The Politics of Climate Change

by Anthony Giddens

  In the wake of the events in Japan, most countries with an existing nuclear industry, or plans to develop one, stated that they would reassess their programmes. The German leadership reversed its intention to extend the life of the country’s nuclear plants (see below, pp. 80–1). Two of the country’s oldest nuclear stations were closed temporarily until they were thoroughly tested. Switzerland was among several countries going back on proposals to replace its existing nuclear plants and build new ones. The Chinese leadership put on hold its plans to construct new nuclear plants, pending tests of the proposed designs. The happenings in Japan are certain to affect the expansion of nuclear power, whatever position governments take. The main reasons are that communities are likely to object if a proposed nuclear plant is sited in their area, while groups that were anti-nuclear from the beginning will renew their protests.

  From the point of view of containing carbon emissions, these developments could be unfortunate. It is possible that countries could decide upon programmes of large-scale investment in renewable technologies to fill the gap left by nuclear. More likely is that they will turn back to, or continue their dependence on, coal, the most polluting of the fossil fuels in terms of carbon emissions, but for many states the most reliable and accessible.

  Wind, wave, tidal and geothermal energy, together with biofuels, are all reasonably well developed. They are likely to play a part – albeit in most countries only a relatively small part – in the total energy mix. None is problem-free. Thus, wind power delivers energy in an erratic way, although it can be topped up from other sources to produce a more stable output. There is some concern that wind farms could interfere with the radar used in air-traffic control. In Britain, a number of proposed wind-power installations have been deferred because of such worries. Widespread enthusiasm for the use of biofuels has diminished as it has become clear that growing them can seriously affect world food production. They could have an important role to play in the future, but further technological advance is needed if they are to be employed on the large scale, as discussed in chapter 3.

  Geothermal energy looks promising. At present, apart from some areas in Iceland, Japan and New Zealand where volcanically active rocks are near the surface, it is too far below the earth’s crust to be accessible. However, technology has quite recently been introduced which could overcome the difficulty. It involves fracturing hot rocks and injecting water which heats up as it circulates through them.6 A commercial plant has been set up in Landau, Germany, which already produces 22 gigawatt-hours of electricity annually. As with most other technologies, substantial government subsidies are needed to get the industry off the ground.

  The technologies whose development will probably be most consequential, as far as we can see at the moment, are CCS and solar energy. CCS potentially is enormously important, because even if world reserves have been exaggerated, coal exists in some abundance; and also because of the fact that coal-fired power stations are very widespread and a major source of global warming. If most of these cannot be retro-fitted with carbon capture technology, then the battle to contain emissions will be seriously handicapped, or even simply lost.

  Some environmentalists more or less write off ‘clean coal’ – CCS – altogether. For them, it’s not a clean technology at all, because of the number of mine-related deaths and the fact that even de-carbonated coal contributes to illnesses such as asthma and heart disease.7 Moreover, they worry that the promise of CCS is being used as a justification for building more coal-fired power stations, in spite of the fact that no one can be sure how effective or affordable the technology will turn out to be. Yet CCS has to stay very high up the agenda for the reasons given above. There are difficult problems to be faced. The CO2 extracted from the coal has to be interred deep underground, with enough pressure such that it turns into a liquid. No one knows how far it will in fact stay buried. If the technology comes into widespread use, it may be difficult to find enough sites.

  The other major problem is expense, which is partly caused by the need for storage, but mainly results from the costs of the process of carbon extraction. CCS is nowhere close to being competitive with orthodox coal production. Four major projects exist at the moment, in North Dakota in the US, in Algeria, in Germany and off the coast of Norway. They are all experimental and none is connected to an electricity grid. Each will require the storing of a million tonnes of CO2 per year. The electricity system in the US alone produces 1.5 billion tonnes of CO2 annually, which would mean finding 1,500 appropriate sites.8 Crucial though it undoubtedly is, no one knows at the moment how far, and within what timescale, the problems of CCS can be overcome. In the meantime, untreated coal, which a few years ago seemed a fuel from yesteryear, is on its way back.

  The picture is quite complex, as there are trends and countertrends. Coal remains, as the International Energy Agency (IEA) puts it, ‘the backbone of global electricity generation’.9 World consumption of coal continues to mount, up 2 per cent in 2010 over the year before. In the OECD countries, the proportion of the energy mix taken up by coal has dropped, and the building of new coal-fired power stations has slowed – largely because of opposition from environmentalist groups, but partly as a result of government policy. The drop in coal consumption in the industrial countries has been more than offset by large increases elsewhere, especially in China. China now consumes more coal than the US, Europe and Japan combined. Coal supplies 80 per cent of China’s electricity, compared to 45 per cent in the US.

