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Environment Magazine September/October 2008

December 2007

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 Energy Choices toward a Sustainable Future

With the release of the Intergovernmental Panel on Climate Change’s (IPCC) Fourth Assessment Report earlier this year and the reactions and accolades it has received since—not the least the IPCC’s recognition by the Nobel Committee for the Peace Prize—it appears this year could mark a turning point in terms of how the world views and acts on a key component of achieving sustainability: climate change. Embedded in both of these interconnected and overarching concerns—addressing climate change and moving toward a more sustainable development—are the energy challenges the world faces today.

There is, as was observed at the beginning of this year after the publication of the International Energy Agency’s (IEA) World Energy Outlook 2006, no silver bullet to resolve our energy challenges. And according to IEA Chief Economist Fatih Birol, “On its current course, the future global energy situation will remain dirty, vulnerable, and expensive.”1 In some ways, then, the world finds itself in a similar position as it did at a different turning point 20 years ago, when the World Commission on Environment and Development published its landmark report Our Common Future. In its chapter on energy, the report, also known as the Brundtland report after its committee chair Gro Harlem Brundtland, announced, “Future development crucially depends on its long-term availability in increasing quantities from sources that are dependable, safe, and environmentally sound. At present, no single source or mix of sources is at hand to meet this future need.”2

Other than the rise to prominence of climate change on the global stage, what has changed in the last 20 years? What has not? What did the Brundtland report miss? Finally, what is a more specific view of the world’s future in terms of energy and sustainable development?

To answer these questions, it is useful to first consider the Brundtland report’s focus, which was spelled out at the beginning of its second chapter, “Towards Sustainable Development”:

Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains within it two key concepts:
•    the concept of “needs,” in particular the essential needs of the world’s poor, to which overriding priority should be given; and
•    the idea of limitations imposed by the state of technology and social organization on the environment’s ability to meet present and future needs.
3

The first concept is an issue of equity; the second, an issue on the availability of resources.

Looking at sustainable development through the lens of energy can help clarify the definition above, because the nature of energy systems offers a response to the thorny question of how many “future generations” we should consider. In its chapter on energy, “Energy: Choices for Environment and Development,” the Brundtland report recognized that a safe and sustainable energy path is crucial to sustainable development. It also laid out four “key elements of sustainability that have to be reconciled”:

•    sufficient growth of energy supplies to meet human needs (which means accommodating a minimum of 3 per cent per capita income growth in developing countries);
•    energy efficiency and conservation measures, such that waste of primary resources is minimized;
•    public health, recognizing the problems of risks to safety inherent in energy resources; and
•    protection of the biosphere and prevention of more localized forms of pollution.4


Current Issues on Energy

An overview of where the world derives its energy reveals much in terms of sustainable development. Exhaustible fossil fuels (oil, coal, and gas) represent 80.1 percent of the present world energy supply; nuclear energy, 6.3 percent; and renewables, 13.6 percent. The largest part of this component is traditional biomass (8.5 percent of total primary energy), which is used mainly in inefficient ways, such as in highly polluting primitive cooking stoves used by poor rural populations, which has often led to deforestation, particularly in Africa.5 Figure 1 shows the present world energy use in 2004.Figure 1

Fossil fuels are exhaustible, and at constant production and consumption rates, the presently known reserves of oil will last around 41 years; natural gas, 64 years; and coal, 155 years (see Table 1).

The energy system has evolved significantly since the 1980s. The evolution of primary energy consumption over time as well as the contribution of the Organisation for Economic Co-operation and Development (OECD) nations and developing and transition economies has seen a huge expansion of the share of developing countries.
The world’s primary energy supply is projected to grow 1.6 percent per year in the period 1980–2030 and 1.13 percent in the OECD countries. Growth per year is approximately zero in transition economies and 3 percent in developing countries and will therefore dominate energy consumption after 2015.6Table 2

Due to the dominance of fossil fuels in the world’s energy supply and their expected lifetime, they cannot be considered the world’s main source of energy for more than one or two generations—thus providing a metric to the aim of “not compromising the ability of future generations to meet their own needs.” In addition to concerns about depletion, burning fossil fuels also generates serious environmental problems; for example, it is strongly linked to climate change.7 Also, fossil fuel production costs will increase as reserves approach exhaustion and as more expensive technologies are used to explore less attractive resources. Finally, there are increasing concerns for the security of the oil supply, originating mainly from politically unstable regions of the world.8

To address these concerns, a sustainable energy system must comprise four components, characterized as
•    physical (related to securing supplies adequate to meet future energy needs and extending their life—essentially an energy supply problem);
•    environmental (related to the use of present sources of supply at the local, regional, and global levels, including averting global warming and catastrophic climate change);
•    geopolitical (related to security risks and conflicts that could arise from escalating competition for unevenly distributed energy resources); and
•    equity (not strictly an energy problem, but similar to the problem of access to food and other amenities provided by modern civilization).


