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Energy: Production, Consumption, and Consequences (1990)

Chapter: 4. Implications for Strategy

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Suggested Citation:"4. Implications for Strategy." National Academy of Engineering. 1990. Energy: Production, Consumption, and Consequences. Washington, DC: The National Academies Press. doi: 10.17226/1442.
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4 Implications for Strategy

Energy: Production, Consumption, and Consequences. 1990. Pp. 205-212. Washington, D.C: National Academy Press. Energy' Environment' and Development WILLIAM D. RUCKELSHAUS We are concerned with the effect of energy production on the envi- ronment, an effect that has heretofore been seen as a sort of collision. A good deal has been said about many of these collisions: global warming, acid rain, the varied impacts of nuclear energy, and so on. It may seem as though the energy necessary for the sustenance of humanity cannot be produced without wrecking the environment necessary for human survival, but this is an illusion based on shortsightedness and on the failure of some of our political and economic institutions to respond to the wrongheaded. In fact, responsible environmental policy is the only policy that makes sense economical) in the long run. Two kinds of experience have led me to this belief. The first, and more recent, was my tenure as U.S. representative on the World Commission on Environment and Development, a panel chartered by the United Nations; the second was my experience as administrator of the U.S. Environmental Protection Agency, both in its founding period and again between 1983 and 1985. Although past experience is not always an unerring guide to the future, it is the only one we have. Whereas the simple extrapolation of current trends is unwise, it seems clear that if some changes are not made in both the way energy is produced and the way the environment is protected, the future will range from unpleasant to awful for most of the people in the world. This was, in fact, a major conclusion of the World Commission on Environment and Development, which met from 1984 to 1987, and whose - 205

206 W7~LIM D. RUCRELSHAUS deliberations have strongly influenced my own views on environmental pro- tection. The World Commission's charter was both simple and enormous: to formulate a global agenda for change and to propose long-term en- vironmental strategies for achieving sustainable development by the year 2000 and beyond. It proceeded to do this using a remarkable and unique method, that of holding a series of public hearings in major cities in all regions of the world, and receiving ideas and testimony from thousands of people—scientists, scholars, politicians, and large numbers of concerned citizens. The report of the World Commission, entitled Our Common Future (1987), deals with various aspects of development population growth, food security, resources, energy, industry, urban problems as part of a single interrelated problem. Its central finding is that the continued prosperity of the developed world depends on the rapid extension of prosperity to the less developed nations in an environmentally responsible manner and that, therefore, economic development and environmental protection are complementary rather than opposing goals, two sides of the same coin. The World Commission has proposed the concept of sustainable development as the new model for economic growth, a model that requires efforts to increase prosperity without the destruction of the environment on which all prosperity ultimately depends. This finding, of course, contrasts sharply with earlier studies recommending limitations on growth as the answer to global environmental deterioration. Naturally, energy development must play a critical, and perhaps the most difficult, role in the realization of this new model. As a matter of fact, the most contentious of all the commission's deliberations were those concerned with energy, and the panel almost failed to reach consensus because of energy-related issues. Perhaps the timing was unfortunate: When the commission began oil was $25 per barrel; when it ended the price had dropped to $10. Also, somewhere in the middle, the Chernobyl accident occurred. On the other hand, the world may be running out of "good" periods. It is well known that the quarter of the world's population living in the industrialized world now uses about three-quarters of the world's output of energy. This is obviously going to change as dozens of less developed nations push toward large-scale industrialization. Energy demand is going to grow accordingly, and the critical question for the environment is, by how much? Although the answer is essentially unknowable, some reasoned guesses can be made. The logic used by the World Commission can be described as follows. In 1980 the world consumed about 10 billion kilowatts of energy. If per capita use remained at the same levels as today, the projected world population by the year 2025~.2 billion people would use 14 billion

ENERGY E~RONME~ ID DEVELOPMENT 207 kilowatts. However, if energy consumption became uniform worldwide at the current level of industrial nations, the same population would require 55 billion kilowatts. Neither of these figures is realistic; they merely establish the approximate bounds of the range within which energy futures are likely to fall. The World Commission examined the environmental effects of energy futures at the high and low ends of this range, 35 billion and 11.2 billion kilowatts. The high-end scenario would involve producing more than one and a half times as much oil, more than three times as much natural gas, and nearly five times as much coal as in 1980. This increase in fossil fuel use implies bringing the equivalent of a new Alaska pipeline into production every two years. Nuclear capacity would have to be increased 30 times over 1980 levels. The high-energy future would continue to aggravate some disturbing environmental trends, directly via physical effects and indirectly through the economies of developing nations. Direct effects include global warming associated with the carbon dioxide produced by burning fossil fuels, as well as urban industrial air pollution and acidification of the environment from the same cause. They also include the various risks accidents, waste disposal, and proliferation—attendant on the expansion of nuclear energy. Indirect effects arise from the continuing dependence of less developed nations on steadily increasing amounts of imported energy and their need to borrow vast sums to keep up with demand. For example, the high- energy use scenario just mentioned would require investments of $130 billion per year in the developing counties alone. This dependence creates a desperate need for foreign exchange, which in developing nations often translates into overuse and destruction of natural resources. For example, over 38,000 square miles of tropical forest are destroyed each year, and a like amount is grossly disrupted. It is impossible to tell how much of this loss is attributable to the need to procure energy directly or to pay for it, but that is probably a substantial part and it will continue to grow. If energy cannot be purchased abroad, it must come from immediately available sources, and in the undeveloped world this most often means firewood. If present trends continue, by the year 2000 nearly 2.5 billion people will be living in areas that are extremely short of fuel wood. In some cities of the developing world, families may pay one-third to one-half of their income for firewood. The pressure on remaining forests from this sort of economics is easy to imagine. Of course, as forests are depleted, we see not only the familiar damage to habitat and species extinctions, but also a diminution in the very ability of the planet to handle the carbon dioxide produced by burning fossil fuels—a vicious cycle indeed. A future that includes this kind of damage is by no means foreordained, provided we have the political will and the institutional structure to create

208 W7~L4M D. RUCKELSHAUS sustainable development throughout the world. Foremost among the will and structures will be the public environmental demands of the developed world and the agencies created in response to these demands. I would like to offer my own view of U.S. environmental protection both past and present—because we must understand its capabilities and deficiencies as a tool for solving the problems being addressed. Here I am both hopeful and dismayed hopeful because I know, first hand, how far we have come in changing the national consensus on environmental protection. The Environmental Protection Agency has been in existence for less than 20 years. Virtually all our environmental legislation is a product of that brief t~me-span. Before that, there was a widespread belief among business and political leadership that environmentalism was a fad and that it would, if taken seriously, wreck U.S. industry. That agreement has been entirely reversed. Most all corporate leadership now accepts some form of environmental protection as a legitimate cost of doing business. Thus, we nearly all have environmental consciousness now, whereas nearly all of us grew up without it. That is a monumental change and a hopeful sign, because if we could achieve such change, then the even greater changes required to establish sustainable development, in energy and elsewhere, may not be beyond our grasp. The dismaying part results from the current orientation of our en- vironmental protection efforts. In fairness, this orientation arises out of the history of these efforts, a history that might be called "pollute and cure." That is, environmentalism began in this country, as it did in all the industrially developed nations, as a response to widespread pollution. A structure of command and control regulation was established, first for the most egregious pollution and later for the less obvious types. The theory was that by establishing very high standards and gradually cracking down on allowable emissions and effluents, a point would eventually be reached where virtually no pollution would enter the environment. Where it was appropriate, this approach worked reasonably well, albeit at colossal cost. It was appropriate, for example, in controlling a relatively small number of mass pollutants from easily identifiable fixed and mobile sources. It was appropriate for repairing badly polluted localities through targeted investment in items such as tall smokestacks and sewage treatment plants. As time went on, new environmental problems emerged, for which this approach was much less appropriate. Thousands of products were found in daily use which, even at very low levels of exposure, had some probability of causing damage to human health or the environment. It was learned that many of the pollution control systems mandated simply transferred

ENERGY E~RONME~ ID DE~LOPME~ 2(J9 pollution from one environmental medium to another taking toxic wastes out of the river, for example, and burying the residue on the land. The structure of environmental law and regulation had also become very complex, as the law chased pollution around wherever it seemed most apparent in any particular year. This complexity has rendered almost impossible an ordered, multimedia approach to controlling pollution, in which some finite national investment in pollution control could be aimed at targets that represented the most significant risks. Most of the environmental protection resources in this country are now directed, as our laws demand, toward reducing even further what appear to be relatively small risks to human health. Very little of that previous resource is left over for dealing with the immense transboundary and global environmental issues that concerned the World Commission, and ought to concern us now. A slow, legalistic, and extremely expensive system has been created which is at heart an adversarial system. Environmentalists and their political allies push for tighter and tighter controls. The industrial community and its political allies push for lower control costs. Yet, in principle, neither environmentalists nor industry should have any objection to efficient pollution control. We can no longer afford to stage these elaborate battles over incremental pollution, especially when a much wiser goal would be investment in waste-minimizing productive capacity. What about the rest of the world? Is there some way for nations to achieve environmental goals without eventually reproducing this wasteful and frustrating pattern? The newly industrialized nations have just started to arrive at the stage where they find pollution intolerable. Once this stage arrives, progress can be quite rapid. On Taiwan, for example, a complete reversal of public opinion with regard to pollution control has occurred over the past two years. Taiwan and South Korea will probably increase their environmental consciousness in the late 1980s, not unlike the United States and Japan did in the 1970s. However, these nations will probably not adopt the legalistic, adversarial pattern found in the United States; the national consensus model used by Japan is more likely. In any case, these nations are not the chief concern over the next 20 years. We should be much more worried about the less developed nations, which are now getting ready for their leap into industrial life. If they must go through the same "pollute and cure" cycle as both the older and the more recently industrialized nations have, three~uarters of humankind may produce pollution at the levels historically produced by the small fraction of it that was industrialized during the century now coming to an end. Given the current situation with respect to energy, the question must be asked: Will these nations be able to afford it? Highly polluting machinery is often more wasteful of energy and raw materials than its less polluting

210 VELLUM D. RUCKELSHAUS counterpart. Given the situation with respect to the global environment, another question must be asked: Will the world be able to afford it? It seems undeniable that somehow, within the next quarter of a century, the transition must begin to a stable base of minimally polluting energy sources at levels that will allow the development and prosperity of all the societies on the planet. It is unlikely that this will be done well unless the power, prestige, and skill of U.S. environmental institutions, public and private, are shifted away from efforts to "control" progressively smaller increments of toxic pollution and toward the long-term problems of the global environment. For our purposes, these problems can be posed in the form of a single question: How can the world develop the energy it requires and sustain the health of the environment without which it cannot live? Answers must be sought at three different levels with respect to the future: the immediate, the midrange, and the ultimate. These will be addressed in turn. The immediate issue is how to continue progress toward a sustainable energy future in the current low-price environment. Conventional account- ing works against conservation measures when energy is cheap, although paradoxically it is in such periods that more resources are available to make conservation investments against the inevitable day when the price of energy goes up again. From the viewpoint of public policy, there should be no subsidies for fossil fuel use when prices are this low: that means both the familiar direct subsidies and the more subtle environmental subsidies paid via health, property, or environmental damage. Also, policies that discriminate against renewable energy sources should be eliminated. These include both the fossil fuel subsidies just mentioned and the continuing discrimination against small-scale sources of energy by large energy distrib- utors. Overall, these months of low energy costs must be used as a grace period, in which to marshal our resources and establish the basis through investment and planning for a sustainable energy future. In the midrange, ameliorative steps must be taken against the global and regional energy-related problems. This refers mainly to greenhouse warming and precipitation acidification, both of which are vast in scale and subject to considerable scientific uncertain~. In both problems there are a number of plausible scenarios from which to choose. Consider the following, however: whatever the scenario, the resources that can be devoted to any environmental problem are finite and we cannot afford to launch major programs against every "problem of the week" or to march off boldly in the wrong direction. On the other hand, windows of opportunity may be slamming shut with every year of delay. We cannot afford paralysis by analysis either. The way out of this quandary seems to be an approach patterned on the way insurance is bought. We are accustomed to sacrifice some present

ENERGY E~RONME~ ID DEVELOPMENT 211 income in order to protect ourselves and our families against the possibility of disaster. No one now would deny the possibility of disaster from these global problems. The arguments are about probability and timing. Therefore, investments must be adjusted according to the likely range of probability, as with insurance, but in any case at a scale adequate to make a dent in the problem if a dent can be made. The knowledge gained by actually operating a program is invaluable and cannot be replaced by academic research. Moreover, it sends an important message, that the problem is real, and that we are concerned about it. Consider, for example, how much more would be known about how to handle acid rain and how much better off we would be scientifically (not to mention politically) if a modestly scaled sulfur control program had been launched in 1982. On the ultimate time scale, the basic thing to keep in mind is that global problems require global solutions. It is now possible for one nation to damage another nation inadvertently through environmental pollution at levels of human suffering and property damage that once were associated only with acts of war. It, therefore, seems wise to accept such problems as falling broadly within the purview of "national defense" and to start paying the kind of attention such damage would demand if inflicted by hostile troops. The recommendations of the World Commission outline what kind of attention is needed. On the global impacts of fossil fuels, including greenhouse effects and acidification, the commission recommends a four-part strategy that combines improved monitoring and assessment of the evolving phenomena, increased research to improve knowledge about the origins and effects of these phenomena, development of international agreements on the reduction of greenhouse gases, and adoption of international strategies for minimizing damage from the coming changes in climate and sea level. On the nuclear front, the World Commission recognized that at present, different nations have different views about the necessity and safety of nuclear power. Yet because of the potential for transboundary effects, it is essential that governments cooperate in the development of a com- prehensive set of international agreements covering the technical, health, and environmental aspects of nuclear power. These would include such things as international notification of nuclear accidents or transboundary movement of nuclear materials, as well as codes and standards for operator training, compensation and liability, reactor safety, radiation protection, decontamination, and waste disposal. Above all, in nearly every one of its recommendations, the World Commission urges a return to multilateral action global responses to global problems. Without an acceptance of this, if global issues are seen only as some legalistic fray between a polluter and a victim, nothing much

212 W7~L4MD. RUCKELSHAUS will be accomplished. In the United States, for example, responsible and wise action on acid rain has been thwarted by, among other things, the insistence that ratepayers of midwestern utilities bear the entire cost of remedial action. In fact, acid rain is, at the very least, a national problem and it requires a national response. The developed world and its institutions should play a leading role in formulating the global response, but will they? Global responses are difficult things to organize in representative democracies. It is hard for elected officials to spend many chips on efforts that benefit their home constituency only indirectly, or may have some immediate adverse effects on that constituency, and relate to events farther off in time than the next election. On the other hand, as pointed out earlier, no one could have predicted in 1968 the realization of the environmental agenda 20 years later. So perhaps this scant grace period will not be wasted. Perhaps there will be time to plan for the changes attendant on creating the energy future the environment needs, a future with the necessary energy services, at a fraction of current primary energy consumption. We will, eventually, have to change, and the longer change is put off, the more desperate, painful, and expensive will the remedies be. It remains to be seen for how long narrow considerations of national sovereignty and short-term interest will keep us from doing what global environmental and . . . economic WlSC om requires. REFERENCE World Commission on Environment and Development. 1987. Our Common Future. New York: Oxford University Press.

Energy: Production, Consumption, and Consequences. 1990. Pp. 21~237. Washington, D.~: National Academy Press. What to Do About CO2 JOHN L. HELM AND STEPHEN H. SCHNEIDER The energy that people use predominantly comes from burning fuels containing carbon: coal, oil, gas, and wood. When these fuels are burned, carbon dioxide (CO2) is released to the atmosphere. CO2 is called a greenhouse gas because it lets radiant energy into the atmosphere more freely than it lets it out. The effectiveness of this atmospheric heat retention increases with CO2 concentration. Climate is known to fluctuate naturally over all scales in space and time, yet there is strengthening evidence of a changing, indeed warming, climate, over the past 100 years. Further, this warming is consistent with the progressively increasing concentration of greenhouse gases, especially CO2, in the atmosphere. Although scientists do not yet know how much of the current climatic change is natural and how much is due to human activity, there is no question that the burning of fossil fuels is the dominant mode of human CO2 production. There is also no question that a large, rapid climatic change is likely to have a substantial impact on the environment and society. The subject of this discussion is what can or should be done about the greenhouse situation in view of the attendant uncertainties? 1b address this question, first we review briefly the essential climatological context of the greenhouse effect and the uncertainties in our understanding of it. Next we review the range of possible climate futures and their potential societal consequences. This provides a framework in which the spectrum of policy responses can be introduced. Finally several energy policy and technology options are presented. 213

214 JOHN ~ HELM AND STEPHEN H. SCHNEIDER HUMAN ACTIVITY AND THE ATMOSPHERE Since the industrial revolution, human activity has manifested itself in three similar, large-scale atmospheric problems that have been debated intensely in the past: (1) the possible reduction of stratospheric ozone, (2) the generation of acid rain, and (3) the climatic change from the greenhouse effect. The latter two are actually very old issues. Acid rain has been known for centuries; it was particularly notorious in London, among other places, where coal fires belched oxides of sulfur, which in turn led to the formation of toxic smog. However, only in the past few decades have the substantial long-term effects of precipitation acidity on forests and lakes been scientifically studied in depth. The possible climatic influence of CO2 has been known for more than a century. These three problems have several common features: all are complex and punctuated by large uncertainties; all could be long lasting; all cross state and national boundaries; all may be hard to reverse; all are inadvertent by-products of essential economic activities; and all may take investments of present resources to hedge against the prospect of large future environ- mental changes. The current understanding among atmospheric scientists is that the depletion of stratospheric ozone is not significantly caused by the energy system. Although acid rain is related to energy use, especially coal use, another chapter in this volume will discuss it (Graedel, in this volume). Because current methods of energy production and use present the largest anthropogenic source of greenhouse materials, we will focus our discussion on this issue. The Greenhouse Effect Energy from the sun is the principal source of power for life on earth and for the climate. The flow and storage of energy among the various climatic subsystems- the planetary energy balance—is very complex and not fully understood. Figure 1 depicts a simplified version of these flows, and Figure 2 suggests the complexity of the processes by which they interact. The net effect is that the earth's atmosphere acts as a blanket to retain heat and maintain the earth's average surface temperature of about 15°C. This heat retention is principally due to the action of the particles and gases that give rise to the greenhouse effect. The greenhouse effect, despite the controversy that continues to sur- round the term, is actually one of the most well-established theories in the atmospheric sciences. For example, with its very dense carbon dioxide atmosphere, Venus has oven-like temperatures at its surface. Mars, with its very thin carbon dioxide atmosphere, has temperatures comparable to our polar winters. The explanation of the Venus hothouse and the Martian

VVHA.T TO DO ABOUT CO2 215 I I / I \ Incoming Solar / / Reflected Solar / I Radiation (100) / / Radiation (30) / l A: \ \ ~ bsorbed by// \ \ ~ Atmosphere// red If' \ Reflected by / / \ Atmosphere (25) / l// \ \~ // ~ Reflected by Absorbed by\ \~\\)J Surface (5) Surface (45) ~ ~~ (45) I Outgoing Infrared , Radiation (70) Emitted by / Atmosphere (66) J Thermals Evaporation (24) ~ ~ ~,,-~0~-~` ::ll I:: f,reenhc,rln~ offs, Radiated by I I Surface (104) I / FIGURE 1 Simplified planetary energy balance. The left side of the figure gives the approximate distribution of incoming solar radiation. The right side of the figure shows the flow of terrestrial infrared (JR) energy lay water vapor, C02, and other gases and particles radiated back toward space. The downward reradiation of IR energy is indicated by the two downward-pointing allows on the nght-hand side of the figure. It is this reradiated energy that provides the basis of the greenhouse effect. Note also that the ratio of energy emitted from the surface layer of the earth (reflected by the surface, 5; emitted by the atmosphere, 25 plus 29; radiated by the surface, 104) is about 1.6 times that of the incoming solar radiation. SOURCE: Schneider (1987a). deep freeze is quite clear and straightforward: the greenhouse effect (see Kasting et al., 1988). The greenhouse effect arises because some gases and particles in an atmosphere preferentially allow sunlight to filter through to the surface of the planet relative to the amount of radiant energy that the atmosphere allows to escape back up through the atmosphere to space. (The retained energy is represented by the arrow labeled "Greenhouse effect (88~", on the right-hand side of Figure 1.) Note that some level of the greenhouse material is necessary for keeping the planet at a habitable temperature; the earth would be much colder in the absence of any green- house warming. Thus, if there is an increase in the amount of greenhouse gases, there is an increase in the planet's average surface temperature, because more heat is trapped (see Figure 3~. What is controversial about the greenhouse effect is exactly how much the earth's surface temperature will rise because of an increase in the concentration of a greenhouse gas such as CO2.

