The production and use of energy is the leading source of humanity's greenhouse gas emissions. The combustion of coal, oil, and natural gas accounts for roughly three quarters of all carbon dioxide emissions, or some six billion metric tonnes of carbon annually (as of 1992). Extracting and using fossil fuels emits almost one-fifth of all humanity's methane, some carbon dioxide, and large quantities of carbon monoxide and other air pollutants. The industrial sector accounts for more than a third of the global CO2 emissions from fossil-fuel combustion (excluding the power generation sector), the residential and commercial sector 32%, and the transport sector a bit over 21% (and growing rapidly). These energy-related emissions could be significantly reduced through a combination of new technologies and policies.
Leaks and spills during the extraction and transport of fossil fuels can be minimized. New "integrated recovery" techniques can cut methane emissions from coal mines by up to 8090% compared to standard practices. Technologies available today can reduce methane emissions from natural-gas distribution systems by up to 80% (compared to the world average). In oil fields where natural gas is flared off or vented because its sale is uneconomic, small on-site power generators can be introduced to make electricity for local use, or the gas can be compressed or converted for use by transport or near-by industries. These and many other technologies could together reduce total fugitive emissions from energy extraction and fuel transport by 5090%.
Fiscal and tax policies can encourage the early introduction of new technologies. By the year 2100, the entire capital stock of the world's current commercial energy system will be replaced at least twice. Incentives for investing in more cost-effective and energy-efficient technologies could maximize the opportunity this replacement offers for reducing emissions. Taxing emissions or the carbon content of fuels can steer investments toward lower-emissions technologies. Economists estimate that a worldwide phase-out of fossil-fuel subsidies would cut global emissions by 418% while boosting real incomes.
The conversion efficiency of electric power plants can be raised. The world-average conversion efficiency of 30% could be more than doubled in the longer term. The best available coal- and natural gas-fired power plants already convert fuel into useable energy with an efficiency of 45% and 52% respectively. One promising new technology is combined cycle power plants, where heat from the burning fuel drives steam turbines while the thermal expansion of the exhaust gases drives gas turbines. Another is cogeneration, or combined production of heat and power, which could increase the amount of useful energy produced to approximately 8090% of the heat energy in the fuel; this is much higher than what could be achieved with separate electricity and heat production plants, although users needing cooling or heat must exist nearby. Raising the efficiency of a typical coal-fired plant from 40% to 41% would cut the plant's CO2 emissions by 2.5%.
Power-plant emissions can also be reduced by switching from coal to less carbon-intensive fuels.Switching from coal to natural gas can reduce emissions by up to 4050%. (A possible constraint is that estimated coal reserves far exceed those of natural gas.) The efficient use of biomass in steam and gas-turbine cogeneration systems can reduce emissions; these systems have already shown themselves to be commercially feasible for certain pulp and paper and agricultural applications in some developing regions. Renewable energy technologies such as wind, solar, and small hydro can also reduce emissions while distributing electricity more flexibly "off the grid".
Industry can further reduce its energy intensity while cutting production costs. During the last two decades, fossil-fuel emissions from industry have declined or remained constant in developed countries due to technological trends and structural changes in the economy. These countries could reduce their industrial CO2 emissions by 25% or more relative to 1990 levels simply by replacing existing facilities and processes with the most efficient technological options currently available. If this upgrading of equipment occurred at the time of normal capital stock turnover, it would be a cost-effective way to reduce industrial emissions. At the global level, industrial emissions are projected to grow dramatically as developing countries industrialize; slowing their rate of emissions growth will require that they have access to the most efficient technologies available.
The residential and commercial sectors can adopt energy-efficient technologies. Technologies with pay-back periods of five years or less are available for many types of equipment now used in buildings. They could cut CO2 emissions 20% by 2010, 25% by 2020, and up to 40% by 2050 compared to the baseline scenario (in which energy efficiency improves gradually without any deliberate climate-related policy intervention). Buildings can be made more energy-efficient through market-based programmes in which customers or manufacturers receive technical support or financial incentives. Other options are mandatory or voluntary energy-efficiency standards, public and private research into more efficient products, and information and training programs. A combination of regulatory, information, and incentive programmes may offer the best approach to boosting the energy efficiency of these sectors.