Energy Supply

The Brundtland report wisely underscored the fact that fossil fuels, the mainstay of the energy system, are finite and will not last more than a few generations. The report also put forward ways to solve this problem, placing great emphasis on energy efficiency in the hope that it would extend the lifetime of fossil fuels and renewables (although in the mid-1980s the latter made an almost negligible contribution to the energy supply).

Energy Efficiency

Energy efficiency was clearly identified as the “low-hanging fruit” of the energy system after the first (1973) oil crisis; it became an important element of energy policy in the mid-1970s.

The enormous increase in oil prices (and the resultant problem of oil shortages) forced a reexamination of the way energy (and particularly fossil fuels) were used. The result was that many opportunities were found to increase the efficiency of production and use of energy. On the supply side, it was found that the transformation of primary energy sources (coal, oil, and gas) into electricity could be greatly improved. On the demand side, innumerable opportunities were identified (in lighting, building construction, transportation, and domestic appliances) to perform necessary tasks and services with less energy.

For the OECD countries, primary energy consumption (E) grew less rapidly than gross domestic product (GDP), in fact “decoupling” E from GDP. As a consequence, the energy intensity E/GDP (in tons of oil equivalent per dollar of GDP) decreased 1.14 percent per year between 1971 and 2004. This translates to energy savings of 49 percent in the period 1973–1998 for OECD nations (see Figure 2).Figure 2

The prospects for further gains in energy efficiency in the main sections of the economy (up to 2020)9 include
•    new buildings (34 percent);
•    equipment and appliances (25–30 percent);
•    industry (25 percent);
•    transportation (new light duty vehicles and trucks (35 percent) and rail, air, and marine (20 percent)); and
•    power generation efficiency (50 percent, to be reached in 2030).

The power generation sector is particularly important due to the large expansion of electricity generation from coal in China and India, which has resulted in large increases in CO2 emissions. Unfortunately, the average energy efficiency in these countries has improved little. The average efficiency of coal-generated electricity plants in India is 28 percent; in China, 33 percent; and in Japan, 40 percent. A comparison of the evolution of the energy intensity in 1980–2002 and 1990–2002 indicates that it has been decreasing less rapidly in recent years.10

Energy efficiency is not a solution, per se; it can only buy time for the world to develop a “low energy path,” which, as the Brundtland report pointed out, should be the foundation of the future of global energy. However, one should point out that per capita energy consumption in developing countries—where three-quarters of the world population lives—is much lower than in industrialized countries (sometimes by a factor of 10). It is thus unavoidable that energy consumption will grow as it has in China, India, Brazil, and others—and the fundamental problem here is to incorporate, early in the process of development, modern and efficient technologies in both the supply and demand sectors.

Renewables

In the early 1980s, modern renewable energy sources such as wind power, photovoltaic, geothermal energy, and biomass for electricity generation and conversion fluids production such as biodiesel and ethanol were all incipient and represented less than 0.5 percent of total energy supply. Only hydroelectric power was significant, contributing 2 percent. However, traditional biomass (and waste) contributed more than 10 percent in the form of fuelwood and agricultural and animal wastes used with very inefficient and wasteful technologies in rural areas or peripheries of large towns.11 The Brundtland report referred to renewable energy as the “untapped potential” and pinned great hopes on what it termed “modern renewable sources,” despite the fact that they were expensive and in a relatively primitive stage of development. The report also noted that such renewable sources “offer the world potentially huge primary energy sources, sustainable in perpetuity and available in one way or another to every nation on Earth.”12

These great expectations are becoming reality today despite the initially limited response by some industrialized countries and international development agencies. In many cases, it was assumed that the “modernization of renewables” had to be associated exclusively with rural development, where the population involved did not have access to electricity and other modern energy services. As a result, innumerable wind machines, photovoltaic panels, solar heating devices, and other renewable technologies were installed as demonstration units in villages in developing countries, mainly in Africa and Southeast Asia. Although such strategies were successful in some cases and helped improve living conditions of rural communities, there were at least three shortcomings: First, the demonstration units required technical expertise that was locally unavailable. As a result, many of them became graveyards of shining new equipment as soon as foreign technicians who installed the equipment left. Second, the units did not provide the volume needed to reduce production costs in the countries in which they were installed. Third, the experience had the perverse effect of suggesting that developing countries were to be used as guinea pigs for new exotic technologies, while industrialized countries could continue to use conventional, fossil fuel–burning technologies.