216 JOHN L. HELM AND STEPHEN H. SCHNEIDER Solar Radiation" ~ ~ Absorbed Sunlight | ~ -— Land, Water ~ Albedo Atmospheric Optical Properties Albedo ~ T^~_~A~400~rA L ,, ".,O,, ,,,, [y Reflectivitv Snow Area / I \ \ \ Cloud Cover . ~ ., | Outgoing Infrared Radiation |~/ / \ \ \ _ Precipitation ~ ~ / ~ ~ \ `. Atmospheric /. /' /' I Precipitable Composition'/ Temperature ~ I / | Latent Heat Flux ~ ~ f ~ Water Vapor Surface Vapor Gradient / / '\ / Soil Moisture ~ Per Square Unit / / / \Evaporation ~ Relative Humidity / / ~: _ Pressure Gradient / / Vertical Wind A=_ Horizontal wing Surface Roughness \ Sensible Heat + ~ / Potential Energy Flux / \ ~ Latitude ~ I ' Current - ~1 Ocean Flux I ~ Mixing Depth FIGURE 2 Schematic representation of selected important physical processes that affect weather and climate. The interactions indicated by the arrows illustrate several climatic feedback mechanisms. The visual complexity of this figure only partially reflects that of the actual climatic system. SOURCE: Schneider and Lander (1984~. UNDERSTANDING CLIMATE Although our principal objective is to understand the role of green- house gases in the context of climate change, it is helpful to begin by showing how climate changes naturally. Incoming Outgoing Solar Solar Radiation Radiation 100 ~ / 30 ~ 70 Absorbed ~ 25 by ~ Atmosphere' ~45 . ~ Heat Absorbed by Surface Outgoing Infrared Radiation _ _ . No ~ GHG Reflected by ~7 Atmosphere. 25 ~ Cold . Heat from the Earth FIGURE 3 Greenhouse gases (GHG) such as CO2 lead to climate warming because they preferentially retain infrared energy. As the atmospheric concentration of these gases increases, the equilibrium temperature of the lower atmosphere rises to maintain the planetary heat balance.

VVHAT TO DO ABOUT CO2 ~:; : ~ Spruce Pol lent (a) 60 ~ ~~ ~ ~~ ~ ~ ~ ~~ ~ ~ ~~ ~ ~~ ~~ ~ ~~ ~~:~ ~~. ~~ ~~ ~~ ~~ ~^ ~ ~ ~~ ~~ ~ ~ ~ ~~ ~ ~~ ~ ~~ ~~ ~ ~ ~ ~~:~ ~ ~~ ~ ~~ ~~ -I ~~ ~~ ~ ~~ I'd ~'~i/>,, 7~/ 570~ ~,5 \f art/ ~ ~ {~20W' 1 / ~ i` | Spruce Pol len , J 11,000 YBP - 217 r r If Ook Pollen jO0lt Pal ten - \ \ _ FIGURE 4 Forest pollen distribution since the last ice age more than 11,000 years before the present (BP). Spruce (left column) is better suited to colder climates than oak (right column). As the ice pack slowly receded, the spruce forests moved northward while being replaced by hardwoods in the south. five numbed are the percentage of fossil pollen accounted for by oak or spruce.) SOURCE: Bernabo and Webb (1977~. Natural Climatic Change The historical record indicates that the earth's climate has changed and affected ecosystems significantly over geologic time. Figure 4 gives an example of how large, natural, climatic change affects natural ecosystems. This set of panels shows the distribution of fossil pollen found in lake beds and soils over the period since the last ice age. From this and other similar information, it is possible to deduce the spatial distribution of forest species over the past 15,000 years, during which time the ice age conditions gave way to our present interglacial period of warmth. Since the ice age, there has been some 3-5°C global warming, with as much as 1~20°C local warming near where the ice sheets used to be. The spruce species found in the boreal forests in northern Canada today were hugging the rim of the great glacier in the U.S. Northeast and Midwest some 10,000 years ago, whereas the currently abundant hardwood species such as oak were then hanging on in small refugia largely in the South. The natural rate of forest movement that can be inferred from analyz- ing the data underlying Figure 4 is approximately 1 kilometer per year, in response to an average temperature change of some 1-2°C per thousand

218 JOHN ~ HELM AND STEPHEN H. SCHNEIDER years. If climate were to change much rapidly than this, then the forests might not be in equilibrium with the climate, that is, they may not keep up with the fast change and would go through a period of transient ad- justment in which many hard-to-predict changes in species distribution or productivity would very likely occur. Modeling Climate To gain a better understanding of climate and the role played by CO2, a systematic study of the planetary weather system is necessary. Because of the scope and complexity of the planetary energy balance, global climatic theory is not complete; thus, three options for investigation could be considered: conduct experiments, review historical data, or model the system. For obvious reasons it is not possible to conduct a program of global weather experimentation. Close historical analogues are unavailable because there is no period of the earth's history in which the concentration of CO2 in the atmosphere was, say, twice what it is now, and for which there exists reliable, quantitative knowledge of the climate and ecology. Thus, we now base our estimates on partial natural analogues and climate models (see Schneider, 1987a). These are not laboratory models, since no physical experiments could remotely approach the complexity of the real world. Consequently, we try to simulate the present earth climate by building approximate mathematical models in which known basic physical laws are applied to the atmosphere, oceans, and other elements of the climate system; and the equations that represent these laws are solved with computers. To model the effects of increasing greenhouse gases we take the best available computer models and change the effective concentration of an atmospheric greenhouse gas. In addition to CO2, other greenhouse gases include CH4, N2O, SO2, chlorofluorocarbons (CFCs), and tropospheric ozone (Wuebbles and Edmonds, 1988~. Taken together, the contribution of these other substances to global warming over the next century is likely to be as important as CO2 (Ramanathan et al., 1985~. However, because CO2 is presently the predominant greenhouse gas, it has been the subject of most greenhouse simulations. The result of a climate simulation premised on an elevated CO2 concentration is then compared with a "control" calculation representing the conditions of the earth at present. The many computer models that have been built over the past few decades are in rough agreement that if CO2 were to double, then the earth's surface temperature would warm up somewhere between 1.5 and 5.0°C (Dickinson, 1986; National Research Council, 1987b). For comparison, the world average surface temperature during the ice age of 18,000 years ago was about 3-5°C colder than our present climate. Thus, a sustained

WHAT TO DO ABOUT CO2 219 global temperature change of more than a degree or two is a substantial alteration. Regional Climatic Response Although the results of current climatic models are useful to scale the magnitude and rate of human alterations to the global climate, they are not sufficient to estimate reliably the societal impacts of climatic change. Rather than focus on the global average temperature, we need to study the regional distribution of evolving patterns of climatic change. Will it be drier in Iowa in 2010, hotter in India, wetter in Africa, more humid in New York, or flooded in Venice? Unfortunately, to predict the fine-scale regional responses of variables such as temperature and rainfall requires climate models of greater com- plexity than are currently available. Although preliminary calculations of these variables have been made, it would be hard to reach a consensus among knowledgeable atmospheric scientists about the reliability of re- gional predictions from current state-of-the-art models (e.g., see Schneider, 1989~. Nevertheless, there is at least some suggestion that the following regional changes might occur over the next 50 years: · Wetter subtropical monsoonal rain belts. Longer growing seasons in high latitudes. Wetter springtimes in high and midlatitudes. · Drier midsummer conditions. · Increased probability of extreme heat waves (see Table 1) and a concomitant reduced probability of extreme cold snaps. · Forest decline and fire increases in the midlatitudes. · Increased sea level, by as much as a meter over the next 100 years. For example, Figure 5 shows the results of a computer simulation of the greenhouse-induced changes in soil moisture associated with drier midsummer, midlatitude conditions. This simulation indicates that such a development could have serious implications for agriculture and water supplies in major grain-producing nations. It must be stressed, however, that considerable uncertainly remains in predicted regional features such as these. Uncertainties 1b consider the uncertainties inherent in current climate models, the topic may be divided into (1) climate model issues and (2) uncertainty about the magnitude of the effective CO2 source.

220 JOHN ~ HELM AND STEPHEN H. SCHNEIDER TABLE 1 Increased Probability of July Heat Waves due to Climate Warming Probability Probability Heat Wave Given Current Given 3°F (1.7°C) ~Ihmshold Conditions of Global Wanning Location (IF) Beret) (Perot) Washington, D.C. 95 18 47 Des Manes, Iowa 95 6 21 Dallas, Texas 100 38 67 NOTE: ' A heat wave is defined as five or more ca~secunve days on which Be maximum daily temperature exceeds the threshold mmperamre. SOURCE: Mearns et al. (1984). The principal climate model issues involve the crude treatment of hydrological, biological, and other feedback processes in climatic models, and the neglect of the effects of the deep oceans. Feedback mechanisms are best illustrated by an example. If the warming due to added CO2 were to cause a temperature increase on earth, the warming would most likely melt some of the snow and ice that now exist. Some of the white, highly reflective . -<20~97 `,\~:~ ~~ ~ :~ ~~ 10 0 ::::~ art: ;30~ '0 I: ~~:~:~ I:> ~~:~ ~,0~: _,, . : ~~ ~~ OK 440^ Too ~ v ~ ~ ,, ~~__~ 5~ I WOW ~' '10 r '~:1~0~—- ~~:~ ~ \) ~~n:~ ~~ ~~> FIGURE 5 Results of a computer simulation of greenhouse-induced change in soil moisture. This change is expressed as a percentage of soil moisture obtained from a control sumulation of present conditions. Change in soil moisture directly affects agriculture and forests. SOURCE: Manabe and Wetherald (1986~.

WHAT TO DO ~0= CO2 221 surface of snow and ice would be replaced with darker blue ocean or brown soil, producing surface conditions that would absorb more sunlight. Thus, the initial warming would create a darker planet, which would absorb more energy and thereby accelerate the warming. In this example, climate warming affects surface energy absorption by melting snow and reducing the planet's albedo, which reinforces the warming process further. However, this is only one of several possible feedback mechanisms, and feedback can limit or enhance the process. Because many such feedback mechanisms are interacting simultaneously in the climatic system (see Figure 2), it is extremely difficult to estimate reliably how many degrees of warming the climate will undergo. The transport of water between various sources and sinks defines the hydrologic cycle. Transformation of water from one phase to another involves the rapid exchange of large quantities of heat. For example, most of the energy in thunderstorms is provided by the heat released as the water condenses from the very humid air rising in the thundercloud. Water, in all its phases, interacts strongly with the other elements of an ecosystem and therefore plays an important role in fine-scale regional climate. A more realistic treatment of the "fast physics" of water-driven cycles is needed to improve the accuracy of regional climate prediction models. On a global scale, the oceans act as a heat transporter and as enor- mous thermal buffers, which would respond slowly—over many decades to centuries—to climatic warming at the surface; but they can also act nonuniformly in both space and time. If the atmospheric concentration of greenhouse gases increases as rapidly as typically projected, and if climatic warming were to occur as fast as a few degrees in a century, then the oceans would be out of equilibrium with the atmosphere. Hence, just as we would expect unpredictable transient "adjustments" in forests out of equilibrium with atmospheric conditions, so too we would expect hard-to- predict transient adjustments in an atmosphere out of equilibrium with the oceans. The natural rate of temperature change during the transition from the last ice age to our present climate was about 1-2°C per 1,000 years. The projected rates of change of 2~°C over the next century are more than 10 times faster. Should these rates occur and ocean-atmosphere disequilibrium result, regional forecasts like that of Figure 5 are not very credible. To forecast the global climate under these circumstances, the climate models must realistically include the ocean-atmosphere coupling driven by realistic time evolving scenarios of greenhouse gas increase. This is a formidable scientific and computational task. Computer climate simulations require as a starting point an estimated value for the effective concentration of CO2 in the atmosphere. Several interacting biogeochemical processes- called the carbon cycle—control the

222 JOHN L HELM AND STEPHEN H. SCHNEIDER 0,, 7 o o In o . _ ._ A o ,_ o a: Cat o 6 5 4 3 2 Total / ~ Fossil Fuel CON 1 / Forest Plus Soil CO2 ~ O f I I I 1800 1820 1840 1860 1880 1900 1920 1940 1960 1980 FIGURE 6 Annual CO2 production, 1800 1980. By the analysis of carbon isotopes in tree rings, a reasonable reconstruction (+ 20 percent) of the atmospheric CO2 inventory can be made. Using records of fuel use, the fraction of CO2 contributed by burning fossil fuels can be determined. This fraction has become dominant since World War II. SOURCE: Bolin (1986~. global accumulation, distribution, and chemical form of carbon. These processes include the uptake of CO2 by green plants and the slow removal of CO2 from the atmosphere by biological and chemical processes in the oceans. Uncertainty about CO2 removal by green plants arises because the rate of photosynthesis is a complex function of climate, the size and distribution of various botanical species, and the health of the ecosystems hosting them. Because the rate of CO2 capture by the oceans is affected by a complex water-air mixing that occurs at the surface, there is also considerable uncertainty about the rate at which the oceans remove CO2. For these and other reasons, the fraction of CO2 that remains in the air is not known very accurately; most current estimates put this fraction in the range of 30 to 60 percent. Although it is difficult to predict what fraction of CO2 produced today will remain airborne, atmospheric scientists have reconstructed the concentration of atmospheric CO2 from the past. From such studies, it has been concluded that the use of fossil fuels has now become the dominant source of CO2, as shown in Figure 6. CLIMATE F1JTURES How can the effects of climatic change be evaluated? We begin by postulating the likely character of the effects.

VVHAT TO DO ABOUT CO2 223 Like) Environmental Impacts One obvious category of direct effects of climate warming is effects on crop yields and water supplies. Another area of concern is the potential for altering the range or numbers of pests that affect plants, or diseases that threaten animals or human health. A wide variety of important effects, such as changes in the probability of catastrophic episodes of drought and flooding, are also possible if climatic change alters the number and character of destructive storms. Also of interest are the effects on unmanaged ecosystems. For exam- ple, the tropical forests are, in a sense, libraries for the bulb of living genetic material on earth. There is major concern among ecologists that, given the present rate of tropical forest destruction through overdevelopment, the world is losing irreplaceable biological resources. The connection between climatic change and this already formidable environmental problem of de- velopment and land use becomes clear when one recognizes that substantial future changes to tropical rainfall have been suggested by climate models. These changes imply that current ecological reserves intended to preserve genetic resources may not be as effective as now planned if rapidly evolving climatic change significantly alters conditions in these refugia (Peters, 1989~. Simply, they may not sustain even those species that they are designed to protect. Economic, Social, and Political Consequences It is certainly easier to postulate the character of the likely climatic effects than it is to assign them a "value." Such an estimation, given a scenario of climatic change, involves more than looking at the total number of dollars lost and gained were it somehow possible to make such a calcu- lation credibly. It also requires looking at these important equity questions: "Who wins and who loses?" and "Are the losers to be compensated, and if so, how?" For example, if the corn belt in the United States were to "move" north by several hundred kilometers because of climatic warming, then a billion dollars a year lost by Iowa farmers could eventually become Minnesota's billion-dollar gain. Although some macroeconomists viewing this hypothetical problem from the perspective of the United States as a whole might see no net losses in this example, considerable social conster- nation would be generated by such a climate-induced shift. Such a situation could be exacerbated by the perception that CO2-producing economic ac- tivities were responsible for redirecting the costs and benefits; and these concerns need not be confined to national regions. The perception that the economic activities of one nation could create climatic changes that would be detrimental to another nation has the potential for disrupting

224 JOHN ~ HELM AND STEPHEN H. SCHNEIDER international relations—witness our recent experience with acid rain. In essence, the issue of greenhouse gas-induced environmental changes is one of "redistributive justice" (Schneider, 1989~. Risk Assessment For society to grapple with the environmental consequences of climatic change, a necessary step is to compare various energy options in terms of their climatic risks as well as other collateral social and economic effects. Since the largest single~component of the greenhouse effect is the emission of CO2 from fossil fuel use, it is obvious that any assessment of the potential climatic consequences of fossil fuel use needs to be weighed against risks associated with alternative means of producing and consuming energy. This is precisely what was attempted more than a decade ago by the Risk/Impact Panel of the National Research Council Committee on Nuclear and Alternative Energy Systems (CONAES). Much of the risk/impact as- sessment performed at that time is still applicable today and is reproduced here as Bibles 2, 3, and 4. Obvious in these tables is the presence of many unquantifiable entries, such as "aesthetic impacts" or "arms proliferation" or "governmental interventions." On the other hand, some risks are more easily quantifiable, such as "accidental deaths and injuries" or "acres of scarred land." The problem for risk analysts, politicians, and citizens alike is how to weigh this complex tangle of entries, each having associated with it some fuzzy, often-intuitive probability. Even for the relatively narrow problem of climatic risks from alternative energy systems, the complexity and uncertainties soon overwhelm the analysis (Schneider, 1979, 1987b). It is fruitless to hope or wait for a well~uantified assessment of comparative climatic risk assessment across various energy options, let alone a fully comprehensive risk assessment that includes all factors on Tables 2 to 4. Nevertheless, it is possible to quantify many elements of the complex whole. We believe it would be just as foolish to dismiss these well-quantifiable elements as to use them as the sole basis for policymaking. Well-quantified aspects are to be welcomed as helping to place decision making on a firmer factual basis, but they cannot serve as a whole-system risk assessment. There is simply no methodological substitute for human judgment at the whole-system scale. THE POLICY RESPONSE SPECTRUM What can or should be done? The greenhouse effect is fraught with scientific and technical uncertainties. It has both potential winners~and potential losers. No one nation acting alone can do much to slow it down. Dealing with it substantively could be expensive and could alter life-styles.

