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Introduction to the Workshop

While much progress has been made in the development of decarbonization technologies, much work remains in scale-up and deployment. In introducing this workshop, K. John Holmes (Director/Scholar, Board on Energy and Environmental Systems) noted the objective of this workshop was to identify the primary challenges and opportunities to deploying decarbonization technologies at scale across major sectors of the U.S. economy. In addition to technology-specific and sector-specific studies, the workshop considered the types of societal transformations required, as well as potential policy drivers for carbon dioxide emissions reductions. These considerations are essential to accurately assess realistic deep decarbonization pathways. For decarbonization technologies to reach meaningful scale, real-world constraints, societal, economic, and political, must be considered. This workshop was intended to scope out the National Academies of Sciences, Engineering, and Medicine’s upcoming coordinated work on deep decarbonization, hereby launching the Deep Decarbonization Initiative. The Initiative will apply a systematic approach to analyzing barriers and opportunities for reduction of carbon dioxide and other greenhouse gas emissions, and take a broader scope beyond the U.S. energy sector to also include the global economy.

WORKSHOP OVERVIEW

The Board on Energy and Environmental Systems (BEES) of the National Academies of Sciences, Engineering, and Medicine convened a workshop on July 22-23, 2019, to scope out the major technical, operational,

financial, societal, and political challenges and opportunities of deploying decarbonization technologies in the U.S. economy. Funding for the workshop was provided by the Sloan Foundation. BEES established a planning committee (see p. iv) to develop the workshop agenda (see Appendix B). The workshop statement of task is shown in Box 1.1. There were 632 people registered to participate in the workshop either in person or online (see Appendix C).

This report is a factual summary of what occurred at the workshop. The planning committee’s role was limited to organizing and convening the workshop. The views contained in this proceedings are those of the individual workshop participants and do not necessarily represent the views of the participants as a whole, the planning committee, or the National Academies of Sciences, Engineering, and Medicine. In addition to the summary of the workshop provided here, materials related to the workshop can be found on the BEES webpage, including speaker presentations and archived webcasts of presentation and discussion sessions.

WORKSHOP THEMES

Operational Challenges

Many decarbonization discussions begin and end with the technologies, themselves. The first major theme of the workshop went one step

further, considering the operational, logistical, and financing challenges of deploying these technologies into existing systems and sectors. The electricity grid of the future will face the dual challenge of incorporating more intermittent renewable electricity generation while satisfying increased demand from the electrification of other sectors. Max Parness (Toyota Motor North America) discussed the massive expansion of electric vehicle charging infrastructure needed to electrify the automobile sector, while Denise Gray (LG Chem) noted the technical challenges of building versatile vehicle platforms that can accommodate large batteries. Adam Rauwerdink (Boston Metal) provided one company’s innovative solution to electrifying the steel-making process and their efforts to create a modular electric furnace unit that can be incorporated into the steel sector’s existing operations, but highlighted the massive electricity loads required, representing an operational challenge for the electric grid. Various technical solutions for carbon dioxide removal were discussed, but they require vast inputs of energy (direct air capture) or land (natural carbon sink solutions). For many decarbonization technologies, deployment at scale will require transformation of the operations of entire sectors, including rebuilding infrastructure, redefining business models, retrofitting or replacing manufacturing processes, discovering new supply chains, developing new product designs, and retraining the workforce.

Investment Challenges

Decarbonization of the economy will require large, up-front capital expenditures, and many sectors have so far struggled to attract the required level of investment due to regulatory uncertainty and non-fully-depreciated assets that result in carbon dioxide emissions. Varun Rai (University of Texas) discussed the penetration of new technologies into the marketplace, describing the long, arduous formative phase when investment in new technologies is a gamble. Policy changes that lead to investment in decarbonization technologies can result in stranded assets and thus can raise equity issues for the owners of those assets. Above all else, regulatory certainty is necessary to lower risk and attract investors to the market place, and without a reliable return-on-investment, investors often stay on the sidelines. Adam Goff (8 Rivers Capital) discussed the business model for an Allam Cycle power plant, describing how uncertainty regarding the 45Q tax credit factors into their long-term profitability projections.

Jurisdictional Challenges

A persistent challenge encountered was uncertainty of jurisdiction and responsibility for decarbonization efforts. Which individuals, companies, agencies, and sectors are responsible for lowering carbon dioxide emissions from various sources? Mark Ahlstrom (NextEra Energy Resources) and Abe Silverman (New Jersey State Board of Public Utilities) discussed the discordance between federal, state, and local power sector decarbonization efforts, suggesting the need for power sector reform, including need for improved market designs. Jurisdictional challenges to building long-distance high voltage direct current (HVDC) transmission lines constrain our ability to deploy new infrastructure that could transmit low-carbon power from areas with high renewable electricity generation to areas which—for physical, economic, or political reasons—cannot deploy as much renewables. The session on corporate value chain decarbonization highlighted the difficulty of accounting for carbon dioxide emissions from complex international supply chains. Sara Law described her organization, the Carbon Disclosure Project, a nonprofit that helps corporations assess environmental impact and understand their environmental risk. Nancy Sutley (Los Angeles Department of Water and Power) described the role of local government in decarbonization, and discussed challenges of reconciling local and state emissions targets. Michael Gerrard (Columbia University) highlighted the complexity of legal jurisdiction covering decarbonization efforts, suggesting the areas where each level of government may be most effective.

Human and Societal Challenges

In addition to organizations of all types, individuals will play important and varied roles in achieving the decarbonization transition. The transition will also have varied impacts on different individuals and communities. Reinhard Fischer (Volkswagen) and Max Parness (Toyota Motor North America) discussed the need for strong consumer acceptance of electric vehicles to justify private sector support for the transition. Emily Schapira (Philadelphia Energy Authority) and Julia Haggerty (Montana State University) described how decarbonization plays out at the local level, suggesting that low income and rural communities may be disproportionately negatively affected by the transition, requiring the need for careful consideration of uneven societal impacts. Ryan Costello (Americans for Carbon Dividends) discussed the political and human elements involved in environmental policy-making, highlighting the need for coalition-building across the political aisle to support carbon pricing policy that remits revenues back to taxpayers.

ORGANIZATION OF THIS WORKSHOP PROCEEDINGS

Subsequent chapters of this publication summarize the workshop presentations and discussion in chronological order. Chapter 2 focuses on integrated assessment modeling results suggesting pathways to meeting our climate goals. Chapters 3-6 include sector-specific studies, including low carbon electricity generation (Chapter 3), corporate value chain decarbonization (Chapter 4), heavy industry decarbonization (Chapter 5), and low carbon vehicles (Chapter 6). Chapter 7 discusses the natural and engineered solutions for carbon dioxide removal from the atmosphere, Chapter 8 focuses on societal transformation pathways, and Chapter 9 describes some of the various policy drivers for decarbonization.