Article - Issue 41, December 2009

Engineering a Low-Carbon world

Dr Scott Steedman FREng

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Dr Scott Steedman FREng

Dr Scott Steedman FREng

It will be over by Christmas, or at least it will be in Copenhagen. By then the world will know whether or not there will be a new agreement on climate change. What should the engineering profession be looking for from Copenhagen? What challenges and opportunities will it present?

The great (as yet) unanswered question is whether low-carbon growth is possible. Some pundits question whether we can afford the cost of a transition to a low-carbon, green economy – or even need it. The issue of necessity is no longer relevant. Political imperatives – including energy security, employment, and the wider sustainability agenda – have combined to set the pace.

Reducing our footprint on the planet is a vital stage in human development if we are to overcome the challenges of consumption and population growth, let alone climate change. As a proxy, carbon reduction provides the focus for political action that sustainability on its own could never muster.

So the residual issue is affordability. Clearly there is a cost associated with moving to low-carbon energy, reducing demand and building an electric society. What comes out of Copenhagen should be an increased confidence in the trajectory that markets will take. Beyond the rhetoric, Treasury decisions on national budgets will be the real indicator that governments are serious about creating a new low-carbon economic model.

Carbon accounting is already here. Government departments in the UK now work to budgets calculated on a non-traded price of £51 per tonne (for 2009) based on the cost of mitigating emissions. The new price is almost twice the old shadow price, which was based on an assessment of damage caused by the impacts of climate change. It is easy to see how a global market price will start to seriously affect cost-benefit analyses for investment in infrastructure and engineering. Expect to see much more of this in 2010.

The European Emissions Trading Scheme (ETS) has had its share of teething problems but it shows that schemes are possible at a regional scale. An agreement at Copenhagen to an overall cap on emissions, leading to a global ETS, would give the engineering industry the confidence to make long-term investment decisions. It would also, crucially, avoid the risk that some countries will create ‘carbon havens’ for industries that are prepared to relocate.

Vital to the success of a global ETS will be the full engagement of developing countries. The Clean Development Mechanism (CDM), which emerged under the Kyoto Protocol and allows investment in projects in developing countries to offset emissions at home, has proved too bureaucratic and complex. Though some successful projects have been funded and experience has been gained in low-carbon technology transfer, there is an urgent need for a successor scheme that can embrace whole industries and operate transparently at a global scale.

Kick-starting the green economy will require not only a global carbon price but an increase in green lending programmes and directed finance for investment in low-carbon technologies. Subsidies and regulations need careful scrutiny to ensure continuing innovation and competition. This is starting to happen and costs are falling as markets grow. Solar photovoltaic modules are still expensive but 40% cheaper now than last year. Car manufacturers are discussing mass marketing of electric cars within two years and the UK Government sees its green cars strategy as a major employment opportunity.

Low-carbon infrastructure remains an area where government intervention at national and intra-national scale is essential to develop momentum and realise the true economic benefits of the low-carbon technological revolution. A few of the large-scale projects to be undertaken include managing distributed electricity generation through a ‘smart grid’, energy storage, and an electric charging network.

Key to success in Copenhagen will be the agreement of the US. China too, but with an eye on the global business opportunity and growing concern at home over the effects of climate change, China is now rapidly asserting itself as a leader in low-carbon technologies. It is American acceptance of a new climate treaty that would unlock our post-carbon future.

With a deal on carbon in place, the race will be on to offer new engineering services and low-carbon solutions on a world scale. Blink and the UK will find itself at the back of a long queue. The alternative is to gear up for change and see the UK engineering profession leading the low-carbon revolution, turning the vision of low-carbon growth into reality.

Dr Scott Steedman FREng

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