A worldwide analysis of stranded fossil fuel assets’ impact on power plants’ CO2 emissions

Daniel Morton — Fri, 30 Aug 2024 21:00:01 +0000

A worldwide analysis of stranded fossil fuel assets’ impact on power plants’ CO2 emissions Daniel Morton Fri, 08/30/2024 - 15:00

NATURE COMMUNICATIONS, 2024, 15, 7517

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The Green Paradox: How Stranded Assets are slowing down the Clean Energy Transition

Daniel Morton — Fri, 30 Aug 2024 20:44:57 +0000

The Green Paradox: How Stranded Assets are slowing down the Clean Energy Transition Daniel Morton Fri, 08/30/2024 - 14:44

Daniel Morton

Read the full paper here

As we transition to a clean energy economy many of the existing fossil-based industries have assets, such as oil and gas that is still in the ground and the associated infrastructure, that are going to be left behind. Instead of winding down the consumption of fossil fuels as we transition, demand is increasing, which is causing a rise in carbon emissions.

RASEI Fellow Don Grant (��ֱ�� Boulder), in collaboration with Tyler Hansen (Dartmouth College), Andrew Jorgenson (University of British Columbia), and Wesley Longhofer (Emory University), used a broad range of analyses on a worldwide dataset of power plant’s CO₂ emissions to explore this so-called Green Paradox.

One of the core pillars of the Paris Agreement laid out for the global transition to a clean energy economy is that a significant portion of the currently owned fossil fuel reserves must remain in the ground, causing such assets to become ‘stranded’. Much of the research around how we make this critical transition assumes that the prospect of such stranded fossil fuel assets will compel actors to divest away from resources and infrastructures associated with high emissions and replace them with clean innovations that will form the foundation of a different way of generating energy. However, not everyone is so optimistic. A more pessimistic prediction warns that these high-carbon sunset industries, in coalition with sympathetic policy makers, and supportive financiers are acting in a more defensive mode and are actively resisting the energy transition. A key issue that apparently galvanizes all the stakeholders is the right of each country, and corporation, to extract as much profit as possible from the existing fossil reserves. Essentially to extract and profit from all the oil and gas, and not leave it in the ground.

“We have found that in anticipation of stronger climate policies many power plants are adopting what we might call a ‘use it or lose it’ approach – they are burning fossil fuels as fast as possible while they still can. This has some real consequences for a countries ability to mitigate climate change in the future.”

As more and more of the regulations and policies prescribed by the Paris Agreement come into action, fossil energy companies are not taking anticipatory action. Instead of divesting away from high-emission technologies in favor of more renewable energy sources, they are accelerating the extraction of fossil fuels, maximizing their profit before those resources are deemed worthless. “We have found that in anticipation of stronger climate policies many power plants are adopting what we might call a ‘use it or lose it’ approach – they are burning fossil fuels as fast as possible while they still can. This has some real consequences for a countries ability to mitigate climate change in the future.” explains Don Grant.

While several previous studies have explored the theoretical factors that are driving these decisions, this is the first empirical study to explore how this acceleration in asset extraction impacts the pollution level of downstream consumers, such as power plants, in anticipation of stronger climate policies. It required a team that brought together various perspectives to tackle these questions, Grant explains a little more about how the team came together “Andrew Jorgenson and Wesley Longhover, are both sociologists and we have worked together for close to a decade looking at super polluting power plants. We recently wrote a book called Super Polluters. We brought in Tyler Hanson, an economist, because he recently published some very interesting work on stranded assets. When we started to ask questions about stranded assets, we knew that we needed to go outside our discipline and tap into the expertise of an economist.” By bringing in the economist’s perspective for this research the team was able to develop an understanding of how to both theorize the stranded assets and how to measure them. This approach provides the first study that can offer some empirical evidence to begin to resolve the debate around the green paradox.

This has been hard to analyze since data on power plants’ CO₂ emissions have been lacking. The team constructed a global dataset that contains information from nearly 12,000 individual power plants in operation in 2009 and 2018, including their CO₂ emissions, technical specifications, and environmental characteristics. Those included in the study were responsible for 88% of the world’s electricity-based CO₂ emissions. With this comprehensive dataset in hand two hypotheses around the green paradox were tested.

