IIASA A. Grübler, 2000

Technology in a Carbon Constrained World

Arnulf Grübler

gruebler@iiasa.ac.at

SHELL Workshop, London

September 19-21, 2000

IIASA A. Grübler, 2000

Part I: Technology and Global Change

• The powers of technology

• Basics of Technological Change I&II• Examples for characteristics of TC:

dynamic (DRAMS) systemic (H2 systems) cumulative (PVs) uncertain (smoke-spark arrestors)

• Hierarchies and rates of change

IIASA A. Grübler, 2000

Factors of Growth: The Last 200 Years

1800 2000 factor

World population,billion

1 6 x 6

Life expectancy, years* 35 75 x 2Work hours per year* 3,000 1,500 2Free time over life* 70,000 300,000 x 4

Mobility, km/day* (excl. walk)

0.04 40 x 1000

World income, trillion $ 0.5 36 x 70Global energy use, Gtoe 0.3 10 x 35Carbon, energy, GtC 0.3 6 x 22Carbon, all sources,

GtC0.8 8 x 10

IIASA A. Grübler, 2000

Dimensions of Global Change AD 2000

Land

106 km

2Water

km3

Materials

109 t

Energy Carbon

103

EJ GtC

Human 47 3.000 <140 0.4 <9 +7

Natural 84 10.000 <25 5440 ~600 --2

as % 56% 30% 560% 0.01% ~1% 300%

c:\leoben\global_change_shell.doc

Net source sink

Land - use vs. availabilityWater - use vs. surface water runoffMaterials - total materials used (40 Gt) and moved (100 Gt) vs. material transported by riversEnergy - global primary energy use vs. solar influxCarbon - sum of annual exchanges between reservoirs (bi-directional) vs. gross emissions

Source: Turner et al., 1990; IPCC, 1996; Grübler, 1998.

IIASA A. Grübler, 2000

Basics of Technological Change I:

• Technology = H+S+O = hardware + software + “orgware”

• Most important single factor of productivity and economic growth

• Source and remedy of adverse impacts

• Hierarchical levels of change (increasing size = slower diffusion)

IIASA A. Grübler, 2000

Basics of Technological Change II: Change is..

• Dynamic: importance of both incremental and radical change (e.g. DRAMS)

• Systemic: importance of spillovers, clusters, and systems “architecture” (e.g. H2 system)

• Cumulative: increasing returns: learning by doing, but: forgetting by not doing (e.g. PVs)

• Uncertain: risk, but resilience through diversity and experimentation (e.g. unsuccessful smoke spark arrestors for steam locomotives)

IIASA A. Grübler, 2000

DRAMs

• Key technology for increased computing performance

• Market size: ~30 billion $• Moore’s Law holds for >30 years

(self-fulfilling prophecy)• Density: doubles every 18-21 months

1kB to 1GB = x106• Cost decline ($/bit): a factor >100,000 !

IIASA A. Grübler, 2000

DRAMS: Memory Size

1.0E+03

1.0E+04

1.0E+05

1.0E+06

1.0E+07

1.0E+08

1970 1975 1980 1985 1990 1995 2000

bit

s p

er

DR

AM

average solddoubling time: 21 months

market introduction*doubling time: 18 months

* f irst year sales exceed 105 units 1K

4K

16K

64K

256K

1M

4M

16M

64M

256M

IIASA A. Grübler, 2000

DRAMS: Prices

IIASA A. Grübler, 2000

A Possible H2 System

IIASA A. Grübler, 2000

100

1,000

10,000

100,000

0 0.1 1 10 100 1,000

Cumulative expenditures, billion (1985) Yen

PV

co

sts

(19

85

) Y

en

pe

r W

1973: 30,000

y = 10 4.0 – 0.54x

R 2 = 0.989

1995: 640

Applied R&D InvestmentBasic R&D

1976: 16,300

1980: 4,900

1985: 1,200

Data source:Watanabe, 1995 &1997

Japan - PV Costs vs. Expenditures

IIASA A. Grübler, 2000

Technological Uncertainty: Patented but non-functional smoke-spark arrestors

Source: Basalla, 1988.

IIASA A. Grübler, 2000

Hierarchy of Technological Change

Technology = Hardware, Software, Orgware

Incremental (H)

Radical (Hn + S)

Systems (Hn + Sn + O)

Clusters & Families (Hn + Sn + On)

With increasing hierarchy (complexity):

larger market size, but slower diffusion.

IIASA A. Grübler, 2000

Hierarchies in Rates of Change

USA USSR t0 Δt t0 Δt

Total length of transportinfrastructure 1950 80 1980 80

Growth of railways 1830-1930 1930-1987

1858 Decline

54Decline

1890 1949

3744

Treated ties (USA) 1923 26Track electrification(USSR)

1965 27

Replacement of steamlocomotives 1950 12 1960 13

to = diffusion midpoint (50% completion rate)Δt = diffusion rate (years to grow from 10% to 90%)

IIASA A. Grübler, 2000

Part II: The GHG Economy: Challenges and Opportunities

• Challenges (e.g. unknown targets)

• Opportunities (e.g. continue decarbonization)

• Opportunities along hierarchy of TC

• An example: “Towngas” strategy

• Implications for SHELL

IIASA A. Grübler, 2000

Challenges

• Uncertain targets: long-term = unknown; short-term = not arguable

• No easy fix: pervasiveness of emissions (agriculture, energy, industry, land use, sewers, etc.)

