Industries and Climate Change

This week I will be talking about carbon pricing, a tactic that captures all of the external costs of greenhouse gas emissions and pushes them back to the fossil fuel companies.

   

Carbon pricing works by capturing the external costs of emitting carbon, meaning the costs that the public pays, such as loss of property due to rising sea levels, the damage to crops caused by changing rainfall patterns, or the health care costs associated with heat waves and droughts – and placing that cost back at its source.

Carbon Pricing effectively shifts the responsibility of paying for the damages of climate change from the public to the GHG emission producers.  This gives producers the option of either reducing their emissions to avoid paying a high price or continuing emitting but having to pay for their emissions.   

Carbon Pricing also creates a price signal that reduces, or regulates, GHG emissions and at the same time provides a strong financial case for shifting investments away from high-emission fossil-fuels based technology towards cleaner technology.

Putting a price on carbon is widely seen as the most cost-effective and flexible way to achieve emission reduction. Carbon Pricing can help facilitate emission pathways compatible with keeping global temperature rise to well below 2°C above pre-industrial levels and pursuing efforts to hold the increase to 1.5°C, as per the Paris Agreement. It can spur investment and innovation in clean technology by increasing the relative cost of using carbon-intensive technology. Businesses and individuals seeking cost-effective ways to lower their emissions will encourage the development of clean technology and channel financing towards green investments. It will also promote the achievement of the Sustainable Development Goals by channeling financing to sustainable development projects. Carbon pricing will also generate revenue which can be recycled into the green economy through government spending for research and development into green technology, helping vulnerable communities adapt to the effects of climate change, or managing the economic impacts of the transition to a low-carbon economy. Finally, carbon pricing will create environmental, health, economic, and social co-benefits, ranging from public health benefits coming from reduced air pollution to green job creation.

There are types of carbon pricing, but all approaches aim to create price signals on greenhouse gas emissions. This is achieved through multiple ways. The first type is an Emission Trading System, also known as cap and trade, is a tradable-permit system for greenhouse gas emissions. It sets a limit on the greenhouse gas emissions that can be emitted. Entities covered by the Emission Trading System need to hold one emission unit, or allowance, for each tonne of greenhouse gasses emitted, but entities have the flexibility of selling and buying emission units. The total number of emission units reflects the size of the cap in the Emission Trading system. Under this approach, the price on carbon will depend on the balance between demand (the total emissions) and the supply (the emission units allocated and available). The second type would be Emission Reduction Funds, which are taxpayer funded schemes in which a government buys credits created by emission reduction projects.  Currently, an Emission Reduction Fund is operational in Australia. Next is a Carbon Tax on fossil fuel usage creates a price signal felt across an entire economy, thereby incentivizing a move away from carbon-intensive production. This results in a total reduction of emissions. Unlike an Emission Trading System, a carbon tax cannot guarantee a minimum level of greenhouse gas reductions, but instead ensures certainty around the size of the price signal on carbon. Depending on the particular needs of the jurisdiction contemplating carbon pricing, a Hybrid Approach can also be considered, combining elements of an Emission Trading System and carbon tax. For example, a jurisdiction might set up an Emission Trading System with either a maximum or minimum price per allowance, or set up a carbon tax scheme that accepts emission reduction units to lower tax liability.

Carbon pricing is a very beneficial way to push the costs of pollution back to those who cause it, fossil fuel companies. It is the most flexible and cost-competitive way to control greenhouse gas emissions

This week I think it is important to go back to the basics, since I have never fully explained the dangers that face our climate. So, this post will be about greenhouse gas emissions and the effect they have.

Greenhouse gas emissions are any forms of various gasses that emit into the earth’s atmosphere. The most known of these gasses is carbon dioxide, which directly contributes to the greenhouse effect. Greenhouse gasses hold the ability to trap heat and make the planet warmer. Researchers have found that it is human activity that is mostly responsible for all of the increase in greenhouse gasses being emitted into the atmosphere over the last 150 years. The largest source of greenhouse gas emissions from human activities in the United States is from burning fossil fuels for electricity, heat, and transportation. 