  However, China has become a world leader in the production of coal plants that create substantially fewer emissions than older types. Power companies are obliged to close down at least one older-style plant for each new one they construct. The most efficient plants in China cut down emissions by 30 per cent over the older versions.

  And so – on to solar energy, for many the best hope of all. The energy that comes in the form of sunlight every day is far greater than we would ever need to fuel our needs. Such energy can be generated effectively even in temperate climates, but at present it only works well when there are long sunny periods. Solar energy has a range of practical advantages. It can be deployed on the small or the large scale and, once installed, has high reliability and low maintenance costs, with a lifespan of 30 years or more. So far it only supplies about 1 per cent of the world’s electricity. Solar power has been around since the 1970s, which could mean that the technology has got stuck; or it might mean that the long lead-up time will set the stage for major expansion.

  Silicon semiconductors, which so radically altered the nature of computers, may be set to do the same for solar technology. The search is also on for non-silicon materials that are cheaper to produce. Solar technology takes various different forms, but the most advanced is photovoltaic, which turns sunlight into electric current; it can be directly connected to the grid. One of the main difficulties, which also arises with other intermittent energy sources, is how to store the electricity so as to have stocks in reserve. Various modes of storage exist at the moment, but none is of the capacity needed to use solar power on a large scale. For instance, the heat energy can be stored in containers in which stones are placed, which can conserve the energy temporarily; the same can be done with water. A pilot study, funded by the EU, is under way to study how solar energy might be converted into chemical fuels that can be stored for long periods of time and transported over long distances.

  Finally in this lengthy list there is geo-engineering, although none of the projects of this sort being mooted at the moment is more than a gleam in the eye of their potential inventors. In its Fourth Assessment Report, the IPCC concluded that, at present, geo-engineering projects are ‘largely speculative and with the risk of unknown side effects’. Most would agree, but in Britain the Royal Society nonetheless commissioned a report on them, on the grounds that we have to explore all possibilities in the struggle to limit climate change. The report concluded that ‘no geoengineering method can provide an easy or readily a
cceptable alternative solution’ to the prime need to reduce emissions of greenhouse gases.10 Geo-engineering is likely to be technically possible, but the technologies that would be needed are ‘barely formed’, while great uncertainties surround their potential effectiveness. Two categories of geo-engineering exist: those which would reflect a proportion of the sun’s radiation back into space; and those that would remove greenhouse gases from the atmosphere.

  Figure 6.1 Selected indicators and top five countries in terms of renewable energy sources

  Source: REN21, 2010. Renewables 2010 Global Status Report (Paris: REN21 Secretariat)

  The first could involve interventions such as placing shields or deflectors into space to reduce the amount of solar energy reaching the earth. The second would mean either removing greenhouse gases directly, or using the natural world to do so – for example, by seeding the oceans with substances that would cause them to absorb more CO2. Some place faith in the possibility of constructing a technology that will extract CO2 from the air and allow it to be stored.11 Small-scale models of such ‘scrubbers’ exist. Just as in clean coal technology, the CO2 would have to be sequestered – which, given the quantities involved, is a problem. It will be a mammoth task to develop the technology on the scale needed to make a meaningful impact. Yet its potential is large, since it is the only technology known at the moment that could actually reverse the causes of global warming.

  The Royal Society notes that there are no major programmes of research on any of the methods considered, and proposes that such programmes be instituted, since, otherwise, discussions of geo-engineering will remain wholly speculative. International scientific organizations should coordinate a programme of research that would provide concrete evidence about what might be feasible.

  As there are no guaranteed technological solutions, radically increasing energy efficiency has to be high on the agenda. The constructing of eco-homes and other environment-friendly buildings is likely to be very important for the future. The German Passivhaus has such high levels of insulation that it can be heated by the warmth of the human body alone, even in sub-zero temperatures. Dramatically heightened energy efficiency is the essence of Amory Lovins’s notion of ‘natural capitalism’, which he defines as capitalism that includes a full economic valuation of the earth’s eco-systems.12 It involves ensuring that natural resources – not just energy, but also minerals, water and forests – stretch many times further than they do today. His ultimate aim is not just to reduce waste, but to eliminate it altogether. In closed production systems, every output would either be returned to the ecosystem as a nutrient or become an input for another manufacturing product. A further objective would be to move away from the usual notion of making goods for consumers to purchase; instead, they would rent them. At the end of a given period, the producing company would buy them back. Manufacturers would thereby have an interest in concentrating on the durability of their products; when they are exchanged against new ones, they would be wholly recycled.

  These ideas may sound unrealistic, but in some ways and contexts they are closer to being realized than most of the hoped-for technological innovations, since they have already been put into practice. For example, a large glass-clad office tower in Chicago needed a major renovation some years after it was built. The glazing was replaced by a new type that let in six times more daylight than the old units, while reducing the flow of heat and noise fourfold. The need for lighting, heating and air-conditioning was reduced by 75 per cent. Lovins claims that in the US there are some 100,000 office towers of a similar type that are due for renovation, where the same order of saving could be made.

