985 (in primary energy equivalent
terms [U.S. DOE, 1987b]). Actual secondary energy consumption was about 36%. In developing
countries, if agriculture is included as part of industry (as it is in this chapter), then the industrial
sector generally consumes an even higher percentage of total commercially-traded energy. In
developing countries as a whole, industrial energy makes up almost 60% of total modern energy use.
In the Soviet bloc, the percentage is slightly under 50% (see CHAPTER IV), but in the scenarios this
proportion declines over time, accounting for only 36-40% by 2025.
Industrial use is also an area in which impressive efficiency gains have been observed in recent
years. In the United States, for example, "end-use energy consumption per constant dollar of
industrial output declined by 28% between 1974 and 1984 - reflecting substantial improvements in
energy efficiency as well as the relative decline in output from energy-intensive industries in this
country" (U.S. DOE, 1987b).
Several researchers have documented the components of changing industrial energy use in
developed countries (see Ross, 1984 and 1986; Goldemberg et al., 1987; and Williams et al., 1987).
One significant component of declining industrial energy use is a structural shift to products that are
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inherently less energy-intensive to produce. It is now a well-documented phenomenon that as
industrialized countries proceed beyond a certain level of economic development and affluence, their
per capita consumption of some of the most energy-intensive industrial products (e.g., cement, steel,
and durable goods) declines. Thus, having approached "saturation" in many energy-intensive products,
industrialized countries will likely continue to consume less energy per dollar of GDP in the future
as incomes continue to rise.
The other major component of declines in energy intensity over the past decade and a half has
been actual improvements in the efficiency of production processes. Energy price shocks of the 1970s
often affected industrial energy users more than other sectors. As stated by Goldemberg et al.
(1988): "Because the cost of providing them energy involves much less unit transport and marketing
cost, industrial users are more sensitive than other energy consumers to cost increases at or near the
point of energy production." In addition, industrial users, particularly where energy costs are a
significant component of product cost, tend to be more aware of and responsive to the return on
investments in energy efficiency than are customers in other sectors. Ross (1986) has noted many
cases in which industrial managers have pursued aggressive efficiency improvement policies in
response to the price signals of the 1970s.
Efficiency improvements to date have largely been in a few industries that are the most energy
intensive: petroleum refining, chemicals, cement, metals, pulp and paper, glass, clay, etc. (See Table
7-5). There is reason to believe that efficiency improvements will continue rapidly in the future in
the energy-intensive sectors of industry in the developed countries. It is also expected that the
structural shifts to less energy-intensive products will also continue in these countries (Williams et al.,
1987). Technical options may exist for accelerating these trends and also taking advantage of
additional efficiency improvements possible in other industries. Evidence exists that economically-
attractive energy conservation investment opportunities exist in industries outside of those few that
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TABLE 7-5
Reduction of Energy Intensity*
In the Basic Materials Industries (1972-1983)
Percent
Chemicals"
Steel
Aluminum
Paperc
Petroleum refmingd
Energy Weighted Reduction
31
18
17
26
10
21
1 Generally energy per pound of product, unadjusted for environmental and other changes.
Purchased electricity accounted for at 10,000 Btu/kwh (2.5 Mcal/kwh).
b Not including fuels used as feedstock.
c Not including wood-based fuels.
d Changes in inputs and outputs and environmental regulations have had a particularly strong impact
on petroleum-refining energy. Adjusted for such changes, energy intensity was reduced 26%.
Source: Ross, 1985.
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are energy-intensive. For a number of reasons these investment opportunities are often being
overlooked (Ross, 1984, 1986).
In contrast to industrialized countries, the developing countries generally are hi the midst of, or
beginning, a period of rapid expansion of energy- and materials-intensive industries to raise per capita
income levels. In addition, industries in these countries currently use energy far less efficiently than
do similar industries in industrialized countries. In many cases, this is related to the government's
subsidizing of energy prices, lack of access to the most modern technologies, and lack pf management
skills for identifying and implementing efficient options (Flavin and Durning, 1988). If developing
countries industrialize without dramatically improving energy efficiency, the result would be enormous
increases in industrial energy use.
The No Response scenarios indicate the potential for extensive growth in industrial energy use
by 2025. Figure 7-9 illustrates these results and also shows that the overwhelming majority of growth
in this category (81-92%) occurs in developing countries. As these countries develop industrial
infrastructure and as their standards of living rise in the future, the energy requirements for the
production of basic industrial materials could be enormous.
There is a widening recognition, however, that this type of growth may not be sustainable, and
may indeed become self-defeating. Continuing along current energy-intensive industrial development
paths may result in increases in energy imports, which absorb foreign exchange credits that are
needed for further development. Local environmental concerns and capital scarcity may also constrain
the conventional industrial development option. Developing countries and development assistance
organizations are now focusing much more attention on the energy consequences of industrial
development decisions.
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Chapter VII
FIGURE 7-9
INDUSTRIAL ENERGY USE BY REGION
(exajoules)
SCW
SCWP
RCW
2025 19BS
RCWP
Reduction
from
No R*fpon»i
So«n*rlo
Developing
Countries
2026 1986
YEAR
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Technical options may exist for "leapfrogging" from current obsolete energy-inefficient technologies
directly to very advanced efficient technologies in some developing countries (although new policy
actions will be required; see CHAPTER IX of this report). In addition, opportunities exist for
designing industrial development based on locally-available alternative fuels, which has been initiated
in some developing countries.
These options are poorly defined as yet and clearly require more detailed attention. As a result,
the Stabilizing Policy scenarios incorporated in this report are somewhat conservative, in terms of the
assumptions about efficiency improvements. As shown in Figure 7-9, these scenarios result
inefficiency improvements of 6-10% overall in the industrial sector by 2025, most of which occurs in
the developing countries.
Near-Term Technical Options: Industrialized Countries
Accelerated Efficiency Improvements in Energy-Intensive Industries
As discussed above, significant improvements in energy efficiency were made in the basic
materials industries during the late 1970s and early 1980s (see Table 7-5 for improvements in key
industries). Despite these improvements, in most industries the opportunities for further reductions
are still quite large. This is true for two basic reasons. Industrial process technology has improved
significantly in recent years, and the pace of energy-related technology investment has been relatively
slow, particularly in industries that are not growing overall (Ross, 1988).
The steel industry provides one interesting example. For the integrated, or ore-based industry
(excluding scrap-based steel making), the average energy intensity in the U.S. in 1983 was about 31.2
GJ per ton (Ross, 1987). The reference plant documented by the International Iron and Steel
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Institute (1982) would consume about 19.2 GJ per ton producing roughly the same mix of products.
Thus, replacing existing U.S. technology with the best currently commercial, cost-effective technology
would produce a 39% savings.
More energy-efficient technologies, once proven commercially, will likely be extremely attractive
on the basis of cost-effectiveness, including improvement in overall process cost and environmental
impact as well as energy efficiency. Thus, the marketplace can be expected to encourage all
producers to adopt advanced technologies in the long run. From the perspective of climate warming,
the important concern is whether there are opportunities for accelerating this turnover, either through
research initiatives or through programs to promote more rapid capital replacement in selected
industries.
Other major energy-consuming industries-petroleum refining, chemicals, pulp and paper, etc.-
are also undergoing transformations that will result in continuing declines in energy intensity in the
future. Quantifying the potential energy efficiency improvements in each major industry and in
various OECD countries will require more detailed analysis than has been carried out to date.
Technically-feasible improvements (e.g., assuming that each industry average improves to match the
energy efficiency of the best currently-available or emerging technology) could be much greater. With
the exception of primary aluminum, other energy-intensive industries have even greater technical
opportunities for energy conservation than the steel industry (Ross, 1988).
One important component of the technical potential for reducing energy use in basic industries
is materials recycling. Recycling of inorganic wastes, such as bottles and aluminum cans, saves energy
and reduces waste streams. Substituting recovered materials for virgin materials to produce steel,
aluminum, and glass conserves energy. Depending upon the types of materials recycled, estimates
of energy savings can range from an average of 5 GJ per ton of material recycled (Gordon, 1979)
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to 25 GJ per ton (Stauffer, 1988).5 Recycling 24 million tons of paper, cardboard, glass, and
aluminum (about 16% of our current waste stream) could result in savings of up to 0.6 EJ (Stauffer,
1988).
Unfortunately, economic policies discourage recycling and the use of recycled materials.
Differentials in transportation rates favor virgin loads over secondary loads, and favorable tax
treatment toward production from virgin materials continues to make recycled materials more
expensive to use. If these policies were eliminated or reversed (e.g., creating incentives to boost
demand for recycled products), the technical potential for energy savings is quite large. Increased
recycling would also have the added benefit of reducing waste.
Aggressive Efficiency Improvements of Other Industries
While there is clearly measurable progress in the energy-intensive, and therefore energy-price-
sensitive, industries, less progress has been made in energy efficiency in other industries. Industries
for which energy is not a major component of product cost frequently pass up opportunities for
investing in energy efficiency with high estimated rates of return (Ross, 1984).
The technical potential for energy savings could be important for widespread penetration of just
a few energy-saving measures. The Electric Power Research Institute estimates that 95% of industrial
electricity use is represented by three major applications: electromechanical drives or motors, 70%,
electrolysis, 15%, and process heat, 10% (Kahane and Squitieri, 1987). Recent studies have estimated
that cost-effective replacement of motors and the addition of variable-speed drives could reduce total
PJ = petajoule; 1 petajoule=10is Joules.
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electricity use in motors by as much as 17% in some regions (Geller et al., 1987; Alliance to Save
Energy, 1987).
Comparable efficiency improvement measures have also been identified for the other major
components of industrial electricity use (Kahane and Squitieri, 1987). In addition, many of the
efficiency measures identified earlier for lighting and space conditioning in large commercial buildings
are also applicable to industrial users. A recent study examined electricity-saving projects currently
being undertaken in automobile manufacturing plants in the U.S. and Europe. It shows that roughly
30% savings from the current cost of purchased electricity are being achieved (Price and Ross, 1988).
Cogeneration
Technologies for cogeneration-production of electricity and heat or steam for other useful
purposes from a single combustion source-are described hi PART TWO: ENERGY SUPPLY. The
primary market for cogeneration is in large industrial facilities (although large commercial/institutional
applications are important in the Eastern Bloc and are also beginning to be seen in the U.S.). From
industry's perspective, cogeneration is one method for improving energy efficiency. The industrial
facility benefits, either in the form of electricity used on-site or revenues from sales of electricity to
the local utility, from the fuel it would otherwise have consumed solely for industrial production
purposes.
Industrial cogeneration has grown rapidly in the U.S. since the 1978 passage of the Public
Utilities Regulatory Polices Act (PURPA), which ensures that cogenerators (among others) can sell
electricity to utilities at the utilities' avoided cost (the cost that the utility would otherwise have to
pay to produce or obtain the electricity). As of 1985, 13 gigawatts of cogeneration capacity were
in operation (Edison Electric Institute, 198S). Projects that would yield an additional 47 gigawatts
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have been registered with the Federal Energy Regulatory Commission (FERC) through October 1987
(FERC, 1988). One company specializing in cogeneration has estimated that cogeneration capacity
could reach 100 gigawatts (equal to about 15% of current capacity) by the year 2000 (Naill, 1987).
All of these projects tend to reduce potential greenhouse gas emissions as they result in more
efficient use of energy. To the extent that industrial cogeneration projects are based on natural gas
or oil—or industrial waste products such as black liquor or bark in pulp and paper—and displace new
coal-fired electric generating capacity, the net impact on greenhouse gas emissions (as well as local
environmental loadings) could be much greater.
Near-Term Technical Options: Developing Countries
As noted above, developing countries generally are in the early stages of a rapid expansion in
producing energy-intensive materials associated with infrastructure development and widespread access
to basic consumer durables. If this process proceeds along the path experienced historically by the
industrialized countries, the increases in energy consumption and CO2 emissions will be enormous.
In fact, the need to import fossil fuels to support rapid expansion of heavy industry could become
self-defeating, operating as a brake on the rate at which some developing countries can industrialize.
Understandably, developing countries and development assistance organization are concerned
about alternative approaches to industrial development that would allow developing countries to
increase economic activity without having to devote ever-increasing shares of their foreign exchange
earnings to financing fossil-fuel imports. Several possible strategies for achieving this goal are very
compatible with concerns about long-term greenhouse wanning.
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Technological Leapfrogging
This phrase has been used by Goldemberg et al., (1987) in discussing industrial development
options for both industrialized and developing countries. Theoretically, at least, developing countries
could adopt the most efficient process technologies currently available, or even push ahead with
currently-experimental technologies as they invest in major expansions of heavy industry necessary to
foster economic development. If this strategy were implemented, the projected massive increases in
industrial energy use in the developing countries would be significantly reduced.
There are a number of reasons why this may not occur in practice. Because capital (and
entrepreneurial experience) is scarce in developing countries, there is a tendency to avoid risky
investments. Conventional wisdom suggests that these countries should adopt technologies that are
already "mature" in the industrialized countries. This "conventional wisdom" has affected decisions
both by developing countries themselves and by relatively conservative leading institutions (banks or
assistance organizations) called upon to provide capital. Often, though by no means always, advanced
energy-efficient technologies require larger capital investments than older technologies. Also
extremely important is that the availability and cost of certain components of production-labor,
capital, and natural resources—vary widely between developing countries and industrialized countries,
and among individual developing countries. Since many developing countries have difficulty raising
the capital required for many investments, some form of international financial arrangements may be
necessary to ensure that developing countries adopt energy-efficient technologies as they industrialize
(see CHAPTER IX for further discussion).
Thus, developing countries will have difficulty basing rapid industrial development on currently
mature, but also relatively energy-intensive, technologies available from the industrialized countries.
On the other hand, "leapfrogging" to the most advanced technologies now being developed in
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industrialized countries may be inappropriate in terms of the local availability of labor, capital, and
natural resources. What appears to be needed is to identify and develop advanced industrial process
technologies that are appropriate to each developing country's individual endowment of resources.
To the extent that developing countries move in this direction, energy efficiency, or at least efficiency
in fossil-fuel use, should be a major characteristic of the desirable options for most developing
countries.
Alternative Fuels
As discussed above, most developing countries are interested in limiting increases in fossil-fuel
imports associated with industrialization. For this reason, they will undoubtedly provide a proving
ground for development of heavy industry based on alternative fuels.
One option for some developing countries may be to develop potential hydroelectric generation
resources and base industrial development on advanced electricity-intensive processes (Opportunities
and difficulties in developing hydroelectric generation are discussed in more detail in PART TWO:
ENERGY SUPPLY). In general, developing countries are relatively rich in biomass resources and
in some cases undeveloped hydropower, while they are net importers of fossil fuels. Thus, the
tailoring of industrial development strategies to local resources will likely reduce greenhouse gas
emissions in addition to achieving other benefits.
For those developing countries with abundant coal resources, most notably China, there may be
a tradeoff between energy self-sufficiency goals and climate warming concerns. Even in these
situations, promoting the most energy-efficient technologies should be a common goal. When
developing countries have both natural gas and coal resources, local environmental and economic
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concerns, including consideration of the greenhouse phenomenon, should all encourage a near-term
emphasis on natural gas.
Retrofit Energy Efficiency Programs
A recent report by the U.S. Agency for International Development (U.S. AID, 1988b) reviewed
the electricity supply-and-demand situation in a number of developing countries. The report
documented serious concerns in many developing countries about current or projected shortages in
electricity. However, it also found that "few achievements have been made in developing countries
in using electricity more efficiently. The opportunities are tremendous, and the cost is only a fraction
of the generation expansion option." According to the report, over 40% of the electricity use in
developing countries is by electric motors in the industrial (including agriculture) sector (U.S. AID,
1988b). One detailed energy analysis in Pakistan identified specific industrial efficiency improvements,
including improved controls and lighting, which could reduce industrial energy consumption by more
than 20% in 2005 (Miller et al.).
Other recent studies in Kenya and South Korea indicate that efficiency programs have been
successful in reducing energy use in heavy industry (Geller, 1986). A detailed analysis of the
electricity conservation potential in Brazil indicates that improvements in electric motors and motor
controls could reduce industrial electricity consumption by an amount equivalent to 8.7 Gw of new
generating capacity (Geller, 1984). Many of the potential industrial energy savings in developing
countries are undoubtedly not yet identified because of the relatively little attention that has been
given to this issue in the past. However, the fragmentary evidence currently available suggests that
these opportunities are much greater in percentage terms than those in industrialized countries and
are much cheaper than the incremental cost of increasing energy consumption.
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Agricultural Energy Use
On a global scale, agriculture accounts for a small part of "commercial" (excluding traditional
biomass) energy use—about 3.5% in 1972-73. However, the percentage in some developing countries
may be higher. In addition, the projected transition in developing countries from traditional labor-
intensive agricultural practices to modern mechanized practices is expected to increase the use of
commercial energy in agriculture significantly in developing countries by the year 2000 (FAO, 1981).
A major goal of most developing countries is to increase productivity in agricultural production
either for domestic consumption or for export purposes. If energy conservation is viewed as a
constraint to such improvements, it generally will not be viewed as a more important objective.
However, productivity increases may be possible through several alternative approaches, with markedly
different implications for energy and employment.
Many developing countries are interested in holding down imports of fossil fuels. They may also
experience widespread unemployment or underemployment and may seek modernization without
displacement of employment. It is important that agricultural modernization be incorporated into an
overall development strategy appropriate to each individual country. In this context, energy savings
may be achieved in conjunction with other objectives. Goldemberg et al. (1988) point out that some
agricultural modernization can occur without such large increases in commercial energy consumption
(and associated reductions in labor requirements). Using one type of rice production as an example,
they illustrate that many benefits of the "green revolution" in increasing yields per hectare can be
achieved with intermediate approaches that do not go as far in substituting mechanical energy for
labor.
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Expanded agricultural energy needs can also present an attractive opportunity for biomass energy
development. FAO (1981) projected that an increase of 17 PJ of oil-equivalent agricultural energy
use would be required to double food production in developing countries by 2000. Goldemberg et al.
(1988) calculate that this amount of energy in the form of methanol could be produced by
thermochemical processes from 40% of the present organic wastes (crop residues, animal manure,
and food-processing wastes) in developing countries. Alternatively, feedstocks could come from tree
plantations representing land equivalent to 3% of current forest land in developing countries. Other
possible areas for efficiency improvements include electromechanical pumping of water for irrigation,
more efficient use of existing water resources, and the use of alternative energy supplies such as wind
for pumping.
Near-Term Technical Options: Soviet Bloc Countries
In the Soviet Union and Eastern Europe, industrial energy use accounts for nearly fifty percent
of secondary energy use. As a share of primary energy equivalent (with electricity conversion losses
allocated to end uses of electricity) it is even larger (Mintzer, 1988). These countries have very high
energy consumption per unit of GNP. One recent analysis indicates that the current energy intensity
of the Soviet economy is "akin to the IEA energy economies of the early 1970s," as shown in Table
7-6 (IEA, 1988). In fact, while energy intensity in OECD countries was declining by over 20% from
1973 to 1986, energy intensity in the USSR actually increased slightly. Industrial energy conservation
could, therefore, provide significant improvement in these countries.
A closer look at some specific industries verifies the general impression of energy-inefficiency.
The USSR is by far the world's largest producer of steel (WRI and IIED, 1988). Unfortunately, it
is also apparently close to last in the world in efficiency. Estimates for 1983 indicate that the USSR
used 31 GJ to produce a ton of steel as compared to the Japanese standard of about 19 GJ
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Chapter VII
TABLE 7-6
Energy Intensities of Selected Economies
(energy/unit of Gross Domestic Product)
Canada
United States
IEA Pacific
IEA Europe
IEA Total
Soviet Union
1973
0.88
0.76
0.42
0.40
0.56
0.99
1986
0.76
0.57
0.31
Q34
0.44
1.03
Sources: IEA, 1988.
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t
(Chandler, 1986). As shown in Table 7-7, the Soviet Union and many Eastern European countries
continue to produce a large percentage of their steel in very inefficient "open hearth" furnaces, which
have been virtually eliminated in the OECD. They also do very little recycling, as indicated by the
small percentage of steel produced in electric arc furnaces.
One analyst has suggested that Soviet industry has shown some success in improving efficiency
with existing technology in their heavy industry (e.g., "housekeeping" measures, refinements of existing
technologies), but have failed to assimilate distinctly different, and inherently less energy-intensive
technologies. An example is the cement industry, a heavy energy-using sector for which energy use
can be greatly reduced by switching from the wet process to a newer dry calcining process. Although
the dry process is available in the Soviet Union, it has not been widely utilized (Hewitt, 1984).
There are several reasons for the extraordinarily high energy intensity of Eastern Bloc industry.
The Soviet Union (and to a lesser extent Eastern Europe) has enormous energy resources and has
historically invested heavily in energy development due to national economic policy rather than
demand. Hence, scarcity of energy resources has not provided an incentive to conserve. In addition,
the "mark-up" pricing systems used in these countries does not provide a strong incentive for
efficiency improvements. In fact, it has been argued that the reward system has actually provided
managers with an incentive to consume more energy (Chandler, 1986).
More recently, the value of energy efficiency has been recognized by Soviet leadership. As
described by Soviet energy analysts, "the energy economy of the Soviet Union is entering a new
period of development. The most economical and favorable located oil and gas resources...are
gradually running out." The result is that development of new energy resources is much more
expensive and difficult than in the past (Makarov, et al., 1987). One result of rising costs of energy
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TABLE 7-7
Innovation in Steel Production Technology
Selected Countries, 1985
"Inefficient" "Recycling"
Open Hearth Electric Arc
Country Economy Type (% of production)
Spain
Italy
South Korea
United Kingdom
Japan
West Germany
Brazil
United States
Romania
China "
Yugoslavia
India1
Poland
East Germany
Hungary *
Soviet Union
M
M
M
M
M
M
M
M
C
C
C
C
C
C
C
C
0
0
0
0
0
0
4
7
29
31
34
42
42
34
51
57
61
53
31
29
29
19
25
33
22
19
26
19
15
31
13
11
M = Market-oriented; C = Centrally planned.
* Though this country's agricultural economy is market-oriented, its industry is not.
Source: Chandler, 1986.
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development has been the explicit inclusion of energy efficiency measures in central economic and
energy planning. Targets have been set that would result in more than a 20% reduction in the
energy intensity of the Soviet economy (Makarov, et al., 1987).
The Soviet Union has historically done very well in the utilization of industrial waste heat for
electricity generation (cogeneration) and for other heat needs, such as district heating. This trend
is continuing. In the Leningrad region, for example, the 1981-1990 energy plan calls for savings of
about 2 EJ of previously-projected industrial energy use through a combination of improved industrial
technology and expanded use of waste heat for both electricity and other heat needs (Glebov and
Kovlenko, 1987).
In addition to efficiency improvements, other options for reducing greenhouse gas emissions from
industry in the Eastern Bloc are possible through fuel switching. Although the major resources are
generally located far from current industrial centers, the Soviet Union has the world's largest proven
recoverable natural gas reserves in the world, amounting to about 39% of the World total (IEA,
1988). In addition, its undeveloped geothermal and hydroelectric resources are significant (as
discussed in PART TWO: ENERGY SUPPLY). It would be technically possible, therefore, for the
USSR to substitute various alternative fuels for current and projected coal use in the industrial sector,
although the costs of such substitution have not been well analyzed.
Summary of Near-Term Technical Potential in the Industrial Sector
Some available projections based on trends in structural change and process technology
improvement alone suggest that industrial energy use in the OECD countries may not rise
significantly over the next 25-40 years (Williams et al., 1987). The No Response scenarios used in
this study are consistent with this view, showing roughly constant to slightly increasing industrial
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energy use for industrialized countries through 2025. Very recent data for 1987 and 1988 in the U.S.
show sharp increases in durable goods and basic material production (U.S. DOC, 1988). If these very
recent trends continue, industrial energy use in OECD countries would be higher than indicated in
the No Response scenarios. Industrial energy consumption in the East Bloc and developing countries
increases substantially in the No Response scenarios.
The technical options identified above could reduce industrial energy consumption by 25% below
the levels in the No Response scenarios in the 2000-2010 time frame. One recent analysis indicates
that cost-effective conservation could result in an absolute decline of about 19% in industrial energy
consumption (fuel and purchased electricity) in the U.S. by the year 2010 (Ross, 1988). Changes
incorporated into the Stabilizing Policy cases in this document result in small reductions in the U.S.
and industrialized countries. These scenarios appear to be well within the cost-effective technical
potential; the achievability of these targets within real-world policy constraints is addressed in
CHAPTER VIII.
Long-Term Potential in the Industrial Sector
Over the long term, technological options for improving efficiency in industrial energy use are
very speculative. Several concepts have been advanced by various analysts that may warrant further
study to identify potential options for reducing long-term industrial demand for fossil fuels.
Structural Shifts
As discussed above, over the long term, shifts in the structural composition of industrial activity
will undoubtedly continue, with significant energy consequences. As discussed by Ross et al. (1987),
production of basic (and inherently energy-intensive) materials has tended to decline over time as a
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share of GNP after an economy achieves a certain level of affluence. Three components of this shift
are:
• Substitution of new (and often less energy-intensive) materials;
• Product and production design changes that result in more efficient materials
use; and
• Saturation of major markets for material-intensive products, including
infrastructure and material-Intensive consumer products.
These effects can be expected to continue in the future and to some degree are incorporated in
all the scenarios of future energy use presented in this report. With combinations of policies, such
as economic incentives and aggressive research and development, these effects can be accelerated
considerably, especially in the developing countries where major increases in industrial energy use are
expected. It is currently very difficult to identify, much less quantify, the effects of actions to achieve
the technical potential. Further study of long-term trends in the structure of industrial activity and
specific policy options for influencing these trends is needed.
Advanced Process Technologies
As pointed out by Ross (1985), major reductions in energy intensity in industrial processes can
come about through "revolutionary" change in process technology. Typically, process change is not
motivated primarily by energy conservation, but large reductions in energy intensity often result due
to technological advances. An example is advanced technology for steel production now under
development that could result in very large energy savings per unit of output. About 40% of the
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energy used in iron and steel production is related to shaping and treating starting with liquid steel.
Advanced processes utilize controlled solidification, perhaps very rapid, of thin castings near their
final shape. When fully developed, this technology should eliminate almost all of the energy use
currently associated with rolling and shaping (Ross, 1985).
In the petrochemical industry research is currently underway to identify advanced separation
techniques that could eliminate many of the losses inherent in the current distillation process. Gas
separation membranes, gas adsorption and liquid mass separating agents are all currently commercial
for very specialized petrochemical applications and use considerably less energy than the distillation
processes they have replaced (Mix, 1987). Over the long term, wider applications of these or similar
technologies may further reduce process energy requirements.
In general, advanced technologies are attractive because of lower total cost, better quality control,
reduction in inventories, greater flexibility, etc. as well as improved energy efficiency. It is difficult
to identify possible process technology improvements that could become available through research
and development over the long term, although it is likely that energy efficiency improvements will be
part of these developments.
Another long term area of process technology advancement is the use of biological phenomena
in production processes. Although it is difficult to even identify specific applications of biological
processes at this time, they appear to offer possible improvements in speed, control, and precision
of process technologies (Berg, 1988). As such technologies emerge, they will undoubtedly offer
additional opportunities for reductions in fossil energy use. Industrial policies designed to stimulate
technological advances and capital turnover will ultimately also lead to reduced energy requirements.
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Non-fossil Energy
Although it is likely that energy intensity of industrial activity will continue to decline over the
long term, significant levels of energy consumption will no doubt still be required. Opportunities
exist for meeting these demands with non-fossil energy sources. Many industrial technology experts
(see, for example, Berg, 1988, Schmidt, 1987) have suggested that increasing use of electricity in
industrial processes over the long run is likely because of its superior characteristics of controllability
and minimal loss or error.
Even though production of electricity involves large losses, this is often offset because the more
sophisticated and precise production processes it allows are generally less energy-intensive at the end
use. Increasing electrification of industrial processes at the end-use point allows for a wide variety
of alternative generation options (as discussed in PART TWO: ENERGY SUPPLY), which can
reduce greenhouse gas emissions.
In addition, one analyst has suggested that economic competition will cause energy-intensive
industries over the long run to locate geographically where isolated resources of cheap and hard-to-
transport energy are available. Examples cited include natural gas and hydro locations in Canada,
Brazilian hydropower sites, and natural gas locations in the Middle East (Ross, 1985). The same
logic could also apply to locations with geothermal and solar resources as those technologies become
competitive. Policies could be implemented to discourage fossil fuel use (see CHAPTERS VII and
IX), as well as to encourage movement of heavy industry to locations where renewable resources are
economically attractive.
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PART TWO: ENERGY SUPPLY
This section discusses technical options for reducing greenhouse gas emissions by (1) utilizing
fuels for power generation more efficiently, and (2) altering the types of energy supplies we use.
These two goals have one common objective: to supply a similar amount of useful energy services
compared to current energy consumption practices, but in such a way that the amount of greenhouse
gas emissions are minimized. Options for reducing greenhouse gas emissions in end-use applications,
particularly by improving energy efficiency and switching fuels, were discussed in PART ONE:
ENERGY SERVICES. This section focuses on possible options for improving the delivery of energy
services by reducing the losses during energy production and conversion processes. Additionally, the
types of energy supplies can be altered by developing sustainable sources of energy that do not emit
greenhouse gases.
As discussed in chapters IV and V, fossil fuels currently dominate commercial energy use
globally (88 percent of primary energy supplied in 1985). This demand for fossil fuels is expected
to continue in the future, e.g., fossil energy production in the No Response scenarios increases by
28-73% by the year 2025 in the Slowly Changing World and Rapidly Changing World scenarios,
respectively. Much of this increase in fossil fuel demand will be for electricity generation, with coal
as the primary fuel, since it is a relatively inexpensive, abundant resource globally. For example, by
2025 coal use for electricity generation increases by 30% in the SCW scenario and by 130% in the
RCW scenario.
In the Stabilizing Policy cases first presented in Chapter V, several measures are assumed
to reduce greenhouse gases emissions from the production of electricity. These include improved
efficiency in electricity generation, greater use of natural gas to displace coal, recovery of methane
from coal seams, and increased use of renewables, e.g., biomass and solar, for producing electricity
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and synthetic fuels. The contribution that these measures can make to reducing greenhouse gas
emissions can be considerable. These options help to reduce the percentage of electric utility primary
energy consumption from fossil fuels from over 60% in 1985 to under 40% in 2025 in both the
SCWP and RCWP scenarios (see Figure 7-10). The extent to which any specific technological option
is emphasized to reduce global warming is a matter for future consideration; as discussed in this
section, however, there are many options for altering our current dependence on fossil fuels.
The first part of this section discusses possible options for altering current patterns of fossil
fuel use. This is clearly one of the highest near-term priorities, since as discussed in Chapters IV
and V, current commercial energy use globally is dominated by fossil fuels. In many cases, however,
options exist for reducing emissions from these applications. This is followed by a discussion of
possible supply alternatives to fossil fuels, including increased use of biomass, solar resources,
additional renewable energy resources, nuclear power, and options for enhancing energy storage and
delivery to consumers.
FOSSIL FUELS
As discussed in Chapter IV, fossil fuel consumption is responsible for the vast majority of
CO2 emissions. On an energy-equivalent basis, coal produces the most CO2 (about 24 kg
C/gigajoule), oil about 80 percent the amount of CO2 compared to coal (about 19 kg C/gigajoule),
and natural gas about 55-60 percent the amount of CO2 (about 14 kg C/gigajoule). Given these
rates of CO2 emissions, major reductions in fossil fuel consumption (or their elimination) would be
necessary over the long run to control greenhouse gas emissions. With the current global reliance
on fossil fuels, however, the shift away from fossil fuels can not be accomplished easily, even with
international agreement to pursue this objective. Steps can be taken now to begin or accelerate the
transition to non-fossil energy by minimi/ing the greenhouse impact of the fossil fuels that are used.
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Chapter VII
FIGURE 7-10
ELECTRICITY UTILITY DEMAND BY FUEL TYPE
(exajoules)
SCW
Z
3 400
O
1985 2000 202S 2060 207E 2100
lit! 2000 2021 2010 207C 2100
RCW
From
No R«fpons«
So«n«rlo
207S a100
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Possible actions include improving the efficiency with which fossil fuels are produced and converted
to electricity, switching from more carbon-intensive fuels to less carbon-intensive fuels (e.g., coal to
natural gas), and applying various engineering controls to reduce emissions of greenhouse gases
during the production and consumption of fossil fuels (e.g., NOX control, CH4 recovery).
Since one of the primary uses of fossil fuels currently is the production of electricity, one
potential option is to produce electrical power more efficiently, using less energy input to produce
electricity. For example, in the U.S. during the 1950s and early 1960s, the efficiency, of powerplants
consuming fossil fuels increased from 25 to about 32 percent (see Figure 7-11). This improvement
has stalled since the early 1960s because of fewer technical improvements in combustion techniques,
higher energy consumption by auxiliary equipment used for pollution control (e.g., electrostatic
precipitators for particulate removal and scrubbers for SO2 removal), and increased use of less
efficient fuels, such as subbituminous coal and lignite.
Although electricity production is currently one of the primary uses for fossil fuels, other
applications have been proposed in order to meet future energy needs. Specifically, as conventional
petroleum resources are depleted, it is expected that much of the demand for liquid (oil and natural
gas liquids) and gaseous (natural gas) fuels will ultimately be met by synthetic fuel production.
Although there is currently little synthetic fuel production in the world, processes have been
developed to convert relatively abundant solid energy resources such as coal, oil shale, and tar sands
to liquid or gaseous products that could be consumed in the same end-use applications as more
conventional resources.
The production of synthetic fuels, however, typically requires the consumption of significant
amounts of energy to produce the liquid or gaseous fuels. These conversion processes produce
greenhouse gas emissions, particularly CO2, so that the total emissions per unit of energy are higher
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Chapter VII
FIGURE 7-11
AVERAGE FOSSIL POWERPLANT EFFICIENCY
1951-1987
(Percent)
III
u
{£
111
so
40
30
20
10
i
1950 1956 1960 1965 1970 1975 1980 1965 1990
Average efficiency at all existing coal,
oil, and natural gas powerplants
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for synthetic fuels than for conventional fossil fuels. For example, the CO2 emissions from
production and consumption of liquid fuels from coal is about 1.8 times the amount from
conventional liquid fuels from crude oil (see Chapter IV for further discussion).
The following sections explore possible options for reducing the greenhouse impact of fossil
fuels. Using fossil fuels more efficiently is discussed, including refurbishment of existing powerplants,
repowering opportunities (including application of clean coal technologies), and cogeneration.
Greater use of natural gas is discussed since it produces less CO2 than oil or coal Methods for
controlling greenhouse gas emissions are also presented.
Refurbishment of Existing Powerplants
Energy use at existing powerplants can be reduced by refurbishing the plant to keep it
operating at optimal efficiency. Over time, these efficiencies decline due to wear and various aging
processes. For many economic reasons it has become clear over the past decade that utilities in the
U.S. are planning to keep existing powerplants in service longer than initially planned (Democker,
et al., 1986). It is likely that this trend will occur globally as well to minimize the need to invest in
new powerplants. As these powerplants age, however, declining efficiency will become more
widespread than in the past.
In response, the U.S. electric power industry has developed new techniques for extending the
life of powerplants. The extent of efficiency improvement depends on how badly the specific plant
had degraded and the extensiveness of the upgrades. Increases in efficiency in the range of 3-4%
appear to be possible at many existing units, with even greater improvements possible in some cases
(PEI 1988).
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In developing countries, the opportunities for generating efficiency improvements may be
much greater. According to a recent study by U.S. AID (1988b), "The majority of thermal
powerplants in developing countries operate at lower-than-design capacity and efficiency." Many of
these powerplants use more than 13 MJ1 of fuel to generate a kWh of electricity, compared to typical
design heat rates of 9-11 MJ/kWh. It is estimated that a rigorous program of powerplant
rehabilitation could improve overall fuel use efficiency for thermal power generation by 10% or more
in most developing countries (U.S. AID, 1988b).
Clean Coal Technologies and Repowering
As new powerplants are constructed to meet increasing electricity needs, many of these plants
are likely to be fossil-fueled. To the extent that new powerplants use fossil fuels, greenhouse gas
emissions can still be reduced by using the most efficient conversion technologies. The U.S.
Department of Energy, the Electric Power Research Institute, and many other organizations have
been investing significant funding hi research, development, and demonstration of "clean coal
technologies" designed to allow burning of coal to generate electricity with maximum efficiency and
minimum environmental impact (U.S. DOE, 1987e). These technologies offer the potential to
significantly reduce the amount of traditional air pollutants such as sulfur dioxide and nitrogen
dioxides. However, they may also affect the amount of greenhouse gas emissions, particularly for
those technologies that improve the overall efficiency of converting coal to electricity. For example,
some of these technologies can improve efficiency 10-25% relative to conventional coal combustion
technologies.
1 1 MJ = 1 Megajoule = 10* joules.
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Three of these advanced technologies currently in the demonstration phase are atmospheric
fluidized bed combustion (AFBC), pressurized fluidized bed combustion (PFBC), and Integrated
Gasification/Combined Cycle (IGCC). AFBC is likely to be very similar in efficiency to conventional
technology, and therefore not beneficial in reducing greenhouse gas emissions. The PFBC and IGCC
systems, however, are projected to increase conversion efficiencies as much as 10-20%, with
corresponding reductions in CO2 emissions per unit of electricity produced (U.S. DOE, 1987e).
Clean coal technologies can be used for newly-constructed powerplants, but also to "repower"
existing powerplants. In repowering, the basic combustion components of existing powerplants are
replaced with one of the new technologies. Additionally, new components, such as a gas turbine
cycle, may also be installed in combination with some refurbished components of the existing
powerplant. The result is a hybrid plant with performance very much like that of an efficient new
unit.
Cogeneration
degeneration is typically the production of both steam and electricity from the same source,
with the steam used to meet heating and process requirements at a facility and the electricity used
on-site or sold to electricity customers. Because it is more energy-efficient than conventional
generating options, it has been encouraged in the U.S. recently by many regulatory and legislative
initiatives. For example, the Public Utilities Regulatory Policy Act (PURPA) encouraged
cogeneration by establishing a process ensuring that cogenerators with low production costs could sell
this cogenerated electrical power to electric utilities.
As discussed earlier PART ONE: ENERGY SERVICES, cogeneration has been very popular
with large industrial energy users as one approach for reducing their overall energy costs. Most of
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the approximately 18 GW of currently-operating cogeneration projects in the U.S. and an additional
29 GW under active development fall into this category (Williams, 1988). Similarly, as electric
utilities face more competition from industrial cogenerators and independent power producers (i.e.,
companies not regulated as utilities but do produce power), they may choose to retrofit some existing
generating facilities with cogeneration, using the waste heat from electricity production for district
heating or industrial process heat applications. Engineering assessments have shown this potential
retrofit option to be economically attractive for powerplants burning coal and located close to steam
load centers (Hu, et al., 1984).
Natural Gas Substitution
Natural gas (which is primarily methane) has just over hah7 the carbon per unit of energy as
coal. In applications such as electricity production where coal is frequently used, switching to natural
gas would substantially decrease CO2 emissions. As discussed previously in PART ONE: ENERGY
SERVICES, natural gas is currently used in several key end-use applications, particularly a wide
variety of industrial energy applications and in residential and commercial space heating. In addition
to its end-use potential, natural gas can be used as a fuel for electricity generation. The discussion
below focuses on the technical options and advantages of using natural gas as a fuel for electricity
generation, and then reviews the issue of how much natural gas is available overall since its role as
an end-use fuel and a fuel for electricity generation depends on the amount of natural gas resources
available and the cost at which these resources can be supplied.
Natural Gas Use At Existing Powerplants
There are several near-term alternatives for increasing the use of natural gas for electricity
generation. One relatively inexpensive option would be to increase the utilization of existing natural
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gas and oil-fired (most of which can also consume natural gas) powerplants. For example, in 1987
average capacity utilization rates for U.S. oil and gas powerplants were 40% relative to 58% for coal
powerplants. Thus, there is some technical potential to increase gas use by increasing the utilization
of natural gas-fired powerplants. However, these plants are utilized less because the variable cost
of power is higher at most oil and gas plants than at coal, nuclear, and hydro powerplants and oil
and gas-fired powerplants can be switched on and off more easily and with less wear on the systems
to meet rapid increases in electricity demand. Since electric utilities produce electricity with their
least expensive powerplant, policies would have to be adopted to increase utilization of natural gas
capacity.
Advanced Gas-Fired Combustion Technologies
An additional option for increasing natural gas use is the construction of new gas-fired
combined cycle or combustion turbine powerplants. These powerplants cost significantly less to build
than coal powerplants and are typically more energy efficient. They could also be part of a near-
term solution since the lead times for plant siting and construction average about two to four years
versus six to ten years for coal-fired powerplants. These advanced combustion technologies are not
in greater use primarily because of investors' expectations that the costs of natural gas over the
operating life of the facility would be substantially higher than other fuel alternatives (such as coal).
As a result, despite the lower capital costs of these technologies, electric utilities have often invested
in other alternatives because total operating costs of combined cycle or combustion turbine
technologies have been perceived to be greater than coal-fired powerplants.
Combustion turbines—Simple/Combined Cycle. Combustion turbines are similar to jet
aircraft engines in that fuel is burned in compressed air, with the combustion gases then used to turn
a turbine for electricity generation. This process is known as a simple cycle turbine. After the hot
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gases are used to produce electricity, the exhaust gases can be converted to steam, which can be used
to generate additional power in a process known as combined cycling. Most combustion turbines in
use are simple cycles, which are used primarily for peak power requirements due to their favorable
operating characteristics (primarily their ability to increase power production quickly) and low capital
costs, although operating costs are high overall. Combined cycle capital costs are higher and more
efficient, and hence, are currently preferred for units expected to be utilized more frequently.
Aeroderivative Combustion Turbines. Recent advances in jet engine {aeroderivative)
technology, including new materials and designs that enable combustion to occur at higher
temperatures, have made turbines more efficient. Many of these advances are being, or could be,
applied to turbines for generating electrical power. For example, existing simple and combined cycle
systems have efficiencies of about 32% and 42%, respectively, compared to conventional coal
powerplants that have efficiencies of about 31-32%. Recent improvements in aeroderivative
technology could significantly improve these efficiencies. For example, one technology that has been
recently commercialized is the steam-injected gas turbine (STIG). STIG units take any steam not
needed for process heat requirements and inject it back into the combustor for added power and
efficiency, e.g., in a simple cycle application the efficiency of the turbine might be 33% with an
output of 33 MW, while with full steam injection the efficiency would increase to 40% with an output
of 51 MW (Williams, 1988). An improvement in steam injection that has been proposed is the
intercooled steam-injected gas turbine (ISTIG). ISTIG cools the compressor bleed air used for
turbine blade cooling, allowing a much higher turbine inlet temperature. With this technology the
single cycle efficiency cited above would increase from 33% to 47% and output from 33 MW to 110
MW; the estimated capital cost of ISTIG is about $400/kW (Williams, 1988).
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Natural Gas Resource Limitations
There is a significant amount of research and debate over the quantity of natural gas that
is available. As discussed in Chapter IV, global gas resources are estimated to be significantly
smaller than global coal resources (resource estimates by the World Energy Conference indicate that
coal resources are about 30 times greater than gas resources). Within the U.S. there is disagreement
over the size of this difference. One source has indicated that in the U.S. the natural gas resource
base is as large as the coal resource base when one compares the economically recoverable and
usable resources; the supply should be adequate for hundreds of years (Hay et al., 1988). On the
other hand, based on 1985 consumption levels of about 18.6 EJ, the U.S. DOE has estimated that
technically-recoverable U.S. gas resources would last only about 70 years and only about 45 years if
limited to supplies that could be marketed for about a maximum of $5/GJ (see Table 7-8). In
contrast, U.S. coal reserves are estimated to be about 350 times greater than 1985 U.S. consumption
levels (U.S. DOE 1985; U.S. DOE 1986).
In addition to the potential limit on gas supplies, there are also questions about the cost of
additional gas supplies, the location of supplies vis-a-vis the areas of demand, the cost of improved
distribution systems, and in the case of international trade in liquified natural gas (LNG), the costs
of liquefaction, transportation, and regasification facilities.
These concerns over the cost and availability of natural gas may appear unwarranted given
the existence of excess capacity and falling prices in the U.S. gas industry in recent years. However,
these market conditions may be temporary. Current excess capacity follows a period in the 1970s
when natural gas was in short supply. The recent changes are primarily due to natural gas price
deregulation, which allowed prices to increase from previously controlled levels. The price increases
had two effects: (1) a decrease in demand as prices increased, and (2) an increase in supplies as the
DRAFT - DO NOT QUOTE OR CITE VII-127 February 22, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VII
higher prices of gas prompted increased exploration and development. The duration of the current
black market conditions is a matter of much debate, but as the demand and supply for natural gas
come into balance, natural gas may no longer be available at current prices.
The relevance of these concerns is not that natural gas cannot play a role in reducing CO2
emissions; unquestionably, it can. However, the ability of natural gas to replace higher carbon
content fuels is a function of the quantity of natural gas available and the cost at which natural gas
can be supplied to consumers. That is, even if natural gas is available, its ability to replace other
fuels will depend on its cost relative to alternative fuels. Any policies promoting increased use of
natural gas need to recognize these factors.
Electric Utility Gas Consumption. In 1985, gas consumption by U.S. electric utilities was
about one-fifth of total U.S. gas use, or about 3 EJ. Even though U.S. utilities consume only a
minor fraction of natural gas, they can have a large impact on prices because they are frequently the
marginal buyer. That is, utilities often have alternative generation options such as oil or coal and
can easily switch, unlike many residential or commercial gas users who do not have such flexibility.
Increases in electric utility demand for natural gas would affect residential, commercial, and industrial
customers by raising gas prices. For example, assuming 13 EJ of consumption, a $l/gigajoule price
increase would increase natural gas costs $13 billion per year among all consumers.
To replace a significant amount of electric utility coal consumption would require a very large
increase in natural gas consumption. For example, compared to 1985 utility gas consumption of 3
EJ, utility coal consumption was about 15 EJ. Thus, to replace 40% of coal consumption (6 EJ), a
200% increase in utility gas consumption would be necessary, raising U.S. electric utility gas use to
unprecedented levels. As a result, any policy to increase natural gas use needs to recognize possible
impacts on gas supply and the market price of gas.
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Additional Gas Resources
This section discusses two other sources for increasing the available supply of gas to
consumers: (1) methane emissions during the production and distribution of natural gas, and (2)
methane recovery from coal seams. In each of these cases, increasing the amount of methane
available to consumers would often have other positive environmental benefits by reducing the amount
of CH4 and CO2 emitted to the atmosphere.
Emissions from Natural Gas Flaring. Venting, and Leaking. As discussed in Chapter IV,
during the production of oil and natural gas, natural gas2 may be vented to the atmosphere as CH4
or flared (producing COj). Additional CH4 emissions are also produced during the refining,
transmission, and distribution of natural gas. These emissions can be reduced through more careful
production and maintenance procedures or by capturing the gas for on-site use or sale to gas
customers.
Gas vented or flared in the U.S. represents around 0.5% of annual domestic production,
while gas losses during transmission and distribution represent less than 2% of production. These
values are estimated to be much lower than the global average due to a number of factors, including
regulations prohibiting the flaring and venting of gas in the U.S. and the existence of a market and
infrastructure to transport and sell the gas. In areas in the U.S. where no market for the gas exists
(e.g., Alaska), gas produced during oil production activities is reinjected into the reservoirs in order
to maintain pressure. Opportunities do exist in the U.S. for reducing gas losses during transmission
and distribution and through maintenance and replacement of old, outdated distribution lines.
Natural gas is mostly methane, but the methane content can vary from less than 70% to nearly
100% depending on the source of the gas. We refer to the vented or flared gases as methane, although
other trace gases may also be present.
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Globally, a larger percentage of natural gas is vented or flared due to fewer regulations governing
these releases and a less-developed infrastructure for utilizing the gas. The quantities of gas vented
or flared could be reduced through development of an infrastructure to market the gas or through
regulations governing these releases.
Coalbed Methane. As discussed in Chapter IV, during coal mining, particularly underground
mining, methane trapped in the coal seam is released. Historically, coalbed methane has been viewed
as a safety problem during coal mining since methane can accumulate in the coal mine and explode.
In the U.S., mining regulations require that underground coal mines be adequately ventilated to
prevent this problem. Recently, however, there has been a growing interest in utilizing coalbed
methane as a natural gas resource.
Methane extraction from coalbeds, which is being done commercially in a few areas in the
U.S., differs from traditional natural gas production in several respects. Perhaps most importantly,
the gas production profile differs from conventional gas wells in that maximum output generally
occurs two to three years after the wells are in place, compared to immediately afterwards for
conventional wells. For a given production site, more wells are drilled to maximize methane flow.
Also, because these wells are drilled into available coal seams, they are generally quite shallow (i.e.,
not more than 3000-4000 feet below ground). While the relatively shallow access helps to reduce
drilling costs, more groundwater is encountered, requiring additional efforts to combat this problem.
Due to the relatively new state of the coalbed methane recovery industry, it is difficult to
quantify the potential size of this resource. In addition to offering another gas source, coalbed
methane recovery could potentially be used to remove methane prior to mining the coal seam. Such
recovery would help to ease the problem of methane buildup in coal mines (possibly reducing coal
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mining costs) and avoid the emissions of CH4 to the atmosphere that result from current coal-mining
operations.
Emission Controls
One technological option for reducing the amount of greenhouse gas emissions is the use of
emission control techniques on combustion technologies that generate these emissions. NOX and CO2
emission control options for stationary combustion sources, such as electric utility powerplants, are
discussed below.
NO., Controls
Nitrogen oxides (NOX) are formed during combustion primarily by the combination at high
temperatures of nitrogen (N2) and oxygen (O2) naturally found in the air and secondarily by the
nitrogen that is found in fuels such as coal and oil. Of these two factors, it is the combustion
temperature that is the most critical factor affecting the NOX emission rate. There are a number of
currently-available methods for controlling NOX emissions (based on NAPAP, 1987):
• Low Excess Air (LEA1. Overfire Air. These two combustion techniques alter the
flow of air during the combustion process. With low excess air the amount of excess
combustion air is reduced, thereby lowering emissions up to 15%. With overfire
air, some combustion air is redirected to a region above the burners, which can
reduce emissions by 30%. Potential drawbacks are incomplete combustion of the
fuel, increased smoke, and the extensive plant modifications that may be required.
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• Low NOg burners. This control technique operates within the furnace to limit the
mixing of coal and combustion air to create a low-temperature combustion zone.
Removal efficiencies approach 45-60%. This technique can be applied to existing
and new units, although experience on existing units is quite limited.
• Air and Fuel Staging. When combined, these two controls can achieve 80% removal
efficiencies. With air staging, up to 50% of the combustion air is directed above low-
NOX burners. With fuel staging (also known as reburning) additional fuel is burned
in a region above the burners to create a fuel-rich combustion zone. Within this
zone NOX is destroyed by reducing conditions that convert NOX to molecular nitrogen.
This technique has been used in full-scale applications abroad, but only in pilot-
scale facilities in the U.S.
• Selective Catalytic Reduction (SCR). SCR is a post-combustion control technology
that uses a catalyst to reduce NOX; reductions of 50-80% are possible. Its advantages
include relatively simple equipment, no byproduct, and minimal efficiency loss. Its
cost-effectiveness, however, depends on catalyst lifetime, which depends primarily on
fuel characteristics. SCR has been used abroad, particularly in Japan and West
Germany.
CO2 Controls
Technologies have been developed to remove carbon dioxide from powerplant flue gases and
dispose of it in a manner that prevents it from reaching the atmosphere. However, these technologies
are unproven and very costly at this time. In one process, carbon dioxide in the flue gas is mixed
with water in a solvent solution at temperatures slightly above ambient conditions. The carbon
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dioxide binds to the reagent and passes to a regenerator chamber where temperatures are elevated.
The reverse reaction occurs and carbon dioxide is released, removed, pressurized, and liquified. The
reagent is regenerated and reused. The liquid carbon dioxide could then be used for various
commercial applications, or pumped to deep ocean locations, deep wells, or salt domes for permanent
disposal.
In order to understand the relative costs of this CO2 removal process, the costs of this system
are compared to a conventional sulfur dioxide scrubber in Table 7-9. The carbon dioxide scrubber
is 250-350% more costly than the sulfur dioxide scrubber and increases electric power costs 60-80%.
The cost of transporting and disposing of the large volume of removed CO2 has not been adequately
assessed, but is likely to substantially increase this estimate. Although some CO2 could be used for
enhanced oil recovery or stored in exhausted oil and gas wells, large-scale disposal would most likely
have to be in the ocean. This raises serious environmental concerns that have not been examined.
Emerging Electricity Generation Technologies
There are a number of technological options that could be available in the longer term that
would substantially alter the way fossil fuels are utilized. Two of the most-discussed options-fuels
cells and magnetohydrodynamics-are discussed below.
Fuel cells
Fuel cells are a new set of technologies now in use in the U.S. space program and expected
to eventually be commercially available to the electric power industry. The technology converts fuel
energy to electricity using an electrochemical process similar to that employed in chemical batteries.
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TABLE 7-9
CO2 Scrubber Costs Compared To SO2 Scrubber Costs'
CO, Scrubber" SO3 Scrubber'
Capital Cost ($/kw)d
Scrubber 810 220
Pipeline/Disposal 80-710 NA
Variable Operation and Maintenance
Costs (mills/kwh) NA 3.5
Energy Penalty (%) 25 4.5
Capacity Penalty (%) 22 2.5
Fixed Operation and Maintenance
Costs ($/kwyr) NA _1Q
Total Cost (mills/kwh)' 36-47 10.7
a 90 percent removal of both CO2 and SO2.
b Steinberg, Cherg, Horn, 1984
c 1987 EPA Interim Acid Rain Base Case Estimates.
d Greenfield Site.
e 65 percent capacity factor; 9 percent capital charge rate; incremental power costs 65
mills per kilowatt-hour; new plant costs of $l,200/kw; fixed O&M for CO2 scrubber
is assumed to be ten dollars per kilowatt-year for comparison purposes only, actual
costs could well be higher; 1988 dollars assumed to be worth 42 percent less than
1980 dollars.
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Total fuel cell plants may achieve efficiencies of up to 85%. There are several drawbacks to the
technology at this time, especially: (1) special fuel requirements, and (2) relatively low reliability.
The fuel cell closest to commercialization is the Phosphoric Acid Fuel Cell (PAFC). This
fuel cell converts hydrogen into electricity and water. The hydrogen must be produced, however;
considering the conversion losses, overall powerplant efficiencies for large fuel cell plants (e.g., several
MW) approach 45%. In theory, the chemical reaction could continue as long as fuel is supplied, but
in practice the materials fail after prolonged operation. The current goal is 40,000 hours which, even
if achieved, is still well below that of conventional powerplants. Another drawback is that the
production of hydrogen from fossil fuels creates CO2. The section on hydrogen at the end of the
chapter discusses this further.