In the United States, the main sources of greenhouse gas emissions are transportation, industry and agriculture. For transportation, their sector generates one of the largest shares of greenhouse gas emissions. These greenhouse emissions through transportation are largely from the burning of fossil fuel for our cars, trucks, ships, trains, and planes. The remaining greenhouse gas emissions from the transportation sector come from other modes of transportation, including commercial aircraft, ships, boats, and trains, as well as pipelines and lubricants. Mainly small amounts of methaneb and nitrous oxide are emitted during fuel combustion. In addition, a small amount of hydrofluorocarbon emissions are included in the Transportation sector. These emissions result from the use of mobile air conditioners and refrigerated transport.The primary reason that the burning of fossil fuel for transportation is our main source of gas is because of fossil fuel subsidies. These subsidies are provided by the government and make it very easy for corporations to profit off of producing gas made out of fossil fuels. 

Greenhouse gas emissions for the industry also come mainly from the burning of fossil fuel for energy. Industries also produce the goods and raw materials we use every day. The greenhouse gasses emitted during industrial production are split into two categories: direct emissions that are produced at the facility, and indirect emissions that occur off site, but are associated with the facility’s use of electricity. Direct emissions are produced by burning fuel for power or heat, through chemical reactions, and from leaks from industrial processes or equipment. Most direct emissions come from the consumption of fossil fuels for energy. A smaller amount of direct emissions, roughly one third, come from leaks from natural gas and petroleum systems, the use of fuels in production, like petroleum products used to make plastics, and chemical reactions during the production of chemicals, iron and steel, and cement. Indirect emissions are produced by burning fossil fuel at a power plant to make electricity, which is then used by an industrial facility to power industrial buildings and machinery.

The agriculture sector’s emissions are from the agricultural activities, like crop and livestock production for food, which contribute emissions in many ways. These ways through various management practices on agricultural soils can lead to increased availability of nitrogen in the soil and result in emissions of nitrous oxide. Specific activities that contribute to nitrous oxide emissions from agricultural lands include the application of synthetic and organic fertilizers, the growth of nitrogen-fixing crops, the drainage of organic soils, and irrigation practices. Management of agricultural soils accounts for just over half of the greenhouse gas emissions from the Agriculture economic sector. They can also be done through livestock, especially ruminants such as cattle, which produce methane as part of their normal digestive processes. This process is called enteric fermentation, and it represents over a quarter of the emissions from the Agriculture economic sector.

For the Agricultural sector we can find trances in their emissions. In 2019, greenhouse gas emissions from the agriculture economic sector accounted for 10 percent of total U.S. greenhouse gas emissions. Greenhouse gas emissions from agriculture have increased by 12 percent since 1990. Drivers for this increase include a 9 percent increase in nitrous oxide from management of soils, along with a 60 percent growth in combined methane and nitrous oxide emissions from livestock manure management systems, reflecting the increased use of emission-intensive liquid systems over this time period. Emissions from other agricultural sources have generally remained flat or changed by a relatively small amount since 1990.

 

The last climate change blog focused on technological approaches as a whole. This blog is going to focus on technology and its advancement with Hydrogen. This chemical element is viewed to be the next best thing regarding mitigating climate change.

Hydrogen is colorless, odorless and non-toxic gas that is a minor makeup of the universe. Using this gas has shed hope in some scientists’ views because the element is virtually inexhaustible and could be used as an alternative to fossil fuels. Hydrogen as a fuel has been rising with the concern surrounding climate change, but it dates back further than the 21st century. In the 18th and early 19th centuries, electrolysis of water, breaking it down by electricity to separate its two elements, was first achieved. Having obtained hydrogen as a raw material, in 1838 the German-Swiss chemist Christian Friedrich Schönbein and the British scientist William Robert Grove demonstrated the reverse path, the principle of the hydrogen fuel cell, combining it with oxygen to produce water and electricity. The use of hydrogen was a century away when these discoveries were made, but scientists and authors prophesied its use in their works.

Technology has progressed since the 1800s, generating different types of fuel cells. In addition, hydrogen has been found to also be used directly in combustion engines without generating carbon dioxide. In the automotive industry, hydrogen also offers a particular advantage over electric batteries in the case of heavy-duty vehicles. However, hydrogen does have different production origins that directly affect their benefits with mitigating climate change. The production of hydrogen has a “color system” of being classified as “green”, “gray”, and “blue”.

“Green” hydrogen is produced by the electrolysis of water powered by renewable energies. But this ideal method is expensive, so the vast majority of hydrogen produced in the world today is made by a cheaper process called steam reforming, which uses natural gas as a feedstock and does generate carbon dioxide from the reaction of methane with water. This is “gray” hydrogen, which has negative effects on the mitigation of climate change. However, gray hydrogen can be transformed into “blue” hydrogen when the carbon dioxide generated is captured by carbon storage technologies (CCUS). However, there are doubts among experts not only about the viability of these systems, but also about how green so-called blue hydrogen can be. These different types of hydrogen pose problems to the effectiveness of utilizing hydrogen to aid the hydrogen economy and to use it as a substitute for fossil fuels.