However, several industrialized countries implemented renewable strategies that worked. Through government subsidies, feed-in tariffs (a policy whereby the government legally guarantees that renewable energy producers have access to the power grid at a guaranteed price), and renewable portfolio standards (state policies mandating a state to generate a percent of its electricity from renewable sources), these countries created a large market for renewables with the result that production costs decreased with increased production. Such policies have had particularly good results in Denmark (with wind power), Germany (with photovoltaics), and Brazil (with biofuels, mainly ethanol from sugar cane).13
In 2005, world grid-connected solar photovoltaic systems increased 55 percent in cumulative installed capacity to 3.1 gigawatts (GW, or watts 109), up from 2.0 GW in 2004. More than half of the annual global increase took place in Germany, where more than 600 megawatts (MW, or watts 106) of photovoltaic systems were installed in one year. Das 100.000 Dächer Programm (100,000 Roofs Program) provided low-interest loans and feed-in tariffs of¤0.50 per kilowatt hour (kWh) through 2003.14 In 2004, tariffs were set at ¤0.45–0.62 per kWh.

Wind power was second globally in added power capacity in 2005, with the addition of 11.5 GW reaching an installed capacity of 59 GW, a growth of 24 percent. Most representative global wind power additions occured in the United States (2.4 GW), Germany (1.8 GW), and Spain (1.8 GW). The United States was the leader in wind power additions for the first time since 1992, while India’s existing capacity surpassed wind pioneer Denmark.

In Brazil over the last 20 years, the accumulated production of ethanol grew at a rate of 11.4 percent. As accumulated production grew, the ethanol price paid to producers dropped: for each doubling of accumulated production, the price fell by 47.5 percent. Such gains have decreased in the last few years, which might reflect the need for more technological progress. A similar behavior is common to all new renewable energy technologies, including wind and photovoltaics.15

In the particular case of wind power, the electricity generated is usually fed into the grid and not used in decentralized systems as envisaged initially; large wind farms became the rule rather than the exception.

Several renewables referred to in the Brundtland report now already compete with conventional ways of producing energy and have thus penetrated huge markets in developing countries.

The average annual increase in installed capacity of “new renewables” (modern biomass, biofuels, wind, and photovoltaics) from 2001 to 2004 is spectacular in some cases, having reached a growth rate of 1.4 percent per year in that period.

In 2004, “new renewables” represented 3.40 percent of total primary energy supply (see Figure 1), and there were explosive growth rates in the period 2001–2005, as shown in Table 2. If such growth rates were to persist until 2020, they would represent 15 percent of the total primary energy consumption in the year 2020. One indication that such a goal could be reached is the European Union’s decision to make 20 percent of EU power sources renewable by 2020.Table 2

Environment

The Brundtland report’s chapter on energy used two scenarios on future energy production to discuss potential environmental and economic impacts: a high energy future,16 in which world power production would reach 35.2 terawatts (TW, 1012 watts) by 2030, and a low energy future,17 at 11.2 TW. The discussion on the environmental risks and uncertainties of a high energy future, which the report characterized as disturbing, was very insightful. Such a scenario, according to the report,

would give rise to several reservations. Four stand out:
 •    the serious probability of climate change generated by the “greenhouse effect” of gases emitted to the atmosphere, the most important of which is carbon dioxide (CO2) produced from the combustion of fossil fuels;
•    urban-industrial air pollution caused by atmospheric pollutants from the combustion of fossil fuels;
•    acidification of the environment from the same causes; and
•    the risks of nuclear reactor accidents, the problems of waste disposal and dismantling of reactors after their service life is over, and the dangers of proliferation associated with the use of nuclear energy.
18

Climate Change

At the same time the Brundtland report was being prepared, a conference focusing on climate change was convened by the United Nations Environment Programme, the World Meteorological Organization, and the International Council of Scientific Unions (now the International Council for Science) in Villach, Austria, in October 1985. The Brundtland report noted the meeting’s key conclusion “that climate change must be considered a ‘plausible and serious probability.’”19

Since then, a multitude of studies and analyses have been carried out on climate change, the most important of which are the IPCC asssessment reports. The most recent IPCC report, completed this year (2007), concluded that anthropogenic climate was not only a probability but almost a certainty:

The understanding of anthropogenic warming and cooling influences on climate has improved since the [2001 Third Assessment Report], leading to very high confidence that the global average net effect of human activities since 1750 has been one of warming.
20

(In a footnote to this statement, the IPCC defined “very high confidence” as a 90 percent likelihood.)