The use of hydrogen in fuel cells suggests the possibility of coupling fuel cells with renewable
energy sources. For example, solar powerplants could use any power not delivered to customers to
create hydrogen, which could then be used when solar powerplants are not operating or when
demand exceeds solar capacity.
Magnetohydrodynamic.'; (MHD)
Magnetohydrodynamics (MHD) is an advanced, efficient generation technology that could use
coal as a fuel. In a MHD system, coal is burned at very high temperatures and the hot combustion
gases are chemically treated. The gases then pass through a magnetic field created using
superconductors, thereby generating power. The gases can also be used in a steam cycle to produce
additional power. The MHD system is expected to eventually achieve efficiencies of 60%. In
comparison, conventional coal powerplants operate at about 31-32% efficiencies and advanced
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pressurized fluidized bed combustion (PFBC) and Integrated Gasification/Combined Cycle (IGCC)
coal units, now being demonstrated, are expected to achieve 35-37% efficiency.
There are several drawbacks to the MHD technology. It is very capital-intensive, requires
superconductors that have only reached the laboratory stage of development, and the high
temperature combustion could result in high nitrogen oxide emission rates. Nonetheless, many
observers believe MHD systems will eventually be available as these obstacles are overcome, creating
an option for very efficient coal combustion.
BIOMASS
Biomass in one form or another continues to be the predominant source of energy for at
least half of the world's population. In many countries, such as Nepal, Ethiopia, and Guatemala, over
90% of total energy used comes from biomass (Goldemberg, et al., 1988). Although on a global
basis it accounts for only one-seventh of all energy consumed, for over 2 billion people it is close to
being the only source of energy.
A number of studies have reported on the alarming rate of global deforestation as the
current demand for biomass resources far exceeds the natural rate of regeneration (e.g., IUCN 1980,
WRI 1985). It is this difference between growth and use that contributes to net greenhouse gas
emissions. Despite this current situation, biomass energy over the long term offers some of the most
promising opportunities for displacing large amounts of fossil fuel use.
Although biomass fuels account for about 14% of global primary energy use, they deliver a
much smaller fraction of useful energy because of the inefficient nature of their current use.
However, technologies exist or are under development to provide many times the current level of
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energy services from the amount of biomass currently consumed globally. In addition, it is also
technically possible to greatly increase the annual increment of biomass available for energy use.
Methods for increasing supply through agroforestry, biotechnology, etc., and for reducing extractive
use of forest products for non-energy purposes are discussed in PART FOUR: FORESTS. In this
section various approaches are discussed to reduce biofuel demand through fuel switching, by
improving end-use efficiencies, and by increasing conversion efficiencies using upgraded fuels (see
Figure 7-12).
Direct Firing of Biomass
The primary uses of biomass in direct combustion applications include use in cookstoves,
space heaters, bakeries, brick kilns, and boilers of various sizes. Typical conversion efficiencies range
from 5-15%. There is tremendous potential for improving the end-use efficiency in each of these
energy conversion processes. In fact, this may be the most cost-effective, immediate option for
decreasing the demand for biomass resources (e.g., see discussion on technical options for improving
efficiency of biomass use in PART ONE: ENERGY SERVICES).
Wood or wood products (bark, sawdust, chips, bagasse) are already used directly as a boiler
fuel (especially in agroforestry-based industries with readily-available access to wood supplies). But
there are a number of modern technologies that can be used to extract much more useful output.
Due to the physical variability of biomass (and the lower density of crop residues), very often some
improvements in combustion properties can be achieved just by properly sizing the solid biofuels.
The energy requirements for sizing and densification must be weighed against improved
combustion, convenience, and ease of transport. While this is not absolutely essential when the
application is for heating, some amount of sizing and/or briquetting is critical in more efficient boiler
or gasifier designs.
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Chapter VII
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February 22, 1989
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Another area in which combustion efficiency can be significantly increased is in the use of
advanced burner systems, such as fluidized bed combustors. These use a stream of hot air to
suspend the fuel and thus achieve more complete combustion. Some of these technologies can also
use certain fuels with high ash or silica content, such as rice husks, that would be harmful to standard
combustion systems.
In a few areas, central power stations have been constructed specifically to use wood as a
fuel. The facilities that are burning wood for electrical power range in size from 5 te 50 megawatts.
Depending on the cost of fuel, conventional wood burning is generally not competitive with
conventional fuels due to lower combustion efficiency and greater fuel bulk, which necessitates larger
fuel-handling facilities. The localities served by these plants gain various benefits that may offset
these inefficiencies. For example, local timber industries may be assisted, and environmental benefits
may be obtained from reduced CO2 emissions.
Charcoal Production
Charcoal is produced by heating wood in the absence of air (also known as pyrolysis). The
traditional method of producing charcoal hi kilns made of earth, as used for centuries in many
regions such as Africa, is very inefficient. Only 15-30% of the energy content of the wood is retained
in the charcoal as all of the gases produced during pyrolysis are allowed to escape. Substantial
efficiency improvements are possible, e.g., Brazilian kilns built of brick, which produce charcoal for
steel manufacture, have achieved overall efficiencies of up to 50%, twice that of traditional methods,
by utilizing the gaseous by-products (Miller et al., 1986). Even further improvements are expected
(Goldemberg et al., 1987).
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Anaerobic Digestion
Anaerobic digestion is a biological process whereby a combustible gas is produced in the
absence of oxygen; this gas is a mixture of methane and carbon dioxide similar to the marsh gas
produced in swamps and landfills. This technology has the attractive feature of separating the energy
content of biomass from its value as a soil conditioner and fertilizer. The energy content is released
in a gaseous form (i.e., biogas) that can be utilized at a higher efficiency than the original solid
biomass. Biogas is primarily used for cooking and lighting, but can also partially substitute for diesel
hi engines used for irrigation pumping.
China and India have had extensive biogas programs for more than 15 years (Moulik, 1985).
Both programs have concentrated on household systems, with manure and other farm wastes being
the most common feedstocks, with over 7 million systems installed, most of these in China.
Programs in both countries have had to deal with design, construction, and maintenance problems
so that many of the digesters are no longer functioning (Miller, et al., 1986), demonstrating the
difficulty of introducing even relatively "simple" low-cost technologies in remote, rural areas of
developing countries. Some larger institutional plants have had a higher probability of succeeding
than household-size facilities.
Financially, the feasibility of biogas plants depends largely on whether the biogas and biomass
residues substitute for fuels or fertilizers that have traditionally been purchased or obtained at zero
financial cost. In cases where the biogas or residues do not generate incomes or reduce cash
outflows, they are less likely to be viable. However, the nonfinancial benefits of these programs, such
as improvements hi public health due to lower emissions during cooking or increased mortality of
pathogens in the digester, reduced deforestation, less reliance on imported fuels, etc., motivate
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countries such as China and India to continue subsidies for biogas projects (Gunnerson and Stuckey,
1982).
There are a number of other approaches being tried to make this technology more appealing.
Ideally, what is required is a low capital cost technology that permits the use of a wide variety of
feedstocks and results in high gas yields over a range of ambient temperatures. In Taiwan, a durable
and cheap above-ground bag digester made from bauxite refining wastes has been used with success
(Miller et al, 1986). Other promising anaerobic digester designs being explored include the upflow
sludge blanket and baffled reactor (Gunnerson and Stuckey, 1982).
Gasification
Many cellulosic materials can be gasified and then either used directly or liquified into
methanol. There are two routes for gasifying biomass-one resulting hi producer (or wood) gas and
the other in higher calorific value synthesis gas. Producer gas is made by heating wood in an almost
oxygen-free environment so that the unburned fuel breaks down into gases, ash, and tar. Producer
gas was used to propel trucks in World War II when oil was scarce. Synthesis gas is made at higher
temperatures with a more pure oxygen source than producer gas, thus eliminating nitrogen, and lends
itself to conversion into methanol (see later section on liquid fuels from biomass).
Producer gas can be made using a number of raw materials: wood, charcoal, crop residues,
and urban refuse. There are more than 20 companies world-wide selling gasifiers, with Brazil and
the Philippines leading in the use of this technology. Gasifiers have been used to power tractors,
motor boats, and irrigation pumps and to provide electricity for food processing and other rural
needs. They can also replace oil as a boiler fuel.
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Electrical Power Applications. Kjellstrom (1985) has shown that for conventional power
generation applications, biomass gasifiers compete favorably if the operating times are long, load
factors high, and power outputs large. The economics are most favorable for wood-based systems
rather than charcoal systems, and could become substantially more attractive if oil prices were to
increase or biomass input costs were to decline. One drawback to gasifiers at this time is that
current designs do not accept all types of crop residues. Kjellstrom also demonstrated that at 1985
diesel prices it would be uneconomic to run diesel tractors or trucks on producer gas or to use it in
industrial applications except for industries with surplus biomass residues. Another technical problem
is the need to understand the pollution impacts due to CO emissions and tar condensates from the
biomass material.
While there are a number of problems to be resolved before biomass gasifiers can be easily
used to replace natural gas in conventional applications, research at Princeton University has shown
that integrated gasifier-combustion turbine systems could provide, at small scales (e.g., 5-50 MW),
power that is less expensive than power from new hydroelectric, coal, or nuclear plants. (See Box 7-
5, Larson, et al., 1987).
Liquid Fuels From Biomass
Biomass can also be used to produce liquid fuels. There are two basic energy types that can
be produced with biomass—ethanol and methanol. Each of these fuels is discussed below.
Metfaanol
Methanol is attractive because current technologies use raw materials grown on lands not
required for food production (unlike ethanol). Methanol is produced by producing synthesis gas from
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Box 7-5. Biomass-Fired Combustion Turbines
Adaptation of the integrated-gasifier-combustion-turbine technology discussed above
(combined cycle or aeroderivative turbines-see FOSSIL FUELS) to use biomass presents an
attractive option for generating electricity in developing countries (Larson et al., 1987), and
could also become important in industrialized countries with advances in biomass plantation
productivity (see FORESTRY). Indeed, the use of this technology with biomass should be
simpler than with coal because biomass is easier to gasify and sulfur removal is unnecessary.
The use of aeroderivative turbines (STIG and ISTIG, see Natural Gas Substitution) may be
particularly attractive because this technology remains quite economic at small scales. While
the individual components of such a system have been tested, a commercial demonstration of
the integrated package could be very important in increasing investors confidence in this
technology.
Biomass-based electricity generation is most economical where the fuel has already been
collected for other reasons (e.g., the forest products industry, the cane sugar industry). A
prime example is the use of bagasse (Le., sugarcane residues) at sugar mills and ethanoj
distilleries. Although these waste products are currently used to provide on-site needs for
process steam and often electricity, there has been little interest in increasing efficiency once
on-site requirements are satisfied. Indeed, steam and electricity production is often
intentionally inefficient because of the desire to consume the wastes. Substituting an ISTIG-
based cogeneration system for current steam turbines could increase electrical output by a
factor of 20, while still meeting process steam requirements; total system efficiency could
exceed 50% (Larson et al., 1987). This could make the cane sugar industry a major electricity
producer in developing countries: If this technology were adopted in the 70 sugar-producing
countries, total capacity could exceed 50 GW, increasing electricity supplier by 25% in these
countries.
Design calculations suggest that the costs would be very competitive with alternatives.
Capital costs could be less than $l,000/kW, and electricity could be generated for 3-4
cents/kWh where biomass is available for $2/GJ or less (Larson et al., 1987). (Bagasse in
the sugar cane industry is essentially free, implying that the additional costs for producing
electricity could be less than 2 cents/kWh.) The barriers to adoption of this technology
appear to be primarily institutional -- collaboration between the cane sugar or other biomass
producers and the utility industry is required. Furthermore, an integrated biomass-based
advanced turbine system needs to be commercially demonstrated, but it is difficult to attract
investors for projects considered to entail technological risk in developing countries where this
technology is most attractive (see Chapter IX).
biomass, which is then converted to methanol. While the technology for conversion of synthesis gas
to methanol is well-established, converting biomass to synthesis gas is a major technical and economic
challenge (Williams, 1985). Although this part has been demonstrated (e.g., in West Germany and
Brazil), the use of biomass is still not as economic as methanol derived from fossil sources such as
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natural gas and coal. In the U.S. for wood costing $20/dry ton, the cost of methanol, which burns
more efficiently than gasoline, would be $14/GJ, which is equivalent to a gasoline price of $11/GJ
(or about $1.50/gallon). As a result, the production of methanol from biomass should be regarded
as a promising long-term opportunity if alternative fuel prices rise and/or technical improvements
reduce cost. (Williams, 1985).
Ethanol
Biomass can also be used to produce ethanol. Ethanol is useful both as an automotive fuel
and as a feedstock for the production of ethylene and other chemicals. Because of certain inherent
requirements, as discussed below, its applicability is limited to a few countries. However, to the
extent it can replace petroleum products, net emissions of CO2 will be zero since ethanol from
biomass is produced on a renewable basis.
Today, Brazil has the most extensive ethanol development program in the world. The
purpose is to provide alternative transportation fuels, based largely on sugarcane-derived ethanol
(Sathaye et al., 1988). Although Brazil has succeeded in reducing its oil imports, its program has
received mixed reviews, largely because the program has depended on substantial subsidies to ensure
its success. Similar efforts in other countries, such as Kenya, have been less successful, usually due
to a lack of low-cost biomass or industrial expertise such as that available in Brazil (Miller, et al.,
1986). Despite these problems, alcohol production may offer future benefits, as a number of other
feedstocks (e.g., grain, sorghum, corn) may provide cheaper ethanol (Brown, 1980) and as
technologies to produce ethanol from wood are developed.
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Other
One technically-feasible option with biomass-derived liquid fuels is to partially substitute
coconut, palm, and other vegetable oils with diesel fuel. These oils can be grown on plantations with
high yields, but their worth is usually greater as food than as fuel. The Philippines briefly
experimented with a mixture of coconut oil and diesel until changes in relative prices made the
approach uneconomical (Miller et al., 1986).
SOLAR ENERGY
Solar energy technologies, as used in this section, refer to technologies that collect,
concentrate, and convert solar radiation into useful energy. Technologies for converting solar energy
into useable energy offer some of the greatest long-term opportunities for replacing fossil fuels.
Within this category, however, there are several types of technologies. Some solar energy applications
for the residential and commercial sectors were discussed in PART ONE: ENERGY SERVICES. This
section will focus on solar thermal and solar photovoltaic options.
Solar thermal systems that are more sophisticated than the residential and commercial
systems described earlier are being developed that can concentrate solar radiation to produce higher
temperatures. These higher temperatures could be used to make steam, electricity, or power for
other industrial process heat applications. The most sophisticated solar conversion approaches are
photovoltaic technologies that convert solar radiation directly into electricity. These techniques have
received considerable research attention over the last 10-15 years and have progressed considerably
as a result. The potential of both photovoltaic and solar thermal technologies, which produce power
directly only during daylight hours, will be even greater as more efficient storage technologies increase
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the cost-effectiveness of storing excess power generated during the daytime for use at other times,
as discussed further in STORAGE TECHNOLOGIES.
Solar Thermal
Solar thermal technology is a promising area of solar research since it can provide thermal
energy at temperatures from 150-1700°C for heat or electricity applications, at almost any scale, and
with conversion efficiencies as high as 31.6% for electricity and 80% for heat (IEA, 1987). Solar
thermal concentrating systems have been extensively demonstrated in recent years for both industrial
heat and electricity generation. 670 MW of electric generating capacity are already in place or under
construction in seven countries (Shea, 1988). In the U.S., solar thermal capacity is projected to
increase to 550 MW in the next 5 years based on announced industry plans (U.S. DOE, 1987a). The
U.S. Department of Energy has estimated recently that a further cost reduction by a factor of 1.5 to
2 would make these technologies competitive with conventional electric generating technologies. DOE
has also identified several key technical improvements currently being researched that could achieve
the needed cost improvements, leading to economic competitiveness by the mid-1990s (U.S. DOE,
1987a). In recent years most research and development has focused on three thermal technologies-
-parabolic troughs, parabolic dishes, and central receivers. These technologies, along with solar ponds,
are discussed below.
Parabolic Troughs
Parabolic troughs are often referred to as line focus systems because they use one axis only
to track the sun; each concentrator (collector) has its own receiver, with parabolic troughs often
connected to form a series of collectors (see Figure 7-13). Troughs operate at lower temperatures
than most other technologies, e.g., up to 4QO°C, making them most suitable for industrial process heat
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Chapter VII
FIGURE 7-13
BASIC SOLAR THERMAL TECHNOLOGIES
Parabolic Trough
Concentrator
Parabolic Dish
Receiver \ Concentrator
Central Receiver
Source: IEA, 1987
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applications. The thermal efficiencies of these units have improved significantly in recent years,
reaching 65-70%, with availabilities exceeding 95% (IEA, 1987).
Parabolic Dishes
Parabolic dishes differ from troughs in that they are point focus systems, i.e., a two-axis
tracking system is employed to follow the sun (see Figure 7-13). The higher concentration ratios
allowed by this design (from one hundred to several thousand suns) produces temperatures
approaching 1700°C, making electricity conversion possible. This technology currently holds many
efficiency records, including the highest conversion efficiency (31.6%). Several of the most ambitious
development projects are in the U.S., with installed capacity at some projects approaching 5 MW.
DOE estimates total system cost at $3,4QO/kW, although cost reductions of 40% are considered
feasible (IEA 1987).
Central Receivers
Central scale receivers are the largest scale thermal technology. The receiver is typically
mounted on a tower surrounded by a large field of nearly flat tracking mirrors called heliostats (see
Figure 7-13). The heliostats focus the solar energy on the receiver, achieving working fluid
temperatures of 1500°C or higher (IEA 1987). Several countries are studying central receivers, with
the largest plant built in southern California (10 MW). This plant has exceeded peak design output
by 20%, operated at night from storage, and achieved overall plant efficiency of 13% (IEA 1987).
Heliostats account for 40-50% of total costs, and consequently are the focus of most cost reduction
efforts; recent developments indicate that cost reductions of 50% could be achieved in one or two
years (IEA 1987).
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Solar Ponds
Solar ponds collect and store heat in large bodies of water and operate at much lower
temperatures than other solar thermal technologies (85-100°C). In a typical design, a salt gradient
below the surface acts as an insulating barrier by trapping incoming solar radiation. Large heat
exchangers are used to extract the thermal energy, which can be used for many purposes, including
seasonal heat storage for space heating, low temperature process heat applications, or even electricity
production. Research into this technology has achieved thermal efficiencies of 15%; with electrical
conversion efficiencies of about 1-2% (IEA 1987). Despite these low efficiencies, solar ponds can
be attractive since capital costs are very low.
Solar photovoltaic
Solar photovoltaic (PV) technologies convert solar radiation to electricity (DC, or direct
current) without moving parts or thermal energy sources. Photovoltaic technology was initially
developed in the 1950s; these first systems were about 100 times more expensive than conventional
generation technologies, but major improvements have reduced this differential to 3-4 times current
energy costs. This differential is even lower when compared to current replacement costs. Figure
7-14 shows the dramatic progress that has been made since 1975 in reducing the costs of electricity
from photovoltaic systems.
The principal drawback with photovoltaics is their high capital costs. The current goal is to
reduce costs to about 6 cents/kwh (which is comparable to the best conventional powerplant costs),
at least for conditions in the southwestern United States where insolation is high. The U.S. DOE
is projecting that its cost goal ($0.06/kwh) may be achieved in the 1990s and that photovoltaic systems
could provide up to 1.5 GW of generation capacity by 2005 (U.S. DOE, 1987a). Researchers at
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Chapter VII
FIGURE 7-14
Photovoltaic Electricity Costs
$15-1
s
8.
Small Stand-Alone
Applications
1st Large (60kW)
Experiment
Intermediate (20-200kW)
DOE
Present Status Research Goal:
Austin Electric ^ 6«/kWn
1975
1986
1990
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Princeton University are also projecting major technological breakthroughs in amorphous silicon solar
cell technology. They have projected that capital costs (almost the entire cost for PV) for these cells
may decline by over 80% by the year 2000, while the conversion efficiency of photovoltaic arrays
roughly doubles (Ogden and Williams, 1988). This could greatly expand the contribution of
photovoltaic electricity generation over the next several decades.
The basic principle behind solar photovoltaic power is that as light enters the PV cell,
electrons are freed from the semi-conductor materials, thereby generating an electric current. To
generate substantial amounts of power with PV, individual cells (which produce about 1 watt of direct
current electric power) are combined into a weatherproof-unit called a module. Modules can then
be connected together into an array, with the power output limited only by the amount of area
available. The modular nature of PV arrays allows them to be built in increments to conform more
closely to power requirements as demand for electricity grows.
The principal photovoltaic technologies for current commercial power applications use silicon
for the semi-conductor materials. Several efforts are underway to improve silicon-based photovoltaic
cells, including optical tracking that orients the cell toward the sun, concentrating devices that increase
the amount of solar energy hitting the plate, layering materials to absorb more of the energy, and
using amorphous thin film techniques to lower production costs. The major PV technologies are
briefly discussed below.
Crystalline Cells
Crystalline silicon cells are the earliest and most-established PV technologies. The most
popular material has been single-crystal silicon, which had 90% of the global market in 1980 but only
44% (10.8 MW) by 1985 (IEA 1987). Single-crystal silicon PV cells are relatively efficient
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(production efficiencies are 12-14%; laboratory efficiencies up to 21%), but have lost market share
primarily due to the high cost of manufacturing. This involves several energy-intensive stages to
produce the large silicon crystal ingots from which wafers are cut (which destroys about half the
crystal ingot), then final preparation and assembly.
In response to some of the problems encountered with single-crystal technology, other
crystalline technologies have been developed. Polycrystalline silicon cells use a casting process that
is less expensive but only slightly less efficient than single-crystal silicon, e.g., commercially-produced
cells have a conversion efficiency of 11-12%, with laboratory efficiencies of 18% (IEA 1987).
Polycrystalline silicon cells captured about 20% of the global market in 1985. Another alternative
is polycrystalline silicon ribbon, which avoids the need to produce slices (or wafers) by producing
sheets or ribbons of polycrystalline silicon. The advantages of this technology are the potential for
high-speed production and less material waste, although its efficiency is somewhat lower, e.g.,
production efficiencies are 10-13% and laboratory efficiencies are 17% (IEA 1987). This technology
has been commercialized only recently.
Thin-Film Technologies
As an alternative to crystalline technologies, researchers have focused on thin films. Thin-
film solar cells can be produced less expensively using less material and automated production
techniques. There are many semi-conductor thin-film materials under investigation, including
amorphous silicon, copper indium diselenide, gallium arsenide, and cadmium telluride.
Amorphous Silicon. Amorphous silicon cells have received the most attention of the thin-
film technologies, supplying 35% of the global market in 1985 (IEA 1987). The vast majority of this
was for use in the consumer market, especially calculators. Because this material does not possess
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the natural photovoltaic properties of crystalline silicon, efficiency levels have been a problem-
laboratory efficiencies are about 13%. Additionally, amorphous silicon suffers from a light-induced
power degradation problem which can cause a 22-30% loss of power output over time. Thus, large-
scale projects can currently expect to achieve about 5% efficiency over the life of the project.
Research into this problem continues, with amorphous silicon thin-film cells considered one of the
best potential technologies for power applications as efficiencies improve and production costs are
lowered.
Other Semiconductor Materials. Other materials are being investigated that do not utilize
silicon, including copper indium diselenide, gallium arsenide, and cadmium telluride. Copper indium
diselenide is attractive due to its high efficiency (up to 12% currently) and stability when exposed to
sunlight over extended periods. Gallium arsenide technologies have achieved the highest efficiency
of any PV material (29%, Poole, 1988), but are also some of the most costly. Research continues
on production processes, such as electroplating, that would significantly reduce current production
costs.
Multi-Junction Technologies
Multi-junction, or tandem, technologies combine the characteristics of two or more different
PV technologies to take advantage of different light absorption characteristics, thereby increasing total
cell efficiency (e.g., two-junction devices can achieve efficiencies of 18-35%; U.S. DOE, 1987c). This
technique has been used to produce the most efficient solar cell to date—a 31% efficient cell that
combined a single-crystal gallium arsenide cell and a single-crystal silicon cell (Poole, 1988). Multi-
junction devices are also thought to be a critical component of solar concentrators, which are optical
systems designed to improve PV output by increasing the amount of sunlight striking a cell by ten
to a thousand times. In combination these technologies may help to achieve in practice the 25-30%
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efficiency range considered critical for utility applications (U.S. DOE, 1987c). Multi-junction thin
film technologies are also expected to become more important as multi-layering increases system costs
proportionately less than the resultant increase hi efficiency.
ADDITIONAL PRIMARY RENEWABLE ENERGY OPTIONS
There are opportunities for increased use of additional renewable energy sources, such as
hydroelectric, wind, geothermal, and ocean energy. Many of these resources are utilized today (often
to supply electricity) and, with continued research and development, have the potential to make
important contributions to meeting future energy needs without increasing emissions of greenhouse
gases.
Hydroelectric Power
Hydro power currently provides the largest share of renewable electricity generation in the
U.S. and globally. In the U.S., hydroelectric capacity accounted for 10-14% of total electricity
generation for the years 1983-1987 (U.S. DOE, 1988). Globally, hydroelectric generation accounts
for about 20% of total electricity and 7% of primary energy production (United Nations, 1988). The
technical potential exists to expand the contribution of hydro at least by a factor of two by the year
2025.
Industrialized Countries
Traditional large-scale hydropower projects are no longer a significant option for most
industrialized countries. Many of the most attractive sites have already been exploited in these
countries and remaining potential sites are often highly valued in their natural state for recreational,
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wilderness or ecological purposes. The U.S. has more operational large hydroelectric capacity than
any other country in the world. However, new sites are no longer being developed, and the U.S.
Bureau of Reclamation, the federal agency historically responsible for large dam-building projects in
the West, announced in 1987 that its mandate to develop new water supplies has virtually expired and
that it would be contracting in size and shifting its focus to other activities over the next decade
(Shabecoff, 1987).
One exception among industrialized countries is the potential for greatly expanding
hydroelectric generating capacity in Canada. The U.S. Department of Energy recently identified
potential hydro sites in Canada which, if developed, could more that double peak hydro generating
capacity in Canada (from about 55 GW to over 127 GW). This level of expansion would not be
required to meet projected Canadian demand for many years. However, excess capacity developed
in Canada could be used to generate power for transmission to the U.S. where it could compete
favorably with other generation options in many regions. The DOE analysis estimates that U.S.
imports of power from Canada could more than double by 2010 if the potential hydro sites discussed
above were developed (U.S. DOE, 1987d). In lieu of this hydro development, additional generating
capacity in the U.S. during this period would predominantly be fossil-fueled. Thus, displacing U.S.
capacity additions with Canadian hydro development would reduce CO2 emissions. However, any
hydro development raises potential bilateral and environmental issues with Canada that would need
to be resolved.
Expansion of small-scale hydropower (e.g., less than 30 MW) could be an option in many
industrialized countries. In the U.S. up to 10 GW of potential capacity additions in this category have
been identified (U.S. DOE, 1987a). Other OECD countries, such as Canada and West Germany,
are evaluating the potential for expanding small-scale hydroelectric generation (Shea, 1988).
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In the USSR and Eastern Europe, there appears to be significant technical potential for
expanding both large- and small-scale hydro use. In 1981, hydroelectric generation provided about
13% of total electricity in the USSR. Soviet researchers estimated that this was only about 19% of
the country's potential large hydro capacity. Much of the untapped potential is in Siberia, requiring
potentially costly long distance transmission to reach major load centers (Hewitt, 1984). In Eastern
Europe there are indications that opportunities for large hydro projects still exist as well. Between
1980 and 1985 Romania increased its hydroelectric capacity by 2.5 GW, which was more than a 70%
increase in total capacity (World Bank, 1984).
Opportunities also exist for expanding small-scale hydro in the USSR and Eastern Europe.
Poland, for example, has recently initiated a program to rehabilitate 640 small dams that had fallen
into disrepair and return them to electric generation (Shea, 1988).
Developing Countries
In developing countries the potential for large-scale and small-scale hydro development is very
large. For example, by 1980 it is estimated that North America and Europe had developed 59% and
36% of their large hydropower potential, while in contrast, Asia, Africa, and Latin America were
estimated to have developed only 5-9% of potential resources. In fact, most large-scale hydro
development in the 1980s has taken place in the developing countries.
Between 1980 and 1985, hydro capacity additions in twelve developing countries totaled over
38 GW (over 8% of total generating capacity in developing countries). Several developing countries,
notably Brazil, China, and India, have ambitious large hydro development programs planned for the
future. Total capacity additions in developing countries could exceed 200 GW by 1995 if these plans
are implemented (World Bank, 1984).
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There is some question, however, if these plans will be fully implemented. A recent study
by the U.S. Agency for International Development (U.S. AID, 1988b) points out that many developing
countries are finding it increasingly difficult to finance capital-intensive power projects, especially
hydro, which have construction periods of 10 years or more. In addition, the AID and others have
pointed out that concerns about ecological and land use impacts such as submergence of forested
areas as well as resettlement impacts of large hydroelectric projects may slow such development hi
the future.
As in industrialized countries, there is also significant potential for small-scale hydro potential
in developing countries. At least 28 developing countries already have active programs for developing
small-scale hydropower (World Bank, 1984). Equipment for small-scale hydro generation is now
manufactured in a number of developing countries, resulting in designs that are both less costly and
more suitable to local conditions (U.S. AID, 1988a).
Wind Energy
Wind-powered turbines were first connected to electric power systems in 1941. Currently,
there are several technologies available, primarily horizontal axis wind turbines and vertical axis wind
turbines. Under optimal conditions, these systems can produce power at 10 to 15 cents per kilowatt-
hour, or about two to three times more expensively than conventional fossil powerplants. The goal
is to reduce these costs such that in areas with wind resources, these systems can be used
economically. In particular, wind energy systems may be very suitable for remote sites where the cost
of conventional generation technologies may also be quite high.
Considerable improvement in the performance and economics of wind electric generation was
achieved in the early 1980s. In California, electricity generated from "wind farms" increased from 10
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terajoule-hours to 16 petajoule-hours (primary energy equivalent) while capital costs fell from $3,100
to $l,250/kw between 1981 and 1987 (Shea, 1988). The Department of Energy reports that the cost
of electricity from wind turbines has fallen from about 30 cents/kwh to 10-15 cents/kwh in the 1980s.
DOE projects that this improvement will continue and that wind energy could provide as much as
0.7 EJ of electricity in the U.S. by 2005 (DOE, 1987a).
Considerable international attention is now being paid to wind energy. Wind farms are being
installed hi Denmark, the Netherlands, Great Britain, Greece, and Spam (IEA, 1987). Other nations
that have announced plans for expanded wind energy development include China, Australia, Belgium,
Israel, Italy, the Soviet Union, and West Germany (Shea, 1988).
Geothermal energy
Geothermal energy is thermal energy stored in rocks and fluids within the earth. It has been
estimated that approximately 10% of the world's land mass contains accessible geothermal resources
that could theoretically provide hundreds of thousands of megawatts of energy for many decades
(IEA, 1987b). As indicated in Table 7-10, geothermal resources suitable for generating electricity are
extensive and geographically widespread. From a global warming context, several countries with the
most extensive geothermal potential, e.g., the U.S., China, and the USSR, are also currently heavily
dependent on coal consumption. Geothermal energy may, in these countries, provide one option for
displacing coal as a source of baseload electricity generation' and industrial heat. Significant
geothermal resources also exist, and are being developed, in several Pacific Run countries, where
economic growth rates, and thus demand for additional energy, is expected to be high.
While certain types of geothermal resources, specifically hydrothermal and geopressured
reservoirs, are not strictly renewable on a human time scale, resources are so extensive that with
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Chapter VII
Country
TABLE 7-10
Estimates of Worldwide Geothermal
Electric Power Capacity Potential
(in Megawatts)
MW
Country
MW
Argentina
Bolivia
Cameroon
Canada
Chile
China
Columbia
Costa Rica
Ecuador
El Salvador
Ethiopia
Greece
Guadeloupe
Honduras
Iceland
India
Indonesia
Iran
Italy
Japan
19,950
63,100
15,150
446,700
30,200
537,050
77,650
12,600
100,000
5,000
154,900
8,900
387
12,600
22,900
15,200
436,500
75,850
33,900
79,450
Kenya
Korea (N. & S.)
Mexico
Morocco
New Guinea
New Zealand
Nicaragua
Peru
Philippines
Portugal
Saudi Arabia
Soviet Union
Spain
Taiwan
Tanzania
Turkey
U.S.
Venezuela
Vietnam
79,450
79,450
257,050
19,950
30,900
30,900
33,900
302,000
67,600
1,000
15,850
239,900
5,900
8,150
6,200
87,100
501,200
39,800
37,150
Source: U.S. DOE, 1985c.
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careful phasing and reservoir management, geothermal energy can make a significant long-term
contribution to global energy needs. Unlike renewable energy sources such as solar radiation and
wind, geothermal resources are available on a constant basis, making them suitable for baseload
electricity generation and industrial applications without the storage problems associated with
intermittent energy sources.
There are several types of geothermal resources that require somewhat different approaches
for exploitation. Hydrothermal resources contain hot water and/or steam trapped-in fractured or
porous rock at accessible depths (e.g., 100-4500 meters). These are the most commonly used
resources currently, and the only resources currently commercially exploited. Technology for
exploiting these resources involves sinking wells, extracting the hot fluids, and using the steam or hot
water for electricity generation or direct heat applications. Steam can be used directly in steam
electric generating turbines. Hot water resources are either "flashed" to produce steam, or used to
vaporize another working fluid which in turn drives a turbine.
Another type of geothermal resource of long-term interest is hot dry rock. These potential
resources are widely distributed around the world, but more difficult to exploit than hydrothermal
resources. To extract heat from hot dry rock, it is necessary to inject liquid into one well and
withdraw it through another well after it has absorbed heat. Considerable research is underway to
improve technologies for extraction of energy from hot dry rock. A geothermal resource still at the
conceptual stage of development is magma which is liquefied or partially-liquefied rock. Potential
resources may be greater than any other geothermal resource and the very high temperatures
available suggest that power could be economically produced; however, development of the necessary
technologies is seen as a major challenge.
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Geothermal energy is currently used in several countries for direct heat and electricity
generation. Table 7-11 shows the extent of direct heat use in 1984. Table 7-12 indicates the installed
capacity for geothermal electricity generation by country in 1985. Although they represent only a
small fraction of total energy use, these facilities have demonstrated the commercial viability of
geothermal technologies. In the U.S. geothermal systems currently produce electricity at a cost that
is competitive with coal and nuclear plants, and the average geothermal unit today is available on-
line more than 95% of the time (U.S. DOE, 1987a). The Department of Energy projects that U.S.
geothermal electric capacity will more than double by 1995 to about 4.7 GW.
Geothermal energy may also play an even more important role in some developing countries.
Eight developing countries currently have installed geothermal electric capacity, and about 50 more
have been identified as having potential for geothermal development (U.S. AID, 1988a). In the 1980s,
the costs of geothermal technology have come down considerably, and small-scale, ready-to-install
generators (1-1.5 MW) have also been developed and proven reliable. These and other developments
should make geothermal electricity more attractive to many developing countries (U.S. AID, 1988a).
Ocean Energy
There are several types of potential ocean energy sources, including thermal gradients and
waves. Research is underway in many countries, including the U.S., to develop technologies that can
exploit these resources. In one technology, cold water located deep in the ocean is used to condense
a working gas such as freon or ammonia. The liquid then is reconverted to gas by warm surface
waters and used to drive a turbine and generate electricity. Current costs for such a system are
roughly three times higher than commercial alternatives, and significant technological uncertainties
remain regarding system components and operation in an ocean environment.
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TABLE 7-11
Capacity of Direct Use Geothermal Plants
In Operation - 1984
(For countries having capacity above 100 MW)
Power Energy Load
Country MW GWh %
China 393 1945 56
France 300 788 30
Hungary 1001 2615 30
Iceland 889 5517 71
Italy 288 1365 54
Japan 2686 6805 29
New Zealand 215 1484 79
Romania 251 987 45
Soviet Union 402 1056 30
Turkey 166 423 29
United States 339 390 13
Other 142 582 47
Total 7072 23957 391
1 Based on total thermal power and energy.
Source: IEA, 1987.
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Chapter VII
TABLE 7-12
Geothermal Powerplants On-Line As Of 1985
Country
No. Units
Type(s)'
MW
United States
Philippines
Mexico
Italy
Japan
New Zealand
El Salvador
Kenya
Iceland
Nicaragua
Indonesia
Turkey
China
Soviet Union
France (Guadeloupe)
Portugal (Azores)
Greece (Milos)
56
21
16
43
9
10
3
3
5
1
3
2
12
1
1
1
1
DS,1F,2F,B
IF
1F.2F
DS.1F
DS,1F,2F
2F
1F,2F
IF
1F,2F
IF
DS,1F
IF
1F,1F,B
F
2F
IF
IF
2022.11
894.0
645.0"
519.2"
215.1
167.2
95.0
45.0
39.0
35.0
32.25
20.6
14.32"
11.0
4.2
3.0
2.0"
Totals
188
4763.98
1 DS = dry steam; 1F.2F = 1- and 2-flash steam, B = binary.
" Includes plants under construction and scheduled for completion in 1985.
Source: IEA, 1987.
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Another technology would exploit wave energy using a device in which wave motion would
compress trapped air. The compressed air would then be used to drive a turbine and generate
electricity. This system is also currently unproven and expensive. Further, the output of a wave-
based system would fluctuate with wave conditions, which would not necessarily match well with
electricity load requirements. As with many other renewable technologies, economic and reliable
energy storage would be necessary to make this option viable.
NUCLEAR POWER
This section discusses the potential role for nuclear power to meet future energy needs.
From the perspective of global warming, nuclear power technologies are attractive in that they do not
emit greenhouse gases. As will be discussed, however, there are other problems that beset the
nuclear power industry. The first part of this section discusses fission technologies; nuclear fission
is the technology currently used in operating nuclear powerplants. One of the key attributes of this
technology is its need for fissionable, radioactive material in order to operate. The last part of this
section discusses fusion technology, which is a longer term nuclear option currently in the research
and development stage. Unlike fission technologies, fusion technologies would not require large
inventories of radioactive materials such as uranium and plutonium for their operation.
Nuclear Fission
Nuclear fission technology is an important source of electricity in many regions of the world.
For example, in the U.S. nuclear plants provided about 17% of total electricity generated in 1987.
This total is projected to increase throughout the remainder of this century as about 20 GW of new
nuclear powerplants, which are currently under construction, are completed. However, the prospects
for further capacity additions are clouded. In the words of the U.S. Department of Energy, "No
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additional orders for nuclear powerplants are likely in this country until the conditions of the past
few years are changed" (U.S. DOE, 1987a). Moreover, between 2000 and 2015, about 40% of existing
nuclear powerplant capacity will have to retire unless current operating licenses are extended beyond
their expiration dates.
The situation is somewhat similar in many other industrialized countries. The International
Energy Agency reports that nuclear energy was the fastest growing fuel for electricity generation in
the OECD countries between 1985 and 1987. However, the report continues: "It should be kept in
mind, however, that present additions to nuclear capacity come from stations authorized in the second
relatively intense "cycle" of nuclear plant construction activity in the 1970s. Compared with some 239
GW of nuclear capacity operating in the OECD countries at the end of 1987, around 52 GW are
under construction" (IEA, 1988). In addition, planned nuclear electricity production hi the 1980s in
the USSR has been consistently behind schedule due to construction delays. By 1986, nuclear
generation was providing about 10% of electricity in the USSR. In the wake of the Chernobyl
disaster of April 1986, the nuclear program in the USSR is experiencing further delays and future
contributions are difficult to project (IEA, 1988).
Nuclear power has been beset by a series of problems. Plant capital costs have increased
so dramatically that new nuclear powerplants are no longer considered economical (see Figure 7-
15). Powerplant lead times (i.e., the time for project initiation to completion) are greater than ten
years, increasing project risk. Additionally, in many countries such as the U.S., the regulatory
environment is generally unfavorable toward large, long-term capital investments and nuclear
powerplants in particular (U.S. DOE, 1987a).
Public opposition to nuclear powerplants is strong, in part due to concerns about safety in
the aftermath of the accidents at Three Mile Island and Chernobyl. In addition to plant safety, waste
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Chapter VII
FIGURE 7-15
«A
^
<0
9
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Policy Options for Stabilizing Global Climate ~ Review Draft Chapter VII
disposal is an issue of major concern. Although several countries utilizing nuclear power are working
on the problem, none have identified an acceptable solution to the problems of long-term nuclear
waste disposal.
Finally, the nuclear weapons proliferation issue must be addressed if nuclear power is to
become publicly acceptable. A present day 1000 MW nuclear plant produces some 141 kg of
fissionable plutonium annually in its spent fuel. For comparison, it takes less than 10 kg of
fissionable plutonium to make a nuclear weapon. Currently, this spent, intensely radioactive fuel is
stored at plant sites. If nuclear power were to be greatly expanded in the future, limited
supplies of uranium worldwide would rapidly force a shift from today's "once through" nuclear cycles
(i.e., the nuclear fuel is only used once) to fuel cycles involving the reprocessing of spent fuel and
the recycling of recovered plutonium for use as fuel in present reactor types and a new generation
of plutonium breeder reactors. The amount of fissionable material required would pose a formidable
institutional challenge to the world community to safeguard relatively large quantities of plutonium
that would circulate in worldwide commerce (Ogden and Williams, 1988).
In the U.S., the Department of Energy has recognized many of these potential obstacles. In
its 1987 Energy Security report (U.S. DOE, 1987a), the U.S. DOE identified three basic obstacles
that must be overcome before new orders will be forthcoming:
• Given current reactor designs and regulatory processes, nuclear power is not
economically competitive with alternative generation options.
• Public concerns about reactor safety make licensing of new plants difficult.
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• Currently unresolved questions about the viability of long-term waste disposal options
have become a significant barrier to expansion of nuclear power.
DOE has initiated efforts to deal with all of these problems. First, it has underway a
research program aimed at the development of improved reactor designs. Program goals include new
designs for "enhanced safety, increased simplicity, and improved reliability." To meet these goals, the
new designs incorporate innovative concepts of passive safety that hopefully would ensure that any
equipment or operator failure would cause the plant to shut down automatically. A second important
attribute of the advanced designs is standardization of designs, which could reduce cost, shorten the
permitting process, and improve reliability and safety. Third, the new designs are for smaller,
modular units, which should make them more compatible with the utility industry's needs for smaller
capacity addition. Another design concept is that the portion of the plant that is actually within the
nuclear containment vessel can be minimized and modularized, thereby allowing the balance of the
plant to be built to standard construction specifications. An example of this approach is Sweden's
ASEA-ATOM's PIUS reactor, which places the steam generator and primary pumps outside the
containment vessel (EIA, 1988). More stringent safety standards for nuclear powerplants could then
focus on the smaller nuclear component. Ultimately, the nuclear portion may be designed to be
fabricated at the manufacturing plant and transported in its entirety to the powerplant site for
insertion into the remainder of the plant (Griffith, 1988).
These principles are being applied to several basic reactor types:
• Advanced Light Water Reactor fALWR). Light water reactor technology is currently
the type most widely in use in the U.S. The hope is to develop a standardized
design incorporating the lessons of recent experience.
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• Modular High Temperature Gas Reactor (HTGR). This is an advanced concept that
has not been demonstrated yet but is being designed to provide a next generation
nuclear capability that goes further toward meeting the design criteria mentioned
above than the ALWR.
• Advanced Liquid Metal Reactor (LMR). For the longer term, designs are being
developed that would incorporate the design goals stated above into a potential
breeder reactor option.
Finally, on the waste disposal issue, DOE has announced that it will continue to implement
the long-term Geologic Repository Program for disposal of high-level wastes while also constructing
a Monitored Retrievable Storage (MRS) Facility (U.S. DOE, 1987a). Thus, DOE is attempting to
deal with many of the constraints affecting the nuclear power industry. It is difficult to predict at
this point how effective these programs will be. In addition, the DOE report does not mention the
weapons proliferation problem that is also perceived as a long-term constraint by many observers.
Nuclear Fusion
Nuclear fusion, like nuclear fission, is an attractive power generation technology from a global
warming perspective because it does not generate greenhouse gas emissions. Fusion power has two
key advantages over fission power: (1) It uses secure and inexhaustible fuels: lithium and deuterium
are obtainable from seawater, and (2) it does not create large inventories of radioactive wastes.
However, fusion reactor technology is only in the early stages of research and development;
it is not expected to be a viable technology until after 2025. The costs of development for this
technology are expected to be high. To hasten fusion development and to defray the costs that need
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to be borne by any single country, international cooperative R&D agreements are likely to be signed
in the next few years.
ELECTRICAL SYSTEM OPERATION IMPROVEMENTS
One possible option for reducing the amount of greenhouse gas emissions from electricity
is to improve the efficiency of transmission, distribution, and storage of electrical power. Each of
these areas is discussed below.
Transmission and Distribution
Electrical energy losses from transmission and distribution are normally in the 5-10% range
in industrialized countries. When generation is primarily from fossil fuels, as in the U.S., programs
to reduce efficiency losses associated with electricity transmission and distribution may provide one
option for modest reductions in greenhouse gas emissions. In developing countries, however, it is
very likely that significant improvements are technically possible. Many developing countries
experience losses of over 20%, even 30%. Relatively inexpensive and straightforward technological
solutions exist for upgrading utility transmission and distribution systems to recover a major portion
of these losses. On the other hand, in many countries it is estimated that half of the "controllable"
losses are due to theft (U.S. AID, 1988b); despite many reasons for reducing these thefts, it is not
clear whether a straightforward solution to these electricity thefts exists nor would this mean a
significant reduction in greenhouse gas emissions, except to the extent demand is reduced as
consumers are charged for the power they use.
Electric utility companies normally operate their systems and interconnections with other
systems in such a way as to minimize generation costs, subject to a number of other constraints.
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Thus, powerplants with the lowest variable operating (including fuel) costs would be operated more
of the time, and power available from other utility systems would be purchased when its cost is lower
than the incremental cost of generating additional power within the system.
Within this framework, there may be some flexibility to shift more of the overall load to non-
fossil or natural gas-fired capacity without greatly increasing overall generating costs. Although
difficult to achieve institutionally, such alternative dispatching options may be technically feasible and
cost-effective in the near term. This could include "wheeling" power from region te region to take
maximum advantage of non-fossil generating capacity. On its largest scale, this type of strategy could
result in international electricity transfers from countries with less carbon-intensive generating capacity
to countries with more carbon-intensive available options. For example, expanded Canadian power
imports to the U.S. based on hydroelectric generation would be one such possibility.
Superconductors
Superconductors offer no resistance to electrical flow. Recently, breakthroughs in
superconductivity research has increased the prospects that this technology could be applied to power
production. Until recently, superconductivity could only be achieved in extremely cold environments
(e.g., more than 200°C below zero). The superconductivity effect can now be achieved at much
higher temperatures, although they are still well below ambient conditions. In the long term,
superconductivity could significantly improve the transmission of power. Conventional transmission
systems lose about 8% of the power they conduct; superconductors could greatly reduce, if not
eliminate, these losses. Superconductivity could also be beneficial for power production. For
example, several technologies use electromagnets, including the MHD system discussed above. During
the power production process electromagnets are typically the source of some lost power.
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Superconductors could reduce the energy lost in generating power by reducing these losses associated
with electromagnets. Also, as discussed below, superconductivity could be useful for energy storage.
Storage Technologies
There are a variety of technologies currently available or under development for energy
storage. Storage systems can perform several tasks, including:
• Load-leveling, which would allow inexpensive baseload electricity to be stored during
periods of low demand and released during periods in which the marginal cost of
electricity is high, e.g., powerplants could be run during the night and the power
stored to meet peak requirements in the afternoon. One caveat is that storage may
allow baseload coal to substitute for natural gas, increasing greenhouse gas emissions,
unless renewable energy sources are used.
• Spinning-reserve, in which the energy would be used to backup failed generating
systems.
• System-regulation, i.e., to balance a utility's constantly-shifting generation and load
requirements.
The development of adequate energy storage systems could be particularly crucial for the
competitiveness of many renewable energy technologies which can only produce power when the
resource is available, e.g., during daylight hours for solar or when the wind is blowing for wind energy
systems. To enhance their competitiveness, renewable technologies could be used in tandem with
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storage systems that would allow power to be generated whenever available and then stored until
needed.
Types of Storage Technologies
There are many different types of energy storage systems, including pumped storage,
batteries, thermal, compressed air, and superconducting magnetic energy storage. Several major
energy storage systems are discussed below.
Pumped Storage. Pumped storage is a hydroelectric power storage option that has been used
recently by the electric utility industry to meet electricity requirements during periods of peak
demand. With this system water is pumped from a lower storage reservoir to an upper storage
reservoir during off-peak hours, using electricity from a baseload powerplant (which is frequently coal-
fired or nuclear). During peak demand hours, the water is released to the lower reservoir much like
it would be at a typical hydroelectric dam. This system essentially stores power from the baseload
powerplant when it is not needed for use during peak demand periods when the baseload plant is
already committed 100% to meeting the peak power requirements.
While there are numerous pumped storage plants in the U.S., then- efficiency is low and
additional siting is likely to be difficult if they involve large, above-ground reservoirs. When
underground reservoirs are used, the systems are only economical in very large facilities (e.g., 1000
MW).
Batteries. Batteries are attractive primarily for their flexibility; because they are modular,
plants can be constructed quickly on an as-needed basis. Recent research and development has
focused on advanced lead-acid batteries and zinc-chloride batteries. Lead-acid battery technology has
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*
been used for decades, e.g., in automobiles, although their use in utility applications may be limited
by their capital costs. Due primarily to the lower cost of the construction materials, the zinc-chloride
battery is expected to be less expensive than the lead-acid battery in the longer term; possibly less
than $500/kW compared to $600/kW or higher for lead-acid batteries (OTA 1985). Plans to test
both types of batteries on a commercial scale are currently being planned. Other battery technologies
that could be available in the longer term include zinc-bromide, sodium-sulfur, iron-chromium, and
lithium-iron sulfide batteries.
Compressed Air Storage. Compressed air energy storage (CAES) uses off-peak electricity
to store energy in the form of compressed air in an underground cavern such as salt reservoirs, hard
rock reservoirs, or aquifers. The compressed air is used in tandem with natural gas or oil in a
modified gas turbine where the compressed air is used in lieu of a conventional compressor in the
turbine cycle, thereby allowing the turbine efficiency to increase up to three times its normal
efficiency (OTA 1985). CAES is dependent on geological characteristics that can be found in about
3/4 of the U.S. and uses technology that is well-advanced. However, no CAES facility has yet been
built in the U.S.; there is a facility that has been operating since 1978 in West Germany. There are
two sizes proposed for CAES plants; a mini-CAES (about 50 MW) costing about $392/kW and a
maxi-CAES (about 220 MW) costing about $515/kW; construction lead times are estimated to be 4
to 8 years (U.S. OTA, 1985).
Superconducting Magnetic Energy Storage. Superconducting magnetic energy storage (SMES)
would function like more conventional storage technologies, but would be able to store energy with
an efficiency of approximately 95% compared to 75% for pumped storage or 65% for battery storage
(Schlabach 1988). At this time SMES is clearly a long-term technology pending further improvements
in basic superconductivity design.
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HYDROGEN
One concept for reducing CO2 emissions is the long-term phaseout of a carbon-based
economy and the adoption of one utilizing hydrogen and electricity as complementary energy
currencies. Hydrogen would serve as an "energy carrier" since electricity or some other source of
power is required to produce it. Hydrogen is attractive for this role because it is nonpolluting,
portable, and relatively safe. Hydrogen could be produced in a number of ways, including chemical
processes beginning with coal or natural gas, and electrolysis using electricity from the full range of
potential electricity production options. Of course, production chemically from fossil fuels or the use
of fossil-based electricity would not provide significant long-term reductions in greenhouse gas
emissions. However, these technologies are currently available and could play a role in a transition
to greater use of hydrogen as an energy source (Harvey, 1988).
One technology under development holds some promise for allowing hydrogen to be
generated from fossil fuels without CO2 emissions. The process, known as hydrocarb, produces
hydrogen and carbon black through a process of gasification and distillation. When coal is used as
the feedstock, approximately 20% of the energy value is converted into hydrogen. The carbon black
produced could be disposed in mines or other disposal facilities. Biomass can be used as the
feedstock, although it is a less efficient source of hydrogen (Grohse and Steinberg, 1987).
While large-scale hydrogen use would have to be considered a long-term option, this fuel
could begin to make contributions in the near term. Researchers at Princeton University have
suggested that use of hydrogen as a transportation fuel in urban areas may be its first significant role
in replacing traditional fuels. This is because existing transport fuels are high-priced premium fuels
such that the economics would be more favorable, and because urban air quality problems are already
forcing many cities to look for alternatives to gasoline and diesel fuel in the transportation sector.
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They further suggest that recent and projected improvements in the economics of amorphous silicon
photovoltaic cells may make production of hydrogen fuel for transportation use from solar PV
electricity cost competitive in some areas of the U.S. before the end of this century (Ogden and
Williams, 1988).
Another attractive feature of hydrogen that would be helpful in a long-term transition away
from fossil fuels is that it can substitute relatively easily for natural gas in many applications. For
example, natural gas space heating could be replaced by hydrogen over the long term, natural gas
pipelines could be used to transport hydrogen, and hydrogen is the basic fuel for fuel cells. Storage
of hydrogen could utilize salt mines, aquifers, and depleted oil and gas fields for large needs and
liquid hydrogen and metal hydrides for small applications.
In a long-term hydrogen economy, non-fossil energy could be provided by a variety of
renewable sources, with conversion to hydrogen accomplished by the electrolysis of water. Conversion
efficiencies in producing hydrogen from renewable energy exceed 80% and efficiencies for conversion
back to energy in fuel cells range from 58-70%.
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PART THREE: INDUSTRY
Figure 7-16 illustrates the overall current contribution of industrial processes (excluding
energy) to the greenhouse warming problem. By far the largest component is the production and
ultimate release to the atmosphere of chlorofluorocarbons (CFCs), halons, and chlorocarbons. Other
industrial processes are relatively minor (but growing) contributors: CO2 is emitted from cement
manufacture and methane (CHJ is produced by solid waste landfills. In addition, industrial process
emissions of carbon monoxide contribute to atmospheric chemistry, which indirectly affects the
concentration of tropospheric ozone and methane.
CFCs AND RELATED COMPOUNDS
As a result of the Montreal Protocol (discussed in Chapter IX), emissions of the most
important CFCs will be capped in the near future and will be reduced to half of 1986 levels by 1998.
Halons will be frozen at 1986 levels beginning in 1992. Other related compounds, not covered by
the protocol, are projected to grow in the No Response scenarios, partly because some of these
compounds will be used as substitutes for the regulated compounds.
Some of the substitute compounds affect greenhouse warming but generally to a much
smaller degree than do the controlled substances. In addition, most of the unregulated compounds
have much shorter atmospheric lifetimes, which further decreases their impact on the greenhouse
problem.
In the No Response scenarios, we have assumed general compliance with the Montreal
Protocol (100% in U.S., 94 % in other industrialized countries, and 65% in developing countries).
