Heliophage


Damn, a trillion dollars could have come in handy
September 23, 2008, 9:20 pm
Filed under: Global change, Interventions in the carbon/climate crisis

Commuting in this morning on the boat, I was struck by a Guardian article on a new McKinsey report (pdf) about carbon capture and storage:

The study shows that such plants could be economically viable by 2030 at the latest. But it would require substantial public subsidies to get 10-12 plants running by the EU target date of 2015…McKinsey said that, with coal still likely to make up 60% of EU power generation by 2030, CCS could be a vital solution to ensuring security of energy supply and reducing greenhouse gas emissions.It could reduce emissions by 400m tonnes a year by 2030, or a fifth of planned European savings. The consultants’ report, published yesterday, showed that with an aggressive commercial push from the middle of the next decade, CCS costs could come down from as much as €90 for a tonne of CO2 initially, to about €30-45 in 2030 – or in line with expected carbon prices then.

The report (which I’ve not yet scanned: here’s a note from Roger at Prometheus) says that to make this happen will take about €10bn in subsidies. Hey, I thought — that’s about 2% of the proposed banking bail-out (and over a fair bit of time, too). If we can afford to bail out the banks — probably a good idea, if it’s done properly — surely we can afford to make a few investments like this to get us the tools for dealing with the carbon/climate crisis.

But of course we can’t; not now. Spending $700m billion [!] + on bailing out banks is going to make the US, at least, less able to spend comparatively small amounts on other things. As my old boss Bill Emmott but it, also in the Guardian:

The true impact of this expansion of public spending lies in politics, and in what this rescue will now make more difficult or perhaps impossible: the expansion of other areas of public spending, such as healthcare or public programmes for alternative energy. If Barack Obama is elected president in November, he will find his fiscal hands tied a lot tighter than he may have hoped, even with a Democratic Congress alongside him – unless, of course, he wants to raise taxes.

Europe is not yet bailing out its biggest banks (though it could happen). But in general, the climate for big investments of public money is, to put it mildly, not too good at the moment. And as for private money: ha. (In particular, there is concern that it will be hard to find investment banks to underwrite IPOs: Lehman’s used to do a lot of this in green technology, which is hardly an advert.)

So I didn’t get off the boat brimming with my normal cheery optimism. As a devotee of the we-need-everything school of thought, €10bn on CCS struck me as OK even though I’m not wild about the technology (maybe that report will convince me). But it seems to me that it’s a lot less likely than it was a year ago, or even a month ago. If the bailout costs $1 trillion that’s a whole lot of money that won’t be invested elsewhere at a time when we need it most. We may look back in the future and see this as the point when real action on carbon reduction technologies was taken off the table.

Cross-posted to Climate Feedback

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