There is no shortage of options and suggestions for how to address climate change. The more difficult task is determining which solutions, or mix of solutions, will reduce greenhouse gas emissions on the scale of what is needed to avoid disasterous climate change impacts.
In the face of rapidly developing economies, population growth, and rising energy demand, it is clear that technology absolutely must be part of the solution. We will need significantly cleaner energy sources than the ones used today. And we need much faster market penetration than has been the historic norm.
In a 2004 Science Magazine article, Princeton professors Rob Socolow and Stephen Pacala introduced the wedge approach to frame this debate. The idea is elegant and simple. To stabilize emissions in the next 50 years, the world must reduce emissions by about 7 gigatons of carbon (not carbon dioxide) compared to “business as usual” scenarios. So Socolow and Pacala identify 15 stabilization wedges that, if deployed at a significant global scale, could concievably reduce emissions by 1 gigaton each.
At 1 gigaton apiece, each technology wedge still represents a huge investment, but they are nonetheless conceivable. Some examples of the 15 proposed stabilization wedges:
- Increase fuel economy for 2 billion cars from 30 to 60 mpg
- Cut carbon emissions by 25% in buildings and appliances projected for 2054
- Add 4 million 1-MW-peak windmills (100 times current capacity)
- Add 100 times the current Brazil or U.S. ethanol production, with the use of 250 million hectares (one-sixth of world cropland)
- Introduce carbon capture and sequestration (CCS) at 800 GW worth of coal plants or 1,600 GW worth of natural gas plants (U.S. coal plants have an average capacity of roughly 1 GW).
7 gigatons of reductions are needed to achieve stabilization, so 7 of 15 wedges would, in theory, reach that goal. If deeper reductions become necessary, additional wedges could be added to the mix.
The challenge for policymakers is to decide which wedges are preferable, and how to redirect capital towards the deployment of preferred technologies. WRI’s climate policy and capital markets projects are teaming up to answer these critical questions.
Now Goldman Sachs wants to take the wedge model to the next stage. A partnership with WRI’s wedge deployment project will analyze the best ways to accelerate the global adoption of technologies in the wedge model through government policies, corporate action, and financial investment. In other words, turn the wedge approach into action as quickly as possible.
The research project will analyze:
- Market potential and barriers of key low carbon technologies.
- Government policies that can lead to breakthrough and rapid deployment of clean technologies
- Which companies are positioned to deliver these technologies
The project will also identify the most promising technology options, and develop a roadmap for policymakers to propogate those options on a large scale to address climate change.
- Fred Wellington, Senior Associate II, Senior Financial AnalystFred Wellington focuses primarily on the financial and competitive implications of climate change and he works with several investment banks on environmental finance topics.