Mike Aucott

Carbon Tax Center

Pricing carbon efficiently and equitably

A Novel Way to Price Industrial Carbon Emissions?

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First, the Supreme Court blows up EPA’s carbon-regulating authority under the Clean Air Act. Then Joe Manchin torpedoes President Biden’s Build Back Better package.

Climate policy is on the ropes. Is carbon pricing’s moment at hand? Can it move forward in the face of Republican opposition and Democratic indifference?

No federal legislation with a price on carbon has advanced to a floor vote since the “Waxman-Markey” American Clean Energy and Security Act cap-and-trade bill died in the Senate in 2010. Now Senator Sheldon Whitehouse (D-RI), perhaps Congress’s most outspoken climate hawk, is seeking to tax manufacturers of steel, aluminum, cement and other industrial commodities to the extent that the carbon intensity of their manufacturing process exceeds U.S. averages.

If coupled with a carbon border adjustment mechanism, this approach could establish a U.S. beachhead for carbon emissions pricing at the federal level. The key is its potential to benefit American industry. As Whitehouse puts it, his Clean Competition Act (S. 4355), would “give American companies a step up in the global marketplace while lowering carbon emissions at home and abroad.”

The concept resembles the European Union’s carbon border adjustment mechanism (CBAM) proposal. The Clean Competition Act would charge manufacturers of widely used basic industrial commodities a fee based on their carbon emissions intensity. Firms whose carbon intensity is greater than the U.S. average for that industry would be charged, however, along with importers of goods whose carbon intensity exceeds that of its U.S.-produced counterpart.

Manufacturing and Climate Change

Industrial production is a major generator of climate change. Iron and steel manufacture is responsible for around 8% of global CO2 emissions, according to McKinsey, and aluminum production for around 2%, with cement and ammonia close behind. Current laissez-faire trade policies favor carbon-intensive imports and thus incentivize production in regions with lax emission standards, a phenomenon noted recently in a commentary in Science by 35 academics, mostly from the European Union though including a handful from the U.S. Although raw materials and intermediate goods tend to have high CO2 emissions per unit of value added, they typically face lower tariffs than more finished products with lower carbon intensities.

Whitehouse sees his bill as a way to use U.S. trade policy to drive climate action. He also views its potential to boost U.S. industrial competitiveness as a way to attract bipartisan support. Holcim U.S., whose parent company, Lafarge Holcim, is America’s largest cement manufacturer, supports Whitehouse’s bill.

In its current form, the Clean Competition Act is more conceptual than prescriptive. Should it pass Congress, it will fall to the U.S. Treasury Dept. to codify regulations through administrative rulemaking, which could be complex.

U.S. industrial facilities currently report greenhouse gas emissions to EPA. The bill would use these data and also require submission of electricity use and product weight of covered goods.

So far, so good. Data reporting could be trickier for imported goods, however. Whitehouse’s bill states that, absent specific data, the carbon intensity of an imported good shall be that country’s GDP divided by its “production-based greenhouse gas emissions,” i.e., its economy’s overall carbon intensity. While country-level fossil fuel emissions and GDP data are available, translating those figures to a country’s CO2 emissions per unit of product could be contentious.

Carbon Intensities Compared

Whitehouse and colleagues argue that the U.S. economy is only around half as carbon-intensive as our trading partners’, on average — two-thirds less than China, and three-fourths less than India. While these differences hold promise for attracting domestic political support, they’re not stand-ins for industry-specific data, especially insofar as ratios for specific industrial sectors appear to be less steep.

Steel

According to a recent analysis, U.S. manufacture of steel in blast furnaces and basic oxygen furnaces (BF-BOF) is estimated to emit an average of 1.9 tons of CO2 per ton of crude steel. The respective factors for China and India are 2.1 tCO2/t and 2.9 tCO2/t. Since the U.S. also produces steel in efficient electric arc furnaces utilizing scrap metal, these differences may understate the U.S. advantage. Another study, by the Climate Leadership Council (CLC), found that indeed, the prevalence of electric arc furnaces, the relatively low carbon footprint of U.S. electricity production, and a greater reliance on natural gas rather than coal give U.S. steel production a significant advantage over virtually all major trading partners.