Non-fiscal policies can also promote low-emissions technologies. The spread of new technologies and practices is often blocked by cultural, institutional, legal, informational, financial, and economic barriers. Government policies can help to remove some of the blockages. Information-sharing and product-labeling programmes, for example, can help consumers to recognize the broader consequences of their decisions. Governments can also support carefully targeted research, development, and demonstration projects for technologies that can reduce emissions and improve efficiency. While they will want to avoid trying to pick technology "winners", governments can play a valuable role by lowering the barriers faced by innovators and promoting a balanced national portfolio of energy options and research programmes. Another option is to introduce emissions targets together with tradable emissions permits that companies can buy and sell.
Deep reductions in greenhouse gas emissions from fossil fuels are possible over the next 50 to 100 years. A "thought experiment" based on several scenarios for a Low CO2Emitting Energy Supply System (LESS) finds that current and expected technologies could reduce global fossil-fuel-related CO2 emissions from about 6 billion tonnes of carbon annually in 1990 to about 4 billion tonnes in 2050 and 2 billion in 2100. Technology innovation and an emphasis on renewable energy sources, particularly biomass, will be essential for achieving these goals, and some countries may also consider nuclear energy. Since many different combinations of technologies could be used, this future energy-supply system could be constructed in any number of ways. In the short-term, however, with the global demand for energy certain to rise, actions to reduce emissions must continue to include improvements in energy efficiency.
The transport sector is a major and rapidly growing source of greenhouse gas emissions. Fossil-fuel combustion in vehicles and transport equipment accounted for about one-fifth of global carbon dioxide emissions in 1990. Transportation's global fuel consumption rose by 50% between 1973 and 1990, largely because of higher incomes and steady or declining fuel costs. Without new measures to slow the growth in emissions, the use of fossil fuel for transportation is expected to increase by another 35130% by the year 2025. Transportation also contributes to local and regional pollution problems through its emissions of carbon monoxide, lead, sulfur oxides (SOx) and nitrogen oxides (NOx).
Automobiles are the transport sector's largest consumer of petroleum and its largest source of carbon dioxide emissions. The developed world has the highest per-capita ownership of private cars today; developing countries currently claim a mere 10% of the world's cars, but are expected to account for most of the future growth in automobile use.
New technologies can increase the efficiency of automobiles and reduce emissions per kilometer traveled. New materials and designs can reduce a vehicle's mass and increase the efficiency at which it converts energy, thus lowering the amount of energy required to move it. With improved transmission designs, engines can operate closer to their optimal speed and load conditions. Technological improvements in combustion-engine technology and in petroleum formulations have already started to reduce per-vehicle emissions of both greenhouse gases and conventional pollutants. The energy intensity of these engines can probably still be improved by 1530% using current technology. More dramatic improvements could be achieved by, for example, adopting hybrid cars that use a combination of fuel-fired engines and electric motors.
Switching to less carbon-intensive fuels can also reduce carbon dioxide emissions.The feasibility of operating vehicles on fuels other than gasoline has been demonstrated in many countries. Alternative transport fuels include compressed natural gas, ethanol, methanol, and electricity derived from non-fossil sources. Compressed natural gas has been used successfully in fleet vehicles for a number of years in the US, Europe, and New Zealand. Brazil has a programme to promote the use of cars fueled by ethanol derived from sugar cane and other biomass. Such programmes can offer long-term global climate benefits in tandem with immediate improvements in local air quality.
Renewable energy technologies are becoming more and more competitive. Renewable energy could one day offer cost-effective alternatives to petroleum-based fuels. Electricity derived from hydroelectric, solar photovoltaics, wind systems, and hydrogen fuel cells can power the movement of people and goods with almost zero greenhouse gas emissions. The combustion of liquid fuels derived from sustainably grown biomass does emit carbon, but an equal amount of carbon is recaptured by the vegetation grown to make new biomass. The use of renewable fuels in the transport sector can help to reduce new CO2 emissions while delivering the degree of personal mobility that people desire.