Figure 7-17 shows projections for future emissions for the regulated compounds, as well as the
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Chapter VII
FIGURE 7-16
INDUSTRIAL PROCESS CONTRIBUTION
TO GLOBAL WARMING
Energy Use
and Production
(67%)
CFCs
(17%)
Other Industrial
(3%)
Agricultural
Practices
(14%)
Land Use
Modification
(9%)
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Chapter VII
FIGURE 7-17
EMISSIONS OF MAJOR CFCs
(Gigagrams)
CFC-11
400
OIOAORAMS
i i
100
0
18
GOO
400
300
OIOAORAMS
N
0
o
100
0
19
-
RCW
r--^"X '"'• •••''
\\
- \\
\\
\\
\\
« RCWP
ICWP
IS 2000 202E 2060 207S 2100
CFC-12
.•'""' RCW
• jS^**~*~^^-~»^*^'1^ scw
'"°\\
- \\
\\
\\
\\
\\
\\
\\ RCWP
1
~ 5CWP
i i i i
86 2000 202C 20EO 207G 2100
VEAR
CFC-113
198S 2000 202S 20SO 207G 2100
HCFC-22
j
RCW
RCWP
*
/
19SJ 2000 202t 20EO
VEAK
207( 2100
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growing global emissions of unregulated substitute compounds, which have some radiative forcing
impact.
A considerable amount of recent analysis evaluates the potential of further reducing
emissions of CFCs and related compounds (see, for example, Hoffman and Gibbs, 1988, or Makhijani
et al., 1988). As shown in Figure 7-17, the SCWP and RCWP scenarios incorporate a complete
phase-out of the major CFCs and Halons by 2003 and a cap on global emissions of methyl
chloroform at 1986 levels (100% participation in industrialized countries and 85% in developing
countries). This phase-out schedule is feasible given that substitutes and alternative technologies now
being developed and tested are expected to become available over the next decade - as a result of
the considerable research currently underway in response to the Montreal Protocol.
Use and emissions of CFCs could be reduced by three possible mechanisms:
• Chemical substitution - switching from production processes in which
CFCs are used to those in which other chemicals are used; for
example, using FC-134a or blends of other non-fully halogenated
HCFCs instead of CFC-12 in mobile air conditioning.
• Engineering controls - in the near term, switching to production
technologies that use fewer CFCs per unit of output, such as
recycling equipment that collects and recycles CFC emissions during
the production of electronics.
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• Product Substitution - switching from CFC-using products to other products;
for example, replacing CFC-based foam egg cartons with paper-based egg
cartons.
This chapter surveys existing and future product substitutes, engineering controls, and
chemical substitutes that can reduce use and emissions of CFCs and halons. The information
presented is based on a detailed series of industry studies performed by EPA for use in its
Regulatory Impact Analysis (U.S. EPA, 1987) for stratospheric ozone protection. Unless otherwise
noted, information hi this section is drawn from U.S. EPA (1988b).
Technical Options For Reducing Emissions
Chemical Substitutes
Several chemical substitutes that have physical properties (e.g., boiling point) similar to those
of CFCs either do not contain chlorine or have short atmospheric lifetimes that reduce their potential
to deplete stratospheric ozone.
FC-134a and blends of non-fully-halogenated HCFCs appear to be the most promising
chemical substitutes for refrigeration and air conditioning applications, including commercial chillers
and mobile air conditioning, and along with HCFC-141b and HCFC-142b appear to be likely
alternatives to CFC-11 and CFC-12 in production of polystyrene sheet and polystyrene boardstock.
Several major chemical producers have begun limited production of FC-134a. An international
consortium of chemical producers has been formed to undertake toxicity testing of FC-134a and
other chemical substitutes.
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HCFC-141b and HCFC-123 are expected to become commercially available in the early 1990s
and could replace CFC-11 currently being used in manufacturing slabstock flexible polyurethane foam
and rigid polyurethane foam. In blends with HCFC-22, HCFC-142b appears to be an option for
replacing the remaining "essential" CFC use in aerosols.
HCFC-22 is currently used in residential air conditioners and might be used in commercial
chillers. It could substitute for CFC-11 and CFC-12 as a leak-testing agent in several refrigeration
applications. Mixtures of HCFC-22 and other compounds could be used in mobile air conditioners.
HCFC-22 has already been accepted as a substitute for CFC-blown polystyrene sheet
products. It was recently approved by the Food and Drug Administration as an alternative blowing
agent for use in food packaging. The Foodservice and Packaging Institute, in concert with several
environmental groups, recently announced an industry-wide program to eliminate within one year the
use of CFC-11 and CFC-12 use in food service packaging by substituting HCFC-22.
A major manufacturer of extruded polystyrene boardstock recently announced that it will
substitute HCFC-22 and other partially-halogenated CFCs in its manufacturing processes beginning
in 1989.
Blends of HCFC-22 with dimethyl ether and HCFC-142b can be used to replace the
remaining "essential" CFC use in aerosols. Hydrocarbons have largely replaced CFCs as aerosol
propellants in the United States. Other nations can reduce their use of CFCs in aerosol propellants
by reformulating aerosol products.
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Ethylene oxide (EO) is currently blended with CFC-12 for use in sterilization of medical
equipment and instruments. Reductions in CFC-12 use could be achieved by using pure EO, a blend
of CO2/EO, radiation, or the use of CFC substitutes.
Terpene-based solvents can be used instead of CFC-113 to clean electronic components.
One major manufacturer expects to replace one-third of all its CFC use in electronics manufacturing
with terpene-based solvents. Aqueous cleaning can also reduce CFC-113 use in many applications
for cleaning electronic components.
Engineering Controls
Recovery and recycling can reduce CFC emissions from several applications. Recovery and
recycling during servicing of air conditioning and refrigeration equipment, such as commercial chillers
and mobile air conditioning units, can achieve large reductions in CFC emissions.
Carbon adsorption units could be installed to capture CFC emissions during manufacture of
slabstock flexible polyurethane foam. Simple housekeeping improvements and process modifications
such as automatic hoists and covers, carbon adsorption, and reclamation and recycling can reduce
CFC-113 emissions during solvent cleaning.
Alternative leak-testing agents can reduce halon emissions during discharge testing of total
flooding fire-extinguishing systems.
Improved system design can reduce CFC emissions. Attractive techniques in mobile air
conditioning include design improvements, such as the use of more refrigerant-tight hose materials,
shorter hoses, and improved compressor seals and fittings.
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Alternative processes can be used to produce final products without using CFCs. For
example, the CFC-blown foam process can be modified to eliminate use of CFC-11, but the foam
will be slightly denser as a result. Nearly all uses of molded flexible foam could be converted to
water-blown formulations.
Training could reduce unnecessary discharges of CFCs during air conditioning servicing.
Adoption of new training procedures, such as use of simulators, could reduce halon emissions during
military training exercises.
Product Substitutes
Research efforts are exploring ways to replace the use of CFC-blown insulation in
refrigerator walls by insulating vacuum panels. A prototype vacuum panel refrigerator, which could
achieve sizeable gains in insulating properties, is currently being built.
CFC-blown slabstock flexible polyurethane foams can be replaced by other products.
Fiberfill materials, cotton batting, latex foams, and built-up cushioning that contains springs may be
suitable substitutes, but they are more expensive and lack the durability of flexible polyurethane.
Some product substitutes are available for rigid polyurethane foam products. Many
alternative products are currently available for use as sheathing or roof insulating materials.
Expanded polystyrene foam beadboard, fiberglass, fiberboard, and gypsum, for example, could be
used instead of polyurethane foam, as they were 30 years ago when polyurethane foams were not yet
manufactured. In some cases, wall and roofing insulation can be made thicker to achieve the same
insulating capacity as at present, but the use of foam blown with chemical substances is likely to
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continue where it offers the advantages of reduced labor costs and smaller bulk and meets a
building's energy efficiency requirements.
Some product substitutes are available for poured or sprayed foam, depending on the specific
use. In applications such as packaging and flotation, product substitutes are numerous.
Combinations of plastic and non-plastic materials can provide equivalent degrees of cushioning, shock
resistance, and water resistance. At present, however, no other insulation materials have equivalent
ability to be poured or sprayed, nor can other materials of the same thickness insulate as well as
rigid polyurethane foams.
Polystyrene sheet competes with many other disposable packaging and single service products,
including paper, cardboard, solid plastic, metal foils, and laminar composites of foil, plastic film and
paper. Any of these substitutes could eliminate CFC use in food packaging applications.
Current and possible future alternatives to foam boardstock as insulation include a host of
product substitutes, including fiberglass board, perlite, expanded polystyrene, fiberboard, cellular glass,
insulating concrete, rock wool, vermiculite, gypsum, plywood, foil-faced laminated board, and
insulating brick. Greater thicknesses of these alternatives may be required to provide equal energy
efficiency.
Pre-sterilized, disposable products are one possible alternative that will enable hospitals to
reduce their dependence on CFC-12 for sterilization.
Pump sprays and roll-ons are product substitutes that can replace CFC-propelled personal
care aerosols.
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Summary of Technical Potential
A recent detailed report examined the available and emerging options for reducing CFCs,
as well as halons and chlorocarbons, which are of potential concern for both stratospheric ozone
depletion and greenhouse warming (Makhijani et al., 1988). These authors assumed that both CFCs
and halons as well as carbon tetrachloride and methyl chloroform would be phased out by the year
2000. The report asserted that technical options are currently available for eliminating all but two
of the important applications; however, it is not certain that all of the substitutes proposed are
actually available or will perform as hoped.
Given the rapid pace of current technical innovation, however, it is not unreasonable to
expect that all sources of industrial emissions could be eliminated over the next decade. However,
even the less stringent CFC, halon and methyl chloroform controls assumed in the Stabilizing Policy
scenarios were very effective in reducing climate warming commitment. The recent detailed analysis
indicates that even more significant reductions are technically possible.
METHANE EMISSIONS FROM LANDFILLS
As indicated in Figure 7-18, methane emissions from municipal landfills currently are a very
small component of global methane emissions but are expected to increase in the future. In the
No Response scenarios, landfill emissions are projected to increase from 3% of global methane
emissions to 7-8.5% by 2025.
Over 1.6 million tons of municipal solid waste is generated on the planet each day (adapted
from Bingemer and Crutzen, 1987). Approximately 80% of this volume is disposed on land in
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Chapter VII
FIGURE 7-18
CH4 EMISSIONS BY TYPE
(Teragrams)
SCW
RCW
urning
Rle« Production
Ent.rlo
Farmontatlon
N«turtl
1996 2000 202S 2050 207C 2100
1965 2000 202S 2060 2075 2100
SCWP
RCWP
1986 2000 2021 2010 2071 2100
fc Biomass Burning
Fuol Produotlon
Rio* Produotlon
EnUrlo
For men tat Ion
202S 2010
YEAR
2075 2100
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landfills or open dumps. Anaerobic decomposition of municipal and industrial solid wastes in
landfills results in the generation of 30-70 Tg of methane each year (Bingemer and Crutzen, 1987).
The amount of gas produced by a given site is a function of the amount and composition
of landfilled wastes. The rate of gas production is a function of the age of material in the landfill,
oxygen and moisture concentrations, pH, and the presence of nutrients. Methane production is
highest when the organic content of the refuse is high, the wastes are relatively new, and there is
adequate moisture available. The decomposition process only occurs in an environment that is
oxygen-free and has a moderate pH. There is a one- to two-year lag period between landfilling of
wastes and the beginning of gas generation. Methane production occurs once all available oxygen
has been consumed and the environment becomes anaerobic. Food and garden wastes generally
decompose over a 1- to 5-year time frame, while paper wastes could require 5 to 20 years to
decompose (Bingemer and Crutzen, 1987). These factors and the active Me of a landfill affect the
duration of methane production. It can take anywhere from 10 years to over 100 years for a landfill
to produce significant amounts of methane (Wilkey et al., 1982).
Estimates place the rate of methane production between 1000 and 7000 cubic feet per ton
(31-218 m3/mt) of municipal solid waste deposited (Wilkey et al., 1982). The United States
generated approximately 148 million tons of municipal solid waste in 1988 (U.S. EPA, 1988c), which,
using the rates above, would produce between 2.9 and 20.7 Tg of methane. Using a methane
production rate suggested by Bingemer and Crutzen (1987), the same amount of solid waste would
produce an estimated 7 Tg of methane.1
1 This estimate assumes a carbon content of 22% (Bingemer and Crutzen, 1987), that 90% of
municipal solid waste generated is landfilled, and a conservative methane production efficiency of 0.25 ton
of methane per ton of carbon.
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Methane Recovery
Landfill gas, which is typically comprised of approximately 50% methane, 50% carbon
dioxide, and some trace constituents of volatile organic compounds, can be recovered and used as
fuel. The gas is a medium-Btu fuel (approximately 500 Btu/standard cubic foot), which can be used
directly in boilers or for space heating, in gas turbines to generate electricity, or can be processed
to high-Btu pipeline quality gas (Zimmerman et al., 1983). The gas is purified prior to use: for
medium Btu-gas, processing requires removal of particulates and water; for high-Btu gas, carbon
dioxide and most trace components must also be removed.
Landfill gas can present an environmental hazard because of its high combustibility and
ability to migrate through soil. Methane is flammable in concentrations between 5 and 15% by
volume in air at ordinary temperatures. Methane can rise vertically or can migrate horizontally out
of a landfill. Methane migrates easily through porous soils, drainage corridors and other open areas,
often to significant distances. Migrating methane gas has caused explosions and flash fires, resulting
in property damage and death. Malodors and vegetative damage have also been attributed to
migrating landfill gas.
Methane control systems, required under certain circumstances by the Resource Conservation
and Recovery Act (RCRA), can help to mitigate malodors, gas hazards, and vegetative stress.
RCRA requires that concentrations not exceed a lower explosive limit of 5% methane (10% landfill
gas) at the landfill boundary. Controls include impermeable barriers, induced exhaust systems,
evacuating and venting or flaring (burning) of the gas, and recovery for use as an energy source. Of
these controls, only flaring and recovery of the gas reduce the amount of methane emitted into the
atmosphere.
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Of the 6,584 municipal solid waste landfills in operation in the U.S., 1539 (16.6%) employ
some methane recovery or mitigation system such as venting or flaring. Only 123 of these sites
(1.9% of total) recover methane for energy use (U.S. EPA, 1988c). New regulations proposed by
EPA under the Clean Air Act would require collection and control of landfill gas at both new and
existing landfills. These regulations have the potential to significantly reduce the emission of methane
from landfills in the U.S. (U.S. EPA, 1988a).
Estimates place the quantity of gas generated by sanitary landfills in the United States at 1%
of the nation's annual energy needs, or approximately 5% of current natural gas utilization (Escor,
1982). The recovery efficiency of methane from landfills can range between 60 and 90% of the gas
produced, depending upon the quality and design of the gas recovery system, spacing of recovery
wells, and landfill covering.
The economic viability of methane recovery at a landfill depends upon the landfill's size,
location, proximity to potential users, current competing energy costs, and regulations governing the
site. The capital costs of recovery projects are about $1000/kw. Suggested minimum requirements
for recovery include an in-place refuse tonnage of 2 million tons, a disposal rate of 150 tons per day,
an average refuse depth of 40 ft, a surface area of 40 acres, and two years of remaining active fill
life (EMCOM Associates and Gas Recovery Systems, Inc., 1981).
It is probable that fewer than 1000 landfills in the U.S. are of sufficient size to meet these
criteria. Sanitary landfills in developed countries hold the best potential for economical recovery of
methane. Currently, there is little potential for methane recovery from open dumps in the
developing world; if the practice of sanitary landfilting is adopted, the prospect of methane recovery
will improve.
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Over 408 (about 5%) of the municipal solid waste landfills in the U.S. receive more than 500
tons of municipal solid waste per day (U.S. EPA, 1988c). Collectively, these landfills receive over
75 million tons of municipal solid waste each year (over 50% of the total generated in the U.S.).
If methane recovery were implemented only on the largest 5% of landfills in the U.S., an estimated
2.2-3.3 Tg of methane could be recovered.
Constraints on the economic feasibility of recovery projects have hampered further adoption
of this technology. Under current market conditions, projects are not economically viable unless
there is a suitable gas user within 2-3 miles of the site, or the electricity generation can be tied into
an electricity grid. Current regulations governing many sites also discourage the recovery of methane.
Some state regulations subject resource recovery projects to unlimited liability for any potential
contamination problems at a landfill - a significant disincentive to recovery.
Various techniques can be used to enhance gas production and yield from a landfill,
including controlled addition of moisture and nutrients (usually in the form of landfill leachate or
landfill gas condensate), bacterial seeding, and pH control. The addition of leachate and condensate
is only permitted at landfills where there is a liner. Further research in these areas could increase
the economic viability of methane recovery.
Recycling and Resource Recovery
Recycling and resource recovery hold the potential to affect emissions of greenhouse gases
through both waste reduction and reducing energy demand. Source separation and waste-stream
reduction have many benefits for the municipality and the environment. A reduced waste stream
means less refuse going to the landfill, an increasingly limited resource. In addition, the energy
savings from recycling can be significant as discussed in PART ONE: ENERGY SERVICES.
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Separating organics from the waste stream, such as paper and food, lawn, and garden wastes,
can achieve many benefits, including reduced production of methane. Reducing organics in the
landfill results in less methane production from that source. Organics that are separated and
composted do not produce methane if the composting includes aeration to keep the process aerobic.
Within the industrialized countries of the OECD, garden and park wastes make up about 12-
18% of the municipal solid waste stream and account for about 10-14% of its organic content, while
food wastes make up between 20 and 50% of the stream and account for over 20% of the organic
content. Within developing countries, garden and park wastes are insignificant, while food wastes
account for between 40 and 80% of the waste stream and over 70% of the organic content (adapted
from Bingemer and Crutzen, 1987). Given these high proportions of food, garden, and park wastes,
the potential for reducing methane production through aerobic composting could be significant.
CO2 Emissions From Cement Production
Carbon dioxide emissions from cement production originate from two sources: 1) as a
chemical by-product of the manufacturing process, and 2) as a by-product of fossil fuel combustion
used for kiln firing and plant electricity. Energy consumption emissions are discussed in the end-
use section of this chapter. The CO2 emissions that result as a chemical by-product occur during
the firing process, when the raw materials (cement rock, limestone, clay, and shale) are exposed to
progressively higher temperatures in a kiln. It is during calcination, which occurs at approximately
900 to 1000°C, that the limestone (CaCO3) is converted to lime (CaO) and CO* and the CO2 is
released. For every million tons of cement produced, approximately 0.137 Tg C as CO2 is emitted
as a result of this chemical process (Rotty, 1987). For comparison, approximately 0.165 Tg C per
million tons of cement produced result from energy consumption.
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Although cement manufacture currently accounts for only a small percentage (approximately
2%, not including the energy consumption emissions) of the global anthropogenic source of CO2,
emissions associated with this industry have increased rapidly over the last few decades and can be
expected to continue to grow hi the future as demand for cement grows. Between 1950 and 1985,
cement production and associated CO2 emissions grew at an average annual rate of 6%. Regional
production growth rates have varied during this period due to economic fluctuation in the
construction industry (cement's primary market) and shifts hi international competition between the
cement-producing countries. Today, the USSR, China, Japan, and the U.S. account -for 43% of the
world's cement production.
Since CO2 is an inherent product of cement manufacture, the only way to slow the rate of
growth emissions is to limit the amount of cement required, i.e., reduce demand through more
efficient use of cement and/or through substitution with other materials (e.g., steel and glass).
Increases in efficiency can be achieved through both material and fabrication improvements, e.g.,
through the use of pre-stressed and steel-reinforced concrete products. Substitution of cement with
other materials such as steel, glass or wood also would slow the growth in cement demand, although
substitution with such energy-intensive materials as steel may result in greater net CO2 emissions.
In fact, in some applications cement products have been used in lieu of other materials, such as
steel. Improved efficiency has already occurred in much of the developed world due to improved
engineering design hi construction. Also, most basic infrastructure has been built in the developed
world, so demand may slow somewhat in the future. This is not likely to be the case in the
developing world, however, where demand will probably continue to grow more rapidly than GNP,
particularly since cement is an inexpensive building material.
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PART FOUR: FORESTRY
FORESTS AND CARBON EMISSIONS
Forests, which store 20-100 times more carbon per unit area than croplands, play a critical
role in the terrestrial carbon cycle (Houghton, 1988a). Active forest management to maintain high
amounts of standing biomass, to reduce tropical deforestation, and to aggressively reforest surplus
agricultural or degraded lands, offers significant potential for slowing atmospheric buildup of CO2,
N20, and CH4.
The ecological diversity and geographic range of vegetation communities determine the degree
of carbon sequestering by forests and the rate of carbon emissions due to disturbances of forests.
Forests cover about one-third of the Earth's land, or 4 billion hectares, of which about 42% is in
developed countries (mostly temperate) and 58% is in developing countries (mostly tropical)
(FAO/WRI/World Bank/UNDP, 1987).1 The carbon content of tropical moist forests (with closed
canopies, like Amazonian rain forest) averages 155-160 t C/ha of standing biomass in Latin America
and Asia and ranges up to 187 t C/ha in Africa.2 The carbon content of dry tropical forests (open
forests with grassy or herbal ground cover, as in African savannas) average 27 t C/ha in Latin
America and Asia and 63 t C/ha in Africa (S. Brown, 1988b).
Anthropogenic alterations of forest ecosystems now account for emissions of atmospheric CO2
equal to about 10-30% of total emissions from combustion of fossil fuels, as carbon stored in
vegetation and soils is released by clearing, fire, or decay (Houghton, 1988a). Recent estimates of
1 hectare = 1 ha = 2.471 acres
2 t C = tons of carbon.
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annual net carbon flux from deforestation range from 0.4 to 2.6 Pg C/yr for 1980, primarily due to
land use change in the tropics (Detwiler and Hall, 1988a; Houghton et al., 1987).3 Brazil, Indonesia,
and Colombia are the largest of the top ten producers of net carbon release from tropical
deforestation; these ten combined account for about half of the CO2 emitted due to land use change
(Houghton et al., 1987).
Uncertainties still exist in determining carbon storage in and emissions from swidden (i.e.,
shifting, or slash and burn cycle) agriculture versus sedentary (permanent) agriculture, including
agroforestry systems. Neither do we have reliable estimates of biomass, carbon content, and trace
gas emissions in tropical forests (both standing and those being cleared) and carbon in disturbed
tropical soils (about one-third of carbon flux from deforestation) (Houghton et al., 1988). Permanent
conversion of natural forest to pasture or cropland results in net loss of carbon stored both in
standing biomass and soils; the amount lost is dependent on the biomass productivity and soil carbon
storage rates of the former versus the new land use. Cyclical harvest of forest for timber or
fuelwood similarly releases carbon from slash (nonmarketable tree parts: branches, leaves) burned
or left to decay on-site, and from timber milled into non-durable wood and paper products (and
wastes like sawdust and scrap) that are soon burned or discarded.
Forests in temperate regions are essentially now in balance in terms of carbon cycling, with
annual incremental growth rates roughly equal to rates of timber harvest and deforestation for urban
growth and other land uses. Consequently, temperate forests do not currently contribute significantly
to the increase in atmospheric CO2 (Houghton et al., 1987). However, they now cover much smaller
areas than in the past, and have historically contributed heavily to global carbon emissions, as forests
were cleared in Europe and North America for agricultural production.
Pg = petagram. 1 Pg = 10W grams
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Widespread reforestation programs that could expand temperate forests into former forest
ranges and reduce net carbon emissions are discussed below. Trees newly planted in urban areas
would alleviate the greenhouse problem in two ways: first by reducing the need for air conditioning
and hence electricity, and second by increasing the uptake of carbon in biomass growth (Akbari et
al., 1988).
DEFORESTATION
Each year, at least 11.3 million (and perhaps as high as 15 million, see below) hectares of
forest are cleared in the tropics, an area larger than Austria or Tennessee (Lanly, 1982; IIED and
WRI, 1987). The rate of deforestation ~ combined with the escalating growth in demand for forest
products ~ is such that while 33 tropical countries are currently net exporters of wood products, this
number may decline to fewer than 10 by the end of the century (Repetto, 1988). If this trend could
be halted and reversed, tropical forests could serve as a vast carbon sink, reducing global CO2 levels.
Figure 7-19 illustrates the movement of tropical forest lands among different stages of the
deforestation cycle (an approach used by several researchers, e.g., Houghton et al., 1985; Lugo, 1988),
and the conversion stages that the response options discussed below would address.
The underlying causes of deforestation vary widely by ecosystem and region, and are often
complex, involving the interplay of historic, biological, economic, and political factors at both macro
(national and transnational) and micro (household and village) levels. A recent international
conference on the state of the world's tropical forests (Bellagio, 1987) concluded that:
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Chapter VII
FIGURE 7-19
MOVEMENT OF TROPICAL FOREST LANDS AMONG STAGES OF
DEFORESTATION AND POTENTIAL TECHNICAL RESPONSE OPTIONS
DEMAND SIDE OPTIONS
* Decrease forest loss
to development
* Substitute sustainable
agriculture
* Improve efficiency
of blomass fuels
* Decrease production
of disposable wood
products
SUPPLY SIDE OPTIONS
* Plant plantations
* Reforest degraded
forest lands
* Increase harvest
efficiency
* Increase forest
productivity
* Reforest degraded
lands
* Substitute sustainable
agriculture
* Plant plantations
* Support agrof orestry
* Substitute sustainable
agriculture
* Reforest degraded
lands
Figure 7-19. Pathways of conversion of tropical closed and open forest lands, and where technical
response options discussed here would intervene to slow conversion. Data were derived from FAO
(1981) and from Lanly (1982), and are expressed in millions of hectares. Numbers inside boxes
represent total area in category in 1980. Numbers on lines tipped with arrowheads represent annual
rates of conversion. Data include both dosed forests (complete canopy) and open forests (incomplete
canopy and grass herbaceous layer). Source: Pathway data modified from Lugo, 1988. Houghton
et al. (1985) offer similar conversion data.
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The causes of deforestation are well known. They include population pressure for
agricultural land, the demand for industrial timber production and export, and
inappropriate government policies regarding land tenure, economic incentives, forest
settlement, and other population issues.
The predominate causes of deforestation vary by region. In tropical Africa and in South and
Southeast Asia, rapid population growth appears to be the critical factor affecting deforestation. The
majority of the population practices agriculture, and most of the increases in agricultural production
necessary to sustain high birth rates have come from increases in the area under cultivation through
deforestation. Seventy percent of Africa's deforestation stems from swidden (shifting) agriculture.
Logging activities, both commercial and individual, in Malaysia, Indonesia, and the Philippines provide
access to partially cleared forest lands that facilitates further clearing of forest for agriculture
(Houghton, 1988a).
Rural populations rely on wood as the major source of energy, another important cause of
deforestation. More than a billion people are currently affected globally by fuelwood shortages that
cause them to spend much of their time searching increasing distances for wood to cook meals and
heat homes. The fuelwood deficit in arid and semi-arid regions of the world in 1980 affected 29.3
million people, and totaled 13.1 million m3 of wood. In the dry topics of Africa, the current annual
rate of fuelwood consumption exceeds the annual rate of additions to supply through mean annual
increment (growth of trees) by the following margins:
Sahelian countries (total): 30%
Sudan: 70%
Northern Nigeria: 75%
Ethiopia: 150%
Niger: 200%
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This fuelwood gap between consumption and supply is anticipated to grow to 130% for the Sahelian
countries overall by 2000, with single-country forecasts as high as 620% for Niger (Anderson and
Fishwick, 1984).
The Amazon region in Brazil is experiencing one of the highest rates of tropical deforestation
in the world (IIED and WRI, 1987; Fearnside, 1987). As a consequence, Amazonia is emitting
greenhouse gases at rates and quantities high enough to affect global CO2 and climate cycles. Yet
due to the nature of centralized government policies regarding forests and development, the vast scale
of its forest resources, and international pressures, Brazil offers high potential for slowing
deforestation through proactive adjustments in government, commercial, and colonizing forest use and
development practices. The problem is complex, however, as shown in Figure 7-20 which illustrates
the complexity of deforestation pressures and consequences in Amazonia, and the implied difficulty
of devising technical control solutions.
Brazil has 357 million hectares (ha) of closed tropical forest ~ 30% of the global total, and
three times as much as Indonesia, which is second to Brazil in its extent of forest area. Only 10%
of the Atlantic coastal forest is left, mostly in southern Bahia; the rest has been lost due to logging
and plantation clearing. The rate of deforestation in Rondonia doubled between 1976 and 1981, while
the population increased 15% per year (Woodwell et al., 1986).
The situation in Brazil is changing rapidly. Analysis conducted at the Brazilian Space
Research Center found that forest fires covered 20 million ha (77,000 square miles, or 1-5 times the
area of New York state) during 1987, of which 8 million ha were virgin forest (Setzer and Pereira,
1988). This observation has forced revaluation of standard mid-1980s estimates (e.g., Lanly, 1982)
of 11.3 million ha deforested for the entire globe's closed and open tropical forests (Houghton,
1988b), and could raise estimates, perhaps as high as 15 million ha/yr for the late 1980s. The
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Chapter VII
FIGURE 7-20
POPULATION GROWTH, ROAD BUILDING,
AND DEFORESTATION IN AMAZONIA
Growth of population and deforested area in the state of Ronddnia.
fiooo
- 900
I «oo
e 700
•b •»
= 5OO
f400
_ 300
< ZOO
? 100
1950
6O
70 7S7C7BM ««5
I40OO
13000
12000
IIOOO
IOOOO
9OOO
8000
70OO
6000
9000
4000
3000
2000
1000
0
.§
I S
YEAH
B. Causal loop diagram of the relationship between road building and deforestation.
ROADS
AGRICULTURAL
PROFITABILITY
Source: Fearnside, 1987
DEFORESTATION
(cumulotiv* total)
COLONIST
TURNOVER
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emissions from these fires contribute roughly 10% of total global emissions of CO2 (Fearnside, 1985).
If the Brazilian Amazon were completely cleared, 11 Pg of carbon would be released immediately,
augmented by a continuing gradual release that would elevate the total to 62 Pg (Fearnside, 1985).
Thus, deforestation in Brazil poses serious global consequences for climate change as well as the
much discussed loss of species diversity.
In the Brazilian Amazon, major factors driving the loss of forests include land speculation,
inflation, negative-interest and special crop loans, production of beef for export, and population
redistribution in response to high growth rates and the mechanization of agriculture in southern
Brazil. The Amazon has been perceived by entrepreneurs and planners as an undeveloped frontier
capable of producing vast quantities of timber and minerals, and of absorbing underemployed urban
populations from the southeast. Once roads have been built into the forest, land is worth more
cleared than forested, and the profits obtained from land speculation are reinvested in further
clearing (Fearnside, 1986, 1987; Maguire and Brown, 1986).
TECHNICAL CONTROL OPTIONS
Technical control options involving forestry can sequester carbon through the growth of
woody plants, can reduce anthropogenic production of COj, and can complement other strategies for
reducing the buildup of greenhouse gases. Forestry sector strategies for responding to the threat of
global warming (see Table 7-13) basically fall under two broad categories: (1) Reduce the demand
for forest land and forest products, and (2) Increase the supply of forested land and forest products.
In addition to the obvious benefit, from the climate change perspective, of increasing the supply of
forested land (i.e., trees absorb COj), afforestation has a number of valuable ecological and economic
benefits worthwhile on their own merits. For example, more forests may provide jobs in the forest
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TABLE 7-13
Major Forestry Sector Strategies
for Stabilizing Climate Change
Reduce Demand for Forest Land and Forest Products
• Substitute sustainable, sedentary agricultural technologies for swidden
(shifting) agriculture.
• Decrease consumption of forest for cash crops and development projects,
through environmental planning and management.
• Improve the efficiency of biomass (fuelwood) combustion in cookstoves and
industrial uses.
• Decrease the production of disposable forest products (e.g., paper,
disposable chopsticks) by substituting durable wood or other goods, and by
recycling wood products.
Increase Supply of Forested Land and Forest Products
• Improve forest productivity on existing forests, through management and
biotechnology on managed and plantation forests.
• Increase harvest efficiency in forests, by harvesting more species with
methods that damage fewer standing trees and use more of total biomass.
• Establish plantations on surplus cropland and urban lands in industrialized
temperate zones, to produce high biomass and/or fast-growth species to fix
carbon.
• Reforest degraded forests and establish plantations and agroforestry projects
in the tropics, using both fast-growth and high-biomass species on short
rotations for biomass and timber.
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products industry, maintenance of biodiversity, watershed protection, non-point pollution reduction,
and areas for recreation.
In the RCW scenario, a low rate of replanting is assumed and the area of tropical forests
decreases exponentially from 1980 to 2100. (This assumption is the same as in Houghton, 1988b.)
By contrast, the policy scenario (RCWP) assumes a rapid decline in deforestation (which ceases by
2015), and a linear increase in the establishment of plantations in the tropics. Implementation of the
control options discussed below may make it possible to achieve the RCWP scenario, which results
in a net CO2 uptake of up to 0.7 Pg C/yr in 2025.
Compared with the annual crop cycles of agriculture, rotation time in forestry (the time
necessary for one cycle of a forest crop to be planted, grown, and harvested) is slow - typically on
the order of 25-80 years in temperate zones and 8-50 years in the tropics (where growth rates are
higher). Essentially, therefore, forestry climate strategies can create a net CO2 sink for a fixed
period, albeit long, since trees eventually die or are cut and release carbon through decay or burning.
Harvesting on rotation (with aggressive replanting) allows storage of carbon in durable products like
construction beams, crates, or fences, until they decay, and regeneration of new biomass at high rates
of growth and carbon fixation.
All strategies listed in Table 7-13 could be pursued simultaneously. Some, however, are
better suited to industrialized countries and some are more appropriate for developing countries.
Strategies for maximizing both biomass growth rates and volume of standing stock are needed.
Species that produce high volumes of biomass (e.g., Douglas fir in the Northwest) usually grow
slowly (e.g., 80-100 years to mature) and are most useful in industrialized countries, whose conditions
favor long-term forest protection and intensive management. Developing countries especially need
to maximize biomass growth rates, to restore degraded and desertifying lands, and to produce
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fuelwood and timber. Developing countries face rapid forest depletion and high population growth
rates, and have limited institutional capability to guarantee long forest rotation times in the face of
these realities. However, developing countries should also plant high-value, long-rotation hardwood
stands, and protect existing old-growth forests from cutting and burning.
All potential strategies, whether categorized as demand reduction or supply enhancement, to
the extent feasible should be:
• sustainable over time, without deteriorating the natural resource base or
introducing ecological changes (i.e., pests),
• capable of addressing the direct and indirect causes of forest loss by
providing viable alternatives to current land use patterns,
• economically attractive (low-cost and offering income commensurate to
present land uses),
• capable of providing an equivalent spectrum of forest products and jobs, at
rates of return to labor (or time) and capital comparable to current forest
use patterns,
• socially integrative or adaptive, building on local needs and tradition,
• technologically simple and durable, and
• readily adaptable to changing economic, political, social, and ecological
realities (e.g., civil war, drought, and resource-driven population shifts).
In addition, these response options need to address the full range of causes of, and stages
in, the rapid deforestation occurring in the tropics, including:
• logging and clearing by colonizers in closed canopy forests,
• fuelwood harvesting and swidden (shirting) agriculture in closed and open
canopy forests,
• poor resource management of both undisturbed (virgin) and secondary
(disturbed or fallow) forests,
• low reforestation planting and success rates on lands degraded by human
resource use patterns (e.g., upland forests cut for timber and fuelwood and
then overgrazed by goat and sheep herders).
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See Table 7-14 for a summary of potential technical options for implementing forestry
strategies to reduce demand and to increase supply.
Because of the long rotation times for forest growth, technical options will need to integrate
short-term educational, harvesting, and research work with longer-term adaptations in forest planting,
management, and product use.
Reduce Demand for Forest Land and Products
Both tropical and temperate forest lands are in high demand to provide a range of
alternative land uses and forest products. Forests are consumed in areas of rapid population growth
worldwide as villages and cities expand, transportation corridors are built to connect them, and
additional arable land is sought for food production. Other major forces contributing to
deforestation in the tropics, in particular, include swidden (shifting) agriculture; large-scale economic
development projects (often financed by multilateral banks); cattle ranches and palm oil, timber, and
rubber plantations; and fuelwood demand.
Based on population growth, projected demand for fuelwood by the year 2000 will require
the creation of 20-25 x 10s ha (or perhaps as high as SO million ha) of new closed forest plantations
for fuelwood, at a cost of $50 billion, a rate 10-20 times current planting tallies (Nambiar, 1984;
FAO, 1981; Lundgren and van Gelder, 1984). An additional 200 x 106 ha of croplands will be
needed (FAO, 1978) just to maintain the already inadequate 1980 levels of per capita food supply.
Currently, more than ten hectares are lost to each one that is planted, based on the ratio
of global deforestation to tree planting (Lanly, 1982). Models of forest product demand from 1980-
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VII
2020 project tropical forest removals (harvest for timber) to double between 1980 and 2000, and then
plummet to 72% of their 1980 level by 2020 (WRI et al., 1988; Grainger, 1987).
Option 1: Slow Deforestation by Introducing Sustainable Forest Use Systems
Net deforestation in an area results when demand for timber, fuelwood, or forested land
exceeds the local supply and the productivity rates of forest lands allowed to regenerate do not keep
place with the harvesting of products. One key method of reducing demand for virgin or secondary
forest is to introduce sustainable natural resource management techniques at the village and regional
levels that provide a stream of forest benefits but minimize cutting of natural forest. McNeely (1988)
and McNeely and Miller (1984) offer theory and case studies illustrating the economics of non-
consumptive, integrated natural resource management.
> Natural forest management (NFM) applies silvicultural techniques to allow smaller sustainable
harvests of natural forests, instead of traditional clear-cuts of large tracts to maximize short-term
profits. NFM may increase forest productivity, and provides a wide range of non-wood products with
high economic returns (e.g., nuts, herbal medicines, nature tourism operations; see Gradwohl and
Greenberg, 1988). Extractive reserves are a newly evolved example of NFM in which economic
products like nuts and rubber are extracted from forest reserves in Brazil. They maintain standing
forest while providing jobs and wages to organized rubber tappers and nut collectors otherwise
dependent upon income from logging (Schwartzman and Allegretti, 1987).
The Malaysian Uniform System is a 60-year NFM rotation technique developed to rapidly
regenerate harvested dipterocarp forest (lowland closed forest dominated by trees of the
Dipterocarpaceae family) hi peninsular Malaysia. Another method is the Celos Silvicultural System,
practiced on long-term research plots hi Suriname, which uses carefully planned logging trails and
winches to reduce damage to standing trees during harvest from 25% down to about 12%. Numerous
DRAFT - DO NOT QUOTE OR CITE VII-209 February 22, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VII
small areas are cut on 20-year rotations, rather than single huge tracts, and 3 improvement thinnings
of non-target tree species and vines are made each rotation.
The Palcazu Development Project in Peru, funded by the U.S. Agency for International
Development, has devised a system of active forest management that harvests thin swaths of forest
20-50 meters wide on 30-40 year rotations. Old-growth forest left surrounding the strips naturally
provides seed dispersal after harvest, as in natural tree-gap regeneration processes, and maintains
biological diversity lost in logging operations. Potential net profits after the wood is processed could
be as high as $3500/ha worked, according to estimates by researchers (Hartshorn et. al, 1987).
NFM systems could be widely introduced via forest extension programs, bilateral and
multilateral rural development projects, and integrated management of protected reserves and adjacent
lands (e.g., the Biosphere Reserve concept of multiple-purpose protected areas combining
preservation, research, and economic use zones [McNeely and Miller, 1984]). NFM offers a
promising vehicle for maintaining high-biomass standing forest, slowing deforestation, and allowing
the 54 million ha of forests already logged (WRI and IIED, 1988) to regenerate.
Option 2: Substitute Sustainable Agriculture for Swidden Forest Practices
Sustainable agricultural systems are those that rely on biological recycling of chemical
nutrients (in soils) and energy, and on naturally occurring mechanisms for protecting crops from
pests, to produce annual harvests that can be sustained in perpetuity (Dover and Talbot, 1987).
Generally such systems use low levels of agricultural technology (i.e., minimal agricultural pesticides
or fertilizers or improved seeds, and few conservation measures).
Sustainable agriculture offers three major types of benefits for the carbon cycle:
DRAFT - DO NOT QUOTE OR CITE VII-210 February 22, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VII
• increased supply of woody biomass fixing carbon in natural forests and in forest-crop systems. -
• reduced demand for natural forest wood products, and
• reduced demand for new land cut from primary or secondary forest for swidden agriculture (by
substituting higher-nutrient sedentary systems on permanent plots).
Other non-carbon-cycle benefits of sustainable agricultural systems include the preservation
of biological diversity, low soil erosion, maintenance of the hydrological cycle and soil moisture, and
recreation and tourism.
Swidden (or shifting) agricultural methods involve cutting and, usually, burning forest patches,
to plant crops that are harvested for 1-7 years, and then abandoning and leaving fallow the patches
for about 7-14 years as new patches are cut and farmed. About 41 million ha of tropical primary
and secondary forest are burned per year (see Chapter IV). Tropical forests store up to 90% of a
plot's nutrients in woody plants (compared with temperate forests, where only 3% are stored in plants
and 97% in soils), some of which are released by burning (Keay, 1978). Swidden systems persist
throughout the world, especially in remote and hill districts, and during times of individual or regional
economic stress. On Negros Island in the Philippines, the number of swidden farmers rose by 80%
in only two years in the mid-1980s because of declines in the sugarcane industry that forced
underemployed workers into swidden agriculture to grow food. Ecologists predicted that a major rain
forest there could be destroyed by the year 2000 (Dover and Talbot, 1987).
Sustainable agriculture and soil management systems can be introduced as a substitute for
swidden systems that require destruction of virgin or secondary forest. For every hectare farmers put
into such methods, 5-10 hectares of tropical rainforest may be saved from destruction to store carbon,
conserve hydrologic cycles, and retain biological diversity, according to Sanchez (1988). Table 7-15
shows the equivalent area of forests needed for traditional swidden practices for every one hectare
of forest land needed for more resource-intensive sustainable uses with higher productivity rates.
Agroforestry is the combination of agricultural and forestry techniques to produce woody plants on
the same parcels as food or commodity crops or animals, with a mutually beneficial synergism. It
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Policy Options for Stabilizing Global Climate -- Review Draft
Chapter VII
TABLE 7-15
Comparison of Land Required for Sustainable
Swidden Versus Agricultural Practices
Sustainable Agricultural Practices
Number of Swidden Hectares Required
for Every One Hectare of Sustainable
Flooded rice
Low-input cropping (transitional)
High-input cropping
Legume-based pastures
Agroforestry systems
11.0
4.6
8.8
10.5
not determined
Source: Derived from 17-year ongoing research by North Carolina State team at Yurimaguas, Peru,
in tropical moist lowland forest (Sanchez, 1988, and Sanchez and Benites, 1987).
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offers one of the most promising approaches to providing both fuelwood and food needs, while
reducing environmental externalities associated with monocultural row cropping (pesticide use, pest
population surges, high irrigation requirements). Interest in agroforestry has surged since the late
1970s, and international research and project lending is underway in approximately 100 developing
nations.
Agroforestry systems derive from traditional forest farming practices of many indigenous
peoples and are sustainable over long rotations, large acreages, and low population densities.
Innovative research programs should build on these local methods, where feasible. The Lacandon
Maya Indians living in rainforest in Chiapas, Mexico, practice a multiple-layer cropping system
utilizing up to 75 species in 1-hectare plots that produce crops for 5-7 years. As soil fertility wanes,
the Lacandon plant tree crops (cacao, citrus, rubber, avocado) that provide valuable products as the
plots regenerate with secondary forest. This forest is cut again when the trees overgrow the managed
species. It is estimated that only 10 hectares of rain forest are consumed per farmer throughout his
career with this method of sustained agroforestry. In contrast, immigrant colonists consume two or
three times as much forest area (Nations and Komer, 1983).
Three major classes of agroforestry are being practiced in Asia, Africa, and Latin America:
1. agro-silvicultural (including fuelwood trees, hedgerow or "alley" intercropping, Taungya
forestry, shelterbelts and windbreaks),
2. silvo-pastoral (fodder production, living fences, trees in pastures), and
3. agro-silvo-pastoral (woody hedges for grazing by livestock and producing mulch, home
gardens with woody plants).
Other systems include traditional swidden, and aquaforestry (silviculture in mangrove swamps
and fish ponds). One example of a model agroforestry farm in Rwanda is illustrated in Figure 7-
21, incorporating trees and bushes in erosion-control strips, hedges, nitrogen-fixing trees in fields, and
cash and fodder crops (Dover and Talbot, 1987). (Further information on the array of systems is
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Policy Options for Stabilizing Global Climate - Review Draft
Chapter VII
FIGURE 7-21
MODEL AGROFORESTRY FARM LAYOUT, RWANDA
— 10 to li Meters ——
water retention bv
channels stabilization
with toddcr grasses
trm and bushes
lAlbizzu Greviiiea
Leucaena >
• additional trm
in the fields
(Acacia Albuziai
diversified large hedges
around the farm
Field Crops
• muea cropping
• controlled weed tolerance
• rotation with intensified
seasonal lailow
A. Side View
8. Typical Horuontal Layout of Model Farm ± 1 Hectarf
Small Forvst
Hedge
Bananas
* Avocado
» Taro Potatoes
dsn Crop No .
Cottfr
Lrucarna
Homestead,
gardening cattle
•+• minimum grazing
Fodder grasses
• Desmoaium
*• Leucaena
Food Crops*
Hedge
I Feb Mucuni Fallow 4 Sunflower Oct Beam * Maue
: Feb Sow fc Sorghum. Ocl SOM * Maize
3 Feb Ca»uv« fc Mocuna 4'Season Oct Cawva 4 Mucuna :' Season
4 Feb Canava * Mucuni 4' Season Oct Cassava * M 4't Harvest
5 Fee Sou k Sorghum Oct Sou fc Maue
t- Feb Mucuni Fallow 4 Sunflower Oct Beam t Maize
- Feb Sweet Potatoes k Sou. Oct Sou fc Maue
« Feb Souk Maue Oct Beam k Maize
Source: Dover and Talbot, 1987, derived from Behmel and Neumann, 1981
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i
available in Winterbottom and Hazelwood, 1987; Dover and Talbot, 1987; Winterbottom et al., in
press; and OTA, 1984).
Integrated crop-forest systems not only reduce demand for forest, but also retain carbon
stored in tropical soils (otherwise emitted after disturbance), and in woody biomass, although at rates
well below mature forest. A typical agroforestry system in steep uplands with poor soils in Himachal
Pradesh, India, is stocked with 20.5 trees/ha, which produce a yield of 2.0 m3/ha/yr of wood, or 0.8
t C/ha/yr, plus the potential savings of roughly a 5:1 ratio of ha of virgin forest retained intact per
ha converted to permanent cultivation. A more intensive stocking rate of 322 trees/ha in home
gardens in Surakarta, Indonesia, yields 7.3 m3/ha/yr wood, or 1.9 t C/ha/yr. Data from Indonesia
and Tanzania indicate that 200-300 trees are sufficient to provide wood-production needs of a typical
household (Lundgren and van Gelder, 1984).
Reliable estimates of global acreage with potential for substitution of agroforestry for swidden
agriculture, and net carbon benefits, are not presently available. Preliminary calculations for an
integrated agroforestry and plantation project in Guatemala designed for an American utility (AES)
to offset its CO2 emissions are offered by Trexler (in press) and outlined in Table 7-23. An overview
of potential carbon cycle and biomass productivity benefits from a range of agroforestry systems is
presented in Table 7-16.
Agroforestry projects considered successful from a climate change perspective would require
suitable environmental conditions (soils and rainfall), and human population densities and institutions
adequate to encourage multi-year resource management. Either overcrowding or pervasive poverty
will shift the focus to short-term survival. Social and economic factors likely to promote success
include clear and relatively equitable land tenure for farmers; local decision-making, and political
systems that at least tolerate medium-term investment by villagers of various classes; developed and
accessible markets for crop and forest products; and adequate protection of agroforestry systems
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Chapter VII
TABLE 7-16
Potential Carbon Fixation and Biomass Production
Benefits from Agroforestry Systems
Type of System
Natural forest
management and
crops
Steep uplands,
poor soils
system
Alley cropping
Home gardens
Trees
Per
Location Hectare
Guesselbodi
forest,
Niger
Himachal 20.5
Pradesh,
India
IITA,
Nigeria
Surakarta, 322
Indonesia
Productivity
(t C/ha/yr) Species Used
0.8 native shrubs
(Combretum
micranthum,
Guiera
senegalensis)
0.8
0.9-3 nitrogen-fixing
shrubs (Glicidia,
Leucaena, Calli-
andra, Sesbania)
1.9
Products Produced
wood, mulch, crops,
gums, fodder,
medicines
fuelwood, fodder,
crops
maize in alleys
between hedgerows
cut for mulch and
stakes
fruit, fodder, mulch
fuelwood
CARE Agrofor-
estry and Re-
source Conser-
vation Project
Guatemala 400
4.7 conifers (high-
lands), hard-
woods (lowlands).
20 species in total
fuelwood, fodder,
crops
Source: Winterbottom and Hazelwood, 1987, and WRI et al., 1988 (Niger, Nigeria); Lungren and
van Gelder, 1984 (India, Indonesia); Trexler, in press, and WRI, 1988 (Guatemala).
DRAFT - DO NOT QUOTE OR CITE
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February 22, 1989
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from grazing livestock, villagers, civil strife, and rapid economic changes (Winterbottom and
Hazelwood, 1987; IIED and WRI, 1987).
Constraints to wide diffusion of agroforestry include the difficulty of technology transfer to
remote populations often holding traditional values that do not encourage innovation; the need for
systems tailored to specific site conditions; capital requirements to purchase and maintain seedling
nurseries and to fund extension efforts and research; and the vast scale of implementation necessary
to slow forest degradation (Lundgren and van Gelder, 1984). The long-term sustainability of new
agroforestry systems has not been fully demonstrated in many first-generation projects, which often
still rely upon high levels of fertilizer and labor.
Option 3: Reduce Demand For Other Land Uses That Have Deforestation As A Byproduct
Large development projects, especially those planned in the tropics by transnational
corporations and multilateral development banks, consume huge tracts of forest for roads,
hydroelectric project reservoirs, and new communities. The Mahaweli project in Sri Lanka will
destroy 260,000 ha of tropical moist forest in order to generate 466 MW of electric power and flood
control and irrigation benefits. The Narmada Valley Project in Madhya Pradeshi, India, may inundate
350,000 ha of teak and bamboo forest (Kalpavriksh, 1985).
Pressure on banks and governments to reduce adverse impacts on tropical forests has
mounted since 1980 and spawned new development planning methods that include protection of forest
tracts, in order to offset consumptive use of other forested lands (Rich, 1989; Gradwohl and
Greenberg, 1988). In 1986, the World Bank issued a 6-element new policy on wildlands to guide
planning of Bank development projects. This policy states preference for choosing already degraded
(e.g., logged over) and the least-valuable lands for development purposes. It requires compensation
for wildlands converted by Bank projects, in the form of an added wildlands management and
preservation component (Goodland, 1988; World Bank, 1986). India is experimenting with
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VII
compensatory reforestation, at a 2:1 replacement ratio, for forest cut for hydro projects, although
problems still remain with such mitigation approaches ~ including management responsibility over
long time frames, and potential productivity rates of new compensatory forests.
Option 4: Increase Conversion Efficiencies Of Technologies Using Fuelwood
Fuelwood demand from tropical forests accounts for significant deforestation. Wood supplies
over 90% of total energy use in Burkino Faso, Malawi, Tanzania, and Nepal; 50% in Indonesia; 25%
in China; and 20% in Brazil (Brown et al., 1988a). Annual average fuelwood consumption for
agricultural and industrial uses in Tanzania from 1979-80, for example, consumed 1.9 x 106 m3 of
fuelwood, releasing 0.5 x 10* t C, to cure tobacco, smoke fish, dry tea, fire pottery, and burn bricks
(Mwandosya and Luhanga, 1985).
The introduction of more efficient cookstoves and industrial technologies could reduce
wood requirements by 25-70% at very low cost (Goldemberg et al., 1987; Brown et al., 1988a), as
discussed in the energy section of this chapter. The most successful strategy for reducing fuelwood-
related deforestation in the long run may be the substitution of kerosene, gas, and electricity for
fuelwood, and widespread distribution of cogeneration technologies to produce higher benefits from
fuelwood use.
Option 5: Decrease Production of Disposable Forest Products
Forests harvested in developing countries or managed in industrialized nations to generate
wood products that are consumed and then burned or buried in landfills in the short term (e.g.,
newsprint, paper goods, and fast-food packaging) contribute greenhouse gas emissions. Work has
begun on introducing technologies and programs to replace consumable forest products with durable
goods that are used repeatedly and/or recycled, avoiding these emissions and providing carbon
storage. Two major control options are discussed below.
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Substitute durable wood or non-wood products for high-volume disposable uses of wood
Current storage of durable wood products has been estimated at about 10 x 109 m3 of solid
wood (2.6 Pg of carbon), or roughly 25% of world industrial harvest over the past 35 years (Sedjo
and Solomon, in press).
The global forest industry has been stagnating for the past 15 years, as real prices have
decreased, growth in consumption has shrunk, and competition on world markets has accelerated from
developing countries. FAO (1986a) and Kuusela (1987), however, project annual growth rates of
wood-based panels for 1985-95 at about 2.5-4.0%, down from 6.9% in 1963-75, but along with printing
and writing paper the most quickly rising rate. Total world production of principal forest products
for 1978-82 averaged 805.5 x 106 t/yr, or about 0.4 Pg C/yr, and is projected to rise to a mean
estimate of 1333 x 10* t/yr (0.66 Pg C) by 2000.
Accelerated harvest and storage of wood products could provide a technical response option
for reducing demand for products from virgin forest, and increasing supply from managed forests.
For example, if production of all wood products was increased by 30% on average above the
projected growth from 1982-2000, and this increase occurred through increased use of durable wood
products, then production would rise to 1733 x 106 t/yr, storing an additional 0.4 Pg C over the 18-
year period. Potential storage over the next 50 years to 2030 has not been calculated, but might
reach a total of more than 1 Pg C.
Examples of potential product shifts from consumables to durables include eliminating the
use of disposable chopsticks in Japan and elsewhere, in favor of permanent wood or plastic ones;
replacing single-use wooden crates for shipping, fruit and pallets with metal or plastic ones; and
widely installing wood paneling in homes and commercial structures. To achieve net greenhouse gas
emission benefits, production processes for durables must minimize generation of gaseous byproducts
through use of energy conservation measures noted earlier in this chapter.
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VII
Expand recycling programs for forest products
Global production of newsprint, paperboard, and other paper averaged 334 million t/yr from
1978-82, with growth rates to 2000 anticipated to hover around 3% per annum (FAO, 1986a,b).