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VVHAT TO DO ABOUT CO2 227 Three classes of actions could be considered. First is countermeasures: taking purposeful actions in the environment to minimize the potential ef- fects (e.g., deliberately spreading dust in the stratosphere to resect the sunlight to cool the climate as a countermeasure to the inadvertent CO2 warming). This "geoengineering" solution suffers from the immediate and obvious flaw that if there is admitted uncertainty associated with predicting the inadvertent consequences of human activities, then substantial uncer- tainty surrounds any deliberate climate modification. It is therefore possible that the inadvertent change might be overestimated by our computer models and the advertent change underestimated, in which case our intervention would be "a cure worse than the disease." The prospect for interna- tional tensions resulting from such deliberate environmental modifications is so staggering, and our legal instruments to deal with this possibility so immature, that it is hard to imagine acceptance of any substantial coun- termeasure strategies in the immediate future. However, countermeasures such as planting more trees to soak up some of the extra CO2 would be much less controversial. So would removal of CO2 during energy produc- tion by hydrocarbon fuels, were that kind of engineering solution somehow economically feasible. Second, the policy action that tends to be emphasized by many economists (e.g., Schell~ng, in this volume) is, simply, adaptation society should adjust to environmental changes, recognizing that attempts to mit- igate or prevent the changes may be prohibitively costly or difficult to implement. We could adapt to climatic change, for example, by planting alternative crop strains that would be more suited to a wide range of plau- sible climatic futures. Another example of adaption is the building of dikes and other coastal barriers to block the advance of a rising ocean. The U.S. Environmental Protection Agency (Smith and Tirpat, 1988) has estimated that U.S. coastlines can be afforded a substantial reserve of protection against a 1-meter rise in sea level over 100 years by the investment of several hundreds of billions (10~) of dollars; considerable success may be achieved in this regard as witnessed by the Netherlands. The key element of the adaptation argument is that in comparison with the naturally rapid rate at which society rebuilds and changes, the relatively slow rate of predicted climate change should not be very serious. The third policy category is prevention. In the case of acid rain, this takes such forms as fuel restrictions and use of sulfur scrubbers. In the case of stratospheric ozone, prevention requires abandonment of chlorofluorocarbons and other potential ozone-reducing gases. For CO2, shifting from coal and oil to gas or reducing the amount of fossil fuel used around the world would prevent some CO2 formation. Reducing fossil fuel use, often advocated by environmentalists, is controversial because it involves, in some cases, substantial immediate investments as a hedge

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WHAT TO DO ABOUT CO2 231 against large future environmental changes, changes that cannot be precisely predicted. Another emission that is hard to control is methane from landfills or rice paddies; methane is a greenhouse gas that could contribute as much as 20 percent of the total heat trapping increase from human activities (Ramanathan et al., 1985~. However, various preventive policies may be effective. The list includes deploying energy-efficient technology, developing alternative energy systems that are not based on fossil fuel, and, in the most far-reaching proposal we have seen, enacting a "law of the air." This was proposed in 1976 by anthropologist Margaret Mead and climatologist William Kellogg (Mead, 1976~. They suggest that various nations would be assigned polluting rights to keep CO2 emissions below some agreed upon global standard (see also Ausubel, 1980; Sand, in this volume; Stavins, 1988~. SUSTAINABLE POLICY RESPONSES: "TIE-IN STRATEGIES" Clearly, society does not have the resources to hedge against all possi- ble unpleasant futures. However, without anticipatory actions society may well suffer unnecessary and substantial losses during climate change tran- sition. The nature and extent of such transitional losses depend critically on the rate at which adaptation must occur. The oil price shocks help to illustrate this point. Had oil prices risen slowly over many years, the United States would have been able to adapt better to the changing price envi- ronment. Instead, there was little time for anything but panic and painful adjustments. (However, the price rise did lead to major improvements in energy efficiency that eventually helped bring the price down.) Since each hedging strategy has an associated cost, how can the op- timum level of investment be determined? A complete discussion of this topic is beyond the scope of this chapter; however, one guideline we will discuss here has been called the "tie-in strategy" (Boulding et al., 1980; Kel- logg and Schware, 1981), that is, those actions that provide widely agreed upon societal benefits even if the predicted changes do not materialize. Several examples of tie-in strategies can be identified. The most obvious is to generate, distribute, and use energy as efficiently and cleanly as possible. Energy efficiency is a tie-in strategy because climatic change is only one of several good reasons to consider a policy of energy efficiency. What would be wasted by an energy efficiency strategy if serious global warming never materialized? Although the rate of investment in efficiency does depend, of course, on other competing uses of those financial resources, it often makes good economic sense to use energy more efficiently. The "tie-in" strategy suggests priority for policy responses to the advent or prospect of the greenhouse effect in ways that would have societal benefits

232 JOHN L. HELM AND STEPHEN H. SCHNEIDER even if present estimates of the severity of the greenhouse effect are not met. If in the equally likely event that current estimates are too small, then the efficiency strategy will have been beneficial because greater efficiency in energy use can reduce undesirable vulnerabilities to foreign sources of energy and reduce other non-CO2 emissions of pollutants and their undesirable health effects. Moreover? energy efficient manufacturing can in many cases reduce production costs and enhance global competitiveness of U.S. industry. In addition to making more efficient use of the energy we produce, it is also important to produce and use it cleanly. In principle it is possible to analyze the greenhouse tie-in benefits for an entire energy system. However, to do so is beyond the scope of this chapter because of the wide variety of possible systems. One major basis of such an analysis should be the "net greenhouse gas cost." Although energy systems may produce several possible greenhouse gases, since non-CO2 greenhouse gases can be expressed in terms of a CO2 equivalent, it is convenient to introduce a simplified unit called the "net CO2 cost." The net CO2 cost is defined as the ratio of total gaseous carbon (e.g., moles or tons of CO2, CO, or hydrocarbons) emitted to the total useful energy produced. The amount of total gaseous carbon can be obtained by a system lifetime CO2 balance. By system lifetime we mean the amount of CO2 produced as a result of materials fabrication, construction, operation, decommissioning, and disassembly. The meaning of useful energy depends somewhat on how an energy system is defined. For example, if the waste heat from electricity generation is used for industrial process heat or space heating of homes, the useful energy total should include that portion of the heat so used. Employing CO2 cost as we have defined it here makes possible the comparison of different systems, such as nuclear, hydroelectric, geothermal, ocean thermal, and solar. Then, if two systems are equal in all respects except their CO2 cost, we would advocate that the system with the lower CO2 cost should be chosen because it represents a tie-in strategy or perhaps that a fee be charged on CO2 costs. CO2 costing has the useful property that a clear definition of the entire life cycle of the system is required before deployment. - CO2 cost analysis, of course, is only one of many criteria that should be used to evaluate the suitability of an energy system or subsystem. We also caution that because CO2 costing is based on our imperfect, present understanding of future technology and practices, it, like whole-system risk assessment, should be used more for qualitative guidance rather than as a quantitative performance measure. This is especially true with large- scale infrastructures such as energy systems, because they are sufficiently long-lived for improvements in technology and other pleasant surprises to

WHAT TO DO ABOUT CO2 233 occur. Note, for example, how technology continuously improved domestic oil production over the past 15 years (Bookout, in this volume). On a net CO2 basis, we know that coal typically emits about twice as much CO2 per unit of energy released as methane. Because it is certain that reduced emissions from fossil fuels—especially coal will reduce acid rain and the negative health effects of air pollution in crowded areas, we see that another tie-in strategy is to emphasize the use of hydrogen-rich fuels. Specifically, encourage the use of methane and emphatically discourage the use of coal. The tie-in benefits follow from the increased efficiency and reduced pollution made easier by fuels such as methane, provided that uncontrolled release of methane, itself a greenhouse gas, is adequately controlled. There are many nonfossil-based energy systems that can produce en- ergy without CO2 emission. Of course, CO2 is not the only environmental side effect of any of these (see Tables 2 to 4~; however, it has certainly become an important one. The most developed of the nonfossil energy technologies is electricity generation by nuclear fission power plants, which emit no CO2 during actual plant operation and which should be considered as a potential tie-in strategy. To hold to the concept of CO2 cost, however, the extent to which nuclear power is a tie-in strategy will depend on its total CO2 cost, not just its operating CO2 cost. The increasing prospect of CO2-induced climate change has added CO2 generation to the risk assessment equations, and this addition in- troduces new dimensions of comparison. For example, when comparing nuclear and fossil electricity generators, the question arises as to which poses a more serious risk: enormous volumes of low-activity waste (CO2) or small volumes of high-activity waste (fission products)? The application of CO2 costing may help in addressing such questions. Therefore, we advocate that CO2 cost be evaluated for all important energy technolo- gies, including nuclear electricity generation, and be used as an additional criterion in system selection and evaluation. The tie-in benefits of efficiency technologies and hydrogen-rich fuels are clear and in many cases could be relatively inexpensive. However, we wish also to call attention to some important, but more embryonic, tie-ins such as greenhouse-mitigating transportation infrastructure, hydrogen as a fuel, and genetically engineered plant species. As future transportation infrastructure is planned, several greenhouse tie-ins can be identified. For example, the daytime population of cities such as New York would be impossible without the infrastructure of commuter trains and subways. Making these systems even more efficient and desirable means of daily travel is a tie-in strategy that substitutes the use of CO2- intense means of travel with a more CO2-benign means of travel. This substitution operates at two levels: (1) The amount of COD emitted per

234 JOHN L. HELM AND STEPHEN H. SCHNEIDER train passenger mile is much less than is emitted per car passenger mile, even if the train is powered by a large fossil energy source (i.e., a large diesel or a fossil-fired powerhouse); (2) Once a modern commuter transit infrastructure is in place, it facilitates the substitution of high-CO2-emitting power sources by power sources that are environmentally more suitable. Examples include electric trains powered by solar or nuclear-generated electricity, or possibly a hydrogen-fueled locomotive. Even greater opportunity exists in the so-called corridors between U.S. population centers (Marchetti, 1988), where high-speed train service makes more sense from the standpoint of reducing greenhouse warming. Hue integration of transport systems is an important component of a train renaissance in these corridors. The airport in Frankfurt, Germany, provides an example of a high level of integration; it is constructed in levels, one for the European train system, one for cars and buses, and one for aircraft. In contrast, most U.S. cities with urban train systems do not provide services that effectively connect with the terminals. However, some progress in urban transportation is occurring in the United States today. For example, the Chicago mass-transit system has a line that ends in the bottom level of a terminal building at the airport, but unfortunately it is a long walk to the aircraft gates. And in Philadelphia, there is now direct train service available from downtown to the terminal at the airport. Even without concern over CO2 emissions, these transportation improvements are attractive. Hydrogen may prove to be the ultimate fuel. It is clean, renewable, and can serge as a truly fungible "energy currency" because it can be readily converted into other forms of energr. However, many critics of hydrogen oppose its use on the basis of cost, safety, and the absence of complementary technologies for its transportation and use. The cost of hydrogen is, of course, a function of feedstock price, processing cost, and demand. Hydrogen can be made in a variety of ways; but most likely the first large quantities of hydrogen will be produced by methane steam reforming, which is projected to produce hydrogen at 1.2 times the price of petroleum-derived liquid fuels on a per unit energy content basis (Scott, 1987~. For technologies designed to exploit the advantages of hydrogen, its slightly higher cost as a fuel is more than offset by its form value. Evidence of how form value can offset energy cost is provided by many of the uses of methane and electricity today. For example, the economics of electricity generation achieved with new gas turbine technology more than offsets the higher fuel costs of methane (McCormick, in this volume). As superior technologies for hydrogen production come on-line, hydrogen production should become even more economical; and therefore over the long run, hydrogen may be price competitive with other energy carriers, such as petroleum-based fuels. Although safety problems

VV~AT TO DO ABOUT CO2 235 need to be addressed, they may prove to be more perceptual than actual, as was the case when gasoline was introduced as a motor fuel. In rebuttal to concerns about the absence of a hydrogen technology, it is not necessary to have a complete analogue of our fossil-fueled transporta- tion system for hydrogen to become important and useful. For example, hydrogen can be a viable fuel for systems such as high-performance aircraft and can function as an energy currency in that it is convertible to other energy forms such as electricity and hydrocarbons. Further, the beginnings of a hydrogen technology are already well developed. For example, hydro- gen technology has been central to the U.S. manned space program for decades; large quantities of hydrogen have been generated for ammonia synthesis, hydrocracking of petroleum, hydrotreating of hydrocarbons, and methanol synthesis; and in the Federal Republic of Germany hydrogen producers and users have been safely linked for more than 30 years by a 208-kilometer hydrogen pipeline, portions of which run through several cities. Similar pipelines exist in the United States td transport chemical intermediates among processing plants. The United States has a long and fruitful history of creating technology where there was none. Therefore, the absence of complementary hydrogen technologies is not a reason to oppose its eventual use. Other opportunities provided by hydrogen have been studied elsewhere berg., see Scott, 1987), and may even be materializing; as evidenced, for example, by the recent agreement signed by the European Community and Quebec, Canada, to conduct a five-year study on shipping hydroelectrically generated hydrogen from Canada to Europe for public transportation fuel. The key issue for hydrogen is that its use is environmentally benign and it can be produced from a variety of nonfossil sources such as hydroelectric facilities, photo- voltaic devices, or, possibly, inherently safe nuclear plants. Of course, any system for hydrogen production, distribution, and use must be evaluated in terms of its net greenhouse gas cost. The technology of genetically engineered crop strains is quite new. We only note here that developing crop strains that are climatically more robust, for example, drought resistant and able to use higher CO2 levels effectively, are desirable for many reasons. Although it would be too speculative to conjecture what might be done, it is easy to see how such crops also make sense as tie-in strategies for CO2 adaptation or mitigation (National Research Council, 1987a). Other tie-in benefits can be argued for trade agreements or treaties for climatically dependent strategic commodities such as wheat and water. In some circles there would be ideological opposition to government funding of all such tie-in strategies on the grounds that these activities should be pursued by individual investment decisions through a market economy, not by collective action using tax revenues. In rebuttal, it can

236 JOHN L. HELM AND STEPHEN H. SCHNEIDER be pointed out that exactly this kind of strategic investment is made on the basis of noneconomic criteria even by the most conservative people: investments in military secunty. It is not an economic calculus that dic- tates investments In a military, but rather a strategic consciousness. The argument here is simply that strategic consciousness can be extended to other potential threats to our security, including a substantially altered environment occurring at unprecedented rates. Furthermore, a zero cost of pollution hardly sets up proper market incentives for energy efficiency or alternatives. Recent experiences with pollution controls and hazardous waste cleanup have already shown that pollution is not cost free. Quite simply, the land, water, and air that historically have been cost-free inputs to the metabolism of society are now becoming more expensive to use. The cost of pollution defines an additional economic feedback not unlike the feedbacks in the climate system we discussed. Because these future liabilities are not well quantified, they are not reflected In the current prices of these "free" resources. Investment to hedge against potential environmental change can, however, deny resources to other socially worthy goals. More research will certainly put poli~naking on a firmer scientific basis, but credible details about specific winners and losers are not likely to be available much before society has committed itself to large atmospheric changes. If we choose to wait for more certainty before taking preventive actions, then this is done at the risk of having to adapt to a larger, faster-occurring dose of greenhouse gases, acid rain, and ozone depletion than if actions were initiated today. In sum, many of the prudent things to do about the greenhouse effect are prudent things to do anyway. REFERENCES Ausubel, J. H. 1980. Economics in the air. Pp. 12-59 in Climatic Constraints and Human Activities, J. H. Ausubel and A. K. Biswas, eds. Oxford: Pergamon Press. Bernabo, J. C., and T. Webb III. 1977. Changing patterns in the holocene pollen record of northeastern North America: A mapped summary. Quaternary Research 8:64 96. Bolin, B. 1986. How much CO2 will remain in the atmosphere? Chapter 3 in The Greenhouse Erect, Climatic Change, and Ecosystems, B. Bolin, B. R. Doos, J. Jager, and R. A. Warrick, eds. New York: John Wiley & Sons. Boulding, E., et al. 1980. Pp. 79-103 in Carbon Dioxide Erects Research and Assessment Program: Workshop on Environmental and Societal Consequences of a Possible CO2-Induced Climatic Change. Report 009, CONF-7904143. Washington, D.C: U.S. Government Printing Office. Dickinson, R. E. 1986. How will climate change? The climate system and modelling of future climate. Chapter 5 (pp. 207-270) in The Greenhouse Effect, Climatic Change, and Ecosystems, B. Bolin, B. R. Doos, J. Jager, and R. A. Warrick, eds. New York: John Wiley & Sons. Kasting, J. F., J. B. Pollack, and O. B. Toon. 1988. How climate evolved on the terrestrial planets. Scientific American 258~2~:9(~97.