Emissions can be further cut through changes in maintenance and operating practices. Many vehicles are not adequately maintained due to high costs or to the limited local availability of spare parts. In some areas, maintenance may simply be a low priority for drivers and vehicle owners. Recent studies suggest that an average vehicle's fuel consumption can be reduced by as much as 210% just through regular engine tune-ups.
Policies to reduce road traffic congestion can save both emissions and costs. The energy intensity of transport and the amount of congestion on the roads are strongly influenced by the average occupancy rate for passenger vehicles. Computerized routing systems for trucks can save money and fuel by optimizing payloads and minimizing time spent in traffic; some studies indicate that it is already technically possible to reduce energy use per tonne-kilometer by 2530%. Similarly, measures to improve general traffic control and restrict the use of motor vehicles have reduced energy use in some areas by as much as 2040%.
Urban planners can encourage low-emissions transport. Convincing people to switch from automobiles to buses or trains can reduce primary energy use per passenger-seat-kilometer by 3070%. A vital part of encouraging this transition is providing safe and efficient public transport systems. Cities can also promote walking, bicycling, and car pooling by limiting automobile access to certain roads, increasing the fees for public parking, and converting existing roads into bicycle lanes, bus-access roads, or "High Occupancy Vehicle" (HOV) lanes during peak hours. The introduction of computerized traffic-light control systems, more informative signs, and improved network designs, especially in urban areas with a high density of vehicles during peak travel hours, can also boost efficiency. In the short term, the greatest potential that urban planning has for affecting transport is in rapidly developing cities where cars are still in limited use.
Policies to reduce air traffic congestion can cut emissions while improving safety. Present flight patterns seek to reduce fuel consumption and other in-flight costs. Nevertheless, crowding at airports leads to long holding times at many destinations and contributes to higher-than-necessary fuel emissions. Advances in booking systems, policies to increase seat occupancy rates, and efforts to discourage simultaneous, partly-filled flights on the same route could further reduce congestion, minimize landing delays, and decrease emissions. Additional aviation fuel taxes could also play a role in promoting energy efficiency.
Policies to accelerate the rate of capital stock turnover in automobile and aircraft fleets may be the quickest way to reduce the short-term rate of emissions growth.This is especially true for developed countries, where large fleets with many older vehicles are already in place. Rewards can be offered for retiring older vehicles and airplanes that do not meet current national emissions standards, or small environmental "user fees" can be imposed, with the fees proportional to the vehicle's energy consumption. Fuel-efficiency standards for autos and aircraft are vital to reducing the energy intensity of transport over the longer term, but they affect only the newest vehicles.
The appropriate mix of policies will vary from city to city and country to country. In addition, measures to reduce emissions in the transport sector can take years or even decades to show their full results. But if carried out with care, climate-friendly transport policies can play a major role in promoting economic development while minimizing the local costs of traffic congestion, road accidents, and air pollution.
Forestry and agriculture are important sources of carbon dioxide, methane, and nitrous oxide. The world's forests contain vast quantities of carbon. Some forests act as "sinks" by absorbing carbon from the air, while forests whose carbon flows are in balance act as "reservoirs". At the global level, deforestation and changes in land use make forests a net source of carbon dioxide. As for agriculture, it accounts for about 20% of the human-enhanced greenhouse effect. Intensive agricultural practices such as livestock rearing, wet rice cultivation, and fertilizer use emit 50% of human-related methane and 70% of our nitrous oxide. Fortunately, measures and technologies that are currently available could significantly reduce net emissions from both forests and agriculture - and in many cases cut production costs, increase yields, or offer other socio-economic benefits.
Forests will need better protection and management if their carbon dioxide emissions are to be reduced.While legally protected preserves have a role, deforestation should also be tackled through policies that lessen the economic pressures on forest lands. A great deal of forest destruction and degradation is caused by the expansion of farming and grazing. Other forces are the market demand for wood as a commodity and the local demand for fuel-wood and other forest resources for subsistence living. These pressures may be eased by boosting agricultural productivity, slowing the rate of population growth, involving local people in sustainable forest management, adopting policies to ensure that commercial timber is harvested sustainably, and addressing the underlying socio-economic and political forces that spur migration into forest areas.
