Technology-Inclusive Climate Strategy: An Open Race with Many Winners

Over roughly the last decade, renewable energy sources—wind and solar in particular—have become dramatically less costly and are starting to play a major role in parts of our energy system. But at the global level, these technologies have mostly added to—not displaced—the incumbent energy sources of the past. The world uses more coal than ever before, more oil, and more natural gas. Today, fossil fuels still account for over 80 percent of global primary energy demand.

This energy, and the emissions that come with it, are used across the economy—in industry, buildings, and transportation. In addition, a sizable portion of global greenhouse gas emissions comes from non-energy activities, such as agriculture, forestry, and other land-use practices, plus process emissions from cement, chemicals, steel, and other industries. So, as we think about the climate challenge, let’s keep in mind that while energy accounts for about 70 percent of global emissions, it is not the only source. We therefore require a wide range of solutions that cut across disparate sectors of the economy.

As global population and income continue to rise, the world has made modest progress on bending the emissions curve. The US and global energy systems have become more efficient, with less energy input per unit of gross domestic product. The carbon intensity of the energy system has also declined—slightly at a global level and more so in the United States and Europe. Nonetheless, global carbon dioxide emissions continue to rise. After an additional 50 gigatons of carbon dioxide equivalent entered the atmosphere just last year, the atmospheric concentration of carbon dioxide now hovers at around 410 parts per million. For all greenhouse gases, the concentration is at 450 parts per million of carbon dioxide equivalent—higher than it has been for at least 800,000 years. As long as net emissions are above zero, global concentrations will continue to rise.

The consequences of this increasing concentration of greenhouse gases are stark. The average global temperature has already risen by 1°C, and some regions have had to confront temperature increases more than twice that amount. As more gases accumulate in our atmosphere, global temperatures will only increase.

Changing our global energy system comes with many challenges and costs. But the costs of inaction are clearly much higher.

At the rate we have been adding emissions, we’re on a path to more than triple the amount of greenhouse gases in the atmosphere by the end of the century, leading to average temperature increases of more than 4°C (or 7°F). This is the global average; in some regions, the temperature increase would be much higher. If we include commitments made by nations under the Paris Agreement, some estimates suggest that we could limit average warming to around 3°C by 2100.

The resulting negative impacts are well known, including more heat waves, extreme weather, wildfires, rising sea levels, increased acidification of oceans, and a heightened risk of abrupt and irreversible damage to our planet. To reduce the likelihood of the worst outcomes of climate change, we need to accelerate the shifts in our energy systems and look toward new solutions to manage risks.

The Ultimate Endpoint

Since the beginning of international cooperation on the climate issue, global goals for managing greenhouse gas emissions have been ambitious. Back in 1992, virtually all nations agreed in the UN Framework Convention on Climate Change to the objective of “stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.”

“Stabilization” here implies that humans must head in a direction where our net contribution of greenhouse gases to the atmosphere is zero, meaning we cannot add more than we take out. Defining “dangerous interference” is more complex, but the special report on 1.5°C of warming from the Intergovernmental Panel on Climate Change makes a strong case that we are fast approaching such “dangerous interference.” If, in fact, we pass that point, then we will need to begin pulling out more than we are putting in. We will need to achieve net negative emissions.

The international community has articulated numerous long-term stabilization targets, including 2°C and, in the Paris Accord, “well below” 2°C. But looking across the policy and technology landscape, it is clear that our current strategy for climate action is insufficient to achieve those targets. If the true goal is to stabilize concentrations at a level that avoids dangerous interference, then the world needs to commit itself not just to ambitious targets, but ambitious actions, as well.

More Proximate Objectives

Now, these goals can seem daunting—or even downright impossible—given political and economic realities. Obviously, no individual policymaker or nation has direct control over global temperature changes or the atmospheric concentration of greenhouse gases. There is an essential need for leaders to seek out more proximate targets, commitments, and frameworks that can help the world eventually achieve our loftier goals.

In recent years, leaders have emerged at the national and subnational level. Countries like the United Kingdom and France have substantially reduced their emissions and are looking to build on that progress by committing to net-zero emissions by 2050. The European Union recently announced a goal of net-zero emissions by 2050. In the United States, California and New York now have laws aiming for economy-wide reductions of 80 to 85 percent by 2050, and in New York’s case, net-zero emissions by 2050. Canadian leaders have also announced the goal of achieving a net-zero emissions economy by 2050.

Many of these goals depend on rapid progress in reducing emissions from the power sector. California, which would be the world’s fifth-largest economy if it were its own country, has committed to 100 percent carbon-free electricity by 2045, including options like natural gas with carbon capture and storage. A diverse array of other US states, including New York, Washington, Hawaii, and New Mexico have each adopted similar goals.

Widening the Track

These ambitious goals will not be easy to meet, and there has been much discussion about what range of options should be on the table. Should the strategy focus solely on energy efficiency, renewables, and electrification? Or should we pursue a “technology-inclusive” approach, where other technologies are welcome to play a role, whether that’s nuclear energy; fossil fuels with carbon capture, utilization, and storage; or so-called “negative emissions” technologies such as direct air capture or biomass energy with carbon capture and storage?