YVIlAT TO DO ABOUT CO2 237 Kellogg, W. W., and R. Schware. 1981. Climate Change and Society, Consequences of Increasing Atmospheric Carbon Dioxide. Boulder, Colo.: Westview Press. Manabe, S., and R. Wetherald. 1986. Reduction in summer soil wetness induced by an increase in carbon dioxide. Science 232:626-627. Marchetti, C. 1988. Infrastructure for movement: Past and future. Pp. 146-174 in Cities and Their Vital Systems: Infrastructure Past, Present, and Future, J. H. Ausubel and R. Herman, eds. Washington, D.C.: National Academy Press. Mead, M. 1976. Preface to society and the atmospheric environment. In the Atmosphere: Endangered and Endangering. Fogarty International Center Proceedings No. 39, W. W. Kellogg and M. Mead, eds. Washington, D.C.: Department of Health, Education, and Welfare Publications. Mearns, Lo O., R. W. Katz, and S. H. Schneider. 1984. Extreme high-temperature events: Changes in their probabilities with changes in mean temperature. Journal of Climate and Applied Meteorology 23:1601-1613. National Research Council. 1987a. Agricultural Biotechnology: Strategies for National Competitiveness. Washington, D.C: National Academy Press. National Research Council. 1987b. Current Issues in Atmospheric Change, Summary and Conclusions of a Workshop October 3~31, 1986. Washington, D.C.: National Academy Press. Peters, R. ~ 1989. Proceedings of the Conference on the Consequences of the Greenhouse Effect for Biological Diversity. New Haven, Conn.: Yale University Press. Ramanathan, A, R. J. Cicerone, H. B. Singh, and J. T. Kiehl. 1985. Mace gas trends and their potential role in climate change. Journal of Geophysical Research 90:5547-5566. Schneider, S. H. 1979. Comparative risk assessment of energy systems. Energy 4:919-931. Schneider, S. H. 1987a. Climate modeling. Scientific American 256~5~:72 80. Schneider, S. H. 1987b. Future climatic change and energy system planning: Are risk assessment methods applicable? In Proceedings of the Engineering Foundation Conference on Risk Analysis and Management of Natural and Man-Made Hazards, November ~13, 1987, Santa Barbara, Calif. Schneider, S. H. 1989. The greenhouse effect: Science and polisher. Science 243:771-781. Schneider, S. H., and R. Lander. 1984. The Coevolution of Climate and Life. San Francisco, Calif.: Sierra Club Books. Scott, D. 1987. Hydrogen: National Mission for Canada. Cat. No. M27-6/1987E, Ministry of Supply and Services, Canada. Smith, J. B., and D. A. Tirpak, eds. 1988. The Potential Effects of Global Climate¢Change on the United States: Draft Report to Congress, Vols. 1 and 2. U.S. Environmental Protection Agency, Office of Poligy, Planning, and Evaluation, Office of Research and Development, Washington, D.C. Stavins, R. N., ed. 1988. Project 88: Harnessing Market Forces to Protect Our Environment Initiatives for the New President. A public policy study sponsored by Senator Timothy E. Mirth and Senator John Heinz, U.S. Congress, Washington, D.C. Wuebbles, D. J., and J. Edmonds. 1988. A Primer on Greenhouse Gases. DOE/NBB-0083. Washington, D.C.: National Technical Information Service.

Energy: Production, Consumption, and Consequences. 1990. Pp. 238 245. Washington, D.C.: National Academy Press. Achieving Continuing Electrification WALLACE B. BEHNKE, JR. A scenario of continuing electrification such as that of Chauncey Starr (in this volume) implies the ongoing availability of adequate amounts of reliable and reasonably priced electric power. Therefore, it seems virtually certain that for at least the next several decades U.S. electric power supply systems will play an increasingly critical role in the nation's energy economy. Rather than debate this point, let us focus on the upstream implications of continuing electrification for the electric power supply infrastructure. The deliverable supply of energy, including that provided by the electric power industry, will be affected by the interplay of public policy, technolog- ical innovation, environmental concerns, and economic forces. As things stand now, U.S. electric power supply systems face the prospect of fun- damental change engendered by the energy dislocations of the 1970s and nurtured by the policies and politics of the 1980s. Hard choices will have to be made during the l990s, and the legacy of those decisions will endure well into the next century. This chapter focuses on several of the more significant forces that promise to reshape the nation's electric power supply systems over the next several decades, beginning with demand. DEMAND Any forecast of electricity growth on a global scale to the year 2060 is a courageous and useful attempt to put the issues into perspective. Is a projected tripling over the next 60 years optimistic or pessimistic? 238

ACHIEVING CONTINUING ELECTRIFICATION 239 We simply do not know. We do know that, despite increasing emphasis on conservation and end-use efficiency, improvements in productivity and quality of life have caused the U.S. electric power systems to experience new records for peak demands and output. Is it reasonable to expect any less of the developing nations? Probably not. There is also evidence that the growth of energy use occurs in long pulses. If we are nearing the end of a slow period, will the current trend in public policy, which discourages utility construction in favor of contractual arrangements with unregulated suppliers, prove unexpectedly detrimental? Despite the uncertainty of demand projections, improvements in end- use efficiency brought about by the combination of new technology and market forces could postpone the need for new generating capacity. Ef- ficiency gain on the customer side of the utility meter is viewed as an objective worth pursuing. Recognizing this, utilities are spending more to promote conservation. Moreover, at least 20 states now impose re- quirements for least-cost planning, which incorporates both supply- and demand-side strategies. It has even been suggested that utility payments to customers for certain conservation improvements would be more eco- nomically efficient than investment in additional utility plants and should be passed through to ratepayers. The merits and ultimate costs of this concept are the subject of intense debate. Even so, experimentation in this direction is already under way. SUPPLY The outlook for electricity supply should also be considered. The North American Electric Reliability Council oversees and promotes power system reliability for North America's electric utilities. The council was created by the utilities in response to the system black-outs of the 1960s. In a Midyear forward assessment of bulk electric system reliability, the council found the supply plans of U.S. electric utilities adequate to support an average annual growth in electricity demand of 2.0 percent per year (North American Electric Reliability Council, 1987~. Although these are seen as the most likely growth rates, the council estimates a 50 percent chance that growth will be greater than these utility plans can support. I\vo things are troubling about this assessment: 1. Since 1982 when the United States emerged from the recession, electricity sales growth has been higher than 2 percent annually growing 3.5 percent per year on average. In 1987, sales were up 4.5 percent, and for the first quarter of 1988 they ran at an annual rate of 5.9 percent above the correspondending rate of 1987, well ahead of the gross national product in 1988.

240 WALLACE B. BEHNRE, JR. 2. Construction has not yet started on almost 45 percent of the 79,300 megawatts of new generating capacity currently planned in the United States through 1996. Much of this capacity will not be completed on schedule because of drawn out regulatory proceedings, construction delays, cost containment pressures, and increasingly stringent environmental requirements. The council predicts that supply problems could develop in some areas of the country as soon as 1990. Offsetting concerns about adequate supplies are claims that these projections are too high, especially if more emphasis is given to efficiency opportunities and other demand-side strategies. Which assessment is correct is not known. RELIABILITY The chapters by Weinberg, Gibbons and Blair, and Starr in this volume illustrate the profound difficulty in forecasting electricity demand with a sufficient precision to be useful for planning the additional capacity, given the 10- to 12-year lead times currently required to build new central station generating facilities and the useful life they must serve. The blackouts of the mid-1960s demonstrated that the consequences of a breakdown in the power supply system are greater than the costs of having new capacity in service a few years sooner than needed for system reliability. This experience continues to temper the judgments of utility system planners, but it is apparently being largely ignored in the current nublic lice dehate over the power supply issues. ~ ~ ~ ~ ~ - . , . _ ~ ~ ~ A ~ The U.S. bulk power transmission system has evolved into a complex network. Portions of this system will continue to be heavily loaded by energy transfers, both within and among regions, as utilities strive to minimize the cost of electricity. In some areas, concentrations of non- utility power generation will further increase loadings on already heavily used segments of the grid. In addition, energy transfers among regions can increase loadings in utility systems not party to these transactions. Similarly, disturbances in one system can affect the reliability of other systems. All of these factors underscore the critical importance of coordinated planning and operation of the bunk electric transmission systems. Reinforcements of the bulk power grid are planned to enhance energy transfer capability and ensure continued reliability. About 20,000 circuit miles of new transmission capacity are planned for service over the next 10 years. Yet, lengthy licensing proceedings and other disincentives inherent in the current regulatory process create formidable impediments to con- structing new transmission lines. The North American Electric Reliability Council warns that delays encountered in the expansion of the transmis- sion grids will further compound the stress on the power supply network

ACHIEVING CONTINUING ELECTRIFICATION 241 by reducing operating margins and limiting the flexibility to respond to facility outages, start-up delays, fuel supply interventions, and other system emergencies. DEREGULATION A second major force shaping the electric utility business in the United States is deregulation. Deregulation has implications for both the price and the reliability of electric service. After deregulation of the telecommunications, airline, trucking, and natural gas industries, interest in more competition in the electric utility industry has grown. In theory, increased competition will produce lower prices and a more efficient industry. The bulk power markets will almost certainly become more competitive in the years to come. Increased competition from qualified generating facilities (QFs) and independent power producers (IPPs), encouraged by the Public Utility Regulatory Policy Act of 1978, is already being felt in the bulk power markets and could extend to the retail markets as well. At the same time, a more adversarial regulatory climate has caused utilities to be more averse to risk Many utility managers say they plan to meet future electricity demand by extending the life of existing facilities, purchasing power from other suppliers, and promoting conservation and load management. The Federal Energy Regulatory Commission (1988) Is responding to this situation by holding hearings on proposed rules that would expand op- portunities for IPPs to compete in the bulk power market. The commission apparently believes that IPPs are needed as a new and flexible source of power at a time when utilities are reluctant to invest in new generating capacity. The commission is also considering guidelines for the conduct of competitive bidding as a means of purchasing power from unregulated producers. In weighing the merits of deregulation, a number of key questions should be addressed. For example, to what extent will deregulation cause utilities to lose control of construction and operation, and what will be the consequences of this loss? The highly reliable electric power systems in North America are the result of extensive planning and operating coordi- nation among utilities over many years. Because of antitrust concerns and competitive conditions, will power producers withhold from each other the very information needed for coordination to maintain reliability? Can cen- tralized, coordinated planning, which some advocates of least-cost planning seek to enhance, coexist with competition? What characteristics must an IPP have for its operation to be fully coordinated with the rest of an electri- cal power system? What contractual arrangements would be necessary for

242 WALLACE B. BEHNKE, JR. IPPs to be willing or able to engage in economic dispatch? How would the quality of service be impacted by a large concentration of IPP generation? Other important questions also need to be considered. Encouraging regulated utilities to seek bids for new bulk power requirements from QFs and IPPs may help ensure that the most efficient sources of power are developed, provided there is a level playing field for all participants' including the utilities. Can utilities develop the economic characteristics of a competitive enterprise with the continuing obligation to be the supplier of last resort? If utilities are excluded from bidding on capacity to serve their native load as some are proposing, how can a utility protect itself against collusion among bidders? What will be a utility's obligation if not enough capacity is bid? What would be the price for power from any capacity it is required to build? Will a power purchase strategy better shield the utility from ex post facto prudency and "used and useful" disallowances than a decision to build its own generating capacity? Given the capital-intensive character of power production facilities, investors will undoubtedly insist on assurance of revenue sufficient to pro- vide for a return on the investment made. About the only way IPPs can provide this assurance is with some form of collateral, such as a take-or-pay contract with a franchised utility. What will be the effect on the utility's financing flexibility if such long-term take-or-pay capacity commitments are regarded as debt equivalent obligations on its balance sheet? TRANSMISSION ACCESS The key issue for those who are expounding the need for increased competition in the electric utility industry is access to the transmission grid, especially "wheeling," or the third-party transfer of electricity between buying and selling utilities. Increased economic efficiency or lowering of aggregate electricity costs through wheeling is a commendable goal, as is reducing regional price differentials through increased access to low-cost interregional power suppliers. But what about the merits of transactions that merely transfer benefits from one customer class to another? Suppose, for example, wholesale municipal distributors or large industrial consumers were allowed to bypass their local utility service and purchase cheaper power. Would they be required to pay a wheeling charge that reflects the host utility's continuing and unavoidable obligation to serve and, therefore, will the utility be financially indifferent to the transaction? Or will captive customers end up covering the cost of stranded investments through higher tariffs? Large regional price differentials and variations in generating reserve margins, along with the difficulty in obtaining new transmission rights- of-way, are likely to increase interregional power flows and force more

ACHIEVING CONTINUING ELECTRIFICATION 243 intensive use of existing transmission corridors, according to the North American Electric Reliability Council. A recently released statement by the Institute of Electrical and Electronics Engineers (IEEE) describes the more significant technical considerations related to deregulation of the transmission grid (Tackaberry, 1988~. The IEEE statement notes that the economic results from any restructuring of the electric power industry will depend on how well the essential technical considerations are accommo- dated. For this reason the IEEE statement strongly recommends that full consideration be given by public policymakers to technical, reliability, and safety factors as well as theoretical economic factors when restructuring proposals are being evaluated. The statement underscores the important economic benefits currently being realized through coordinated planning and operation of the highly integrated electric generation and transmission systems. These benefits result from reduced generation capacity margin requirements and the ability to schedule generation on a lowest incremen- tal cost basis over broad geographical areas on a regional or multiregional power pool. The statement identifies operational stability of interconnected systems, fault (short-circuit) protection, power flow, generation scheduling, dispatch and control generation maintenance, voltage and frequency regu- lation, reactive power requirements, backup capacity, and emergency oper- ating procedures as among the many technical factors that require carefully coordinated planning and operation of electric utilities on a regional or mult~regional basis. The statement calls attention to the fact that the flow of electrical energy through a transmission network is determined by the electrical characteristics of the network at any moment in time; therefore, interchange or wheeling transactions may significantly affect the owners of network segments who are not parties to transactions between the buyer and the seller. According to the North American Electric Reliability Council (1987), present and planned transmission system capability is heavily committed to capacity and energy transactions among utilities. Ib accommodate trans- actions beyond those already planned with either utilities or nonutility generators utilities need to build additional transmission facilities. But how will these be financed? Will regulators authorize charges for long- term wheeling service based on long-run marginal costs, or will third-party wheeling customers be given access to the remaining network capacity at low embedded-cost-based tariffs? The latter arrangement may cause the retail customers of the utilities to bear the cost of new facilities. If new capacity cannot be built, how will existing capacity be allocated? How will utilities that are not a party to power contracts be compensated for inadver- tent power flows over the transmission network? How will the liability for a blackout caused by overload or instability because of third-party access

244 WALLACE B. BEHNKE, JR. be allocated among the parties? These questions are more than technical, or even institutional; they are societal. ROLE OF TECHNOLOGY Another major driving force in shaping the electric power industry is the application of new technology on the supply side of the utility meter. New technology promises to increase the flexibility and efficiency of electric power production and delivery systems, and thus provide added resilience to accommodate a more competitive bulb power market with a larger number of unregulated buyers and sellers. The most important development over the past two decades has been the great leap forward in information technology brought about by the con- vergence of rapid advances in microelectronics, computers, and telecom- munications. These technologies are being widely applied to the design and operation of power systems. Solid-state devices are replacing mechanical relays for fault protection, and computers and microprocessors have taken over many data logging and control functions. Computer simulation is used widely for system planning, engineering, and operator training. In the future, artificial intelligence techniques may soon provide expert guidance for system operators, and robots will be used increasingly for maintenance tasks in hostile environments. The United States is headed toward power systems that are electron- ically, rather than mechanically, controlled and thus are far more flexible than current utility networks. Most of the progress in electronics during the past several decades has involved use of low-voltage, low-current solid-state circuits, or chips. Power electronics applies this more than 30-year-old sci- ence to high-voltage, high-current, "power" applications by using solid-state devices called thyristors. These devices are capable of handling thousands of volts and hundreds of amperes. Thyristors permit the switching of power circuits at the speed of light and thus offer a means of control that is vastly superior to mechanical switching. This technology should permit the United States to enhance use of the transmission grid substantially without compromising system reliability (Hingorani, 1987~. The thyristor and its variations are now being used in AC/DC converters for high-voltage transmission of direct current, static reactive power compensators, uninterruptible power supplies to protect sensitive equipment, and drives for adjustable-speed motors. Power semiconductor devices can ease the problem of feeding the direct current generated by photovoltaic facilities, fuel cells, and storage batteries into the alternating current power lines that are universally employed by utilities throughout the world. In the future, there is the prospect of an all- thyristor-based phase shifter and ultimately a device that can rapidly control

ACHIEVING CONTINUING ELECTRIFICATION 245 both active and reactive power flows through utility networks. Thyristors may eventually replace mechanical circuit breakers on utility distribution power lines. In the more distant future, high-transition-temperature superconduc- tivity, high-performance fission energy, and solar power conversion systems offer promise for still further improvement in the cost and reliability of the U.S. electric power supplies. CONCLUSION Rationalization of the issues concerning U.S. electric power systems is central to the continued electrification scenario. Constructive political responses will require that regulators, government officials, opinion leaders, and the public understand the economic issues and technological constraints involved in deregulating the nation's electric power systems as well as the opportunities afforded by new technology. REFERENCES Federal Energy Regulatory Commission. 1988. Notice of Proposed Rule Making: RM 88~ Regulations Governing Independent Power Producers, March 16, 1988; RM 88-5 Regulations Governing Bidding Programs, March 16, 1988; RM 88-6 Administrative Determination of Full Avoided Cost, Sale of Power to Qualifying Facilities and Interconnection Facilities. March 16. Washington, D.C Hingorani, N. 1987. Future opportunities for electric power systems. IEEE Power Engineenng Review 7~0ctober):05. North American Electric Reliability Council. 1987. Reliability Assessment: The Future of Bulk Electric System Reliability in North America 1987-1996. Princeton, NJ.: North American Reliability Council. Tackabeny, W. R. 1988. The role of electric power engineers in restructuring the electric power systems in the United States. IEEE Power Engineering Review 8(April):11.