The carbon stored in trees, vegetation, soils, and durable wood products can be maximized through "storage management". When secondary forests and degraded lands are protected, they usually regenerate naturally and start to absorb significant amounts of carbon. Their soils can hold additional carbon if they are deliberately enriched, for example with fertilizers, and new trees can be planted. The amount of carbon stored in wood products can be increased by designing products for the longest possible lifetimes, perhaps even longer than what is normal for living wood.
Sustainable forest management can generate forest biomass as a renewable resource.Some of this biomass can be substituted for fossil fuels; this approach has a greater long-term potential for reducing net emissions than does growing trees to store carbon. Establishing forests on degraded or non-forested lands adds to the amount of carbon stored in trees and soils. In addition, the use of sustainably-grown fuel-wood in place of coal or oil can help to preserve the carbon reservoir contained in fossil fuels left unneeded underground.
Agricultural soils are a net source of carbon dioxide - but they could be made into a net sink. As much as 400800 million tonnes of carbon could be taken up by agricultural soils every year through improved management practices designed to increase agricultural productivity. Low-tech strategies include the use of composting and low- or no-tillage practices, since carbon is more easily liberated from soil that is turned over or left bare. In the tropics, soil carbon can be increased by returning more crop residues to the soil, introducing perennial (year-round) cropping practices, and reducing periods when fallow fields lie bare. In semi-arid areas, the need for summer fallow could be reduced through better water management or by the introduction of perennial forage crops (which would also eliminate the need for tillage). In temperate regions, soil carbon could be increased by the use of more animal manure. One recent study suggests that reduced tillage practices alone could convert US agricultural soils from an estimated net source of 200 million tonnes of carbon per year to a net sink of 200300 million tonnes by the year 2020, while improving yields for some crops.
Methane emissions from livestock could be cut with new feed mixtures. Cattle and buffalo account for an estimated 80% of annual global methane emissions from domestic livestock. Additives can increase the efficiency of animal feed and boost animals' growth rates, leading to a net decrease of 515% in methane emissions per unit of beef produced. In rural development projects in India and Kenya, adding vitamin and mineral supplements to the feed mixture of local dairy cows has significantly increased milk production and decreased methane emissions. Laboratory experiments with bovine somatotropin, a growth hormone for cows, have increased milk production in dairy cows while reducing methane emissions by up to 9%.
Methane from wet rice cultivation can be reduced significantly through changes in irrigation and fertilizer use. Some 50% of the total cropland used to grow rice is irrigated. Today's rice farmers can only control flooding and drainage in about one-third of the world's rice paddies, and methane emissions are higher in continually flooded systems. Recent experiments suggest that draining a field at specific times during the crop cycle can reduce methane emissions by up to 50% without decreasing rice yields. Additional technical options for reducing methane emissions are to add sodium sulfate or coated calcium carbide to the urea-based fertilizers now in common use, or to replace urea altogether with ammonium sulfate as a source of nitrogen for rice crops.
Nitrous oxide emissions from agriculture can be minimized with new fertilizers and practices.Fertilizing soils with mineral nitrogen and with animal manure releases N2O into the atmosphere. By increasing the efficiency with which crops use nitrogen, it is possible to reduce the amount of nitrogen needed to produce a given quantity of food. Other strategies aim to reduce the amount of nitrous oxide produced as a result of fertilizer use and the amount of N20 that then leaks from the agricultural system into the atmosphere. One approach, for example, is to match the timing and amount of nitrogen supply to a crop's specific demands. Another is to use advanced fertilization techniques such as controlled-release fertilizers and systems that deliver fertilizer to the plant's roots through its leaves rather than through the soil (where most nitrous oxide production occurs). The fertilizer's interactions with local soil and climate conditions can also be influenced by optimizing tillage, irrigation, and drainage systems.