In addition to greater certainty about the reality and causes of climate change, the IPCC Fourth Assessment reveals that a tremendous amount more is known about its effects than was known 20 years ago. The following are five summaries of IPCC findings in terms of
different effects:
•    Overall warming. Since the pre-industrial era, average temperatures have increased by 0.8°C. The linear warming trend for the past 50 years is twice that of the last 100 years, with the decade since 1995 being the most rapid warming period.
•    Sea level increase. Average sea level rose in the period 1990–2003 at a rate almost double the average for the period 1961–2003.
•    Melting glaciers, snow cover, and ice sheets. Mountain glaciers and snow cover have declined in both hemispheres. Losses from Greenland and Antarctic ice sheets have contributed to rising sea levels. Arctic sea ice has been shrinking at almost 3 percent a year, with larger decreases in the summer.
•    Changing precipitation. In very broad terms, climate change is redistributing rainfall in a northerly direction. Drying has been observed in the Sahel, Southern Africa, and much of South Asia.
•    More intense tropical cyclone activity. There has been an increase in the intensity of tropical cyclones since about 1970, associated with increased sea surface temperatures.21

The IPCC’s recent declaration of its 90 percent certainty on the reality of climate change seems to make moot the Brundtland commission’s question, “How much certainty should governments require before agreeing to take action?” However, its recommendation following this question is still relevant: “Given the complexities and uncertainties surrounding the issue, it is urgent that the process start now.”22

Some progress was made in the decade following Our Common Future in terms of international efforts to mitigate and adapt to climate change. In 1992, the UN Framework Convention on Climate Change was adopted in Rio de Janeiro at the UN Conference on Environmental and Development, exhorting industrialized countries to reach in the year 2000 the same level of emissions of greenhouse gas emissions of 1990. The Kyoto Protocol, adopted in 1997, set binding targets to reduce greenhouse gas emissions below 1980 levels by 2008–2012. Reduction commitments were modest by comparison with those required to avoid dangerous climate change (an average of 5.2 percent). Specific commitments varied across countries. Two major emitters—the United States and Australia—did not sign the protocol, which nevertheless entered in force in 2005. Developing countries were excepted from reducing their emissions on the grounds that it would hamper their possibilities of economic growth and development. (Despite this, China has made important progress in reducing its energy intensity (and carbon intensity as well).)

Outcomes are set to fall far short of targets. For example, Canada is the world’s eighth-largest emitter of CO2. Under the Kyoto Protocol, it targeted a 6 percent cut in emissions. In 2003, Canada’s emissions were 24 percent above 1990 levels.23 Also, Japan’s emissions in 2005 were 8 percent above 1990 levels.24 Its Kyoto target was for a 6 percent reduction. It is projected that the country will miss its target by approximately 14 percent. Moreover, had the United States25 ratified the Kyoto Protocol, it would have been required to cut its emissions to 7 percent below 1990 levels by 2010—a projected reduction, at the time, of 2.1 billion tons. Overall greenhouse gas emissions have increased by 17 percent, from 4.9 to 5.8 billion metric tons. By 2010, projected emissions are 1.8 billion tons above 1990 on a rising trend.

Air Pollution

In terms of air pollution, considerable progress has been made in most cities around the world, with some exceptions, such as Beijing, Mexico City, Bangkok, and São Paulo. Very instrumental to achieving this progress was the introduction of catalyzers in cars, replacement of gasoline by ethanol (particularly in Brazil), and strict enforcement of the limits of emission levels recommended by the World Health Organization in industries, particularly regarding the use of fossil fuels.