In the U.S., consumption of all paper products in 1988 totalled 79.8 million tons. Post-
consumer recycling of paper in the U.S. now provides 28% of domestic production of paper and
paperboard, and totaled about 22.3 million tons in 1986 - virtually twice the amount recycled in 1970
(U.S. EPA, 1988). Current obstacles to enhanced recycling rates include market development,
regulatory, and financial issues (Ruston, 1988).
Recycling of paper products in the U.S. could be pursued as a climate change response
option. If, for example, recycling rose to 80% (with 10% diverted to (stored in) durable books or
construction, and 10% disposed of), then the difference between the number of tons burned or buried
in landfills in 1986 at 28% recycling (about 50 million tons) and at an 80% rate (about 16 million
tons) would equal 34 million tons/yr. Methane production from landfills (see Landfills section, this
chapter) and carbon emissions from incineration would decline. Paper products formerly treated as
consumables would become converted to essentially durable recycled products, thereby increasing the
net total stock of carbon (assuming that forests previously used to grow wood for paper remain
undisturbed).
Increase Supply of Forested Land and Forest Products
Option 1: Increase Forest Productivity: Manage Temperate Forests For Higher Yields
Modern forestry management techniques applied to commercial, state, and large private forest
lands offer the greatest potential for large-scale increases in productivity.
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In the U.S., new forest area growing at average rates would not be sufficient to offset our
current annual production of 1.3 Pg C. Per capita annual carbon production for 237 million
Americans is about 5 t C/capita. U.S. commercial forests (those producing greater than 1.4
m3/ha/yr and not set aside in parks) totalled 195.3 x 10s ha in 1977, with a net average growth rate
of 3.15 m3/ha/yr, or 0.82 t C/ha/yr. Thus, 6 ha (15 ac) of forest would be required to sequester
each person's fossil fuel emissions. For 237 million people this would require 1.5 x 109 ha of average
forest -- a tract 50% larger than the 0.9 x 109 ha land area of the country (Marland, 1988).
However, intensive forest management to increase biological productivity or economic returns
on forest land may offer a partial solution. The U.S. Forest Service (USFS, 1982) estimates that if
current commercial forests simply were fully stocked (i.e., they were universally managed to grow the
tree densities and volumes of mature stands), their net annual growth could be increased by about
65%, which would sequester 0.1 Pg C/yr. This full stocking option is appealing, since many areas
not presently growing forests are sites so poor that even intensive management or aggressive planting
are likely to provide only negligible net annual growth (USFS, 1982). Forest Service estimates also
indicate that forest owners could go further by managing forests to take advantage of economically
feasible opportunities that would offer a 4% annual return on investment. These management options
could produce an additional 18 billion cubic feet of annual forest growth, equal to 0.16 Pg C (327
x 106 t wood) (Hagenstein, 1988; Moll, 1988).
Intensive management techniques that improve productivity include site-specific species
selection (through provenance trials with seeds), thinning and release cuttings, control of spacing
among trees, weed and pest control, fire suppression, fertilization, irrigation, and planting genetically
improved seedlings. All options requiring significant labor tend to be prohibitively expensive if
implemented on large scales; however, access to volunteer labor from youth or citizen groups might
make these options more feasible.
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VII
The economics of fertilization on large tracts vary; for many species and sites, the costs of
chemical fertilizers exceed growth stimulated. Yet according to Ford (1984), "fertilization is the most.
important single treatment that the forest manager can apply during the growth of the crop to
accelerate growth." More than half of the loblolly pine plantations in the Southeast would show
value-added growth from fertilization, according to one observer (Binkley, 1986).
Obstacles to use of fertilizers include trees' low nutrient recovery rates, due to leaching and
microbial activity, the nutrient status of the site; and whether slash is removed from the site during
harvest (tropical forests store 90% of available nutrients in biomass and only 10% in soils, compared
with about 30% for temperate forest biomass) (Marland, 1988; Ballard, 1984). Nitrogen-fixing legume
species, like black locust and honey locust in the U.S. and Leucaena and Calliandra in the tropics,
offer the advantages of supplying their own nutrient requirements, growing well in the depleted soils
of degraded lands, and cutting fertilizer costs.
Other constraints to intensive management include the need for very short rotations to
maintain high growth rates (and associated labor costs and need to sequester large volumes of
harvested wood); pest and genetic diversity problems associated with monocultural stands; costs of
energy and labor for plantations; the tradeoff between maintaining large volumes of standing biomass
and fast growth rates; and fire management costs.
Option 2: Increase Forest Productivity. Improve Natural Forest Management of Tropical Little-
Disturbed And Secondary Forests
Natural tropical moist forests produce annual wood increments higher then managed forests
on average (Table 7-17), due to the latter's higher harvest offtake volumes, minimal replanting
success, and reduced biomass in regenerating forests. From a carbon-cycle perspective, this offers
an argument in favor of a two-prong forest management strategy managing virgin and secondary
forests as sustainable high-biomass sinks, and managing fast-growth plantations for provision of
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Policy Options for Stabilizing Global Climate •- Review Draft Chapter VII
TABLE 7-17
Natural and Managed Tropical Moist Forest Yields
(mean annual wood increment, metric tons per hectare)
Continent
Africa
Latin America
Asia
Unmanaged Forest1
2.3-5.8
0.9-1.9
3.7-4.5
Managed Forest
0.6-1.3
0.6-2.0
1.3-2.6
1 Unmanaged forests are stands in balance, where annual increment roughly equals forest losses from
natural causes.
Source: TIED and WRI, 1987 (from Wadsworth, 1983).
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forest products. Natural forest management (NFM) techniques (discussed under demand option 1,
above) can generate products and services that sustain indigenous and village populations otherwise
engaged hi forest felling, and serve as high-biomass carbon sinks. Natural forests comprise 83% of
the tropical forest under intensive management, on 35 million ha; only 7.07 million ha of intensively
managed tropical forests have been planted or artificially regenerated (IIED and WRI, 1987).
Hence, NFM, while requiring considerable investments of labor, may present the most viable long-
run option for forestry in the vast majority of tropical forest lands.
Multiple-use management employs timber harvesting, replanting, stand improvement (release
cutting), and forest protection to confer benefits from timber sales, recreation, and flood control.
Fully 16% of tropical moist forest species have non-timber economic benefits, according to one recent
survey by IUCN (IIED and WRI, 1987). Minor forest products like rattan, latex, resins, medicinal
plants, and bamboo contributed $150 million to Indonesia's economy in 1982 (Repetto, 1988).
Option 3: Increase Forest Productivity. Plantation Forests
Plantation biomass productivity can be improved by three types of actions:
1. silvicultural practices that yield biomass gams, especially in industrialized
country forests;
2. lengthened and stabilized land tenure for commercial and community forestry
projects hi developing countries, to encourage forest management for multiple
(rather than single) rotations and the ensuing environmental benefits; and
3. biotechnology advancements utilizing genetics and seed selection.
This discussion focuses primarily on biotechnology and genetic potential, as silvicultural
management is addressed below, and land tenure considerations reside hi the realm of policy.
Plantations managed to grow a mix of short, medium, and long-rotation species, if site
conditions allow, are most likely to provide the continuous stream of forest products and income
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necessary to meet timber and fuelwood demand in developing country villages. Similarly, mixed-
stand (multiple species) plantations in temperate zones may reduce ecological problems (e.g., pest
infestations) and timber market disruptions, although mixed-stand plantations may require more
intensive management and harvest techniques.
Applied genetics or tree improvement may produce greater increases in yields of biomass
than improved silvicultural methods. Short-rotation intensive culture (SRIC) efforts apply intensive
agronomic practices to growing selected and/or genetically improved hardwood species in plantations,
to achieve maximal productivity rates at competitive costs. The Department of Energy's Short-
Rotation Woody Crops Program, begun in 1977, has conducted field trials to boost productivity and
reduce costs of woody species managed under SRIC as an energy source. Its target is to achieve
average productivity of 20 dry t/ha/yr (10 t C/ha) of biomass at a cost of S2.25/GJ on optimal plots
by 1995, and a competitive technology 5 years later.
By 1987, productivity reached 13 dry t/ha/yr (6.5 t C/ha), at a cost of $55/dry t, or
$3.25/GJ (ranging from $2.90 to $5.10 delivered), on SCS site class I-III soils (i.e, largely fertile and
flat). Planting densities ranged from 2500-4000 trees/ha, on coppice rotations of 5-8 years. Ongoing
research is focused on 4 species (silver maple, sweetgum, American sycamore, and black locust) and
one genus (Populus, including cottonwood, poplar, and aspen). Collectively, average SRIC growth
rates have reached about 9.5 dry t/ha, or 4.7 t C/ha. Rates as high as 12-14 t C/ha have been
documented for exotic or hybrid trees (Ranney et. al., 1987).
Other species with high potential for plantation biomass production include wood grass
(Populus), grown at densities of about 1700 trees/ha for 4-year rotations, and 25,000/ha for 2-year
rotations (Shen, 1988). Kenaf, an African annual crop closely related to hibiscus, grows to 6 meters
in 120-150 days after seeding, and can produce 3-5 times more pulp for paper than trees, on an
annual basis, potentially freeing forests for biomass production and carbon storage. Field trials in
Texas by the Department of Agriculture have found that kenaf grows well without pesticides in the
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Cotton Belt and with irrigation in the drier Southern states, and requires less chemical input than
wood to produce and whiten pulp. Ninety percent of its original weight can be converted to usable
fiber (Brody, 1988).
Working with tropical species hi Espirito Santo, Brazil, Aracruz pulp company has produced
eucalyptus hybrids with 30% increased height and 80% improved diameter at breast height (dbh)
over parents at 4 years, through selection of parent tree seeds, breeding for desired characteristics,
and planting into specific microsites. Average yields of 70 m3/ha/yr (18.2 t C/ha/yr) for 14 million
trees per year grown from rooted cuttings of 54 species have been achieved, and yields of 100 m3
(26 t C) or greater are projected. Stands are managed for bleached pulp and charcoal for steel
making. The trees reach 20 meters in height in less than three years (OTA, 1984; HED and WRI,
1987). Other trials with eucalyptus from 32 sites in 18 countries have generated productivity gains
of several hundred percent simply by matching optimal seed characteristics with site soil and
microenvironmental conditions (Palmberg, 1981).
Pine breeding for straightness, reduced forking, and drought resistance, coordinated by seed
cooperatives in Latin American and Europe, are showing significant improvements. Other tree-
improvement methods include seed orchards relying on grafting and rooted cuttings that produce
clones of trees, but these methods are limited to only a few species. Tissue culture (manipulating
sprouts from germinating seeds) is still in its infancy hi forestry, although the Weyerhaeuser
Corporation in the U.S. Northwest plans soon to produce 100,000 clones of Douglas fir per year.
Research on producing cell culture embryoids (microscopic infant trees) is underway in major
developed countries on temperate species, and early work on teak and Caribbean pine is encouraging
(IIED and WRI, 1987).
Table 7-18 surveys productivity increases from intensive management and applied genetics for
selected species hi the U.S. and hi the tropics.
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TABLE 7-18
Productivity Increases Attributable to
Intensive Plantation Management
Maximum
Mean Annual Yield
Management Technique (Tons Carbon/ha/yr)
Douglas Fir in Washington
Natural stands 2.8
Silvicultural treatments
Plantation establishment 3.6
Nitrogen Fertilization 4.4
First-generation genetics 4.9
TARGET 12.5
Loblolly Pine in North Carolina Pocosins
Natural stands 1.8
Silvicultural treatments
Drain and plant 3.5
Bedding 4.3
Preplan! phosphorus 5.3
Nitrogen fertilization 5.9
First- and second-generation genetics 7.2
TARGET 15.0
SRIC Hardwoods, Various Sites in U.S.
Short rotation, genetics, site preparation, fertilizer, coppicing 6.5
TARGET for year 1996 10.0
Energy Crop Plantations, Temperate Zone
Intensive management, mixed species;
TARGET for year 2025 24.7
Eucalyptus Hybrids in Espirito Santo, Brazil
Seed selection, breeding, microsite planting 18.2
TARGET 26.0
Source: Based on Farnum et al., 1983, and Marland, 1988 (Douglas fir and loblolly pine); Ranney
et al., 1987 (SRIC hardwoods); Walter, 1988 (energy crop plantations); WRI et al., 1988 (Eucalyptus).
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The implications for carbon fixing are clear; a 30% rise in biomass production allows 30%
less land in forest -- or a 30% offtake of fuelwood or timber, either managed or poached -- to'
achieve the same results. Drought-resistant strains would encourage forest-sector and donor
community investment in arid and degraded land projects.
The potential benefits of productivity increases on plantation forests currently are limited by
the slow pace of research and field trials on promising species and varying site conditions. Eighty-
seven percent of plantation forestry in the tropics focuses on species of only 3 types: pine, teak, and
eucalyptus (Vietmeyer, 1986). Obstacles to expanding plantations are reviewed below.
Option 4: Improve Forest Harvesting Efficiency
Commercial forest management, especially in tropical forests with extremely high species
diversity per hectare, has targeted harvesting on only about 5% of species. Reasons for this high-
grading - selective cutting of high-value trees - include tradition, lack of demonstrated uses and
educated markets for other species, and the availability of virgin stands open to resource "mining"
without costly management and with government support. As a result, fully 85% of total wood
produced from tropical natural forests in 1970 went unused, left as slash or wasted at the mill
(Goldemberg et al., 1987).
A survey of Malaysian and Indonesian logged forests recently found that 45-75% of standing
trees had been injured (Gillis, in press). In southeast Amazonia, remote sensing study has revealed
that while 90,000 km2 had been clearcut by 1985, three times that area (266,000 km2) had been
seriously damaged by logging and colonization (WRI et al., 1988; Malingreau and Tucker, 1988).
Improvements in forest management would reduce waste of non-target species damaged during
logging (e.g., the Celos Silvicultural System, discussed under option 1 above).
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Efficient harvesting would require less virgin and mature secondary forest to be cut (Mergen
and Vincent, 1987). Malaysian government policy has raised the number of commercial tree species
for harvest from 100 in the mid-1960s to over 600 today (IIED and WRI, 1987). The harvest and
marketing of under-used species and size classes throughout the tropics, encouraged by government
regulations and forestry company practices, could reduce tree losses from harvest and improve stand
yields more than silvicultural innovations could, especially in secondary forests (OTA, 1984).
Option 5: Expand Current Tree Planting Programs in the Temperate Zone
Forested area in temperate and boreal zones is considered roughly constant in most studies
but may be declining in this decade (Houghton, 1988a). However, temperate forests were much larger
historically and could be expanded. Some European countries have increased their net forested
area: France was 14% forest in 1789; today, 25% of France is forested (Brown et al., 1988a).
According to the Forest Service report for FY 1987, total U.S. tree planting by Federal and
State agencies revegetated 1.2 million hectares (3 million acres) in 1987 (USFS, 1987). Table 7-19
lists the five major tree-planting programs in the U.S. since 1935 and the number of acres planted
in their highest 5-year period.
If current programs planted 1.2 million ha with existing financial and programmatic incentives
geared to replacement levels of planting, then additional enticements, on the order of $220-345/ha
($90-140/ac), would probably stimulate tree planting on hundreds of thousands of hectares. The
Conservation Reserve Program of USDA (see Option 2, below) paid an average of $219/ha (average
rental payment of $125/ha ($50/acre) plus half of establishment costs at an average of $94/ha), to
plant 648,000 ha of trees (1.6 x 106 ac) from 1986 to mid-1988. Youth groups could be mobilized
to plant trees annually on Arbor Day or during weekend or summer work camps.
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Chapter VII
TABLE 7-19
Summary of Major Tree Planting Programs in the U.S.
Program
Civilian Conservation Crops (CCC)
Soil Bank
USDA-Forest Service Reforestation
Forestry Incentive Program (FIP),
Agriculture Incentive (ACP)
Conservation Reserve Program (USDA)
Period
(Highest 5 years)
1935-39
1957-61
1979-83
1978-82
1986-90 projected
1986-88 actual
Acreage
(acres)
1.4
2.0
1.5
1.1
5.6
1.6
Planted (x 10')
(hectares)
0.6
0.8
0.6
0.4
2.3
0.6
Sources: Conrad, 1986; USDA, Land Retirement and Water Quality Branch statistics on
Conservation Reserve Program enrollment, November, 1988.
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February 22, 1989
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Large-scale reforestation by individuals, companies, and/or government programs has been
proposed as a possibility in temperate zones (see Table 7-21). However, this would be far less cost
effective (by perhaps a factor of 3-10) than in the tropics because of higher land costs and slower
tree growth. Recent, more targeted proposals for tree planting in the U.S. focus on activation of
croplands considered surplus during periods of diminished exports and high costs for farm support
programs.
Option 6: Reforest Surplus Agricultural Lands
The Conservation Reserve Program (CRP) administered by USDA has been proposed as the
quickest, most cost-effective way to stimulate tree planting at the scale necessary to partially offset
CO2 emissions. Planting tree carbon sinks may be comparatively cheaper than other current CO2-
limiting options, for example, planting short-rotation biomass energy plantations, investing in energy
conservation measures, or scrubbing CO2 from industrial emissions (Dudek, 1988a,b).
The CRP was established by the conservation title of the Food Security Act of 1985 to retire
highly credible cropland, reduce production and boost prices of surplus food commodities, and
reduce Treasury outlays. Participating landowners contract to retire cropland for 10 years. They are
reimbursed for 50% of the costs of planting the necessary vegetative cover, and receive an annual
rental payment.
Participation in the tree-planting program was targeted at 12.5% of projected total retired
acreage (16.2-18.2 million ha, or 40-45 million acres by 1990), or about 2.3 million ha (5.6 million
acres). However, tree-planting enrollment totals only 0.40 million ha (of 10.5 million ha enrolled in
CRP by November 1988), mostly in Southern states already producing plantations of loblolly pine in
favorable soils and climate. Planting rates have been low due to low bid prices, farmers' reluctance
to lose base acreage in Federal crop support programs, and inadequate support for tree planting by
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extension offices. Better financial incentives (i.e., higher bid prices, higher share of planting costs
paid) may greatly increase tree acreage enrollment.
For example, all new CO2 emissions from fossil-fuel electricity plants projected for 1987-96
could be offset by planting trees (see Table 7-20). Estimates of planned increases in fossil-fuel
electric generating capacity for 1987-96 total 25,223 MW, producing 45.5 Tg C (equivalent to 166.7
million tons CO2) (NAERC, 1987).
The uptake of CO2 varies by species. Silver maple, for example, a relatively inefficient
species, absorbs 5 t C/ha/yr under optimal conditions, while American sycamore absorbs as high as
7.5 t C/ha/yr (Steinbeck and Brown, 1976; Marland, 1988). Depending upon species chosen, it would
take between 4.5-13 million ha of short-rotation (4-5 years) monocultural (single-species) plantations
on good sites to offset the planned 25,223 MW of additional fossil-fuel electricity.
Mixed stands of numerous tree species are more desirable to prevent the ecological problems
associated with monocultural stands — increased pest populations, low species diversity, vulnerability
of even-aged stands. The acreage requirements for mixed stands to offset 45.5 Tg C could rise to
13 million ha (32 million acres), or about 70% of the total enrollment target for the 10-year CRP
program. Further analysis is necessary to take into account availability of productive soils, variations
hi actual site and mixed-stand productivity rates.
USDA's share of costs for establishing trees on CRP acres averages $94 per hectare, plus
rental payments averaging $125 per ha per year for the 10 years of the current CRP. If the full costs
of the planting are assumed to be $370/ha, and fertilizer costs are $62/ha, then the mid-range
estimate of 9.1 million ha of trees added to the CRP would cost $3.9 billion to establish ($3.1 billion
if current average USDA cost-share expenditures continued) (see Table 7-20). Rental payments by
USDA or utilities, estimated to rise to about $250/ha/yr, would need to continue over the 50-year
life of the electricity plants whose emissions would be offset.
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TABLE 7-20
Estimates of CRP Program Acreage Necessary to Offset
CO2 Production from New Fossil Fuel-Fired Electric Plants,
1987-96, by Tree Species or Forest Type
Carbon Fixing Rate Land Requirements for Offset (x 10')
Tree Species/Forest Type Used (t C/ha/yr) Hectares Acres
Average growth US commercial
forests 1977 (USFS, 1982)
Average growth US commercial
forests fully stocked (USFS, 1982)
Estimate for large mixed stands
of moderate-growth species
Silver maple (Ranney et al., 1987)
SRIC program average productivity
by 1987 (Ranney et al., 1987)
American sycamore (Marland, 1988)
SRIC program target for 1996
(Ranney et al., 1987)
SRIC program, highest documented
from exotics (Ranney et. al., 1987)
Loblolly pine, target after genetics
(Farnum et al., 1983)
0.82
1.35
3.5
5.0
6.5
7.5
10.0
13.0
15.0
55.5
33.7
13.0
9.1
7.0
6.1
4.5
3.5
3.0
137.1
83.2
32.1
22.5
17.3
15.1
11.1
8.6
7.4
Notes:
1. New fossil fuel-fired electric utility plant emissions are assumed to be 166.7 million tons CO2 total
for period 1987-% (or 45.5 Tg C) (Dudek, 1988a; NAERC, 1987). 1 metric ton CO2 = 0.27 ton
carbon.
2. 1 ton biomass = 0.50 ton carbon. 1 hectare = 2.47 acres. Units are expressed as metric (not
English) tons/acre for comparison.
3. Rotations for all estimates are assumed to be 4-5 years.
4. The carbon fixation rates for silver maple and American sycamore differ from those cited in
Dudek (1988a), following personal communication with Dudek.
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Some lands not presently producing timber or crops might be available for afforestation. In
1976,' the U.S. had 70 x 106 ha (173 million acres) of land currently not productive -- although used
for recreation or other purposes — with rainfall greater to 50 cm/yr that may offer suitable (although
not optimal) habitat for tree planting (Fraser et al., 1976). Any additional lands required would
have to be diverted to forestry from other competing land uses.
The stream of direct and indirect benefits that would accrue from afforestation, including
timber harvest, reduced soil erosion and nonpoint source water pollution, and increases in recreation
use and wildlife, has not been considered yet, and would tend to reduce costs attributed to climate
change programs if utilities or farmers managed forested land for multiple uses. Quantification of
these potential benefits is needed.
CO2 uptake rates might be increased through biotechnology improvements to perhaps 10 t
C/ha/yr within 10-15 years (Ranney et al., 1987). Higher uptake rates would reduce both offset
acreage requirements and costs. If economic hardwood species like American sycamore (used in
flooring and millwork) and silver maple (for furniture and box and crate production) or softwoods
(for lumber) are harvested for durable products, carbon storage continues after harvest.
Option 7: Reforest Urban Areas
Urban areas, which currently contain 75% of the U.S. population, on 28 million ha, are
increasing by 0.53 million ha (1.3 million ac) per year (USDA, 1982). A study of urban forests in
20 cities found that for every four trees removed, only one tree is planted, and for a third of the
cities, only one in eight trees lost is replanted (Moll, 1987). The total number of trees in Chicago
dropped by 43,853 between 1979 and 1986; trees planted per year declined from 24,675 in 1979 to
9,380 in 1980 (NASF/USFS, 1988; Open Lands Project, 1987).
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An urban tree is about 15 times more valuable than a forest tree in terms of reducing CO2
emissions. Trees break up urban "heat islands" by providing shade, which reduces cooling loads (air
conditioning) in warm weather by reducing building's heat gain, and cuts heating loads in cool
weather by slowing evaporative cooling and increasing wind shielding. Three strategically placed
trees per house can cut home air conditioning energy needs by 10-50% (Akbari et al., 1988). Trees
planted as windbreaks around houses and buildings also can reduce winter heating energy use by 10-
50% (Robinette, 1977). Thus urban trees both sequester CO2 and reduce consumption of fossil
fuels, making strategic planting around buildings a small but efficient response option (Meier and
Friesen, 1987). The American Forestry Association (AFA) recently conducted a survey of urban
forest needs, and launched Project ReLeaf to plant 100 million trees in city streets, parks, and rural
areas. AFA estimates savings of 40 billion kilowatt-hours of energy from these new trees (based on
Akbari et al., 1988), which would provide a carbon cycle benefit equivalent to 4.9 Tg C annually.
This benefit would accrue from a combination of absorption of CO2 and reduced emissions from
electricity generation (Sampson, 1988).
Option 8: Afforestation for Highway Corridors
Highway corridors offer significant opportunities for tree planting, along 6.2 million kilometers
(km) (3.9 million miles) of roads in the U.S. In 1985, 11.9 million ha (29.5 million acres) of land
(totalling 1.3% of the contiguous U.S.) were in use as highways, including right-of-ways and buffer
strips -- 9.9 million ha in rural areas, and 2.0 million in urban areas (calculations based on average
municipal right-of-way as 50 feet, reported in U.S. EPA, 1987; data from U.S. DOT, 1985). The
North-Central states have 4.2 million ha (10.3 million acres) in roads, the South has 3.9 million ha,
and the Northeast, 1.1 million ha, all regions with generally good site characteristics for tree planting.
If, for example, an additional 10% of the 9.2 million acres of interstate, state, and local highway
corridors in these regions were planted with trees, 0.9 million ha would be available -- about 10%
of the roughly 9 million ha in trees necessary to offset new CO2 emissions from power plants from
1987-96 (see above). At average costs of establishment and fertilization of $432/ha, total cost would
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approach $390 million. If 20% of highway corridors were planted, 1.8 million ha (4.52 million acres)
would be produced, at a cost of $777 million.
Option 9: Reforest Tropical Countries
Numerous estimates have been made of tree planting desirable for economic, social, and
environmental reasons unrelated to climate warming. One authority concludes that "at least 100
million hectares of tree planting worldwide appears necessary to restore and maintain the productivity
of soil and water resources" (an area equivalent to the size of Egypt) (Brown et al., 1988a). Major
tree-planting programs are being promoted in many parts of the world, partly in response to a 1985
international initiative, the Tropical Forestry Action Plan, jointly sponsored by the Food and
Agriculture Organization (FAO), the United Nations Development Programme (UNDP), The World
Bank, and the World Resources Institute (WRI) (see Chapter 9). In response to the Plan, global
funding for forestry by multilateral development banks and bilateral agencies is expected to rise from
$600 million in 1984 to $1 billion in 1988. In a parallel effort, China doubled tree planting to 8
million hectares by 1985, and planted 3.3 million ha of seedlings in 1986 alone (Houghton, 1988a,
quoting FAO data), although the survival rates initially hovered around 30%. China has set a goal
of 20% forest cover by the year 2000 (up from 12.7% forest in 1978) (Brown et al., 1988a).
Carbon benefits achieved from afforestation are not likely to be realized solely to slow global
warming. Instead, social forestry projects designed to integrate provision of human needs with
economic incentives and environmental stabilization ~ with carbon-reduction goals piggybacked on
top ~ provide the most feasible approach.
Forest plantation planting in the tropics to date has focused on establishing commercial
hardwoods (722,000 ha/yr) (WRI et al., 1988), and on providing fuelwood (550,000 ha/yr) (Brown
et al., 1988a). The gap between fuelwood supply and demand in the rapidly expanding developing
countries could reach 1 billion m3 by the year 2000 (Marland, 1988). World Bank tallies suggest that
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VII
55 million ha of high-yielding fuelwood plantations will need to be established by 2000, to close this
projected deficit ~ fully 2.7 million ha/yr, or 5 times current fuelwood rates. Thus, allowing for
overlap, Postel and Heise (Brown et. al., 1988a) calculate that a total of about 110 million ha of
planting is necessary both to restore degraded lands and to provide fuel requirements in 2000, which
would sequester approximately 0.7 Pg C/yr for the roughly 40-year life of the forest.
Several crude estimates have explored the possibility of very large reforestation efforts in
tropical regions to provide a sink for fossil fuel emissions. For example, Sedjo and Solomon (in
press) have proposed that the current annual atmospheric net increase in carbon (approximately 2.9
Pg C) could be sequestered for about 30 years in approximately 465 million hectares of plantation
forests, at a cost possibly as low as $186 billion in the tropics or $372 billion in the temperate zone,
a large but not inconceivable sum. This area would also produce as much as 4.7 billion cubic meters
of industrial wood annually, three times the current annual harvest. The opportunity cost to society
to offset carbon production from global annual deforestation of 11.3 x 10* ha in the tropics can be
calculated from Sedjo and Solomon's replacement cost figures, and equals $400 per hectare ~ or
$4.5 billion per year, a sum the world community should be willing to pay for forest preservation in
order to avoid paying carbon offset replanting costs. Myers (1988; see also Booth, 1988) has
suggested that 300 x 106 ha of plantation eucalyptus or pine ~ a landmass the size of Zaire ~
absorbing about 10 t C/ha/yr could offset the 2.9 Pg C accumulating in the atmosphere annually.
Dyson and Marland (1976) and Marland (1988) suggested that 700 x 106 ha of land - an area about
the size of Australia, or equal to the total global forest cleared since agriculture began (Matthews,
1983) — in short-rotation American sycamore, fixing carbon at a rate of 7.5 t/ha/yr, would be
required to offset total global production of 5 Pg C per year.
All of these estimates suffer from their application of some of the highest growth rates
observed to vast tracts of highly differentiated site conditions. Also, global reforestation estimates
thus far have focused on the potential for using forest growth to completely offset total or net global
carbon emissions. New estimates are needed that consider more feasible offset goals and growth
DRAFT - DO NOT QUOTE OR CITE VII-237 February 22, 1989
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Policy Options for Stabilizing Global Climate-Review Draft Chapter VII
rates. More complete analyses, based on better field estimates of carbon fixation rates for a range
of mixed-species stands and agrosilvicultural systems, are underway to identify available acreage (with
adequate soils) for potential planting programs in specific countries — to generate inductive
assessments of the potential of this approach, rather than the deductive approaches utilized thus far.
Table 7-21 gives a summary of preliminary estimates of forest acreage required to offset global CO2
emissions.
Is there adequate idle land to seriously entertain the notion of massive tree planting?
Houghton (1988b) has roughly calculated for tropical Asia and Africa availability of tropical land
climatically and edaphically suitable for forest growth (i.e., climate and soils previously supported
forest). Crude measures of land formerly in forest but presently degraded or in pasture, and not in
use for crops or development, suggest that about 100 x 106 ha are available for reforestation in South
and Southeast Asia (excluding arid lands in India and Pakistan). For tropical Africa, ratios of land
once forested and land currently hi "other land" categories in FAO estimates (FAO, 1987) are less
reliable, but create a range of 20-150 x 106 ha available. Human-initiated fires set to create and
maintain savanna for cattle grazing and other uses hypothetically could be suppressed (although
difficult to manage in practice), potentially allowing another 191 x 106 ha of savanna to revert to
closed forest along the northern savanna and in western Africa, providing an upper limit of 340 x 106
ha with potential for reforestation (Houghton, 1988b; FAO/UNEP, 1981).
Reforesting Degraded Lands. Restoration of lands formerly forested but degraded by
anthropogenic practices -- logging, overgrazing, swidden and inappropriate agricultural methods --
could increase reforestation and carbon fixation rates. Forest fallow in swidden agriculture, often with
low volumes of standing biomass, totals 1 billion ha globally, with another 1 billion in some form of
degradation. Desertification (the reduction of biological productivity, primarily from human activities,
usually in dry forests or rangelands) has moderately or severely affected 1.98 billion ha globally,
especially in the African Sahel, Southern Africa, Southern Asia, and China and Mongolia (WRI, 1987;
OTA, 1984). Sedjo and Solomon (in press) stress the low purchase price of degraded lands, while
DRAFT - DO NOT QUOTE OR CITE VII-238 February 22, 1989
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Policy Options for Stabilizing Global Climate-Review Draft Chapter VII
recognizing that low-productivity soils on degraded sites are likely to greatly increase acreage
requirements for a given offset goal. Grainger (1988) concluded that 758 million ha of degraded
tropical land (including 203 million ha forested in the past) could be restocked with forest.
The substitution of sustainable resource use practices and active reforestation on these lands
can reduce further loss of woody biomass and increase rates of carbon fixing and fuelwood
production. The price of establishing plantations on degraded grasslands in Indonesia has hovered
around $400 per ha (JICA, 1986). For example, Houghton (1988b) estimates that by replacing
swidden cultivation with permanent, low-input agriculture, about 365 x 106 ha of fallow land would
be available for reforestation during the period 1990-2015. Managed reforestation of arid lands has
been successful in some sites where natural mulch or commercial fertilizers were applied to seedlings,
and native species well-adapted to local pest and environmental conditions were planted -
supplemented by cautious use of fast-growth or nitrogen-fixing leguminous exotic species, like
Leucaena, Pinus, Acacia, and Eucalyptus, which tend to be more susceptible to pest invasions.
Research and field tests on leguminous trees inoculated with Rhizobium fungi, which produce
nitrogen-fixing nodules on legume roots, have shown that damaged tropical soils depleted of essential
micorrhizal fungi can be replanted effectively and inexpensively (less than 1 cent per tree) (Janos,
1980).
Subtropical dry forests in the Western Hemisphere have been reduced by 98%. Botanist
Daniel Janzen has organized an ambitious plan to restore dry forest cut for agriculture and manage
habitat fragments to expand Guanacaste National Park in Costa Rica (Jansen, 1988a,b). The plan
calls for establishing a local and international environmental educational and research program;
suppressing human fire activities, cattle ranching, and agricultural clearing; purchasing intact remnant
dry forest habitat adjacent to moist forest tracts or protected areas to provide seed sources;
developing a management plan stressing species diversity and zoning for habitat use, including
provision of economic opportunities. A closed-canopy dry forest with significant representation of its
DRAFT - DO NOT QUOTE OR CITE V1I-240 February 22, 1989
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Policy Options for Stabilizing Global Climate-Review Draft Chapter VII
previous fauna is expected to evolve within 10-50 years. Expansion of this innovative approach
throughout the dry tropics may be feasible, if stable land tenure and managed use can be attained.
In Nyabisindu, Rwanda, hillsides denuded by intensive swidden agriculture featuring rapid
deforestation, soil erosion, and overgrazing, are being restored to productivity by strips of densely
planted trees positioned across steep slopes to catch soil and create terraces for crops, and to produce
fruit and fuelwood. The restoration project stocks these hedges from a tree nursery producing 5
million seedlings per year for farm fruit trees, shade trees lining roads and hilltop woodlots. A
typical farm family can produce 25-50% more fuelwood than it consumes with this mixed crop-tree
system (Dover and Talbot, 1987).
Obstacles to Large-Scale Reforestation in Industrialized Countries
Economic and institutional obstacles to widespread reforestation center on the high costs of
site preparation, planting, forest management, and necessary financial incentives to private landowners.
However, 1.2 million ha of trees were planted in 1987 without strong incentives (USFS, 1986). U.S.
state foresters maintain that financial incentives on the order of $125-250/ha ($50-100/ac) would be
sufficient to bolster reforestation of harvested woodland and surplus croplands in most states. With
about 3 years' lead time, existing tree nurseries could accelerate production of seedlings enough to
plant 3-10 times current acreage per year (NASF, 1988).
Ecological drawbacks to massive reforestation schemes include the low levels of genetic
variability that characterize vast tracts of monocultural stands, and their reduced resistance to
infestations by pests (e.g., gypsy moth, pine bark beetles) that can lead to widespread forest decline
and mortality. Large-scale plantations may strain surface and ground water resources in areas already
experiencing overdrafts of and escalating demand on aquifers (e.g., the Ogallala aquifer in the
southern Great Plains, and Southeast coastal plain ground water) (Los Alamos National Laboratory,
1987).
DRAFT - DO NOT QUOTE OR CITE VII-241 February 22, 1989
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Policy Options for Stabilizing Global Climate-Review Draft Chapter VII
Air pollution - acid precipitation, ozone and other photochemical oxidants -- is already
affecting the health of forests in the U.S., Europe, and China. Decline hi at least seven coniferous
and 4 broadleaf important species in European forests, and at least 8 important species in North
American forests have been documented since 1979; 52% of West German and 36% of Swiss forests
were in decline by 1986. In the Southeast U.S., natural-stand diameter growth rates for yellow and
loblolly pines have declined 30-50% in the past 30 years (WRI and IIED, 1986; IIED and WRI,
1987).
Air pollution impacts may be exacerbated by the combined effect of warming and increased
ultra-violet radiation due to ozone depletion. The long-term process of climate change is likely to
complicate the task of actively expanding net forest area, a topic explored in Smith and Tirpak (1989).
The increase of carbon dioxide (through the effect of CO2 fertilization) may spur tree growth rates,
but the net result of climate change on forest growth under changing temperature and precipitation
conditions is difficult to predict. Early studies suggest that Southern bottomlands hardwood, oak, and
pine forests, and Northern conifer forests are likely to advance northward in a doubled CO2 scenario
(as temperatures increase). The natural rate of forest migration - about 100 to perhaps 400 km per
1000 years ~ appears unlikely to keep up with the likely rate of forest decline (Davis and Zabinski,
in press; Shands and Hoffman, 1987; Smith and Tirpak, 1989). Technical methods of speeding seed
dispersal to favorable soils (e.g., seeding from aircraft) are not complex but may be costly, with
potentially low seedling survival rates (WWF, no date).
Forests under the stress of climate change may have difficulty maintaining current productivity
rates, let alone increased rates and expanded geographic range, as envisioned under reforestation
policies. Forests migrating north hi response to rising temperatures will tend to encounter poorer
soils, slow natural seed dispersal methods, stresses on ecosystems, competition from other land use
sectors and ecosystems also responding to climate change, and either reduced or increased
precipitation and water supply conditions, depending on the region. While global boreal forests are
likely to increase in total area and tree density (Shugart and Urban, no date), they probably will
DRAFT - DO NOT QUOTE OR CITE VII-242 February 22, 1989
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Policy Options for Stabilizing Global Climate-Review Draft Chapter VII
contain, on average, lower standing biomass volumes (and carbon fixation rates) than current boreal
forests. Sedjo and Solomon (in press) estimate a net loss of 24 Pg C storage in global forests under
a 2xCO2 scenario, largely due to declines in total biomass in boreal forests.
Climatic change therefore may affect the viability of reforestation strategies as a mitigation
measure. Further research is needed.
Obstacles to Reforestation in Developing Countries
Tropical reforestation schemes face many obstacles. Pest management in monocultural
plantations (e.g., rats, fungus, nematodes for Leucaena in the Philippines), and loss of genetic diversity
that might allow adaptation to pest or viral infestations have proved major deterrents to large-scale
plantation projects in the Philippines, at Jari, Brazil, and elsewhere. Other issues include rapid
removal of soil nutrients by fast-growth species, reduced growth rates at altitudes as low as 450
meters and in frost belts for some species, and sheet erosion. Practical limitations of plantations
include the large areas of land necessary, limited transportation infrastructure to move biomass to
users, plantation security (fencing to prevent poaching of trees in northern Nigeria in 1976 cost $160-
200 per ha), costs of establishment, and limited availability of skilled technicians (Villavicencio, 1983).
Pastures cut from tropical forests have been invaded by resilient monocultural grasses like
Imperata cylindrica that must be suppressed before trees can survive. Research into recolonization
of large, highly degraded pastures in the Amazon (Uhl, 1988) suggests that three factors inhibit
reforestation: few seeds of forest species are being dispersed into pastures, because 85% of tree seeds
are transported by animal pollinators that do not frequent pastures; most seeds dispersed to pastures
are eaten by predators; and moisture and energy conditions near the ground surface in pastures are
radically different from forest conditions.
DRAFT - DO NOT QUOTE OR CITE VII-243 February 22, 1989
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Policy Options for Stabilizing Global Climate-Review Draft Chapter VII
Economic and population pressures in many regions make net afforestation difficult to
achieve. China, for example, is experiencing rapid economic development that has led to housing
construction that consumed 195 million cubic meters of wood (0.05 Pg C) from 1981-85, equivalent
to the total annual growth of all China's forests (Brown et al., 1988a).
Other environmental stresses on extant forests -- including seasonal climatic variations, and
the litany of stresses addressed for industrialized nations — reduce then- ability to meet current and
projected demand for forest products, let alone newly supply large increases in productivity and
plantation acreage. Persistent drought already plays a prominent role in the migration of
environmental refugees from traditional agricultural areas such as the Sahel, forcing relocation in
areas of marginal dry forest exposed to new pressures (Houghton, 1988a; Brown, 1988).
Summary of Forestry Technical Control Options
Slowing tropical deforestation, and rapidly expanding temperate and tropical reforestation,
may offer two of the most cost-effective policy responses to increasing CO2 emissions. However, only
rudimentary estimates of the feasibility, costs, and consequences of large-scale reforestation have been
performed. Table 7-22 summarizes these options. All calculations are preliminary estimates of
planting costs only. Total costs of these measures are not estimated, and would vary greatly
depending on land costs and management costs. These estimates are provided to give a general sense
of the relative costs of these options. Few viable, global-scale plans to slow forest loss in the tropics
have been advanced; most are policy options rather than technical fixes, and are discussed in chapters
8 and 9. Replacement of swidden agriculture with permanent low-input, sustainable agricultural
systems offers particular promise.
Integrated natural resource management and social forestry projects - designed to provide
the full spectrum of forest and food products in demand; forest protection from swidden agriculture,
logging, and fire; economic opportunities and reasonable rates of return; and cooperative management
DRAFT - DO NOT QUOTE OR CITE VII-244 February 22, 1989
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Policy Options for Stabilizing Global Climate-Review Draft Chapter VII
by local people and resource professionals — are likely to be the most successful in addressing climate
change effects and offset goals. Examples of two such projects are displayed in Table 7-23. These
two projects were proposed to offset the lifetime CO2 emissions of a 180 MW coal-fired electric plant
planned by Applied Energy Services for Uncasville, Connecticut, by planting and managing forests
in the tropics.
Our RCWP scenario envisions a "high reforestation" case (Houghton, 1988a,b), in which
deforestation is gradually reduced to zero by 2025. This decline is projected through three major
assumptions. First, 85% of shifting agriculture is replaced with sedentary cultivation, freeing 14.6 x
106 ha of fallow lands for reforestation each year, totalling 365 x 106 ha from 1990-2015. Second,
10 x 106 ha of pastures in Latin America are abandoned each year from 1990-2000, providing 100
million ha for reforestation; 5 million ha of grasslands are abandoned and reforested in Asia each
year from 1990-2010, producing 100 x 106 ha; and 5 million ha of degraded land or savanna in Africa
is reforested each year from 1990-2050, freeing another 300 million ha. Third, establishment of tree
plantations (on 40-year rotations) grows linearly from about 1 x 106 ha in 1980 to about 5 x 106 ha
in 2100. Over the 120-year period, 320 million ha are planted.
The total accumulation of carbon in terrestrial ecosystems from these three assumptions rises
to about 80 Pg (assuming low biomass volumes per ha) to 183 Pg (using high-biomass assumptions).
Peak carbon sequestering rates reach between 0.7 and 3.5 Pg/yr (low and high biomass assumptions),
reversing the current emission of 0.4-2.6 Pg/yr from land use changes in the tropics.
Obstacles to slowing deforestation and to planting and maintaining reforested lands in the
tropics include degraded soils, limited research on appropriate species and systems, limitations in
institutional capabilities, perverse government incentives, and soaring population growth rates.
DRAFT - DO NOT QUOTE OR CITE VII-247 February 22, 1989
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Policy Options for Stabilizing Global Climate-Review Draft
Chapter VII
TABLE 7-23
Overview of Two Social Forestry Projects Proposed to
Offset COZ Emissions of a 180-MW Electric Plant in Connecticut
Forest Attribute
Total area of project
Protected in forest reserves
Logged or managed forests
Newly established woodlots (plantations)
Agroforestry lands
Carbon sequestered
over 40-year life of plant
Cost estimate (cash and in-kind)
CARE/WRI/Guatemala
101,000 ha
19,740 ha
38,000 ha
13,140 ha
68,350 ha
15.8 Tg C
$14 million
WWF/Costa Ric
122,000 ha
72,000 ha
12,000 ha
21.8 Tg C
$9.6 million
Note: Offset goal = 0.39 Tg C/yr.
Sources: WRI, 1988b, and Trexler, in press (Guatemala); WWF, 1988 (Costa Rica).
DRAFT - DO NOT QUOTE OR CITE
VII-248
February 22, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VII
PART FIVE: AGRICULTURE
Agriculture contributes to the emission of greenhouse gases through three primary means:
rice cultivation, nitrogenous fertilizer use, and enteric fermentation in domestic animals. Estimates
place the annual contribution of rice cultivation and domestic animals at approximately 20 and 15%,
respectively, of global methane production. The use of nitrogenous fertilizers is estimated to account
for between 1 and 17% of the current global source of N2O (See Chapter II - Greenhouse Gas
Trends). Figure 7-22 illustrates the net effect of these agricultural sources on current greenhouse
warming.
Both the magnitude of agricultural source emissions themselves and the potential
effectiveness and costs of possible reduction measures are very uncertain. While considerable
research has been done on the agricultural activities of interest, relatively little attention has been
focused on agriculture-related emissions of greenhouse gases and how various changes in agricultural
practices affect these emissions.
In the No Response scenarios (SCW and RCW), as shown in Figure 7-23, emissions from
all three categories of agricultural practices are expected to increase over 1985 levels: Global CH4
emissions from rice and enteric fermentation increase about 35% and 65%, respectively, by 2025; and
N2O emissions from fertilizer use are projected to increase 133% by 2025. By 2100, emissions from
rice, enteric fermentation, and nitrogenous fertilizer increase by approximately 40%, 125%, and 175%,
respectively.
In the Stabilizing Policy cases (SCWP, RCWP) it is assumed that growth in emissions from
all three categories can be reduced somewhat, as shown in Figure 7-23: By 2100, methane emissions
from rice are reduced about 20% from 1985 levels. Methane emissions from enteric fermentation
DRAFT - DO NOT QUOTE OR CITE VII-249 February 22, 1989
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Policy Options for Stabilizing Global Climate - Review Draft
Chapter VII
FIGURE 7-22
AGRICULTURAL PRACTICES CONTRIBUTION
TO GLOBAL WARMING
CFCs
(17%)
Other Industrial
(3%)
Agricultural
Practices
(14%)
Land Use
Modification
(9%)
Energy Use
and Production
(57%)
DRAFT - DO NOT QUOTE OR CITE VII-250
February 22, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft
Chapter VII
FIGURE 7-23
TRACE GAS EMISSIONS FROM AGRICULTURAL ACTIVITIES
FtiCt Productio
SCW (Teragrams CH4 and N20)
20 200
RCW
NitroQ«nouf F«rtilntr
o ?
z "
10 I I 100
Rice Productio
Nitrogenous Fertilizer Use
1985 2000 2025 2050 2075 2100
1985 2000 2025 2050 2075 2100
SCWP
RCWP
125
U
5 100
Rice Production
Ent«ric Farmcntation
Nttrogtnouc F«rttliz«r
8 5
Z 0
(O f)
10 £ 2 100
< <
X. S.
s s
Rice Production
Enterlo Fermentation
Nltrooenous Fertlllier Use
i o Z
075 *•
1985 2000 202E 2060 2075 2100
YEAR
202C 20(0
YEAR
2071 2100
DRAFT - DO NOT QUOTE OR CITE VII-251
February 22, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter VII
fermentation and N2O emissions from fertilizer usage increase by 2100 in the policy cases, but at
reduced rates than in the non-policy cases. Methane from enteric.fermentation increases by about
32% between 1985 and 2100 in the policy cases, and N2O from fertilizer use increases by 35-65%.
It appears likely that reductions in these ranges are possible, but it is not possible at this time to
precisely define the technical measures necessary to achieve these reductions, their costs, or their
other (non-climate related) benefits of these emission-reducing policies.
For each of the three major trace-gas-producing agricultural practices, we discuss existing
technologies and management practices, emerging technologies, and areas that require additional
research. Technical options for reducing greenhouse gas emissions are discussed under each of these
subsections.
RICE CULTIVATION
Methane is produced by anaerobic decomposition in flooded rice fields. Some methane
reaches the atmosphere through ebullition (bubbling up through the water column), but most of it
(about 95%) passes through the rice plants themselves, which act as conduits. Methane production
is affected by the particular growth phase of the rice plant, temperature, irrigation practice, fertilizer
usage, presence of organic matter, rice species under cultivation, and number and duration of rice
harvests (Fung et al., 1988). A limited number of measurements have been performed in California,
Italy, and Spain to evaluate methane production in flooded rice fields. No measurements have been
published for the major rice producing areas of Asia however, where environmental conditions and
cultivation practices differ significantly from those in these more temperate regions (Cicerone and
Shelter, 1981).
DRAFT - DO NOT QUOTE OR CITE V1I-252 February 22, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter VII
Rice cultivation is estimated to contribute between 60 and 170 Tg methane per year currently
(Fung et al., 1988), and with rice-harvested area increasing between 0.5 and 1.0% per year (IRRI,
1986), rice cultivation will continue to be a significant source of methane emissions.
Rice cultivation practices vary widely. With over 60,000 varieties of rice, there is great
variation in water requirements, fertilizer response, pest and disease resistance, growing season, plant
height, and yield potential. Traditional rice varieties are generally tall plants with a low grain-to-
straw ratio that have a good resistance to endemic weeds and pests and a high tolerance for
moisture, including flooded monsoon conditions. Cultivation of traditional varieties of rice does not
involve heavy fertilization because these plants tend to lodge (fall over) at high levels of fertilization.
The highest most stable rice yields are achieved with irrigation.
The research of the 1960s, which led to the Green Revolution, produced a high-yielding rice
cultivar that is short, stiff-stemmed, and very fertilizer responsive. These modern, high-yielding
varieties also have a short growing time, which allows for multiple plantings during the year. The
first of these modern varieties, IRS, established a maximum yield potential of 10 mt/ha under ideal
conditions, and reduced the growing time by a month to 130 days (Barker et al., 1985.)
Existing Technologies and Management Practices
No technology currently available can inhibit the production of methane in rice paddies, but
cultivation practices and plant variety affect the amount of methane produced.
Rice Production System. The nature of the rice production system has a substantial effect
on the amount of methane produced. Wet, paddy rice produces methane, while dry, upland rice
does not. Wetland rice comprises about 87% of rice area worldwide. Of global rice area, about
DRAFT - DO NOT QUOTE OR CITE YII-253 February 22, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VII
53% is irrigated, 22.6% is shallow rainfed, 8.2% is deepwater, and 3.4% is tidal wetland. The
remaining 13% is dry upland rice (Dalrymple, 1986). The majority of upland rice area is in Africa
and Latin America. Rice paddies are inundated to varying depths and for different lengths of time
depending on production system used, which affects the rate of CH4 generation. How these rates
differ has yet to be quantified.
Organic Matter. The kind and volume of organic matter added to the rice paddy has been
shown to affect methane production. Laboratory experiments have shown that adding organic
matter leads to an early peak in methane production and an overall increase equivalent to 2-5% of
the added organic matter (Delwiche, 1988).
Organic fertilizers are often used in rice cultivation in Asia. Sources include animal
manures, composted garbage, night soil (human feces), and plant residues. After harvest, rice plant
residue is often incorporated into the soil as a source of organic material--a practice that appears to
increase methane emissions. In addition, whether and to what extent the introduction of manure
from domestic animals during plowing and harrowing affects methane production, are issues that
must be examined.
Crop Residues. Crop residues can be burnt, buried, incorporated into the rice paddy, or
used for some other activity. Burning the residue releases carbon dioxide. Buried residue partially
decomposes and produces methane, but less than the amount produced by incorporating the residue
into the paddy.
In southern India and Sri Lanka, there is a preference for intermediate height varieties of
rice, which produce more straw for fodder and fuel (Barker et al., 1985). Finding additional uses
DRAFT - DO NOT QUOTE OR CITE VII-254 February 22, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VII
for rice straw, such as for fiber or building materials, is necessary in order to reduce the incentive
for plowing crop residue back into the field.
High-Yield Varieties. The shift to high-yield varieties of rice has helped to reduce the
amount of methane produced per unit of rice. Modern, short-stemmed varieties have a grain-to-
straw ratio that is about 50% higher than traditional varieties, which means less organic material
(straw) is left to decompose (assuming it is not burned). In addition, the shorter growing season of
high-yield varieties results in a reduction in methane emissions. However, the shorter growing season
also allows multiple plantings during the course of a year. Overall methane emissions could increase
as a result of multiple-planting, particularly if more organic material is incorporated into the paddies
to support the greater number of plantings
High-yield varieties of rice are largely limited to irrigated areas where yield response is the
highest. These modern varieties show the best fertilizer response and overall yield in irrigated areas
during the dry season, when water levels are best controlled and solar energy is at its peak. The
yield response is lower and highly variable under the summer monsoon conditions when flooding,
pests, and diseases are most common. Some farmers in India and Bangladesh cultivate modern
varieties in the dry season and traditional varieties in the wet season (Barker et al., 1985).
The uncertainty of adequate moisture in many areas, and flooded conditions in others,
discourages the use of modern fertilizer-responsive varieties in non-irrigated production regimes. But,
in some countries, the use of modern varieties has expanded well beyond the irrigated zones. In the
Philippines, modern varieties are grown extensively in rainfed lowlands. In Burma, modern
deepwater and upland varieties now cover an area three times that which is irrigated (Dalrymple,
1986; see Table 7-24).
DRAFT - DO NOT QUOTE OR CITE VII-255 February 22, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VII
Further dissemination of the short, stiff-stemmed, fertilizer-responsive modern varieties of
rice has potential for decreasing emissions of methane. World rice yield is currently at about one-
half of genetic potential, which is as much as 14-16 mt/ha (Mikkelsen, 1988). There is considerable
room for efficiency improvements in rice production, which would lead to a relative decrease in
methane production.
Fertilizer Use. Widespread adoption of modern varieties has been somewhat impeded
because of the capital required for new seed and fertilizer. Switching to modern varieties has
resulted in an increase in the use of both organic and chemical fertilizers. Research indicates that
a significant increase in production could be achieved through more efficient application of chemical
fertilizer. Asia currently has a fertilizer-use efficiency of between 30 and 40%. Direct placement of
fertilizer into the soil when rice is transplanted could double fertilizer-use efficiency and would
increase yield (Mikkelsen, 1988).
The increase in fertilizer use and intermittent flooding of rice paddies both lead to an
increase in nitrous oxide production through denitrification. (See USE OF NITROGENOUS
FERTILIZER.)
Emerging Technologies
Current research at the International Rice Research Institute (IRRI) and other rice research
centers is focused on the development of varieties better suited to a wide range of environmental
conditions (Dalrymple, 1986). The development of high-yield varieties that can withstand the drought
conditions of upland and shallow rainfed systems, as well as the flooded conditions associated with
lowland and tidal rice cultivation, would increase the dissemination of high-yielding varieties in these
areas.
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Greater emphasis is being placed on efforts to understand the complexities of the farming
system by conducting research in farmer's fields and encouraging farmer involvement. This so-called
farming-systems style of research combines the knowledge of researchers with the direct experience
of farmers (Barker et al., 1985). Research that focuses on developing cultivars that consistently
produce a good yield under a wide range of conditions, rather than a high yield under ideal
conditions, holds the most promise for improving food supply stability and decreasing methane
emissions from rice cultivation in Asia.
