The Green New Deal, the Challenge of Decarbonization, and the - - PowerPoint PPT Presentation

The Green New Deal, the Challenge

• f Decarbonization, and the Crucial

Role of Public Ownership

Sean Sweeney and John Treat International Program for Labor, Climate and Environment, Murphy Institute, CUNY

September 28th, 2019

Photo: BP

“We’re still behind on the scoreboard, but the momentum has shifted. We are winning.”

— Al Gore, 2015

“The progression to low- emission, climate-resilient growth is inevitable, beneficial and already under way.” — Ban Ki-Moon, 2016

Stern on Post-Coal Growth

World Total Coal Production (MT)

“Only green growth can bring prosperity.”

— Nicholas Stern and co- authors, 2017

But energy consumption continues to rise.

Oil consumption will soon reach 100mbd.

Gas consumption is rising 2% per year.

Coal consumption by region, 2017 (million tonnes oil equivalent)

Even coal use began to rise again in 2017.

Emissions began rising again in 2017, and rose even faster in 2018.

“It is hard to overstate the urgency of our situation. Even as we witness devastating climate impacts causing havoc across the world, we are still not doing enough, nor moving fast enough, to prevent irreversible and catastrophic climate disruption.” — António Guterres, UN Sec Gen

“Some of that increase was weather-related: A relatively cold winter led to a spike in the use

• f oil and gas for heating in

areas like New England…. 
 
 “As United States manufacturing boomed, for instance, emissions from the nation’s industrial sectors—including steel, cement, chemicals and refineries—increased by 5.7 percent….
 “[T]rucking and air travel also grew rapidly, leading to a 3 percent increase in diesel and jet fuel use and spurring an

• verall rise in transportation

emissions for the year.”

“Sorry, I have very bad news. My numbers are giving me some despair.”

— Fatih Birol, IEA, 
 October 2018

October 8, 2018

October 8, 2018

On the report’s most likely scenario, by 2100 the world is projected to be a full 3 degrees Celsius warmer: “The world as it was in 2020 is no longer recognizable, with decreasing life expectancy, reduced outdoor labour productivity, and lower quality of life in many regions because of too frequent heatwaves and other climate extremes.”

• Affirms the need to reach net-zero emissions by 2050, and that

the US must take a “leading role.”

• Calls on federal government to lead emissions reductions, create

good, high-paying jobs, ensure clean air, clean water and healthy food as human rights; end all forms of oppression.

• Calls for the launch of a “10-year mobilization” to:
• source 100% of US electricity from “renewable and zero-

emissions” sources

• digitize the US power grid
• upgrade all buildings for energy efficiency
• overhaul US transport to EVs and high-speed rail

AOC / Markey GND:

• Reach 100% renewable energy for electricity and

transportation by 2030 and complete decarbonization by 2050

• Build sufficient wind, solar, energy storage and geothermal

power plants to “fully drive out non-sustainable generation sources” from the electricity mix (with decarbonized transport)

• “The renewable energy generated by the


Green New Deal will be publicly owned.”

• Weatherize homes and businesses for energy efficiency to

reduce their energy consumption by 30 percent

• Replace all mobile homes with zero-energy modular homes

Sanders GND:

October 8, 2018

• The narrative is shifting. Both the headlines and the

activism are very different from even just 5 years ago.

• What’s still needed is a clear assessment of what is

actually involved in meeting ambitious targets like those in the GND proposals.

• Once we are clear about the scale of the challenge,

and about what existing policies have delivered, it’s clear that public ownership is the only way.

Where do we stand?

Renewable energy is being deployed at impressive levels…

Source: UNEP / BloombergNEF

Net capacity added in main generation technologies, 2009-2019 (GW)

… but its contribution to overall energy use is still marginal…

Source: WEF, The Speed of the Energy Transition: Gradual or Rapid Change? (2019)

Total energy supply (Mtoe), 2010-2018

… including in electricity generation.

“Despite the extraordinary growth in renewables in recent years… there has been almost no improvement in the power sector fuel mix over the past 20 years…. “I had no idea that so little progress had been made until I looked at these data.” 
 — Spencer Dale, Chief Economist
 June 2018

Photo: BP

What Went Wrong?