Aluminum and other commodities

U.S. aluminum manufacturers also fare well, with an average carbon intensity of just under 8 tCO2/t vs. nearly 13 tCO2/t for China and 15.5 tCO2/t for India. With cement, however, U.S. production is less energy-efficient on average than in China and India, which have newer factories. However, those countries’ greater coal-dependence for electricity generation may tip the carbon intensity scale in favor of the U.S. For ammonia, the U.S. is likely less carbon-intensive than coal-reliant China, which emits an estimated 45% of that sector’s worldwide CO2 emissions while producing only 30% of the product.

Another factor to consider in evaluating the performance of U.S. industry vs. trading partners is the country of origin. According to the USGS Mineral Commodity Summaries, most U.S. steel imports come from Canada, Brazil and Mexico, while most of our imported cement comes from Canada and Turkey, and most of our imported aluminum from Canada.

Still, China dominates world production of steel, and if CBAM should become established with the European Union or, better yet, with a “climate club” including the U.S., Canada, the UK, the EU and Japan, China’s CO2 emission liability could motivate it to reduce its emissions rather than be disadvantaged in international markets.

Outlook

Could America’s overall carbon superiority over our trading partners help Sen. Whitehouse’s Clean Competition Act attract support from House and Senate Republicans? Climate Leadership Council V-P Catrina Rorke, in a June 13 presentation to Citizens’ Climate Lobby members, cited interest among Republican senators in connecting trade and greenhouse gas emissions. In an August 2021 letter to President Biden, 19 G.O.P. Senators led by Kevin Cramer (R-ND) and Dan Sullivan (R-AS) called on the U.S. to work with EU and other trading partners to design a common approach to climate and trade policy.

While bipartisan action would fly in the face of a dozen years of untempered Republican opposition to climate policy, Sen. Whitehouse is to be commended for pursuing his novel approach. For the climate’s sake, let’s hope his efforts aren’t unrequited.

Renewables Conundrum: Wind and Solar’s Rapid Growth Isn’t Decarbonizing Fast Enough

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Encouraging reports keep emerging about growth prospects for renewable energy. The International Energy Agency’s November report, Renewables 2020: Analysis and forecast to 2025, projects that by 2025 electricity from renewable sources will surpass that from coal, the world’s biggest and dirtiest power source. Also last month, Max Roser, writing in Our World in Data, became the latest journalist to report that in most parts of the world, new wind and solar generating stations can make electricity more cheaply than new plants powered by fossil fuels.

The common driver behind both developments is renewable technologies’ impressive learning curves. Each doubling of cumulative installed capacity has brought a constant price decline, which Roser pegs at about 20% (see chart). The upshot, say Roser and others, is that large investments into scaling up renewable technologies will pay off with still cheaper prices, driving a “virtuous cycle” of ever-cheaper wind and solar power.

Fossil fuel power had its own learning curve, mostly from ever-larger generators, but these petered out a half-century ago. In the competition between carbon-based and carbon-free power, it seems the latter’s price advantage will only grow. This should ensure that the world’s new power supply comes mostly from zero-carbon sources — even without carbon taxes or other carbon-pricing measures.

These reports generated lots of enthusiasm. The British NGO Carbon Brief headlined its story on the IEA report, Wind and solar capacity will overtake both gas and coal globally by 2024. On Twitter, New York Times columnist Paul Krugman touted Roser’s cost curves as evidence of a “technological miracle” portending that “heading off catastrophic climate change now looks vastly easier than we could have imagined.”

Growth in renewables clearly is cause for optimism. But does it herald rapid decarbonization by itself, without aggressive complementary policies? Let’s consider.

First, the IEA prediction that wind and solar capacity will overtake that of gas and coal by 2024 doesn’t equate to these sources overtaking those fuel’s electricity production by then. Wind and solar generators have lower maximum capacity factors than the coal and gas power plants they are intended to replace. This puts the ascendancy of wind and solar over coal and gas in terms of electricity generated — the metric that matters for cutting CO2 — further off in the future.