There are likely to be further shifts to irrigated rice production in the future; however,
improving the potential of modern varieties to perform well under rainfed conditions would reduce
the incentive to shift to irrigated production systems, which are large producers of methane.
Research Needs and Economic Considerations
Before a comprehensive strategy to reduce methane production in rice can be developed,
research in several areas is needed. In particular, to estimate the amount of methane produced per
unit of rice we need to quantify the amount of methane produced from different cultivars, under
various cultivation practices, particularly under different water management regimes. There is also
a need for experiments in Asia, where the majority of the world's rice is grown and no data is
currently available.
Rice is the cornerstone of the Asian economy. Many Asian countries are striving for self-
sufficiency and have protected internal markets against the price fluctuations of the international
market. Some countries have initiated price floors and others price ceilings. Price supports in
countries such as the U.S. and Japan cause an increase in the production of rice.
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USE OF NITROGENOUS FERTILIZER
Denitrification and nitrification are the primary processes that lead to the evolution of N2O
from soils fertilized with nitrogenous fertilizers. In well-aerated soils, nitrification is the primary
process producing N2O (Breitenbeck et al., 1980). Denitrification is prevalent in poorly drained, wet
soils; rice cultivation is the largest agricultural contributor to denitrification losses (Hauck, 1988).
Leaching of fertilizer into ground water and surface water is an additional source of nitrous oxide:
between 5 and 30% of fertilizer leaves the soil system via leaching or runoff (Breitenbeck, 1988).
Researchers need to derive a more precise estimate of nitrous oxide from this source.
Fertilizer-derived emissions of N2O are estimated to be 0.14-2.4 Tg N annually (Fung et al.,
1988), based on global consumption of 70.5 Tg of nitrogenous fertilizer in 1984/1985 (FAO, 1987).
Nitrogenous fertilizer use is increasing at an estimated 1.3% per year in industrialized countries and
4.1% per year in developing countries (World Bank, 1988). By 2050, global fertilizer consumption
is estimated to increase by a factor of 3.5 over the 1990 level (Frohberg et al., 1988).
Anthropogenic factors affecting the fertilizer-derived emissions of N2O include the type and
amount of fertilizer applied, application technique, timing of application, tillage practices, use of
chemicals, irrigation practices, vegetation type, and residual nitrogen in the soil. Natural factors such
as temperature, precipitation, and organic matter content and pH of soil also affect N2O emissions
(Fung, 1988).
N2O emissions are difficult to estimate because of the complexity and variability of fertilized
soil systems. Estimates suggest that fertilizer-derived emissions of N2O are highest for anhydrous
ammonia (between 1 and 5% of N applied), followed by urea (0.5% of N applied), ammonium
nitrate, ammonium sulfate, and ammonium phosphate (0.1% of N applied), and nitrogen solutions
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(0.05% of N applied) (Fung, 1988). Anhydrous ammonia is only used extensively in the United
States, where it comprises about 38% of nitrogenous fertilizer consumption. Urea is used extensively
in Asia and South America, where it accounts for 69% and 58%, respectively, of nitrogenous
fertilizer consumption.
Existing Technologies and Management Practices
The wide variety of agricultural systems and fertilizer management practices produce very
different quantities of N2O emissions. These emissions can be reduced by improving the efficiency
of fertilizer use, which can be achieved through changes in management, such as better placement
in the soil, or in technology, for example, introducing nitrification inhibitors and fertilizer coatings,
which both improve the efficiency of fertilizer applied and reduce the amount required.
Adoption of more efficient fertilizer management practices and technologies by farmers has
been slow, however, particularly in developing countries. Traditional agricultural practices have
proven to be difficult to dislodge. Immediate benefits of alternative practices must be made apparent
or incentives provided in order to achieve widespread adoption of these more efficient practices and
technologies.
Management Practices That Affect N-.O Production
Type of Fertilizer. Nitrous oxide emissions vary by one to two orders of magnitude between
nitrogen solutions, urea, and anhydrous ammonia. The feasibility of using fertilizers with lower N2O
emission rates for different cropping situations needs to be examined.
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Rate and Timing of Fertilizer Application. Increased fertilizer application results in
increased emissions of N2O. Adjusting fertilizer application in accordance with plant requirements
would improve fertilizer-use efficiency. Currently, fertilizer subsidies and pricing encourages a higher
than optimum level of fertilizer use.
The timing of fertilizer application is likely to affect the evolution of N2O from the soil.
Limited studies on the subject suggest that emissions from fertilizer applied hi the fall exceed those
from fertilizer applied in the spring (Bremner et al, 1981).
Placement of Fertilizer. Proper (deep) placement of fertilizer can improve fertilizer
efficiency by curbing nitrogen losses and thus N2O emissions. Broadcasting and hand placement of
fertilizer results in higher nitrogen losses than does deep placement. Deep placement is particularly
important in flooded fields where fertilizer is used inefficiently. In Asia, only about one third of the
nitrogen applied benefits rice crops. Placement of fertilizer into the reduced zone, which prevents
microbial action, can double fertilizer-use efficiency (Stangel, 1988). This technique improves
efficiency regardless of the water regime (Eriksen et al., 1985).
Rice can either be grown from seeds or transplanted. Transplanted rice may reduce
denitrification losses by allowing more efficient fertilizer application. A simple tool that allows for
proper fertilizer placement at the time of transplanting greatly improves fertilizer efficiency, however,
this tool has not been widely adopted in Asia (Stangel, 1988). Rice farms in Asia average 3 hectares
or less and are very labor-intensive operations. Consequently, there has been little incentive to
develop and disseminate fertilizer technology.
Water Management. Intermittent flooding of rice paddies increases nitrogen loss and the
creation of N2O (Eriksen et al., 1985; Olmeda and Abruna, 1986).
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Tillage Practices and Herbicide Use. Measurements suggest that denitrification activity and
N2O emissions are higher under no-till systems than under conventionally tilled systems (Groffman
et al., 1987). This increase could be the result of fertilizer placement or the increased use of
herbicides associated with no-till systems. Preliminary observations indicate that application of post-
emergent herbicides leads to significant, but short-lived, increases in N2O emissions (Breitenbeck,
1988). The influence of tillage practices and herbicide use on N2O emissions merit further study.
Legumes as a Nitrogen Source. Few studies have been done to determine the role of
nitrogen-fixing crops in the emission of N2O. N2O emissions from legumes have been shown to be
similar to those from fertilized crop systems (Groffman et al., 1987) and to emissions from fallow
unfertilized soil (Blackmer et al., 1982). Under no-till cropping systems, there seems to be a greater
potential for N2O emissions when legumes are used as the nitrogen source (Groffman et al., 1987).
Although the use of legumes as a nitrogen source is unlikely to reduce emissions of N2O from
agriculture, better quantification of this source is needed.
Technologies that Improve Fertilization Efficiency
Nitrification Inhibitors. Nitrification and urease inhibitors are fertilizer additives that can
increase efficiency by decreasing nitrogen loss through volatilization. Nitrification inhibitors can
increase fertilizer efficiency by 30% (Stangel, 1988).
Reduced Release Rate. Techniques that limit fertilizer availability, such as slow-release or
timed-release fertilizers improve nitrogen efficiency by reducing the amount of nitrogen available at
any time for loss from the soil system.
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Coatings. Limiting or retarding water solubility through supergranulation or by coating a
fertilizer pellet with sulfur can double fertilizer efficiency (Stangel, 1988).
Emerging Technologies
No breakthrough in chemical fertilizer technology is anticipated in the near future, but there
are likely to be improvements in fertilizer production and application efficiency. The development
of a subsurface fertilizer application method for no-till, for example, could have a significant effect
on N2O emissions from that source.
Advances in biotechnology are likely to affect N2O emissions from agriculture. Engineering
of crop varieties that are more resistant to weeds could reduce herbicide use, and in turn, decrease
the emission of N2O.
Nitrogen-fixing cereal crops, which could be available by 2000, would decrease the use of
fertilizer on those crops. The potential for reduced N2O emissions needs to be examined (OTA,
1986).
Technological advances that increase crop yield will help reduce the amount of land and
other inputs needed to produce the goods required to support the population. Improved yield and
other efficiency improvements hold potential for reducing N2O emissions.
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Research Needs and Economic Considerations
Many uncertainties surround the factors influencing N2O emissions from fertilizer.
Cultivation practices and environmental practices that affect the fertilizer-derived emissions of N2O
have not been quantified. Additional research in the following areas is needed:
• N2O emissions by fertilizer type;
• the effect of crop type on emissions;
• the effect of water management practices on emissions;
• N2O release from drainage and ground water;
• N2O emissions from legumes and manure;
• the effect of tillage, herbicide use, and alternative cropping systems on N2O emissions;
• how the rate of fertilizer application affects emissions;
• the effect on emissions of different fertilizer management practices, including fertilizer
placement; and
• the contribution of tropical agriculture to N2O emissions.
Most fertilizer use in Asia is for rice cultivation. Rice is a significant source of both
methane and N2O. The production of the two gases under different management regimes needs to
be explored. There is room for significant efficiency improvement in this area.
Fertilizer subsidies, target prices and loan levels encourage a higher level of fertilizer use
than would otherwise occur. Such policies also reduce the attractiveness of more efficient fertilizer
application and use. Increased fertilizer prices and the threat of shortages in fossil-fuel-based
fertilizers should increase interest in fertilizer efficiency in the future.
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ENTERIC FERMENTATION IN DOMESTIC ANIMALS
Livestock play a vital role within the agricultural sector, producing meat, dairy products and
fiber. Ruminant animals, including cattle, dairy cows, buffalo, sheep, goats, and camels have the
capability of converting roughages into usable nutrients through microbial fermentation. This unique
capability allows them to convert cellulosic plant material to milk, meat, and fiber that would
otherwise be unavailable for human consumption. Some non-ruminant animals (e.g., horses and pigs)
also produce methane, although in much smaller quantities. Currently, ruminants contribute
approximately 97% of the annual methane emissions from domestic animals; non-ruminants
contribute approximately 3%.
Protein of animal origin has the highest biological value of all sources of protein. Within
the United States, animal products supply 53% of all foods consumed, including 69% of the protein,
40% of the energy, 80% of the calcium, and 36% of the iron in our diets (English et al., 1984). In
developing countries, there is a continued and growing demand for animal proteins.
About 24% of the world's land area is in permanent pasture. Rangeland and pastureland
combined account for over 50% of total land area in the world. Within Africa and Oceania
(Australia and New Zealand), rangeland and pastureland make up 65 and 75% of the land area,
respectively (IIED and WRI, 1987). These areas are typically too steep, arid, rocky, or cold to be
suitable for crops, but provide forage for about 3 billion head of cattle, buffalo, sheep and goats
(FAO, 1986).
The type and function of livestock systems vary considerably around the globe. Within
developed economies and countries in which meat is a major export commodity, livestock are
intensively managed for either meat or dairy production. Ranches within these economies are
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typically large and use management techniques such as selective breeding, rangeland management,
feed enhancement, and the use of antibiotics to increase cattle production.
Livestock within these systems are typically larger animals, fed at least part of the time on
a high- quality grain diet. Fodder crops are grown specifically for feeding cattle. Most beef cattle
are fed a high- quality, low-cellulose diet in a feedlot for several months prior to slaughter. These
animals have a much higher yield of meat or dairy product than similar animals in developing
countries. Table 7-25 shows average meat production per animal in several regions of the world.
Within less developed economies, livestock are usually more integrated into the whole
agricultural system, frequently as a part of a crop/livestock or pasture-based system. These animals
are not always managed to maximize reproductive efficiency or slaughtered at the most efficient stage
of life. They are frequently maintained as scavengers and live on a low-quality forage diet.
Livestock serve as a buffer within agricultural systems by helping to stabilize cash flows and
food supplies. Livestock production can serve to level out the effect of climate variability and the
seasonality of rainfall in crop/livestock systems. Ruminant livestock can salvage energy and nitrogen
from what otherwise could have been complete crop failures. In a grain crop failure, for example,
vegetative matter suitable for livestock consumption is still produced. Livestock are convenient
disposal systems for crop residues and provide a sink for surplus and damaged crops not suitable for
human consumption (Raun, 1981).
In Tanzania and other Central African countries, tribal groups regard an increase in animal
numbers as the best insurance against economic and social risk. The animals afford protection
against the uncertainties of climate and destruction of crops by pests (Winrock, 1977). Livestock
ownership enhances social status in many developing countries.
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Chapter VII
TABLE 7-25
Average Meat Yield per Animal
(kilograms)
Region
North America
Europe & USSR
Oceania
Latin America
Near East
Far East & China
Africa
World Average
Beef & Veal
87.7
59.7
45.8
29.4
17.3
8.2
13.6
31.2
Mutton & Goat
11.1
6.6
5.7
2.7
4.4
4.0
3.5
4.7
Source: Stoddart et al., 1975.
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February 22, 1989
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In addition to the production of meat, dairy products, and fiber, livestock are a source of
fertilizer, fuel, and provide most of the tractor power in many developing countries. Animals are
used for plowing, threshing, and to provide power for irrigation. Draft animals can increase farm
output several times by increasing the area that a farm family can cultivate. Within Africa and the
Far East, over 80% and 90%, respectively, of all draft power is provided by animals (Raun, 1981).
Animal manure is used by about 40% of the world's farmers to enhance soil fertility. Dried
dung can also be used as fuel. It is estimated that over 200 million tons of manure are used each
year as fuel in developing countries (Winrock, 1977).
Methane Emissions from Livestock
Enteric fermentation, the digestive process that makes livestock so useful, causes them to
emit methane into the atmosphere. The 1272 million cattle, 1140 million sheep, 460 million goats,
126 million buffalo (FAO, 1985), and assorted other domesticated animals contribute an estimated
65-100 Tg of methane to the atmosphere annually. Of this amount, approximately 57% comes from
beef cattle, 19% is from dairy cattle, and 9% is from sheep (Lerner et al., 1988). With the global
cattle population increasing at 1.2% per year (see Chapter IV), livestock will continue to be a
significant source of methane.
Livestock cannot metabolize methane. It is lost energy, which neither contributes to the
animal's maintenance, nor production of a product. Estimates of gross energy intake lost as methane
for cattle have ranged from 3.5% (Johnson, 1988) to 8.3% (Blaxter and Wainman, 1964).
Methane emissions from livestock are affected by differences hi quantity and quality of feed,
body weight, age, energy expenditure and enteric ecology. All other thing being equal, emissions are
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higher for animals that are heavier, have higher feeding levels and high-cellulose forage diets, and
are ruminants. Emissions are also higher for work animals because some of the additional feed
required to supply this energy is converted to methane (Lerner et al., 1988). Manure is an additional,
unquantified source of methane (Winrock, 1977).
Although we know that animal type, feed type, and management practice affect the amount
of methane generated by an animal, few modifications to current practices are certain to reduce
methane production.
Existing Technologies and Management Practices
Livestock System Productivity. Intensively managed, high-productivity livestock systems-
those with fewer, larger, more productive animals, produce more animal product per unit of methane
(Moe and Tyrell, 1979). In these highly managed livestock systems, as the feeding level is increased,
the level of methane production increases, but the energy loss in relation to gross energy intake
decreases (Thorbek, 1980). An animal fed at maintenance level, however, loses a larger percentage
of its gross energy intake to methanogenesis than does an animal fed at a higher level, and has no
increase in animal product.
The vast differences between livestock systems in developed and developing countries make
differences in productivity difficult to compare. Additional benefits, such as the work output of draft
animals, must be considered, but, intensively managed, high-productivity livestock systems are the
most efficient in terms of animal product yield.
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Animal Type. Animal type and size affect methane production. Sheep produce less methane
per animal than cattle over a shorter time period. Overall, sheep produce about 20% less methane
per unit of animal product than do cattle.1
Diet. At low levels of feed intake, at or slightly above maintenance, a high-cellulose forage
diet results in lower methane production per unit of feed than a high-nitrogen grain diet. Conversely,
at high levels of feed intake, approaching three times maintenance, a high-quality grain diet results
in lower methane production per unit of feed (Blaxter and Clapperton, 1965).
This information suggests that current feeding practices are reasonably good with regard to
minimizing methane generation. In developing countries, where livestock are living near maintenance
levels, they subsist on a high-cellulose forage diet. In developed countries, where animals consume
several times the maintenance level, animals are fed a high-quality grain diet. The analysis of Blaxter
and Clapperton (1965) suggests that this situation is optimal. But, further research is needed in this
area, as no measurements of methane generation have been done on livestock within farm conditions
of developing countries.
Feed Additives. Feed additives, which increase feed use efficiency and reduce methane
generation by modifying rumen fermentation, are currently available for beef cattle. These feed
additives, known as ionophores, are fed to most feedlot cattle to improve the efficiency of beef
production during finishing for market. lonophores reduce the amount of methane produced by a
ruminant by improving digestive efficiency (less is produced) and by causing the animal to eat less,
which leaves less food in the gut to ferment. lonophores improve the efficiency of beef production
1 This estimate assumed methane production rates of 132 and 17 1/d (adapted from Johnson, 1988);
weight gains of 1.05 and .22 kg/d (English et al., 1984); slaughter weights of 310 and 42 kg; and dressing
percentages of .6 and .5 for cattle and sheep, respectively.
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by 6-8%, while reducing methane production by approximately 5%, for animals on a forage diet, and
by approximately 20%, for animals fed a high-grain diet (Johnson, 1988).
lonophores have been shown to lose effectiveness over time, when the bacteria in the gut
develops a tolerance to them (Johnson, 1974). A feeding program that alternates different ionophores
can improve overall efficiency by impeding bacterial adaptation (Hubbert et al., 1987).
The use of ionophores is predominately limited to feedlot cattle because of the difficulties
associated with administering a drug to range cattle. Range cattle can be fed ionophores using a
mineral block lick, but few range cattle receive this drug.
Feed additives are not currently available for dairy cattle, and are unlikely to become
available because of problems with efficiency and chemical residues in the milk. In developing
countries, where cattle are generally used for milk and meat production, ionophores cannot be used.
Methane from Manure. Microbial decomposition in manure generates methane under
anaerobic conditions, but the amount produced from this source is not well quantified. Disposing
of manure in lagoons and flooded fields creates anaerobic conditions conducive to the generation of
methane.
Energy from manure can be captured in the form of methane in biogas plants. Manure
produced by ruminants, particularly cattle and buffalo, is an ideal substrate for anaerobic fermentation
in biogas plants. Methane from manure has a value of 5 kcal per cubic meter (about 70% of the
energy value of natural gas). In the U.S., the dung from about 40 cows could provide all of the non-
mobile fuel for a farm family, including electricity. Disposal of manure in biogas plants can reduce
methane generation, while still providing a fertilizer source from the residue (Winrock, 1977).
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Emerging Technologies
Efficiency improvements and advances in biotechnology have resulted in considerable
productivity increases for beef cattle, dairy cattle, and sheep. Since 1940, dairy production in the U.S.
has remained relatively constant while the herd size has been cut in half (English et al., 1984).
Efficiency improvements should continue to produce gains in productivity, along with associated
reductions in methane emissions.
Bovine growth hormone, a bio-engineered imitation of a naturally occurring protein in cattle,
is expected to increase productivity in dairy cattle. This drug, which has not yet been approved by
the U.S. Food and Drug Administration, is likely to decrease methane production per unit of milk
(Tyrell, 1988).
The development of a methanogenesis inhibitor for dairy cattle is unlikely in the near future.
Improving the ionophore delivery system for range cattle could increase use of that additive.
There is also some potential for reducing methane production by inhibiting fungus in the
rumen of cattle. These fungal interactions need to be more thoroughly investigated before fungal
inhibitors can be developed.
Through longer-term research in biotechnology, there exists the potential to develop microbial
species capable of converting hydrogen to a useful hydrogen sink, rather than to methane. Acetic
acid is such a hydrogen sink, which is useful as an energy source in cattle.
Animal scientists have long been working on the problems of improving feed-use efficiency
and livestock system productivity and, thereby, the problem of methane generation. This research
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should continue to reduce methane generation per unit of animal product within highly managed
systems.
Research Needs and Economic Considerations
Further research is needed on livestock in developing countries in order to devise a strategy
to reduce methane generation. For example, estimates of methane generation are needed for a range
of livestock (including draft animals) on a variety of diets. Also, the potential for using antibiotics,
such as ionophores, on cattle needs to be explored.
We also need to quantify methane generation from manure under a range of management
and disposal options.
Commodity programs in the U.S. encourage a larger cattle population than there otherwise
would be. Unnaturally low grain prices, which are a result of deficiency payments, are, in effect, a
subsidy to beef and dairy production. Beef producers are also protected by a tariff, which in recent
years has been converted to a variable levy (Schuh, 1988). These policies result in a larger cattle
herd and increased production of methane.
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REFERENCES
PART ONE: ENERGY SERVICES
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Alliance to Save Energy. 1987. Hie GPU Project: Findings and Implications. Washington, D.C.
Automotive News. 1983. Cat's 3306B Makes it Big in the Real World. November 7.
Automotive News. 1986. Chrysler Genesis Project Studies Composite Vehicles. May 5, p. 36.
Automotive News. 1988. Ford Develops Catalyst With No Platinum. December 19.
Berg, C. 1988. Industrial Processess in the Long Run. in S. Mevers. ed. Summary of Presentations at a
Workshop on Energy Efficiency and Structural Change: Implications for the Greenhouse Problem. Oakland,
CA. May 1-3, Lawrence Berkeley Laboratory, Berkeley, CA.
Bleviss, D. 1988. Ttte New Oil Crisis and Fuel Economy Technologies: Preparing the Light Transportation
Industry for the 1990's. Quorum Press, New York, N.Y.
Brody, H. 1987. Energy-Wise Buildings. High Technology. February.
Chandler, W.U. 1986. Tlie Changing Role of the Market in National Economies. Worldwatch Institute,
Washington, D.C. September.
Crandall, R.W., H.K. Gruenspecht, T.E. Keeler, and L.B. Lave. 1986. Regulating the Automobile. The
Brookings Institution, Washington, D.C.
Deluchi, MA., R.A. Johnston, and D. Sperling. 1987. Transportation Fuels and the Greenhouse Effect.
University Wide Energy Research Group, University of California, Berkeley, CA. December.
Deringer, JJ., J.F. Busch, J. Hall, K.S. Kannon, M.D. Levine, A.C. Ayub, and I. Turiel. 1987. Energy and
Economic Analysis in Support of Energy Conservation Standards for New Commercial Buildings in Malaysia.
Lawrence Berkeley Laboratory, Berkeley, CA. April.
Edison Electric Institute. 1985. 1985 Capacity & Generation. EEI, Washington, D.C.
FERC (Federal Energy Regulatory Commission). 1988. Tlie Qualifying Facilities Report. FERC, Washington,
D.C. January.
Flavin, C., and A. Durning. 1988. Raising fuel efficiency. In State of the World 1988: A Worldwatch Institute
Report on Progress Toward a Sustainable Society. W.W. Norton and Co., New York, N.Y.
(FAO) Food and Agriculture Organization. 1981. Agriculture: Toward 2000. FAO, Rome.
Forster, H.J. 1983. Big Car, Too, Can be Light on Fuel. Resources and Consenation 10:85-102.
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Geller, H.S. 1984. The Potential for Electricity Conservation in Brazil. Companhia Energeticer de Sao Poalo,
Sao Poalo, Brazil,
Geller, H.S. 1986. End-Use Electricity Conservation: Options for Developing Countries. Energy Department
Paper No: 32. World Bank, Washington, D.C.
Geller, H.S., M.R. Ledbetter, E.L. Miller, and P.M. Miller. 1987. Acid Rain and Electricity Conservation.
The Energy Conservation Coalition and the American Council for an Energy Efficient Economy, Washington,
D.C.
Geller, H.S. 1988. Residential Equipment Efficiency: 1988 Update. American Council for an Energy Efficient
Economy, Washington. D.C.
Glebov, IA. and V.P. Kovalenko. 1987. Strategies for Conservation of Fuel and Energy Resources in the
Leningrad Region. Energy 12:(10/ll)949-952.
Goldemberg, J., T.B. Johansson, A.K.N. Reddy, and R.H. Williams. 1988. Energy for a Sustainable World.
Wiley Eastern Limited, New Dehli, India.
Goldemberg, J., T.B. Johansson, A.K.N. Reddy, and R.H. Williams. 1987. Energy for a Sustainable World.
World Resources Institute, Washington, D.C.
Goldman, C. 1984. Measured energy savings from residential retrofits: updated results from the BECA-A
projects. In American Council for an Energy Efficient Economy (ACEEE). Proceedings of the 1984 ACEEE
Summer Study on Energy Efficientcy in Buildings, Vol B. ACEEE, Washington, D.C.
Goldstein, D.B., and P. Miller. 1986. Developing cost curves for conserved energy in new refrigerators and
freezers. In American Council for an Energy Efficient Economy. Proceedings of the 1986 Summer Study on
Energy Efficiency in Buildings, Vol. 1. ACEEE, Washington, D.C.
Gray, C. 1983. U.S. light vehicles - some exciting news for the 1990's. Resources and Conservation 10:65-
84.
Hewett, E.A. 1984. Energy, Economics and Foreign Policy in the Soviet Union. The Brookings Institution,
Washington, D.C.
Hirst, E., J. Clinton, H. Geller, and W. Kroner. 1986. Energy Efficiency in Buildings: Progress and Promise.
American Council for an Energy Efficient Economy, Washington, D.C.
Holcomb, M.C., S.D. Floyd, and S.L. Cagle. 1987. Transportation Energy Data Book: Edition 9. Oak Ridge
National Laboratory Report No: ORNL-6325, Oak Ridge, TN.
Husselbee, W.L. 1984. Automotive Emission Control. Reston Publishing Co., Reston, Virginia.
IEA (International Energy Agency). 1987. Energy Conservation in IEA Countries. Organization for Economic
Cooperation and Development, Paris.
IEA (International Energy Agency). 1988. Energy in Non-OECD Countries: Selected Topics 1988.
Organization for Economic Cooperation and Development, Paris.
Jessup, P.S. 1988. Advanced Power Technologies: Their Potential Contribution to Stabilizing CO2 Emissions.
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Kahane, A., and R. Squitieri. 1987. Electricity use in manufacturing. Annual Review of Energy 12: pg
#'s?
Kamo, R. 1987. Adiabatic diesel-Engine Technology in Future Transportation. Energy 12:(10/11)1073-1080.
Kavanaugh, M. 1988. End-use efficiency and NOx emissions in aviation. In S. Meyers, ed. Summary of
Presentations at a Workshop on Energy Efficiency and Structural Change: Implications for the Greenhouse
Problem. Oakland CA. May 1-3, 1988. Lawrence Berkeley Laboratory, Berkeley, CA.
Lovins, A., and R. Sardinsky. 1988. The State of the Art: Lighting. Competitek, The Rocky Mountain
Institute, Colorado.
Maglieri, D.J., and S.M. Dollyhigh. 1982. We have just begun to create efficient transport aircraft.
Astronautics and Aeronautics (Feb.), p.20.
Makarov, A.A., A.A. Beschinsky and A.G. Vigdorchik. 1987. Basic Principles of Energy Policy in the
U.S.S.R. Energy 12:(10/ll)945-948.
Meyers, S. 1988. Transportation in the LDC's: A Major Area of Growth in World Oil Demand. Lawrence
Berkeley Laboratory, Berkeley, CA. March.
Miller, A.S., I.M. Mintzer, and S.H. Hoagland. 1986. Growing Power: Bioenergy for Development and Industry.
World Resources Institute, Washington, D.C. April.
Miller, P.M., H.S. Geller and A.T. de Almeida. Undated. Improving Energy Efficiency of Electrical Equipment
in Pakistan. American Council for an Energy Efficient Economy. Washington, D.C.
Mintzer, I.M. 1988. Projecting Future Energy Demand in Industrialized Countries: An End-use Oriented
Approach. Prepared for U.S. EPA, Washington, D.C. 40+ pp.
Mix, T.W. 1987. Advanced Seperation Techniques for Petrochemicals. Energy 12:(10/11).
Naill, R. 1987. Cogeneration and Small Power Production. Presentation to the Energy Policy Forum,
Airlie Va. June 16.
National Acid Precipitation Assessment Program. 1987. Interim Assessment: The Causes and Effects of
Acid Deposition. Washington, D.C.
National Energy Conservation Center. 1986. Potential for Energy Efficiency Improvements in the Commercial
and Industrial Sectors. Publ. city?
New England Energy Policy Council. 1987. Power to Spare: A Plan for Increasing New England's
Competitiveness Through Energy Efficiency. Energy Policy Council, Boston, MA.
OTA (Office of Technology Assessment). 1982. Increased Automobile Fuel Efficiency. OTA, Washington,
D.C.
OECD (Organization for Economic Co-operation and Development). 1988. Transport and the Environment.
Paris.
Plotkin, S.E. 1989. U.S. Office of Technology Assessment, Personal communication, January 13.
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Price, A. and M. Ross. 1988. Reducing Electricity Costs in Automotive Assembly, Stamping and Parts Plants.
Unpublished.
Rocky Mountain Institute. 1986. Advanced Electricity-Saving Technologies and the South Texas Project. Old
Snowmass, CO.
Ropelowski, R.R. 1982. 757 Key to Route Flexibility. Aviation Week and Space Technology. August 30,
p.36.
Rosenfeld, A.H. 1988. Urban trees and light-colored surfaces: inexpensive and effective strategies for
reducing air conditioning energy consumption. In Meyers S., ed. Summary of Presentations at a Workshop
on Energy Efficiency and Structural Change: Implications for the Greenhouse Problem. Oakland CA, May 1-
3, 1988. Lawrence Berkely Laboratory, Berkely, CA.
Rosenfeld, A.H. and D. Hafemeister. 1985. Energy conservation in large buildings. In D. Hafemeister et
al. (eds). Energy Sources: Conservation and Renewables. Conference Proceedings No. 135. American Institute
of Physics, New York.
Rosenfeld, A.H. and D. Hafemeister. 1988. Energy-efficient Buildings. Scientific American 258:(4).
Ross, M. 1985. Industrial Energy Conservation. In Hafemeister, D., H. Kelly and B. Levi. Energy Sources:
Conservation and Renewables. American Institute of Physics, New York.
Ross, M. 1986. Current Major Issues in Industrial Energy Use. Prepared for the Office of Policy Integration,
U.S. Department of Energy, Washington, D.C.
Ross, M. 1987. Industrial Energy Conservation and the Steel Industry of the United States. Energy
Ross, M. E.D. Larson and R.H. Williams. 1987. Energy Demand and Materials Flows in the Economy.
Energy 12:(10/11).
Sathaye, JA., B. Atkinson and S. Meyers. 1988. Alternative Fuels Assessment: The International Experience.
Lawrence Berkeley Laboratory, Berkeley, CA. March.
Sathaye, JA., A.N. Ketoff, LJ. Schipper, and S.M. Lele. 1988. An End-use Approach to Development of
Long-term Energy Demand Scenarios for Developing Countries. Lawrence Berkeley Laboratory, Berkeley, CA.
September Draft.
Schipper, L., S. Meyers, and H. Kelly. 1985. Coming in from the Cold: Energy-Wise Housing in Sweden.
Seven Locks Press, Washington, D.C.
Schipper, L., et al. 1989. Energy Use and Lifestyle: A Matter of Time? Annual Review of Energy. Annual
Reviews Inc., Palo Alto, CA.
Smith, BA. 1988. Douglas Initiates Marketing Efforts to Promote MD-90 Propfan Program. Aviation Week
and Space Technology. January 25.
Smith, J.B. 1981. Trends in Energy Use and Fuel Efficiencies in the U.S. Commercial Airline Industry. U.S.
Department of Energy, Washington, D.C.
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SERI (Solar Energy Research Institute). 1981. A New Prosperity: Building a Sustainable Energy Future.
The SERI Solar/Conservation Study. Brickhouse, Andover, MA.
Sobey, A.J. 1988. Energy use in transportation: 2000 and beyond. In Meyers S., ed. Summary of
Presentations at a Workshop on Energy Efficiency and Structural Change: Implications for the Greenhouse
Problem. Oakland CA, May 1-3, 1988. Lawrence Berkeley Laboratory, Berkeley, CA.
Stauffer, R.F. 1988. Energy Savings from Recycling. National Appropriation Technology Assistance Service
Paper.
Turiel, I., R. Curtis and M.D. Levine. 1984. Parametric Energy Analysis in Support of Singapore Energy
Conservation Standards for Commercial Buildings. K. H. Olson and W.W. Ching eds. Proceedings of the
Asean Conference on Energy Conservation in Buildings. Singapore.
U.S. AID (Agency for International Development). 1988a. New Directions for A.I.D. Renewable Energy
Activities. Office of Energy, Bureau for Science and Technology, Washington D.C. February.
U.S. AID (Agency for International Development). 1988b. Power Shortages in Developing Countries:
Magnitude, Impacts, Solution, and the Role of the Private Sector. U.S. AID, Washington, D.C. March.
U.S. DOC (Department of Commerce). 1988. Survey of Current Business 68(8), Bureau of Economic
Analysis, Washington, D.C. August.
U.S. DOE (Department of Energy). 1987a. Annual Review of Energy 1986. Energy Information
Administration, U.S. DOE, Washington D.C.
U.S. DOE (Department of Energy). 1987b. Energy Security: A Report to the President of The United States.
U.S. Government Printing Office, Washington, D.C.
U.S. DOE (Department of Energy). 1987c. Long Range Energy Projections to 2010. Office of Policy,
Planning and Analysis, U.S. DOE, Washington, D.C. September.
U.S. DOE (Department of Energy). 1988. Annual Energy Review 1987. Energy Information Administration
Report No: DOE/EIA-0384(87), Washington, D.C.
U.S. DOT (Department of Transportation). 1988. Federal Aviation Administration Aviation Forecasts for
Fiscal years 1988 through 1999. February.
U.S. EPA (Environmental Protection Agency). 1979.
U.S. EPA (Environmental Protection Agency). 1985. Regulatory Impact Analysis: Oxides of Nitrogen Polutant-
Specific Study and Analysis of Comments. Office of Mobile Sources.
von Hippel, F., and B. V. Levi. 1983. Automotive Fuel Efficiency: the Opportunity and Weakness of Existing
Market Incentives. Resources and Conservation 10:103-124.
White, LJ. 1982. The Regulation of Air Pollutant Emissions from Motor Vehicles. American Enterprise
Institute for Public Policy Research. Washington, D.C.
Williams. 1988.
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Williams, R.H., E.D. Larson, and M. Ross. 1987. Materials, Affluence, and Industrial Energy Use. Annual
Review of Energy 12:99-144.
Wohlgemuth, J. 1988. Photovoltaic technology. In Workshop on Global Climate Change: Emerging Energy
Technologies for Electric Utilities. Alliance Technolgies Inc., Bedford, MA. September.
The World Bank. 1985. China: The Transport Sector, Annex 6 to China: Long-Term Development Issues
and Options. Publisher, Publisher's City.
WRI and IIED (World Resources Institute and International Institute for Environment and Development).
1988. World Resources 1988-89. Basic Books, Inc. New York.
PART TWO: ENERGY SUPPLY
Baldwin, S.F. (1987). Biomass Stoves: Engineering Design, Development and Dissemination. V.I.T.A.,
Arlington, VA.
Baldwin, S.F., H. Geller, G. Dutt, and N.H. Ravindranath. 1985. Improved Woodburning Stoves: Signs of
Success. Ambio 14(4-5):280-7.
Bormann F.H., B.T. Bormann, and K.R. Smith. 1988. Earth to Hearth: A microcomputer for comparing
biofuel systems. Submitted for publication.
Brown L.R. 1980. Food or Fuel: New competition for world's cropland. Worldwatch Paper 35, Washington,
D.C.
Clarke, J. F. The U.S. Magnetic Fusion Energy Program. Presented at the Workshop on Global Climate
Change: Emerging Energy Technologies for Electric Utilities. September, 1988.
DeMocker, J.M., J.M. Greenwald, and P.P. Schwengels. 1986. Extended Lifetimes for Coal-Fired Power
Plants: Implications for Air Quality Analysis and Environmental Policy. Paper No: 28.3, Air Pollution Control
Association, Annual Meeting, Minneapolis, MN, June 22-27.
EPRI, Utility Turbopower for the 1990s. EPRI Journal, April/May 1988
Goldemberg J., T.B. Johansson, A.K.N. Reddy, and R.H. Williams. 1988. Energy for a Sustainable World.
Wiley-Eastern, New Delhi.
Grohse, E. and M. Steinberg. 1987, Economical Clean Carbon and Gaseens Fuels from Coal and other
Cabonaceous Raw Materials. Brookhaven National Laboratory, November. (BNL 40485).
Gunnerson C.G., and D.C. Stuckey. 1986. Anaerobic Digestion: Principles and Practices for Biogas Systems.
Technical Paper No. 49, World Bank, Washington,D.C.
Harvey, L.D. 1988. Potential role of electric power utilities in hydrogen economy. Paper presented at
Workshop on Global Climate Change: Emergency Energy Technologies for Electric Utilities. March 30-
31, 1988. American Institute of Architects, Washington, D.C.
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Hay, N. P. Wilkinson, and W. James. 1988. Global climate change and emerging energy technologies for
electrical utilities: The role of natural gas. Paper presented at Workshop on Global Climate Change:
Current Electricity Supply Alternatives. March 30-31. American Gas Association, Washington, D.C.
Hewitt, E.A. 1984. Energy Economics and Foreign Policy in the Soviet Union. The Brookings Institution,
Washington, D.C.
Hu, D., I. Oliker and F. Silaghy. 1984. Power Plant Modification for Cogeneration. Fossil Plant Life
Extension Workshop, Washington D.C., June 12-15, Electric Power Research Institute.
IEA (International Energy Agency). 1987b. Renewable Sources of Energy. Organization for Economic
Cooperation and Development, Paris.
IUCN (International Union for Conservation of Nature and Natural Resources). 1980. World Conservation
Strategy for Sustainable World. Gland, Switzerland.
Jessup, P.S. Advanced Power Technologies: Tlieir Potential Contribution to Stabilizing CO2 Emissions. March
1988
Kjellstrom, B. 1985. Biomass Gasifiers for energy supply to Agriculture and small industry. Ambio 14(4-
5):267-74.
Larson E.D., and R.H. Williams. 1988. Biomass-fired Steam-injected Gas Turbine Cogeneration. Proc.
1988 ASME Cogen-Turbo Symposium, Montreux, Switzerland, Aug 30-Sep 1.
Larson E.D., J.M. Ogden, and R.H. Williams. 1987. Steam-injected Gas-Turbine Cogeneration for the cane
sugar industry. PU/CEES Report No 217, Princeton.
Manibog, F.R. 1984. Improved Cooking Stoves in Developing Countries: Problems and Opportunities. Ann.
Rev. Energy 9:199-227.
Miller A.S., I.M. Mintzer, and S.H. Hoagland. 1986. Growing Power: Bioenergy for Development and
Industry. WRI Study No 5, Washington.
NAPAP (National Acid Precipitation Assessment Program). 1987. Interim Assessment: The Causes and
Effects of Acidic Deposition. Volume IV. NAPAC, Washington D.C.
New York Times, October 25, 1988, [article on superconductors - need complete reference] page D23
OECD (Organization for Economic Cooperation and Development). 1988. Transport and the Environment.
Paris.
PEI Associates, Inc. 1988. Supply-Side Conservation Techniques for Tennessee Valley Authority and
American Electric Power Coal-Fired Boilers. Cincinnati, OH. Draft Report. October.
Poole, R. 1988. Solar cells turn 30. Science. 241:900-901.
Ramakrishna J. 1988. Doctoral Dissertation, Dep of Geography, Univ of Hawaii, Honolulu.
Reid W.V., J.N. Barnes, and B. Blackwelder. 1988. Bankrolling Success: A portfolio of sustainable
development projects. Environment Policy Institute, Washington.
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VII
Sathaye J., B. Atkinson, and S. Meyers. 1988. Alternative Fuels Assessment: the international experience.
LBL mimeo, March, Berkeley.
Schlabach. T.D. 1988. Prospects for high-T0 super conductors in large-scale power utility applications. Paper
presented at Workshop on Global Climate Change: Emerging Energy Techniques for Electric Utilities.
March 30-31, 1988. American Institute of Architects, Washington, D.C.
Shabecoff, P. 1987. U.S. Bureau for Water Projects Shifts Focus to Conservation. New York Times, October
2.
Smith K.R. 1987. The Dialectics of Improved Stoves, presented at 2nd Int. Workshop on Stove
Dissemination, Antigua, Guatemala.
Smith K.R. 1987b. Biofuels, Air Pollution and Health. Plenum Press, New York.
Smith K.R., A.L. Aggarwal, and R.H. Dave. 1983. Air Pollution and Rural Biomass Fuels in Developing
Countries. Atmos. Envir. 17:2343-62.
Steinberg, Cheng, and Horn, Brookhaven National Laboratory, A Systems Study for the Removal, Recovery
and Disposal of Carbon Dioxide From Fossil Fuel Power Plants in the U.S., 1984
United Nations. 1988. Energy Statistics Yearbook. United Nations, New York.
U.S. AID (Agency for International Development). 1988a. New Directions for A.I.D. Renewable Energy
Activities. Washington, D.C. February.
U.S. AID (Agency for International Development). 1988b. Power Shortages in Developing Countries:
Magnitude, Impacts, Solutions, and the Role of the Private Sector. Washington, D.C. March.
U.S. DOE (Department of Energy). 1985a. Federal Ocean Energy Technology Program.
U.S. DOE (Department of Energy). 1985b. Five Year Research Plan 1985-1990, Wind Energy Technology:
Generating Power from the Wind.
U.S. DOE (Department of Energy). 1985c. U.S. Geothermal Technology: Equipment and Services for
Worldwide Application. U.S. DOE, Washington, D.C.
U.S. DOE (U.S. Department of Energy). 1986. International Energy Annual 1985. U.S. DOE, Washington,
D.C.
U.S. DOE (Department of Energy). 1987a. Energy Security, A Report to the President of the United States.
U.S. DOE (Department of Energy). 1987c. Five Year Research Plan 1987-1991 National Photovoltaics
Program.
U.S. DOE (Department of Energy). 1987d. Northern Lights: The Economic and Practical Potential of
Imported Power from Canada. Office of Policy, Planning and Analysis, Report No: DOE/PE-0079,
Washington, D.C. December.
U.S. DOE (Department of Energy). 1987e. America's Clean Coal Commitment. Office of Fossil Energy
Report FE/DOE-0083, Washington D.C. February.
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VII
U.S. DOE (Department of Energy). Draft 1987. U.S. Geothermal Energy Program, Five Year Research Plan,
1988-1992.
U.S. DOE (Department of Energy). 1988. Electric Power Annual 1987. Energy Information Administration
Report No: DOE/EIA-0348(87), Washigton, D.C. September.
U.S. OTA (Office of Technical Assessment). 1985. New Electric Power Technologies. U.S. OTA,
Washington, D.C. 329 pp.
Williams, R.H. 1988. Are Runaway Energy Capital Costs a Constraint on Development? Presented at Int.
Sem. on the New Era in the World Economy, Sao Paulo, Aug 31-Sep 2.
Williams, R.H. 1985. Potential Roles for Bioenergy in an Energy Efficient World. Ambio 14(4-5): 201-9.
Williams, R.H., and E.D. Larson. 1988. Aeroderivative Turbines for Stationary Power. Annual Review
of Energy 13:
Williams, R.H. Draft 1988. Advanced Gas Turbines for Stationary Power.
World Bank. 1980. Alcohol Production from Biomass in Developing Countries. Washington, D.C.
World Bank. 1984. A Survey of the Future Role of Hydroelectric Power in 100 Developing Countries.
Washington, D.C.
WRI (World Resources Institutes). 1985. Tropical Forests, A Plan for Action. Washington, D.C.
Wuebbles DJ., and J. Edmonds. 1988. A Primer on Greenhouse Gases. U.S. DOE/NBB-0083, March,
Washington, D.C.
PART THREE: INDUSTRY
Bingemer, H., and P. Crutzen. 1987. The production of methane from solid wastes. Journal of Geophysical
Research 92:2189.
Emcon Associates and Gas Recovery Systems. 1981. Landfill Gas: An Analysis of Options. Prepared for
New York State Energy Office.
Escor, Inc. 1982. Landfill Methane Recovery Part II: Gas Characterization. Prepared for Gas Research
Institute and Argonne National Laboratory, Department of Energy.
Gordon, J.G. 1979. Assessment of the Impact of Resource Recovery on the Environment. U.S. Environmental
Protection Agency, Washington D.C.
Hoffman, J.S., and MJ. Gibbs. 1988. Future Concentrations of Chlorine and Bromine. U.S. Environmental
Protection Agency Report No 400/1-88-005, Washington D.C.
Jansen, G.R. 1988. The Economics of Landfill Gas Projects. Paper from Governmental Refuse Collection
and Disposal Association (GRCDA) Symposium. March, 1988.
DRAFT - DO NOT QUOTE OR CITE VII-282 February 22, 1989
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Makhijani, A., A. Makhijani, and A. Bickel. 1988. Saving Our Skins: Technical Potential and Policies for
the Elimination of Ozone-Depleting Chlorine Compounds. Environmental Policy Institute and the Institute
for Energy and Environmental Research. Washington, B.C.
Pollock, C. 1987. Realizing Recycling's Potential. In State of the World 1987. W.W. Norton and Company,
New York, pp. 101-121.
Rotty, R.M. 1987. A look at 1983 CO2 emissions from fossil fuels (with preliminary data for 1984). Tellus.
396:203-208.
Stauffer, R.F. 1988. Energy Savings from Recycling. National Appropriation Technology Assistance Service
Paper.
U.S. EPA (U.S. Environmental Protection Agency). 1987. Regulatory Impact Analysis: Protection of
Stratospheric Ozone. Office of Air and Radiation, Washington, D.C.
U.S. EPA (U.S. Environmental Protection Agency). 1988a. Air Emissions from Municipal Solid Waste
Landfills - Background Information for Proposed Standards and Guidelines. Draft EIS. Washington, D.C.
U.S. EPA (U.S. Environmental Protection Agency). 1988b. How Industry is Reducing Dependence on Ozone-
Depleting Chemicals. Washington, D.C.
U.S. EPA (U.S. Environmental Protection Agency). 1988c. Report to Congress: Solid Waste Disposal in the
United States. Washington D.C.
Wilkey, M.L., R.E. Zimmerman, H.R. Isaacson. 1982. Methane from Landfills: Preliminary Assessment
Workbook. Argonne National Laboratory, Department of Energy.
Zimmerman, R.E., G.R. Lytwynyshyn, and M.L. Wilkey. 1983. Landfill Gas Recovery: A Technology Status
Report. Argonne National Laboratory, Department of Energy.
PART FOUR: FORESTRY
Akbari, H., J. Huang, P. Martien, L. Rainier, A. Rosenfeld, and H. Taba. 1988. The impact of summer
heat islands on cooling energy consumption and CO2 emissions. Paper presented at ACEEE Summer Study
on Energy Efficiency in Buildings, Asilomar, Cal., August.
Anderson, D., and R. Fishwick. 1984. Fuelwood Consumption and Deforestation in African Countries. World
Bank, Staff Working Papers, Number 704. The World Bank, Washington, D.C. 52 pp.
Ballard, R. 1984. Fertilization of plantations. In G. Bowen, and E. Nambiar, eds. Nutrition in Plantation
Forests. Academic Press, London.
Bellagio, 1987. Statement of the Bellagio Strategy Meeting on Tropical Forests. Paper presented at the
Bellagio Strategy Meeting on Tropical Forests, Bellagio, Italy, July 1-2, 1987.
Behmel, F., and I. Neumann. 1981. An example for agro-forestry in tropical mountain areas. Presented to
the Workshop on Agro-Forestry in the African Humid Tropics, Ibadan, Nigeria.
Binkley, D. 1986. Forest Nutrition Management. J. Wiley and Sons, New York.
DRAFT - DO NOT QUOTE OR CITE VII-283 February 22, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter VII
Booth, W. 1988. Johnny appleseed and the greenhouse. Science 242:19-20.
Brody, J. 1988. Scientists eye ancient African plant as better source of pulp for paper. New York Times
December 13, 1988.
Brown, L. 1987. State of the World 1987. Norton, New York. 268 pp.
Brown, L. 1988a. State of the World 1988. Norton, New York.
Brown, S. 1988b. The global carbon cycle: Letter in response to Detweiler and Hall, 1988. Science
241:1739.
Conrad. 1986. The conservation reserve: Tree-planting windfall or tilting at windmills? American Forests
September.
Davis, M. and C. Zabinski. in press. Rates of dispersal of North American trees: Implications for response
to climatic warming. Forthcoming in Proceedings of the Conference on Consequences of the Greenhouse Effect
for Biological Diversity. Washington, D.C., October 4-6, 1988, World Wildlife Fund-U.S.
Detwiler, R., and C. Hall. 1988a. Tropical forests and the global carbon cycle. Science 239:42-47.
Detwiler, R., and C. Hall. 1988b. The global carbon cycle: Response to letters. Science 241:1738-1739.
DOT (U.S. Department of Transportation). 1985. Highway Statistics. Federal Highway Administration,
Department of Transportation, Washington, D.C.
Dover, M., and L. Talbot. 1987. To Feed the Earth: Agro-Ecology for Sustainable Development. World
Resources Institute, Washington, D.C.
Dudek, D. 1988a. Offsetting new CO2 emissions, unpublished paper, Environmental Defense Fund, New
York.
Dudek, D. 1988b. Testimony before the Senate Committee on Energy and Natural Resources, September 19,
1988.
Dyson, F., and G. Marland. 1979. Technical fixes for the climatic effects of CO2. In W. Elliott and L.
Machta, eds. Workshop on the Global Effects of Carbon Dioxide from Fossil Fuels. U.S. Department of
Energy, Washington D.C., CONF-7703585, 111-118. Proceedings of workshop at Miami Beach, Florida,
March 7-11, 1977, held by DOE.
Farnum, P., R. Timmis, and J. Kulp. 1983. Biotechnology of forest yield. Science 219:694-702.
FAO (Food and Agriculture Organization). 1978. [[cropld nded to maintain alrdy low levels food supply.
see St of Wld??]
FAO (Food and Agriculture Organization). 1981. Tropical Forest Resources Assessment Project: Forest
Resources of Tropical America, Technical Report 1; Forest Resources of Tropical Asia, Technical Report 2;
Forest Resources of Tropical Africa, Technical Report 3. Food and Agriculture Organization, Rome,
UN32/6.1301-78-04.
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FAO (Food and Agriculture Organization). 1986a. Forest World Outlook Projections 1985-2000. Forestry
Paper 73. Rome.
FAO (Food and Agriculture Organization). 1986b. The Outlook for Pulp and Paper to 1995. FAO, Rome.
FAO (Food and Agriculture Organization). 1985. Tropical Forestry Action Plan. FAO, Rome.
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PART FIVE: AGRICULTURE
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ruminants. Zentralblatt for Veterinarmedizin (Journal of Veterinary Medicine) 32:356-367.
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Eriksen A., M. Kjeldby, and S. Nilsen. 1985. The effect of intermittent flooding on the growth and yield
of wetland rice and nitrogen-loss mechanism with surface applied and deep placed urea. Plant and Soil
84:387-401.
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Vol. 39. FAO, Rome.
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Vol 36, FAO, Rome. 124 pp.
Frohberg, K., and P.R. Vande Kamp. 1988. Results of Eight Policy Scenarios for Reducing Agricultural
Sources of Trace Gas Emissions. Center for Agricultural and Rural Development, Iowa State University.
Report prepared for U.S. EPA, Washington, D.C.
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Animal Science 53:1574-1580.
Fung, I. 1988. Agriculture Emission Coefficients Estimates. Presented at U.S. EPA Workshop on
Agriculture and Climate Change, Washington, DC, February 29-March 1, 1988, and subsequent
correspondence.
Fung, I., E. Matthews, and J. Learner. 1988. Trace Gas Emissions Associated with Agricultural Activities.
Prepared for the EPA Workshop on Agriculture and Climate Change, Washington, D.C. February 1988.
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and F. Sundstol, ed. Energy metabolism of farm animals. European Association for Animal Production
publication 29:104.
Groffman, P., P. Hendrix, and D. Crossley. 1987. Nitrogen dynamics in conventional and no-tillage
agroecosystems with inorganic fertilizer or legume nitrogen inputs. Plant and Soil 97:315-332.
Hauck, R. 1988. Projections of Fertilizer Use. Presented at U.S. EPA Workshop on Agriculture and
Climate Change, Washington, D.C., February 29-March 1, 1988, and subsequent correspondence.
Hubbert, M., M. Branine, M.L. Galyean, G.T. Lofgreen, and D.P. Garcia. 1987. Influence of Alternative
Feeding of Monensin and Lassaload on Performance of Feedlot Heifers-Preliminary Data. Clayton Livestock
Research Center Progress Report No. 47, Clayton, New Mexico.
IIED and WRI (International Institute for Environment and Development and World Resources Institute).
1987. World Resource Report - 1987. Basic Books, New York.
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Johnson, D.E. 1974. Adaptational responses in nitrogen and energy balance of lambs fed a methane
inhibitor. Journal of Animal Science 38:154-157.
Johnson, D.E. 1988. Livestock Emissions Estimates. Presented at U.S. EPA Workshop on Agriculture
and Climate Change, Washington, D.C., February 29-March 1, 1988, and subsequent correspondence.
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Leedle, J., and R. Greening. 1988. Postprandial changes in methanogenic and acidogenic bacteria in the
rumens of steers fed high- of low-forage diets once daily. Applied and Environmental Microbiology 54:(2) 502-
506.
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database. Global Biogeochemical Cycles 2:139-156.
Mikkelsen, D. 1988. Technological Options for Limiting Emissions. Presented at U.S. EPA Workshop on
Agriculture and Climate Change, Washington, D.C., February 29-March 1, 1988.
Moe, P. and H. Tyrell. 1979. Methane production in dairy cows. Journal of Dairy Science 62:1583-1586.
Olmeda, R., and F. Abruna. 1986. Four nitrogen levels and three water management systems on rice yield
and nitrogen recovery. The Journal of Agriculture of the University of Puerto Rico 70:197-205.
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American Agriculture. OTA, United States Congress, Washington, D.C.
Patrick, W. 1982. Nitrogen Transformations in Submerged Soils. Nitrogen in Agricultural Soils. Agronomy
Monograph no. 22. Madison, Wisconsin.
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methanogenesis by steers fed diets with and without ionophores. Journal of Animal Science. 62:1737-1741.
Schuh, G.E. 1988. Agricultural Policies for Climate Changes Induced by Greenhouse Gases. Report
prepared for U.S. EPA, Washington, D.C.
Smith, C., M. Wright, and W. Patrick. 1983. The effect of soil redox potential and pH on the reduction
and production of nitrous oxide. Journal of Environmental Quality 12:186-188.
Stangel, P. 1988. Technological Options Affecting Emissions. Presented at U.S. EPA Workshop on
Agriculture and Climate Change, Washington, DC, February 29-March 1, 1988, and subsequent telephone
conversations.
Stoddart, L., A. Smith, and T. Box. 1975. Rangeland Management. McGraw-Hill, New York.
