The Impacts of Climate Change on Renewable Energy - Term Paper Example

CLIMATE CHANGE Name Institution Date Introduction There is an increased demand for energy as various needs increases in household, business and economic needs. All these areas require energy on day-to-day so that human and business needs are met. However, fossil fuel is one of the most used sources of energy, and it is associated with massive emission of carbon dioxide into the atmosphere. Therefore, with the continued use of fossil fuel as the main source of energy to meet daily need, the concentration of atmospheric greenhouse gas emissions has reached extreme levels. According to IPCC report, most of the increased global temperature is due to the increase in anthropogenic gas concentrations (IPCC 2014). In fact, today the concentrations of carbon dioxide emitted to the atmosphere have reached a concentration of above 390ppm which is higher than the pre-industrial levels. There are several ways in which the greenhouse emissions can be reduced in the atmosphere while meeting the global demand for energy services, for example, fossil fuel switching, carbon and nuclear capture, renewable energy, energy conservation and efficiency. Renewable energy, for instance, can help along way in mitigating climate changes as well as offer other benefits. In fact, when the renewable energy generating projects are implemented properly, they have shown the potential to contribute to both social and economic development, reduce greenhouse emissions and provide a sustainable energy supply. To ensure greenhouse gas emissions measures such as use of renewable energy are effective, the government should introduce policies that encourage shift towards this sector. However, currently utilization of renewable energy has continued to grow and they are expected to continue growing. Therefore, more policies are necessary to encourage the necessary investment in infrastructure and technology. This paper will discuss impacts of climate change on renewable energy, impacts of the carbon tax and direct action plan policies, risk, and opportunities for renewable energy and the appropriate adaptation strategies. Climate Change Impacts on Renewable Energy Increased greenhouse emission can change atmosphere balance, and hence consequently the increased climate changes. However, the extent of these changes will be determined on future emissions of greenhouse gases and will vary in various regions. Current trends show that the greenhouse gas concentrations may increase the global mean temperature, which is projected to rise by 5.8°C by 2100. The rainfall may also decrease, and the sea level will increase. The impact of increasing temperature may negatively affect our environment, and the government is trying to encourage large emitters to cut on emissions to reduce the greenhouse concentration in the atmosphere such as using renewable energy. Climate changes will also affect the amount of renewable energy produced, which plays an increasingly important role as a fossil fuel alternative to reduce greenhouse gases. At the same time, the increase in temperatures will have an effect on the amount of energy consumed, for instance, reduction of energy used for heating. In addition to increased temperature projections, other climate changes include precipitation, wind speed, cloudiness, and humidity. Since renewable energy is dependent on the climate, climate changes can adversely affect the quantity of the resources. The changes in renewable resource will include changes in potential and variance. In other words, the extent of change will depend on the relationship between climate change variable and resource potential. Renewable energy technologies are designed to suit prevalent climate conditions such they can be able to extract energy from a particular band within an overall range of conditions (IEA 2010). On the other hand, the minimum level is dictated by the ability of a resource to overcome friction. Due to renewable energy dependence on climate, changes in climate adversely affect the resource base. For example, in wind power, an increase in energy capture increases with raised speeds as the modern turbines are designed to handle high winds as stormy weather is projected to continue increasing. However, other climatic changes such as clouds and aerosols caused by increased concentration of greenhouse gases can also have the magnitude of wind and thus wind power. Moreover, climate changes can also affect bioenergy since biomass production can change due to changes in rainfall, crop production as well as soil conditions. However, the projected temperature increase with about 2°C is likely to have a little impact on the production of bioenergy. Changes in different parts of the country may be difficult to assess compared to other forms of renewable energy. In the case of solar energy, even though climate changes may affect the distribution and variability of the clouds, the effect of these changes are expected to have a small overall impact on solar energy potential. On the other hand, hydropower appears to be relatively vulnerable because of its relationship with quantity, timing, and patterns of precipitation, accumulation and melting of snow as well as temperature on evaporation (Harrison & Whittington 2002). More importantly, despite the production of hydropower being positively