Second, IEA’s renewables category included hydropower, which in 2019 generated twice as much electricity as solar and wind combined. (Current energy data in this post are for 2019 and are drawn from BP’s Statistical Review of World Energy, 2020.) But hydro isn’t going to grow much. The most productive sites have already been developed, and opposition is fierce in any case. Going forward, the heavy lifting for renewables must be done primarily by solar and wind.

Unfortunately, the evidence is strong that renewables’ exponential growth phase has ended. This shouldn’t be surprising. As I discussed in my June 9 and July 2 posts, nothing, whether it be technologies or bacterial colonies, grows exponentially — increasing by a given percentage each year — indefinitely. The one notable exception, and the iconic one, has been the steady doubling of the number of transistors on a computer chip, although, as engineering and technology blogger John Loeffler explains, even that exponential growth rate has begun slowing.

For both solar and wind electricity output, what was exponential growth has now entered the linear phase — increasing by a given absolute amount per year. My earlier posts make this clear at the global level. Since the U.S. is further along in developing renewables than most other countries, their contributions to energy supply here probably represent an upside of their global potential. And linear trends in both solar and wind electricity production now seem well-established for the U.S., as the chart at right shows.

Still, it’s fair to ask why, given the steady percentage drop in prices of solar modules noted by Roser, IEA, Naam and others, solar electricity production (for example) is no longer growing exponentially. There are two main reasons.

First, even with the downward pressure of the learning curve, the drop in the price of modules must level off, due to sheer arithmetic: as costs fall, the same percentage drop in costs translates to ever-smaller numerical drops.

Look again at the cost data from the “Our World in Data” chart at the top of this post, this time plotted on an arithmetic scale.

See how the declines in the cost of solar modules level off over time. World installed solar PV capacity currently stands at about 600,000 MW, with a price at the margin of about $0.36 per watt. Using Roser’s relationship of costs declining by 20% with each doubling of capacity, today’s costs are about $0.20 per watt less than five years ago, when world installed capacity stood at around 200,000 MW. If world solar capacity keeps growing at the historical rate, reaching 3,500,000 MW in 2050, its cost will have dropped only another $0.20 per watt — a decline of less than a penny per year.

The second and perhaps more important factor is that the cost of solar modules no longer dominates the total cost of PV installations. Solar projects require inverters, trackers, cabling and mounting, as well as labor and often land. Actually bringing each job to fruition also entails permitting, along with insurance and other business and contractual steps. While small-scale solar installations present somewhat different “balance-of-system” cost scenarios than utility-scale installations, the same general dynamics are at play in both.

Few if any of these balance-of-system costs follow steep learning curves. True, business arrangements have evolved toward greater efficiency as solar has expanded from its initial seat-of-the-pants basis. (This is true for wind power as well.) But these cost economies are finite and modest.

The result is that the total costs of new solar and wind energy facilities are levelling off, as shown in the charts below from lazard.com.

Source: Lazard.com, “Levelized Cost of Energy and Levelized Cost of Storage – 2020,” posted Oct. 19, 2020.

Moreover, these individual-facility costs do not include the costs to accommodate the variable nature of solar and wind power production, such as electricity storage (more on this below). Nor do today’s solar price reports or quotes include safe disposal of the panels once their useful life (of 25 years of so) is over.

Still, could renewables’ ostensible price parity (or superiority) versus fossil electricity augur a return to exponential growth for annual wind and solar additions?

Such a change would be shocking. Current growth trends are so robustly linear, and prospective declines in costs of new wind and solar projects are so gradual, that a shift back to exponential growth seems unlikely, at least under current market conditions.

Even the “monster wind turbines” that the New York Times said in a New Year’s Day headline were “upending the [green-power] industry” are more an extension of increases in turbine scale that have continually cut wind-power costs, rather than the harbinger of a dramatic price breakthrough that could accelerate renewables’ growth rate.

In addition to new policies that would favor renewables, two technological developments could change this picture.

