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How Realistic Is National Climate Assessment's Worst Case Scenario?

How realistic is the National Climate Assessment’s worst-case emissions scenario? A report released by the U.S. Energy Information Administration (EIA) on Tuesday sheds some interesting if inadvertent light on that question.

EIA projects that U.S. coal consumption in 2018 will be at its lowest level in 39 years:

EIA expects total U.S. coal consumption in 2018 to fall to 691 million short tons (MMst), a 4 percent decline from 2017 and the lowest level since 1979. U.S. coal consumption has been falling since its peak in 2007, and EIA forecasts that 2018 coal consumption will be 437 MMst (44 percent) lower than 2007 levels, mainly driven by declines in coal use in the electric power sector.

Electric generation accounted for 93 percent of U.S. coal consumption during 2007-2017. The decline in U.S. coal consumption is chiefly due to retirements of coal power plants and decreases in “capacity factors, or utilization, of coal plants as increased competition from natural gas and renewable sources have reduced coal’s market share.”

Specifically, in 2007, the U.S. coal fleet had 1,470 generators with a total capacity of 313 gigawatts (GW). “By the end of 2017, 529 of those generators, with a total capacity of 55 GW, had retired.” An additional 11 GW of coal-generating capacity retired as of September 2018, another 3 GW are expected to retire by year’s end, and four 4 GW are planning to retire by the end of 2019.

One of the “main drivers” of coal power plant retirements is the shale boom, which has kept natural gas prices “relatively low” ever since domestic production began to grow in 2007. Other factors include an aging coal fleet, increased competition from renewables, and environmental regulations such as the Environmental Protection Agency’s Mercury and Air Toxics Standards (MATS) rule.

The charts above provide additional evidence that the U.S. Government’s Fourth National Climate Assessment (NCA4) is alarmist.

As explained last week on this blog, NCA4 uses an emissions scenario called RCP8.5 to estimate climate change impacts if the world’s governments take no action to curb emissions. However, far from being a realistic “no action” baseline, RCP8.5 is close to being a worst-case scenario. It projects more rapid emissions growth than about 90 percent of all baseline scenarios in the literature.

RCP8.5 derives from an older scenario, known as A2, developed for the Intergovernmental Panel on Climate Change’s 2007 Fourth Assessment Report (AR4). According to its authors, the A2 “story line” contains the following elements:

  • Coal use increases almost 10-fold by 2100 and there is a continued reliance on oil in the transportation sector.
  • Population increases continuously (does not peak) in the 21st century, resulting in a global population of 12 billion by 2100.
  • Per capita income growth is slow and both internationally as well as regionally there is only little convergence between high and low income countries.
  • Because economic development is slow, there is little progress in energy efficiency. Combined with the high population growth, that leads to rapid energy demand growth.
  • Despite high energy demand, international trade in energy and technology is limited and overall rates of technological progress are modest.
  • Reflecting the slow rate of technological change, the long-term reduction in the energy-intensity of production slows to 0.5 percent annually—well below the historical average of roughly 1.0 percent annually during 1940-2000.

All of those assumptions today look quite dubious, especially the projection that coal increasingly dominates the global energy mix through the year 2100. As noted in last week’s post, EIA’s 2018 International Energy Outlook projects that global demand for all energy sources will increase through 2040—except for coal.

The Paris-based International Energy Agency (IEA) has a similar assessment. In IEA’s New Policies Scenario, which “aims to provide a sense of where today’s policy ambitions seem likely to take the energy sector,” a lot of new coal generation is built but, unlike RCP8.5, coal’s share of global primary energy declines. The agency’s World Energy Outlook 2017 states: “Compared with the past twenty-five years, the way that the world meets its growing energy needs changes dramatically in the New Policies Scenario, with the lead now taken by natural gas, by the rapid rise of renewables and by energy efficiency.” It further explains:

Since 2000, coal-fired power generation capacity has grown by nearly 900 gigawatts (GW), but net additions from today to 2040 are only 400 GW and many of these are plants already under construction. In India, the share of coal in the power mix drops from three-quarters in 2016 to less than half in 2040. In the absence of large-scale carbon capture and storage, global coal consumption flatlines. 

Climate campaigners’ enthusiasm for a coal-dominant emissions baseline is also a bit much considering their frequent claims that new wind and solar power are already competitive with or cheaper than new fossil generation and even cheaper than existing coal generation.

There are, of course, grounds for debating such claims. Low-priced, intermittent, non-dispatchable power from wind and solar farms is less valuable than reliable, dispatchable power from coal, gas, and nuclear. Cost estimates for wind and solar do not always include the tax credit subsidy costs, the fossil-fuel backup generation costs, and transmission line construction costs.

Nonetheless, the coal-dominated future of RCP8.5 is unreasonable based on the current and foreseeable market conditions. At least ten countries including the U.S. hold large quantities of technically recoverable shale gas. China has the world’s largest reserves and has been developing them since 2011. EIA’s 2017 International Energy Outlook projected that domestic shale resources would provide one-third of China’s total natural gas supply by 2040.

Climatologist Judith Curry recently asked visitors to her blog whether “RCP8.5 is an impossible scenario.” After summarizing the scenario’s features, Chemist in Langley blogger Blair King commented: “So [RCP8.5] assumes that virtually all the recent [global] technological, economic and demographic trends will be reversed. Not exactly a set of assumptions I would base a future plan on.”