But in addition to the fact that the hydrogen economy still has many technical hurdles to overcome, there is a further problem. “We think H2 has an indirect warming effect by affecting OH [hydroxyl radicals], the main sink for methane, and hence the lifetime of methane,” David Stevenson, an atmospheric chemist at the University of Edinburgh, summarizes to OpenMind. In 2006, Stevenson and his colleagues raised the alarm by warning that atmospheric hydrogen sequesters these hydroxyl radicals that are normally responsible for the removal of methane, the second most important greenhouse gas (GHG), 28 times more potent than CO2 over a 100-year time horizon. And if hydroxyl radicals decrease, methane lasts longer in the atmosphere.

In today’s world we are seeing a renewed interest in the use of hydrogen. Europe is the leading global user and supporter of using hydrogen. The interest dates back to World War II, when Nazi Germany used the chemical element to produce synthetic fuels from coal. Today, The International Energy Agency supports the chemical’s “vast potential” in the first report of hydrogen in June 2019. Many say that Europe is setting the foreground for hydrogen being used for global deployment. They are leading the way for countries to use technological ways to produce hydrogen to mitigate climate change without releasing carbon dioxide.

Our modern world is getting more creative in how and what we use to combat the threat of climate change. We are seeing that hydrogen is becoming a very popular way to further aid in this problem. However, it is a new idea that needs to be ironed out. This tactic is only one of the many ways being created to help our world with climate change.

Technology is a facet of humanity that can be used to explain our current climate crisis. Afterall, fossil fuels were exploited by the technological advances of that time. What we are seeing in 2022 is an acknowledgment of the faults in our use of technology, but also a look into what technology can do to aid the climate crisis. Business owners and experts in their field are looking to produce real-time energy management through technology in hopes of mitigating the negative impacts we have seen on the environment. To really experience what technology can do for the environment, there are a few examples.

Carbon capture technology stores up to around 90 percent of the carbon dioxide emissions from the power plants and the industrial facilities. The carbon that is captured by this technology can be repurposed by the practice of enhanced oil recovery. Carbon dioxide is used to extract extra oil from the developed fields in the United States. However, researchers are looking into expanding the repurposing of carbon dioxide, for example, by transforming carbon emissions into an algae biofuel or building materials. Many experts find that capturing carbon dioxide will be the most cost effective way to produce clean hydrogen. Hydrogen is currently thought to be the “clean fuel of the future” and will play a major role in decarbonizing the industrial sector. Carbon capture technology has been around for a couple of decades now, but we can only hope that the new purposes researchers are bringing to this technology will lead to a decrease in the effects of carbon dioxide.

One radical approach to sustainability would be “refreezing” the Earth’s poles. The idea has been proposed in 2019, but has experienced an increase interest in recent years. The company Real Ice has created the “Real Ice Re-Icing Machine” prototype that works on renewable energy. It was developedby a team of graduates and the undergraduate students from the University of Bangor in Wales, along with the United States and France. The machine is wind powered and works by drilling a hole into the ice cap that forces the water to come to the surface, which will then freeze due to the temperature that reaches as low as -58 Fahrenheit. This will create an entirely new layer of ice. The machine is worked in a very simple manual way, which supports the researchers belief that the machine can be employed by the local Inuit people who depend on the ice to survive. The machine was created because if the student’s interest in the crisis and is seen to be a very useful improvement because the current water temperatures will accelerate the rate at which the ice caps are melting. Once this occurs shortages will occur with both food and water on a global scale.

Cement is one the most used commodities in the world, but it contains a high level of carbon. As a result of the popularity of cement, many start-ups have been trying to produce low-carbon cement. More than 100 million dollars has been invested into cement start-ups by prominent tech investors, like Bill Gates. Not only are small start-ups looking into “decarbonizing” cement, so are the big named companies like HeidelbergCement. The type of cement this industry is trying to create is called “Green Cement”, a low-carbon version that is highly efficient in reducing carbon and is structurally sound. It is made of mainly raw material like discarded industrial waste, furnace slag and fly ash. This type of cement reduces the production of carbon emissions when the cement itself is being made. Green cement has a very promising future and is a product that is price effective.

