The Lima climate conference witnessed a tug of war between business leaders, policy makers and activists which fought to advance their own conflicting energy agendas. On the one side are those advocating for 100 percent renewables in the energy mix by 2050. On the other, those backing fossil fuel emphasized the low cost of coal, oil, and gas, their reliability and importance for developing countries and the likely dominance of fossil fuels for decades to come.
Representatives from the oil and gas industry have been keen proponents of carbon capture and storage (CCS) and a carbon tax. According to the International Emissions Trading Association (IETA), CCS has been under research and development for more than twenty years and is technologically mature enough to be deployed on a large scale.
However, the economic incentives are not “quite there yet”, especially for low value products like cement. While it doesn't make sense from an industry perspective to install expensive CCS system for low profit margin production, an adequate carbon tax could potentially effectively solve this problem by increasing the cost of emissions and spurring CCS installation.
CCS has never been implemented on a commercial scale. Therefore, many tend to question whether even assuming the arrival of a global carbon market; CCS could have an impact large enough to slow global warming. Although there are already CCS practices in place, there is uncertainty about the long term implications of underground CO2 storage and how long it can be locked up. Public skepticism about the location of CCS near residential areas also presents a thorny issue.
Renewable energy is certainly not without its own challenges. While it is proven to be a commercial option and its growth in recent years has been phenomenal, it is not in the position to replace fossil fuels in the global energy market in the near future. With more than one billion vehicles burning gasoline and twenty thousand commercial airplanes burning jet fuel, demand for petroleum is unlikely to shrink.
Improving technology in electricity storage, developing better transmission lines and better energy efficiency will be needed to support renewable energy to replace fossil fuel energy. The dominance of petrochemical products in the modern economy including construction materials, pharmaceutical drugs, cosmetics, paint also presents a major challenge in the shift away from fossil fuels.
Energy security, defined by the International Energy Agency (IEA) as the uninterrupted supply of energy at an affordable price, is a sticking point that we cannot bypass in the discussion of climate change. Immediate action is needed on two fronts: to implement options that are available today for more efficient energy use and low-emissions supply, and to put in place the conditions for longer-term structural changes to more efficient and low-emissions energy system.
Effective policy making should strive for an optimal mix of solutions though leveraging market mechanisms. In this prolonged battle against climate change, neither CCS nor renewable energy can be the only answer.