The Carbon Collision Course

Andrew Perry looks at the challenges of tackling global carbon emissions, and asks when the world will start to take them on seriously

AN examination of recent editions of The Chemical Engineer clearly demonstrates one thing: carbon emissions are definitely the topic of the moment. In the June 2019 edition, 15 of the 48 pages of articles or features make some reference to the challenges of reducing emissions. Whether it is renewable energy, carbon capture and storage (CCS), or transitioning to hydrogen-based intermediate fuel, the drive to transition to a ‘low carbon’ economy dominates the debate about the challenges facing chemical engineering.

In the April 2019 edition, News in Numbers reported how the UK’s emissions fell for the sixth consecutive year in 2018. At 361 mt CO₂ the UK’s emissions were 39% below 1990 levels, which is the Kyoto Protocol baseline year. Given the volume of coverage in the scientific and technical literature on this topic, a visitor from another planet could easily be forgiven for thinking emissions on Earth are completely under control.

However, it turns out nothing could be further from the truth. As reported in the February 2019 News in Numbers, global emissions rose by 2.7% in 2018. Man-made emissions from combined fossil fuel consumption and land use change was reported as 38.9bn t CO₂, a 41% increase over 1990 Kyoto baseline year emissions.

Even in today’s popular press, hardly a day goes by without some coverage of climate-related issues. Whether it is extreme weather events, sea-level change, risk to the Great Barrier Reef, and most recently, Australia’s bushfire crisis, mitigating greenhouse gas emissions is claimed to be the greatest technical challenge we face this century. But despite reductions in some jurisdictions, emissions have risen consistently over the past 100 years by a compound interest rate of around 2.5%.¹ Achieving real emission reductions has been likened to squeezing a balloon: squeeze it at one end and it just bulges out at the other. For example, efficiency improvements in cars and aircraft made over recent years haven’t resulted in emission reductions. It has made cheap travel available to more and more of the world’s growing population. And renewable energy hasn’t had any measurable impact on emissions growth. So far, renewable energy has not globally displaced fossil fuel energy, it has come on stream incremental to it.¹

Figure 1 shows the estimated growth of anthropogenic carbon emissions and global population over the past 250 years of the Industrial Revolution. The chart also shows the increasing trend in atmospheric CO₂ concentration on the right-hand axis.

It’s easy to see a correlation between population and carbon emissions. But this doesn’t prove there’s a cause-and-effect relationship. Many in the debate purport that emissions are solely a problem associated with unconstrained population growth. Given that the global population only started to rise exponentially around the start of the Industrial Revolution, it is more likely to be the other way round: access to cheap fossil fuel energy has been a causal factor in this dramatic population growth. Almost all of the recent world population growth has occurred in developing economies – countries with very low fossil fuel consumption and emissions. While most of the cumulative carbon emissions since the Industrial Revolution have occurred in the West (referring here to the US and Canada, the EU including the UK, Australia, New Zealand and Japan), the sheer size of the non-West’s population (6.5bn) means it now accounts for around 70% of the world’s emissions. If the non-West’s CO_2e emissions (which are currently only 4.8 t CO_2e per capita) increase by only 2 t per capita, it will negate the West eliminating all of its current CO_2e emissions.

UK, Australian and global emissions

There are six categories of greenhouse gases that are emitted through human industrial activity – so-called anthropogenic emissions. Although methane emissions from the beef industry gets plenty of media attention, agricultural emissions in total account for only 13% of national emissions for Australia and even less for the UK (see Table 1).

In both countries, fossil fuel consumption (including fugitive methane emissions associated with extraction and processing) accounts for more than 80% of reported emissions. So tackling fossil fuel consumption-based emissions is really the crux of the issue. 

Every day the world consumes about 12m t of oil (around 85m bbl), 21m t of coal, and 7.5m t of natural gas, resulting in about 93m t of direct carbon dioxide emissions. That’s about 12 kg CO₂ per day for every person on the planet (7.5bn). That might not sound like much, but it’s about 12 times the amount of CO₂ we exhale every day by the natural respiration of carbohydrate energy in food. But that’s just the world’s average. In the West, fossil fuel consumption emits 28 kg per day – 28 times the natural respiration rate.

Australia’s greenhouse gas emissions are around 540m t/y CO_2e. That is about 21.4 t CO_2e per capita (60 kg/d), which is the highest emission footprint of all Western industrialised nations. This compares to only around 7 t per capita in the UK. So what drives Australian per capita emissions to be so much higher that the UK? It turns out that Australia simply consumes more fossil fuels and electricity per capita – approximately double the volumes of petrol, diesel, aviation fuel, natural gas and electricity². Australian fossil fuel per capita emissions have stayed relatively constant at about 17 t over the Kyoto Protocol period. The UK’s emissions have reduced from about 12 t in 1990, to around 6 t in 2017. The UK has achieved this reduction through a number of measures, including a high uptake of renewable energy, but the primary driver of the UK emission reductions has been the phasing out of coal-fired power generation. However, reductions from other heavy industrial activity has also played a role. It is estimated that the global steel industry contributes around 7–8% of greenhouse gas emissions. Steel production results in emissions of around 2–3 t of CO_2e per ton of steel. Figure 2 shows steel production in the UK, US and Australia between 1990 and 2016. The three countries have reduced steel production by 20%. But by far the largest percentage decrease has occurred in the UK, where steel production has declined by 57%.

Figure 3 shows global steel production over the same period.

