IDEAS home Printed from https://ideas.repec.org/p/amz/wpaper/2018-02.html
   My bibliography  Save this paper

The Impact of Negative Emissions Technologies and Natural Climate Solutions on Power-Sector Asset Stranding

Author

Listed:
  • Cohen, Francois
  • Pfeiffer, Alexander

Abstract

The generation capacity of existing and currently planned power generators goes beyond the limits of a 2°C carbon budget. Some assets will have to be stranded unless carbon is sequestrated with retrofit CCS or the carbon budget is expanded by the large-scale deployment of negative emissions technologies (NETs), potentially including land-based approaches referred to as "natural climate solutions". In this paper, we show that NETs could reduce stranding by 26% to 46% over the course of the century, depending on the pursued climate goal. The bulk of the additional carbon budget is likely to go to efficient gas generators; the stranding of coal-fired power plants occurs irrespective of the availability of NETs.

Suggested Citation

  • Cohen, Francois & Pfeiffer, Alexander, 2018. "The Impact of Negative Emissions Technologies and Natural Climate Solutions on Power-Sector Asset Stranding," INET Oxford Working Papers 2018-02, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    • Handle: RePEc:amz:wpaper:2018-02
    as

    Download full text from publisher

    File URL: https://www.inet.ox.ac.uk/files/Stranding_Cohen26Pfeiffer_19_Jan_2018.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Christophe McGlade & Paul Ekins, 2015. "The geographical distribution of fossil fuels unused when limiting global warming to 2 °C," Nature, Nature, vol. 517(7533), pages 187-190, January.
    2. Julie Rozenberg & Adrien Vogt-Schilb & Stephane Hallegatte, 2017. "Instrument Choice and Stranded Assets in the Transition to Clean Capital," IDB Publications (Working Papers) 98039, Inter-American Development Bank.
    3. Bhave, Amit & Taylor, Richard H.S. & Fennell, Paul & Livingston, William R. & Shah, Nilay & Dowell, Niall Mac & Dennis, John & Kraft, Markus & Pourkashanian, Mohammed & Insa, Mathieu & Jones, Jenny & , 2017. "Screening and techno-economic assessment of biomass-based power generation with CCS technologies to meet 2050 CO2 targets," Applied Energy, Elsevier, vol. 190(C), pages 481-489.
    4. Elmar Kriegler & John Weyant & Geoffrey Blanford & Volker Krey & Leon Clarke & Jae Edmonds & Allen Fawcett & Gunnar Luderer & Keywan Riahi & Richard Richels & Steven Rose & Massimo Tavoni & Detlef Vuu, 2014. "The role of technology for achieving climate policy objectives: overview of the EMF 27 study on global technology and climate policy strategies," Climatic Change, Springer, vol. 123(3), pages 353-367, April.
    5. Riahi, Keywan & Kriegler, Elmar & Johnson, Nils & Bertram, Christoph & den Elzen, Michel & Eom, Jiyong & Schaeffer, Michiel & Edmonds, Jae & Isaac, Morna & Krey, Volker & Longden, Thomas & Luderer, Gu, 2015. "Locked into Copenhagen pledges — Implications of short-term emission targets for the cost and feasibility of long-term climate goals," Technological Forecasting and Social Change, Elsevier, vol. 90(PA), pages 8-23.
    6. Johnson, Nils & Krey, Volker & McCollum, David L. & Rao, Shilpa & Riahi, Keywan & Rogelj, Joeri, 2015. "Stranded on a low-carbon planet: Implications of climate policy for the phase-out of coal-based power plants," Technological Forecasting and Social Change, Elsevier, vol. 90(PA), pages 89-102.
    7. Guivarch, Céline & Hallegatte, Stéphane & Crassous, Renaud, 2009. "The resilience of the Indian economy to rising oil prices as a validation test for a global energy-environment-economy CGE model," Energy Policy, Elsevier, vol. 37(11), pages 4259-4266, November.
    8. van Vuuren, Detlef P. & Hoogwijk, Monique & Barker, Terry & Riahi, Keywan & Boeters, Stefan & Chateau, Jean & Scrieciu, Serban & van Vliet, Jasper & Masui, Toshihiko & Blok, Kornelis & Blomen, Eliane , 2009. "Comparison of top-down and bottom-up estimates of sectoral and regional greenhouse gas emission reduction potentials," Energy Policy, Elsevier, vol. 37(12), pages 5125-5139, December.
    9. Pfeiffer, Alexander & Millar, Richard & Hepburn, Cameron & Beinhocker, Eric, 2016. "The ‘2°C capital stock’ for electricity generation: Committed cumulative carbon emissions from the electricity generation sector and the transition to a green economy," Applied Energy, Elsevier, vol. 179(C), pages 1395-1408.
    10. Holly Jean Buck, 2016. "Rapid scale-up of negative emissions technologies: social barriers and social implications," Climatic Change, Springer, vol. 139(2), pages 155-167, November.
    11. Kriegler, Elmar & Riahi, Keywan & Bauer, Nico & Schwanitz, Valeria Jana & Petermann, Nils & Bosetti, Valentina & Marcucci, Adriana & Otto, Sander & Paroussos, Leonidas & Rao-Skirbekk, Shilpa & Currás,, 2015. "A short note on integrated assessment modeling approaches: Rejoinder to the review of “Making or breaking climate targets — The AMPERE study on staged accession scenarios for climate policy”," Technological Forecasting and Social Change, Elsevier, vol. 99(C), pages 273-276.
    12. Vivien Foster & Daron Bedrosyan, 2014. "Understanding CO2 Emissions from the Global Energy Sector," World Bank Publications - Reports 17143, The World Bank Group.