One would be a breakthrough in electricity storage technology. A recent study by Jessika Trancik’s group at MIT estimates that dropping storage costs to approximately $150/kWh would allow variable sources such as wind and solar to fulfill all but 5 percent of electricity requirements — not quite a carbon-free grid, but almost. That would entail a roughly five-fold reduction from current costs, a development that energy blogger David Roberts believes may be closer than we think.

The other change would be increases in energy efficiency sufficient to allow the growth in renewables to slash fossil fuel combustion rather than simply cut down on its growth, even as the world replaces with carbon-free electric power the carbon-based liquid fuels that today power transportation and most space heating and process heat. Unless those energy requirements are reduced significantly, replacing them with electric power — as decarbonization requires — will vastly increase the quantity of electricity needed to power our economy.

Let’s assume that major conversions to electricity will be accomplished. How much will electricity demand grow? Projections vary (the uncertainties are wide), but it is likely that without extensive cuts in consumption, electrification sufficient to eliminate U.S. fossil fuel combustion will at least double electricity demand.

For example, Princeton University’s new, ambitious Net-Zero America modeling effort has concluded that all-electric scenarios eliminating U.S. carbon emissions by 2050 will require between a doubling and quadrupling of nationwide electricity generation. (See p. 75 of the linked report.)

This daunting increase range is broadly consistent with global projections by the U.S. NGO Resources for the Future, in its Global Energy Outlook, as well as estimates made with the En-ROADS simulation tool discussed in my July post. On a far smaller scale, it is also in harmony with the projection developed for my home state of New Jersey’s 2019 Energy Master Plan, that fully electrifying transportation and buildings sectors in that state will more than double electricity requirements by 2050.

If in fact U.S. electricity usage more than doubles by 2050, our total electric output then will reach 8,800 TWh. Yet wind and solar, growing at their current linear rate, are on track to provide the U.S. only about 1,550 TWh, or just 18% of that total, as our final chart indicates. Without concerted effort to change the current trajectory, most of the remaining electricity will come from combustion of fossil fuels.

The time left to phase out carbon fuels and avoid the worst effects of climate change is dwindling fast. Growth in solar and wind isn’t close to accomplishing that. Denying this borders on magical thinking. And bad magic at that, since it could undermine efforts to enact a powerful and potentially progressive tool to support U.S. decarbonization: a transparent and robustly rising price on carbon.

Ed. Note: The paragraph about “monster-size” wind turbines was added several days after this post went up.

What does the cessation of renewables’ exponential growth augur for climate policy?

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World solar and wind electricity production data for 2019 have just been released, and they appear to confirm the trend we discerned in our June 9 post, How fast can solar push out fossil fuels?. Exponential growth appears to be finished for both of these pillars of renewable energy.

In this post we show that the linear growth pattern into which solar and wind have apparently settled, while impressive on many counts, isn’t steep enough to displace fossil fuels fast enough to avert climate catastrophe.

There’s no question that solar and wind have grown rapidly worldwide, stimulating hopes that these technologies represent a transformational juggernaut that can carry us into a fossil fuel-free future. Between 2000 and 2016 global solar electricity production grew at an average rate of 44% per year while wind electricity production, starting from a larger base, grew at 25% per year, according to the BP Statistical Review of World Energy, 2020.

A consistent increase by a constant percentage represents exponential growth. Continuation of the 2000-2016 percentage growth rates would lead to enough energy production to blow fossil fuels out of the picture within several decades. But a closer look reveals that solar and wind’s worldwide percentage growth rates have recently been declining. Figures 1 and 2 above show actual growth to 2016. Figures 3 and 4 add production that would have been expected through 2019 and this year as well if exponential growth had persisted, with the yearly growth percentages to 2016 remaining constant.

The takeaway from Figures 3 and 4 is that solar and wind appear to be transitioning from their early, exciting, exponential growth phase into a more settled linear pattern. In each year from 2016 to 2019 global solar electricity grew only by approximately the same absolute amount per year, not by over 40% per year as it had earlier. A straight line fits this recent trend well, indicating a linear (i.e., additive), not exponential (i.e., percentage) rate of increase. The same applies to wind.