“Green growth” climate policy is anchored in two main mechanisms:

• 1. “Sticks”: Carbon pricing (taxes, cap

& trade) — based on “Polluter Pays”

• 2. “Carrots”: Subsidies, incentives,

guarantees

“Sticks”: Carbon pricing

Source: World Bank, 2016

As of 2016, only 15% of global emission have a price.

“Action on carbon pricing is nowhere near where it should be: it still covers only a small part of global emissions at prices too low to significantly reduce emissions.”

“Despite numerous pricing initiatives at the national and sub-national level discussed in this report, the global average carbon price is still only $2 per ton, a tiny fraction

• f what is needed for meaningful action.”

“Carrots”: Subsidies

Germany’s “Solar Miracle”

• 38 GW of solar installed

(residential, cooperatives)

“German Solar Feed-in Tariffs Wildly Successful, says New SEIA Report”

Who paid the subsidies?

• “Around €40 billion of the interventions are paid

directly by energy consumers in the form of levies.” — European Commission report 2012

• In 2014, FiTs accounted for nearly a quarter of

German electricity bills for non-commercial customers.

• In 2016, Germany spent €25 billion, with

€23 billion passed on directly to consumers through electricity bills.

• 48 countries

have adopted auctions

• 27 countries

considering it.

Source: GTM Research

Energy markets with tendering or auction schemes in place, under discussion, or in planning stages, Q2 2017

“Carrots 2.0”: Competitive Bidding

Competitive bidding drives down costs…

* Downward pressure can also lead to “dive bidding.”

Source: IRENA 2017

Average solar auction prices, Jan 2010-Sep 2016

But also profit margins, leading to collapse in investment

New investment in clean energy: China is 40% of total

Globally, investment in RE has fallen to worrying levels

October 8, 2018

October 8, 2018

“Limiting global warming to 1.5°C would require rapid, far-reaching and unprecedented changes in all aspects of society”: land, energy, industry, buildings, transport, and cities.

• Largest contributor to emissions.
• The power sector is key to decarbonization,

since decarbonization of other sectors will depend heavily on electrification.

• This means that demand for electricity will

increase substantially.

• Emissions from the power sector depend on the

source fuel: “electrification” on its own (e.g., of vehicles) means little.

Power Sector

Global GHG Emissions by Sector (2015)

Globally roughly a quarter

• f GHG emissions are

from the power sector.

US GHG Emissions
 by sector (2017)

In the US, 28%

“Aggressive climate policies with 2030 targets will require more capacity to be built every single year

• ver the next 11 years than what has been

installed collectively over the past two decades.”

Buildings are responsible for nearly 40% of annual global emissions.

Global building stock is expected to roughly double in area by 2060.

Example: UK home retrofits

“Essentially every home in the UK will need to be retrofitted between now and 2050 — around 26 million in total.” What does this mean?

• nearly a million homes each year
• over 15,000 / week
• over 3,000 / working day
• nearly 400 / working hour…

… for 30 years.

“Replace all mobile homes with zero-energy modular homes” There are currently ~20M mobile homes in the US. So, the Sanders commitment means replacing:

• ~2 million mobile homes each year
• nearly 40,000 / week
• nearly 1,000 / working hour

… for 10 years.

“If you cannot tackle transportation, you cannot tackle climate change.”

— Yvo de Boer,
 former Executive Secretary, UNFCCC

Global GHG Emissions by Sector (2015)

• Globally, transport accounts

for roughly 14% of total emissions from human sources (nearly a quarter of emissions from energy).

US GHG Emissions
 by sector (2017)

In the US, transport accounts for nearly one third of emissions.

May 2019

THE ROAD LESS TRAVELLED: Reclaiming Public Transport
 for Climate-Ready Mobility

May 2019

THE ROAD LESS TRAVELLED: Reclaiming Public Transport
 for Climate-Ready Mobility

• Vehicle ownership is rising.
• Mainstream transport decarbonization

policy focuses on replacement of ICEVs by EVs.

• If EVs were to grow quickly, the pressure on

renewables to keep up with rising electricity demand would increase accordingly.

