Hope from Rocky Mountain Institute
By George Harvey
Recent news on climate change has looked rather dismal. For those who feel dismayed, I have some good news. A report was issued by the Rocky Mountain Institute (RMI), just as Green Energy Times is going to press. It is full of hope. The report, “Positive Disruption” (PD), is available on-line at bit.ly/Positive-Disruption. (Please note that the URL is case-sensitive.)
I would not want to deceive you. It does not say things will be easy. What it does say, however, is that the climate goals we have set out are not only achievable but can be met without super-heroic efforts. The report says that with reasonable application, we will keep the rise in temperature to below 2° C. In fact, it says that with careful and concerted effort, we can still keep it to below 1.5° C.
PD stands in contrast to numerous other reports published recently. And in fact, PD’s business-as-usual (BAU) scenario is quite similar to projections of other organizations. The problem is that the BAU scenario is very likely wrong, because it projects linear growth for industries that historically have grown exponentially.
The International Energy Agency and the Energy Information Administration have produced linear projections for the growth of solar photovoltaics, wind power, and batteries. They have persisted in doing this year after year, despite the fact that the projections fail badly every year.
By contrast, RMI uses a relationship, Wright’s Law, to describe growth in PD. In a way, Wright’s Law is similar to the better known Moore’s Law, which has been used to describe growth of power in microprocessors, and is actually a rule of thumb, rather than a law. But Wright’s Law, which was first proposed in 1936, is more broadly applicable.
Wright’s Law is also better supported than Moore’s Law. Wright’s Law was tested at the Santa Fe Institute as it applied to technologies as wide-ranging as aircraft manufacture and beer production. It was found a useful tool, for reasons that can be understood.
Wright’s Law says that production efficiency in an industry is a function of the cumulative production of the industry. In other words, as more microprocessors, solar cells, wind turbines, or widgets are produced, the production efficiency increases by a predictable amount. As a corollary, as the number of a product that has been installed increases, the cost of the item declines in a predictable manner, assuming all else is equal.
The important implication of Wright’s Law is that it is possible to forecast non-linear progress. This applies to the growth of the solar photovoltaic industry, for example, as it has historically been exponential, rather than linear. Organizations, such as the Energy Information Administration, have always tried to project growth as linear, because their models did not account for a relationship that was non-linear. They have always failed badly as a result.
In addition to the use of Wright’s Law, PD speaks of converging technologies. The costs of wind power, solar power, and batteries have been falling in a non-linear manner, but they are also mutually supportive, because they complement each other. Add to that use of electric vehicles, electric heat, and increased efficiency, and the result becomes greater than the sums of what each would do in the absence of the others. Also, business models can have profound effects. Virtual power plants (though not explicitly mentioned in PD) will also increase these effects.
Other technologies also can be brought into play, reducing our carbon emissions. For example, PD sees the agriculture sector, which has had a very large carbon footprint, as potentially sequestering more atmospheric carbon in the soil than it emits. One of the routes to this that PD discusses is the manufacture and use of biochar, which could become profoundly important, not only for sequestering carbon, but for reducing needs for irrigation and reducing dependence on artificial fertilizers, which have large carbon footprints.
PD includes a BAU scenario, to which it compares five others with varying levels of adoption of actions on the climate. The BAU, which is a linear projection, shows warming of about 3.7° C by 2100. The other five, which incorporate Wright’s Law in the modeling, show warming ranging from 1.47° C to 1.77° C by 2100. All of these meet standards of the Paris Accord, 2° C, and one meets the hoped-for 1.5° C.
Wright’s law cannot show us progress for the distant future. It only applies to the beginning stages of adoption of certain technologies, such as solar and wind power, which run on curves that are not actually exponential, but follow S-curves. Also, the PD report cannot take into account technologies that will doubtless appear in the future.
However, there are other things about PD that I think might also be wrong. It certainly seems to provide a system for better modeling than what we have seen in the past. Nevertheless, it fails, I believe, to take one thing into account. That thing is what happens when Wright’s Law is operating backwards. As renewable energy and efficiency grow, the fossil fuels industry and nuclear power will necessarily decline. But PD does not look at what will happen as they decline.
In the case of fossil fuels, the growth we could foresee is negative. The cumulative production base would be dismantled as we switch to renewable resources, but many costs are fixed, and so the efficiency of production would decline. With that decline, the prices would increase. With a decline in demand, there would be a decline in efficiency, leading to increases in costs.
This seems like the law of supply and demand is stood on its head. In a situation when both supply and demand are falling but the demand is decreasing faster, one would expect from standard economics that the price would be held down. But in this case, it may indicate increases in price because of decreased efficiency, leading to further reductions demand. And this creates a terminal feedback loop of price increases that would foreshadow the end of the industry.
In other words, as use of electric vehicles and electric heat increases, fossil fuels are used less. But the fixed costs of fossil fuel production remain the same, and the only way to deal with this is to increase prices. This drives further reduction in demand.
What I am suggesting is that the disruption foreseen in PD might go faster than expected, and this could keep our maximum temperature increases even smaller than PD suggests.