For example, air quality reports conducted by the state of São Paulo’s environmental protection agency (Companhia de Tecnologia de Saneamento Ambiental) show significant changes in pollutant concentrations in the São Paulo metropolitan region: lead dropped from 1.4 micrograms per cubic meter (m3) in 1977 to less than 0.10 micrograms per m3 in 1991, sulfur dropped from 50 micrograms per m3 in 1984 to 15 micrograms per m3 in 2003, and particulate matter dropped from 90 micrograms per m3 in 1986 to 50 micrograms per m3 in 2003.26

Acidification

Acidification and, generally speaking, regional pollution, was in 1987 already a serious problem in the Baltic Sea, Scandinavian lakes, and the U.S.-Canadian Great Lakes region. Most of these problems were solved over the years as a consequence of policies to clean up industries, except in Southeast Asia, where a “brown cloud” has formed due mainly to emissions from coal burning in China and India and has become a serious health concern.


Nuclear Energy

The Brundtland report greatly emphasized the problems surrounding the use of nuclear energy for electricity production: costs, health and environmental risks, nuclear accident risks, and radioactive waste disposal. Nuclear energy for electricity production, which in the 1960s and 1970s appeared to be a very attractive option, witnessed a spectacular growth in that period.


Today, nuclear electricity represents 17 percent of the electricity produced in the world and 6 percent of the world’s primary energy supply, approximately the same amount produced by hydroelectricity. However, the construction of new nuclear reactors around the world stagnated almost completely after the mid-1980s. For example, all of the 104 active nuclear reactors in the United States were built before 1985. The reasons for such a slowdown are complex, and it is difficult to discern the influence the Brundtland report might have had. Other factors, such as the increased importance of electricity generated from natural gas, were important contributors. The rising costs of nuclear energy also certainly played an important role—a price hike aggravated by the additional safety measures and procedures put in place following large accidents such as those on Three Mile Island in Pennsylvania in 1979 and at the Chernobyl reactor in the Ukraine in 1986.


If the stagnation of nuclear energy continues, nuclear power’s importance to the world energy supply will decline from 17 percent today to 13 percent in 2020 (concentrated in the United States, France, Japan, and South Korea).27

A great effort is being made by the nuclear industry to revive itself. This effort has gained support from some environmental groups, since nuclear reactors, in operation, produce a smaller amount of greenhouse gases than an equivalent thermal power plant burning gas or coal. A 1,000 GW nuclear reactor operating for one year avoids 1.5 million tons of carbon emissions. However, when one considers the whole life cycle of a reactor, from uranium mining to decommissioning, the advantages are not so clear.28

Due to the increase in prices of natural gas (and fossil fuels in general), the economics of nuclear energy has improved somewhat vis-à-vis other options. Better operation of the reactors also allowed improvements of the duty cycle (the fraction of time during which the reactors generate electricity), so the same number of reactors has been generating
more energy. The International Atomic Energy Agency estimates for the year 2030 a modest growth in the number of installed reactors.29

Other projections, however, contemplate even a tenfold increase in the number of reactors in operation in the year 2050, with an eye on markets in emerging developing countries such as China and India. This is due in part to subsidies and guarantees granted by the U.S. government. If such projections materialize, uranium resources would be greatly strained. Presently the “once through” technology is used in which only a small part of the enriched uranium is consumed, leading to a sizable amount of radioactive waste, the disposal of which is a serious problem. A proposed solution, according to the U.S. Department of Energy, is to reprocess the waste and ultimately build “breeder reactors” that would greatly extend the life of uranium reserves. However, this ambitious project is facing serious opposition not only because of a myriad of technical problems but also the increased danger of nuclear proliferation in reprocessing centers.


Written in the wake of the Chernobyl disaster, the Brundtland report took a sobering view of nuclear energy and summarized its findings in three possible positions governments could take:

•    remain non-nuclear and develop other sources of energy;
•    regard their present nuclear power capacity as necessary during a finite period of time of transition to safer alternative energy sources; or
 •    adopt and develop nuclear energy with the conviction that the associated problems and risks can and must be solved with a level of safety that is both nationally and internationally acceptable.
30

Although there have been no nuclear accidents on the scale of Chernobyl following that incident, many smaller accidents have occurred in nuclear plants, indicating that nuclear energy technology still has a long way to go before becoming a safe and acceptable energy supply, as exemplified by the problems caused by an earthquake in Japan in July 2007.31 On the other hand, the problem of radioactive waste disposal is still intractable as it was in 1987: after many years of operation of the more than 350 active commercial reactors, more than 70,000 tons of highly radioactive material are being stored in provisional sites, and no permanent depositories exist today, despite efforts made in several countries.32
Our Common Future also noted that the Treaty on the Non-Proliferation of Nuclear Weapons “has not proved to be a sufficient instrument to prevent the proliferation of nuclear weapons, which still remains a serious danger to world peace.”33 Events in the last 20 years in Iraq, Iran, and North Korea confirm this grim prophecy.