Energy: Production, Consumption, and Consequences. 1990. Pp. 246 264. Washington, D.C.: National Academy Press. Regional Approaches to Transbounda~y Air Pollution PETER H. SAND International air pollution problems have traditionally been attributed to emissions from "point sources" being transported across national borders and have been viewed mainly as a matter for bilateral arrangements between neighboring countries. The bilateral approach is well illustrated by the U.S.- Canadian Mail Smelter arbitration (Read, 1963; United Nations, 1949), by the recent U.S.-Mexican agreement on transboundary air pollution caused by copper smelters in the common border area (Applegate and Bath, 1986; Utton, 1987), and by a number of similar local agreements or judicial settlements in Europe, such as the French-German case of Poro v. Lorraine Basin Coalmines (Bunge, 1986; Sand, 1974~. Accordingly, the customary principle of "good neighborliness" (Goldie, 1972) was long considered as an adequate legal basis, both for intergovernmental arrangements and for granting private remedies to individual pollution victims across national boundaries (McCaffrey, 1975; Sand, 1977~. The advent of long-range transboundary air pollution (LRTAP) quickly shattered this confidence. First alerted by Scandinavian reports of "acid rain" damage due to air pollution from Western and Central Europe (Russell and Landsberg, 1971), the Cooperative Program for Monitoring and Evaluation of the Long-Range Transmission of Air Pollutants in Europe (EMEP) was established in 1977 (United Nations Economic Commission for Europe [UN/ECE], 1982~. It has produced voluminous and increasingly reliable evidence that sulfur and nitrogen compounds emitted by a wide range of stationary and mobile pollution sources are dispersed through the atmosphere over thousands of miles. Because these sources are principally 246

REGIONAL APPROACHES TO TRANSBOUNDARY AIR POLLUTION 247 related to fossil fuel combustion, they are inextricably linked to energy consumption. The EMEP program has three main elements (Dovland, 1987~: (1) col- lection of emission data; (2) measurement of air and precipitation quality; and (3) modeling of atmospheric dispersion, using emission data, mete- orological data, and functions describing the transformation and removal processes. The purpose of the models is to provide concentration and deposition profiles for major air pollutants over Europe. Coordination and intercalibration of chemical measurements are carried out at the Norwegian Air Research Institute in Lillestrom; the two coordinating centers for mod- eling activities are the Norwegian Meteorological Institute in Oslo and the Institute for Applied Geophysics in Moscow. The EMEP sampling network, consisting of 95 stations in 24 countries of Western and Eastern Europe, is based on 24-hour sampling of air and precipitation. The accuracy of the atmospheric dispersion calculations is evaluated by frequent comparison with measurements. Canada and the United States also contribute to the program with reports and interlaboratory comparisons. Figures 1 and 2 show the geographical distribution of sulfur dioxide (SO2) and nitrogen dioxide (NO2) emissions in Europe (including the European part of the USSR) on the standard sample grid, based on official emission data reported by governments. Figures 3 and 4 display the mean annual concentration of sulfate (SOT, corrected for sea salt) and nitrate (NOT ), which are the main ions contributing to precipitation acidity, shown in Figure 5. Figure 6 shows the concentration of ozone (O3), another important atmospheric pollutant caused by nitrogen oxides and hydrocarbon emissions in the region. EMEP results annually reviewed, updated, and approved by an in- tergovernmental steering body—make it possible to quantify the pollutant depositions in each country that can be attributed to emissions in any other country. Study of these matrices shows that for about half of the European countries concerned, the major part of the total pollutant depo- sition originates from foreign emissions (Eliassen et al., 1988~. Even minor emitters such as Switzerland "export" some of their airborne pollution to neighboring countries such as Italy and as far afield as the Soviet Union. However, less than 15 percent (i.e., 17,000 metric tons) of the estimated 121,000 metric tons of sulfur deposited in Switzerland in 1980 originated from Swiss sources: 65,000 metric tons were "imported" by air from neigh- boring countries (Italy 31,000, France 23,000, Federal Republic of Germany 10,000, Austria 1,0{)0~. Another 20,000 metric tons originated in countries as distant as the United Kingdom, the German Democratic Republic, and Spain (4,000 each), Belgium, Czechoslovakia, and Poland (2,000 each), and Hungary and the Netherlands (1,000 each); the remainder came from indeterminate sources.

:~: ~::~ it:: - ~ \ PETER H. SAND :~: ::::: I:: . ~ - ~~ ~~ ~ ~ ~ ~ ~ _ ~ : ~ ~ ~7 ~ ~ TV ~, ~ 1~;~ -~k,~:~ ~ _; Jq ~7 ~:~ ~ hi ~~1~;~ _~r ~~ ~~ ~ ~~ ~~ ~~ ~~ ~~'~ ~~ ~~ ~ ~~ ~~ _. ~~ ~~_~~ _ ~~ ~~ ~~ ~~ _; iT~ ...~.ii ~ ~ _ ~ ~ ~ ~ , ~ At, `~~ A ~~ :~< , - ~ ~: ~~ ~ ~ ~ ~ , ~ ~~ gyp ~~ ~~ ?~ ~~ ,~ \ ~~;~ i, ~ 1 a <10 ~~ 10-99 ~ ~~ 100-199 . 200 299 · > 300 i;;; G talc;.: FIGURE 1 Emissions of sulfur dioxide in Europe, 1985 (in 1,000 metric tons of sulfur

REGIONALAPPROACHESTOT~NSBOUND~YAIRPO~UTION 249 ~ ~ ~ :: ~ . ~ ~ 77 ~ . i ~ ~:~:~:~;~:~ I~ ~ ~ ::: ~2 2 _< ~:~::~::~ ~ ~~ :: ~~ ~~ ~~ r , . - ) ~,~_ ~ 'Gil ~ : ~~ . , J : ~~_ \ ~ ~~:~N ~ ~~:~\W ~ ::\ ( \ ~ i: ~ : ~~ ~ ~ ~ ^~ ~~ ~~ ~~ ~~ :~ \t ~ lo ~~ ~~ ~~ ~~ ~:~1 ~ \~,~.~ `~ ~ ~~, ~~ ~ 72 ~ ~ / _Q _< :: :; ~ ~ ~ ~ <10 ~~ 10-99 ~ .> 100-199 ~ 200-299 ~ > 300 FIGURE 2 Emissions of nitrogen oxides in Europe, 1985 (in 1,000 metric tons of NO2 per year).

250 PETER H. SAND '~ ~ \ 1.0 ~ ~ 1.5 / ~ lp-q ~ ~ ' ~ —2.: _~2.0 it, '..' L`~—~ 1 2 -.2.2.-.2." 2! ) l 2:.:.:2:2:2: :.: ::1 / , .... ~ / l ,.,, · ~ , , ~ / , , ~ , \ , .~ . , .... , ,,.,., 1 , / . .,,.. ~ , ~ 0.3 FIGURE 3 Mean annual concentration of sulfate in precipitation in Europe, 1985 (milligrams S per liter). These findings demonstrated that bilateral concepts of geographical contiguity and "good neighborliness" useful as they may have been for point-source transboundary pollution—had ceased to be sufficient or ad- equate for the region, and that a new multilateral approach was needed. Although international efforts to cope with long-range air pollution were at first confined to Western Europe—primarily the Organization for Economic Cooperation and Development in Paris (Eliassen, 1978), but also the Coun- cil of Europe in Strasbourg and the European Economic Community in Brussels (Adinolfi, 1968; Ercman, 1986; Smeets, 1982) it soon became ev-

REGIONAL APPROACHES TO TRANSBOUNDARY AIR POLLUTION 251 . )~ I . _ , , :,:,:,:,:,:,:,:,:.:,:,:,:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::':::::'~n ~ ~ \ ~ ':, ''.'.."'"""""""""" "''"''"""""'"""""""""""""""""""'"""""""'""'"""'"''"'"""'""'''' """'""""'"'''by \ - ' .L :.::::::::.:.:.:::::m :::: ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::~/ ~ ~ `::::~ ... ,: :,:,:,:,:,:: :.:. - ~ ' ''' '''''' '''' ' ' ' ''""'I / ~ ~ ~ l/ 4P~ red W / no \ ~ - - :::::-:t t..1.0.... ~ _._ ~ og -if ~1~ 'I :._ , ~~ a. ;' FIGURE 4 Mean annual concentration of nitrate in precipitation in Europe, 1985 (milligrams N per liter). ident that the problem called for joint action on a wider scale and required cooperation between Western and Eastern European countries (Amendola and Sand, 1975; Lykke, 1977~. The only intergovernmental body at this level was the UN Economic Commission for Europe in Geneva, one of the five regional commissions of the United Nations (Szasz and Willisch, 1983~. It includes not only all European countries but also the United States and Canada and had already begun to deal with environmental problems in 1968 (Bishop and Munro, 1972; Stein, 1972~.

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Jo: ...:,:,:,:,::,:.:.:. _ . ~ ',j~ . . . in :~:::# I ~ .......................... ~~ ~~ ~ ~ ~ ::::::::\ ~':'::'::'::::::':':':::':':':':': ~ ~ _ ,:,::::::::::::::::: . I :% I:,:,:,:.: - ,,:,:,:,:,:,:,:,:,:,:,:,:,:,: :,: : .:2 I,:, ::::::::::::: ~ _ ~ ...... : 2 :,#:, . [ H.22.2 ~ .. ::::::: ~ ~ ~ _ :,:.:.: :,:: :.:.:.:.:,:,,: ; .................. _ _ :: :,:,:,:,:,:.:,:.:,:,: :,::: :. ......................... .. ................................ .. ::: :::::::::.:.::.:::. :,:,::: :::::::::::::::::::::::: .. .......................... . : :.: ::::::::::::::::::::::::::::::, ................................. .. :,..:,:,:.:.:.:.:.:,:.:,:.:,:,:,: :,: 1~ ~ \ 9 A A ~ 4.Z ~ 4.1 ~ a,::::: Add..::::::::::::::: ala:::::::::: :~ , . '' :.~ ~ 2 i~ ~ ts;~:i~:::::::::;~::::::::::::::::: :::::i ~ . :~c I::.::: - a:::::::::::::::: ( - , ~ ... ~ k4.2~4.2~ W4.3)~54-7 .............. , ~f- 1~ 4~ :::-~.4 .. :::::::::-:-: :-:-:-:-: . .. .2 2 2. :: :::::::: :::::::::' . .. ...................... ! .:.:,: :,:,:.:.:,:.:. ... :::::::::::::::::: .... . ... . t 2 ' .- ...................................... ~ ~ _ ~ A-! ,, ,,, ~ . ~_` ~ ~ ~ : . ~ `,.-~ ~ ~ ~ ., . . ~ ,, ., Hi,, . ~ ~ . ~ ~ ~ ~ _ _ ~ ~ _ , . . . . ~ . ~ _ _ _ . ~ ....,,. ~ . . ~ ~ . jjr_ _`22 2' ~ r ,.,.,,...,, ................... ~ ..................... ) ,::::::::: 1 . V / :::::: / .~ ~ ...2.~ .,,, ~ ................. 5.3 PETER H. SAND /~. _R 1 I id ~ i.- - - .-.-.~ ~ ~ - - ·:-:-:-:-: :-: :-:-. :~:::.::~:~:~:-::-::::::::- - \ / :::-::-::: .] — ~ w :::: :.: :::::~::::l ~ :-~:~:~:.:.:~:.:~:~:.-.~ - ~..-v ~~.:~ , I.-.-::-: ::-:-:-:-:-:: :-: :.::: :-:: :::::::::::::::::::::::~:::::::::::::::::::::: ~—~ Aim-: :-:— '.-:: :-:::::::::::::::::: ~ - .::: :-:-::-:-:-' }:~:-:-~:~:~:~:.:~:~:-:-::: ::.:::-::-:: :~ I: :-:: :-:-:::::: :::: ~::::::::::::::::::::::` ~ ~ t -A ~..................~.~ _............ ~ . ~ ......,,, ,, ~ ~ . , . .. ~ ~ ::: :: t..............,.,,.,~..............................................\ >..............................................................' I...........................................t e.......................................................... `::::::~:::::::::::::::::::::::::::::::::::::::::::~..::: ::::::::::::::::::::::::::: :::::~:::::::::::::::::::::::::L a::::::::::::::: :::::::::: ?2........................'.,.' :: ~ #:::: ::: ::: ::::: ::::::::::::::::::::::::::::::::::::::::::::::::::::: ::::::: ::::: ::::: :::::::: :::: :::::: ::::::::::::::::::::: ::::::: ::: :::: ,...................~........................................................................................................................................................................................................ FIGURE 5 Mean annual precipitation acidity in Europe, 1985 (pH values). JOINT PROGRAMS AND AGREEMENTS After intensive diplomatic preparations and negotiations (Chossu- dovsly, 1988; Wetstone and Rosencranz, 1983), a Convention on Long- Range ~ansbounda~y Air Pollution was adopted in Geneva on November 13, 1979 (LRTAP Convention, 1979~. It went into force on March 16, 1983, and currently has a membership of 32 parties including the United States and Canada (Franker, 1989; Rosencranz, 1981; Sion, 1981~. In addition to laying down common policy principles including a commitment to use "the best available technology that is economically feasible" for air pollu- tion abatement this regional treaty establishes institutions for permanent cooperation, including annual review meetings of the intergovernmental

REGIONA ~ APPROACHES TO T~NSBOUNDARY AIR PO~UTION 253 ....: ............. ~ Hi' - ................................................ ,~ , ~ / ~ ·. .................................................................................................................................................................................... ,,,.' ~ \ ~ ~ . . ~ ~ . ~ ~ f ~ \ A.,, ~ . ~ ., , , ,,., .,. ~ I.,, .,, `' ,, ., .,, ,~ ~ ,, .,, ., .,, . it, ~ , . ~ .,, ,..,, ..... ., , . ....... ` I/ 1::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::~ 1 I ''' '''''' '''''t ~ .......... ; . . ~ / .:.:-:::.::::::~:-:-:-:-:-::~.::-~:~:~:~:~:.:.:-:~:~:-:~::~:~:~:~:~:~:~:~::::::::::::::::::::::::::::::::::::::::::t l :.:.:~:~:~:~:~:-:.:.:~:~:~: :~:.:.:.:.:~:.:~:.:.:.:.:.:~:.:.:-:: :-::::: :-: :-:-:-: :-:::::: :-:-::::: :-:~:::-:::::-:-:::-:-:::~:::~:::::::::-::::::: :-:::: :-: :-:-: l ::.:::: :~: :-:: ::: :~: :-:-:-:.:.: :::-::::-.: :~:.:~:~:.:~:.:~:~:.:.:.:.:.:-:-::::::: :-:-:-:-:-:-::: :-: :-:-:-:: :-:: :-:-:-:-:-:: :~:-:-:-:-:-:::::~:-:-::::::.:::-:-:-:-::-::-:::~:~:::~:~:~:::::-:::::::::-::-:-::::-:::::::::::::::::::::::::::~ : ::-: ::-:-:-:-:-:-:::-::-: :-::: :::::-: - - -:. :-::: : ::: ::::. :: :::.~:: :: ~ : -::: :~: :::::::::::::::::::-:-:-:-:-:-::-:-::::-:::::-:-:::~:-:-::::-::::-:::::::::::~::-:-::~::~:~::::-:----:-:- : :~:~:.:-~:~:~:~:~:~:~:.:~:-: :~:~:-~:~:-~:-~:~:~:~:~:~:~:~: :.:-~:~:~:~:~:~:~:.:.:-~:.:.:~:~:-~:.:::::: :-:: :-::: :-: :-:-:-:::::: :-:-:-::: :-:-: ::::::::::::-:-:-:-:::::::::-:-:-:::::::::::--:-:. :::--- :::::-: ----:--~. -::: ---:~:-------- -- :.:.:-::-:::: :~:~:.:-:~:.:-:~:~:-:-:~:~:~:.:.:~:~:~:.:~:~:~:~:~:.:~:~:~:~:.:::-~:~:] .2.2. 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' 2 ' 2 '.2 '.2.2 ' "'''''-"\ : :,:: :.:.::: :,:,:,:,: :,:.:.:,:: :,:.:,:,:,:.:.:,:.:::.:.:,:.:,:.:.:.:,:.:::::::-::::: :` :::::-::-::::::~:~::-:::-:-:-:-:-:::-:::-::-:-:-:-:::::::~::::::-:::::::: :-::: :-:-:::: :-::: :-: :~: :-: :-:-: :-:-: :-:-: ::::::: ::: ::: ::::::: :: ---:: ~ - :::::::::i' :::::~:.:.:.:~:~:.:. ~ .:~:-~:~:~:-~:.:~:~: / ~ :, / :~:~:.:~:.:' / . ~ J ., .. . ~ ~ ...' I ...,...~ .. , .,, , ~ ...................................... \ _ _ '. l9Z · \~ _ - ^ ~ _ ' ` ~8~f \ ·, 262 ~ ~...'.2'.................................... 12:.:.:.:.:.:.:.:.:.:.:.:.:.:.:2:.:.:.:.:.:.:.: {............................................ . , _ ~ ~ J ~ ~ ~ r~ . ~ ~ ~ ~ ~ ~ . ~ ~ ~v ~ ~ ~ I ' /- ~.t ~ \ ] ~ ~ ~ 1 ~22~ %,~ ,^ -~ i ~ ~ - ,_ ~ - ~ s ~ \ __, ' ~ ~ ..^2~ <.~ N K~ ~ r, ~ ~ ~ r~ ~ ? ~ .~ ~ ~:::::::::::::::::::::::::::::::::::::: ::::::: :::::::::: ::::::::::::::::::::::::-:::::-:-:-:::-:: :~ :-:-:-:-: :-:~:-:-:~:~:~: :-: :-:: :-:~:~::: :-:-:-:-:~:~: :-:-:-:-:-: :-:~:~::: :~: :~:~: :~: :-: :- FIGURE 6 Ninety-eighth percentile of ozone concentrations in Europe from Apnl to September 1985 (in micrograms per cubic meter). Executive Body. Moreover, it provides the legal framework for several joint programs and specific agreements (Sand, 1987; 1bllan, 1985~: 1. A comprehensive review of national strategies and policies for air pollution abatement is undertaken every four years to ascertain the extent to which the objectives of the convention have been met. The first of these major "audits" of compliance was carried out in 1986 (IJN/ECE, 1987a); it provides country-by-country tables of the most recent emission statistics, data on applicable national standards, and an overview of regulatory and economic measures taken by each party to comply with the treaty.