• Extreme long time horizon: >100 yrs (act and see rather than see and act, mismatch between rhythms of climate change, socio-economic change, and politics)

• Externality not quantified (no binding targets = no price; future (ecosystems) damages: not quantifiable; damages < than costs with discounting; dilemma between intra- and inter-generational equity)

• Institutional settings not yet existing (“rules of the game”?, who decides?) with contradictory interests (global -- national; dominant -- emerging business)

IIASA A. Grübler, 2000

0

5

10

15

20

1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Car

bon

emission

s (G

tC y

r -1)

Year

550 ppmv (F = 1.1)550 ppmv (F = 0.6)550 ppmv (F = 2.6)F = 0.6 DT2x = 4.5F = 2.6 DT2x = 1.5

(2.6, 1.5)

(2.6, 2.5)

(1.1, 2.5)

(0.6, 2.5)

(0.6, 4.5)

(a)

0.1

1

10

100

1,000

10,000

1990 20002010 20202030 2040 2050 20602070 20802090 2100

CO

2 sh

adow

pric

e ($

per

ton

C)

Year

550 ppmv (F = 1.1)550 ppmv (F = 0.6)550 ppmv (F = 2.6)F = 0.6 DT2x = 4.5F = 2.6 DT2x = 1.5(not shown as zero)

(b)

A. Grübler, 2000k:\TNT2000\Arnulf|reprintfigs-transp-collandsc.dsf

Uncertainties in Stabilizing Climate at +2.5 ºC by 2100

IIASA A. Grübler, 2000

Opportunities• External support for development of new technologies,

businesses, industries• Innovation trigger (technologies, organizations, institutions)• Move with, and shape social tide (PR, avoid worse: e.g. hefty

C-tax)• Continue historical path of decarbonization

(woodcoaloilgas hydrogen)• New business (revenues and profits) from:

--new products (e.g. fuel cells, carbon-buckyball structures, CO2 turbines)

--new markets (e.g. CO2 sequestration & storage, “towngas”: CH4 & H2)

--new industries (e.g. C as structural & manufacturing material, H2 economy)

IIASA A. Grübler, 2000

Microchip

Television

Steamengine

Electricmotor

Gasolineengine

Vacuumtube

Commercialaviation

Nuclearenergy

1850 1900 1950 2000

Nuclear

HydroGasOil (incl. feedstocks)CoalTrad. renewables

Gto

e1.6 2.5 5.3

10

8

6

4

2

0

World primary energy use (Gtoe)

World population(billion)World Primary Energy Supply

IIASA A. Grübler, 2000

World Primary Energy Shares

IIASA A. Grübler, 2000

Decarbonization of Global Energy

IIASA A. Grübler, 2000

Hierarchies of ChangeT = H+S+O

• Incremental (H): e.g. CO2 capture from CO2-rich gas & reinjection; 3-litre car

• Radical (Hn+S): e.g. cheap&clean recovery of methane hydrates; CO2- turbine

• Systems change (Hn+Sn+O): e.g. CO2 market (sequestration + transport + disposal); “towngas” strategy

• Clusters, families, “paradigms” (Hn+Sn+On): e.g. H2 economy: H2 + FC = all energy services; consumers = utilities

IIASA A. Grübler, 2000

An (evolutionary) “Towngas” Strategy

• Location: close to major transit pipelines and old oilfields (e.g. West Ukraine)

• Steam reforming (endothermal - gas; later exothermal - nuclear)

• Towngas: CH4 + H2 (<30%)

• Transport to consumption centers in existing gas pipelines

• Membrane separation (H2FC; CH4gas turbines (with CO2 capture)

(C. Marchetti, 1989, Int.J.Hydrog.Energy 14(8):493-506)

IIASA A. Grübler, 2000

Methane Hydrogen

IIASA A. Grübler, 2000

Where to start...

IIASA A. Grübler, 2000

Implications for SHELL

• Biggest risk: customers and rules still undefined; options involving soil carbon (forestry) might turn out phoney

• Biggest opportunity: entirely new business areas, new dash for gas

• Focus short-term 1: capacity building (CO2 trading, CDM, work with: sisters, NGO’s, governments)

• Focus short-term 2: incremental changes with positive (even if small) ROI: efficiency improvements (refineries), stop flaring, monitor & plug CH4 leaks (become world leader)

• Focus medium-term: increase value of gas reserves (infrastructure investments); “towngas” strategy

• Focus long-term: push decarbonization and hydrogen economy, explore fundamentally new solutions (return to R&D, e.g. closed hydrate - H2 cycles)