The value of energy companies, embodied by the size of their reserves, could pop like a bubble.
That was the conclusion widely drawn from the Intergovernmental Panel on Climate Change's fifth assessment report, released in October, which found the world can emit no more than 469 gigatons of carbon to avoid the worst effects of climate change.
Energy companies have much more than this amount of carbon trapped in their coal, gas and oil reserves. So, the thinking goes, if governments decide to seriously tackle climate change, some of these reserves would have to remain underground (EnergyWire, Oct. 4).
But some scientists view the IPCC's strict carbon limit, known as a carbon budget, as nothing more than a red herring, distracting from the need for immediate, nuanced global policy and technological progress.
"The number in the IPCC report in terms of the carbon budget is only a number," said Keywan Riahi, head of the energy program at the International Institute of Applied Systems Analysis in Austria and a contributor to the IPCC. "It does not translate to how much resources we can extract."
Riahi and his colleagues are integrated assessment modelers (IAMs), and they have found that carbon capture and sequestration is critical to limiting temperature rise to the threshold of 2 degrees Celsius (3.6 degrees Fahrenheit) that nations aspire to. And if carbon capture is developed, we could have some -- though not all -- coal, oil and natural gas in the fuel mix as far into the future as 2100.
These results are from models the scientists have constructed of the future world -- its energy consumption, economic development, population growth and technological progress. For each story, they figure out how much the world will emit, how much of those emissions will accumulate in the atmosphere and the resulting warming of the Earth's surface, expressed in watts per square meter. The goal is to figure out which policies can help the world best tackle climate change.
"Integrated assessment puts various parts of the puzzle together and tries to derive some sort of high-level insight," said Richard Tol, professor of economics at the University of Sussex.
The IAM community working for the IPCC had close to 1,200 such models, but a set of four, called representative concentration pathways or RCPs, were published in the latest assessment report.
The report finds that if we emit enough greenhouse gases to warm every square meter of the world by 2.6 watts (an average light bulb emits 60 watts), it would likely raise temperatures by 1.7 C above 2005 levels by the end of the century. This is the RCP2.6 scenario.
Warming the world by 4.5 watts would raise temperatures by 2.6 C (RCP4.5 scenario).
Warming by 6 watts would raise temperatures by 3.1 C (RCP6.0 scenario).
And 8.5 watts would raise temperatures by 4.8 C (RCP8.5 scenario).
Of these, the RCP4.5 and RCP6.0 scenarios are most likely, and only if governments agree soon on a climate policy, said John Weyant, director of the Energy Modeling Forum at Stanford University and chairman of the IAM group that worked with the IPCC.
"There has been this real tricky part of explaining to the policymakers that you may want to do 2 degrees C, but you need to prepare yourself for a 3 or 4 degrees C [temperature rise] as the most likely outcome at this point," Weyant said. "And if you don't like that, you better get on your pony and do more domestic or negotiated international policy responses."
Making a better model
Economists began looking into fossil fuel use, economic growth and climate in the anxious years following the 1973 Arab oil embargo when it became clear that limits to energy resources could doom the American way of life.
In 1979, a young economist from Yale University, William Nordhaus, put together one of the first models that linked our energy use to CO2 concentrations in the atmosphere. The premise was that it is possible to calculate the benefits of unchecked economic growth, the basis of modern capitalism, and weigh it against the costs of solving an environmental problem like climate change.
"There are two issues to worry about," said Hadi Dowlatabadi, a professor of global change at the University of British Columbia and one of the earliest integrated assessment modelers. "What does it cost to stop climate change, and what will it cost us if climate change is not stopped?"
The environmental cause du jour in the '80s was industrial pollution that rose to the atmosphere, acidified water vapor and fell to the ground as acid rain. Apocalyptic visions of forests dying out and lakes acidifying created great urgency, and scientists in Europe put together the first comprehensive integrated assessment model, called RAINS, to figure out how to stop the pollution.
The effort was wildly successful. European policymakers set specific environmental goals, and the RAINS model spit out the most cost-minimizing route for achieving the target, which was adopted in 1994.
Different research groups had assembled IAMs for climate change by this time. Dowlatabadi and his colleagues spent 10,000 hours building a program called ICAM-3 that distilled the world down to 2,000 equations that modeled fossil fuel use, demographics, ecosystems, energy efficiency improvements, emissions and transport of greenhouse gases in the atmosphere, climate policy actions, and other factors. It was to be a masterpiece.
But in 1996, Nordhaus released a model, called RICE, containing 18 simple equations that represented complex global changes. Its simplicity made it all the more accessible, and it has remained a bedrock for modeling the economic trade-offs of climate change ever since.
"Bill's work is fantastic," Dowlatabadi said of Nordhaus. "It is super-simple, so any idiot can understand it."
By the end of the '90s, there were more than 20 groups of scientists, each with its own models that varied in complexity and focus. Today, there are many more. The various models differ in particulars, but they agree on average that the world will be warmer by 3.5 C above 1900 levels in 2100.
By the '80s, climate scientists had assembled basic models that simulated the atmosphere, oceans, land and ice cover with the goal of studying the effects of greenhouse gas concentrations on the future climate. They were assuming that CO2 concentrations in the atmosphere would increase linearly by 1 percent every year, said Detlef van Vuuren, a professor of integrated assessment of global environmental change at the Netherlands' Utrecht University.
That was not exactly reflective of the real world. For instance, CO2 concentrations rose by 1.4 percent in 2012.
So the IPCC asked the integrated assessment modeling community in 1989 to provide climate scientists with more plausible estimates of future greenhouse gas concentrations.