Geopolitics

A problem that the Brundtland report did not identify clearly was security of supply. The issue is touched upon tangentially and perhaps in a somewhat incorrect way when discussing renewables. What is stated there is that most renewable energy systems operate best at small-to-medium scales ideally suited for rural and suburban applications. They are generally labor-intensive, which should be an added benefit where there is surplus labor and they are less susceptible than fossil fuels to world price fluctuations and foreign exchange costs.

However, experience has shown that renewable systems such as wind energy are not restricted to “rural and suburban applications” but generate electricity that can be fed into the grid. For example, liquid biofuels produced in rural areas can be transported to urban centers of energy consumption. The concept of self-reliance envisaged in the report is restricted to considering renewables as decentralized energy sources.

The reality is that we are still highly dependent on fossil fuels. Among these fuels, natural gas has gained an increased importance as seen in Table 2 (17 percent in 1980 and 21 percent in 2004). This will continue to grow. Construction of large gas lines from Russia to Western Europe was a major new development in the last 20 years, and other parts of the world have also built such lines. The geopolitical situation in the Middle East deteriorated with the U.S.-led invasion of Iraq, and the shipment of oil from that region to other parts of the world has become a major security problem.34


The cost of energy security goes beyond investing in redundant facilities and building pipelines, grids, and strategic reserves. Tremendous military expenditures—both visible and invisible—are required to head off any threats to the flow of oil, particularly from Persian Gulf countries. These costs cannot be easily computed or ascertained. The enormous expenditures of the 1990–1991 Gulf War or in Iraq today, totaling several hundred billion dollars, were meant to ensure energy security for major oil importers and the world oil markets in general.

Such problems were not anticipated in the Brundtland report.

Equity

The Brundtland report considered “the sufficient growth of energy supplies to meet human needs” a key element of sustainability (which means, according to the report, “accommodating a minimum of 3 per cent per capita income growth in developing countries”).35

Little progress has been made in this area between 1971 and 2004 except in China, the Middle East, and Pacific OECD nations, as seen in Figure 3.Figure 3

Worldwide consumption per capita grew very little, from 1.45 tons of oil equivalent (toe) per capita in 1971 to 1.74 toe per capita in 2004, a growth of 20 percent over a period of 31 years, less than 1 percent per year.


Overall Assessment

One of the ways of assessing the effectiveness of the Brundtland report in influencing the future evolution of the world’s energy system is to compare different projections for the primary energy supply up to 2020 that were made in the mid-1980s and explored various technical, economic, and environmental factors that could interact with supply and demand.

On the high side, as mentioned above, the report described work by the International Institute for Applied Systems Analysis, which projected a 35.2 TW future in 2020 and included a large nuclear energy contribution.36 On the low side, a 1985 study by energy researchers published in the Annual Review of Energy projected 11.2 TW,37 which, according to the report, would require “an energy efficiency revolution.”38

Figure 4 shows these projections and today’s reality, which is midway between them: clearly no energy efficiency revolution happened; neither did a large nuclear energy future materialize.Figure 4

The Brundtland report is notoriously vague on the economics of energy, which was based at that time essentially on fossil fuels. It was also not very specific about the costs of a transition to a more sustainable future.

An essential element in this transition is the question of “externalities” that do not fall in the realm of traditional market transactions. For example, as was pointed out by the Stern Review of the Economics of Climate Change,39 although global warming is a problem affecting all humankind, and most of it is caused by the burning of fossil fuels, one of the greatest of all the market failures is not taking this properly into account—in other words, by not attaching a price to carbon emissions. The Stern Review estimates that pricing carbon at US$100 per ton would go a long way in reducing the deforestation of tropical forests, which contributes approximately 15 percent to all carbon emissions. To protect these forests by assigning a price to the carbon stored in the forest (approximately 100 tons of carbon per hectare) would also go a long way in reducing carbon emissions to the atmosphere.


The Current Challenges

The current energy challenges we are facing from a sustainable development perspective are essentially the same as the ones outlined in the Brundtland report in 1987: long term availability of energy supply; security of supply and geopolitical conflict; environmental degradation; and the need to extend basic energy services to 2–3 billion people.

The difference is that these challenges are more serious today than they were 20 years ago.

The report was written at a time when the oil crisis of the 1970s were a thing of the past and oil prices had fallen considerably, making it hard to justify other energy options on the basis of economics.