A technology-inclusive strategy has a number of advantages.

Expanding our solution set makes more ambitious and comprehensive strategies more feasible and cost effective. In addition to renewable power and solutions for long-duration energy storage, moving the global power system to net-zero emissions is also likely to require firm, dispatchable power sources, such as nuclear, and natural gas with carbon capture. Certain transportation emission sources, such as aviation, shipping, and long-haul trucking are hard to electrify, opening an opportunity for net-zero liquid fuels, hydrogen, or other options.

Industrial processes that require very high temperatures or come with process-related emissions require yet another set of solutions—possibly carbon capture and storage, hydrogen, certain advanced nuclear technologies, or other as-yet-undiscovered alternatives. Agriculture, forestry, and other land-use emission sources present a distinct group of challenges; they also present an array of opportunities for emissions offsets through biomass carbon sequestration.

What does a comprehensive and technology-inclusive strategy, that drives toward net-zero emissions, imply for policy design? It means we frame our ultimate policy goals in terms of net emissions, rather than limiting ourselves only to goals that specify the set of viable technologies, or to policies that require every individual source to release zero emissions. Such policies would become increasingly difficult as deeper reductions are sought. The clean energy sources that are thriving today, such as wind and solar energy, may well play a dominant role in achieving those goals. But the key is that we don’t predetermine the outcome; instead, we allow a diverse set of technologies to compete to achieve our goals at the lowest possible cost and to the greatest effect.

A technology-inclusive approach is facilitated by broad carbon pricing. This policy shift creates the right incentives for producers and consumers and is feasible the world over: governments around the world and in various US states have adopted some version of carbon pricing, either in the form of carbon fees or cap-and-trade programs.

Properly pricing carbon can also take the form of incentives for early-stage deployment of low-carbon technologies and correct accounting for climate risks in public and private investment decisions, using metrics such as the social cost of carbon.

A technology-inclusive approach applies performance standards that are flexible, tradable, and can be met through a range of approaches, rather than limited to only a subset of technologies. Automobile fuel economy and appliance efficiency standards are two examples that require companies to meet certain benchmarks of performance for the products they sell. And increased interest in low-carbon alternatives is emerging for a range of products—from fuels to concrete to food—and coming from both producers and consumers.

Companies themselves are seeing value in achieving higher performance in the products they manufacture and buy than may be required by policy. Take, for example, the wide range of companies that have committed to using 100 percent clean power, or have set ambitious goals for decarbonizing their business.

In the United States, there is substantial interest in the possibility of Clean Energy Standards for electricity, through which a range of technologies—from renewables and nuclear to natural gas and carbon capture and storage—could make the power sector 100 percent clean (net-zero emissions) over time. For liquid fuels, California’s low-carbon fuel standard includes a broad set of pathways for lowering carbon content, from biofuels and electric vehicles to emission offsets through direct air capture.

And, crucially, a technology-inclusive approach means investing heavily in developing new innovations; seeking the approaches that are the most effective, scalable, and cost efficient; and ultimately deploying the most promising technologies to address the multitude of emissions sources across the globe. This approach is a humble one; it acknowledges that governments do not—and cannot—predict the future of technological development. Nor can any of us. Instead, the approach leverages a confidence that human ingenuity will surprise us all, as it has many times in the past.

If we want these new technologies to move from the lab or the pilot stage to widespread deployment, we should remember that innovation accelerates where a vibrant private sector and competition flourish. Governments certainly have a role in funding research, development, and demonstration of technologies, and policy can play a role in supporting early deployment of these technologies, as they enter into commerce. At the mass commercialization stage, a diverse and competitive marketplace—guided by the right market and policy signals to demand improved performance—can work wonders in incentivizing the best mix of approaches to achieve emissions reduction goals.

At Resources for the Future (RFF), many individuals are working today on policy approaches that can enable this type of technology-inclusive approach, including research and policy engagement in the energy and power sector, new initiatives to address industrial emissions, carbon in forests and other land uses, and more. We’re also looking at how communities that have historically depended on the production and transformation of fossil fuels can become more economically resilient while taking advantage of the potential that a wide range of new technologies can offer to create economic and job opportunities, while reducing emissions.

Setting the Pace to the Finish Line

This technology-inclusive approach allows for ambitious clean energy and climate goals, but it doesn’t make any particular technology a prerequisite for climate action. It engages more stakeholders, making climate action more accessible, more feasible, more globally impactful, and cheaper. It asks governments to use policy instruments to price carbon, set market-based performance standards that target net emissions, and invest in new innovations. And it welcomes a wide range of technologies in the solution set, whether they facilitate an expansion of renewables, nuclear, carbon capture, synthetic fuels, or any other climate-friendly solution. A technology-inclusive approach will likely require all of the above.

We have an enormous challenge ahead of us. But instead of growing intimidated by the scale of our energy and climate challenge, we should be invigorated by the variety of potential solutions and excited to see what solutions we can devise to maintain a thriving economy and a healthy environment. What we need now is dynamic decisionmaking that can set a framework in place for this transition.

This article is based on remarks delivered at the T20 Inception Conference in January 2020.