Staying below 2 degrees is “possible and practical” says RMI

Whether they are images of polar bears straddling thinning ice sheets or the ghostly whiteness of bleached coral, signs of climate change rarely inspire hope. The optimism after the signing of the Paris Climate Accords was quickly dashed as President Trump withdrew the world’s second largest emitter from the agreement.

Even if all signatories met their emissions targets, the latest UN Emissions Gap report showed that the world would still be heading for a temperature rise between 2.9 to 3.4 °C by 2100. Moreover, many experts doubt whether any serious changes to the energy system can occur within the necessary timeframe.

Positive Disruption, a recent report from the Rocky Mountain Institute (RMI), argues that such pessimism is “both dangerous and wrong – dangerous because despair undercuts the will to act, and wrong because this view does not take into account events already taking place that indicate a possible pathway to a rapid energy transition.” The report argues that staying below 2°C is both practical and possible given the adoption trends in renewable energy.

The report lays out five scenarios based on recent advancements in renewable energy and efficiency as well as changes in land use.

Figure 1 from the report shows that all scenarios modeled from the most conservative to most aggressive keep global temperatures well below 2 °C.

The centerpiece of the report involves the continued exponential growth in solar and wind adoption as the technologies reach scale.

Failing conventional wisdom

The report argues that history is full of examples of experts underestimating the speed of the technological transition. One example mentioned in the report discusses how AT&T commissioned McKinsey & Company in 1980 to predict cell phone usage over the next twenty years. McKinsey estimated that only 900,000 people in the US would have a cellphone in 2000, less than 1% of the 109 million who actually had cell phones.

In the same way, organizations like the International Energy Agency (IEA) and U.S. Department of Energy’s Energy Information Agency (EIA) have consistently underestimated future growth in wind and solar adoption.

Figure 4 from the report shows that each year, the IEA’s World Energy Outlook increases their prediction of wind and solar, and despite these revisions, their estimates continue to underestimate actual deployment.

Experts consistently underestimate technology adoption because they overlook the compounded growth that comes from cost-reducing feedback loops. Increased production results in lower costs, which results in increased demand, which in turn results in increased production bringing the feedback loop full-circle.

The exponential growth fueled by increased production, lower cost, and increased demand can describe one of the most prominent technological phenomena of our era: Moore’s law. A study by the Santa Fe Institute found that the Moore’s Law relationship of a doubling of microprocessor performance every two years is better described as the relationship between performance and cumulative production of microprocessors.

The feedback loop that has drive Moore’s Law is also occurring the energy technologies. The decrease in cost associated with larger production volumes can be described as a technology’s “learning rate”. A recent analysis by Bloomberg New Energy Finance (BNEF) shows that solar PV has had a learning rate of 28% meaning that the cost of a solar module decreases 28% every time production capacity doubles. For wind power and lithium-ion batteries, the learning rates are slightly less at 10.5% and 18.6%, respectively.

This production feedback loop will continue to drive costs down and accelerate adoption.

“In periods of fundamental change, transitions always occur faster than either the incumbents or industry experts think is possible,” James Newcomb, an RMI managing director, said. “The cost reductions we now anticipate in batteries and solar photovoltaic technologies alone are enough to drive system-wide changes in electricity and transportation. These changes are triggering shifts across the entire economy at a global scale.”

The conventional argument against a rapid transformation of the energy system is that the energy system is too vast and complex, has a slow rate of capital turnover, is “locked-in” to the existing fossil-fuel based structure, and has incumbents actively resisting the transition.

As the energy system has become more distributed, the reasoning behind the conventional argument has become weaker. Distributed projects allow for shorter deployment and payback periods and smaller capital investments. Market forces driven by lower-cost renewables are eroding the power of large, entrenched incumbents.

Demand Transformation

In addition to changes in the supply of energy, how the economy consumes energy through homes and buildings, industry, and transportation will also undergo a transformation.

Figure 9 quantifies how changes in transportation, buildings, and industry will reduce overall demand from the business-as-usual case.

Achieving the demand reductions in each sector involves a combination of energy efficiency and design improvements. Through electric vehicles and heat pumps, a greater share of total energy demand can be electrified, which will be powered by renewables.

Agriculture, Forestry, and Other Land-Uses

The report argues that the transformation of energy production and demand by themselves will be insufficient to stay below 2 °C of warming. Emissions from agriculture, forestry, and other land-uses (AFOLU) need to be reduced through improved agriculture and forestry techniques.

Figure 10 from the report shows how AFOLU becomes a net sink of emissions by 2050 through a variety of means such as: 1) sustaining and increasing forest cover, 2) integrating trees into farming, 3) farming without disturbing the soil through tillage, 3) adopting permaculture principles, 4) managing wetlands, and 5) using rotational grazing to amplify soil carbon sequestration.

Through the combination of increased renewable adoption and demand reduction as well as improved land use management, the report argues that keeping global temperature rise below 2°C is achievable.

“The message of Positive Disruption is clear: the global community has all the tools to achieve the rapid transitions in energy and other sectors necessary to limit climate change,” Jules Kortenhorst, RMI’s chief executive, said. “However, the rapid energy transition described in this analysis relies on massively accelerating the deployment of business-led, market-driven solutions that can deliver huge benefits to economies and societies globally.”

Author: Dustin Zubke