In a way, like the work of many other analyses, it was heavily influenced by the events of the previous decade that had made a transition away from non-fossil fuels a high priority. In the late 1980s and 1990s, the price of oil remained low, making a transition to non-fossil fuels less attractive. The report did not anticipate the growing importance of energy consumption in developing countries (particularly China and India).

This has changed dramatically since 2004; oil prices are high and rising due to a combination of factors, such as indications that we are reaching the end of the era of cheap and abundant natural resources, escalating geopolitical conflicts in the Middle East, and quarrels over the gas supply from Russia to Western Europe.

In addition, the concerns about climate change and its consequences reached a high point with the release of the IPCC’s Fourth Assessment Report, and a conviction has arisen that it is high time to do something about it. Also, the international community has awakened to the need to address equity problems and the central role of energy in eradicating poverty.

The 2002 Johannesburg Conference clearly established the need to increase the contribution of renewables to reduce environmental impacts. In addition, the Millennium Development Goals highlighted the importance of energy in helping to achieve some of these goals.

These outcomes were clearly influenced by the realization that very little progress has been achieved since the 1970s in reducing the wide disparities in energy consumption per capita around the globe.

Where Do We Go from Here?

With the rising prices of oil and the probability that the most easily accessible fossil fuel reserves are dwindling, there is a great impetus to look for alternative solutions, the most likely of which are renewable sources such as hydroelectric, biomass, wind, solar, geothermal, and marine tidal. Other options, such as synthetic fuels from coal, biomass refineries that would allow the production of a wide variety of fuels, and carbon capture and storage, will also benefit from higher oil process but pose additional
environmental problems.

The introduction of carbon taxes or the adoption of mandatory caps (and trade) on emissions through Kyoto-type agreements are potentially very powerful instruments. The Kyoto Protocol extends only to 2012, so intense international negotiations are needed to adopt a new protocol or equivalent instrument for the post-2012 period.

The June 2007 meeting of the heads of state of the largest industrialized countries (G8) endorsed such approaches, and the European Union has already taken an important step forward on this issue by adopting a 20 percent renewable energy target and a 20 percent reduction of greenhouse gas emissions below the 1990 level—and maybe more, if other countries accept also such commitments.

However, the greatest challenge we face is getting the United States, overwhelmingly the largest per capita emitter of greenhouse gases, as well as China (now the largest overall emitter), India, Brazil, and other significant emitters to agree to introduce emission caps.

Countries such as the United States should certainly have the means to make such a decision. But a substantial course correction, pointing the world’s energy system to a more sustainable future, will not be accomplished in the timeframe needed to avoid significant environmental and energy-security risks if developing countries simply retrace the historic energy trajectory of already developed countries.

José Goldemberg earned his Ph.D. in physical sciences from the University de São Paulo in 1954, where he held the position of full professor in the Engineering School’s Physics Department. He was rector of the university from 1986 to 1990. A member of the Brazilian Academy of Sciences, he has served as the president of Brazilian Association for the Advancement of Science and president of the Energy Company of São Paulo (CESP). Between 1990 and 1992, he was Brazil’s secretary of state for science and technology and minister of state for education. Over the years, he did research and taught at the University of Illinois, Stanford University of Paris (Orsay), and Princeton University. From 1998 to 2000, he served as chairman of the World Energy Assessment. More recently, between 2002 and 2006, he was secretary for the environment of the state of São Paulo. He has authored many technical papers and books on nuclear physics, sustainable development, and energy. Earlier this year, Time honored him as one of its “Heroes of the Environment.” The author thanks Patricia M. Guardabassi and Suani T. Coelho for help in the preparation of this paper.