On this global scale, the reductions in the US, UK and Australia can hardly been seen. All the net increase in global steel production since 1990 (around 800m t) has been met by production growth in China  and India – both countries exempt from Kyoto Protocol round one emission reduction targets (set in the 1990s). And it’s a similar story for the other high emission intense metal, aluminium. China and India combined now produce 59% of the world’s primary aluminium.⁵

The reduction in emissions from heavy industrial activity in the UK has had no impact on global emissions. The emissions have simply been outsourced. In fact, when the net carbon footprint of the balance of imported and exported goods is taken into account, it is estimated that the UK’s emissions increased by around 20% over the period 1990–2009.⁴ Figure 4 shows the growth in global fossil fuel emissions over the Kyoto Protocol period from 1990–2104.

It looks like the UN’s policy of only restricting emissions from the West (so called Annex-1 nations) has completely failed to curb the rise in global emissions. Any minor gains that have been achieved have been more than negated by industrial growth in non-Western and developing economies. Much of this growth has been underpinned by Australian natural resources exports of about 1.3bn t/y (iron ore, coal, gas and bauxite), worth about A$160bn/y (US$110bn/y) to the Australian economy.

The remaining carbon emissions budget

Figure 1 showed billions of tons of CO_2e emissions per year (as carbon equivalent – equal to CO_2e x 12/44). The area under the curve is equal to the total cumulative amount of carbon emitted. The result is about 2trn t of CO_2e. The various UN climate studies estimate that to stay within a temperature increase of less than 1.5°C, we can emit around another trillion tons (+/- 50%)¹, about half of what we have emitted so far. If we gradually cut our current ~44bn t of CO_2e emissions to zero from today, we’ll use up our remaining emission budget in about another 50 years.

Figure 5 shows the emission cut we would need to achieve.

The problem is that there are more fossil fuel reserves than the remaining carbon budget allows. We have enough proven and probable fossil fuel reserves to emit an estimated 3trn t into the atmosphere – three times the allowable budget.¹ But if possible reserves and non-conventional resources are included, that figure increases to about ten times the allowable budget. So the key question is: which private or state-owned energy companies will be restricted to leaving their economically-recoverable fossil fuel reserves in the ground? When will we start? And who will pay the cost of writing off the reserves? For Australia, this would be a write-off of trillions of dollars’ worth of coal reserves and export revenue. Even the UK, which has the most ambitious direct emission reduction targets in the world, has a policy of maximising recovery of its remaining oil fossil fuel reserves. To the visitor from another planet, it might seem that we suffer from a severe case of the right hand not knowing what the left hand is doing.

Conclusions

Given there is so much concern about emissions, why haven’t we so far been able to do anything about it? As shown, the UN’s policies have completely failed to curb the rise in global emissions. And the EU’s policies of capping and trading emissions have simply driven heavy industrial emissions to be outsourced to developing economies. Well, as with most things in life it boils down to costs. Renewable energy is espoused as the solution to fossil fuel emissions, and certain sectors in the energy debate claim it is already cheaper than fossil fuel. If this is the case, emission reductions should be easy, and further uptake of renewable energy would be booming without government subsidy.

However, to quote from a recent article in The Chemical Engineer: “Finally, with regards to cost, it would be intellectually dishonest to set expectations that decarbonisation of the economy will not come at a cost compared to the status quo. Therefore, decarbonisation is fundamentally a moral decision, not an economic inevitability”. (Tommy Isaac, Issue 933, Mar 2019: Hydrogen Economy).

If decarbonisation of the global economy is going to increase costs, who is going to pay? Of course, it can only be governments, or in other words, taxpayers.

In my view, the fairest and most transparent way to incentivise decarbonising any economy is through an across-the-board carbon tax. As has been the case in some jurisdictions, there should be no exception for luxury items such as international air travel and tourism. But a carbon tax cannot just be applied to country-produced direct CO_2e emissions. To avoid the effect of high emission industries being outsourced to developing economies, it must be applied to the carbon footprint of imported goods, known as a ‘consumption-based tax’. Consumption-based carbon taxation is a way for individual countries to commit to achieving global emission reduction objectives, without having to consider the action – or inaction – of other countries. 

The problem with a consumption-based carbon tax is it is very difficult to accurately determine the carbon footprint of specific wholesale imported goods. While the carbon emissions for whole economies can be estimated with reasonable accuracy, allocating them to specific units of production would require immensely complicated allocation rules and material traceability requirements. The possibility that such a scheme could be worked into our global trade framework seems pretty unlikely.

Tackling carbon emissions requires a global long-term plan, for which outcomes will only be measurable over a 50–100-year horizon. Tax payers in democracies will have to vote for more expensive energy and consumer goods over multiple short political terms. This is for benefits to the environment they probably will not live to see, and could well be negated by other countries failing to take similar action on emissions. There is little wonder that carbon emissions have presented a challenge, which so far our global scientific, engineering and political communities have been unable to address.

Everybody seems to have an opinion on what should be done about emissions. However, I wonder if many of us appreciate how dependent on fossil fuel energy for our everyday consumer goods we have become, and what radical changes to our consumption habits are required if we are to seriously alter our current emissions trajectory.

References

1. Burners-Lee, M and Clark, D, The Burning Question, Profile Books, 2013.

2. Perry, A, The Carbon Collision Course:  Australia’s Emissions and Energy Policy Crisis, Australia, Pursuit Energy and Project Consulting, 2019 (contains a full list of references for this article).

3. Olivier JGJ, Janssens-Maenhout G, Muntean M and Peters JAHW (2014), Trends in global CO2 emissions; 2014 Report, The Hague: PBL Netherlands Environmental Assessment Agency; Ispra: European Commission, Joint Research Centre.

4. https://bit.ly/2ZYVBC1

5. Brown, TJ et al, 2018, World Mineral Production: 2012–2016. British Geological Survey, Keyworth, Nottingham.