Climate Policy Imbalance in the Energy Sector: Time to Focus on the Value of CO2 Utilization

Abstract

Global warming is an existential threat to humanity and the rapid energy transition, which is required, will be the defining social, political and technical challenge of the 21st century. Practical experience and research results of recent years have showed that our actions to cover the gap between real situation and aims of climate agreements are not enough and that improvements in climate policy are needed, primarily in the energy sector. It is becoming increasingly clear that hydrocarbon resources, which production volume is increasing annually, will remain a significant part of the global fuel balance in the foreseeable future. Taking this into account, the main problem of the current climate policy is a limited portfolio of technologies, focused on replacement of hydrocarbon resources with renewable energy, without proper attention to an alternative ways of decreasing carbon intensity, such as carbon sequestration options. This study shows the need to review the existing climate policy portfolios through reorientation to CO2 utilization and disposal technologies and in terms of forming an appropriate appreciation for the role of hydrocarbon industries as the basis for the development of CO2-based production chains. In this paper we argue that: (1) focusing climate investments on a limited portfolio of energy technologies may become a trap that keeps us from achieving global emissions goals; (2) accounting for greenhouse gas (GHG) emissions losses, without taking into account the potential social effects of utilization, is a barrier to diversifying climate strategies; (3) with regard to hydrocarbon industries, a transition from destructive to creative measures aimed at implementing environmental projects is needed; (4) there are no cheap climate solutions, but the present cost of reducing CO2 emissions exceeds any estimate of the social cost of carbon.