NOTES

1.    “Energy: Finding a New Gear,” OECD Observer, January 2007, http://www.oecdobserver.org/news/fullstory.php/aid/2080/Energy:_Finding_a_new_gear.html. See also International Energy Agency (IEA), World Energy Outlook 2006 (Paris: Organisation for Economic Co-operation and Development (OECD), 2006).
2.    World Commission on Environment and Development (WCED), Our Common Future (Oxford and New York: Oxford University Press, 1987), 168.
3.    Ibid., page 43.
4.    WCED, note 2 above, page 169.
5.    See, for example, E. F. Lambin and H. J. Geist, “Regional Differences in Tropical Deforestation,” Environment, July/August 2003, page 29.
6.    IEA, note 1 above.
7.    Intergovernmental Panel on Climate Change (IPCC), Climate Change 2007: The Physical Basis. Contribution of Working Group I of the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge, U.K., and New York: Cambridge University Press, 2007), http://ipcc-wg1.ucar.edu/wg1/wg1-report.html. See especially the Summary for Policymakers, page 3.
8.    See, for example, China’s struggle with this issue in H. Lee and D. A. Shalmon, “Searching for Oil: China’s Initiatives in the Middle East,” Environment 49, no. 5 (June 2007): 8–21.
9.    UN Foundation, personal communication, 2007.
10.    Ibid.
11.    J. Goldemberg and S. T. Coelho, “Renewable Energy—Traditional Biomass vs. Modern Biomass,” Energy Policy 32, no. 6 (2004): 711–14.
12.    WCED, note 2 above, page 192.
13.    Renewable Energy Policy Network for the 21st Century (REN21), Renewables Global Status Report 2006 Update (Paris and Washington, DC: REN21 Secretariat and Worldwatch Institute, 2006).
14.    See Das 100.000 Dächer Programm, http://www.100000daecher.de/.
15.    T. B. Johansson and J. Goldemberg, eds., World Energy Assessment Overview: 2004 Update (New York: United Nations Development Programme, United Nations Department of Economic and Social Affairs, and World Energy Council, 2004), accessible via http://www.undp.org/energy/weaover2004.htm.
16.    Energy System Group of the International Institute for Applied Systems Analysis (IIASA), Energy in a Finite World: A Global Systems Analysis (Cambridge, MA: Ballinger, 1981).
17.    J. Goldemberg, T. B. Johansson, A. K. N. Reddy, and R. H. Williams, “An End-Use Oriented Global Energy Strategy,” Annual Review of Energy 10 (1985): 613–88.
18.    WCED, note 2 above, page 172.
19.    WCED, note 2 above, page 175.
20.    IPCC, note 7 above, page 3 of the Summary for Policymakers.
21.    IPCC, note 7 above.
22.    WCED, note 2 above, page 176.
23.    G. Marland, T. Boden, and R. J. Andres, National CO2 Emissions from Fossil-Fuel Burning, Cement Manufacture, and Gas Flaring: 1751–2004: Canada (Oak Ridge, TN: Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory, 2007), data available at http://cdiac.esd.ornl.gov/ftp/trends/emissions/can.dat (accessed September 2007).
24.    G. Marland, T. Boden, and R. J. Andres, National CO2 Emissions from Fossil-Fuel Burning, Cement Manufacture, and Gas Flaring: 1751–2004: Japan (Oak Ridge, TN: Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory, 2007), data available at http://cdiac.esd.ornl.gov/ftp/trends/emissions/jap.dat (accessed September 2007).
25.    Ibid.
26.    Companhia de Tecnologia de Saneamento Ambiental (CETESB, São Paulo’s state environment agency), Relatório de Qualidade do Ar no Estado de São Paulo (Air Quality Report for the State of São Paulo) (São Paulo: CETESB, 2003).
27.    V. M. Fthenakis and H. C. Kim, “Greenhouse-Gas Emissions from Solar Electric- and Nuclear Power: A Life-Cycle Study,” Energy Policy 35, no. 4 (2007): 2549–57.
28.    Ibid.
29.    International Atomic Energy Agency (IAEA), Nuclear Power Plants Information, http://www.iaea.org/cgi-bin/db.page.pl/pris.charts.htm; and IAEA, Nuclear Power Plants Information: Operational Reactors by Age, http://www.iaea.org/cgi-bin/db.page.pl/pris.reaopag.htm.
30.    WCED, note 2 above, page 188.
31    “Japan Earthquake Caused Nuclear Waste Spill,” Telegraph.co.uk, 23 July 2007, http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/07/19/wjapan119.xml.
32.    See, for example, J. I. Dawson and R. G. Darst, “Russia’s Proposal for a Global Nuclear Waste Depository: Safe, Secure, and Environmentally Just?” Environment 47, no. 4 (May 2005): 10–21.
33.    WCED, note 2 above, page 189.
34.    A. Greenspan, The Age of Turbulence: Adventures in a New World (New York: The Penguin Press HC, 2007).
35.    WCED, note 2 above, page 169.
36.    IIASA, note 16 above.
37.    Goldemberg, Johansson, Reddy, and Williams, note 17 above.
38.    WCED, note 2 above, page 171.
39.    N. Stern et al., Stern Review on the Economics of Climate Change (Cambridge, U.K.: Cambridge University Press, 2007).

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