Thorbek, G. 1980. Commission on Animal Nutrition, Factors Influencing Energy Losses During Metabolism.
Evaluation of Energy Systems. Energy Losses in Methane. National Institute of Animal Science, Copenhagen.
Tyrell, H. 1988. Livestock Emissions Estimates. Presented at U.S. EPA Workshop on Agriculture and
Climate Change, Washington, DC, February 29-March 1, 1988.
U.S. EPA (U.S. Environmental Protection Agency). 1988. Meeting Summary of Workshop on Agriculture
and Climate Change. A report prepared for EPA by J,T&A, Inc. Washington, D.C.
Wedegaertner, T., and D. Johnson. 1983. Monensin effects on digestibility, methanogenesis and heat
increment of a cracked corn-silage diet fed to steers. Journal of Animal Science 57:168-177.
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Whitelaw, F., J. Eadie, L. Bruce, and W. Shand. 1984. Methane formation in faunted and ciliate-free cattle
and its relationship with rumen volatile fatty acid proportions. British Journal of Nutrition 52:261-275.
Winrock. 1977. Ruminant Products: More than Meat and Milk. Windrock International Livestock Research
and Training Center. Morrilton, Arkansas.
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CHAPTER VIII
POLICY OPTIONS
FINDINGS VIII-2
INTRODUCTION VIII-6
INTERNALIZING THE COST OF CLIMATE CHANGE RISKS VIII-8
Evidence of Market Response to Economic Incentives: Energy Pricing VIII-9
Financial Mechanisms to Promote Energy Efficiency VIII-14
Creating Markets for Conservation VIII-16
Limits to Price-Oriented Policies VIII-18
REGULATIONS AND STANDARDS VIII-22
Existing Regulations that Restrict Greenhouse Gas Emissions VIII-23
Regulation of Chlorofluorocarbons VIII-24
Energy Efficiency Standards VIII-25
Air Pollution Regulations VIII-28
Waste Management VIII-29
Utility Regulation VIII-31
Existing Regulations that Encourage Emissions Reductions VTII-35
RESEARCH AND DEVELOPMENT VIII-39
Energy Research and Development VIII-40
Global Forestry Research & Development VIII-45
Research to Eliminate Emissions of CFCs VIII-46
INFORMATION AND TECHNICAL ASSISTANCE PROGRAMS VIII-47
CONSERVATION EFFORTS BY FEDERAL AGENCIES VIII-50
STATE AND LOCAL EFFORTS VIII-52
PRIVATE SECTOR EFFORTS VIII-57
COMPLEMENTARY STRATEGIES TO REDUCE GREENHOUSE GAS EMISSIONS . . VIII-59
IMPLICATIONS OF POLICY CHOICES AND TIMING VIII-63
SENSITIVITY TESTS OF THE EFFECT OF ALTERNATIVE POLICIES ON
GREENHOUSE GAS EMISSIONS: RISK TRADE-OFFS VIII-67
Policies That Increase Greenhouse Gas Emissions VIII-69
Policies Designed to Reduce Greenhouse Gas Emissions VIII-76
Conclusions From the Sensitivity Tests VIII-78
REFERENCES VIII-83
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter VIII
FINDINGS
• If limiting U.S. and global emissions of greenhouse gases is desired, government
action will be necessary. Market prices of energy from fossil fuels, products made
with CFCs, forest and agricultural products and other commodities responsible for
greenhouse gas emissions do not reflect the costs associated with the risk of climate
change. As a result, increases in population and economic activity will cause
emissions to grow in the absence of countervailing government policies to modify
and/or supplement market signals.
• Policy preferences will vary among nations. However, nations can choose among
many complementary policy options to reduce emissions consistent with governmental
systems and other societal needs.
• There is an important distinction between short-term and long-term policy options.
In the short-term, the most effective means of reducing emissions is through
strategies that rely on pricing and regulation. In the long-term, policies to increase
research and development of new technologies and to enhance markets through
information programs, government purchases, and other means could also make a
major contribution.
• The most direct means of allowing markets to incorporate the risk of climatic change
is to assure that the prices of fossil fuels and other sources of greenhouse gases
reflect their full social costs. It may be necessary to impose emission fees on these
sources according to their relative contribution to global warming in order to
accomplish this goal. This would also raise revenues that could finance other
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programs. The acceptability of such fees will vary among countries, but would be
enhanced if equitably structured.
• Regulatory programs would be a necessary complement when pricing strategies are
not effective or produce undesirable impacts. In the U.S., greenhouse gas emissions
are influenced by existing federal regulatory programs to control air pollution,
increase energy efficiency, and recycle solid waste. ' Reducing greenhouse gas
emissions could be incorporated into the goals of these programs. New programs
could focus directly on reducing greenhouse gas emissions through requirements such
as emissions offsets (e.g., tree-planting), performance standards, or marketable
permits.
• Over the long-term, other policies may be needed to reduce emissions and can
complement pricing and regulatory strategies. Other policy options include
redirecting research and development priorities in favor of technologies that could
reduce greenhouse gas emissions, information programs to build understanding of
the problems and solutions, and the selective use of government procurement to
promote markets for technological alternatives.
• State and local government policies in such areas as utility regulation, building codes,
waste management, transportation planning, and urban forestry could make an
important contribution to reducing greenhouse gas emissions.
• Voluntary private efforts to reduce greenhouse gas emissions have already provided
valuable precedents for wider action and could play a larger role in the future.
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• Government policy is already exerting considerable influence on the rate of growth
in greenhouse gases. Policies adopted or under consideration to promote greater use
of coal, reduce required improvements in automobile efficiency, subsidize electricity
consumption, and similar measures may significantly accelerate the rate of U.S.
greenhouse gas emissions. A modeling exercise shows that a combination of policies
that increase greenhouse gas emissions globally could substantially increase the rate
of climatic change.
• Policies to create incentives to improve energy efficiency, promote renewable energy
technologies, encourage tree planting, and other strategies for reducing emissions
could substantially reduce emissions. A modeling exercise combining aggressive use
of these policies shows that such measures could reduce the rate of warming to levels
that may greatly enhance the potential for adaptation by natural and economic
systems.
• Near-term actions to reduce greenhouse gas emissions will be necessary if it is
decided to limit the concentration of greenhouse gases and facilitate future
reductions. Atmospheric concentrations of most greenhouse gases will decline much
more slowly than emissions. Delay would allow time to increase knowledge of risks
and refine the choice of policies but could substantially increase the cost and reduce
the effectiveness of policy responses. Time will be needed to agree on and implement
policy responses since rapid changes in patterns of energy use and the industrial
infrastructure responsible for emissions are likely to be disruptive and expensive.
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• Most of the policies necessary to limit the buildup of greenhouse gases, such as
improving energy efficiency and reversing deforestation, would produce other
substantial short-term benefits. Policies to limit emissions can therefore be
implemented consistent with other important economic and environmental goals.
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INTRODUCTION
If the government desires to stabilize the concentration of greenhouse gases, short-term
actions must be considered. Market forces do not reflect the risks of climate change and therefore,
barring government intervention, emissions-and the risks of climate change-can be expected to grow.
The costs of taking action may increase with time; it takes many years to develop new technologies,
implement policies and replace the existing capital stock. The chemistry of the atmosphere also has
long lags so that even large reductions in emissions are likely to cause atmospheric concentrations
of greenhouse gases to decline very slowly or even increase. The earth would continue to warm and
the climate to change for decades after atmospheric concentrations of greenhouse gases were
stabilized.
Near-term government action to reduce emissions may consist entirely of policies that will
contribute other substantial short-term benefits. The justification for policies that reduce greenhouse
gas emissions may, therefore, be much greater than it would appear from a traditional comparison
of costs and benefits. Finally, decisions not to take action to reduce emissions could also facilitate
policies that result in increased emissions since such policies are presumably less likely if they
contravene the purpose of other programs. This is a significant risk as we discuss later in this
chapter; several recently proposed policies have the potential to significantly increase greenhouse gas
emissions.
The government may pursue many policy alternatives to reduce greenhouse gas
concentrations. In the short-term, economic incentives and regulatory strategies will be most effective,
but in the long-run other policies will complement and support these approaches. Strategies to
reduce greenhouse gas emissions can contribute to other goals, including economic growth, enhanced
energy security, and a cleaner environment.
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The preceding chapter shows the wide range of measures available to limit greenhouse gas
emissions. Many of these measures are nearly cost-competitive or are expected to be soon. Is
government intervention to reduce emissions therefore necessary? The analysis done for this report
strongly suggests that without such action emissions will increase significantly. Without government
intervention, there may be insufficient market incentive to develop and adopt the measures identified
in Chapter VII.
In the absence of government intervention, market prices will not reflect the cost to society
of activities that are detrimental to the environment. Accordingly, we will not see a reduction in
consumer demand of goods and services that increase environmental risk.
The obstacles to bringing about consumer response to environmental dangers are particularly
challenging for global problems like ozone depletion and the greenhouse effect. In this situation,
there is the danger of what is commonly termed the "tragedy of the commons," the ecological
destruction that can occur from uncontrolled use of shared resources like the atmosphere. There is
probably no country for which reductions in global warming provide an adequate economic incentive
to reduce greenhouse gas emissions unilaterally, even though such action could yield substantial global
benefits. From any one country's viewpoint, the costs of controlling emissions may exceed the
benefits since, without international agreement, reductions achieved by one nation may be offset by
another. Therefore, even though the entire world may be better off as a result of efforts to lower
emissions, new economic incentives are necessary to lead the market to a socially efficient outcome.
The remainder of this chapter describes the range of domestic and international policies that
could be adopted to reduce emissions of greenhouse gases, and also discusses the results of modeling
analyses of government actions that could reduce or increase such emissions.
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There are many possible policy responses to reduce greenhouse gas emissions; none is likely
to be totally effective without other supporting programs. However, as previously mentioned,
consumers are not likely to reduce their demand for products and services that produce emissions
of greenhouse gases unless the cost begins to exceed the benefits derived. In addition, other policies
will be much less effective in the absence of economic incentives. In the short term, economic
incentives and regulatory programs are likely to be the most effective policies. In the long term,
research and development, information and educational activities, government procurement, and other
policies can make a substantial contribution.
The policies discussed here are most applicable to the United States. However, many of the
ideas reviewed are likely to be potentially suitable to other countries. Policies most suitable for
developing countries are discussed in Chapter IX. However, some programs developed in the U.S.,
such as energy conservation programs financed by electric utilities, may have even greater relevance
for developing countries, which have higher interest costs and a greater need for new generating
capacity.
INTERNALIZING THE COST OF CLIMATE CHANGE RISKS
One of the most potentially effective ways to promote energy efficiency and other strategies
to reduce greenhouse gas emissions is to increase the cost of activities responsible for emissions to
reflect the risks of climate change. The government could increase the price of fossil fuels and other
sources of greenhouse gases by imposing charges or fees and at the same time reducing the price
of desirable alternatives by providing direct or indirect subsidies. Prices of some relevant
commodities, particularly electricity, are already regulated and could be adjusted to promote reduced
emissions. Such policies have already been adopted to varying degrees in some states to promote
other economic and environmental goals. However, the limitations of economic approaches should
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also be recognized; other types of policies may be more effective in redressing some market failures,
and these can complement policies based on adjusting prices.
Evidence of Market Response to Economic Incentives: Energy Pricing
Proper pricing of energy to reflect the reality of the global warming threat could substantially
reduce emissions. It was long assumed (based on historical data) that there was a constant
relationship between the rate of growth in energy use and the rate of growth of GNP (Weinberg,
1988). The historical constancy of the relationship was often explained as a consequence of
technology and stable or declining fuel prices. The chief flaw in this argument was its failure to
anticipate the effects of rising real energy prices. During the century preceding 1973, the relative
price of energy had fallen. However, between 1973 and 1985 the price of energy rose, relative to
other goods and services, and in accordance with basic economic theory; growth in energy demand
slowed, and by some measures declined significantly.
Prior to 1973, U.S. energy demand grew at a rate only slightly less than the rate of growth
in real GNP. Had this trend continued, U.S. energy demands would nearly have doubled between
1973 and 1985. Had pre-1972 energy-use trends continued, by 1984 the United States would have
been consuming almost 40 percent more energy than it actually did (U.S. DOE, 1987c). But
efficiency improvements induced by significant oil price increases enabled the U.S. to hold energy use
to 1973 levels while expanding the economy by 40 percent. By one estimate, energy efficiency
improvements now save the U.S. economy $160 billion annually.1
1 The $160 billion figure is derived by first calculating what total expenditures on energy in
1985 would have been had energy intensities remained constant at 1973 levels and 1985 price levels
prevailed, and then subtracting actual expenditures on energy in 1985. For further discussion, see
Chandler et al. (1988) and U.S. DOE (1987c).
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U.S. energy efficiency improved markedly between 1973 and 1985 while energy prices rose
markedly (Figure 8-1). However, efficiency improvements in the U.S. and many other industrialized
countries have leveled off in recent years. Whereas energy intensity in the nations of the European
Economic Community declined 20 percent from 1973 to 1982, the corresponding figure for 1982 to
1986 is 2.4 percent (EEC, 1988). One important factor is that oil prices have fallen continuously since
1981. Oil prices dropped precipitously in 1986: World oil prices fell from about $25 per barrel in
January 1986 to about $10 per barrel in July 1986. Prices have since fluctuated in the $15 per-barrel
range. Adjusted for inflation, gasoline prices in the first half of 1988 were 27 percent less than in
1985 and 48 percent less than in 1980 (Geller, 1988). The rapid decline in world energy prices has
slowed the rate of improvement in energy efficiency. This trend is a predictable response to pricing
and may continue for some time given Department of Energy forecasts for relatively constant or even
declining energy prices in the short term (EIA, 1988).
The performance of other countries suggests that higher energy prices are conducive to
greater efficiency. Japan, France, and West Germany, much more dependent on imported oil than
the U.S., currently use much less energy per unit of output than does the United States (see Table
8-1). Many developing countries are much less energy efficient than the U.S., in part because they
subsidize energy prices.
In recent years, the U.S. has debated and rejected higher oil import fees and gasoline taxes
as an instrument of energy policy primarily out of concern that such policies would have significant
regional and national macroeconomic impacts (U.S. DOE, 1987; U.S. DOE, 1988). However, without
such policies the incentive to purchase more efficient vehicles has declined and the trend has been
toward a renewed emphasis on more powerful, less efficient engines (Geller, 1988; Bleviss, 1988).
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Chapter VIII
FIGURE 8-1
10
5 -
ENERGY INTENSITY REDUCTIONS
1973-1985
(Thousand BTU Per Dollar GNP; 1985 Dollars)
1973 1975 1977
Source: Chandler, et al., 1988
1979
YEAR
1981
1983
1985
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TABLE 8-1
Energy Intensity of Selected National Economies, 1973-85
Country
1973 1979
(megajoules per
1983 1985
1980 dollar of GNP)
Change,
1973-85
(percent)
Australia 21.6 23.0 22.1 20.3 -6
Canada 38.3 38.8 36.5 36.0 -6
Greece a 17.1 18.5 18.9 19.8 +16
Italy 18.5 17.1 15.3 14.9 -19
Japan 18.9 16.7 13.5 13.1 -31
Netherlands 19.8 18.9 15.8 16.2 -18
Turkey 28.4 24.2 25.7 25.2 -11
United Kingdom 19.8 18.0 15.8 15.8 -20
United States 35.6 32.9 28.8 27.5 -23
West Germany 17.1 16.2 14.0 14.0 -18
a Energy intensity increased as a result of a move toward energy-intensive industries such as
metal processing
Source: IEA, 1987.
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Existing federal law gives an additional economic incentive for efficiency through the so-
called "gas-guzzler" tax. For 1986 and later models, the law imposes a $500 tax on any car with a
fuel economy rating less than 22.5 mpg and a $3,850 tax on models with ratings less than 12.5 mpg.
It was originally proposed that the revenues collected be given to purchasers of highly efficient cars
in the form of a rebate; however, this proposal was rejected because at the time the beneficiaries
would have been almost exclusively buyers of imported cars (see Bleviss, 1988).
Gas-guzzler fees could be used as a potentially more effective and acceptable substitute for
gasoline taxes if set equal to the amount that would be collected from a gas tax over the expected
lifetime of the automobile. For example, a 50 cents per gallon tax would become a $1,000 excise tax
on a 25 mpg car but only $333 on a 75 mpg car. An advantage of this strategy is that, unlike
gasoline taxes, it takes advantage of the first-cost sensitivity of consumers in a non-regressive way,
taxing new inefficient vehicles the most.2 The structure of the charge could vary with vehicle class
so as not to unduly favor small cars over larger models. The effectiveness of such a system could
be enhanced by rebating some of the revenue to buyers of the most efficient models, a concept that
now may be more acceptable since several American models rate among the most efficient.
The market for electricity also demonstrates the influence of prices and competition on
growth in demand. Until about 1970, the efficiency of new plants was improving and prices of
electricity generation were therefore declining, contributing to steady growth in the demand for
electricity. From about 1970 through 1982, electricity prices rose mainly as a result of higher fuel
costs and interest rates, construction delays, the cost of environmental controls, and the end to
2 First-cost sensitivity refers to the tendency, common to many consumers, to prefer a product
that has a low initial cost to a higher-priced alternative which might be much more cost efficient
over the long term. In other words, the upfront costs to consumers tend to dominate the purchase
decision more than a conventional economic analysis would predict. The use of a hefty excise tax
may affect consumer decisions more acutely than would the gasoline expenses for operation of an
inefficient vehicle, which occur in smaller amounts and at intervals rather than all at once.
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significant improvements in generating efficiency. In the last five years prices have been stable or
declining as fuel costs stabilized and the amount of new capacity being added slowed in response to
the decline in demand (Figure 8-2). The Department of Energy projects continued stable prices until
the mid-1990s, followed by modest price increases (EIA, 1987c).
Financial Mechanisms to Promote Energy Efficiency
Since the mid-1970s, the U.S. has accumulated a substantial body of experience with a variety
of financial incentives for energy efficiency. Most of these programs have been carried out by state
and local governments and utility companies, usually without much publicity but often quite
successfully.3 These efforts suggest the possibilities for more widespread programs in the future.
One of the most popular forms of utility programs is rebates for high-efficiency appliances.
A recent survey revealed 59 such programs among U.S. utilities in all parts of the country (Berman
et al., 1987; ACEEE, 1988). The majority of these programs are only for residential customers, but
more than 20 programs also provide incentives to commercial and industrial customers. Rebates are
structured in many different ways; most go only to the purchaser, but some are also offered to
retailers. Program coverage varies with differences in demand across the country; some summer-
peaking utilities promote both high-efficiency air conditioners to reduce summer demand and heat
pumps to increase demand in winter. Rebate amounts frequently vary with the size and efficiency
of the appliance, sometimes according to a sliding scale to encourage maximum efficiency. In
general, rebate programs appear to be highly cost-effective relative to the costs of new generating
capacity. For 33 utilities reporting such data, the median cost of peak demand reduction was $200
per kW saved. (For an example of one unique utility conservation program, see Box 8-1).
3 The results of these programs have been periodically reported and evaluated by the Electric
Power Research Institute, the American Council for an Energy Efficient Economy, and others. See,
for example, Berman et al. (1987) and ACEEE (1988).
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Chapter VIII
FIGURE 8-2
U.S. ELECTRICITY DEMAND AND PRICE
(1982 Cents/kWh; Annual Average Percentage Growth)
3
o
o
I- oe
Z "J
UJ 0-
O UJ
M O
co <
O) K
2 -
1960
1965
Source: u.S. DOE, 1988.
1970
1975
1980
YEAR
1987
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Some programs demonstrate the potential for giving economic incentives for energy efficiency
to builders. For example, the Bonneville Power Administration's "Super Good Cents" program gives
builders a cash grant of $1,000 per house for meeting Model Conservation Standards developed by
the Northwest Power Planning Council (Randolph, 1988a).
Box 8-1. The Hood River Experiment
One recent conservation program illustrates the possibility of achieving high
levels of efficiency and broad public participation. The Pacific Power & Light
Company and Bonneville Power Administration financed what was arguably the most
aggressive conservation program in the U.S. in the small community of Hood River,
Oregon. The sponsors offered to audit and implement all cost-effective conservation
measures in electrically-heated households. In two years, 85 percent of the eligible
households accepted improvements, and most of the remainder of the populace
received an audit or had previously improved their homes. Space heating levels were
reduced to about half the level expected in pre-project forecasts. However, the cost-
effectiveness of the program became difficult to evaluate when electricity
consumption dropped sharply shortly before the program went into effect due to
price increases in excess of 40 percent (Cavanaugh and Hirst, 1987).
Creating Markets for Conservation
The opportunity for highly profitable investments in energy efficiency has not gone unnoticed
by some businesses. If consumers are unresponsive to opportunities for profitable investments in
conservation, businesses theoretically could make such investments and share the savings, particularly
since a technically expert company could avoid some of the uncertainties facing the typical energy
user. Such firms, often referred to as energy service companies, did emerge in the early 1980s.
These firms offered a one-stop shopping approach to conservation, combining an energy audit to
identify opportunities for savings with installation and financing in exchange for a share of the savings
for some fixed period. The owner is not required to assume any risk and is guaranteed a bill no
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more than would have been the case without the improvements. Federal and State governments are
testing shared-saving programs to reduce capital spending requirements as discussed in STATE AND
LOCAL EFFORTS below.
In practice, the energy service concept has proven to be valuable but not a panacea (Weedall
et al., 1986). The negotiation and administration of contract terms can be lengthy and expensive.
Relatively large savings are necessary to justify the overhead costs, meaning that privately funded
energy service companies have generally been most interested in larger projects, such as commercial
buildings. One means of expanding the reach of the energy service companies has been the
organization of such services by non-profit groups, which can sometimes operate on a lower margin
because they do not pay taxes or return a profit and may also be able to obtain below-market-rate
financing. On the other hand, the range of permissible activities for such organizations is also usually
limited by charter and funding source. Recently, hybrids containing elements of non-profit and for-
profit organizations have begun to appear, with possibilities for achieving the benefits of both (Kerwin
and Jolin, 1988).
Another innovative approach to reducing the cost of energy service contracting is to pool
enough buildings to achieve economies of scale. The Alliance to Save Energy developed a model for
this concept after a demonstration program with eight agencies organized by the United Way of
Wilkes-Barre, Pennsylvania. However, the project was difficult to implement and the potential for
replication remains to be seen (Prindle and Reid, 1988).
Many other financing mechanisms have been tested or proposed (Lovins and Shepard, 1988).
Several utilities offer generic rebates for any demonstrated savings; in one area in Manhattan with
exceptionally high cost of service the utility offers commercial customers rebates of $500 per kW peak
reduction. Another possibility is sliding-scale hookup fees for new buildings, based on the cost of
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the generating capacity necessary to supply the building's electricity needs (the converse of subsidies
for more efficient buildings) (Rosenfeld and Hafemeister, 1988; also see Box 8-2).
Box 8-2. Creating Markets Through Demand Side Bidding
Another emerging approach to promoting markets for efficiency is the
demand-side bidding concept. Bidding programs for new capacity have been
developed in many states as a means of obtaining low-cost supply additions, a
concept that may receive further encouragement from proposed rules now being
considered by the Federal Energy Regulatory Commission (FERC, 1988a). FERC
has invited comment on the possibility of addressing demand-side bidding, and
several states have already implemented such programs. Energy service companies
have some potential here since they can achieve some economies of scale. However,
large commercial and industrial firms may want to bid themselves rather than share
savings (Cole et al., 1988). In 1987 Central Maine Power requested bids for
investments producing demand reductions from large industrial customers. The
utility offered to pay up to 50 percent of the project cost or a rebate sufficient to
reduce the payback to two years, whichever is less; four contracts were produced for
a demand reduction of over 11 MW at a cost of $2.5 million.
Limits to Price-Oriented Policies
Economic incentives could play a critical role in reducing greenhouse gas emissions.
Nevertheless, there are often practical and political limits to reliance on price-oriented policies.
Demand may be very inelastic due to lack of information, the absence of alternatives in the near
term, or shortages of capital. Price increases may also have socially undesirable, disproportionate
impacts on particular groups or regions. Price increases may also be politically unpopular relative
to other policies. Thus, the price necessary to induce change might be so high as to be inequitable,
economically impractical, and politically unattractive. Empirical studies illustrate some situations in
which increased energy prices have not resulted in nearly the degree of energy efficiency that would
be expected from economic calculations. One study at the Energy Analysis Program at the Lawrence
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Berkeley Laboratory examined the market for more energy efficient appliances over the period 1972-
1980 (Ruderman et al., 1987). The authors found that consumers demand payback periods of two
years or less for investing in more efficient household appliances. Except for air conditioners, the
implicit discount rates corresponding to these payback periods are much higher than real interest
rates or the discount rates commonly used in life-cycle cost analysis of consumer choice (see Table
8-2). The study suggests several factors are responsible for this substantial underinvestment in energy
efficiency: lack of information; lack of access to capital to pay for the added first cost; the relatively
small savings; a substantial number of purchases of some appliances by builders or landlords who do
not pay operating costs; and manufacturers' decisions to limit high-efficiency features to top-of-the-
line models that yield higher profit margins.
Studies of small commercial customers and larger industrial customers indicate they also
make greater demands of efficiency investments than of alternatives that are considered to be more
within their main line of business (Komor and Katzev, 1988; Lovins and Shepard, 1988; Cavanaugh,
1988; Alliance to Save Energy, 1987). Managers of small enterprises may never see the electric and
gas bill, have no knowledge of the rate structure for their building, and are largely unaware of which
appliances are responsible for most of their bill. Larger companies may demand payback periods of
six months to two years for conservation investments, while simultaneously investing in government
bonds at an 11 percent interest rate. Utility companies also typically apply investment criteria to new
powerplants that are much less demanding than consumer investments to save an equivalent amount
of energy (Cavanaugh, 1986).
Some authorities predict that market forces alone are unlikely to prompt continued demand
for automobile efficiency improvements due to the declining share of operating costs attributable to
fuel as efficiency improves (Figure 8-3). According to an analysis by the Department of Energy, a
typical automobile costs over $10,000 and consumes about 370 gallons a year (U.S. DOE, 1988; see
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TABLE 8-2
Payback Period in Years for Appliances, 1972-1980
Appliance 1972 1978 1980
Gas central space heater 2.98 2.38 2.21
Oil central space heater 2.33 1.70 1.18
Room air conditioner 5.11 4.77 5.25
Central air conditioner 4.96 4.16 5.18
Electric water heater 0.48 0.41 0.41
Gas water heater 1.50 1.07 0.98
Refrigerator 1.35 1.45 1.69
Freezer 0.60 0.67 0.72
Source: Ruderman et al., 1987.
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Chapter VIII
FIGURE 8-3
COST OF DRIVING VERSUS AUTOMOTIVE FUEL ECONOMY
10
1 10-
U
20
5!
^
,U
^
-c
* 3 v fl
0. ou
§ s a *
_ 2 = jj = J
•si s-s I c>
I "3 5 = >5 "" »'
-> 4; 0 -fl h. Q (-
S etc U > t— 2 uj •
r
30
I
Miles Per Gallon (United States)
50
__] I L
70
90
Gasoline Price
4xUS.
-30
Base Vehicle Purchase Price (57,000)
Vehicle Fees and Taxes _
Incremental Price •
for Improvements
Insurance
Garaging, Parking, and Tolls
Repairs, Parts, and Maintenance
—I 1 1 1 1 1—
10 75 6 5 4 3.5
Liters Per 100 Kilometers
40
-20
-10
2 7
J;
i
Figure 83 The indicated energy performance is based on computer simulations of an automobile
having various fuel economy improvements added in the sequence shown at the top
of the graph. The base car is a 1981 Volkswagen Rabbit (gas version).
The figure shows that the reduced operating costs associated with various fuel economy
improvements are roughly offset by the increased capital costs of these improvements
over a wide range of fuel economy.
Source: Goldemberg et ah, 1987.
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also, Bleviss, 1988; Goldemberg et al., 1987). At $1.10 per gallon, this implies that annual fuel
expenses typically represent only about 4 percent of the purchase cost and much less than insurance,
maintenance, and financing expenses. The result, according to U.S. DOE, is that "The desire to
reduce fuel expenses, even with higher gasoline prices, will not motivate consumers to significantly
alter their preferences for automobiles" (U.S. DOE, 1988)." Precise evaluation of this effect is
difficult; the high visibility of posted gasoline prices may cause some consumers to focus more
attention on this cost than on other operating costs. Moreover, at some higher price consumers could
be induced to change their preferences, but this price might be so high as to be inequitable,
impractical, or politically unacceptable.5
Economic incentives alone will not serve to reduce trace-gas emissions to acceptable levels.
When markets are unresponsive, there may be a need for regulations on activities and products that
result in emissions of trace gases. Many such regulations (e.g., restrictions on imports and domestic
uses of CFCs) themselves constitute economic incentives by causing price increases that make it
unprofitable to use regulated products or engage in regulated activities.
REGULATIONS AND STANDARDS
Regulation of energy, CFCs, and forestry could complement pricing and other policies for
reducing greenhouse gas emissions. In brief, pricing strategies and other government policies may
not always induce changes in consumer behavior effectively, either because there is some major
4 One domestic automotive company reportedly estimates that consumers will seek a 1 mpg
improvement in fuel efficiency for every 20 cent increase in gasoline prices (Bleviss, 1988).
5 One expert has noted that "No aspect of America's energy price system is more peculiar, in
comparison with other industrial countries, than the absence of a substantial national sales tax on
gasoline" (Nivola, 1986).
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market failure or because of an unwillingness to set prices high enough to bring about the desired
change in demand.
Like pricing and economic incentive policies, government regulations should be viewed as
simply one tool for promoting the development and adoption of technologies and behavioral changes
necessary to reduce greenhouse gas emissions. They are likely to be most effective (and perhaps
most acceptable) when they are targeted to specific groups, are no more restrictive than necessary,
and are used to complement economic incentives, research and development programs, information
programs, and the other approaches outlined in this chapter.
In this section we will consider possible regulatory strategies for existing regulatory programs,
which have been adopted for reasons unrelated to climate change, that could be strengthened to
either restrict emissions of greenhouse gases or encourage actions to reduce emissions, as well as
concepts for new regulatory programs specifically targeted to reduce emissions.
Existing Regulations that Restrict Greenhouse Gas Emissions
The Federal government already has extensive regulations and regulatory programs that limit
greenhouse gas emissions, such as its air pollution control laws, restrictions on the use of
chlorofluorocarbons, and regulation of investments and rates charged by utilities. There are also
energy efficiency standards for automobiles, appliances, and fluorescent lamp ballasts. These
programs could be modified to further reduce greenhouse gas emissions.
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Regulation of Chlorofluorocarbons
Chlorofluorocarbons (CFCs) are being regulated because of concern about their impact on
stratospheric ozone (see discussion in Chapters IV and VII). The potential for introducing substitutes
for CFCs to reduce the risks of ozone depletion and global warming has been known for many years.
For example, the DuPont Company stated in 1980 that such substitutes could be produced, but the
cost would be much higher (DuPont, 1980). Without regulation, however, there was no market for
these alternative chemicals and they were not produced. The Montreal Protocol on Substances That
Deplete the Ozone Layer, signed in September 1987, provides a framework for global reductions in
CFC emissions:
• The use of CFCs-11, -12, -113, -114 and -115 is to be frozen at 1986 levels
starting in approximately mid-1989, reduced to 80 percent of 1986 levels in
1993, and reduced to 50 percent of 1986 levels in 1998. The reduction from
80 percent to 50 percent will take place unless the parties participating in
the Protocol vote otherwise.
• The use of Halons -1211, -1301, and -2402 is to be frozen at 1986 levels
starting in approximately 1992.
• Beginning in 1990, and at least every four years thereafter, the parties will
assess the control measures in light of the current data available. Based on
these assessments the parties may adjust the control levels and substances
covered by the Protocol.
• Each party shall ban the import of the controlled substances (bulk CFCs
and halons) from any State not party to the Protocol beginning one year
after the Protocol takes effect. The parties shall, in addition, develop a list
of products that contain the controlled substances, which will be subject to
the same trade restrictions. The feasibility of restricting trade in products
manufactured with the controlled substances shall also be assessed.
• Developing countries with low levels of use per capita are permitted to delay
their compliance with the Protocol for up to 10 years. The parties also
agree to assist developing countries to make expeditious use of
environmentally safe alternative substances and technologies.
On August 1, 1988, EPA announced a comprehensive regulatory program for these chemicals
that will reduce production and consumption hi three phases leading to a 50 percent cut by July 1,
1998 (Federal Register, August 12, 1988). The U.S. regulations become effective upon international
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ratification of the Protocol. In September 1988 EPA Administrator Lee Thomas stated that recent
scientific evidence makes it necessary to consider a complete phase-out of these chemicals. The
regulatory approach adopted by EPA restricts CFCs by granting limited production rights to the five
U.S. companies who manufactured them in 1986, and by restricting imports. This is expected to
cause an increase in price and an increasing incentive for CFC users to find substitutes.
EPA was concerned that the added profits for CFC producers could create an incentive to
delay the introduction of substitute chemicals. EPA estimated that CFC producers could earn
additional profits between $1.8 billion and $7.2 billion by the year 2000. The Agency therefore
requested comments on the merit and legality of taxes on CFCs to remove the added profit and
potential incentive to delay.
Another concern is that the price rise alone may not be an effective means of reducing demand
for some uses of CFCs for which substitutes may be available, but which have a small impact on
total product cost. EPA has indicated it will monitor this possibility and will, if necessary, consider
product-specific regulations.
Energy Efficiency Standards
Congress adopted minimum energy efficiency standards in 1987 for refrigerators, water
heaters, air conditioners, furnaces, and other appliances. The standards take effect on different dates
for each product in recognition of differences in product planning and production needs. The law
defines standards for different classes and categories of each appliance and does not prevent new
features that may increase total energy consumption (see Table 8-3). By one estimate, the standards
will reduce peak electricity demand in the year 2000 by an amount equivalent to the output of 22
large powerplants (Geller, 1986). The appliance standards were adopted on the basis of a consensus
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Chapter VIII
TABLE 8-3
Appliance Efficiency Improvements Required by Law
Product
Refrigerator
Central Air
Conditioner
Electric Water
Heater
Electric Range
Gas Furnace
Gas Water
Heater
Gas Range
Average
Of Those
In Use
1,500
3,600
4,000
800
730
270
70
New Best
Model Commercial
Average Model
1,100
2,900
3,500
750
620
250
50
(kilowatt-hours per year)
750
1,800
1,600
700
(therms per year)
480
200
40
Estimated
Cost-Effective
Potential '
200-400
900-1,200
1,000-1,500
400-500
300-480
100-150
25-30
Potential
Savings 2
(percent)
87
75
75
50
59
63
64
Source: Geller, 1986.
1 Potential efficiency by mid-nineties of further cost-effective improvements already under
study are made.
2 Percent reduction in energy consumption from average of those in use to best cost-effective
potential.
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February 21, 1989
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supported by industry and environmental and consumer groups, demonstrating that a cooperative
approach to establish achievable energy efficiency goals is possible. Appliance manufacturers were
most interested in preemption of State regulation, while utilities and environmental groups were
motivated by energy savings.
The energy efficiency standard for new U.S. automobiles as of 1988 is a corporate average
fuel economy (CAFE) of 26 mpg. In September 1988, the Department of Transportation set CAFE
standards at 26.5 mpg for the 1989 model year, down from a scheduled increase of 27.5 mpg.
Automakers are allowed to meet this requirement by offsetting less efficient (usually larger, more
powerful) models with more efficient ones; they may also offset their failure to meet the target in
one year with credits gained in prior years. However, mpg ratings of domestic models may not be
averaged with those of foreign imports. New-car fuel economy has improved markedly since CAFE
was adopted (well over 50 percent since 1973), but its value has been vigorously debated. Critics
argue that the gains have been primarily a response to higher prices and that the regulations have
imposed substantial costs on manufacturers and consumers. They argue that fuel efficiency is
improving due to market pressures and technological innovation, but that if more rapid improvement
is desired, it could be promoted more efficiently by higher gasoline taxes to promote demand for
more efficient vehicles and encourage turnover of older, inefficient cars (U.S. DOE, 1988; Crandall,
et. al. 1986).
However, there is no assurance that market forces alone will produce substantial further
improvement in vehicle mileage ratings so long as oil prices are stable or declining in real terms.
Higher gasoline taxes would help, but may have to be increased sharply to spur demand for efficiency
improvements beyond 30 mpg. Exclusively demand-oriented strategies can leave manufacturers with
considerable uncertainty about future markets (Bleviss, 1988). Regulations adopted as a supplement
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Policy Options for Stabilizing Global Climate •- Review Draft Chapter VIII
to tax increases could give industry a clear target, reducing the need for hedging strategies that dilute
efforts and increase investment costs (Bleviss, 1988).
The CAFE approach also could be improved to both increase incentives for efficiency
improvements and meet some industry objections (McNutt and Patterson, 1986). The fleet average
concept unduly penalized larger cars, when technologies could allow improvements in all sizes and
classes. It required annual improvements, when improvements are made in steps over longer time
periods, and then sought to provide flexibility with credits that encouraged a search for administrative
exemption rather than long-term improvement. Lower standards were set for light trucks, which
further undercut the program. Finally, violations of standards are punishable by court-imposed civil
penalties, when equivalent economic incentives could be achieved more acceptably by imposing fees
proportional to the noncompliance (Bleviss, 1988).
Air Pollution Regulations
Some greenhouse gases are already regulated as air pollutants because of their effects on
human health and welfare. Under the Clean Air Act, EPA sets uniform ambient standards for
emissions of carbon monoxide, ozone, nitrogen oxides, and other pollutants and uniform technology-
based standards for major new sources of these pollutants. However, States retain responsibility for
compliance with the ambient standards, which may require allocating greater responsibility on some
sources than on others. States are also free to set more stringent requirements on stationary sources.
The regulatory strategy for control of air pollutants to stabilize greenhouse gas concentrations
is not identical to that for achieving compliance with ambient air quality standards. In the latter
case, the objective is to stay below threshold levels that effect human health or welfare. However,
total, as well as peak, emissions affect the buildup of greenhouse gases, which implies a potentially
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different regulatory approach. An area barely in compliance with ambient air quality standards at
all times may contribute more to greenhouse gas buildup than an area with occasional air quality
violations but substantial periods of much cleaner air.
Substantial progress has been made in reducing total emissions of regulated pollutants since
the Clean Air Act was adopted in 1970 (U.S. EPA, 1987). For example, carbon monoxide emissions
from automobiles dropped about 35 percent from 1970 to 1985 despite a 58 percent increase in
vehicle miles traveled (Figure 8-4). Emissions of volatile organic compounds from highway vehicles
decreased 48 percent in the same period. However, emissions of NO, during this period were
relatively unchanged.
Waste Management
The problem of waste management illustrates another area in which policies to reduce
greenhouse gas emissions may complement other environmental objectives. As discussed in Chapter
IV, decomposition of solid wastes is a growing source of methane emissions. In the U.S.,
governments at all levels have accelerated efforts to promote recycling and reduction of solid wastes
for both economic and environmental reasons.
State and local governments have historically been primarily responsible for solid waste
disposal. The cost of landfills and public opposition to burning waste has generated substantial
interest in recycling and waste reduction. Numerous states have recently adopted stringent programs
to reduce the waste stream by a minimum of 25 percent. How this will be accomplished has yet to
be made completely clear, but economic incentives will play a major role in some States. Florida
adopted an advance disposal fee on every container sold at retail that fails to achieve a 50 percent
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Policy Options for Stabilizing Global Climate - Review Draft
Chapter VIII
FIGURE 8-4
U. S. CARBON MONOXIDE EMISSIONS
(Million Metric Tons)
cc.
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter VIII
recycling rate; the fee increases if targets are not met (Carlson, 1988b). California similarly adopted
a system of deposit fees with increases scheduled to take effect if goals are not met.
Federal law (RCRA Sec. 4010(c)) assigns EPA the responsibility for ensuring the
environmental safety of sanitary landfills. As discussed in Chapter VII, EPA proposed minimum
standards on August 1, 1988 that would require gas monitoring stations to detect methane and to
plan for its removal, and proposed regulations under the Clean Air Act would require collection of
landfill gas at both new and existing landfills. The Agency has also supported a national recycling
goal of 25 percent by 1992.
Another source of methane releases discussed in Chapter VII is coal mining. Interest in
coalbed methane recovery is increasing for economic reasons, but a this time there are no specific
policies to promote such efforts.
Utility Regulation
Regulatory policies also can exert a significant influence on the price and demand for
electricity. Electric companies are regulated monopolies whose rates and investments are regulated
by State public utility commissions-except for wholesale transactions, which are reviewed by the
Federal Energy Regulatory Commission. The structure as well as the overall level of electricity rates
is regulated and both influence demand (see Kahn, 1988). For example, some States provide
relatively low "lifeline" rates for the initial increment of residential demand to meet the basic energy
needs of all customers. The consequence is usually an inverted rate structure, with rates increasing
with greater use. Even though rates may be initially set to produce the same total revenue, the
result is some reduction in demand because consumers recognize the higher rates associated with
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Policy Options for Stabilizing Global Climate ~ Review Draft Chapter VIII
greater use. For example, Detroit Edison estimated that a lifeline rate structure imposed in 1981
resulted in reducing demand about 3 percent (Kahn, 1988).
Where the production of electricity to meet peak power needs is more carbon-intensive (e.g.,
where the marginal fuel is oil and the base fuel has a large percentage of nuclear power), incentives
to reduce peak demand and levelize loads may be economically justified and a means of supporting
greenhouse gas reductions. With time-of-use metering, utilities can charge rates that more accurately
reflect costs, potentially promoting energy efficiency as well as cost savings. This is possible because
the costs of generating electricity are not uniform throughout the year; when demand peaks, costs are
usually highest because the utility must rely on its most costly units to meet the increased demand.
Some utilities in the U.S. and in Europe have tested rate structures that give customers incentives
to use electricity at times when costs are low, and conversely, disincentives when costs are high. For
example, a recent three-year New York experiment gave customers a one-cent-per-kWh reduction
during hours of normal demand, but above a certain threshold level, customers were charged a rate
of 40 cents per kWh, several times higher than the usual rate. On average, customers saved 5 to 10
percent annually, reduced their peak period loads over 40 percent relative to the average customer,
and expressed strong support for the continuation of the program (Cole and Rizutto, 1988). The
metering costs are currently about $500 per house, but the overall program is still expected to
produce substantial net benefits. Moreover, it is expected meter costs will drop substantially with
large production. (For an example of utility disincentives, see Box 8-3.)
Another significant issue in utility regulation is the creation of competitive markets for the
generation of electricity. Federal and State policy has encouraged this concept since the enactment
of the Public Utility Regulatory Policies Act (PURPA) in 1978. This law requires utilities to buy
power from cogenerators and small renewable energy projects and to pay an amount equal to the
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter VIII
Box 8-3. Disincentives to Utility Conservation
The revenues earned by electric and gas utilities are governed by accounting rules devised
to allow utilities to recover operating costs and earn a fair rate of return. These rules were
not intended to favor particular types of investments but recent analysis by the Maine and
California public utility commissions indicates that they may in fact favor investments in
additional supply as opposed to efficiency improvements, even when the latter is much less
expensive (Moskovitz, 1988; Cavanaugh, 1988). So long as retail rates exceed short-term
production costs, these studies show that, under traditional regulatory practices, utilities will
always earn greater profits by selling more electricity, even if the cost of conservation is zero.
Allowing utilities to profit from conservation by allowing an equivalent return on such
investments does not rectify the situation. Instead, the economic incentive is to do the most
costly conservation investments (to achieve the greatest return) with the least impact (to
maintain sales). California and Maine have adopted procedures designed to correct these
disincentives as one means of encouraging utility interest in demand-side investments.
costs they save as a result. Since the law's adoption, thousands of projects have been developed
around the country, despite the absence of a need for new generating capacity in many areas (FERC,
1988c).6 Federal Energy Regulatory Commission (FERC) compilations indicate cumulative
applications from projects equivalent to more than 40 nuclear powerplants (see Table 8-4). FERC
is currently reviewing proposed rules to expand the circumstances and type of projects eligible to
participate in competitive bidding arrangements (FERC, 1988a, 1988b). FERC has also asked for
comment on the possibility of allowing demand-side reduction efforts to compete with additions to
capacity.
6 FERC publishes periodic compilations of "qualifying facilities," projects that have formally
requested status as entitled to the benefits of PURPA. However, the list is only an approximation
of actual activity, since not all projects file such applications; some file after they have already begun
operation, and some applications are made for projects that are never completed.
DRAFT - DO NOT QUOTE OR CITE VIII-33 February 21, 1989
-------
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter VIII
Existing Regulations that Encourage Emissions Reductions
In contrast with the mandatory regulations discussed above, some regulatory programs stress
positive incentives for activities to reduce greenhouse gas concentrations. Such programs could be
expanded to encourage greenhouse gas reductions.
A prime example of regulatory incentives for actions that reduce greenhouse gas
concentrations is the Conservation Reserve Program (CRP) created by the Food Security Act of 1985.
The CRP gives up to 50 percent of the cost of establishing approved conservation practices to farmers
who agree to take highly erodible cropland out of production for contracted periods of 10 to 15 years.
Under Section 1232(c), at least one-eighth of the number of acres placed in the reserve between 1986
and 1990 are to be devoted to trees. As of the sixth signup, ending February 19, 1988, more than
1.5 million acres had been committed to trees-less than a third of the Congressional goal—at a cost
to the government of roughly $58 million (Dudek, 1988).
In recognition of the CRP's broader potential for achieving environmental protection, the
program was modified in the sixth signup to allow the inclusion of 66- to 99-foot-wide strips of
cropland along streams and waterbodies, irrespective of the erosion rate.7 Tree planting is one
allowed use of the land. These so-called "filter strips" provide a buffer zone that absorbs pollutants
that would otherwise go into lakes and streams. The Conservation Reserve program offers a possible
model and precedent for further cooperation between EPA and the Forest Service to identify
opportunities where tree planting may serve multiple-agency goals.
7 Joint Memorandum of the Soil Conservation Service, EPA, Fish and Wildlife Service, and
Forest Service on the Conservation Reserve Program Filter Strip Initiatives, April 29, 1988.
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Policy Options for Stabilizing Global Climate - Review Draft Chapter VIII
Because the CRP program provides such diverse benefits, proposals have been made to
expand its scope and coverage. In some States, particularly in the Southeast, aggressive tree planting
could become a significant means of offsetting the buildup of carbon dioxide. According to a recent
study, most eastern States, with the exception of Florida, appear to have enough erodible acreage to
provide the acres needed to offset new CO2 emissions from electricity production if planted with trees
(Table 8-5). Roughly 11-22 million acres of new trees, or about a fourth to one-half of the current
CRP goal, would offset projected new fossil-fueled generating plants for the 1987-1996 period if
planted with optimum species (Dudek, 1988). By this estimate, the costs are modest relative to other
environmental requirements associated with operating powerplants, on the order of 0.5 cents per
kilowatt-hour.
New strategies to promote tree planting may avoid some of the limitations and complications
created by the CRP program, which must identify farmers willing to withdraw farmland and which
restricts the land for a period less than the time many trees require to reach maturity. Utility
companies and large industrial coal users may also wish to sponsor tree planting. The Forest Service
reports that southeastern States-where most timber industry investments have occurred in the past
two decades-must replant and manage their dwindling forests to allow its timber industry to keep
growing (USFS, 1987).
The Food and Security Act has another provision that demonstrates the potential use of
regulations to promote environmental goals. Under Section 1221, any farmer who produces an
agricultural commodity on a wetland converted to agricultural use after the effective date of the Act
may become ineligible for many forms of USDA financial assistance. The restriction applies to all
of the farmer's land, not only the converted wetland area. The impact of the program obviously
depends on the value of the financial assistance, which in turn varies with commodity prices, but the
precedent is important (see Tripp and Dudek, 1986).
DRAFT - DO NOT QUOTE OR CITE VIII-36 February 21, 1989
-------
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter VIII
Another example of regulatory incentives for actions to reduce greenhouse gas emissions is
higher rates of return in some States for utility investments in efficiency or renewable energy.
Utilities are also sometimes allowed to choose whether to amortize their investment and receive a
return or recover their expenses in the first year. Some States have also adopted revenue adjustment
provisions to prevent reductions in utility profits as a consequence of utility-sponsored conservation
programs (Cavanaugh, 1988; Moskovitz, 1988).
There are some practical questions to be answered before attempting a large-scale program
to offset carbon emissions with trees, particularly if implemented on an international basis. For
example, there may be difficulty counting net "new" trees in a developing country undergoing
deforestation; there must be assurances that the trees are properly cared for and not cut down
prematurely. Similarly, counting net energy reductions may be difficult since a factory may have
intended to make improvements in any case.
Despite these concerns, the offset concept offers some advantages that make it worthy of
further consideration. First, it can be targeted to achieve greenhouse gas reductions, unlike energy
regulations, which may not always reduce carbon-intensive fossil fuels. Second, it is consistent with
efficiency and innovation by allowing each developer the flexibility to seek out the least expensive
means of reducing his emissions. Third, it can be implemented in a way that promotes international
cooperation by allowing reductions to be achieved in developing countries where they can be
accomplished most cheaply and also contribute to development. Eligibility for offsets could be limited
to countries that join in an international greenhouse agreement as an incentive for participation.
DRAFT - DO NOT QUOTE OR CITE V1II-38 February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter VIII
RESEARCH AND DEVELOPMENT
Further research and development (R&D) will be necessary to bring about widespread use
of many of the technologies and strategies reviewed in Chapter VII. As discussed below, in some
areas substantial programs are already in place, while in others existing priorities may not be entirely
consistent with the objective of stabilizing greenhouse gas emissions.
Research programs can serve several different purposes. In some cases, such as finding more
efficient methods for producing steel and photovoltaics, basic research is needed. In other areas
technologies are nearly commercially ready but their introduction could be accelerated through testing
and demonstration. Research is important to improve policies and programs as well as hardware;
for example, the U.S. has acquired a great deal of experience with energy conservation programs over
the last decade that has yet to be fully evaluated and summarized for use by public and private
authorities.8
The importance of government support for R&D is widely accepted; industry often has only
a weak incentive to pay for research that will be of widespread benefit, or that is long term and high
risk (U.S. DOE, 1987c). However, government can create incentives for greater industry efforts.
Special efforts are also needed to develop technologies suitable for use in developing countries where
local needs and resources may dictate very different solutions.
8 One excellent source of information on technologies, programs, and policies on energy
efficiency in buildings is the biennial proceedings of the summer study program organized by the
American Council for an Energy Efficient Economy (ACEEE, 1988).
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter VIII
Energy Research and Development
The energy R&D budget is important from a greenhouse perspective in both its total amount
and its relative priorities. Research to promote the more efficient use of all forms of energy is
desirable from the standpoint of greenhouse gas emissions, as is research to reduce the cost of
renewable and nuclear energy relative to fossil fuels. Since FY 1981 annual appropriations for energy
R&D have declined from $3.4 billion to roughly $1.4 billion in FY 1988. An examination of R&D
expenditures in other western industrialized countries suggests that their research budgets have tended
to fluctuate less than those of the U.S.; as of 1986 the U.S. ranked last among OECD member
countries in the percentage of GNP devoted to energy R&D. However, U.S. expenditures still ranked
first in absolute terms (Table 8-6).
Priorities among energy sources have also shifted during the 1980s as research on renewables
and conservation has declined more than research in other areas (see Figure 8-5). The Clean Coal
Program is by far the largest energy R&D initiative this decade; President Reagan requested $525
million for FY 1989 and $1.775 billion for FY 1990-1992. The intent is in part to improve the
efficiency of coal use, but equally important to expand the market for coal here and abroad--an
objective that would unavoidably increase carbon emissions relative to other fuels used with equivalent
efficiency (U.S. DOE, 1987c; see also, National Coal Council, 1987).
The analysis presented in earlier chapters of this report suggests that research priorities may
have to be redirected in order to stabilize greenhouse gas emissions. Several prime objectives are
to reduce the demand for fossil fuels for transportation, reduce the energy intensity of basic materials
production, particularly steel and cement, and improve the efficiency of biomass use for energy. The
prospects for research to improve light vehicle fuel economy are discussed in more detail below.
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter VIII
TABLE 8-6
Government Efficiency Research and Development
Budgets in OECD Member Countries, 1986
Efficiency
Efficiency Total as Percent
Country Budget R&D Budget of Total
Japan 78 2,311 3
United States 275 2,261 12
Italy 48 761 6
West Germany 21 566 4
United Kingdom 43 378 11
Canada 34 336 10
Sweden 29 79 37
Greece 0 15 0
Denmark 5 14 36
Total OECD1 622 7,133 9
1 Total includes minor additional expenditures. Excludes France.
Source: IEA, 1987.
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Chapter VIII
FIGURE 8-5
CHANGES IN U.S. RENEWABLE ENERGY
R&D PRIORITIES OVER TIME
(Million Dollars)
1000
800 -
600
cc.
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Based on projections supplied by automobile manufacturers, the Department of Energy
recently estimated that U.S. fuel economy will rise modestly from 27.1 mpg in model year 1988 to
32 mpg in 1995 (U.S. DOE, 1988). U.S. DOE recommended against any action to spur the
development or introduction of more efficient vehicles, instead suggesting the use of alternative fuels
and increased domestic production of petroleum (U.S. DOE 1988; 1987c). However, these
alternatives could exacerbate the greenhouse problem, particularly if alternative fuels were coal-
derived (see Box 8-4).
Total federal spending on R&D is not the only measure of success. Some studies suggest
that the variations in funding levels and priorities in U.S. R&D efforts have reduced their
effectiveness relative to more steady and long-term programs such as those in Japan (Flavin, 1988;
Chandler et al., 1988). Federal R&D support may no longer be as important for technologies
reaching commercial competitiveness, such as photovoltaics; low energy prices have become a more
critical obstacle (Carlson, 1988a). The largest improvements in energy efficiency often result from
changes in processes or products that serve multiple purposes; reduced energy costs may be only a
secondary consideration (OTA, 1983). Narrowly-focused energy conservation programs may not
effectively address this objective. One alternative is to establish research centers for energy-intensive
industrial processes. Such centers could research multiple improvements on a cooperative basis with
industry and academia, an approach currently incorporated in the Combustion Research Program
operated by Sandia National Laboratories (Chandler et al., 1988).
Federal programs are also not the only large source of energy R&D support. Several states,
notably New York, California, and North Carolina, have created State agencies to support energy
R&D (see STATE and LOCAL EFFORTS, below). Private sector support is also large; the utility-
supported Electric Power Research Institute and Gas Research Institute both have annual budgets
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Box 8-4. Light Vehicle Fuel Economy R&D
Prototype vehicles designed by Toyota and Volvo have already demonstrated that it is
technically possible to produce full-sized vehicles with fuel economy of 70 mpg or better, as
discussed in Chapter VII. Recent developments in materials technology and other areas
suggest that even this level will be greatly exceeded in the near future. The problem therefore
is less one of basic science than it is lack of incentives for product development to reduce
costs. The relatively low price of oil has diminished incentives to invest in improved efficiency
unless it is associated with other features considered more marketable. This is true both in
Japan and Western Europe, as well as in the U.S., since the price of oil has declined even
more rapidly in these countries due to the relative decline in the value of the dollar.