The resulting IAM models projected greenhouse gas concentrations and outlined the underlying policy choices that would lead to them. The choices included elements like the rate of consumption of fossil fuels, a price on carbon, and a gentle hint to world governments that unless all nations work together, CO2 would rise above desired levels. A summary of the policy findings of various IAM models was published as a chapter in the 1995 second assessment report.
Tol, the Sussex professor and one of the lead authors, described the chapter as incredibly controversial, partly because the IPCC has a mandate to be policy-relevant but neutral.
"IAMs are not policy-neutral; they will tell you, 'This is bad idea, boys! Don't do it,'" Tol said. "It sits very badly within the IPCC. I think that the leadership of the IPCC should simply have grown a pair of balls and said, 'Look, what do these models tell us?' That is what they should have done, but that is not what has happened."
Instead, the IPCC excised the policy recommendations of IAMs from its assessment reports.
For the IPCC's fourth assessment report, published in 2007, IAM scientists gave climate scientists four scenarios of future greenhouse gas concentrations, without the underlying policy prescriptions. The scenarios were roundly criticized by outside academics, said Edward Parson, professor of environmental law at the University of California, Los Angeles. The IAM scientists had assumed in their models that the world could somehow avoid climate change even without a comprehensive climate policy.
Tol, who excused himself from the IPCC modeling after the early years, said the community has slapped an overly optimistic face on economic growth in the poorer parts of the word, presumably to appease representatives from those nations.
"All scenarios foresaw rapid economic growth, so the poorest in Africa in 2100 would be twice as rich as Portugal is now," he said. "This is great, if that would be true, but it is not quite in line with what we understand about economic development in Africa."
Weyant, the director of the Energy Modeling Forum who has spent much of his career working on IAMs for the IPCC, attributed part of the problem to doing science with the organization.
"Historically, a very important feature of the IPCC is it operates in a way that tries to defend the interests of people in developing countries," he said. "So they will appoint people from developing countries, some of whom have expertise and some who do not."
A country could block certain assumptions of the IAM, such as modest economic growth or limits to fossil fuel consumption, if they were not particularly flattering. That would affect how much greenhouse gases are emitted over time in the models.
Stung by the criticism, the IAM community worked outside the IPCC's purview for the fifth assessment report. It was a "labor of love," as Riahi of the IIASA put it. The first section of the report was published in September.
In it, the scientists have provided the IPCC with the greenhouse gas concentrations. But like presenting food photos in a cookbook without the actual recipes, the report does not contain the underlying assumptions behind the scenarios.
Without these assumptions, scientists outside the immediate IPCC community say they are less likely to trust the outputs of the IAM modeling, especially given the controversies surrounding the previous assessment reports.
"I find that rather strange, in fact rather embarrassing, that results are published but not the assumptions that led to these results," Tol said. "As a result, it is essentially a black box."
The four scenarios saw radiative forcing increasing by 2.6 watts per square meter, 4.5 w/m2, 6 w/m2 or 8.5 w/m2. Technically speaking, the scenarios are plausible versions of the future that governments can use to make climate policy decisions. But without knowing how the scenarios were derived, it's difficult to know how to interpret them, Tol said.
Riahi said the community would publish some of these results independently in 2014. Some clues are already available in the studies the modelers have published elsewhere. These suggest that to achieve RCP2.6 -- that is, to hold temperatures below the 2 C threshold -- the world would have to capture and store more carbon than is being emitted.
That would involve completely changing the surface of the planet -- taking away all known energy systems and replacing them with biomass plantations to get negative carbon energy, implementing carbon capture and sequestration, and full electrification of the transport sector.
For RCP4.5 and RCP6.0, CCS could still be essential, together with climate policy. Some IAM models suggest it is possible to continue extracting fossil fuels till 2100 if CCS is implemented, Riahi said.
"There are technology options like combining coal power plants with CCS -- that would allow carbon to be captured and pump them into the ground," he said. "How much fossil fuel is used in the end will depend on what sort of technology will be used."
And with no coordinated climate policy or technology development, RCP8.5 is most likely. That is where the world is heading today.
Distractions and 'the real issue'
Given the lack of progress on the part of the IPCC and world governments, some IAM modelers argue for a reframing of the climate debate.
"Since '94 or '95, we've spent a lot of money, we've built lots of climate circulation models, but the real issue is not the scientific uncertainty of climate change," Dowlatabadi said. "If you ask me back in '93, what is the probability this is human driven, I'd say 95 percent human."
The real issue is that the governments are failing to tackle climate change, he said. Dowlatabadi suggests the IPCC should refocus on climate-related issues that can deliver better results.
For instance, stimulating research into alternate energy sources to make them as cheap and efficient as coal or gas would naturally move people away from fossil fuels and cut emissions.
And reducing poverty, medical innovations to prevent disease transmission, higher buildings and other adaptations can make societies less vulnerable to climate change, he said. These are not strictly climate issues but are still related to climate.
Instead, the IPCC has continued to tightly focus on emissions reductions, a strategy it promoted further with its carbon budget number. Scientists called the budget a distraction because it would be of little use to policymakers. A global budget implies the IPCC or a global dictator would set an emissions limit for each country, a scenario that is extremely unlikely given the sovereignty of nations. And if nations exceed the carbon budget, there will be very few repercussions.
"If there's a carbon budget and if you go over it, what is going to happen?" Tol asked. "People will very rapidly discover that unlike, say, if you spend more money than you have, the bank will come after you, the same thing is not true for the carbon budget at all."
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