Power plants will pollute at higher levels in countries with more at-risk fossil fuel reserves because these countries are more likely to exercise regulatory leniency to soften the otherwise disruptive effects of stranded assets on their economy (government revenues, employment, and energy security).
Assuming that most power plants are locked into long-term fossil fuel contracts and many of the fuels that they have acquired are from their host country, then in countries with more at-risk assets, power plants will have a vested interest in shifting the processing of fossil fuels forward to capitalize on their purchase of coal, oil, and gas, and use their plant equipment while they still can.

Consistent with both predictions, their findings indicate that not only do power plants release more CO₂ in countries where more fossil fuel assets are in jeopardy of being stranded, but in those same countries, plants also operate at closer to full capacity, causing them to emit CO₂ at even higher levels. “Imagine that you have a cell phone contract that lasts for 12 months,” suggests Don, “and you get 10,000 h, or a certain amount of data in that contract. Then you’re told that the company is going to fold sometime in the near future. What would you do? You would use them up.”

“This is a business-driven decision, and until countries put together policies to compensate fossil fuel industries and utilities for stranded assets, one might expect this process to continue”.

Resolving the debate around the green paradox and its societal impacts needs to happen soon. “Companies are doubling down. Until now it has been something of a conceptual debate and this is the first study that can offer some empirical evidence to begin to resolve this dispute” explains Don. There is more at stake than just resolving a debate. “This is a business-driven decision, and until countries put together policies to compensate fossil fuel industries and utilities for stranded assets, one might expect this process to continue”.

By exploring the empirical evidence behind the Green Paradox, this research moves the debate forward. With proof that this is happening, we must now think about how to influence this situation. “We are just beginning to figure out how you might address this, and researchers are starting to tackle these questions” says Don. A critical part in accelerating an equitable clean energy transition is making sure that countries who are dependent on such stranded assets are compensated and incentivized. Otherwise, they will extract every last drop of their fossil fuels.

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BES: Super Polluters

Anonymous — Sat, 20 Feb 2021 07:00:00 +0000

BES: Super Polluters Anonymous (not verified) Sat, 02/20/2021 - 00:00

February 20, 2021

Download the Flyer

Power plants have paved the road to achieving the standard of living that modern societies demand and the social and economic infrastructure on which they depend. Yet their indispensability has allowed them to evade responsibility for their vast carbon emissions. In a new book, Super Polluters, Don Grant, Professor of Sociology at the University of ��ֱ�� Boulder, and two co-authors offer a groundbreaking global analysis of carbon pollution caused by the generation of electricity. They examine which plants discharge the lion’s share of carbon pollution, the paradoxical effects of efficiency, the social conditions that shape plants’ emissions and the effectiveness of local policies and citizen activism. Especially important, they show that targeting a small subset of hyper-polluting power plants could go a long way toward reducing the CO₂emissions of countries’ electricity sectors as shown in the table below.

Grant and his colleagues note that one reason climate change activists have struggled to mobilize action is the difficulty of identifying specific villains to blame for the escalating threat. While admitting targeting hyper-emitting power plants is not a panacea, they argue “the fact that we now have just over a decade to bring climate change under control means that society must zero in on the worst of its polluters.”

Don Grant is professor of sociology at the University of ��ֱ�� Boulder, where he is also a fellow at the Renewable and Sustainable Energy Institute and director of the Social Innovation and Care, Health, and Resilience programs. Andrew Jorgenson is professor and chair of sociology and professor of environmental studies at Boston College. Wesley Longhofer is associate professor of organization and management and academic director of social enterprise in the Goizueta Business School at Emory University.

Grant, Jorgenson, and Longhofer have been working on this project, funded by the National Science Foundation, since 2013. Formally trained as sociologists, each researcher brought a distinctive specialty with Grant’s primary area of expertise being the sociology of organizations. The research team has received additional NSF funding to continue their collaborative project. Next, they will be examining “green stars” in the electricity-generating sector and how energy and climate policies affect power plants’ environmental performance in an age of experimentalist governance.

New Book from Columbia University Press - Super Polluters: Tackling the World’s Largest Sites of Climate-Disrupting Emissions

Get 20% off paperback using this code (��ֱ��P20) at this site - https://cup.columbia.edu/book/super-polluters/9780231192170

Don Grant | ��ֱ�� Boulder

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