Developing countries need financial resources so that they can address the causes and consequences of climate change. The Climate Change Convention therefore states that developed countries should provide “new and additional” funds to help developing countries meet their treaty commitments. Support can come from bilateral donors, multilateral sources, or the private sector.
The Convention’s financial “mechanism” is a major source of funding.Its role is to transfer funds and technology to developing countries and to countries with economies in transition on a grant or concessional basis. The mechanism must be guided by, and accountable to, the Conference of the Parties (COP) to the Convention, which decides on policies, programme priorities, and eligibility criteria. The Convention states that the operation of the financial mechanism can be entrusted to one or more international entities with “an equitable and balanced representation of all Parties within a transparent system of governance”. The COP has given this responsibility to the Global Environment Facility (GEF).
The Global Environment Facility was established in 1990, before the start of the Convention negotiations. The idea of an international mechanism to support projects benefiting the global environment was first discussed in 1987 by the Brundtland Commission. The GEF was launched several years later with the World Bank, the United Nations Development Programme (UNDP), and the United Nations Environment Programme (UNEP) as the implementing agencies. By the time the Earth Summit was held in 1992, the GEF was considered a possible source of funds for the implementation of the biodiversity and climate change conventions.
The GEF pays the “agreed full incremental costs” of projects to protect the global environment. GEF funds complement regular development assistance, offering developing countries the opportunity to incorporate environmentally-friendly features that address global environmental concerns. For example, if a country invests in a new power plant to promote economic development, the GEF may provide the additional, or incremental, funds needed to buy equipment for reducing the emissions of greenhouse gases. In this way, GEF funds normally cover only a portion of a project’s entire costs.
The available funds are based on voluntary contributions from governments. During the “pilot phase” of 1991-94, the GEF trust fund contained some $800 million from participating governments. When the GEF was later restructured to make it more universal, democratic, and transparent, it was replenished from 1 July 1994 through 30 June 1998 with over $2 billion. The second replenishment for the four-year period starting in 1998 will be based on pledges from 36 governments totaling $2.75 billion.
Projects must be country-driven and based on national priorities that support sustainable development.The GEF covers four focal areas: climate change, biological diversity, international waters, and protection of the ozone layer. In addition, the agreed incremental costs of activities to combat land degradation (primarily desertification and deforestation) as they relate to the four focal areas may also be eligible for funding. So too are the agreed incremental costs of other activities under Agenda 21, insofar as they achieve global environmental benefits in the focal areas. At the end of 1996, climate change activities accounted for about 38% of the gross funds allocated in the GEF portfolio.
In addition to technical assistance and investment projects, the GEF supports various “enabling activities.”These activities help countries to develop the necessary institutional capacity for developing and carrying out strategies and projects. In particular, the GEF pays the full costs of preparing the national communications that are required by the Convention. Projects relating to grassroots action sponsored by non-governmental organizations are supported through a Small Grants Programme managed by UNDP, while medium-sized projects (under $1 million) can be financed through UNDP, UNEP, or the World Bank. Besides directly providing grants, the GEF facilitates other bilateral, co-financing, and parallel financing arrangements. It also promotes the leveraging of private-sector participation and resources.
Funding proposals are submitted to the GEF through one of the three implementing agencies.UNDP, UNEP, and the World Bank each has its own special role to play in promoting projects and supporting the GEF process. The GEF Secretariat oversees the work programme and helps to ensure that projects comply with GEF programming strategies and policies. Once approved, projects are carried out by a wide range of executing agencies, such as government ministries, non-governmental organizations (NGOs), UN bodies, regional multilateral institutions, and private firms. The final authority for all funding decisions and operational, programmatic, and strategic issues is vested in the GEF Council. The Council consists of 32 of the GEF’s 157 members and meets semi-annually, while the Assembly of all participating countries meets every three years.
In 1999, the COP asked the GEF to continue operating the financial mechanism. It decided to review the situation again within four years. As required by the Convention, the COP continues to provide guidance on the GEF’s policies, programme priorities, and eligibility criteria relating to climate change projects. It has emphasized that projects funded by the GEF should be cost-effective and supportive of national development priorities, and that they should focus, at least initially, on enabling activities that help developing countries prepare and submit information about their implementation of the Convention.
