How to get rid of existing coal?

If you ask Jim Hansen to name the single most important thing required to avert catastrophic climate change, he’ll say this: don’t burn all the coal (nor unconventional fossil fuels, such as tar sands and oil shales). Ideally, we would also prefer to leave some of the oil, and much of the natural gas, in the ground — or at least use it for other purpose that didn’t require combusting it, such as for chemical feedstocks and lubricants. But the latter is, alas, unlikely.

As Described in Storms of Our Grandchildren (and elsewhere), if we accept that all the proven reserves of oil/gas will be burned (i.e., consumed up to the dashed line in the figure above), and yet also required that all coal combustion be phased out by the year 2030, then the level of atmospheric CO2 would likely peak at about 425 ppm. At that point, improved forestry, soil carbon sequestration and potentially geoengineering, could be used to gradually draw CO2 back down to levels of around 350 ppm — a value necessary to restore the Earth’s present energy imbalance of ~0.75 W/m2. In short, we’d have overshoot, but have a decent chance of recovering the climate system to a near-Holocene state before amplifying feedbacks really take hold.

Now, a line of argument that has been developing here on BNC — and one that I have found quite persuasive, and readily espoused in my blogs and talks — is this: If we, as a global society, can develop and deploy electricity generating technologies that are cheaper than coal, yet emit no CO2 when operating, then we can realistically fix the carbon problem in time without the need to impose a carbon price. After all, even if you were unconcerned about carbon pollution, why would you choose to build a coal-fired power station –which has to be fed huge amounts of mined fuel and which produces large amounts of unhealthy fly ash, heavy metals, sulphate and black carbon aerosols etc. — if there was a cheaper alternative? (be it nuclear power, solar thermal, whatever)

If the above reasoning is valid, then it is reasonable to consider what, in addition, a carbon price might achieve. There has been a lot of recent heated debate in this thread on that very point! One obviously positive outcome would be to hasten — rapidly, if the price rose quickly and followed a clear schedule — the deployment of non-coal alternatives, because they’d become relatively cheaper than coal more quickly, and would also be favoured in medium- to long-term financial planning, compared to the situation where it was left only to the market via ‘nth-of-a-kind’ engineering/economic cost reductions (and the uncertainty associated with the price-parity-cross-over point). A carbon price might also provide a strong motivation to ‘backfill’ the coal problem, such as encouraging nations to look at innovative ideas such as Jim Holm’s Coal2Nuclear strategy. A negative outcome (putting aside the socio-political difficulties in getting a price implemented in the first place), would be that electricity prices would rise in the short- to medium-term, and this would risk stymieing sustainable development (other arguments for the negative case are detailed by Peter Lang, TerjeP, and some other commenters, here).

So, from a climate change perspective, a rising carbon price makes real sense (i.e., it facilitates a faster mitigation response, and avoids some risk by offering hope of ditching fossil fuels even if we cannot develop cheaper alternatives). From a sustainable development perspective, however, a carbon price might drive up energy prices up to unmanageable levels (leading to cycles of economic depression), slow the rise in people’s standards of living (especially in the developing world) and so do little to slow population growth, and would also waste time and resources in wrangling over the implementation model right and in securing political and international multilateral agreements. We all saw how Copenhagen turned out. (More on alternatives to the UN-process in later posts)

After Hansen’s talk in Adelaide on 11 March 2010 (podcast here), I had an interesting chat with him over dinner. It was wide ranging, but one point in particular stuck in my mind. I put to Jim the proposition that cheaper-than-coal electricity could fix the carbon mitigation problem without needing to impose a carbon price. He replied that he didn’t think any fit-for-service technology was close enough to achieve levelised-cost-of-electricity price parity with coal within the next two decades. I said ‘I beg to differ Jim — Gen III nuclear power in China (and perhaps India and South Korea)  is very likely to get there within the next 10 years, and after that, the world will follow quickly by example‘. I felt confident that I was on a winning argument.

He paused and then replied: ‘Well, even if you’re right, we’ve got all those existing coal-fired power stations that will go on burning coal for their lifetime‘. I responded that it might be feasible to rip out the coal burners at large plants, and install nuclear reactors, all whilst keeping the balance of the plant (cooling towers, transmission lines and other plant infrastructure) to reduce costs — i.e., coal2nuclear.

‘Look, even if that idea turns out to be feasible, and I have my doubts, absent a carbon price, what’s the motivation for doing this?’ he asked. I said it might be anything from cleaning up local air and water pollution, to long-term energy security, to the economic impact of the rising cost of thermal coal, whereby prices could rise dramatically if supplies continue to tighten. This would be especially the case for enormous consumers like China — which is the world’s largest coal producer yet is already a net coal importer — because as their mines play out, they won’t be able to get coal into the ports quickly enough to keep up with rising demand.

Jim said (I’m paraphrasing): ‘Barry, it’s a nice idea, but I don’t buy it. If nations start building lots of cheap nuclear or solar power plants, the demand for coal is going to drop through the floor. At that point, coal will get real cheap, and someone, somewhere, will burn it. Or turn it into liquid fuels. And they’ll keep using it for coking iron, and so on. The bottom line is that we’ve got to stop using coal within the next few decades. Slowing down over this century is not enough. We have to leave most of it in the ground‘.  At that point I nodded, and admitted that he was probably right. The conversation then drifted on to other matters.

So BNC readers, what’s your take? Will the prospect of cheaper-than-coal electricity from non-carbon sources be enough? Can we even take this risk that this will be so? Or, is a rising price on carbon required no matter what – irrespective of the difficulties in implementation and potential problems it creates? I think Jim pretty well convinced me that we need both, if we’re going to be sure of licking the climate change problem in time. But that’s my view. Over to you…