Globe watch: $US3.7 trillion a year of fossil fuel revenue has to go away

Thinking global

Wikipedia, yet another crowd sourced, productivity enhancing resource driven by the global cognitive surplus, states that “Thinking  globally, acting locally” can almost certainly be attributed to a Scottish town planner, Patrick Geddes in 1915 but it rose to prominence in the USA environmental activist groups that came from the 1970s.

We hippies may have made a lot of mistakes but you could trace some of today’s activism back to our generation. In any event it’s a great slogan/idea. As is crowdsourcing.

In deference to the thinking globally part, I’ve done the mundane task of putting some dollar values on the main contributors to carbon emissions and represented a couple of graphs that, to my mind, demonstrate that the future of the world depends in the first instance on China doing more than it is about reducing coal fuelled electricity generation.

In my view the best annual summary of global carbon is the  Carbon budget 2018 presentation. The data and graphs are produced by lots of people and its nice to see Pep Cannadell from the CSIRO as well as Robbie Andrew from Norway’s CICERO listed as two of the 68 authors.

As an analyst I am not much interested in who is historically responsible for emissions but rather what has to be done looking forward. Historically  Western civilisation is still responsible for more cumulative emissions than Asia but the gap is closing quickly.

Straight line growth is 2C in 20 years or less

So Point 1. The world will hit 2°C warming in about 2040 at current annual emission rates. And emissions are still growing not falling. It may be that some inaccuracies around measuring historic emissions, particularly say during the 1940s mean there is a few years more than 2040.

But the point remains that well within the expected lifetime of my children, never mind the grand kids, the world will likely be 2°C warmer than the 20th Century global average of 13.9°C.

A recent reader comment on one of my articles here at Reneweconomy said, in effect, that I over-employ Phil Wright to do my spreadsheet analysis. In practice, change happens in S curves where most of the effort goes into the first couple of per cent of change, then there is a rush.

So I guess that a straight line target of hitting 2°C in 2040 or earlier might be seen as pessimistic. On the other hand, emissions are still growing and the second derivative isn’t moving much and time is very short and some of the impacts of what’s already been done such as sea level rise are very long lasting.

When will global emissions peak? Is anyone ringing the bell

Realistically who can confidently forecast when annual global emissions will actually start falling? If it’s to be in the next couple of years it can only be if there is a dramatic slow down in Asia’s economic growth (Fig 3).

If there is something positive to be said about China’s emissions growth, besides the fact that China is providing most of the world’s PV panels and a major contributor to lower global wind costs, it’s that China is, to some extent, a command and control economy. But it’s only to some extent.

China’s Central government has so far shown no ability to cut back on the growth of coal-fired electricity. Despite various mandates and other signals provincial governments captive power aluminium producers have simply carried on doing what’s made them wealthy in the past 20 years.

Figure 1: Global carbon budget, forget 1.5C. Source: Carbonbudget, ITK

Point 2.  Excluding land use and clearing carbon emissions come from coal, oil, gas and cement. Coal is the largest contributor. In terms of what’s at stake to existing producers (at the mine-mouth/well-head) oil is more than 60 per cent of the total. This table can be criticised because it omits land use revenue. The annual revenue at stake is $US3.7 trillion, or say $70 trillion cumulative to 2040.

The global balance of power is going to be completely changed by decarbonisation.

Figure 2: Carbon emitters, carbon and revenue. Source: Carbonbudget, BP, ITK

The rise of Asia in general and China in particular is the reason for the continued annual growth in carbon emissions. China uses more than half the world’s coal and more than half the world’s cement. China has the largest sales of new cars of any country in the world. Most of the coal goes into electricity and most of the electricity goes into heavy industry. The coking coal goes into steel and that mostly goes into construction.

Figure 3. Source: Carbon budget

Again this is not a blame game but the point is that the burden of saving the world will fall disproportionately on Asia and in particular China. And its coal in China.

Figure 4. Source: Carbonbudget