For as many examples that have been provided to support a technology based attempt to aid the climate crisis, some researchers believe that we should not be focusing solely on technology. They say that the world cannot rely solely on technology production and that we have to start pushing for lifestyle changes in wealthy countries. Scientists are calling for cultural and political changes through policies. They believe that wealthy societies can reduce inequality, guarantee that citizens receive a livable wage, ensure access to healthcare, etc. It is their view that these states can have economic stability without going too far in growth, which will then make mitigation in relation to climate change manageable.

Technology has proven to be a great aid in human advancement and we are still seeing it being used to adapt to a new type of world. With climate change we are seeing inventions or further use of existing technology to aid in the crisis. However, the climate crisis has been around for a very long time to be fixed overnight by these advancements. This is why we see researchers asking for other actions that are not based on technology.

Climate change has become a very important topic not only on an economic scale, but also in politics. One recent trend we are seeing would be the move towards reducing fossil fuel subsidies. Countries across the globe are putting plans in motion to aid in the climate change problem.

Fossil fuel subsidies are essentially anything that offers the fossil fuel production market an upper hand over other, cleaner, producers of energy. More specifically it is any government action that raises prices that are received by these energy producers, lowers the cost of fossil fuel production, or lowers the price that these consumers pay. The most common examples of these subsidies are tax giveaways, direct funding or even governments offering land and water to fossil fuel companies.

 For the United States, direct subsidies to fossil fuels is estimated to be around $649 billion dollars a year. This includes federal subsidies up to $14.7 billion dollars, states subsidies up to around $5.8 billion dollars and externalities like health and environment. If these subsidies were to decrease or even be eliminated, it would result in saving taxpayer’s money and a decrease in greenhouse emissions. 

President Biden made an executive order under the title Executive Order 14008. In this order, Biden has made it clear that his administration’s goal is to put the climate crisis at the center of focus by making it an essential element of foreign policy and national security. Under section 102 it states that the order will continue the previous actions of the administration. It further states that President Biden will host an early Leader’s Climate Summit in order to make a “positive contribution to the 26 United Nations Climate Change Conference of Parties”. Among other clauses of this section, Biden states that he has created a new Presidentially appointed position, the Special Presidential Envoy for Climate. This position aims to elevate the importance of climate change under the administration. The executive order also specifies their relationship with fossil fuels. Under it Biden calls for the elimination of  fossil fuel subsidies under the FY2022 budget. In order to meet this goal, they aim to repeal thirteen fossil fuel tax preferences. This would make federal revenue increase by around $35 billion dollars over a 10 year span; along with $86 billion dollars that would be raised in the same time period by reforming the taxation pertaining to foreign fossil fuel income. The tax preferences that they are looking to reform encourage more investment in the fossil fuel market. The goal with the tax reform would be to decrease the amount of distortion they apply to the market. 

FY2022

The United States is not the only country looking to reduce fossil fuel subsidies. The European Union is looking to put stricter rules on fossil fuel subsidies. The Union noticed fifteen states that are a part of the European Union spent more money on fossil fuels than green energy in 2019, along with European Union countries providing $56 billion euros in fossil fuel subsidies. The Commission states that they are undergoing an adoption of new legislation in 2022 that will display how the member states have to report their progress in phasing out fossil fuels. In the European Union the subsidies for fossil fuels often have tax exemptions or tax cuts. This has resulted in many of the highly polluting energy fuels having lower rates and cleaner energies or electricity having higher rates. These high-pollutants face an advantage in taxes, which offers many of these industries or producers of these fuels an incentive to keep up with these fossil fuels.

Big Shift Global

Last year Brussels produced an idea to favor cleaner fuels over the popular dirty fuels. The idea is to take away the tax exemptions from these fossil fuels and other energies would rise. However, these tax changes need to be unanimously approved by the European Union governments. This factor of the process has been seen to be problematic since every government in the Union has the power of veto. A number of member countries have openly announced their hesitance to agree to these costs on the dirty fuels because of the potential social backlash they would face if they increase household bills. Auditors that are reviewing this problem say that a remedy of the future social fallout would be aided by exterminating other taxes or possibly using money that was raised to offer compensation to the affected households.

What the public is witnessing is a global effort to reduce the production and consumption of fossil fuels. With the climate crisis holding a place on the political stage we can expect to see many more policies aiming to control fossil fuel subsidies. This is, hopefully, going to result in a decrease in the dangerously high pollution these dirty fuels produce.