    13. C. Wilson & A. Grubler & N. Bauer & V. Krey & K. Riahi, 2013. "Future capacity growth of energy technologies: are scenarios consistent with historical evidence?," Climatic Change, Springer, vol. 118(2), pages 381-395, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Audoly, Richard & Vogt-Schilb, Adrien & Guivarch, Céline & Pfeiffer, Alexander, 2018. "Pathways toward zero-carbon electricity required for climate stabilization," Applied Energy, Elsevier, vol. 225(C), pages 884-901.
    2. Ajay Gambhir & Laurent Drouet & David McCollum & Tamaryn Napp & Dan Bernie & Adam Hawkes & Oliver Fricko & Petr Havlik & Keywan Riahi & Valentina Bosetti & Jason Lowe, 2017. "Assessing the Feasibility of Global Long-Term Mitigation Scenarios," Energies, MDPI, vol. 10(1), pages 1-31, January.
    3. Fankhauser, Samuel & Jotzo, Frank, 2017. "Economic growth and development with low-carbon energy," LSE Research Online Documents on Economics 86850, London School of Economics and Political Science, LSE Library.
    4. Renaud Coulomb & Oskar Lecuyer & Adrien Vogt-Schilb, 2019. "Optimal Transition from Coal to Gas and Renewable Power Under Capacity Constraints and Adjustment Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(2), pages 557-590, June.
    5. Hepburn, Cameron & Pfeiffer, Alexander & Vogt-Schilb, Adrien & J. Tulloch, Daniel, 2018. "Dead on arrival? Implicit stranded assets in leading IAM scenarios," INET Oxford Working Papers 2018-08, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    6. Adrien Vogt‐Schilb & Stephane Hallegatte, 2017. "Climate policies and nationally determined contributions: reconciling the needed ambition with the political economy," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 6(6), November.
    7. Shimbar, A., 2021. "Environment-related stranded assets: An agenda for research into value destruction within carbon-intensive sectors in response to environmental concerns," Renewable and Sustainable Energy Reviews, Elsevier, vol. 144(C).
    8. Mignone, Bryan K. & Showalter, Sharon & Wood, Frances & McJeon, Haewon & Steinberg, Daniel, 2017. "Sensitivity of natural gas deployment in the US power sector to future carbon policy expectations," Energy Policy, Elsevier, vol. 110(C), pages 518-524.
    9. Yangsiyu Lu & Francois Cohen & Stephen M. Smith & Alexander Pfeiffer, 2022. "Plant conversions and abatement technologies cannot prevent stranding of power plant assets in 2 °C scenarios," Nature Communications, Nature, vol. 13(1), pages 1-11, December.
    10. Luderer, Gunnar & Pietzcker, Robert C. & Carrara, Samuel & de Boer, Harmen Sytze & Fujimori, Shinichiro & Johnson, Nils & Mima, Silvana & Arent, Douglas, 2017. "Assessment of wind and solar power in global low-carbon energy scenarios: An introduction," Energy Economics, Elsevier, vol. 64(C), pages 542-551.
    11. Cotterman, Turner & Small, Mitchell J. & Wilson, Stephen & Abdulla, Ahmed & Wong-Parodi, Gabrielle, 2021. "Applying risk tolerance and socio-technical dynamics for more realistic energy transition pathways," Applied Energy, Elsevier, vol. 291(C).
    12. Ajay Gambhir & Isabela Butnar & Pei-Hao Li & Pete Smith & Neil Strachan, 2019. "A Review of Criticisms of Integrated Assessment Models and Proposed Approaches to Address These, through the Lens of BECCS," Energies, MDPI, vol. 12(9), pages 1-21, May.
    13. Löffler, Konstantin & Burandt, Thorsten & Hainsch, Karlo & Oei, Pao-Yu, 2019. "Modeling the low-carbon transition of the European energy system - A quantitative assessment of the stranded assets problem," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 26, pages 1-15.
    14. Tamaryn Napp & Dan Bernie & Rebecca Thomas & Jason Lowe & Adam Hawkes & Ajay Gambhir, 2017. "Exploring the Feasibility of Low-Carbon Scenarios Using Historical Energy Transitions Analysis," Energies, MDPI, vol. 10(1), pages 1-36, January.
    15. Li, Jun & Hamdi-Cherif, Meriem & Cassen, Christophe, 2017. "Aligning domestic policies with international coordination in a post-Paris global climate regime: A case for China," Technological Forecasting and Social Change, Elsevier, vol. 125(C), pages 258-274.
    16. Agarwala, Matthew & Burke, Matt & Klusak, Patrycja & Mohaddes, Kamiar & Volz, Ulrich & Zenghelis, Dimitri, 2021. "Climate Change And Fiscal Sustainability: Risks And Opportunities," National Institute Economic Review, National Institute of Economic and Social Research, vol. 258, pages 28-46, November.
    17. Antoine GODIN & Emanuele CAMPIGLIO & Eric KEMP-BENEDICT, 2017. "Networks of stranded assets: A case for a balance sheet approach," Working Paper d51a41b5-00ba-40b4-abe6-5, Agence française de développement.
    18. Zhang, Shuwei & Bauer, Nico & Yin, Guangzhi & Xie, Xi, 2020. "Technology learning and diffusion at the global and local scales: A modeling exercise in the REMIND model," Technological Forecasting and Social Change, Elsevier, vol. 151(C).
    19. Sen, Suphi & von Schickfus, Marie-Theres, 2020. "Climate policy, stranded assets, and investors’ expectations," Journal of Environmental Economics and Management, Elsevier, vol. 100(C).

    More about this item

    Keywords

    negative emissions technologies (NETs); carbon budget; stranded assets; climate policy; power generation;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:amz:wpaper:2018-02. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: INET Oxford admin team (email available below). General contact details of provider: https://edirc.repec.org/data/inoxfuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.