254 PETER H. SAND 2. The EMEP Protocol was signed in September 1984, ratified by 31 parties (including the United States and Canada), and has been in force since January 28, 1988 (EMEP Protocol, 1984~. It ensures the joint long- term financing of the above-mentioned regional monitoring program and its three international centers, with an annual budget of slightly more than $1 million, to which the United States and Canada currently contribute $10,000 each on a voluntary basis. Programs and budgets are supervised by the EMEP Steering Body and are approved at the annual meetings of the Executive Body for the Convention. 3. In addition, optional cooperative programs have been set up by the parties to the convention to monitor and assess air pollution effects on four main targets: forests (coordinated by the Federal Republic of Germany and by Czechoslovakia, with the first large-scale surveys of forest decline carried out In 25 European countries in 1986 1988~; materials and monuments (coordinated by Sweden, with a uniform four-year exposure experiment using 39 test sites in 14 countries, including the United States, started in 1987~; rivers and lakes (coordinated by Norway, with a first geographical survey of acidified surface waters In 21 countries, including Canada and the United States, carried out in 1988~; and agnculh~ral crops (coordinated by the United Kingdom, with a uniform controlled exposure experiment in 10 countries, including the United States, started in 1988~. A new pilot program on integrated (i.e., multimedia and cross-media) monitoring, led by Sweden, also became operational in 1988. After endorsement by the Executive Body, scientific results of these programs are published regularly In the trilingual Air Pollution Shoddies series (UN/ECE, 198~1989~. 4. The Sulfur Protocol was adopted in Helsinki, Finland, on July 8, 1985 (Sulfur Protocol, 1985~. It was ratified by 19 parties (including Canada but not the United States) and has been in force since September 2, 1987. It commits governments to reduce national emissions of sulfur compounds or their transboundary fluxes by at least 30 percent by 1993 at the latest, using 1980 as the baseline year (Bjorkbom, 1988; Vygen, 1985~. As of 1988, 12 parties had reached the 30 percent target ahead of schedule; 10 parties are committed to cutting their SO2 emissions below one-half of their 1980 levels by 1995, and at least four of these (Austria, the Federal Republic of Germany, Liechtenstein, and Sweden) to below one-third. For large combustion plants in particular, the environmental ministers of the European Economic Community (EEC) after reaching a compromise in Brussels on June 17, 1988, that grants exemptions to certain member countries such as Ireland, Spain, and the United Kingdom— agreed to accelerate the schedule for reducing sulfur emissions (European Economic Community, 1988~. The agreement calls for reductions of 40 percent by 1993 (UK 20 percent), 60 percent by 1998 (UK 40 percent), and 70 percent by 2003 (UK 60 percent). Earlier EEC decisions and

REGIONAL APPROACHES TO TRANSBOUNDARY AIR POLLUTION 255 directives had already tightened the standards for sulfur content in fuel (Oil Companies' European Organization for Environmental and Health Protection [CONCAWE1, 1989). 5. A new Protocol on Nitrogen Oxides, signed by 25 countries, includ- ing the United States and Canada, at the sixth session of the Executive Body in Sofia, Bulgaria, on November 1, 1988, calls for a "freeze" of national NOR emissions or their transboundary fluxes at 1987 levels by 1994, to be followed by reductions from 1996 onward at a rate yet to be agreed (Nitro- gen Oxides Protocol, 1988). The United States exercised an option to select an earlier baseline year (namely, 1978), with the understanding that this will not result in an increase of emission averages or transboundary fluxes over 1987 levels by 1996. On the other hand, the Sofia Protocol expressly reserves the right of parties to take stricter regulatory measures individually or collectively. Twelve European signatories thus went a step further and signed an additional (and separate) joint declaration committing them to a 30 percent reduction of emissions by 1998. The protocol-plus-declaration formula helped to resolve a dilemma typical of multilateral treaty-making in the environmental field: ensuring (a) to get as many countries as possible to join when wide geographical coverage is essential, without (b) slowing down the convoy to the speed of the slowest boat. 6. Next in line for international regulation will be emissions of volatile organic compounds (VOCs). Considered one of the main causes of pollution-related forest decline in Europe, VOCs, together with NO=, are precursors in the photochemical formation of tropospheric ozone and other pollutant oxidants (Nilsson and Duinker, 1987; Prinz, 1987). The Sofia meeting therefore set up a new VOC Working Group (chaired by France) to evaluate the scientific evidence and to prepare proposals for a further protocol. Ken together, these agreements and programs may be described as an international regime, namely, "principles, norms, rules, and decision- making procedures around which actor expectations converge in a given issue-area" (Haas, 1980; Krasner, 1983). How effective has this "functional regionalism" (Majone, 1986) been in terms of actual pollution trends? As shown in Figure 7- using official data and forecasts reported by all parties to the Convention, whether or not they ratified the Sulfur Protocol there has definitely been an overall net decline in sulfur dioxide emissions since 1980. Moreover, this trend is expected to continue in the 1990s despite rising energy demands. Figure 8 is a first attempt at correlating these recent figures with long-term assessments of energy consumption and SO2 emission trends in Europe (Dovland and Semb, 1980; Eliassen et al., 1988; Field, 1976).

256 PETER H. SAND It may be too early to interpret these figures as evidence of actual "de- coupling" of energy consumption from energy pollution trends. It should also be kept in mind that at least part of the emission reductions can be attributed to fuel switches from coal and oil to increased use of nuclear energy and natural gas for power production, for example, in France and several East European countries. Nevertheless, the rising impact of in- vestments and improvements in emission control technology can also be documented, for example, in the review of national implementation of the Convention up to 1986 (UN/ECE, 1987a). Regular information exchange within the framework of the Convention for example, the 1986 Graz Seminar on the Control of Sulfur and Nitrogen Oxides from Stationary Sources (UNIECE, 1987b) has not only promoted the dissemination of new antipollution technologies but also tends to strengthen consensus on their technical and economic "feasibility" (LRTAP Convention, article 6~. A key factor in this process of mutual education has been the active partic- ipation of nongovernmental organizations, including both industrial groups (e.g., the International Chamber of Commerce, the International Union of Producers and Distributors of Electric Energy, the International Road { ' ' '.' 2~ EUROPE ~ :rl~.~im , . . . _. _ . . _.. ~2 .1E Rim ffl _88H ,_ NORTH AMERICA ~ ,....,,, # , ~ . .~ ~ , a,,,,,, ` _ .. . . 2 a_ A. lo, .` . ,, , , Hi_ ... , . . ~ ....................................... c' 2. '' ""'"""""""""'""""""'''"""""""'''""""""""""".] ~...28.6....= by...... 3~9 X ~ g go g X 2 gl v. - 1_ ~4.71 EASTERN EUROPE WESTERN EUROPE , L a; ,, ., ,, .,,,,,,, ~ _i - , , .,,,,, _ i, ., , , .... a ,: ., .,, , , , ,.,.,.,., s, ,.,., , , lo_ ,, ,.,,,.,, . . ,, lo. .. , .. it, ,.~ , By: 25 5::: ~ A: .:::: .: : ~:'.2 '.~ - ,. "2'. 2~ go:::::' I,. v.v,,~ 5X ~ ~9 . W 18321 6 ~ l R5. ~ , ~ 3.9 1980 1985 1990 1980 1-985 1990 JSA CANADA FIGURE 7 1tends in total man-made emissions of sulfur dioxide in Europe and North America, 198~1990 (million metric tons of SO2 per year).

REGIONS APPROACHES TO T~SBOUND~Y AIR PONTOON 257 ~ 2000 - o ._ . _ z 1 500 o z ~ 8 1000 cr z cn . 0 500 ALL r /~\~ 'it / / f ~1 ~ ran 1900 1920 1940 1960 1980 50 40 o con ._ a) 30 E ._ G z 20 ° In In UJ llJ c, o FIGURE 8 Gross energy consumption of solid and liquid fossil fuels (million metric tons of coal equivalent) and total sulfur dioxide emissions (million metric tons of SO2 per year) in Europe, 190(~1985. Transport Union, and CONCAWE) and environmental groups (e.g., Green- peace, Friends of the Earth, and the International Union for Conservation of Nature and Natural Resources). POLICY CRITERIA FOR INTERNATIONAL AGREEMENTS Paradoxically, perhaps, the very open-endedness and generality of the LRTAP Convention's provisions frequently pointed out by its critics (Gundling, 1986; McCormick, 1985) may be one of its main assets, as new priorities for action continue to arise and are met in turn by the flexible Protocol" system. Even though the convention binds all parties to common goals and institutions, participation in protocols is optional. As with any international agreement, it is up to each party to weigh the pros and cons of joining or staying outside. Besides environmental criteria, governments usually evaluate agreements in the light of many other factors, including (a) economic costs and benefits; (b) compliance controls and verification;

258 PETER H. SAND and (c) equity for all parties concerned. These policy criteria can also be applied to the sulfur and nitrogen protocols under the LRTAP Convention. Economic Ranonale Any environmental benefits of a treaty regime, however quantified, invariably mean pollution control costs costs to governments and costs to industry. In an international setting, countries will first seek to avoid pe- nalizing their own domestic industries and taxpayers; rather than imposing such costs unilaterally, they will instead endeavor to ensure that costs are spread evenly and, in particular, are also imposed on foreign competitors. Hence, one way of looking at intergovernmental environmental agreements is as legal mechanisms to ensure a degree of international equalization of costs among competing polluters. In this perspective—with Japan al- ready leading North America in regulatory requirements for control of sulfur and nitrogen emissions (Weidner, 1986~- the focus of attention is on Europe. Whereas Austria, Switzerland, and the Nordic countries already require that new emission controls for motor vehicles match 1987 U.S. fed- eral standards (Assarsson, 1986; Walsh, 1988), specifications applicable in the 12 member states of the European Economic Community are roughly comparable to U.S. standards of 1983 (CONCAWE, 1989; Lomas, 1988), gradually to be tightened in 1991 and 1993. The Nitrogen Oxides Protocol accelerates this process by "technology-forcing" provisions requiring use of the best available and economically feasible technology, as specified in the protocol's technical annex. One nonnegligible side effect is gradual international standardization in the growing market for pollution control technology. Uniform emission standards for motor vehicles are set and periodically revised under a 1958 agreement administered by the United Nations Economic Commission for Europe (UN/ECE, 1958~. In actual practice, many of these standards are followed not only by the 22 West and East European countries having signed the agreement but also by a growing number of other countries, as a convenient shortcut to national type-approval of imported foreign cars and spare parts. The Nitrogen Oxides Protocol, besides using these standards as a baseline (in its technical annex on mobile emission sources) also opens the way for wider application of new technologies such as catalytic converters, by requiring all parties to make unleaded fuel available "as a minimum along main international transit routes" as soon as possible and no later than two years after the date on which the protocol enters into force. Verz~canon Another major concern of governments contemplating accession to an international treaty is usually compliance control: regular monitoring to

REGIONAL APPROACHES TO TRANSBOUNDARY AIR POLLUTION 259 ensure that each party lives up to its commitments. In this respect, the LRTAP Convention probably is unique, with periodic reviews of state prac- tice carried out every four years, and with the EMEP monitoring network, which has now been in operation for more than 10 years, internationally accepted as a reference source by participating governments and by the scientific community (Eliassen and Saltbones, 1983; Gosovic, 1989; Israel et al., 1987; United Nations Environment Program [UNEPl, 1986; Wallen, 19864. Few other international agreements can be said to come equipped with verification instruments of this caliber. Weighing the Equities Unlike bilateral transboundary agreements where asymmetries and even inequities are often resolved by ad hoc trade-offs completely unrelated to the alleged environmental purposes of a treaty (Carroll, 1983; Handl, 1986) a stable regional regime must be built on strict reciprocity and fairness to all parties concerned. The needed balance can be achieved by several alternative means, as illustrated by the LRTAP protocols on sulfur and on oxides of nitrogen. The Sulfur Protocol uses a flat-rate percentage reduction comparable to the "bubble" approach of domestic air quality regulation in the United States and the Federal Republic of Germany. This approach was also used in the more recent Montreal protocol on ozone-depleting substances, concluded in September 1987 under the auspices of the UNEP (Szell, 1988~. All emissions from a country are aggregated annually; as long as the overall reduction can be met by the prescribed deadlines, each country is free to choose its own methods for reaching that target. These methods may include cutting emissions from all sources proportionately, or imposing heavier cuts selectively on major emission sources or source categories and then allowing for internal deals and "bubble trades" between them. The percentage is uniform for all parties (30 percent of 1980 levels by 1993), but countries may opt to measure and reduce their annual SO2 transboundary fluxes rather than total national emissions. The Nitrogen Oxides Protocol adopts a uniform flat-rate "freeze" as a first step. It takes a more flexible approach at the second stage, where emission cuts are to be specified selectively on the basis of internation- ally accepted and periodically revised critical loads. Although international standard-setting for environmental purposes is a well-established practice (Contini and Sand, 1972; Sand, 1980), the "critical loads" concept is com- paratively new in air pollution control (Ekman, 1986; Nilsson, 1986~. The closest analogy is the "safe minimum standards" concept used in natural re- sources management (Ciriacy-Wantrup, 1968~. Translating these standards into actual control options and measures will require a sequence of further

260 PETER H. SAND international and national decision-making, also taldng into account ele- ments of welfare economics, including comparative cost-effectiveness and optimal resource allocation (Alcamo et al., 1987; HordiJk, 1988; Pers7son, 1988~. Elaboration of the critical loads concept is part of the mandate given to a new Working Group on Abatement Strategies established for this purpose by the Executive Body for the Convention at its 1988 Sofia session. Even as the regional regime of transbounda~y air pollution control under the Geneva Convention continues to evolve, the basic concern of governments remains essentially as formulated more than 80 years ago by the U.S. Supreme Court in the case of State of Georgia v. Tennessee Copper Company and Ducktown Sulphu'; Copper and Iron Company, Ltd. (U.S. Supreme Court, 1907~: It is a fair and reasonable demand on the part of a sovereign that the air over its territory should not be polluted on a great scale by sulphurous acidic gas; that the forests on its mountains, be they better or worse, and whatever domestic destruction they may have suffered, should not be further destroyed or threatened by the acts of persons beyond its control; and that the crops and orchards on its hills should not be endangered from the same source. NOTE .. Views and opinions expressed are those of the author and do not necessarily reflect those of UN/ECE. REFERENCES Adinolfi, G. 1968. First steps toward European cooperation in reducing air pollution: Activities of the Council of Europe. Law and Contemporary Problems 33:421-426. Alcamo, J., M. Amann, J. P. Hettelingh, M. Holmberg, Lo Hordijk, J. Kamari, L. Kauppi, P. Kauppi, G. Kornai, and A. Makela. 1987. Acidification in Europe: A simulation model for evaluating control strategies. Ambio 16:232-245. Amendola, G., and P. H. Sand. 1975. Translational environmental cooperation between different legal systems in Europe. Earth Law Journal 1:189-195. Applegate, H. G., and C. R. Bath. 1986. Air pollution in a transboundaIy setting: The case of El Paso, Texas, and Ciudad Juarez, Chihuahua. Pp. 96-116 in liansbounda~v Air Pollution: International Legal Aspects of the Cooperation of States, C Flinterman, B. Kwiatkowska, and J. G. Lammers, eds. Dordrecht, Netherlands, and Boston, Mass.: Martinus Nijhoff Publishers. Assamson, B. 1986. Swedish policy on exhausts. Acid Magazine 4:~9. Stockholm: Swedish Environmental Protection Board. Bishop, ~ S., and R. D. Munro. 197Z The UN regional economic commissions and environmental problems. International Organization 26:348 371. Bjorkbom, Lo 1988. Resolution of environmental problems: The use of diplomacy. Pp. 123 137 in International Environmental Diplomacy, J. E. Carroll. ed. C->mbncl~e England: Cambridge University Press. —7 ~ C—7 Bunge, 1: 1986. Itansboundar,, cooperation between France and the Federal Republic of Germany. Pp. 181-198 in 1tansboundary Air Pollution: International Legal Aspects of the Cooperation of States, C Flintelman, B. Kwialkowska! and J. G. Lammers, eds. Dordrecht, Netherlands, and Boston, Mass.: Martinus Nijho~ PublisheIs.

