Co-Conveners:

William Moomaw, Tufts University

Richard Richels, Electric Power Research Institute

Rapporteurs:

Seth Dunn, Worldwatch Institute

Laurie Geller, National Academy of Sciences

I. Summary of Findings

The Energy Breakout Group was nearly unanimous in concluding that the effects of the U.S. energy sector on climate are likely to be greater than the effects of climate change on the U.S. energy sector. Furthermore, it was generally agreed that the energy sector will continue to be affected by economic, regulatory and social factors that may or may not interact strongly with climate change. For example, some participants suggested that the current transformation of the electric utility industry by converting it to a price competitive market system may have a more significant effect than climate change.

Regarding the effects of climate change on the U.S. energy sector, there was a consensus with respect to the following, general principals that should guide future research:

• It is possible to assess with reasonable certainty the impacts of proposed climate change scenarios on existing energy infrastructure and systems.
• The effects of anticipated climate change on the existing system may be significant locally, but overall is expected to have modest impact on the overall energy system.
• The U.S. energy system and its technological base will evolve because of on-going economic, regulatory and social transformations, and that the course of this evolution will be influenced both by future climate change and by future policies that are introduced to address climate change and other environmental stressors.
• Because of uncertainties in 1) future climate predictions, 2) the future structure of the economy, 3) the nature of future policy prescriptions and 4) the evolution of future technology, it is difficult to predict the impacts of climate change on future energy systems.

II. Proposed Research Strategy

Based upon the discussions, the following set of research strategies emerged.

1. Utilize an alternative scenarios approach for analysis.
2. Establish baseline energy impact assessment scenarios for the existing energy system under several given climate scenarios. Although this should be relatively easy to do, to date, no fully, systematic analysis has been undertaken.
3. Conduct research on the climatic, economic, and policy factors that will shape the future technological and organizational structure of the U.S. energy system.
4. Based upon the findings of which factors are most likely to drive changes in the U.S. energy system, identify a limited number of different possible technology and organizational structures for the U.S. energy system, and develop alternative impacts scenarios for them.
5. Develop coping strategies for the U.S. energy system, and how to make that system more resilient to both existing and future climate events. Special attention needs to be directed towards the transportation and the electric power generation, transmission and distribution subsystems. Pay special attention to the timing and magnitude of change in energy sector technologies and structure relative to the timing and magnitude of changes in climate.
6. Identify energy services, and then the technological and organizational systems needed to meet them. Develop options for both the supply and demand sides that will create an energy system that is more resilient to climate change. R&D was identified as "cheap insurance" against the adverse consequences of climate change, and should be promoted not only by government, but government needs to create a hospitable environment for the private sector as well.

It was strongly argued within the Energy Breakout Group that examining the effect of possible future consequences of climate change on the existing energy system was not sufficient, and that the major efforts should be directed at items 3 through 6 above.

III. Information needs

The primary information needed to implement the above research priorities included the following identified items:

1. A set of spatially resolved climate scenarios that provide enough information on temperature, precipitation, wind velocity, cloudiness, storm intensity and frequency to be able to assess the implications for a range of structural and technological mixes for the energy sector.
2. Economic information on the future costs of technologies, and what are the factors that will influence them.
3. Information on the implications of future regulatory actions such as utility restructuring, climate mitigation policies and other environmental protection initiatives. What is likely to be the interplay between impacts and regulations for the energy sector?
4. Information about non-market barriers to the introduction of new or existing technologies such as siting and approval regulations.
5. Behavioral factors that influence either producers or consumers of energy.
6. Identification of the energy technology needs of other countries, and the opportunities that this provides for the U.S. to develop energy technologies for commercial, joint implementation, emissions trading or development assistance purposes.
7. Economic and social consequences of alternative future energy sectors, and the role played by climate change.

IV. Specific examples

During the discussions by the Energy Breakout Group on climate effects, the energy sector was divided into the following subsectors:

• Energy supply
• Electric utilities
• Transportation
• Industry
• Buildings

While it is not possible to be comprehensive in a one day meeting among fifty people, the following examples were given at the meeting to illustrate at a micro level some specific topics that need to be addressed through research within each of these areas. The latter items in each category are impacts that might arise from policies and measures that might be imposed to reduce levels of greenhouse gas emissions.

1. Energy Supply

• Increased storm intensity and frequency could adversely affect off-shore oil and gas production.
• The melting of permafrost might cause the collapse of the northern half of the Alaska pipeline through which approximately half of all U.S. production flows.
• [Policy] Evaluate how the future price of energy might change with and without internalization of climate and other environmental costs.

2. Electric Utilities

• Climate change altered precipitation patterns will affect water availability and seasonality thereby influencing hydropower output and fossil and nuclear thermal power plant cooling.
• Increased cloudiness could greatly decrease the potential for solar electric and solar thermal power and heat production. It would also decrease the rates of growth of biofuels.
• Altered wind patterns would shift the location of best locations for wind turbine electric generating systems and water pumping systems.
• Increased ice and wind storms could disrupt transmission and distribution systems.
• Altered weather patterns and temperatures will alter demand for electricity for building services.
• Implications of sea level rise on cooling water intakes for thermal power stations.
• Explore future likely roles of nuclear power.
• [Policy] Possible increased demand for combined heat and power to lower CO₂ emissions.
• [Policy] Possible need to adapt to new lower greenhouse gas technologies such as renewables and fuel cells, and fuel switching to lower carbon fuels.
• [Policy] Possible adaptation to distributed power system.
• [Policy] Utilities may have to develop offset, joint implementation and trading programs.
• [Policy] Possible requirements for biological or physical sequestration of CO₂.

3. Transportation

• Increases in number or intensity of wind storms, fog, ice or snow will cause more road and air traffic disruptions; a lessening of these weather events will enhance the transport sector.
• Droughts will adversely affect river barge traffic.
• [Policy] Possible need for auto, truck, bus, rail and aircraft manufacturers to develop alternative and more efficient propulsion systems to reduce greenhouse gases.
• [Policy] How transportation costs might change under different economic and policy assumptions.

4. Industry

• The agricultural and forestry industries can be adversely affected by climate change in some regions while others benefit.
• Altered precipitation patterns could affect industrial cooling needs.
• Implications for highly water dependent industries such as pulp and paper, textiles, food processing and chemicals.
• [Policy] Climate change regulations requiring or encouraging industrial co-generation.
• [Policy] Industries may have to develop offset, joint implementation trading programs.

5. Buildings

• The building construction industry is very affected by weather conditions that determine how many days per year it can work.
• Warmer climate will increase the need for air conditioning, and decrease the need for space heat.
• The possible use of buildings as platforms for solar panels, and the incorporation of fuel cells for heat and electricity.
• Retrofit and new building construction technologies to adapt climate change.
• [Policy] Response to possible policies designed to address climate change, e.g. improved efficiency performance standards.

V. Conclusions

The overall recommendation is to move beyond assessing the effects of climate change on the present energy system. There was a strong consensus that there is a need to develop a set of interactive scenarios that will explore the economic, policy and social factors that will drive technological change that determine future possible structures of the U.S. energy sector. Then, one can begin to examine the effects of climate change on several possible alternative energy futures.

Participants were very concerned that such current factors such as utility restructuring and new vehicle technology be incorporated into the analysis of future scenarios in determining how the energy sector will be influenced by climate change. There was also a strong interest in determining not only which technologies might make the energy sector more resilient to climate change, but also in assessing the rate and cost of introducing them, and the consequences to society of doing so.