Barring another large rise in oil prices or some significant government policy intervention,
it seems unlikely to expect that consumers will demand, and that manufacturers will produce,
vehicles with much higher fuel economy. Indeed, there is some evidence that fuel economy
(particularly in U.S.-made vehicles) will stagnate or even decline in the near term due to
market demand for larger models and increased acceleration and performance capabilities
(Bleviss, 1988).
in excess of $100 million, and some of these organizations give high priority to research on efficiency
improvements.
Another important consideration is the allocation between basic science and more applied
research. The former has received highest priority but demonstration and technology transfer
programs can accelerate acceptance of innovative ideas that have been proven on a small scale but
not yet widely adopted. The Department of Energy now supports some technology transfer activities
for conservation (U.S. DOE, 1987c) and full-scale demonstration of clean coal technologies to provide
"proof-of-concept" experience (Clean Coal Synfuels Letters, August 26, 1988, pp.3-4; U.S. DOE, 1987c).
Some of the technologies with greatest potential to reduce greenhouse gases, such as advanced gas
turbines (see Chapter VII), also could benefit from full-scale demonstration and evaluation (Williams,
1988).
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Energy R&D should also include examination of policy and program issues (IEA, 1987).
One very critical question is why so many consumers often fail to invest in energy conservation
measures despite very high rates of return; this behavior appears to be irrational in economic terms
(Kempton and Neiman, 1987; Aronson and Yates, 1985). Consumers also respond differently to
loans, rebates, and other subsidies even though they have roughly equal cost to the government.
Another research need for policy purposes is a more detailed data base on international
sources of greenhouse gas emissions. The compilation of such data should be an initial goal of the
recently formed Intergovernmental Panel on Climatic Change.
Global Forestry Research & Development
The benefits of trees for storage of carbon are widely accepted, but the elements of a large-
scale forestry program to stabilize greenhouse gas emissions have yet to be fully described (see
discussion in Chapter VII). Such a program would seek to maximize global vegetation and storage
of carbon. The steps necessary to accomplish this objective may not be entirely consistent with the
emphasis and goals of existing governmental and commercial forestry research programs. The
preservation of tropical forests, for example, is a critical international environmental problem with
considerable impact on global climate change. However, this effort may not be the most cost-
effective way to increase net global forest cover, because the underlying causes are often closely
related to deeply-rooted social ills that require very long-term solutions. Large-scale plantation
forestry is one alternative, but the economic criteria used in commercial forestry may also have little
relationship to maximizing carbon storage.
Traditional forestry research priorities have not emphasized conservation. Recent reviews of
forestry research in tropical countries conclude that most projects have focused on the creation of
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large-scale industrial plantations and other activities to promote the improved industrial use of timber
(FAO, WRI, World Bank, and UNDP, 1987a; FAO, 1988). According to the Tropical Forest Action
Plan prepared by an international task force, forestry has not received the large-scale, targeted
research support devoted to agricultural study of plant breeding and the development of improved
crop varieties. The Plan proposed to begin responding to these needs with a five-year, $1 billion
research program.
Efforts to date indicate that forestry research can produce markedly higher yields through
genetic improvement and better management practices. For example, a Brazilian paper company was
able to double yields from 33 to 70 cubic meters per hectare per year through genetic selection and
cloning (WRI, World Bank, and UNDP, 1985). Research and demonstration can also help promote
sustainable management practices; an AID-funded village woodlot project in Thailand shows that
planting fuelwood species can be profitable and environmentally protective (U.S. AID, 1987).
More research on managing public lands, pricing public resources, and other policy aspects
of tree planting is also needed. For example, government policies in both the developing and
industrialized world have been a major source of pressure on tropical forests, but this relationship
has not been thoroughly studied. Excessive consumption of forest products has also sometimes been
encouraged by underpricing of public resources in some developing countries (see CHAPTER IX).
Research to Eliminate Emissions of CFCs
Industry is now making substantial effort to reduce or eliminate emissions of CFCs as
discussed above (U.S. EPA, 1988; Cogan, 1988). However, existing regulatory incentives may not be
adequate to assure that all users of CFCs will make a serious effort to find substitutes. The demand
for some uses of CFCs, such as automotive air conditioning, is highly inelastic because the cost is very
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low relative to the total cost of the product and there are no obvious short-term alternatives (Federal
Register, August 12, 1988). EPA is considering regulatory changes to address this problem, but also
is attempting to bolster industry interest in alternatives through a program of cooperative research
on promising technologies (U.S. EPA, 1988; Claussen, 1988). Such efforts could be expanded as part
of an effort to phase out all CFC emissions as soon as possible and could serve as a model for
programs to reduce emissions of other greenhouse gases.
INFORMATION AND TECHNICAL ASSISTANCE PROGRAMS
The government can facilitate the development and adoption of new technologies and
strategies through many forms of information and technical assistance programs. These efforts
complement research, pricing, and other policies by making consumers more aware of the value of
energy conservation and therefore more likely to respond to investment opportunities. Information
programs can serve to improve consumer understanding of the significance of energy costs, which are
often underestimated because they occur over time. For example, many consumers do not know the
relative energy cost of home appliances or that the cost of operating a refrigerator over its lifetime
will be greater than the first cost. Information coming from the government is also frequently
perceived to be more credible than similar information coming from utility companies or other private
firms (Kempton and Neiman, 1987).
Information and technical assistance programs take a variety of forms to serve a range of
specialized purposes. Within the Department of Energy, R&D results are disseminated to potential
users through "technology transfer" programs (U.S. DOE, 1987c). One element of this program is
the National Awards for Energy Innovation, which annually recognizes outstanding achievements in
conserving and producing energy.
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U.S. DOE also operates several energy information services for different audiences (U.S.
DOE, 1987b). The Conservation and Renewable Energy Inquiry and Referral Service (CAREIRS)
serves the general public through a toll-free telephone number and refers technical questions to one
of several hundred laboratories and expert agencies. In FY 1987, CAREIRS responded to more than
40,000 inquiries. General information on energy production and consumption is also available through
the National Energy Information Center and the Solar Technical Information Program. More
specialized assistance is provided by the National Appropriate Technology Assistance Service
(NATAS), which will help evaluate new technologies and suggest approaches to commercialization.
The Federal government has also provided consumers detailed information on the
comparative energy cost of new cars and appliances through mandatory labeling requirements. These
programs improve market forces by making it easier for consumers to make decisions about the value
of more expensive but more efficient models.
There is no standardized or widely-accepted system for communicating energy cost
information for homes and buildings, which may be partly responsible for the slow rate of
improvement in this sector (Chandler et al., 1988; Hirst et al., 1986, Alliance to Save Energy, 1988).
For example, such a system could be used by lenders to evaluate the expected energy cost of a home
as a factor in loan amounts, creating an incentive to improve energy efficiency. Such a system is used
on a limited basis now by the Federal National Mortgage Association (U.S. DOE, 1987c). Another
model is in use by 12 banks in Seattle (Hirst et al., 1986).
Several Federal information programs directed to small-scale energy use have been gradually
curtailed but still operate in many states. One is the Residential and Commercial Conservation
Program, which requires electric and gas utilities to offer home energy audits to their customers for
a minimal charge. The program was not promoted effectively in most parts of the country and
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participation has typically been very low, although a few states achieved notably better success (Hirst
et al., 1986). The Energy Extension Service provides a small amount of Federal support for State
energy information programs and technical assistance programs targeted to individuals and small
energy consumers.
Another approach to improving consumer awareness of energy costs is through the
introduction of technology that continually reports electricity costs. Advances in microelectronics and
communications now make it possible to provide such information for a cost that could be offset by
savings achieved through better energy management and shifts in time of use, while at the same time
more closely tracking marginal costs (Peddie and Bulleit, 1985; Rosenfeld, 1985).
Federally-supported programs have also helped support development of computer models and
other analytical methods for evaluating the energy use from new residential and commercial buildings.
These analytical tools can be used by designers to lower the energy use of buildings and as a basis
for calculating energy use for purposes of minimum standards and incentive programs (Vine and
Harris, 1988). Computer models of building energy use were a key product of the Federal Building
Energy Performance Standards. The Standards began as a mandatory Federal regulatory program
in 1976 but Congress subsequently amended the law to require only voluntary guidelines. The
standards have yet to be released in final form, but much has been learned in the process and
interim products have been used by industry and government. The Federal government could
facilitate use of the final rules by providing additional technical assistance such as materials on
compliance methods (U.S. DOE, 1987c, Chandler et al., 1988).
The integration of research, technical assistance, and public information has a long and
productive tradition in Federal agriculture programs. The Federal budget for such activities is about
$3 billion annually, and as of 1984 there were over 3,500 specialist extension agents and over 11,000
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county agents (OTA, 1986). As discussed in Chapters IV and VII, modifications in some farming
practices, such as selection of crop varieties and fertilizers, water use, and disposal of crop residues
may inhibit greenhouse gas emissions, although more research is needed to establish the efficacy of
such changes. As our understanding of agricultural sources of greenhouse gas emissions improves,
extension activities could be used to teach farmers how to reduce their emissions.
Information and technical assistance is also an important function of bilateral aid, as discussed
in U.S. Bilateral Assistance Programs (Chapter IX).
CONSERVATION EFFORTS BY FEDERAL AGENCIES
The Federal government is the single largest consumer of energy in the United States,
accounting for 2.5 percent of total energy consumption (U.S. DOE, 1987a).9 The annual energy
budget for over 500,000 Federal buildings and facilities is about $4 billion, plus another $2 billion for
Federally-assisted housing. A Federal Energy Management Program was established 12 years ago
to provide leadership in reducing these costs and has achieved some success. According to U.S.
DOE, cumulative energy savings over the past 12 years are nearly 1.6 Quads, equivalent to about $6.5
billion in savings (U.S. DOE, 1987a; see Table 8-7). In FY 1985 a 10-year performance target for
improving the energy efficiency of Federal buildings ended, having attained a 16.6 percent reduction
in energy per square foot relative to a 20 percent target.
The government could use its buying power to test and demonstrate energy conservation and
alternative energy sources. Government procurement could help demonstrate new products, acting
as an incentive for manufacturers worried about the lack of a market and consumers worried about
being first-of-a-kind purchasers (Goldemberg, 1987). The Department of Energy expressed support
9 Expenditures on energy in FY 1987 were over $8 billion, or 0.8 percent of the Federal budget.
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Chapter VIII
TABLE 8-7
Federal Energy Expenditures and Cost Avoidance
FY 1975-FY 1987
Annual Energy Cost
($ Million)
Annual Energy Use
Reduction Rel. to
FY 1975 (BBTU)
Average Annual
Energy Cost
($/MBtu)
Annual Energy
Cost Avoidance
(SMillion)
Buildings and Facilities
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
Total
1,812.453
1,888.673
2,162.395
2,286.054
2,636.361
3,168.399
3,713.200
3,804.965
3,863.248
3,919.356
4,054.799
3,828.608
3.941.605
General Operations
58,080.4
51,847.4
66,013.3
77,885.9
97,947.3
99,466.9
92,207.3
98,559.4
64,706.3
27,131.1
50,877.7
6.465.6
2.107
2.355
2.675
2.879
3.370
4.157
4.882
4.955
5.073
4.928
4.868
4.731
4.617
136.779
138.692
190.052
262.475
407.167
485.597
456.887
499.992
318.873
132.074
240.702
29.852
3,299.142
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
Total
All Energy
2,697.494
2,310.695
2,594.787
2,710.483
3,705.588
6,195.928
8,289.325
9,828.685
8,743.907
7,728.081
6,336.706
4,006.669
4,348.108
Total
...
129,389.8
115,884.7
139,408.6
112,222.9
94,910.6
33,191.0
6,669.7
9,260.1
18,506.1
49,557.8
63,407.1
26,606.8
2.578
2.520
2.789
2.989
3.967
6.513
8.182
9.454
8.432
7.258
6.358
4.077
4.264
...
326.062
323.202
416.692
445.188
618.153
271.569
63.055
78.081
134.317
315.088
258.511
113.451
3,363.369
6,662.511
Note: This table incorporates revisions to previously published energy consumption and cost data
submitted to DOE by Federal agencies. Energy costs for FY 1975 - 1981 are estimated, based on
data provided by the Defense Fuel Supply Center and the DOE Energy Information Administration
(EIA). Energy costs for FY 1982 - 1987 are based on annual reports submitted to DOE by Federal
agencies.
Source: U.S. DOE, 1987a.
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for this role in the 1987 Energy Security report to the President: "The Federal Government should
lead by example in testing and adopting cost-effective technologies that use energy more efficiently,
especially those that minimize future reliance on insecure supplies of oil" (U.S. DOE, 1987c).
According to the U.S. DOE, a major obstacle to Federal conservation efforts was recently
addressed through a change in Federal law. Conservation investments, although cost-effective, may
require a substantial initial investment in order to achieve energy and cost savings over the long
term (U.S. DOE, 1987a). Agencies may now legally "share the savings" from investments in
conservation through contracts for up to 23 years with companies that supply the necessary equipment
or services in lieu of paying the full capital cost upfront. Several states already have such programs,
which can serve as demonstration programs for other levels of government and the private sector and
may facilitate future Federal efficiency investments. Texas has implemented an energy performance
audit program for 18 major universities enforced by a potential 10 percent withholding of
administrative funds. The audit includes a review of the energy management program, including
procedures for tracking and monitoring, use of audit activities, capital outlays, and professional
training programs. The entire program has been highly cost-effective and in addition served to
increase upper management awareness of the energy management opportunities under their control
(Verdict, 1988).
STATE AND LOCAL EFFORTS
State and local governments can make an important contribution to the reduction of
greenhouse gas emissions. Much environmental regulation and energy policy are to a considerable
degree State and local responsibilities. For example, State public utility commissions oversee decisions
about the need for new generating capacity and the choice of fuel and can exercise their discretion
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to promote or discourage particular fuels to promote environmental objectives (ABA, 1980; Randolph,
1988b).10
A growing number of States have adopted programs to reduce costs and growth in electricity
demand through comprehensive planning and conservation efforts supported by electric utilities.
There is evidence that the potential impact of such programs is very large and could allow substantial
displacement of fossil-fuel generating capacity in the future. At least 10 States have statutory
requirements and policies requiring that utilities examine efficiency investment opportunities as part
of a "least-cost" plan (Machado and Piltz, 1988). However, in recent years some utilities have reduced
their commitment to conservation and renewed efforts to promote new demand for electricity in order
to reduce the costs of excess capacity.
One of the most comprehensive and thoroughly evaluated programs is in the Pacific
Northwest. The Northwest Power Planning Council, a regional planning agency created by Congress
in 1980, must by law evaluate conservation as a potential resource comparable to generation, and may
not support new plants until after first undertaking less expensive demand-side measures. In
cooperation with the Bonneville Power Administration, the region spent over $800 million on
conservation between 1979 and October 1987. The Council concluded that its conservation programs
had achieved energy savings at costs ranging between 1.9 and 2.9 cents per kilowatt-hour, much less
than the cost of generation. The Council has undertaken some conservation programs despite a
power surplus because of the potential "lost-opportunity" resource if, for example, new buildings are
constructed without cost-effective conservation measures. Savings from improving the efficiency of
new buildings alone are estimated at $700 million over 20 years (NPPC, 1988).
10 For example, Washington offers utilities a higher rate of return on investments in
renewable energy systems, while Texas requires that renewable energy be considered first when a
utility seeks to add new capacity and also requires retail wheeling (use of transmission lines) for
renewable energy generators under 10 MW whose owners wish to sell power to non-utilities.
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A recent Michigan study focused on opportunities to improve efficiency in the residential
sector (Krause et al, 1988). The study, done by the Lawrence Berkeley Laboratory, examined the
technical and economic potential for electricity conservation. Some of the key findings were that 3400
GWh/year, or 680 MW of baseload equivalent, can be reliably saved by 2005. This is about 29
percent of the forecasted demand for this date and is about two-thirds of the technical potential
(Figure 8-6). The result implies a steady decline in overall residential electricity demand of about
1 percent per year over the next 20 years. Most of the projected savings could be purchased at a
cost of less than 3 cents per kWh assuming utilities pay for the full extra first costs of consumer
investments; the average cost is about 1.1 cent/kWh, in contrast with short-run marginal costs in
Michigan of about 3 cents/kWh and much higher costs for new capacity. The greatest savings are
from improving the efficiency of lighting, water heating, and refrigerators. The net present value
of implementing these savings over 20 years at a 7 percent discount rate would be $545 million.
Some States have undertaken impressive programs to develop alternative energy technologies
suited to their climate and energy needs. The North Carolina Alternative Energy Corporation (AEC),
for example, is funded by voluntary contributions from electric utilities recovered from ratepayers
(Harris and Kearney, 1988). The AEC has contributed almost $6 million to projects that test or
demonstrate either conservation, load management, or renewable energy technologies. New York and
California are among the other States with substantial energy research programs.
Local governments also undertake many relevant activities. One traditional local government
function is to establish building codes and land use regulations. Some local governments have
implemented stringent energy conservation requirements for new housing. For example, Tacoma,
Washington, estimates that compliance with its code adds only $2,000 to the cost of a new home but
saves electricity at a cost equivalent to 2 cents/kWh (much less than any new generation) and offsets
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Chapter VIII
FIGURE 8-6
10
o>
o
c
TJ
0>
I
C
o
o
C
0)
o
*- «o
o o>
t; ^4
o
o
COST OF POTENTIAL RESIDENTIAL ELECTRICITY
CONSERVATION IN MICHIGAN BY 2000*
(1985cents/kWh)
Average Price of Electricity
Short-run marginal costs,
existing plants
400
800
1200 1600 2000 2400 2800 3200
GWh
300
MWBaseload
Based on analysis of territories served by Consumers Power and
Detroit Edison companies and assuming a 7 percent discount rate.
Source: LBL, !988.
3409
683
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the need for 1 MW of generation (Randolph, 1988a). Seattle, Santa Monica, and several other cities
have worked out cooperative arrangements with their utilities in which the utility provides audits or
other services on a reimbursable basis—sometimes at a profit (Randolph, 1988a). Two California
cities, Davis and Berkeley, require compliance with minimum residential energy standards as a
condition for the sale of a home (Randolph, 1988a).
The State and local role in limiting greenhouse gas emissions is not limited to energy
regulation. Other state and local authority that could be exercised to lower greenhouse gas emissions
includes management of landfills and regulation of existing stationary sources of air pollution.
Another source of large, short-term opportunities may be tree planting programs. As discussed in
Chapter VII, urban tree planting can reduce local temperatures, thus reducing summer energy needs
for air conditioning, while simultaneously storing carbon dioxide for a relatively modest cost (Akbari
et al., 1988). Cities have undertaken large-scale tree planting programs to improve air quality, lower
summer temperatures, and beautify neighborhoods. In Los Angeles, a nonprofit group called
TreePeople organized a successful effort to plant a million trees prior to the 1984 Olympic games.
A new initiative announced by Mayor Bradley in October 1988 calls for planting five million trees
and painting surfaces light colors to save 500 MW of peak power, or the equivalent of a large new
coal plant (LBL, 1988).
Some States have also taken steps to help reduce emissions of CFCs. For example,
Massachusetts recently fined a foam manufacturer for failing to recover CFCs, and obtained an
agreement from the company that it will reduce emissions in the future (New York Times, August
25, 1988, p. A-21).
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PRIVATE SECTOR EFFORTS
Because of the global nature of the greenhouse problem and the lack of direct economic
incentive for solutions, much of the impetus for solutions will have to come from governments.
Nevertheless, private corporations, non-governmental organizations, and individuals can make
important contributions without waiting for government direction. Indeed, there are already several
good examples of private initiatives that will contribute to reducing greenhouse gas emissions.
There have also been a number of important actions by private companies to reduce
emissions of CFCs in advance of any government mandate. In September 1986--a year before the
Montreal Protocol-the DuPont Company announced that they could produce chemical replacements
for ozone-depleting CFCs within 5 years if governments provided proper regulatory incentives to
support the new market. The substitutes either do not contain chlorine, the chemical that threatens
the ozone layer, or they contain hydrogen, resulting in a much shorter and therefore less dangerous
atmospheric lifetime. As evidence of the risk to the ozone layer mounted, other companies also
announced support for efforts to reduce CFC emissions. The food packaging industry, for example,
voluntarily agreed to substitute food packaging made with HCFC-22 rather than with CFC-12; HCFC-
22 has an ozone-depletion and greenhouse potential roughly one-twentieth that of CFC-12, as
discussed in Chapter III.
Since March 1988, when the NASA Ozone Trends Panel announced its conclusion that global
ozone depletion has been detected, several major CFC producers and users have stated their support
for an orderly phase-out of all production of CFCs by the turn of the century. Some companies have
restricted sales to existing markets, stopped development work on new applications for regulated
products, and committed not to increase production capacity nor sell technology to others.
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It is often the private non-governmental organizations that are uniquely capable of promoting
grassroots development and alleviating poverty (World Bank, 1984). The World Bank has supported
the involvement of private companies in the design and implementation of projects, particularly
projects on social forestry, agroforestry, and the environment. AID and the Peace Corps have given
a high priority to involving private voluntary organizations in community forestry projects undertaken
through the Food for Peace Program (Joyce and Burwell, 1985). The Tropical Forest Action Plan
also includes strong support for involving private organizations.
Applied Energy Services (AES) of Arlington, Virginia, a private company involved in
cogeneration projects, recently hired a non-profit organization, the International Institute for
Environment and Development (IIED), to assist in identifying potential reforestation projects capable
of providing a carbon sink equal to the emissions from a new 180 MW coal-fired plant in
Connecticut. This approach reflects the offset concept discussed above. One problem in making this
exchange on a voluntary basis was that the company had difficulty obtaining financing despite the
small cost of the trees relative to the total project.11
Many of the strategies necessary to reduce greenhouse gas emissions require changes in
technologies or policies that can only be accomplished by large corporations and governments.
However, there are some important exceptions, particularly tree planting. Reviving the tradition of
Arbor Day could provide a very effective symbol of individual responsibility for greenhouse gas
emissions; one hectare of well-managed Douglas fir trees can absorb the average American's lifetime
11 The program will cost the company $2 million for an endowment to finance a 10-year tree
planting program by CARE, the Guatemalan forest service, and the Peace Corps to support 40,000
small farmers in planting 52 million trees in plantations and agroforestry systems. Over the 40-year
life of the plant, 15 million tons of carbon will be fixed at a total cost of $14 million cash and
contributed labor. AES is considering providing similar offsetting forestry projects for nine other
plants. The costs are expected to be only about 0.1 cents per kWh because the projects will take
place in developing countries and some labor will be contributed. CARE officials informally estimate
that the project could be replicated perhaps 100 times given current institutional capability and land
availability (WRI, 1988).
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per capita emissions of CO2 (about 400 tons, or 5 tons C/year x 80 years).12 The cost of planting
that many trees on a large scale is difficult to estimate, but $1500 is a reasonable approximation--a
large but not impossible lifetime investment.13
As these examples suggest, the government can help foster private initiatives. In some cases
regulatory obstacles impede voluntary efforts and government can help remove them; in other cases
the government may be able to help bring parties together and provide technical information or
assistance. The important point is that government can help promote voluntary efforts to reduce
greenhouse gas emissions.
COMPLEMENTARY STRATEGIES TO REDUCE GREENHOUSE GAS EMISSIONS
The policies described in this chapter are likely to be most effective when used in
combination and, wherever possible, linked to the attainment of other national goals. Pricing and
regulatory strategies are the most effective policies in the short term, however, the other policies
reviewed in this section can complement and enhance pricing and regulatory approaches. In the long
run, government-supported R&D, information programs, and other market-enhancing activities can
make a significant contribution. Because government action to reduce greenhouse gas emissions will
often be closely related to other national policies, programs must also be carefully crafted to meet
several goals simultaneously (IEA, 1987).
Improving the efficiency of the U.S. economy is closely related to concerns about the
country's economic competitiveness. While the U.S. has reduced its energy intensity a great deal, our
12 Other species would require more land but with research it may be possible to do substantially
better.
13 A more detailed discussion of the feasibility of large-scale tree planting is provided in Chapter
VII.
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principle economic competitors have done even better and can offer more efficient technologies in
many areas. Per capita energy consumption in the U.S. remains more than double that of Europe
or Japan; Japanese industry uses half as much energy per dollar of value added as industry in the
U.S although spending about as much due to higher energy prices (Zimmerman and Reid, 1988;
Flavin and Durning, 1988). Efficiency investments would make available billions of dollars in capital
for other investments (Rosenfeld and Hafemeister, 1988). Oil imports are also a growing negative
influence on the U.S. balance of trade, accounting for roughly a fourth of the merchandise trade
deficit-more than any other single item (Chandler et al., 1988).
Policies for reducing greenhouse gas emissions may also complement efforts to address
concerns raised by recent growth in oil imports and potential risks to U.S. energy security (U.S.
DOE, 1987c). Oil imports have increased from 27 percent of U.S. supply in 1985 to about 37 percent
in 1988, and current forecasts indicate imports could exceed 50 percent by the mid-1990s (U.S. DOE,
1987c). By comparison, imports accounted for 35 percent of supply before the 1973 embargo and 43
percent before the 1979 embargo.
As discussed in Chapter IV, oil consumption for transportation is one of the largest sources
of U.S. greenhouse gas emissions, as well as a major contributor to projected increases in global
emissions. Transportation also accounts for almost two-thirds of U.S. oil consumption. Further
improvements in auto efficiency could therefore contribute to both policy objectives (Mackenzie,
1988).
Complementary strategies are very important in the building sector, where the effectiveness
of pricing strategies is limited by extreme first-cost sensitivity and the stringency of regulation is likely
to reflect considerable compromise. Studies show that selective financial incentives in combination
with information and training programs can be highly effective in promoting innovation not covered
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by standards, creating incentives for early adoption of standards, and enhancing compliance with
standards. The result can be performance that is substantially better than compliance with minimum
standards would produce (Vine and Harris, 1988).
Complementary strategies can also work well to achieve the goal of reducing carbon
emissions from automobiles. To achieve this goal, which is clearly consistent with efforts to promote
higher average fuel economy, consumers must be able to evaluate the relative fuel efficiency of
automobiles; Federal fuel efficiency tests, gas mileage guides, and other information programs
promote this goal.14 Manufacturers have rightfully noted that consumer interest in fuel efficiency has
declined with lower gasoline prices; higher gasoline taxes, gas guzzler fees, or some other form of
economic incentive is necessary to stimulate demand for efficiency.
Better management of solid wastes can reduce methane emissions. States with the most
effective programs often combine some or all of the following policies: regulations on landfills,
deposits on recyclable materials, tax incentives for recycling companies, and government procurement
policies that promote purchase of recycled materials (Shea, 1988).
Research and development programs can assist on the supply side by accelerating the
development and testing of new technologies. Procurement programs can provide an initial market
and extensive testing for concepts prior to wider marketing. Minimum fuel economy standards fill
a different role by providing clear targets and reducing market uncertainty, but regulations must be
carefully structured to allow adequate time for adjustment, to avoid conflicts with other socially
desirable features, and to preserve fair competition.
14 The Department of Energy publishes Gas Mileage Guides, which list the fuel economy of all
new car models; however, the number of guides distributed has been reduced from 10 million to 3
million annually.
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There is some concern that other national policies for reducing automobile oil consumption
and improving urban air quality may lead to increased carbon emissions--for example, if methanol
is produced from coal in large quantities (as discussed in Chapter VII), particularly if vehicles using
such fuels are permitted to be less efficient as provided in recent Federal legislation.
Federal and state governments have also been considering air pollution regulations to control
problems other than global warming that could unintentionally exacerbate global warming. Most
prominent of these areas is the ongoing debate over acid rain legislation. Acid rain is caused in part
by sulfur dioxide and nitrogen oxide emissions from electric utility powerplants. Some of the methods
to limit these emissions could result in greater CO2 emissions. For example, the use of scrubbers
to control sulfur dioxide emissions from coal-fired or oil-fired powerplants would increase CO2
emissions because the additional fuel required to operate the scrubbers would produce additional CO2
emissions. However, strategies that rely on natural gas or demand-side reductions would reduce
carbon emissions (Centolella et. al., 1988). Thus, an important priority for acid rain mitigation
strategies should be to consider the global warming impacts of alternative acid rain programs.
Just as strategies to reduce greenhouse emissions must be applied in combination in order
to be maximally effective, so too must we work together at all levels of government, as well as in the
private sector.
Many short-term actions to reduce greenhouse gas concentrations could be implemented
today on the basis of existing legislative authority. Indeed, some policies directed toward this objective
are already under consideration. For example, agencies could make greater use of the environmental
impact statement process to consider the extent to which their major projects will contribute to or
be effected by climate change. The President's Council on Environmental Quality has done an analysis
of projects that might warrant discussion of climate change issues and may issue guidelines for other
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agencies. EPA, which is legally required to review draft impact statements, has used its authority in
at least one instance to comment on the additional greenhouse gas emissions that might result from
actions proposed by the Federal Energy Regulatory Commission.
Much more could be done to improve the federal government's energy management within
existing legislative authority, beginning with much more disaggregated reporting of energy use by
agencies. The laws creating the Federal Energy Management Program require an examination of
opportunities for energy-saving alternatives in federal buildings. Such analysis is to be done on the
basis of life-cycle costs, reflecting marginal fuel costs and a 7 percent real discount rate-terms
intended to favor conservation, as compared with using average costs and a higher discount rate.
(Energy Security Act, PL 96-294, Section 405). The Department of Energy proposed implementing
regulations in 1980, but final regulations were never completed.
Other short-term possibilities follow from some of the recent and pending agency decisions
discussed above, such as ongoing consideration of rules to promote demand-side bidding by the
FERC and reconsideration of CAFE standards by the Department of Transportation.
IMPLICATIONS OF POLICY CHOICES AND TIMING
The potential cost of government action to reduce greenhouse gas emissions may be much
less than it would appear if such action serves other important economic or environmental objectives.
Most of the measures proposed to reduce emissions are already of substantial public interest, for
example, policies that promote energy efficiency, reductions in use of CFCs, efforts to halt
deforestation, and other desirable social policies-so that the threat of a global warming is often
simply another reason to implement such policies. The incremental cost of taking actions to limit
global warming today may therefore be modest.
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The technical feasibility of implementing various measures that have been proposed for
limiting global warming has already been addressed in Chapter VII. However, since the threat of
global warming has so far not been an important consideration in government policy-making, it is
important to note the other benefits of these measures. For example, serious consideration is being
given to eliminating emissions of CFCs because of their impact on the ozone layer. In addition, a
substantial number of states are promoting investments in energy-efficient technology in order to
reduce energy costs and to meet the need for new generating capacity. Also, Federal and state
authorities are promoting waste reduction and recycling as alternatives to land disposal because of
the high cost and environmental risks associated with traditional disposal methods. Finally, a large
and growing international effort has been organized to slow tropical deforestation because of its
impact on economic development and the quality of life in many developing countries.
For several reasons, near-term action may be necessary if it is desired to stabilize greenhouse
gas concentrations. For political and economic reasons, actions cannot be immediately implemented
once it is agreed they are needed, and for reasons having to do with atmospheric chemistry,
concentrations of greenhouse gases--and the attendant risks-will decline only gradually even after
actions are implemented.
Policy development and implementation can be a lengthy process, particularly at the
international level. Roughly a decade was required for the process that led to international
agreement to reduce emissions of CFCs embodied in the Montreal Protocol, and it will take another
decade to implement the agreed-upon reductions. An agreement to reduce emissions of greenhouse
gases associated with the use of fossil fuels and with deforestation could take much longer to achieve:
the activities responsible for CO2 emissions are more economically valuable, the distribution of
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emissions is greater, the responsible countries have diverse economies and less shared interests, and
the difficulty of implementing alternatives may be greater.
Implementing new technologies can also often be time-consuming. Most emissions result
from fundamental activities that support the global economy (transportation, space conditioning,
industrial production, land clearing, etc.); therefore, rapid introduction of new technologies for some
uses could be very disruptive. Once a technology is cost-effective, it may take years before it achieves
a large market share, and decades more for the existing capital stock to be replaced. The historical
pattern of gradual displacement of old energy sources by new is shown in Figure 8-7. Government
policy may be able to significantly accelerate this transition, although it is debatable whether such
efforts have been very successful in the past.
New end-use technology with greater efficiency can replace existing technologies more quickly:
it takes 5-10 years to develop new automobile models, and the existing fleet is largely replaced over
8-12 years; major home appliances and space heating and conditioning systems are in use for 10-20
years, and industrial equipment, for 20-40 years. Buildings may be used for 40-100 years or more,
however, and the reduction in energy requirements that can be achieved (per unit) as a result of
remodeling is more limited than what can be achieved in newly-constructed buildings. Thus,
depending on the sector, it traditionally takes roughly 20-50 years to substantially alter the
technological base of industrial societies, and thus the cost of reducing emissions could rise
dramatically as the time allowed for achieving these reductions is decreased. While the rate of
change can be higher in rapidly developing countries, once the industrial infrastructure is built, it will
normally be many years before it is replaced. This process will be naturally accelerated if new
technologies become sufficiently attractive, and government policies can encourage more rapid
retirement of existing buildings and equipment. Nevertheless, such efforts are likely to be more
expensive and technically difficult.
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Chapter VIII
FIGURE 8-7
100
U.S. ENERGY CONSUMPTION BY FUEL SHARE
(Percentage of Total U.S. Energy Consumption)
Nuclear
Hydropower
Natural Gas
Petroleum
Wood Fuel
Coal
1900 1910 1920 1930 1940 1950 1960 1970 1980
YEAR
Source: U.S. DOE, 1987a.
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Once greenhouse gases have entered the atmosphere, they continue to affect climate for
decades. Even if all anthropogenic emissions of carbon dioxide could be suddenly eliminated, it may
take more than a century for the oceans to absorb enough carbon to reduce the atmospheric
concentration of CO2 even half way toward its preindustrial value (see discussion in Chapter II).
With continued emissions, the time required to reduce excess concentrations by the same percentage
increases further. For CFCs and N2O, it would be more than 50 years before their excess
concentrations declined by half even if all anthropogenic emissions were eliminated. Only methane
responds relatively quickly--the excess concentration would fall by 50 percent in less than a decade
after anthropogenic emissions were eliminated (Figure 8-8).
The climate response also lags behind the radiative forcing imposed by changes in
atmospheric composition (Chapter HI). Due to the heat capacity of the ocean, the global average
temperature will rise more slowly than if climate were continuously in equilibrium with the changing
composition of the atmosphere. The climate will also cool more slowly if trace-gas trends are
reversed. Consequently, any strategy that involves responding to climate impacts is very risky: Once
climate change occurs even draconian measures would not reverse the process for decades.
SENSITIVITY TESTS OF THE EFFECT OF ALTERNATIVE POLICIES ON GREENHOUSE GAS
EMISSIONS: RISK TRADE-OFFS
A series of sensitivity tests were run using the EPA's Atmospheric Stabilization Framework
to test the relative effect of a range of policies that might increase or moderate greenhouse gas
emissions. These tests involved changing key parameter values in the Rapidly Changing World No
Response scenario (RCW) and the Rapidly Changing World with Stabilizing Policy scenario (RCWP)
to represent more aggressive government intervention. The following section summarizes the results
of those sensitivity tests and concludes with some suggestions concerning possible future targets for
policy intervention. (For a detailed description of the assumptions and outcomes incorporated into
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FIGURE 8-8
ATMOSPHERIC RESPONSE TO EMISSIONS CUTOFF
(Percent Reduction Relative To Year of Emissions Cutoff in 2000)
125
100
75 -
iu
o
a
ui
a.
50 -
25 -
'•v. Realized Warming
2000
2025
2050
YEAR
2075
2100
Figure 8-8. Change in atmospheric concentration and temperature following a cutoff in anthropogenic
emissions of greenhouse gases. 100% is defined as the year 2000 concentration or temperature and
0% as the preindustrial concentration or temperature. Total methane emissions are reduced to 380
Tg per year, which may represent only a 50% reduction in anthropogenic emissions.
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the RCW and the RCWP scenarios, the reader is referred to Chapter V and Appendix B of this
report.)
To measure the impact of a range of specific policy goals in the RCW scenario, two sets of
sensitivity tests were developed. In each case, the effects of the policy alternatives were first
evaluated individually and then in combination to measure the impact of implementing all the
identified measures simultaneously. The results were evaluated in terms of the degree to which the
projected global warming was amplified or reduced relative to the reference scenarios.
Policies That Increase Greenhouse Gas Emissions
Several recent policy proposals indicate the potential for government actions that will or may
promote increased emissions of greenhouse gases. U.S. energy policy currently seeks to increase coal
production and use to reduce dependence on imported fuels and boost employment; the Department
of Energy has made numerous suggestions concerning various policies to increase the role of coal in
relative and absolute terms (U.S. DOE, 1987; National Coal Council, 1987; see Figure 8-9). Recent
initiatives in utility regulation and alternative fuels have an ambiguous impact and the Department
of Transportation has also decided not to increase automobile fuel efficiency requirements beyond
26.5 mpg.
Improving the efficiency of coal combustion in so-called "clean coal" technologies may reduce
greenhouse gas emissions relative to the current generation of coal-burning plants. Over the long
run, however, more efficient coal-burning technologies may increase greenhouse gas emissions by
making coal economically attractive relative to other fuels. (This proposition is tested in the modeling
analysis presented below.) Numerous policy proposals have also been made to increase U.S. coal
exports in order to improve the balance of trade. A recent proposal by the U.S. DOE coal advisory
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Chapter VIII
FIGURE 8-9
ACTUAL AND PROJECTED U.S. COAL PRODUCTION
(Million Metric Tons)
1200 -
1000 -
z
o
o
cc.
t-
LU
2
z
o
800 -
600 -
400 ;-
200
Exports
U.S.
Consumption
1960 1965 1970 1975 1980 1985 1990 1995 2000
YEAR
Source: U.S. DOE, 1987a.
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committee would link exports of clean-coal technology to an agreement to purchase U.S. coal policy
that might slow the adoption of more efficient technology for burning less expensive domestic coal
in some developing countries like China (National Coal Council, 1987).
The need to more carefully consider the potential impact of government decisions on
greenhouse warming is evident from analyses of two recent policies with ambiguous impact on
greenhouse warming. The Methanol and Alternative Fuels Promotion Act enacted this year creates
incentives for auto manufacturers to produce vehicles powered by methanol, ethanol, and substitutes
for gasoline. This program was adopted to lessen dependence on imported oil and improve urban
air quality. However, during Congressional debates concern was expressed that if methanol were
produced in large quantities from coal, the result would be a significant increase in greenhouse gas
emissions. Congress therefore included provision for study of this relationship. (The potential effect
of accelerated synfuels development is presented below.)
Another example of a policy with ambiguous but potentially significant effects on greenhouse
gas emissions is rule changes proposed by the Federal Energy Regulatory Commission (FERC) to
facilitate non-utility power production. The draft environmental impact statement (DEIS) on these
rules concluded that coal-fired technologies have so far played a limited role in the development of
independent power projects relative to resource recovery, hydro power, and natural gas. As a result
of the FERC proposals, coal could assume a much larger role in the future because of proposed
elimination of requirements for cogeneration incompatible with the most economic coal technologies
and because larger firms with the resources necessary to undertake large-scale projects that increase
the attractiveness of coal technologies may find the power market more attractive. However,
alternative assumptions imply natural gas will grow much more than coal (FERC, 1988b).
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A set of tests applied to the RCW case measures the effect of policy choices that cause
future emissions to grow. In this "Accelerated Emissions" case, eight key parameters in the model,
representing domestic and international policies that increase emissions, were varied. These
parameters were chosen as proxies for currently-proposed policies (e.g., accelerated development of
synfuels) or as possible consequences of government inaction or failure (e.g., high CFCs and
deforestation).
The tested policy alternatives included the following:
• A High CFC Case, which assumed a low level of participation in and compliance
with the Montreal Protocol.
• A Cheap Coal Case, which assumed that advances in the technology of coal
extraction and transport rapidly reduce the market price of coal at the burner tip.
In the RCW scenario, coal supply productivity was assumed to improve at a rate of
approximately 0.5 percent per year. In this case, it is assumed to improve at a rate
of 1 percent per year.
• A Cheap Svnfuels Case, which assumed that the price of synthetic oil and gas could
be reduced by 50 percent and commercialization rapidly accelerated relative to the
RCW case. This case assumes that the minimal production price for synfuels can
be achieved in 20 years rather than the 30 years assumed in the RCW case.
• A High Oil Price Case, which assumed that OPEC (or some other political entity)
could control production levels and thus raise the border price of oil and gas. To
simulate this effect, oil and gas resources were shifted to higher points on the
regional supply curves. In addition, extraction costs for oil in each resource grade
were increased relative to the assumptions in the RCW case.
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• A Slow Improvement Case, which assumed that technical gains in the engineering
efficiency of energy use occurred only half as rapidly as had been assumed in the
RCW case. In the RCW case, it was assumed that efficiency improved at rates of
approximately 1-2 percent per year. In the Slow Improvement case, the assumed
rates were reduced to only 0.5-1.0 percent per year.
• A Rapid Deforestation Case, which assumed that rates of deforestation increased at
a rate equal to the rate of growth in population.
• A High-Cost Solar Case, which assumed that solar energy was so expensive that its
price precluded the possibility of making any significant contribution to global energy
supply.
• A High-Cost Nuclear Case, which assumed that the cost of electricity from fission
electric systems became so high that their contribution to global energy supply was
permanently limited. In this case, an environmental tax of S20/GJ in 1975$ (i.e.,
$40/GJ in 1985$) was imposed on the price of electricity supplied by nuclear
powerplants.
• A Combination Case, in which all of these policy strategies were combined in one
scenario.
Figure 8-10 summarizes the results of these sensitivity tests as compared with the RCW case.
The results are illustrated in terms of the incremental effect of each policy strategy on the warming
commitment in the RCW scenario in 2050 and 2100. Figure 8-10 indicates that the measures that
amplify the warming to the greatest extent are those that (1) reduce the rate of efficiency
improvement (Case 5), (2) reduce the cost of synfuels (Case 3), and (3) increase the assumed rate
of growth in CFC production and use (Case 1).
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Chapter VIII
FIGURE 8-10
ACCELERATED EMISSIONS CASES:
PERCENT INCREASE IN EQUILIBRIUM WARMING COMMITMENT
1. High CFC Emissions3
2. Cheap Coal
3. Cheap Synfuels
4. High Oil & Gas Prices
6. Slow Efficiency
Improvements e
6. High Deforestation
7. High-Cost Solar
8. High-Cost Nuclear
Accelerated Emissions
(Combination of 1-8)
Percent Increase From RCW Scenario
2050
2100
j i I i I i I i I i I i I i I i
-10 0 10 20 30 40 50 60 70 80
Percent
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FIGURE 8-10 -- NOTES
Impact Of Accelerated Emissions Policies On Global Warming
a Assumes a low level of participation in and compliance with the Montreal Protocol. The
assumptions used in this case are similar to those used in the "Low Case" analysis described in the
EPA's Regulatory Impact Assessment report.
b Assumes that advances in the technology of coal extraction and transport rapidly reduce the market
price of coal at the burner tip. In the RCW scenario, the economic efficiency of coal supply is
assumed to improve at a rate of approximately 0.5% per year. In this case, it is assumed to improve
at a rate of 1% per year.
c Assumes that the price of synthetic oil and gas could be reduced by 50% and commercialization
rapidly accelerated relative to the RCW case. This case assumes that the minimal production price
for synfuels can be achieved in 20 years rather than the 30 years assumed in the RCW case.
d Assumes that OPEC (or some other political entity) could control production levels and thus raise
the border price of oil and gas. To simulate this effect, oil and gas resources were shifted to higher
points on the regional supply curves. In addition, extraction costs for oil in each resource grade were
increased relative to the assumptions in the RCW case.
e Assumes that technical gains in the engineering efficiency of energy use occurs only half as rapidly
as assumed in the RCW case. In the RCW case it is assumed that efficiency improves at rates of
approximately 1-2% per year. In the Slow Improvement case the assumed rates were reduced to only
0.5-1.0% per year. The lower rate of improvement is similar to the assumptions in recent projections
for the Department of Energy's National Energy Policy Plan.
f Assumes annual deforestation increases at a rate equal to the rate of growth in population.
8 Assumes that solar energy remains so expensive that its price precludes the possibility of making
any significant contribution to global energy supply.
b Assumes that the cost of electricity from fission electric systems becomes so high that their
contribution to global energy supply is permanently limited. In this case, an environmental tax of
about $40 (1985$) per gigajoule (GJ) on the price of electricity supplied by nuclear powerplants was
phased in by 2050.
' All of the above assumptions were combined in one scenario. The result is not equal to the sum
of the warming in the RCW and the eight individual cases because of interactions among the
assumptions.
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Policies Designed to Reduce Greenhouse Gas Emissions
The second set of tests, called the Rapid Reduction scenario, examines the effect of measures
that might be imposed to supplement those already analyzed in the RCWP scenario. The
assumptions made in this case imply more aggressive response to the risks associated with rapid
climate change and the near-term adoption of strategies that rapidly reduce the rate of emissions
growth. To parallel the accelerated emissions case, eight separate policy strategies were also tested
individually and in combination in this exercise by varying key parameters in the model.
The tested policy alternatives included the following:
• A Production Fee Case, in which fees are imposed on the production of fossil fuels
in proportion to the CO2 emission potential. In this case, fees of S8.50/GJ were
imposed on unconventional oil production, S5.70/GJ on coal, S2.30/GJ on oil, and
S1.10/GJ on natural gas. These fee levels are specified in 1985$ and are phased in
over the period between 1985 and 2050.1S
15 The revenue implications of these fees (in billions of U.S. dollars) are as follows:
RCWP
Year US Global
2000 $30 $134
2025 $46 $338
Additional Production Fee
2000 $54 $293
2025 $73 $605
Consumption Fee
2000 $59 $255
2025 $70 $507
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• A Consumption Fee Case, in which a percentage fee, proportional to the carbon
content of the fuel, was levied on fuel use. Consumption fees were also imposed
in the RCWP case. In this sensitivity case, the fee on coal consumption was
increased from 28 percent of the price to 40 percent; the fee on oil use was
increased from 20 percent to 30 percent; the fee on natural gas use was increased
from 13 percent to 20 percent; the fee on electricity use was increased from 0 to 5
percent. These fees were phased in and fully applied by 2025.
• A High-mpg Car Case, in which global fleet-average auto efficiencies reach 65 mpg
in 2025 and 100 mpg in 2050.
• A High Efficiency Buildings Case, in which the rate of technical efficiency
improvement in the residential and commercial sectors improves substantially beyond
that assumed in the RCWP case. In this case, the rate of efficiency improvement
in the residential and commercial sectors is increased so that a net gain in efficiency
of 50 percent relative to the RCWP case is achieved in all regions.
• A High Efficiency Power Case, in which, by 2050, average powerplant conversion
efficiency improves by 50 percent relative to the RCWP case. In this scenario, the
design efficiencies of all types of generating plants improve rapidly. For example,
by 2025, oil-fired generating stations achieve an average conversion efficiency roughly
equivalent to that achieved by combined-cycle units today.
• A High Biomass Case, in which the availability of commercial biomass was doubled
relative to the assumptions in the RCWP case. In this case, biomass availability was
assumed to follow the trajectory outlined in the U.S. DOE Biofuels Program.
Conversion costs were assumed to fall by half relative to the assumptions in the
RCWP scenario.
• A No Coal Case, in which environmental fees of approximately S20/GJ in 1985$
drove coal out of the bulk power markets by 2050;
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• A Rapid Reforestation Case, in which deforestation is halted by 2000 and the biota
become a net sink for CO2 at a rate of about 1 Pg C per year by 2025, about twice
the level of carbon storage assumed in the RCWP case.
• A Do It All Case, in which all of the above measures are implemented
simultaneously. The impact is much less than the sum of the individual components
because many of the measures are not additive.
Figure 8-11 summarizes the results of the second set of sensitivity tests as compared with the
RCWP case. The results are illustrated in terms of the effect of each policy strategy in reducing
the warming commitment from the RCWP scenario in 2050 and 2100 relative to the RCW scenario
(for consistency with the Accelerated Emissions case). Figure 8-11 indicates that the measures that
reduce the warming to the greatest extent are those that (1) drive coal out of the power markets
(Case 7), (2) impose stiff fees on the production of fossil fuels (Case 1), and (3) increase the
assumed level of biomass availability (Case 6).
Conclusions From the Sensitivity Tests
This analysis demonstrates that policy choices can significantly affect the timing and
magnitude of future global warming. Comparing the results in Figures 8-10 and 8-11 suggests,
however, that the effects of policy choices that increase the rate of growth in greenhouse gas
emissions could be much larger than the effects of policies that accelerate reductions in future
emissions rates. In other words, it may be easier for government policy to worsen the problem than
to ameliorate it. If the policies evaluated here are representative of the range of relevant choices,
policies that increase emissions may make the situation much worse than current trends suggest, and
may have large effects very quickly.
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Chapter VIII
FIGURE 8-11
RAPID REDUCTION STRATEGIES:
ADDITIONAL DECREASE IN EQUILIBRIUM WARMING COMMITMENT
1. Carbon Fee
2. Consumption Tax
3. High MPG Cars
4. High Efficiency
Buildings
5. High Efficiency
Powerplants8
6. High Biomass
7. Coal Phaseout
g
8. Rapid Reforestation
Rapid Reduction Scenario
(Simultaneous
Implementation of 1-8)
Additional Percent Reduction
Relative to RCW Scenario
10 15
Percent
2050
2100
20
25
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February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter VIII
FIGURE 8-11 -- NOTES
Impact Of Rapid Reduction Policies On Global Warming
a High carbon emissions fees are imposed on the production of fossil fuels in proportion to the CO2
emissions potential. In this case, fees of S8.50/GJ were imposed on unconventional oil production,
S5.70/GJ on coal, $2.30/GJ on oil, and Sl.lO/GJ on natural gas. These fee levels are specified in
1985$ and are phased in over the period between 1985 and 2050.
b A percentage fee, proportional to the carbon content of the fuel, was levied on fuel use.
Consumption fees were also imposed in the RCWP case. In this sensitivity case, the fee on coal
consumption was increased from 28% of the price to 40%; the fee on oil use was increased from
20% to 30%; the fee on natural gas use was increased from 13% to 20%; the fee on electricity use
was increased from 0% to 5%. These fees were phased in and fully applied by 2025.
c Assumes that the average efficiency of new cars in the U.S. reaches 50 mpg (4.7 liters/100 km) in
2000 and that global fleet-average auto efficiencies reach 65 mpg in 2025 (3.6 liters/100 km) and 100
mpg (2.4 liters/100 km) in 2050.
d Assumes that the rate of technical efficiency improvement in the residential and commercial sectors
improves substantially beyond that assumed in the RCWP case. In this case, the rate of efficiency
improvement in the residential and commercial sectors is increased so that a net gain in efficiency
of 50% relative to the RCWP case is achieved in all regions.
' Assumes that, by 2050, average powerplant conversion efficiency improves by 50% relative to the
RCWP case. In this the design efficiencies of all types of generating plants improve significantly.
For example, by 2025, oil-fired generating stations achieve an average conversion efficiency roughly
equivalent to that achieved by combined-cycle units today.
f The availability of commercial biomass was doubled relative to the assumptions in the RCWP case.
In this case the rate of increase in biomass productivity is assumed to be at the high end of the range
suggested by the U.S. DOE Biofuels Program. Conversion costs were assumed to fall by half relative
to the assumptions in the RCWP case.
8 Environmental fees of about $20/GJ (in 1985$) are phased in by 2050. This has the effect of
gradually making coal uncompetitive in utility markets.
b A rapid rate of global reforestation is assumed. In this case deforestation is halted by 2000 and
the biota become a net sink for CO2 at a rate of about 1 Pg C per year by 2025, about twice the
level of carbon storage assumed in the RCWP case.
1 Impact on warming when all of the above measures are implemented simultaneously. The impact
is much less than the sum of the individual components because many of the measures are not
additive.
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter V1I1
Of the options available to slow the rate of emissions growth, the most promising near-term
strategies are measures to increase the efficiency of energy use. As noted earlier, these measures
are improving rapidly and provide other substantial economic, social, and environmental benefits.
The warming estimates for all of the combination scenarios considered in this report are
summarized in Table 8-8. Only the most aggressive policy case lowers realized warming below a
tenth of a degree Celsius per decade. Some experts have suggested this rate of change represents
a maximum consistent with acceptable adaptation for many species of plants and animals (Woodwell,
1987).
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Policy Options for Stabilizing Global Climate -- Review Draft
Chapter VIII
TABLE 8-8
Scenario Results For Realized And Equilibrium Warming
Realized Warming - 2°C Sensitivity
Accelerated Emissions
RCW
sew
RCWP
SCWP
Rapid Reduction
Realized Warming - 4°C Sensitivity
Accelerated Emissions
RCW
sew
RCWP
SCWP
Rapid Reduction
Equilibrium Warming Commitment - 2°C Sensitivity
Accelerated Emissions
RCW
sew
RCWP
SCWP
Rapid Reduction
Equilibrium Warming Commitment - 4°C Sensitivity
Accelerated Emissions
RCW
sew
RCWP
SCWP
Rapid Reduction
1985
0.5
0.5
0.5
0.5
0.5
0.5
1985
0.5
0.5
0.5
0.5
0.5
0.5
1985
0.7
0.7
0.7
0.7
0.7
0.7
1985
1.5
1.5
1.5
1.5
1.5
1.5
2000
0.7
0.7
0.7
0.6
0.6
0.6
2000
1.0
0.9
0.9
0.9
0.9
0.9
2000
1.1
1.1
1.0
1.0
1.0
1.0
2000
2.2
2.1
2.1
2.0
1.9
1.9
2025
1.5
1.2
1.1
0.9
0.9
0.8
2025
2.1
1.7
1.7
1.4
1.3
1.3
2025
2.4
1.7
1.6
1.3
1.2
1.1
2025
4.7
3.5
3.3
2.5
2.4
2.1
2050
2.8
1.9
1.6
1.1
1.0
0.8
2050
4.1
2.8
2.5
1.8
1.7
1.4
2050
4.3
2.7
2.2
1.5
1.3
1.0
2050
8.7
5.4
4.5
2.9
2.7
2.0
2075
4.5
2.7
2.0
1.3
1.2
0.8
2075
6.8
4.1
3.2
2.1
1.9
1.3
2075
6.4
3.8
2.7
1.6
1.4
.9
2075
12.4
7.5
5.4
3.2
2.8
1.7
2100
6.3
3.6
2.5
1.4
1.2
0.7
2100
9.6
5.6
4.0
2.3
2.0
1.2
2100
8.3
4.8
3.1
1.7
1.4
.7
2100
16.5
9.6
6.3
3.3
2.8
1.3
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February 21, 1989
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CHAPTER IX
INTERNATIONAL COOPERATION TO REDUCE GREENHOUSE GAS EMISSIONS
FINDINGS IX-2
INTRODUCTION IX-4
THE CONTEXT FOR POLICIES INFLUENCING GREENHOUSE GAS EMISSIONS IN
DEVELOPING COUNTRIES IX-5
Economic Development and Energy Use IX-7
Oil Imports, Capital Shortages, and Energy Efficiency IX-13
Greenhouse Gas Emissions and Technology Transfer IX-17
STRATEGIES FOR REDUCING GREENHOUSE GAS EMISSIONS IX-18
International Lending and Bilateral Aid IX-20
U.S. Bilateral Assistance Programs IX-21
Policies and Programs of Multilateral Development Banks IX-24
New Directions 1X-31
REDUCING GREENHOUSE GAS EMISSIONS IN EASTERN BLOC NATIONS IX-33
U.S. LEADERSHIP TO PROMOTE INTERNATIONAL COOPERATION IX-36
Restricting CFCs to Protect the Ozone Layer IX-36
International Efforts to Halt Tropical Deforestation IX-38
Ongoing Efforts Toward International Cooperation IX-42
REFERENCES IX-45
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter IX
FINDINGS
• Most of the expected growth in greenhouse gas emissions is from other countries, particularly
developing countries and the Eastern Bloc. Efforts to promote international solutions are
therefore essential to achieve global reductions in greenhouse gas emissions.