That solar and wind growth should transition from exponential to linear shouldn’t come as a surprise. As I noted in my June 9 post, maintaining exponential growth over long periods of time is extremely challenging. Most technologies, after an initial exponential growth spurt, tend to grow in a linear manner, adding a more-or-less constant increment each period. This pattern fits U.S. automobile ownership, railroad track mileage and electricity production — despite consistent technological improvements — to name just a few technologies, and natural systems as well.

If the solar and wind transition to linear growth is confirmed over the next few years, how much electricity production are they likely to contribute by 2040? Linear growth would represent more-or-less steady production of a constant amount of new capacity each year, with the amount being a function of manufacturing capacity and other constraints such as siting and financing. Based on their 2016-2019 growth, the upper limits of future annual growth are 161 TWh/y for solar and 216 TWh/y for wind. (These are upper limits, at the 95% confidence level; mean growth rates for 2016-2019 were 132 TWh/y for solar and 153 TWh/y for wind.) Solar would then provide about 4,000 TWh to world electricity supply in 2040, and wind approximately 6,000 TWh, as Figures 5 and 6 show.

To put these future productions levels in context, we need to look at how much electricity production will be required. World electricity production last year totaled about 27,000 terawatt hours. That figure will almost certainly grow not only to spread prosperity to the one to two billion people who currently use little or no electricity, but to shift provision of transportation, heating and factory production to electricity from petroleum fuels on account of climate concerns.

In a recent report, Global Energy Outlook, the U.S. NGO Resources for the Future (RFF) reviewed and compared projections from some of the world’s leading energy institutions. Because many of the projections used different assumptions, RFF “harmonized” them to bring them into an apples-to-apples alignment. An approximate average of these projections is that world production of electricity will grow by 2040 to about 40,000 TWh. I myself derived a considerably higher figure for the same year, around 70,000 TWh, when I used the En-ROADS simulation tool developed by Climate Interactive, Ventana Systems and MIT Sloan School and set electrification of transportation, buildings, and industry to a maximum level. (Projections this far into the future are fraught with uncertainty but are nevertheless useful in framing the discussion.)

In a non-climate-challenged world, steady linear growth leading to a total 10,000 TWh of production from these two renewable sources by 2040 would be a worthy achievement. But it’s barely a third of today’s electricity consumption, and just one-fourth or less of the expanded generation that’s likely to be needed in that year. Without major changes that significantly accelerate development of low- and zero-carbon power sources, or that drastically reduce the need for energy, the “missing” electricity will come from fossil fuels, exacerbating the already ominous impacts of climate change.

Such major changes could include emergence of one or more disruptive new technologies, such as utility-scale storage cheap enough to ameliorate wind’s and solar’s intermittency, more efficient methods of harnessing solar, wind, and geothermal energy, a radically different, easily deployable version of nuclear power, or something else not yet above the horizon.  The need for new low-carbon tech was underscored this week by the International Energy Agency, whose new Clean Energy Innovation report concluded that “Without a major acceleration in clean energy innovation, net-zero emissions targets will not be achievable.”

Another major change could be a revolutionary policy that dramatically accelerates progress in energy efficiency and funnels significantly more funding to R&D of new power sources. One policy that could catalyze that is a steadily increasing fee on emissions of carbon dioxide. Pricing carbon emissions so that uses of fossil fuels include their true climate costs would incentivize development of low- and zero-carbon power sources and encourage the full gamut of low-carbon alternatives from energy efficiency and conservation to more-efficient and less-carbon intensive factories, transport and electricity. This could be done in an income-progressive, revenue-neutral fashion, as in proposed legislation H.R. 763, the Energy Innovation and Carbon Dividend Act, introduced early last year by Representative Ted Deutch (D-FL).

But the time left to phase out fossil fuels and avoid the worst effects of climate change is dwindling fast. After three consecutive years of incontrovertibly linear (additive) growth — extrapolation of which leads to scenarios falling far short of what’s needed to meet the twin imperatives of prosperity and decarbonization — the onus should be on renewables advocates to demonstrate why the world’s hopes should continue to be placed largely on solar and wind.