• Emissions from EVs depend almost entirely
• n the source fuel for electricity generation.

THE ROAD LESS TRAVELLED: Reclaiming Public Transport
 for Climate-Ready Mobility

• Public transport offers huge advantages over

individual vehicles, but:

• Where public transport is pursued, it is mostly

through “public-private partnerships” (PPPs).

• These tend to focus on “mega-projects” serving the

business class.

• Urban public transport systems are rarely able to

cover (let alone exceed) their operating costs through fares alone.

• Conclusion: Private sector will not deliver the public

transport we need. We need publicly owned public transport — “sustainable mobility as a public service.”

• Cement, steel, ethylene, and ammonia are

responsible for ~45% of industrial GHG emissions.

• These are especially “hard to abate,” due to

the “high share of emissions from feedstocks and high-temperature heat compared to other sectors.”

“The Crucial Role of Public Ownership”

A Pro-Public Narrative is Cohering

February 2012: NUMSA Conference in Johannesburg on Social Ownership of Renewable Energy

Trade unions and left allies are increasingly taking up the call for Just Transition and Energy Democracy

“Without rejection of the current model of the energy system in Europe, we will fail to meet

• ur commitments under the Paris Agreement.

“Taking the energy system back into public

• wnership for the common good of society

can deliver clean, affordable energy and democratic control to the people.”

“Public ownership can help us plan public transport better to dramatically reduce pollution and congestion in towns and cities. “Globally, we desperately need clean, green public transport to reduce carbon

• emissions. Public ownership

is vital to help us to tackle climate change where market-driven, private solutions have failed.” — ITF / We Own It, 2019

• Emissions generated anywhere hurts

everyone.

• Emissions reduced or avoided anywhere

helps everyone.

We need a policy shift: from “Mobilize the Private Sector!” to “Global Public Goods”

• Speed and Scale
• Jobs and Equity
• Investment and Costs
• Conservation
• Planning
• Technologies


 S

dd

Speed: The New Deal (1935) and Rural Electrification

Speed: The New Deal (1935) and Rural Electrification

Jobs: The Battle for BiFab

Jobs and Equity: South Africa unemployment

• “Neoliberalism” created risk; now they want it to

go away.

• “Energy War” – the “death spiral”
• Solution: “subsidies for all”
• Result: Falling investment in RE and other forms
• f generation

Addressing the Investment Deficit

• Main cost for RE is the “cost of capital” — i.e.,

the cost of borrowing

• Low interest rates will allow for favorable debt

financing conditions – if that’s the only option

• Control of prices is essential: wholesale markets

are not “competitive” and should be phased out

Public ownership means lower costs for renewable energy

“The cost of servicing private finance debt is approximately double that of government debt…. “The average cost of all government borrowing is 3% to 4%, compared with an estimated financing cost of 7% to 8% for all private finance projects.”

• “Build and sell” model: more electrons sold = more

revenue generated

• Counter-conservation

“Future projections reveal that under existing policies, the vast majority of economically viable energy efficiency investments will remain unrealized.” — International Energy Agency, 2017

Conservation

• Technologies represent competing interests that

want to sell or demand subsidies for nuclear, capture technologies, RE energy storage, EVs.

• Need to take profit out of decision around

technologies

Technologies

• Technical challenges are formidable
• Need to plan where to place

generation assets

• Align with conservation push
• Grid upgrades (that private

companies don’t want to pay for)

Planning and Balancing

• Technical challenges are formidable
• Need to plan where to place

generation assets

• Align with conservation push
• Grid upgrades (that private

companies don’t want to pay for)

Planning and Balancing

According to the report, only 3 of 26 sectors and technology areas are “on track” to meet their projected contribution to decarbonization: electric vehicles, energy storage, and “solar PV and onshore wind” (which the report takes together). Even these three areas will require “sustained deployment and policies” to remain on track.

• A new global energy order must be based on

sharing the best available technologies on a global public goods basis

Intellectual Property

• Technical challenges are formidable
• Need to plan where to place generation assets
• Align with conservation push
• Grid upgrades (that private companies don’t

want to pay for)

Planning and Balancing