REGIONS APPROACHES TO T~SBOUND~Y AIR POLLUTION 261 Carroll, J. E. 1983. Environmental Diplomacy: An Examination and a Prospective of Canadian-U.S. Transbounda~y Environmental Relations. Ann Arbor, Mich.: University of Michigan Press. Chossudovsky, E. M. 1988. "East-West" Diplomacy for the Environment in the United Nations. E.88/XV/S126. Geneva: United Nations Institute for Raining and Research. Ciriacy-Wantrup, S. V. 1968. Resource Conservation: Economics and Policies, 3rd ed. Berkeley: University of- California Division of Agricultural Sciences. Contini, P., and P. H. Sand. 1972. Methods to expedite environment protection: Interna- tional ecostandards. American Journal of International Law 66:37-59. Dovland, H. 1987. Monitoring European transboundary air pollution. Environment 29(10):10-15, 27-28. Dovland, H., and A. Semb. 1980. Atmospheric transport of pollutants. Pp. 1021 in Proceedings of the International Conference on the Ecological Impact of Acid Precipitation, D. Drablos and ~ Tollan, eds. Oslo, Norway SNSF Project. Ekman, H. 1986. The limits to nature's tolerance. Acid Magazine 4:28 30. Stockholm: Swedish Environmental Protection Board. Eliassen, A. 1978. The OECD study of long-range transport of air pollutants: Long-range transport modelling. Atmospheric Environment 12:479 487. Eliassen, A., and J. Saltbones. 1983. Modelling of long-range transport of sulphur over Europe: A two-year model run and some model experiments. Atmospheric Environment 17:1457-1473. Eliassen, A., O. Hov, T. Iverson, J. Saltbones, and D. Simpson. 1988. Estimates of airborne transbounda~y transport of sulphur and nitrogen over Europe. EMEP/MSC-W Report 1/88. Oslo, Norway: Norwegian Meteorological Institute. EMEP Protocol. 1984. Protocol to the 1979 Convention on Long-Range liansboundary Air Pollution, on long-term financing of the Cooperative Program for Monitoring and Evaluation of the Long-Range Transmission of Air Pollutants in Europe (EMEP). United Nations Document ECE/EB.AIR/11. Reprinted in International Legal Mate- rials 24(1985):484. Ercman, S. 1986. Activities of the Council of Europe and the European Economic Communities related to transbounda~y air pollution. Pp. 131-140 in 1tansbounda~y Air Pollution: International Legal Aspects of the Cooperation of States, C. Fiinterman, B. Kwiatkowska, and J. G. Lammers, eds. Dordrecht, Netherlands, and Boston, Mass.: Martinus Nijhoff Publishers. European Economic Community (EEC). 1988. Council directive of 24 November 1988 on the limitation of emissions of certain pollutants into the air from large combustion plants (88/609/EEC). Official Journal of the European Communities (L 336):1. Fjeld, B. 1976. Forbruk av fossils brensel i Europa og utslipp av SO2 i perioden 1900 1972 (Fossil fuel consumption in Europe and SO2 emissions during the period 1900 1972). NILU report TNI/76. Lillestrom, Norway: Norwegian Institute for Air Research. Frankel, A. 1989. Convention on Long-Range liansbounda~y Air Pollution. Harvard International Law Journal 30.447~77. Goldie, L. F. E. 1972. Development of an international environmental law: An appraisal. Pp. 10~165 in Law, Institutions, and the Global Environment, J. Lo Hargrove, ed. Dobbs Ferry, N.Y.: Oceana Publications. Gosovic, B. 1989. Earthwatch for the liventy-Fint Century: Piecing Together a Global Environment Monitoring System. London: Rutledge. Gundling, L. 1986. Multilateral cooperation of states under the ECE Convention on Long-Range liansbounda~y Air Pollution. Pp. 19-31 in liansbounda~y Air Pollu- tion: International Legal Aspects of the Cooperation of States, C. Flinterman, B. Kwiatkowska, and J. G. Lammers, eds. Dordrecht, Netherlands, and Boston, Mass.: Martinus NiJhoff Publishers. Haas, E. B. 1980. Why collaborate? Issue-linkage and international regimes. World Politics 32:357~05.

262 PETER H. SAND Handl, G. 1986. Transboundary resources in North America: Prospects for a comprehensive management regime. Pp. 63-93 in 1tansboundary Air Pollution: International Legal Aspects of the Cooperation of States, C. Flinterman, B. Kwiatkowska, and J. G. Lammers, eds. Dordrecht, Netherlands, and Boston, Mass.: Martinus Nijhoff Publishers. Hordijk, L. 1988. Linking policy and science: A model approach to acid rain. Environment 30~2~:17-20, 40-42. Israel, Y. A., I. M. Nazarov, and S. D. Fridman, eds. 1987. Monitoring ltansgranichnogo Perenosa Zagryaznyayushchikh Vozdukh Vyeshchestv (Monitoring the transboundary transmission of air pollutants). Leningrad, USSR: Hydro-Met Publications. Krasner, S. D., ed. 1983. International Regimes. Ithaca, N.Y.: Cornell University Press. Lomas, O. 1988. Environmental protection, economic conflict and the European Community. McGill Law Journal 33~3~:506 539. LRTAP Convention. 1979. Convention on Long-Range liansboundary Air Pollution. United Nations Document E/ECEtl010. United States Treaties and International Agreements Series No. 10541. Reprinted in International L-gal Materials 18:1442. Lykke, E. 1977. International effort needed to combat airborne pollution. European Free liade Association (EFTA) Bulletin 18~7~:15-17. Majone, G. 1986. International institutions and the environment. Pp. 351-358 in Sustainable Development of the Biosphere, ~ C. Clark and R F. M~'nn -~1~ C~mhr~r~oP FnolanH Cambrid~e UniversitY Press. ~ —~ ——— ~ b ~ ~ McCaffrey, S. C. 1975. Private P~emedies for liansfrontier Environmental Disturbances. IUCN Environmental Policy and Law paper no. 8. Morges, Switzerland: International Union for Conservation of Nature and Natural Resources. McCormick, J. 1985. Acid Earth: The Global Threat of Acid Pollution. Earthscan, J. Tinker, ed. London and Washington, D.C.: International Institute for Environment and Development. Nilsson, J., ed. 1986. Critical loads for nitrogen and sulphur. Miljo report no. 11. Stockholm, Sweden: Nordic Council of Ministers. Nilsson, S., and P. Duinker. 1987. The extent of forest decline in Europe: A synthesis of su~vey results. Environment 29~9~:4-9, 30-31. Nitrogen Oxides Protocol. 1988. Protocol to the 1979 Convention on Long-Range Transboundary Air Pollution concerning the control of emissions of nitrogen oxides or their transbounda~y fluxes. United Nations Document ECE/EB.AIR/22. Reprinted in International Legal Materials 28~1989~:214. Oil Companies' European Organization for Environmental and Health Protection (CON- CAWE). 1989. Itends in Motor Vehicle Emission and Fuel Consumption Regulations: 1989 Update. Report No. 6/89. The Hague, Netherlands: CONCAWE. Persson, G. 1988. Toward resolution of the acid rain controvemy. Pp. 189-196 in International Environmental Diplomacy, J. E. Carroll. ed. Cambrid~e. En~land Cambridge University Press. ~ _ ~ ~ ~_ ~ ~ A ~ e~—~ ~4— ~r~nz, u. 1987. Causes of forest damage in Europe: Major hypotheses and factors. Environment 29~9~:11-15, 32-37. Read, J. E. 1963. The lLail Smelter dispute. Canadian Yearbook of International Law 1:21~229. Rosencranz, A. 1981. The ECE Convention of 1979 on Long-Range ~ansbounda~y Air - Pollution. American Journal of International Law 75:975-982. Reprinted in Zeitschrift fur Umweltpolitik 4:511-520. Russell, C. S., and H. H. Landsberg. 1971. taxonomy. Science 172:1307-1314. Sand, P. H. 1974. Itansfrontier air pollution and international law. Pp. 107-113 in New Concepts in Air Pollution Research, J. O. Willums, ed. Experientia Supplementum No. 20. Basel, Switzerland: Birkhauser Verlag. Sand, P. H., 1977. The role of domestic procedures in transnational environmental disputes. Pp. 14~202 in Legal Aspects of ~ansfrontier Pollution, H. van Edig, ed. Paris: Organization for Economic Cooperation and Development. International environmental problems: A

REGIONS APPROACHES TO T~SBOUND~Y AIR POLL=ION 263 Sand, P. H. 1980. The creation of transnational rules for environmental protection. Pp. 311-320 in Trends in Environmental Policy and Law, M. Bothe, ed. IUCN Environmental Policy and Law paper no. 15. Gland, Switzerland: International Union for Conservation of Nature and Natural Resources. Sand, P. H. 1987. Air Pollution in Europe: International policy responses. Environment 29~10~:16-20, 28-29, with a correction in Environment 30~1988~2~:42. Sion, I. G. 1981. Regional approach to environmental protection and the UN/ECE Convention on Long-Range Transbounda~y Air Pollution. Revue Roumaine d'Etudes Internationales 15:317~00. Smeets, J. 1982. Air quality limits and guide values for sulphur dioxide and suspended particulate European Community directive. Environmental Monitoring and As- sessment 1:373-382. Stein, R. E. 1972. The potential of regional organizations in managing man's environment. Pp. 253-293 in Law, Institutions, and the Global Environment, J. Lo Hargrove, ed. Dobbs Ferry, N.Y.: Oceana Publications. Sulfur Protocol. 1985. Protocol to the 1979 Convention on Long-Range Transbounda~y Air Pollution, concerning the reduction of sulfur emissions or their transboundary fluxes by at least 30 percent. United Nations Document ECE/EB.AIR/12. Reprinted in International Legal Materials 27~1988~:707. Szasz, P., and J. Willisch. 1983. Regional commissions of the United Nations. Encyclopedia of Public International Law 6:296-301. Amsterdam, Netherlands: North-Holland Publishing. Szell, P. 1988. The Montreal Protocol on Substances that Deplete the Ozone Layer. International Digest of Health Legislation 39:278-282. Tollan, A. 1985. The Convention on Long-Range Transboundary Air Pollution. Journal of World Trade Law 19:615-621. United Nations (UN). 1949. The Mail Smelter Arbitration. Reports of International Arbitral Awards 3:1905-1982. United Nations sales no. 1949.V.2. New York. United Nations Economic Commission for Europe (UN/ECE). 1958. Agreement concerning the adoption of uniform conditions of approval and reciprocal recognition of approval for motor vehicles equipment and parts. United Nations Meaty Series 335:211, 740:364 (as amended/supplemented through 1989~. UN/ECE. 1982. EMEP: The Cooperative Programme for Monitoring and Evaluation of the Long-Range Transmission of Air Pollutants in Europe. Economic Bulletin for Europe 34~1~:29-40. United Nations: Pergamon Press. UN/ECE. 198~1989. Air Pollution Studies, nos. 1-5. United Nations sales nos. E.84.II.E.8, E.85.II.E.17, E.86.II.E.23, E.87.II.E.36, E.89.II.E.25. New York. UN/ECE. 1987a. National strategies and policies for air pollution abatement: Results of the 1986 major review prepared within the framework of the Convention on Long-Range Itansboundar$r Air Pollution. United Nations sales no. E.87.II.E.29. New York. UN/ECE. 1987b. Technologies for control of air pollution from stationary sources. Economic Bulletin for Europe 39~1~:1-244. United Nations: Pergamon Press. United Nations Environment Program (UNEP). 1987. United Nations Environment Pro- gram: Environmental Data Report. Prepared for UNEP by the Monitoring and Assessment Research Centre, London. Oxford and New York: Basil Blackwell. U.S. Supreme Court. 1907. State of Georgia versus Tennessee Copper Company and Ducktown Sulphur, Copper and Iron Company, Ltd. Supreme Court Reporter 206:230; 237:474, at page 477. Utton, ~ E., ed. 1987. Agreement of cooperation between the United Mexican States and the United States of America regarding transboundary air pollution caused by copper smelters along their common border, of JanuaIy 29, 1987. Itansboundary Resources Report 1~3~:5-7. Vygen, H. 1985. Air pollution control: Success of East-West cooperation. Environmental Policy and Law 15:6 8.

264 PETER H. SAND Wallen, C. C. 1986. Sulphur and nitrogen in precipitation: An attempt to use BAPMoN and other data to show regional and global distribution. WMO/ID-no. 103, Environmental Pollution Monitoring and Research Programme no. 26. Geneva, Switzerland: World Meteorological Organization. Walsh, M. P. 1988. Worldwide developments in motor vehicles pollution control reflect per- sisting problems, varying standards, technological growth. International Environment Reporter 11:41-49. Weidner, H. 1986. Japan: The success and limitations of technocratic environmental policy. Policy and Politics 14:43-70. Wetstone, G. S., and A. Rosencranz. 1983. Acid Rain in Europe and North America: National Responses to an International Problem. Washington, D.C.: Environmental Law Institute.

Energy: Production, Consumption, and Consequences. 1990. Pp. 265-277. Washington, D.C.: National Academy Press. Efficiency' Machiavelli' and Buddah ROBERT MALPAS A few years ago, in Japan, I came across the works of Buddha and found the following: There are two kinds of worldly passions that defile and cover over the purity of Buddha-nature. The first is the passion for analysis and discussion by which people become confused in judgment.... The second is the passion for emotional experience by which people's values become confused. If ever there was a subject in danger of too much analysis and too much emotion at the expense of objectivity, that subject is energy. Of course we need analysis to help us understand, and we need well-directed emotion~ven passionate emotion- to get things done. But we must not lose sight of the essential reality in the process: energy is fundamental to our material well-being. Those in the richer countries want more of what energy makes possible to enable more travel; to heat, cool, and illuminate more buildings; to communicate more. The hundreds of millions of people in the poorer countries need more of what energy can provide just to improve the standard of their everyday life. Notice that energy is a means to many ends, and that it is the ends that are desired, not necessarily the energy itself. Yet most analysis, and certainly all of the passionate emotion, is directed to the supply of energy and very little to how more of its fruits can be obtained for less. Associated with this clear need are mounting fears. The events of 1973 and 1979 aroused them worldwide fears concerning the finiteness of oil and, hence, of high prices. The events of Three Mile Island and - 265

266 ROBERT MALPAS Chernobyl raised fears that are severely restricting the growth of nuclear power. Lately, the fear of the greenhouse effect from burning fossil fuels has been spreading fast. That is the overall picture. We need more of the fruits of energy, yet we increasingly fear the environmental effects from using it; we fear for its availability and sometimes its price. There are only a few global forces that affect the energy scene, but they are powerful. In contrast, there are many national forces that impinge mainly on the supply of energy. From all this, a simple common theme suggests itself: the need for energy efficiency. This theme, with some notable exceptions, has been largely overlooked in a large number of supply-side energy analyses. There is a clear option available that will help both to meet the needs and to reduce the fears that have been noted. It is to accelerate the rate at which energy efficiency is increasing, both in its supply and in its use. The oil shocks of 1973 and 1979 provided a great spur through the sudden price increases, but much more can be and needs to be done. The trouble is that, at present, most global forces tend to retard the rate of advance. The purpose of this discussion is to urge the engineering profession to make the drive for greater energy efficiency a powerful global force. I speak as an engineer who works for an oil company. In pursuing a theme that encourages the world to use less of our products, you might wonder how I keep my job. Rest assured that even the most optimistic predictions on energy efficiency will offer more than enough business opportunities, not only to provide the necessary fuels but also to serve the needs that will arise from the quest for greater efficiency. 1b produce more of what you want while using less of what you have is basic to the teaching of all engineers. It is part of our fundamental philosophy. So I would expect all engineers to embrace enthusiastically the policy options that emerge from this attempt to stimulate greater energy efficiency. In the richer countries of the world, each person consumes the energy equivalent of 36 barrels of oil per year. In the United States, energy consumption is 55 barrels per person per year! One might think that policies that result in requiring only, say, 18 barrels to produce more of what is currently wanted by the year 2020 would be vigorously supported. In the poorer countries, 6 barrels per person per year offer only a bare subsistence. If by the year 2020, that same 6 barrels could provide a significantly higher standard of living, one might think that this also would be a goal all would strive to achieve. This will not happen, however, unless much more effort and attention are devoted to demand-side issues and policies. Consider the principal global forces affecting the energy scene. These include supply, in terms of both the quantities of energy available and where the resources are to be

. EFFICIENCY HI, AD BUDDED 267 found, and demand, which determines how much is required. Technology is a major force that constantly shifts the goalposts of both supply and demand. There are political forces that are almost entirely national but have international consequences. Concern about the environment and the world ecosystem is now a major public issue. Then there are those two human factors fear and basic need that are powerful stimulators of all global forces. The fears have already been mentioned. Basic need requires no elaboration, except to say that it leads to decisions being taken on the basis of short-term considerations without any thought of long-term consequences. Unfortunately, the major energy issues are mostly long-term. ~ complete the list of global forces affecting the energy scene, there is the reality of economics. On the macroscale, this encompasses the desire for economic growth vigorously sought after by all people, rich and poor. On the microscale, energy economics includes investment and revenue decisions at national, local, corporate, and individual levels. Let us review these forces briefly. On the supply side, while accounting for less than half of the total energy demand, crude oil still dominates the energy scene. Some would say that its availability and price are the only global forces of any real significance. Certainly, the oil shocks of 1973 and 1979 bear out that claim. They aroused all the fears and hence were an enormous spur to energy efficiency. Equally important, this greater energy efficiency uncoupled economic and energy growth. The one-to-one relationship that had lasted so long seemed Lee an incontrovertible law of economics. Breaking the link was a major event and contributed to the dramatic fall in the oil price in 1986. Crude oil supplies are, however, finite, and although countries in the Organization for Economic Cooperation and Development (OECD) may at present have reduced their dependence on supplies from the Middle East, two-thirds of the world's oil reserves are still located there (Figure 1~. The problem is that the drop in oil prices makes it difficult for the public to recognize this fact. Dire warnings are heeded only when manifested in high prices, not otherwise. Of course, low prices do not encourage investment for greater energy efficiency. On the demand side, the realization that economic growth is no longer directly limited by energy supply has provided an opportunity, which is excellently articulated in the publication Energy for a Sustainable World (Goldemberg et al., 1987~. This opportunity is undoubtedly a force in favor of greater efficiency, but it is still a small force, which must be strengthened. Technology, of course, exerts a major force. The advent of micro- circuits and the microprocessor has resulted in spectacular advances in

268 USA Latin Amen ~ Africa 55:2 r it. ;. ~ .; :; ~ . A. 2-..'0"'0;1-' . FIGURE 1 Proven oil reserves as of 1987 (billions of barrels). ROBERT MALPAS Western Europe 22.4 Centrally Planned Economies 79.2 ~ Canada 7.7 Id ~ _ ~ ~ ~ ~ (~ _~7,,] ~~-~ ~~:~ - _ ~ T~ j? ~ '2'~ W ' ~ ~ Asia & Australasia 19.5 technology, which will continue on their own momentum (e.g., advances in miles per gallon driven or flown, lumens per watt, degrees of heat in our buildings, units of information per unit of energy). Yet, paradoxically the very success of technology, because it reduces energy consumption, also reduces the economic incentive to invest further in greater efficiency. On the supply side, technology has two major effects. It is reducing the price at which it is economic to discover and develop oil fields previously considered uneconomic, and it is reducing the price at which alternatives to crude oil become economic, such as harnessing very heavy oil or converting natural gas to gasoline. World resources of very heavy crude oil and natural gas are each as large as reserves of conventional crude oil. The result of all this is best illustrated by long-term forecasts of the price of crude oil. Planners have become wiser: they now forecast a bracket. In 1986 the upper bound was $30 and the lower, $15. The rationale was that above $30, alternatives to conventional crude would become economical, and that below $15, demand would quickly revive and the economic penalties on suppliers would be too hard to bear. Today the upper bound has already been reduced to $25 in lower valued dollars at that. Of course, we applaud these achievements and call for more; but they do undermine efforts toward higher energy efficiency. The public concludes that technology will come to its rescue on every issue. People believe that technology will continue to extend the finiteness of oil, as indeed it has, and that it will reduce the energy needed per unit of output, without any action \