How fast can solar push out fossil fuels?

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Five years ago, novelist and technologist Ramez Naam published a series of articles, collectively titled How Far Can Renewables Go? Pretty Darn Far, in which he wove empirical data into declining-cost curves for wind power, solar photovoltaic cells and battery storage that pointed, in his estimation, to prodigious future growth paths for renewables in the U.S.

Now, in a new post, Solar’s Future Is Insanely Cheap, Raam carries optimism about solar photovoltaics to a new height.

A classic early-stage growth curve: year-on-year increments increase, but year-on-year percent changes decrease.

He demonstrates that costs of utility scale solar electricity in the U.S., China, India and the world as a whole have dropped by a factor of five since 2010, putting them at around $50 per megawatt-hour (5 cents per kWh), the low end of the cost range for new fossil-fuel generating plants. He points out that most forecasts, including his own, have underestimated the speed of decline in solar costs.

Predictions

This 10-year record of plummeting solar PV costs is impressive and heartening. But what can it tell us about the next 10 or more years? To predict the cost of solar electricity going forward, Naam uses a “learning curve” approach based on Wright’s Law, a staple of industrial engineering that states that, for many technologies, each doubling of cumulative production leads to a constant percentage decline in the cost of that technology. (The decline rate varies across technologies but tends to be constant for each.)

By Naam’s account, Wright’s Law has been found to apply to at least sixty technologies. Naam demonstrates it via falling prices for Henry Ford’s Model T as its production grew steadily through the period 1909 to 1923. He then compares the cost of utility-scale electricity with global cumulative installed capacity of solar, and, just as Wright’s Law would predict, finds a smooth and steady decline, which he depicts in the chart at right, below.

Reproduced from Ramez Naam, “Solar’s Future Is Insanely Cheap,” May 2020 (see link in text).

By plotting these data on a log/log scale (not shown here), as befits “power laws” like Wright’s Law, Naam finds that the cost of utility-scale solar generating facilities has dropped by 30% to 40% for each doubling of installed capacity. This coefficient is at the high end of “doubling elasticties” in those sixty or so technologies that are said to conform to Wright’s Law.

If ever there was cause for optimism that solar power (and perhaps its renewable-power cousin, wind turbines) can keep getting cheaper at a fast enough rate to permit and justify massive deployment (which in turn will keep driving down costs), it is Raam’s May 2020 post. Think of it: just two more doublings in cumulative production (and installed capacity) will drive down costs by another one-half to two-thirds. Affordable, irresistible solar is coming to save us from fossil fuels and climate change.

There’s a problem with this approach, however. The solar costs that Naam has plotted are total installed costs. Thus, they include not only the cost of the solar panels (modules) but the costs of inverters, trackers, cabling, mounting systems, land and labor, not to mention the business relationships and contractual arrangements necessary to actually bring each job to fruition. These so-called balance of system (BoS) costs currently account for 2/3 of the cost of solar installations, by Naam’s admission. And while it is true that the “inertia” in BoS costs means that the costs of the modules themselves have fallen even faster since 2010 than the 80 percent overall drop in solar costs in that time (that’s the 5-fold drop we noted earlier), this same inertia seems almost certain to drag down the rate of cost decline going forward.

And in fact since 2010, costs of modules have dropped approximately 10-fold; twice as much as solar installations as a whole, which means that the other parts of solar costs fell less impressively (see this and this). The slower learning rate for BoS solar costs suggests that while the modules, with their very high learning rate, might theoretically cost next to nothing, the inertia in at least some BoS costs could mean that, no matter how many megawatts and gigawatts of solar are installed here and globally, the full cost of solar electricity may level off and be unable to fall below a certain level.