Climate change is a global problem that requires a global solution.Developed countries account for the largest part of historical and current greenhouse gas emissions; their share for 1994 was about 75% of the global total. However, while per-capita emissions in developed countries are likely to stabilize (at well above the world average), developing-country emissions continue to rise steadily and are expected to represent some 50% of the global total before the year 2025.
Developing countries will need access to climate-friendly technologies if they are to limit emissions from their growing economies.Such technologies are essential to establishing a low-emissions industrial infrastructure. Under the Climate Change Convention, the richest countries (essentially the OECD members) agree to “take all practical steps to promote, facilitate, and finance, as appropriate, the transfer of, or access to, environmentally-sound technologies and know-how to other Parties, particularly developing country Parties, to enable them to implement the Convention.”
Technology can be transferred through several different channels.The traditional channel has been bilateral and multilateral development assistance in the form of export credits, insurance, and other trade support. Incorporating climate change considerations into the programmes of national development offices and multilateral development banks would greatly increase the transfer of low-emissions technologies. The Convention also provides for two new channels. The first is the government-funded Global Environment Facility (GEF). The second is “Activities Implemented Jointly”, or AIJ, which seeks to attract private sector funds for the transfer of technology and know-how to developing countries and countries with economies in transition. The Convention emphasizes that these two new channels must add to, rather than replace, traditional development assistance.
The GEF has a critical role to play in the co-development and transfer of advanced technologies. The GEF supports both the development and demonstration of technologies that can improve economic efficiency and reduce greenhouse gas emissions while promoting sustainable development in developing and transition countries. GEF projects can be used to demonstrate the technological feasibility and cost-effectiveness of renewable energy technologies and energy efficiency options. In these cases, the GEF pays the added cost of introducing a climate-friendly technology in place of a more polluting one.
Activities Implemented Jointly has been conceived as one way of channeling private-sector money into climate change activities. If successful, AIJ could promote the co-development of advanced technologies and their transfer from developed countries to other parts of the world. These technologies would need to be appropriate to local circumstances, environmentally sound, and economically competitive. AIJ is carried out through partnerships between an investing company in a developed country and a counterpart in a host country (which could be developed, developing, or in transition to a market economy). The investing partner is expected to provide most of the required technology and financial capital. The host-country partner may provide the site, the principal staff, and the organization needed to launch and sustain the project.
AIJ is currently being tested through a pilot phase that will end by 1999.Proponents argue that AIJ can reduce global emissions cost-effectively, as reducing a given quantity of emissions may be cheaper in many developing and transition countries than in some developed countries. Skeptics are concerned that AIJ will not only transfer technology but – contrary to the spirit of the Convention – the responsibility for combating climate change from developed to developing countries. Under the pilot phase, the investing country does not receive credits for the emissions it helps to reduce in another country, although supporters of the concept emphasize the importance of a credit system if AIJ is to achieve its full potential. Other issues include how to structure the reporting and regulatory regime and how to prevent the transfer of uncompetitive and inappropriate technologies.
Technology transfer must be accompanied by capacity building.The delivery of new hardware alone rarely leads to “real, measurable and long-term environmental benefits” in the host country. In many cases it is absolutely essential to strengthen existing local institutions. This includes building managerial and technical skills and transferring the know-how for operating and replicating new technological systems on a sustainable basis. Without such preparation, advanced technologies may fail to penetrate the market. Capacity building also has a role to play in ensuring that new technologies are, in the words of the Convention, “compatible with and supportive of national environment and development priorities and strategies, [and] contribute to cost-effectiveness in achieving global benefits.”
The 1997 Kyoto Protocol provides for a “clean development mechanism”. This mechanism is intended to help developing countries achieve sustainable development and contribute to the Convention’s goals. It will be guided by the Parties to the Protocol, supervised by an executive board, and based on voluntary participation. Project activities will result in “certified emissions reductions” that developed countries can use to meet their own binding emissions targets. These projects can involve private or public entities and must lead to real and measurable long-term emissions-limitation benefits. The details of just how this mechanism will work in practice must still be developed.