  In terms of the near future – the next 20 years – it seems certain that a diversity of energy sources will be required to reduce emissions and break dependence on oil, gas and coal. In a now well-known article published in Science magazine, two Princeton professors, Robert Socolow and Stephen Pacala, identified 15 energy ‘wedges’ that, combined with one another, could stabilize world emissions over the next 50 years.

  They calculated that, given current patterns of economic development, emissions must be reduced by about seven gigatonnes to hold the increase in world temperatures at or below 2 per cent. Each wedge could reduce emissions by one gigatonne, so, all other things being equal, seven of the wedges out of the substantial number they identify would be enough to reach that end. The wedges include factors such as the successful deployment of CCS technology, nuclear power, increased fuel economy for vehicles, and improvements in building insulation.13

  The role of government

  The issue for governments is how best to encourage technological innovation without prejudging where the most relevant and profound innovations are likely to occur. Subsidies are needed to provide a platform, since virtually all new technologies are more costly than fossil fuels. Innovation, however, is obviously not all of a piece. In a classic study, Christopher Freeman distinguishes a number of different levels of innovation, each of which might have to be dealt with in a different way as far as industrial policy is concerned.14

  There can be incremental improvements in a given technological context, based upon improved design and efficiency, as in the case of the evolution of jet engines. This situation can be distinguished from new inventions, which alter the nature of a product – as when those engines were invented in the first place. On a more comprehensive level, changes in a technological system can occur when innovations are made which affect that system as a whole – an example would be the impact the computer has had on office work. Finally, changes can be introduced whose effects are felt in almost all fields of social and economic life, as has happened with the coming of the internet. Those in the final category are, by definition, the most significant, but they are least predictable and hence the most difficult to encourage by active policy.

  Analysis of the economics of innovation helps suggest where government might be effective in its interventions.15 For instance, new processes or inventions may not become cost-effective until significant investment is made and experience developed as to how they might effectively be applied. An industry might wait around for someone to take a leap of faith, which might not happen, with the result that the industry (and consumers) remain locked into old technology. This point is one at which state-provided subsidies, in the form of challenge schemes, for example, could promote a breakthrough. Another major area is patenting, since companies will be reluctant to innovate unless they receive protection against their competitors simply taking over what they have pioneered. Government must look for an appropriate balance. If patents are too strong, innovation may in fact be discouraged, since other firms will find it difficult to build on the work of the originating company. Much the same applies on the international level, where safeguarding intellectual property is more difficult. Allowing poorer countries to bypass patents will be vital. Yet a similar dilemma to that operating nationally applies here too. If the international regime is too loose, it could militate against much-needed technological advances.

  Of particular importance will be what happens in the power industry, especially given its history of widespread deregulation over the past three decades, as described in chapter 2. Power supplied through national grids is a public good, but in the 1970s and 1980s governments took the decision to turn much of it over to private firms – with the UK leading the way. Planners emphasized quantity first and foremost, having in mind issues of security, which were uppermost in policy-makers’ minds; cost was a secondary consideration. Following privatization, these emphases were in effect reversed. Once the major companies had been privatized, prices were pushed down towards marginal costs, leading, in effect, to a writing-off of the sunk costs. Much-needed investment was put off or scrapped, and the concentration on extracting the maximum from existing assets meant there was little capacity to cope with external shocks. Moreover, electricity generation became caught up in the more extreme edges of financial speculation, with consequences seen mo
st spectacularly in the case of Enron in the US. Enron’s troubles came from the corrupt activities of its leadership, but these developed when the complex system of trading in deregulated energy markets, which Enron set up, failed, creating a ‘regulatory black hole’.16

  One of the results of the sweating of assets in power generation is the low level of R&D in the industry generally – a major problem now the emphasis has swung so heavily in favour of innovation. In earlier days, state-owned industries invested a good deal in R&D, drawing upon an indigenous manufacturing base that was much stronger than is now the case. The proportion of turnover spent on R&D varies in a major way between different industries. In the big pharmaceutical companies in the UK, as of 2007, R&D intensity was 15 per cent. A survey of power-generating firms found the average to be only 0.2 per cent. In-depth studies have shown that the decline in R&D corresponds closely with electricity reform.17

  As elsewhere, the response cannot simply be a return to top-down measures on the part of the state or the regulators appointed by the state. Policies that encourage consumers to become active partners in the supply chain are very likely to be important in terms of innovation; among other advantages, they create markets for smaller firms to enter. Yet, as elsewhere, wholesale decentralization would not work. A system like an electricity grid has to have organized coordination mechanisms, especially if smart grids are to be introduced.