EFFICIENCY CHILI, ID BUDDER 269 or investment on their part. They also believe that environmental and ecological concerns will be solved by the cavalry technology riding over the hill! (Superconductivity seems to be the name of one of its younger officers!) Lest anyone derives too much comfort from all this, it should be em- phasized that even in the most optimistic energy-efficient scenario available, the United States will, by the year 2000, be importing more than half of its crude oil requirements. Under the heading of technology one must recognize the remarkable increase in the use of electricity in the world. It is unquestionably the most convenient form of energy. It is intense—much more so than fossil fuels and very easy to control, measure, and program. Its growth strongly favors greater energy efficiency. On an international plane, politics is concerned with ensuring that the world is not unduly dependent on its supply of energy from a particular group of governments whoever they may be. At the national level, politics is concerned with self-sufficiency, if possible, or less dependency if not. It means ensuring sufficient energy to sustain national growth, supplying the basic needs of the poor, and raising revenue by taxing energy. It also means protecting local environments and worrying about emissions from neighboring countries. It is predominantly concerned with supply issues. The following are some random examples. Brazil, South Africa, and New Zealand have invested in expensive options to seek greater self-sufficiency: Brazil, in ethanol; South Africa in converting coal to gasoline; and New Zealand, in natural gas conversion to gasoline. These policies are now heavily subsidized because they were predicated on the expectation of high crude oil prices. In France, a few years ago, President Mitterand almost apologized for the decision to reduce the number of construction starts of nuclear power stations from three per year to two. It was an issue of jobs, national pride, and self-sufficiency. In Great Britain today, politicians are justifying raising electricity prices to improve the economics of building new power stations that use coal, at present highly priced, to subsidize the coal mining industry. Also, Great Britain is about to privatize electricity. The prime considerations are evidently not about demand energy efficiency. The United States faces many political challenges on the energy scene. It consumes for its transportation needs half of the total energy used by all OECD countries for less than one-third of the people and also consumes significantly more energy per unit of gross domestic product (GDP) than any other country in the world, except Canada (Figure 2~. Other than in the less developed countries, this ratio has fallen consistently since the early 1970s. The challenge now is to ensure that it continues to fall in the

270 0.60 0.55 0.50 =~ 0.45 0.40 0.35 0.30 0.25 0.20 0.15 ROBERT MALPAS - ;- ~ ",_` __ .` United States — _ 1965 1970 1975 1980 1985 1990 1995 2000 2005 FIGURE 2 Energy intensity (tons of oil equivalent per thousand dollars). future. Looked at another way, we need to extract more value, in terms of economic growth, from each unit of energy we consume; let us turn the index up the other wa~more or less (Figure 3~. There is much to do in the way of formulating policies that rekindle the public's incentives to use energy more efficiently. Then, to reduce increasing U.S. dependence on crude oil imports, we need to stimulate more indigenous exploration and development of known reserves. 6.5 6.0 ~ 5.5 o t; an - cn in ~5 o _' AL 2.0 I InitPc] Estates 1.5 I I I i I I I 1 1965 1970 1975 1980 1985 1990 1995 2000 2005 FIGURE 3 Productivity intensity (thousands of GDP dollars per ton of oil equivalent), the reciprocal of energy intensity (compare with Figure 2~. High values of this indicator result when an economy is producing more with less energy.

EFFICIENCY CHILI, ID BUDDED ~ 9 a) >, 8 an 7 o Hi: o . _ ._ - 6 co 4 of o ct) oh - llJ Cal o 271 ~ ~ ~~ If::: Coal Oil Gas Gas Combined GENERATION METHOD Cycle FIGURE 4 Carbon dioxide (C02) emissions for various fuels (million tons per year). Gas-fired combined cycle generation facilities emit half as much CO2 per gigawatt as conventional coal-fired facilities. Environmental fears and the concern for the world ecosystem are global forces that can be harnessed to encourage energy efficiency. The most effective way of reducing atmospheric pollution both in power gener- ation and in transportation the main culprits is to become more efficient at both. The less consumed the less emitted. This is a simple [act, yet public resolve has been allowed to weaken. For electricity generation, ever-greater efficiency and cleaner fuels must be the objective. Methane is by far the best fossil fuel in this respect. It emits less carbon dioxide per unit of energy than any other fuel and generally produces no oxides of sulfur (Figures 4 and 5~. The only count on which gas may perform less well than other fuels is in NOX emissions, although these are, at worst, comparable with those of other fuels (Figure 6~. Gas lends itself more readily to combined cycle generation, thereby raising the efficiency of generation from just under 40 percent to near 50 percent. Gas wins twice, resulting in about half the carbon dioxide emitted per kilowatt than coal. Not much is heard about this in Europe where gas may be underutilized for power generation. Finally, in a brief review of global forces, there are the realities of microeconomics: that is, the criteria by which investment decisions are judged. Two effects act against greater energy efficiency:

272 ct a) a) ~ 200 o 150 en o Oh of O 50 Oh Oh - llJ O OX Oh ROBERT MA1LPAS _ ~ ~~. ~~ ~~;~;~ : ~~;~:~ :~:~ ~ ~~ If: All: : ~ ~~ i: . ~ ~ E: iF ~ :~ ~~ ~~ ~~;~:~ ;::: If: ~ ~~ ~~ :: .-~-~ .~ ~~ ~~ ~~- ~ i: ~ ~ ~ ~~ ~~ ~~ ~~ ~~ : :~;~ : ~~ ~~ ~~ ~ ~~ ~ ~~ ~. :~-~-~: ~~ ~~ ~~ a ~-~-~-~;~ ~~. ~-~'~'~;~;~ - ~~:~ ~,~.~ ; ~,~ ~~ ;: ~~. ~ ~~.~ ~~ ~~ ~ ~~ ~~ ~~. ~.~.~-~-~;;~ ~~;~ ~-~-~.~-~.~-~ ~~'~.~.~; ~.~.~ :~: ~~.~ i: ~~ i.: :~ ~~ . ; ~~ ~~.~:~ ~~ ~~ Coal Coal Oil Gas Gas 0.5% 3% 2% 0% Combined Sulfur Sulfur Sulfur Sulfur Cycle GENERATION METHOD FIGURE 5 Sulfur oxide (SO=) emissions, by fuel, for the configurations shown in Figure 4 (thousand tons per year). co a) a) Q I,, 40 o + ~ en o - cn of o co en LL Ox 50 45 35 30 25 20 15 to 5 :: ~~ ~ ~ ~ ~ ~~ ~~ ~ ~~ ~~ ~ ~ ~~ ~ ~ ~ ~ :~:~:~::~:~ ~ ~ it: i: a:::: ~~ ~~ ~~ ~~ :: _ ~~;~ :~;~ ~~-~ ~~:~:~;~;~:~ ~:~ _ ~~ ~~ ~~ ~~ E~ ~.~::~:~:~j~:~:~:~ i; ~ ~ ~ ~ ~~ ~~ ~~ ~~ ~~ ~~ ~ ~ ~~ ~~ ~~ ~ ~ ~~ ~:~ ~~:~:~ ~~ ::~:~:~ ~~:~ ::: ~~-~ ~ ~~ ~~;~ ~ ~~ : ? ~~;~ ~~ ~ :~;~ ~~;~;~ ~~ ~~:~:~:~ ~~ ~~:~ ~: :~ ~:~ ~~: ~~ :~:~:~ ~~ ~~ ~~ ~~:~ ~:~:~ ~~ ~~;~ :: ~~ ~~;~ ~ ~~ ~~ ~:~:~ ~~:~:~ ~:~:~ ~~:~ :::: ~~:~ ~:~ ~~ ~ ~~::~ ~ ~~: ~~:~:~:~i~ ~~::~ :: ~~:~ ;~ ~~: ~~ ~~:~:~ ~~ ~~ i: ~~:~:~:~:~:~:~:~: ~~:~ all::: ~~ ~ :::: ~~:~ ~~:~:~ :~ ~ ~~ ~ ~~ ~~j~:~:~ ~~ ~~:~:~:~: ~:~ ~~ ~~ ~~:~: ~~:~:~;~ ~~ ~ ~~ ~~:~ ~ ~~ ~~:~:~ ::~:~;~:;~ ~~;~: ~~:~:~: ~~:~:~:~;~ ~~::~ :~:~;~:~:~::~: : ~::~:::;~:~:~::~ :;: ~~:~;~ :; If:: ~~ ~ :~::~ :: ~~ ~~ ~~:~ :: :~:::~ ~~ ~~ ~ If;:; i: :: ail: ~~ ~~ ~:~ ~ ~~;~;~: ~~ ~~ ~:~ ~~:~ :~:~:~ ~~ ~ ~~ i: ~~ ~~ ~ ~~;~ ~ ~;~ ~~ ~~ ~~ ~ :~:~:~ ~~: :~ ~~ ~~ ~~:~:~ ~:~ : : ::; ~~:~:~;~ ~~ ~~ ~~:~ ~:~:~ ~:~ ~:~ ~:~ hi;: ~~ ;::: ~ ~ ~ ~ ~ ~ ~ ~ ~? ~~ ~ ~ ~ ~ ~~ ~~ ~ ~ ~ ~~ ~ ~ ~ ~ ~~ ~ ~~ ~ ~ ~ ~~ ~ ~ ~ ~ ~~ ~ ~~ ~~ ~~; ~~ ~ i; ~ ~ ~ Coal Oil Gas Gas Combined GENERATION METHOD Cycle FIGURE 6 Nitrogen oxide (NO=) emissions, by fuel, for the configurations shown in Figure 4 (thousand tons per year).

EFFICIENCY HI, AD BUDDED Trucks Aviation High Temperature Process Heat Low-Temperature Space Heating Lighting 273 Domestic Appliances Refining Fossil-Fired Power Generation 0 10 20 30 40 50 60 70 80 90 100 1 10 PERCENT CHANGE FIGURE 7 Current and potential improvement in end-use efficiency (percent change from 1973~. 1. Investments in electricity generation, for example, are based on long lead times, utility rates of return, and payback periods of 15 to 20 years or more. On the other hand, decisions affecting energy demand, taken daily by millions of individuals and corporations worldwide, are based on very short payback periods of 3 to 6 years. 2. There is no way, at present, to reflect in these decisions their long- term consequences for both future supplies and the ecosystem. How can they be brought home to the public, to a present-day value of some sort, even if only qualitative, but nevertheless vivid and real? Cars Current U.S. Average Do not get the impression that nothing is happening with respect to greater efficiency. New aircraft are typically 20 percent more efficient than the stock average. The concept of the energy-efficient house is gaining ground, albeit slowly. In Europe the high-speed 185-mph train is developing and gaining popular appeal. It is more efficient, comfortable, and trouble- free than short air flights. The channel tunnel between England and France will be a further boost. But far more could be done, given the proper incentives, by harnessing existing technology as we develop future technologies (Figure 7~. If the current pace of demand continues and the current rate of improvement in energy efficiency is assured by the year 2020, more than twice as much total energy will be required as is used today. The bulk of

274 12 10 8 Z 6 o J J m 4 2 o ROBERT MALPAS ~0il — [~1 Gas Coal it Nuclear ~ Hydra :.:.:.:.:.:.: :.: .... . .::.:... .................................................... _ -.-.- Conventional +340% + 1 85% + 1 40% +68% High Tech . . . - + 48% illlillill1lllll1llllfT +58% +35% + 1 00% _ it. +34% 1 987 2020 2020 FIGURE 8 Current and possible future energy requirements for the noncommunist world (billion tons of oil equivalent). without the potential benefits of technology, demand will be more than twice current levels by the year 2020. this, it is forecast, can be met only by tripling the consumption of coal the least elegant source of energy used widely today and even this assumes that the use of nuclear power will more than triple. Yet, by harnessing the obvious benefits of technology, the outlook for world energy demand in 2020 could be radically different (Figure 8~. How can we reach the other, much more acceptable scenario—of achieving the same world economic growth over the next 30 years for not much more than current total energy consumption? This will only occur if greater prominence is given to energy demand issues and policies, and if engineers provide the lead. The proposition of using less to produce more, both to conserve resources and to reduce waste, is at the very heart of all engineering philosophy. It is an objective that can find universal support. Greater efficiency, which facilitates greater growth, is a '~virtuous circle" worth striving for and surely on the side of the angels. I call on engineers because it is engineers who harness the extraordinary advances in science. "Science," said Von Karman, "discovers what is; engineers turn this knowledge into things that have never been." So engineers and technologists in general are best equipped to know what can be by using today's science and technology, and what might be by using tomorrow's. Engineers who complain about the short-term attitudes of the public, financiers, accountants, and politicians have somehow allowed themselves

EFFICIENCY MACHL4VELLI, AND BUDDAH 275 to be painted into a corner, to become a service. They should be out there, in front, illustrating the opportunities and their benefits, both qualitative and quantitative. Consider how biotechnologist entrepreneurs have shown that hard-headed investors will put their money into "expectation." The price/earnings ratios of biotechnology stocks are about the future not about quarter-by-quarter results. The challenge facing demand-driven energy policy options is how to influence short-term decisions to take into account long-term opportunity and potential penalties. In this we must seek help from economists. The challenge is similar to that which engineers and technologists constantly face in industry. So let me share with you a simple, powerful, equation imparted several years ago by a colleague; I use it in the task of harnessing technology for profitable growth. "Change," said my friend, "is a function of dissatisfaction, vision, and a practical first step." Dissatisfaction involves the feeling that we can do better, rather than just complaining about how awful things are. Vision is, of course, what engineers and technologists can provide by articulating what might be. The praci!calprst step is what engineers must fashion. This is true also with energy. There is plenty of dissatisfaction and fear. The vision needs to be articulated and propagated by engineers, strongly supported by economists. What specifically should engineers do as a profession? The following are some suggestions. First of all, the drive for greater energy efficiency should be at the top of all our agendas, and should remain there for the next decade. This is not the case today. Perhaps technical meetings could be used more effectively toward this end. Led by the National Academy of Engineering, the Council of Academies of Engineering and Technological Sciences brings together the academies of six nations, and several others are now eager to join this group. This mechanism could be used to have a strong voice, which would be heard worldwide. Second, the excellent studies on energy conservation being carried out by many organizations should be actively supported: in the United States for example, this includes Harvard, Princeton, Berkeley, and the World Resources Institute. Perhaps a new ratio should be developed to measure the productivity of energy, such as gross national product (GNP) per unit of energy. This would heighten public awareness and thus could become a powerful force toward greater energy efficiency. Third is for engineers and economists to devise means and measures to bring home to the public both the quantitative and the qualitative, long- term consequences, penalties, and benefits of day-to-day energy decisions. This is not an easy task, but it must be made to capture the imagination and support of the young, for it is their future we are talking about.

276 ROBERT MALPAS Perhaps a concept introduced by Professor Henry Jacobi of the Mas- sachusetts Institute of Technology might help. He spent some time in Britain developing economic evaluation techniques for projects with long lead times, such as oil exploration. The concept is one of "options for the future," that is, to give a present-day value to the options for the future created by a decision made today—options which would not exist but for that decision. It is particularly useful for investments in new areas of business, new products, and new processes. Other action might be taken to join with, or initiate, a worldwide review of public policy measures that have been successful in promoting greater efficiency through, for example, incentives, penalties, subsidies, and taxes. This would also deter policymakers, who might otherwise be tempted to use them, from those measures that have failed. For example, the CAFE (corporate average fuel economy) legislation in the United States has been remarkably successful in raising the efficiency of U.S. automobiles. This was the only such policy in the world—and a very effective one but the public seems to have turned its back on this. On the other hand, subsidizing energy to help the poor in less developed countries has not worked. Over the longer term, it has failed to alleviate poverty and has been a disincentive to energy efficiency. Finally, even higher priority should be given to improving the safety of operation and the waste disposal of nuclear power stations. Nuclear energy is the cleanest of all fuels and produces no atmospheric waste. It is the ultimate answer to fears of the greenhouse effect, acid rain, and other forms of pollution. One is surprised that environmentalists do not promote it, demanding that it be made safer than it already is. Such actions as these, plus setting out to understand the ecosystem more fully, seem the minimum that engineers should be actively promoting. If the engineering profession can be persuaded to slip into higher gear for more concerted and international action toward greater energy efflciengy, and to assume its natural role as an agent of change, perhaps some words of warning from a wise "business" philosopher are in order. He said: There is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things. For the reformer has enemies in all who profit by the old order, and only lukewarm defenders in all those who would profit by the new order. This lukewarmness arises partly from fear of their adversaries, who have the law in their favor; and partly Mom the incredulity of mankind, who do not truly believe in anything new until they have had actual experience of it. Who wrote that, you may wonder? Schumpeter? Keynes? Friedman? Drucker? It was written by Machiavelli in lhe Prince (chapter 6), published in 1517.

EFFICIENCY HI, AD BUDDED NOTE 277 This discussion tacitly assumes world GNP growth of 3 percent per year and world population growth of 2 percent per year from the present until 2020. REFERENCE Goldemberg, J., T. B. Johansson, ~ K N. Reddy, and R. H. Williams. 1987. Energy for a Sustainable World. Washington, D.C.: World Resources Institute.

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Energy provides a fresh, multidisciplinary approach to energy analysis. Leading experts from diverse fields examine the evolving structure of our energy system from several perspectives. They explore the changing patterns of supply and demand, offer insights into the forces that are driving the changes, and discuss energy planning strategies that take advantage of such insights.

The book addresses several major issues, including the growing vulnerabilities in the U.S. energy system, the influence of technological change, and the role of electricity in meeting social objectives. The strongest of the book's themes is the growing influence of environmental concerns on the global energy system.

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