In addition to developments in transport technology, two complementary fuel production trends emerge in the sustainable transport scenario described here. The first is an increasingly important role of biomass as a primary feedstock, and the second, somewhat related, is the development of a hydrogen and alcohol-based energy system. Creating the production and distribution infrastructure required for largescale deployment of these fuels poses a number of challenges.
In the case of alcohols some of these challenges may be relatively easily overcome, since alcohol fuels have some advantages in that they can be distributed using similar infrastructure to that employed for petroleum fuels. However, the emergence of a sustainable transport and energy system may well require the deployment of hydrogen-based technologies. To supply these technologies with fuel, it is likely that major capital-intensive investment in hydrogen production and distribution infrastructure will be necessary. Moreover, as is often cited, much of this infrastructure will need to be developed before there exists sufficient demand to make it commercially viable. However, because of the significant social benefits of sustainable development that may arise from H2 deployment it is important that adequate investment is directed towards this infrastructure. This identifies an important role for public support, or innovative schemes to share the risk of large-scale capital-intensive infrastructure investment. Moreover, given the likely monopoly nature of a hydrogen distribution network, there exists an important role for government in overall strategic co-ordination of investment to guarantee an efficient network, in addition to more traditional roles in regulation.
In the sustainable transport scenario presented here, both alcohols and hydrogen are synthesized predominantly from biomass. This is despite the fact that creating an energy system in which biomass is one of the main primary feedstocks poses a number of significant challenges. Biomass is favoured because without major technological breakthroughs – for example, that result in a large surplus of cheap renewable energy for large-scale electrolysis, or very large-scale carbon capture and storage – there are relatively few long-term cost-effective alternatives to biomass for transport fuel synthesis. One possibility not included in the modelling framework applied here is hydrogen produced from high-temperature nuclear reactors (for example, see DOE although nuclear energy is already heavily exploited for electricity generation in this scenario suggesting there may be limited scope for further applications.
The challenges facing large-scale sustainable biomass mobilization relate particularly to finding sufficient productive land to devote to fuel production, while satisfying increasing human needs for food and fibre, and at very least maintaining environmental amenity. The scale of biomass production is best illustrated by considering that the resource potential identified by Rogner (and used here) was based on the availability of an additional 1.3 billion ha of land globally. Clearly, biomass production on a scale of this order of magnitude must address other aspects of sustainable development, including effective water and soil management, nutrient recycling and preservation of organic matter In addition to a significant transformation to land management systems, and utilization of all organic waste streams, sustainable biomass production faces other challenges. Harvesting and transporting biomass to fuel synthesis plants represents a significant logistical challenge, although this may promote smaller-scale decentralized alcohol and hydrogen synthesis close to the feedstock source. Such decentralization, however, may merely shift logistical difficulties further down the production chain. On the other hand, there may also be benefits compared to today’s relatively centralized oil industry because fuel production and demand centres may be proximate (compared to today’s oil industry which relies on long-distance transport), and the fuel production system will no longer necessarily depend on a small number of large critical infrastructures – such as pipelines, shipping terminals and refineries – but instead on a less vulnerable network of energy producers.
However, developing such a sustainable biomass-based energy production system is likely to require a long-term overall strategic vision and substantial investment, and face long lead-times before becoming profitable. This highlights the need for innovative approaches to investment, including public – private partnerships. Moreover, the major transformations to the energy and complementary systems described here may be particularly challenging in the developing world, where many of the systems may need to be established from scratch. Accordingly, realizing longterm sustainability is likely to also require major international partnerships to promote technology transfer and investment in new energy, transport and supporting system infrastructure.
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Fighting For the Planet
The giddy price of oil subsumed most talk of the environment in 2008; in 2009 the price of carbon will be the most pressing question. In America, the new president has pledged to cut emissions by instituting a cap-and-trade scheme: expect a drawn-out battle in Congress. Meanwhile, the European Union will be fine-tuning the rules for the next phase of its carbon-trading scheme. New Zealand is launching one too. And all around the world politicians will be debating how to update the Kyoto protocol, the United Nations’ treaty on climate change, a successor to which is supposed to be agreed upon at a summit in Copenhagen in December.
As with free-trade deals, the proliferation of regional and local carbon-trading schemes is likely both to spur efforts to reach a global accord and to complicate them. In America, ten north-eastern states have grouped together to form the Regional Greenhouse Gas Initiative, a cap-and-trade scheme among utilities that starts running on January 1st. Opponents of emissions-trading will hold up every glitch as an example of how misguided the whole concept is; proponents will insist it proves emissions-trading is viable, whatever its flaws.
Western states plan another, more ambitious programme, while Midwestern states are working on a third. To make matters even more complicated, several Canadian provinces plan to participate in the various American initiatives, in protest at the relative modesty of Canada's own national scheme. Australia and New Zealand will try to link up their respective systems. And there will be a row, complete with legal battles, over the eu’s plan to levy a carbon tax on flights to or from Europe. As a negotiating stance, the regions and countries with more stringent policies will insist that national and global arrangements must not pander to the lowestcommon denominator. But they will also be quick to scale back their green ambitions if efforts to set up broader trading schemes founder.
All this uncertainty will not be good for the carbon markets. Prices will be volatile, providing more ammunition to those who dislike the idea of emissions-trading, in particular, the market for the sort of offset sanctioned by the Kyoto protocol will dry up, as buyers wait to see what the future holds. That will make life difficult for the firms that have sprung up to take advantage of the Clean Development Mechanism, as the offset provision is known, and so hamper the launch of a future global carbon market, if one is set in motion at Copenhagen.
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