• Technological solutions and policy strategies for the U.S. and other western industrialized
nations may not be equally applicable in other parts of the world. Differences in economic
development, energy resources, and economic systems must be addressed in devising
international strategies to reduce greenhouse gas emissions.
• U.S. leadership has historically made important contributions to other important international
environmental agreements, such as the Montreal Protocol on Substances that Deplete the
Ozone Layer and the Tropical Forest Action Plan. In the future, U.S. leadership could
promote international cooperation to reduce emissions worldwide. Reductions in national
emissions may encourage similar actions by other nations and could serve as a valuable
demonstration that reductions are feasible.
• Developing countries could reduce the expected increase in greenhouse gas emissions
consistent with economic development and other environmental and social goals. Energy
efficiency improvements are already essential to reduce capital requirements for the power
sector, and efforts to halt tropical deforestation will provide many long-run economic and
environmental benefits. The U.S. can promote desirable changes in energy and
environmental policy in developing countries through judicious use of its bilateral aid
programs and its influence on loans extended by multilateral development banks.
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter IX
• The Soviet Union and Eastern Bloc nations are and will continue to be important
contributors to greenhouse gas emissions. The absence of market pricing has hindered
efforts to reduce the energy intensity of these economies but their governments have shown
increasing interest in curbing energy costs.
• There have already been some important first steps toward building a framework for
international cooperation to reduce the risks of climate change. The November 1988 meeting
sponsored by UNEP and WMO initiated a process that includes an intergovernmental
committee chaired by the United States to discuss policy responses.
DRAFT - DO NOT QUOTE OR CITE IX-3 February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter IX
INTRODUCTION
The greenhouse problem requires international strategies to promote global cooperation. An
important first step has been taken in this direction under the auspices of the United Nations
Environment Programme (UNEP) and the World Meteorological Organization (WMO). In 1988
these organizations helped organize an Intergovernmental Panel on Climate Change to review the
science, impacts, and response strategies associated with climate change. The U.S., Soviet Union,
China, Japan, and many other leading nations agreed to participate. Three panels were organized
to consider scientific issues (chaired by the United Kingdom), effects of climate change (chaired by
the Soviet Union), and policy responses (chaired by the U.S.). The first meetings are planned for
early 1989.
There is an important relationship between the domestic policies discussed in Chapter VIII
and the evolution of international cooperation that is the focus of this Chapter. U.S. actions can
promote further international cooperation and complementary strategies by other countries.
Consideration of the domestic policies reviewed in this report demonstrates that the U.S. no longer
views the problem as only a scientific concern. Further analysis and consideration of such policies
may also convince other nations of the seriousness of the risks and the need for action. U.S.
leadership in the United Nations and other international forums can have a major impact on the
evolution of international understanding and ultimately agreements, as illustrated by the Montreal
Protocol on Substances that Deplete the Ozone Layer.
Special efforts will be necessary to limit the growth in greenhouse gas emissions from
developing countries while addressing their need for energy and economic growth. Solutions to the
problems of climate change may be linked to other development needs, such as capital shortages and
increased recognition of local environmental problems. U.S. bilateral assistance programs and
DRAFT - DO NOT QUOTE OR CITE IX-4 February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter IX
participation in multi-lateral development banks (MDBs) provide an opportunity to promote policies
that reduce greenhouse gas emissions in developing countries consistent with their development needs.
Programs should be designed to increase developing countries' stakes in contributing to this global
effort, for example, through debt swaps, afforestation programs, and technology transfer agreements
that are linked to reductions in greenhouse gas emissions.
The need for international cooperation has already been recognized, and some important first
steps have been taken to establish a framework for international cooperation on scientific aspects
of the global warming and to discuss policy responses.
THE CONTEXT FOR POLICIES INFLUENCING GREENHOUSE GAS EMISSIONS IN
DEVELOPING COUNTRIES
Because of faster growth rates and greater needs for basic materials, the developing countries
will contribute an increasing share of greenhouse gas emissions (Figure 9-1). Any global effort to
reduce emissions will therefore have to take into account the very different needs, resources, and
other constraints in the developing countries, particularly their need to grow economically in order
to be able to meet basic human needs despite their limited capital resources for meeting development
objectives. These issues will have to be addressed in the international forums that are being created
specifically to deal with the greenhouse problem. However, the U.S. can also address these concerns
in the short term by recognizing the link between emissions of greenhouse gases and the investment
choices encouraged by bilateral aid and lending by multilateral development banks. Before we
discuss these options, however, it is useful to examine the different context within which developing
countries operate to get an idea of the energy and environmental issues they face and the priority
of their concerns.
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Policy Options for Stabilizing Global Climate -- Review Draft
Chapter IX
FIGURE 9-1
GREENHOUSE GAS EMISSIONS BY REGION
(RCW Scenario)
C02
25 -
1985 2000
CH4
1000 -
1985 2000
Other
Developing
China &
CP Asia
USSR&
CP Europe
Rest of OECD
United States
2100
Other
Developing
China &
CP Asia
USSR&
CP Europe
Rest of OECD
United States
Oceans
2100
DRAFT - DO NOT QUOTE OR CITE
IX-6
February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter IX
The context for policy formation in developing countries often differs substantially from that
in the industrialized countries, reflecting differences in political and economic systems, resources, and
societal needs. Some of the major issues associated with the formulation and implementation of
energy and related environmental policies in developing countries include socioeconomic equity,
financial viability, institutional structure and management of enterprises, and the burgeoning
awareness of environmental concerns. Our understanding of these issues is essential to developing
emissions reduction policies that are relevant to developing countries, that take into account the
conditions existing in these countries and the issues that are of most concern to them.
Economic Development and Energy Use
Developing countries are a much more diverse group than the member countries of the
OECD. They range from some of the poorest nations, such as Bangladesh and Ethiopia, to some
of the richest ones, such as Saudi Arabia and Singapore. Their annual income per capita varies from
$150 to $7000 (World Bank, 1987). The group includes oil and natural gas exporters and importers
at different levels of per capita income. Their economies vary from a centrally-planned one like
China to more market-oriented ones like Brazil and South Korea. Each country has a different mix
of institutions engaged in the supply of energy, reflecting different degrees of governmental control
and foreign involvement (Table 9-1).
Equity concerns play a strong role in the pricing of fuels. Preferential electricity tariffs for
residential customers are often accompanied by even lower tariffs for agricultural ones. (This is
not unlike the situation in some developed countries where low "lifeline rates" are charged for small
amounts of electricity consumption.) On the other hand, gasoline prices in developing countries are
typically set high relative to world market prices, since gasoline is used in cars that are primarily
owned by the rich. Petroleum taxes are an important instrument of social policy that can be adjusted
DRAFT - DO NOT QUOTE OR CITE IX-7 February 21, 1989
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-------
Policy Options for Stabilizing Global Climate - Review Draft Chapter IX
to cushion the impact of energy price increases, or to maintain higher prices when international
prices decline.
The price of coal in India and China, the two major developing countries that rely heavily
on coal, is subsidized with subsidies varying by sector. In China, since the coal price is too low, the
government provides subsidies varying from 10 to 27 yuan/ton (or $2.7 to $7.2) to coal producers
in order to encourage them to produce more coal (Dadi, 1988). Similarly, despite continual increases
in the price of coal in India, Coal India Limited (CIL), an Indian government enterprise that
produces over 90 percent of the country's coal, incurred losses equivalent to more than $8 per ton
(Hindu Survey, 1988).
Industrial energy use forms a major segment of overall energy use in the developing
countries. Because the industries are generally less modern than their counterparts in the developed
countries, they tend to be less energy-efficient as well (Table 9-2). According to AID, developing
countries can typically save 5-15 percent of commercial fuel through low cost measures and up to 25
percent through cost-effective retrofits (U.S. AID, 1988). A recent detailed study of the potential for
cost-effective electricity conservation in Brazil documented potential savings equal to more than a
fourth of currently-forecasted needs (Geller et al., 1988; see Table 9-3). The management of
government-controlled industries is often inefficient, as a comparison of similar products produced
by government-controlled and private-sector industries, even in the same country, will show.
Given adequate capital and technical knowledge, industries in a developing country can
operate just as efficiently as comparable ones in a developed country (Schipper, 198?). For example,
multinational companies operating in developing countries often use about the same amount of energy
per unit of output as the company's comparable plants in the developed countries.
DRAFT - DO NOT QUOTE OR CITE IX-9 February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter IX
TABLE 9-2
Efficiency of Energy Use in Developing Countries: 1984-85
Energy Use/ Average Annual
Country/Region Unit of GDP" Growth Rate (%)
North America6'0
Canada 0.80 -0.5
United States 0.61 -2.2
Average 0.62 -2.1
Oceania"0
New Zealand
Australia
Japan
Average
Europe"0
Luxembourg
Turkey
Portugal
Greece
Ireland
Norway
Sweden
Belgium
Netherlands
United Kingdom
Austria
Italy
Spain
Germany
Denmark
Switzerland
Average
0.50
0.45
0.29
0.32
0.65
0.56
0.49
0.44
0.44
0.40
0.40
0.36
0.36
0.35
033
0.33
032
0.31
0.27
0.25
0.34
+ 1.8
-0.5
-3.1
-2.5
•
-4.9
-1.0
+ 1.5
+ 1.2
-1.4
-1.4
-0.6
-2.2
-1.7
-2.0
-1.2
-1.8
+0.3
-1.7
-1.7
+ 0.3
-1.4
DRAFT - DO NOT QUOTE OR CITE IX-10 February 21, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter IX
TABLE 9-2 (continued)
Efficiency of Energy Use in Developing Countries: 1984-85
Country/Region
Asia*'
People's Republic of China
India
Pakistan
Taiwan
Thailand
Malaysia
Indonesia
Philippines
Bangladesh
Average
Latin America*'
Venezuela
Brazil
Mexico
Argentina
Average
West Africa"'f
Senegal
Morocco
Nigeria
Cote d'lvoire
Average
Energy Use/
Unit of GDP4
1.40
0.79
0.64
0.62
0.38
0.36
0.35
0.35
0.27
0.97
1.40
0.68
0.56
0.29
0.57
0.49
0.27
0.18
0.13
0.20
Average Annual
Growth Rate (%)
-1.3
+ 1.4
+4.2
+0.2
-0.8
+0.3
+ 3.3
-2.7
NA
+ 0.5
+4.6
+ 2.1
+2.2
+ 1.8
+2.7
+3.6
0.0
+ 9.4
+2.8
+6.5
' Gross domestic product metric tons of oil equivalent per $1,000 U.S. (constant 1980 dollars).
b 1985 data.
c Average annual growth rate for 1973-85.
" 1984 data.
e Average annual growth rate for 1973-84.
' Average annual growth rate for 1977-84.
NA = Not available.
Sources: Sathaye, et al., 1987; OECD/IEA, 1987.
DRAFT - DO NOT QUOTE OR CITE 1X-11 February 21, 1989
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Policy Options for Stabilizing Global Climate - Review Draft
Chapter IX
TABLE 9-3
Potential for Electricity Conservation in Brazil
End-Use
Area
Industrial
motors
Domestic
refrigerators
Domestic
lighting
Commercial
motors
Commercial
lighting
Street lighting
Total
Current
forecast
(TWh)
164.8
24.7
16.5
28.0
25.0
16.8
275.8
Savings
potential
(%)
20
60
50
20
60
40
-
Savings
potential
(TWh)
33.0
14.8
8.2
5.6
15.0 '
.62
83.3
Source: Geller et al., 1988.
DRAFT - DO NOT QUOTE OR CITE
IX-12
February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter IX
The energy sector is owned and operated by government-controlled corporations in the
poorer developing countries. These corporations often have little incentive to invest in reducing their
energy costs because they are protected from competition and rewarded more by measures of
production than efficiency of service. This is compounded by regulated prices that are often not high
enough to pay for the companies' expenses and non-payment or delayed payment for fuels purchased
from other government companies.
Oil Imports, Capital Shortages, and Energy Efficiency
Most developing countries are largely dependent on imports for commercial fuels. During
periods of high oil prices, import costs have resulted in serious hardship in these countries. In some
countries oil import costs exceeded 25 percent of export earnings in 1984 and much more than that
in earlier years (Table 9-4). Future increases in world oil prices may have an even more adverse
impact because of the rapid growth in the transportation sector in some countries.
A shortage of capital for large development projects is pervasive in developing country
economies and increasingly a constraint on the energy sector. Energy investments in developing
countries require a high percentage of available capital (Table 9-5). The World Bank and more
recently AID have reviewed the magnitude of energy shortfalls in developing countries and its
implications for economic development (World Bank, 1983; U.S. AID, 1988; see Table 9-6). AID
estimates that in a current trends scenario, AID-assisted countries would need to spend over $2.6
trillion for the power sector by the year 2008 to meet projected needs. This is an average of over
$125 billion per year, compared with the estimated $50 to $60 billion currently being spent annually.
Since current expenditures already consume a fourth or more of development budgets, this is
potentially a serious constraint on economic development. Aggressive conservation efforts could
reduce capital needs by 40-60 percent (Williams, 1988; World Bank, 1983).
DRAFT - DO NOT QUOTE OR CITE IX-13 February 21, 1989
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Policy Options for Stabilizing Global Climate -• Review Draft
Chapter IX
TABLE 9-4
Net Oil Imports and Their Relation, to Export Earnings
for Eight Developing Countries, 1973-1984
Net Oil Imports
(million U.S. dollars, current prices)
1973
1974
1977
1979
1981
Source: IMF, 1985 in Goldemberg et al., 1987.
1983
1984
Kenya
Zambia
Thailand
Korea
Philippines
Brazil
Argentina
Jamaica
India
Bangladesh
Tanzania
Kenya
Zambia
Thailand
Korea
Philippines
Brazil
Argentina
Jamaica
India
Bangladesh
Tanzania
1
11
173
276
166
986
83
71
308
-
47
0.1
2.2
11.1
8.6
8.8
15.9
2.5
18.1
10.6
.
12.8
27
30
510
967
570
3,230
328
193
1,170
92
153
Imports
4.1
5.1
20.9
21.7
20.9
40.7
8.3
27.3
29.7
26.5
38.0
57
53
806
1,930
859
4,200
338
242
1,750
172
102
as Percentage
4.8
9.5
23.1
19.2
27.5
34.7
6.0
32.4
27.5
36.1
20.2
113
72
1,150
3,100
1,120
316
63
2,170
6,380
2,080
6,920 11,720
351
309
3,067
247
174
of Export Earnings
10.2
8.2
21.6
20.6
24.4
45.4
4.5
37.7
39.3
37.4
34.8
302
490
-
509
306
26.9
7.8
30.9
30.0
36.8
50.4
3.3
50.3
-
64.6
52.7
208
274
1,740
5,580
1,740
8,890
-
-
-
286
175
21.2
20.8
27.3
22.8
35.4
40.6
-
-
-
39.4
47.0
219
454
1,480
5,770
1,470
7,470
-
-
-
314
156
20.3
21.4
20.0
19.7
27.8
27.7
-
-
-
33.6
42.3
DRAFT - DO NOT QUOTE OR CITE
IX-14
February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft
Chapter IX
TABLE 9-5
Annual Investment in Energy Supply As a Percent of
Annual Total Public Investment (Early 1980s)
Under 20%
Egypt
Ethiopia
Ghana
Nigeria
Sudan
20-30%
Botswana
China
Costa Rica
Liberia
Nepal
30-40%
Ecuador
India
Pakistan
Philippines
Turkey
Over 40%
Argentina
Brazil
Columbia
Korea
Mexico
Source: Munasinghe and Saunders, 1986.
DRAFT - DO NOT QUOTE OR CITE
IX-15
February 21, 1989
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Policy Options for Stabilizing Global Climate - Review Draft
Chapter IX
TABLE 9-6
World Bank Estimate of Capital Requirements for Commercial Energy
In Developing Countries, 1982-1992
Total Required Capital
Electricity
Oil and Gas
Coal
Total
Foreign Exchange Requirements
Electricity
Oil and Gas
Coal
Total
Low Income
17.6
12.1
.56
35.3
3.6
4.9
1.1
9.6
Middle Income
Oil Importers Oil
35.9
16.7
2.8
55.4
11.4
5.9
1.0
18.3
Exporters
13.1
40.0
_06
53.7
7.2
25.4
0.3
32.9
All Countries
66.6
68.8
_2£
144.4
22.2
36.2
2.4
71.2"
' Includes $10.4 billion for refineries that is not included in country group or individual fuel totals.
Source: The World Bank, 1983.
DRAFT - DO NOT QUOTE OR CITE
IX-16
February 21, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter IX
The added cost of more efficient products is often cited as an obstacle to efforts to improve
efficiency in capital-short developing countries. However, the high cost of capital may favor
investments in efficiency relative to investments in long lead-time supply projects, such as construction
of new powerplants. Because efficiency investments pay-off much more quickly, their economic
advantage increases with interest rates (Geller, 1987). However, this comparison is not visible to
consumers who are not paying the marginal cost of new energy supplies, and energy and utility
companies may have no interest in efficiency for institutional reasons (Goldemberg et ah, 1987).
Greenhouse Gas Emissions and Technology Transfer
The transfer of state-of-the-art technology will be necessary to significantly reduce commercial
energy use in developing countries. However, there are many obstacles to the development and
dissemination of such technologies from industrialized countries to potential competitors in developing
countries.
Even when state-of-the-art technology is made available, developing country governments or
manufacturers may be reluctant to accept it. Such technology will carry a higher capital cost and
may produce products of higher quality at a higher price. Heavily-indebted developing countries
may not be in a position to secure the additional capital needed for state-of-the-art technology.
Developing country markets tend to be more price-sensitive given the lower discretionary income
enjoyed by consumers in these countries. A program to reduce the cost of capital for more efficient
plants and equipment, and another to induce consumers to purchase products with higher first-costs
yet lower lifecycle costs are essential to encourage developing country consumers to acquire and use
state-of-the-art technology.
DRAFT - DO NOT QUOTE OR CITE IX-17 February 21, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter IX
Most developing countries need technologies that take advantage of abundant but unskilled
labor and that minimize the need for capital, and many have more biomass resources than fossil fuels
(Goldemberg et al., 1987; Williams, 1988). Improved versions of some low-cost technologies no
longer used in the industrialized countries, such as wood-burning cookstoves, are therefore a high
priority. Developing countries are still rapidly increasing their consumption of basic materials,
whereas such consumption is being replaced by high value-added fabrication and finishing activities
in industrialized countries (Williams et al., 1987). This implies substantial differences in research
priorities, but there are few institutions and much less money devoted to meeting their needs. The
tendency, reinforced by the risk-averse policies of multilateral banks, is to make do with what is tried
and true in the industrialized nations.
STRATEGIES FOR REDUCING GREENHOUSE GAS EMISSIONS
Studies of future energy use in developing countries indicate that the industrial sector and
power generation will retain their large share of total energy demand (Sathaye et al., 1988).
However, the mix of fuels is less certain. A slower growth rate would mean continued use of
traditional, and therefore, biomass fuels. On the other hand, faster economic growth would reduce
this burden, but it would add to that caused by transportation, as individuals with higher income
would demand greater mobility and consequent higher consumption of petroleum products. Strategies
to reduce CO2 emissions will therefore depend on the rate of economic growth in the developing
countries.
Energy-pricing reform is essential to promote efficient use of fuels; existing subsidies and
price controls are major barriers to investments in energy conservation. However, the short-term
result may not be to reduce CO2 emissions since many countries have substantial unmet needs that
would utilize any supplies made available by efficiency improvements. Coal is also the least expensive
DRAFT - DO NOT QUOTE OR CITE IX-18 February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter IX
fuel other than biomass in most developing countries, and market pricing may lead to increasing the
share of energy from this carbon-intensive source.
AID, the World Bank, and other development agencies have actively promoted energy-pricing
reform in developing countries. However, a recent AID analysis concludes that such efforts have
often failed due to fears that reforms will be economically and politically destabilizing. However,
effective pricing reform does not necessarily require radical reorganization of economies. Hungary,
for example, has achieved substantial improvements in agricultural productivity by creating economic
incentives while maintaining a primary role for cooperatives (Chandler, 1986). Further study may
help identify ways to overcome this problem, but a realistic expectation may be gradual price
increases and structural reform to reduce future interference in energy markets (U.S. AID, 1988).
Improvements in energy efficiency in developing countries may not lead to emission
reductions in absolute terms because the energy made available may meet unmet needs and pent up
demands. This is consistent with efforts to promote economic growth but implies that even highly
successful conservation programs may not avoid substantial emissions growth in these countries.
However, over the long run the result will be less emissions than would result from continued
inefficient use of energy. Pricing reform similarly may not always lead to reduced emissions of
greenhouse gases. For example, removing subsidies for kerosene and LPG may push some consumers
back to inefficient use of traditional fuels (Leach, 1987, 1988). This may promote deforestation and
a net increase in CO2 emissions if the only alternative is wood from freshly-felled trees. Continued
subsidies for modern cooking fuels for some transition period might be desirable in order to reduce
CO2 emissions.
Several financial strategies can promote improved industrial efficiency by increasing the capital
available for desired investments. One traditional financial approach is to allocate capital for
DRAFT - DO NOT QUOTE OR CITE IX-19 February 21, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter IX
designated purposes, such as improving energy efficiency, sometimes at subsidized rates. Power sector
loans also could be tied to stringent conservation targets involving utilities in promoting conservation
as in some industrialized countries. Governments also sometimes deliberately seek to increase
competition within the industrial sector, sometimes inviting foreign collaboration, as a way of forcing
companies to increase capital spending.
As capital becomes expensive, governments have begun to tap into private capital markets
by floating bonds in targeted funds (e.g., the Korean, Taiwanese, or Indian funds introduced in
international markets). Domestic markets are being tapped as well in similar ways. Governments
could target private capital for proven technologies and government funds for investment in novel,
yet economic, energy conservation schemes specially targeted to reduce CO2 emissions. Industrialized
countries may help by inducing banks to reduce the interest charged for investment targeted for CO2
emissions abatement strategies.
Another possible innovative approach is for governments to allow the release of so-called
"black money" funds locked away by private individuals to evade taxes, if directed to investments for
CO2 emissions abatement. In some countries black money may account for 30-40 percent of total
GDP (Economist, August, 1988). Placing this money in circulation would mean that governments
would have to forego or reduce taxes on these funds, in effect conceding that they would not collect
them anyway without substantial increase in enforcement.
International Lending and Bilateral Aid
The U.S. can help developing countries reduce their greenhouse gas emissions through its
foreign aid programs and contributions to the World Bank and other multilateral development banks
(MDBs). Although all such programs (U.S. and foreign) address only a small percentage of total
DRAFT - DO NOT QUOTE OR CITE IX-20 February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter IX
investment in developing countries, they can exert disproportionate influence because they leverage
much greater amounts of funds and certify the financial merit of particular technologies and projects.
U.S. Bilateral Assistance Programs
Most U.S. non-military bilateral assistance is administered by the Agency for International
Development (AID), including energy- and forestry-related assistance. AID has attempted to improve
its sensitivity to environmental concerns in recent years and estimates that it now spends over $100
million for activities aimed at conserving natural resources (U.S. AID, 1987). The Agency has
expanded the number of environmental professionals and established an Office of Forestry,
Environment, and Natural Resources.
Most AID support for energy is provided through regional and national programs, although
a few projects are funded through a central Office of Energy. Some coordination is also encouraged
by an Agency Sector Council for Energy and Natural Resources. Energy-related funding for the past
five years has averaged slightly less than $200 million per year; the FY 1986 budget included $254
million for energy projects in 23 countries, of which $180 million was spent for electric power (U.S.
AID, 1988). This is about 4 percent of the total AID budget, much less than the share allocated to
energy by the World Bank and many other bilateral aid programs (Gray et al., 1988).
AID has funded some analysis of promising projects for biomass fuels that indicate the
possibilities for redirecting some bilateral assistance to more effectively promote rational energy
planning and development and adoption of improved technology. The Multi-Agency Working Group
on Power Sector Innovation, coordinated by AID's Office of Energy, was organized in 1987 to
promote cooperation among international institutions involved in power sector development. AID
has proposed using this group and the International Development Assistance Committee to focus
DRAFT - DO NOT QUOTE OR CITE IX-21 February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter IX
greater attention on the energy/environment relationship (U.S. AID, 1988). Proposals have also been
made to expand the scope of the Consultative Group, on International Agricultural Research, a highly
successful international consortium of lenders for improving crop yields and production in developing
countries, to encompass agroforestry, bioenergy, and tropical ecology.
Current AID priorities are to identify projects that utilize indigenous energy resources and
that have the greatest potential for replication. AID will attempt to broker technical and financial
assistance for promising projects, emphasizing private sector participation. AID's funding priorities
are also shifting toward the poorest nations, which generally implies countries with lower energy
growth rates - although sometimes high rates of deforestation (Gray et al., 1987). AID is proposing
to give greater attention to the environmental implications of the energy sector
AID has steadily upgraded its commitment to forestry in recent years, from about $20 million
in 1979 to $56.2 million for 146 projects in FY 1987 (U.S. AID, 1987; Stowe, 1987; Table 9-7).
Agroforestry has been emphasized along with training and institution building. A large amount of
support has been given to tree planting and forestry-related activities through the Food for Peace
Program (PL 480); the program is responsible for direct tree planting on an estimated 1.5 million
hectares in 53 countries during the early 1980s (Joyce and Burwell, 1985) and for 38 tree-planting
projects in 23 countries in FY 1987, mostly in Africa (U.S. AID, 1988). Combining bilateral and
food-aid assistance, AID's tropical forestry programs exceeded $82 million in FY 1987. AID has
also been a strong supporter of the Tropical Forest Action Plan.
If the U.S. seeks to promote reductions in greenhouse gas emissions in developing countries,
AID would logically play a major role. Section 106 of the Foreign Assistance Act already authorizes
AID programs to promote renewable energy and improvements in energy efficiency. Several
proposals have been made for greatly expanded efforts in this area. A working group of the Atlantic
DRAFT - DO NOT QUOTE OR CITE IX-22 February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft
Chapter IX
TABLE 9-7
U.S. AID Forestry Expenditures by Region
Number of
Region
Africa
Asia/Near East
Latin America/
Caribbean
Central Bureaus
Countries
With
Projects
23
11
12
NA
Number of
Projects
Active
in FY 1987
45
39
46
16
Number of
New Starts
3
1
3
0
Number
Completed
3
6
8
0
LOP
Forestry
Obligations
(in $1,000)
95,150
273,212
140,241
78,103
FY 1987
Forestry
Obligations
(in $1,000)
13,960
17,337
17,398
7,488
Totals
46
146
17
$586,706
$56,183
Note: Many forestry projects are components of larger natural resource and agricultural projects. To
determine the forestry component, a percentage of the total LOP funding was estimated for
significant forestry activities based on judgments made by A.I.D. staff and contractors. This
percentage was then applied to each year's obligations to arrive at annual figures. Projects
can receive funding obligations at any time during the life of the project.
Source: IDEA Inc., 1988.
DRAFT - DO NOT QUOTE OR CITE
IX-23
February 21, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter IX
Council of the United States and the Member Committee of the U.S. World Energy Conference
recommended expanding AID's energy assistance programs to promote greater private-sector
investment. They suggest using the revolving loan fund and grant program administered by the
Bureau for Private Enterprise to make energy loans; its current priority is agri-business (Gray et al.,
1988).
Another recent study by the American Council for an Energy-Efficiency Economy proposes
that AID's energy budget be increased to $50-$100 million per year. The authors would redirect aid
programs away from support of specific projects in favor of building the capabilities of individuals and
institutions within developing nations. They conclude that increasing private-sector involvement should
be a high priority, noting that U.S. companies could be encouraged to market energy-efficient
technologies with the assistance of the Overseas Private Investment Corporation, the Export-Import
Bank, and the Trade and Development Program (Chandler et al., 1988).
AID is not the only U.S. agency involved in bilateral assistance. For example, both the
Department of Agriculture and the Peace Corps support international cooperative forestry programs.
The former has an Office of International Cooperation and Development exclusively devoted to
international activities and also funds some research (Stowe, 1987).
Policies and Programs of Multilateral Development Banks
The U.S. contributes over $1 billion to MDBs annually, an amount that leverages many times
as much actual borrowing through co-financing and other arrangements. Much of the activity of
these banks is directly or indirectly related to greenhouse gas emissions through loans for energy
projects, forestry, and agriculture. U.S. influence on these institutions is substantial, though they
are not controlled by the U.S. government. Voting on each bank's board is through a board of
DRAFT - DO NOT QUOTE OR CITE IX-24 February 21, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter IX
directors whose membership is proportional to the size of contributions, giving the U.S.
percent in the World Bank. (U.S. recommendations on specific loans, however, have been outvoted.)
The U.S. is the largest contributor to the Bank, and the Bank president has traditionally been an
American. Congress has directed use of the U.S. "voice and vote" to promote several selected
policies, such as human rights concerns and the use of "light capital technologies" (22 U.S. Code Sec.
262f and 262d).
The MDBs are able to influence the policies of developing countries to some degree because
loans and aid tend to be offered on relatively favorable terms and bank support can help countries
obtain credit from lenders. MDB lending has taken on even greater significance as the debt burden
and capital requirements of developing countries have grown enormously in recent years. This
influence has been used in ways that have had both positive and negative impacts on the energy and
forestry sectors. For example, the World Bank has been a strong advocate of energy-pricing reforms
(World Bank, 1983; Goldemberg et al., 1988). However, studies have also documented numerous
MDB projects that lead directly and indirectly to deforestation, including roads, dams, tree crop
plantations, and agricultural settlements (Repetto, 1988).
About one-fourth of World Bank lending goes to energy-related projects, or nearly $4 billion.
The rate for other MDBs ranges from 9 percent by the African Development Bank to 34 percent
for the Asian Development Bank (Gray et al., 1988). Traditionally, a majority of this funding has
gone for development of very large power projects (Table 9-8). By one estimate, over 90 percent
of multilateral and bilateral energy assistance has been for large systems for the generation,
transmission, and distribution of electricity; new and renewable energy sources have received about
3 percent and end-use efficiency measures less than 1 percent of total energy-related loans
(Goldemberg et al., 1987; see Table 9-9).
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Policy Options for Stabilizing Global Climate — Review Draft
Chapter IX
TABLE 9-8
World Bank Energy Sector Loans in 1987
(Million U.S. Dollars)
Eastern &
Southern Western East Asia South
Africa Africa & Pacific Asia
Europe,
Middle Latin
East & America &
N. Africa Caribbean Total
Oil/gas/coal
Hydroelectric
Total
20.0
63.0
83.0
15.0
6.3
21.3
0.0
684.8
684.8
548.0
1,312.0
1,860.0
0.0
527.0
527.0
104.4
423.8
528.2
687.4
3,016.9
3,704.3
Source: World Bank, 1987.
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February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft
Chapter IX
TABLE 9-9
Expenditures of Multilateral and Bilateral
Aid Agencies in the Energy Area
(millions of current dollars)
Conventional
Power Gener-
ation (Hydro,
Nuclear,
Thermal),
Transmission;
Distribution;
Power Sector
Studies
MULTILATERAL AID
World Bank
(FY 1972-
December 1978) 5,210
Inter-American Development
Bank
(FY 1972-FY 1978) 2,596
Asian Development Bank
(FY 1972-FY 1978) 1,183
European Development Fund
(to May 1978) 141
U.N. Development Programme
(to Jan. 1979) 72
U.N. Center for Natural
Resources, Energy and
Transport
(to Jan. 1979) 3
Subtotal 9,205
Fossil Fuels
Recovery
(includes
Studies and
Training)
305
158
21
-
23
5
512
New and Technical
Renewables Assistance,
(includes Energy
Geothermal, Planning,
Fuelwood) Other
170
4
0
9
29 13
4 5
216 18
Total
Energy
Aid
5,686
2,758
1,204
150
137
17
9,952
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February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft
Chapter IX
TABLE 9-9 (continued)
Expenditures of Multilateral and Bilateral
Aid Agencies in the Energy Area
(millions of current dollars)
Conventional
Power Gener-
ation (Hydro,
Nuclear,
Thermal),
Transmission;
Distribution;
Power Sector
Studies
Fossil Fuels New and Technical
Recovery Renewables Assistance,
(includes (includes Energy Total
Studies and Geothermal, Planning, Energy
Training) Fuelwood) Other Aid
BILATERAL AID
French Aid
(1976-1979) 229
Canadian International
Development Agency
(1978-1979, 1979-1980) 88
German Aid
(1970-present) 1,925
Kuwait Fund
(FY 1973-FY 1978)
437
Netherlands-Dutch
Development Cooperation
(1970-present) 119
U.K. Overseas Devel.
Admin.
(1973-present) 146
U.S. AID
16
41
99
71
30
81
1
48
280
91
2,095
536
198
149
(FY 1978-FY 1980)
Grand Total
Percentage in Each Sector
403
12,719
91
2
757
5
96
437
3
46
121
1
546
14,033
100
Source: Goldemberg et al., 1987.
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter IX
The World Bank has had a major role in financing energy sector expansion in the developing
countries that are growing most rapidly and relying most heavily on fossil fuels, including China,
India, and Pakistan. Coal resources in these countries are often characterized by low heating values
and the generation and distribution of electricity is typically much less efficient than in the
industrialized countries. Bank projects, therefore, represent a large share of carbon emissions from
developing countries.
In 1987 the World Bank announced a general commitment to upgrade its support for
environmental analysis and programs (World Bank, 1987). The Bank has created a new
environmental department, increased environmental staff, and begun a process of preparing
environmental assessments on about 30 developing countries. Special attention is being given to
identifying regional environmental projects in Africa. Support for tropical forest conservation and
development has also been made a high priority; funds will increase from $152 million in FY 1987
to $350 million in FY 1989.
Some power sector loans have important conservation components; for example, a recent loan
to Zimbabwe includes $44 million to upgrade generating equipment, rehabilitate transmission lines,
and train workers to increase total output (World Bank News, January 14, 1988). The Bank has
used its influence to support energy-pricing reforms and the elimination of subsidies and has funded
a small number of conservation programs through its Energy Sector Management Assistance Program
(Table 9-10). Some industrialization loans may also result in substantial improvements in energy
efficiency, although such improvements are not a primary purpose for these loans.
The Bank plans to maintain energy loans as a relatively constant percentage of its total
lending (Gray et al., 1988). However, recognizing that capital needs for energy in developing
countries are expected to grow much faster than available funding, the Bank plans to increase its
analytical, policy, and technical advisory roles and to become more of a catalyst for funds from
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Policy Options for Stabilizing Global Climate - Review Draft Chapter IX
TABLE 9-10
World Bank Energy Conservation Projects:
Energy Sector Management Assistance Program (ESMAP)
Energy Efficiency Initiatives
Industrial Energy Efficiency
Program Design and Institutional Support (Senegal, Ghana)
Energy Audits (Syria)
• Training of Local Staff (Tanzania)
Power Efficiency (Many Countries)
• Design of Programs to Reduce Technical and Non-Technical Losses
Pre-Feasibility Studies for Life Extension and Rehabilitation Projects
Utility Organization Studies
Electricity Savings in Buildings
• Energy Efficient Building Code (Jamaica)
• Appliance Labeling (Jamaica)
Household Energy Savings
Household Energy Strategy Studies
• Improved Cookstoves Projects
Improved Charcoaling
Energy-Environmental Studies
Energy Supply Options to Steel Industry in Carajas Region (Brazil)
Source: WRI, 1988a
DRAFT - DO NOT QUOTE OR CITE IX-30 February 21, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter IX
non-Bank sources. The Bank, like AID, plans to give more attention to private power generation
and other innovative means of financing new power sources.
A Bank representative cited several obstacles to increased support for conservation at an EPA
workshop (WRI, 1988a). One is that the Bank traditionally has found it difficult to fund relatively
small projects; ways must be found to package them as an element of a larger loan. (This was done
in the case of a large power loan to Brazil, which included $2 million for analysis of conservation
opportunities.) Implementation of projects that require actions by many individuals is similarly
perceived as difficult. Some of the most inefficient industries may be judged uneconomic and
therefore inappropriate candidates for loans. Finally, the recipient governments have to be interested
and must possess the necessary technical skills to implement conservation programs.
Another problem is the availability of proven technology suited to the needs of developing
countries. As discussed above, the technological needs of developing countries differ from the
industrialized countries in many areas. However, lending criteria tend to discourage the search for
new or innovative technologies by restricting financing to practices that have been fully proven in
practice (Daffern, 1987). This reflects an understandable desire to minimize risks, but the effect is
often to finance equipment that is not the most efficient. Promising alternatives that would utilize
biomass and other local resources are also neglected because the technologies are not widely used
in the industrialized countries (Williams, 1988).
New Directions
The possibility of redirecting bilateral aid and Bank loans to further energy conservation and
other strategies to reduce greenhouse gas emissions was discussed at the EPA workshop on
developing country issues. One proposed remedy is a shift in Bank energy sector lending to general
DRAFT - DO NOT QUOTE OR CITE IX-31 February 21, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter IX
energy programs as opposed to specific projects as a way of facilitating more funding of demand-
side efforts (Goldemberg et al., 1988). This proposal may be difficult to implement but may receive
more attention as capital constraints lead to greater interest in conservation.
A recent study of innovative financing mechanisms by the World Resources Institute proposes
that the MDBs place greater emphasis on promoting policy reforms in conjunction with loan
agreements to protect natural resources. The authors suggest that the international development
agencies identify and analyze the effects of tax, tariff, credit and pricing policies, as well as the terms
and administration of concession agreements, on the use of resources (Repetto, 1988, p. 41).
A possible strategy for creating an economic incentive for protection of tropical forests
involves payment of annual fees for custodian services-protection from squatters and illegal
development~to affected nations in proportion to the areas under protection (Rubinoff, 1985).
Agreements to protect 100 million hectares, or roughly 10 percent of the world's remaining moist
tropical forest, might cost on the order of three billion dollars. The status of reserves would be
monitored and payments adjusted accordingly. In this way tropical countries would be paid for some
management costs, reflecting some of the benefits thereby provided to the rest of the world.
Section 119 of the Foreign Assistance Act requires AID to prepare environmental assessments
of its major actions, including effects on the global environment.1 AID is also specifically directed
to consider the impacts of its programs on tropical forests (22 CFR § 2151(a), (p); see also Stowe,
1987, p. 73-74).
1 AID procedures for preparing environmental assessments are published in the Code of
Federal Regulations, Volume 22, Part 216.
DRAFT - DO NOT QUOTE OR CITE 1X-32 February 21, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter IX
The importance of these issues is suggested by increasing Congressional interest (Stowe, 1987;
Rich, 1985, p. 681). Section 539 of Public Law 99-591 directs the Secretary of the Treasury to
instruct U.S. Executive Directors in each of the multilateral development banks to take a number
of steps to support environmental reform measures and also requires the Treasury Department to
report on progress toward these objectives (U.S. Treasury Department, 1988). The Department's
most recent report provides mixed reviews of the MDBs' responsiveness to environmental concerns.
As already noted, the World Bank announced a higher priority for environmental concerns in 1987,
but the report states that "The Bank has not moved effectively in the area of energy conservation."
REDUCING GREENHOUSE GAS EMISSIONS IN EASTERN BLOC NATIONS
The Soviet Union is the third largest source of carbon dioxide emissions and together with
Eastern European nations is likely to remain a significant contributor to global greenhouse gas
emissions in the years to come (Figure 9-1). The energy policies of these countries will therefore
have an important influence on the greenhouse problem.
The Soviet Union has enormous energy resources, although much of it, including half the
world's accessible coal, is in relatively remote areas of Siberia. Soviet oil production is roughly equal
to the total production of all Middle Eastern countries combined and the Soviets also rank first hi
gas production and third in coal production. Coal was the dominant energy source until the late
1950s but declined to less than 30 percent in 1977 with the growth in oil production (Table 9-11).
Future plans call for increasing reliance on natural gas and nuclear power and renewed growth in
coal use; large coal-burning powerplants and coal slurry pipelines are now under construction. Other
Eastern European nations, particularly Poland, East Germany, and Czechoslovakia, are even more
dependent on coal (WR1, 1988).
DRAFT - DO NOT QUOTE OR CITE IX-33 February 21, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter IX
The energy intensity of the Soviet economy changed relatively little between 1970 and 1985,
in contrast with the substantial reductions achieved during the same period in the U.S. and other
industrialized nations. The government has become increasingly interested in energy conservation
because of the growing capital and fuel costs of energy production. More than 20 percent of national
capital investments and 14 percent of primary energy resources are consumed by the energy supply
system (NAS, 1987). Oil is also a valuable export commodity, and known reserves may be exhausted
at current production rates by the year 2000. Siberian reserves may be large but production costs
will be much higher (WRI, 1988).
According to a recent report by a Soviet energy expert, improvements in energy efficiency
continue to prove elusive contrary to official progress reports (Martynenko, 1988). This is because
industry does not pay market prices for energy and therefore has little economic incentive to
conserve. However, the government is gradually increasing fuel costs -within the Soviet economy and
recent economic reforms may give industry greater incentive to conserve (NAS, 1987).
Energy pricing and planning in Eastern Europe is complicated by trade agreements with the
USSR. These countries have provided labor for construction on Soviet oil and gas projects in return
for options to purchase oil at a price equal to the average price paid for Soviet oil exports over the
previous five years--a rewarding arrangement when prices were rising but unattractive at recent low
oil prices (WRI, 1988).
The Soviet Union and United States currently have cooperative agreements on both climate
change and energy conservation. The U.S.-USSR Agreement on Cooperation in the Field of
Environmental Protection lists numerous projects on atmospheric science. The first U.S.-USSR
Symposium on Energy Conservation was held in Moscow in June 1985 and several meetings followed,
most recently in October 1988. A program of cooperative research has been developed,
DRAFT - DO NOT QUOTE OR CITE IX-35 February 21, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter IX
administered in the U.S. by the National Academy of Sciences (NAS, 1987; Memorandum of the
Soviet-American Symposium, 1988). The Soviet Union has also independently expressed strong
interest in global climate change problems. At the November 1988 meeting on global climate issues
in Geneva sponsored by WMO and UNEP, the Soviet Union agreed to chair a panel on the effects
of climate change.
U.S. LEADERSHIP TO PROMOTE INTERNATIONAL COOPERATION
The international and bilateral cooperation already in place has established a solid foundation
for discussion of policy responses; however, there is much that needs to be done before this
discussion and analysis leads to agreement on necessary actions. Several precedents suggest that
U.S. leadership can help achieve agreement on response strategies. Two important sources of
greenhouse gas emissions, the use of CFCs and tropical deforestation, have already been the subject
of international agreements that should moderate global warming. In both cases, action was taken
for reasons largely unrelated to climate change, but examination of the evolution of these agreements
may suggest factors conducive to agreement on climate change.
Restricting CFCs to Protect the Ozone Layer
In September 1987, twenty-four nations signed an agreement in Montreal (the Montreal
Protocol) to reduce emissions of CFCs 50 percent by 1999 because of growing concern about the
effect of these chemicals on stratospheric ozone. The reductions are to be achieved through a phased
process beginning with a freeze six months after the Protocol goes into effect (January 1, 1989, or
shortly thereafter) and a 20 percent reduction by July, 1993. The U.S. ratified the Montreal Protocol
on April 21, 1988. EPA issued regulations consistent with the requirements of the Protocol on
August 1, 1988 (Federal Register, Aug. 12, 1988). For a description of the terms of the Protocol and
DRAFT - DO NOT QUOTE OR CITE IX-36 February 21, 1989
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Policy Options for Stabilizing Global Climate - Review Draft Chapter IX
U.S. regulations, see REGULATIONS AND STANDARDS in CHAPTER Mil. These regulations also
will go into effect at the time the Protocol takes effect.
Aside from its direct impact on reducing emissions of important greenhouse gases, the terms
of the Protocol and the process that led up to the agreement offer some valuable insights for
cooperation to address climate change. Developing nations, which currently use only about 15
percent of CFCs, were concerned that emissions reductions might hinder their economic growth.
Therefore, to encourage their participation, Article 5 of the Protocol allows countries with
consumption less than 0.3 kg per capita to delay compliance by 10 years so long as they do not
exceed that amount. (U.S. CFC consumption was more than 1 kg/capita in 1985). The industrialized
countries also agreed to provide technical assistance and financial aid in support of developing
countries' efforts to adopt alternatives.
The Protocol was negotiated over a two-year period, but the foundations were laid over a
period of a decade or more. Intergovernmental meetings were first held in 1977 and 1978 (Stoel
et al., 1980). A consensus-building scientific process, the Coordinating Committee on the Ozone
Layer, was created by the UNEP Governing Council in 1977. The Council decided to convene a
working group of legal and technical experts in 1981, and the first meeting took place in January
1982. When agreement on proposals for action at first proved impossible, the participants came to
an agreement in March 1985 that provided a framework for scientific cooperation: the Vienna
Convention for Protection of the Ozone Layer. The Convention also committed the signatories to
hold workshops and exchange information as the basis for further efforts to achieve a protocol.
Some of the factors that facilitated the Protocol may provide some insight into possible
strategies for future efforts to achieve agreements to reduce greenhouse gases (Benedick, 1987). The
existence of an international scientific consensus report prepared under WMO auspices, Atmospheric
DRAFT - DO NOT QUOTE OR CITE IX-37 February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter IX
Ozone 1985, helped avoid debate about the underlying seriousness of the problem. The workshop
process and informal negotiations that they allowed proved to be very conducive to consensus
building. UNEP served a valuable organizing role and provided a valuable objective international
forum.
According to the chief U.S. negotiator, U.S. leadership had a major role. "The treaty as
eventually signed was based upon the structure and concept advanced by the United States late last
year." In addition to governmental efforts, such as a series of diplomatic initiatives, the U.S. role
includes industry actions to take responsibility and express support for the proposed emission controls,
efforts undertaken by public interest groups to inform the public, and threats of unilateral action and
trade sanctions by members of Congress.
International Efforts to Halt Tropical Deforestation
There has also been substantial recent international cooperation on the problem of tropical
deforestation. These efforts are of substantial interest because of some of the similarities between
the obstacles to solving the tropical deforestation problem and the larger greenhouse problem. In
both cases, there is a need for industrialized countries to help developing countries implement policy
changes that may be costly and difficult. Mechanisms for achieving international cooperation must
be found, substantial amounts of financial assistance must be provided to developing countries, and
politically-difficult policy choices must be made.
The Tropical Forestry Action Plan is a promising response to this challenge (WRI, 1985;
FAO, WRI, World Bank, UNDP, 1987). The Plan was developed by a consortium of institutions
concerned about tropical deforestation, including the U.N. Food and Agriculture Organization (FAO),
the U.N. Development Programme (UNDP), the World Bank, the World Resources Institute (WRI),
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Policy Options for Stabilizing Global Climate -• Review Draft Chapter IX
and representatives of more than 60 tropical countries. The task force that drafted the Plan included
Brazil's Secretary of the Environment and one of India's former Secretaries of the Environment. The
broad and highly-visible sponsorship of the Plan has helped to highlight the important benefits
provided by tropical forests and to draw attention to their accelerating loss. Equally important, the
Plan offers the broad outlines of a solution, including regional and functional budget proposals. The
total budget calls for $8 billion over a five-year period.
The Plan has become a focal point for cooperative efforts by bilateral aid agencies and has
influenced World Bank policies (Wolf, 1988; Stowe, 1987).2 Ultimately, the Plan's success is
dependent on the cooperation and support of the affected developing countries, and many of them
are preparing national action plans and increasing national support for reforestation (WRI, 1988).
The International Tropical Timber Organization (ITTO) is another important mechanism for
north-south cooperation on tropical forest management. The ITTO was created by a March 1985
agreement reached under the auspices of the U.N. Conference on Trade and Development
(UNCTAD), primarily as a commodity agreement to facilitate economic use of tropical timber; its
purposes include "expansion and diversification of international trade," a "long-term increase in
consumption," and greater access to international markets. However, unlike traditional commodity
agreements, the ITTO explicitly recognizes the importance to conservation efforts and management
policies of the premise of sustainable use. The connection has thus been made between conservation,
economic development, and the export of resources to industrialized countries (Wolf, 1988; Forster,
1986).
2 Periodic reports on progress implementing the Action Plan are available from the TFAP
Coordinator, FAO Forestry Department, Via delle Terme di Caracalla, 00100 Rome, Italy.
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Policy Options for Stabilizing Global Climate - Review Draft Chapter IX
The importance given to promoting cooperation between tropical nations and industrialized
consumers of tropical hardwoods is evident in the ITTO organization; the headquarters is in Japan,
a very large consumer, and the executive director is from Malaysia, an important producer. Another
promising sign is that at the first meeting in April 1987, Japan announced a pledge of $2 million for
research on reforestation and sustainable management.
The ITTO also affords a forum for addressing the linkage between industrial country policies
and resource exploitation in developing countries. A recent WRI study concludes that "industrial-
country trade barriers in the forest products sector have been partially responsible for inappropriate
investments and patterns of exploitation in the Third World Forest industries. . . . [Negotiations
between exporting and importing countries should reduce tariff escalation and non-tariff barriers to
processed wood imports from the tropical countries, and rationalize incentives to forest industries in
the Third World" (Repetto, 1988).
Looking to the future, increased international cooperative efforts will be necessary if tropical
deforestation is to be halted and reversed. A possible framework for a program to achieve this
goal has recently been outlined by Professor Pedro Sanchez of North Carolina State University
(Sanchez, 1988). Dr. Sanchez notes that 12 countries account for three-fourths of the net carbon
emissions from clearing primary forests; 10 more account -for much of the remainder (Table 9-12).
Efforts could be made to engage the leaders of these countries in a dialogue for the purpose of
bringing them to specific program agreements targeted to deforestation "hot spots," where technology
transfer and government policies would be focused-an approach that is consistent with the Tropical
Forest Action Plan's emphasis on national planning.
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Policy Options for Stabilizing Global Climate - Review Draft
Chapter IX
TABLE 9-12
Countries Responsible for Largest Share
of Tropical Deforestation
Country
Net Carbon Emissions in 1980
From Primary Forests
(million tons)
Brazil
Columbia
Indonesia
Malaysia
Cote d'lvoire
Mexico
Thailand
Peru
Nigeria
Ecuador
Zaire
Philippines
207
85
70
50
47
33
33
31
29
28
26
21
Source: Sanchez, 1988.
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter IX
Ongoing Efforts Toward International Cooperation
Some important first steps to promote international action have already been taken in the
last few years and a foundation for international cooperation now exists. Several meetings without
formal governmental status established a basis for international scientific cooperation. A conference
on the status of the greenhouse problem, organized by the United Nations Environment Programme
(UNEP), World Meteorological Organization (WMO), and International Council of Scientific Unions
(ICSU), was held in October 1985 in Villach, Austria and was attended by experts from 29 countries,
which included representatives from several U.S. agencies. Among their conclusions were
recommendations that "scientists and policy-makers . . . begin an active collaboration to explore the
effectiveness of alternative policies and adjustments." In response to the recommendations, a small
task force was created to advise on needed domestic and international actions and to evaluate the
need for efforts to initiate consideration of a global convention.
The government of Canada convened a non-governmental meeting on "The Changing
Atmosphere" in June 1988, which was attended by more than 300 experts from 46 countries and
several United Nations' organizations. The Conference Statement that resulted from the meeting
urges development of an Action Plan for the Protection of the Atmosphere in addition to several
specific proposals for government policy, including:
directing energy R&D budgets to energy options that would greatly reduce
CO2 emissions;
reducing CO2 emissions by 20 percent of 1988 levels by the year 2005, half
by reducing energy demand and half by changing the sources of energy;
initiating development of a comprehensive global convention as a framework
for protocols on the protection of the atmosphere; and
establishing a World Atmosphere Fund, financed in part by a levy on fossil-
fuel consumption in industrialized countries to help finance the Action Plan.
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UNEP and WMO have continued their activities since the 1985 Villach meeting: An
Intergovernmental Panel on Climate Change, organized by UNEP and WMO, met in November 1988
with representatives from countries. Participants agreed to establish three committees, the first
to assess the state of scientific knowledge on the greenhouse issue, chaired by the United Kingdom,
the second to assess social and economic effects from global warming, chaired by the Soviet Union,
and the third to evaluate potential response strategies, chaired by the United States.
The U.S. also has some important bilateral cooperation with some of the other nations that
emit large amounts of greenhouse gases, particularly the USSR and the People's Republic of China.
(These three countries account for over 40 percent of the current commitment to global warming.)
U.S./Soviet cooperative efforts include studies of future climates, climate studies in the Arctic,
measurements of methane and ozone change in the polar regions, and analysis of possible response
strategies. The joint communique released after the Reagan-Gorbachev Summit emphasized the high
level of interest in cooperation on the greenhouse issue: "The two leaders approved a bilateral
initiative to pursue joint studies in global climate and environmental changes through cooperation in
areas of mutual concern . . . there will be a detailed study on the climate of the future. The two
sides will continue to promote broad international and bilateral cooperation in the increasingly
important area of global climate and environmental change."
The U.S. and Soviet Union also have some relevant cooperative activities designed to
promote energy conservation. For example, the National Academy of Sciences and the Soviet
Academy of Sciences have a cooperative program on energy conservation that includes some
comparative evaluation of building codes and other energy conservation programs in addition to
exchange of technical information.
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter IX
The U.S. Government has also initiated cooperative research on climate change with the
People's Republic of China, now the world's largest user of coal. Potential areas for cooperative
research include exchange of information and development of data on future energy development
paths, emissions from rice fields and other sources, and concentrations of trace gases in remote
regions.
DRAFT - DO NOT QUOTE OR CITE IX-44 February 21, 1989
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Policy Options for Stabilizing Global Climate -- Review Draft Chapter IX
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DA"
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DRAFT - DO NOT QUOTE OR CITE IX-48 February 22, 1989
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