Today we review the results of economic modeling which examined how high carbon emitters and their infrastructure and supporting networks tend to discourage attempts to transform society to a low carbon economy in time to avoid exceeding the 450 ppm/2 deg C warming that is the global target. Results show that coal fired power plants are the biggest obstacle world-wide and their lifetimes lasting decades also discourage early conversion to low catrbon. The model also predicts what level of carbon price would make continued investment in these old technologies uneconomic. Coal power plants require a carbon tax above $30 US/tonne. Other stranded assets include gas power plants and combustion engine cars and their economic carbon tax trigger point is higher than for coal.
Key Quotes:
“‘carbon lock-in refers to the dynamic whereby prior decisions relating to GHG-emitting technologies, infrastructure, practices, and their supporting networks constrain future paths, making it more challenging, even impossible, to subsequently pursue more optimal paths toward low-carbon objectives”
“at the global level…carbon lock-in is greatest, globally, for coal power plants, gas power plants, and oil-based vehicles.”
“continued near-term (through 2020) investment in conventional technologies instead of low-carbon alternatives would increase investment costs four-fold in the longer term (through 2035)”
“The approach can be readily applied at the national or regional scale and may be of particular relevance to policymakers interested in enhancing flexibility for deeper emissions cuts in the future, and therefore in limiting the future costs associated with ‘stranded assets’ “
“conventional technologies might be retired early or ‘unlocked’ in the future, especially if the full costs of an alternative, low-carbon technology were to fall below the marginal (in this case, the ongoing operating) costs of the conventional technology, accounting for all climate policies”
“This analysis indicates that, globally, coal-fired power plants are long-lived (averaging 45 years), and large numbers are expected over the next 15 years (over-committing 200 GtCO2), creating further political and institutional entrenchment. Unlocking coal plants would, on average, require a carbon price of about USD 30 per tonne, lower than for most technologies, but still higher than carbon prices in most countries”
“in addition to pursuing policies to reduce energy demand and install low-carbon power generation, policymakers could also then begin limiting investments in technologies, such as those identified here, that pose the greatest risks of carbon lock-in.”
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