Even if we assume as Naam does that a 30% to 40% learning rate applies more or less uniformly to all solar costs, including modules and BoS items, cumulative installed capacity will have to double to achieve each approximate 35% drop in cost. Successive doublings in generating capacity require larger and larger absolute increases. World solar generating capacity was about 1 gigawatt in 2000. It was over twice that in 2003, and twice that, about 4 gigawatts, in 2005. Today world solar generating capacity is about 600 gigawatts. Growing from 600 to 1200 gigawatts, and then again from 1200 to 2400 gigawatts, requires vastly more production of panels and other necessary materials than growing from 1 to 2 gigawatts and then from 2 to 4 gigawatts, etc.

In order for cumulative installed solar capacity to double and then double again by 2030, for example, solar’s rate of growth would have to maintain exponential growth in the range of 15% per year. Whether such a continued high rate of growth is at all feasible is a fair question.

Chart by author from data in U.S. DOE 2018 Transportation Energy Data Book.

Learning from History: Autos, Railroads, Electricity

U.S. solar growth has slowed of late, taking three years for its most recent doubling, from 2016 to 2019, which Naam refreshingly acknowledges, noting that “solar growth has very clearly slowed over the past few years.” This slowdown in solar’s growth in the face of continued dramatic declines in costs signals that other factors are involved than cost alone.

In short, cost declines following Wright’s law may not translate directly to increased deployment. Take Naam’s example of the Model T. U.S. motor vehicle ownership grew exponentially from around 1900 to 1920 but then settled into a long period or more of less linear growth, as indicated in the chart above.  (In this figure and the two following it, exponential growth rates were selected that produce curves that approximately match actual data for the early years.)

Chart by author from data in “Train Factory” exhibit and sources noted therein, Franklin Institute, Phila. PA, 2016.

Another example, shown at left, is U.S. railroad track mileage, which surged in the 1850s and 60s and then also settled into a long period of linear growth.

A third example, shown further below, is U.S. electricity generation. An exponential growth rate of about 9% per year is apparent from 1900 until the mid-1950s. Exponential growth slowed around then, and by 1970 growth had settled into a more-or-less linear pattern.

Few technologies — or natural systems, for that matter — grow in an exponential manner for long (Smil, 2014, Kramer & Haigh, 2009.) Instead, “growth curves” are characterized by an early exponential period that transitions to a linear phase, adding a more-or-less constant increment each period, which eventually levels off as constraints increasingly come into play and limit further growth.

Chart by author from data in “Energy” tab of Carbon Tax Center carbon-tax spreadsheet, accessed June 6, 2020.

Growth in both motor vehicle ownership and railroad track mileage became linear despite ongoing innovations in the technologies themselves and improvements in manufacturing methods as production continued to increase. A similar pattern is apparent with U.S. electricity generation; growth gradually transitioned from exponential to linear during the ‘60s and ‘70s, as decades of declining costs (which enabled utilities to discount rates for big users) ground to a halt. Since 2005 growth in electricity use has ceased altogether, primarily due to large-scale dissemination of energy efficiency (see reference to Komanoff analysis, below).

How fast will solar electricity production grow?

Naam’s discussion of solar electricity’s declining costs is important because it can shed light on how far and fast solar electricity generation is likely to grow. In particular, can solar output grow rapidly enough to displace enough coal and natural gas to help avert climate catastrophe?

To be sure, growth in solar electricity is already pushing out fossil fuel use in the United States and other countries. In the U.S., the roughly 100 TWh increase in solar electricity production since 2005 was great enough to avert burning coal and gas that would have emitted 74 million metric tons of carbon dioxide in 2019, according to an analysis released last month by Carbon Tax Center director Charles Komanoff.

Yet that accomplishment pales beside the 1,618 million metric tons actually emitted by U.S. power plants last year. And the need for large-scale electrification of transport and heating — in order to displace petroleum — only magnifies the growth required of solar (and wind), and perhaps from other advanced energy sources such as next-generation nuclear and enhanced geothermal, to fully decarbonize the  economy.-

Unfortunately, Naam doesn’t venture to predict the pace of solar growth, either for the U.S. alone or for the world as a whole. That is probably wise, seeing as that at this point, and probably for some time to come, there is no way to divine whether to extrapolate past growth figures linearly or exponentially. We’ll revisit this issue in a follow-on post scheduled for the first week of July.