correlated to the flow of the river, changes in flow are estimated to be greater compared to those brought by changes in precipitation. However, these impacts will vary across regions and even within the country. Research shows that climate change will not significantly affect wind energy potential; however, there will be changes in the wind energy resource distributions. Climate change also will not have a significant impact on the potential of geothermal energy. Direct Action Plan and Carbon Tax Policies The Carbon Tax was passed in 2012 as a Clean Energy Act and required all entities which emit over 25,000 tonnes of CO2 equivalent greenhouse gases that are not produced in transport and agriculture sector to obtain emission permits (Freebairn 2012). These large emitters were asked to pay for each ton of emission above the 25,000 tons threshold, in carbon units that were charged at $23 a tonne in 2012, $24.15 a tonne in 2013 and $25.40 a tonne in 2014. The carbon pricing mechanism covers more than 50% of Australia's emissions including electricity generation, landfills, industrial process, direct combustion and wastewater. Some other sectors are regulated by a similar carbon price. The emission pricing was part of a broad strategy aimed at reducing five percent of greenhouse gas emissions in Australia by 2020. The carbon pricing was thus aimed at encouraging large emitters to reduce greenhouse gases by investing in sustainable energy and increasing energy efficiency. As part of carbon tax policy, personal income tax was reduced for firms with earning of $80,000 or less per year. The carbon pricing policy was intended to improve the energy by converting electricity generation from coal to other clean alternatives and shift the economy towards low carbon. The policy aimed to reduce carbon dioxide in the atmosphere as well as generating income. After the policy had been implemented, there was a reduction in carbon emission. In fact, the emissions from sectors subject to the pricing mechanism reduced by 1% in 9 months after the introduction of the carbon tax, carbon dioxide emission from electricity, and coal generation reduced by 11%. However, these trends have been disputed, and the carbon tax was replaced by the Direct Action Plan. On the other hand, direct action plan offers incentive to companies to encourage them to reduce emission rather than tax the emitters. The Australian government has a set aside fund in the annual budget to provide incentives to these companies (Australian Government 2014). The opponents of the carbon tax argue that the policy is imperfect because it cannot be effective in non-financial market. The market forces will be used as a determinant the quantity of emission to be cut, and the carbon pricing may therefore not be a good motivator. On the contrary, The Direct Action plan has included other policies such as the Carbon Farming Initiative (CFI). It allows the government to mediate with business and households to lower emissions. For instance, the government can give subsidies to low emitters, close plant with a high level of emissions and limit investment of companies with high emissions. The policy offers incentives to companies that reduce emissions to ensure we reach a 5% reduction by 2020. It also encompasses program to support renewable energy; it is an emission reduction fund aimed at supporting emission reduction called abatement. The lowest cost abatement includes reducing waste in coal mines and landfills, energy efficiency and so on. It may also include reforestation of the marginalized lands or vegetation to improve the soil carbon. Risk and Opportunities for Renewable Energy in Carbon Tax and Direct Action Plan The imposition of the carbon tax aimed at reducing emissions to a point there is no big emitter (Gillard, Swan & Combet 2011). In the electricity industry, an increase in sales leads to higher profits; therefore, carbon pricing companies to reduce carbon dioxide emission per electricity unit sold, for example, renewable energy but not measures that reduce sales. In fact, renewable energy generators are the biggest beneficiaries under the policies of carbon constraints. Generation of wind electricity output is expected to double. The solar and biofuel electricity will also increase its output as well as the hydroelectricity. The increase in output was due to the cost structure and emission profile from the renewable energy sectors. Although wind electricity has a high fixed cost, it has a low variable cost and little emission, and thus carbon pricing will make firms seek other sources with fewer emissions. Also, this sector has an advantage in the electricity bidding system under direct action plan. Hydroelectricity has little emissions but has operating costs, so it can be successful in bidding only when demand for electricity is relatively high. The solar and biofuel sector has a lower variable cost but a higher emission cost, hence it performs better than hydroelectricity but poorer than wind electricity. Overall, the electricity generation may decrease significantly due to a decrease in electricity demand under carbon constrained policies, and thus the electricity distribution decreases. However, energy companies may not encourage energy efficiency in carbon pricing because such action will cut their profits. Carbon pricing costs are translated to the consumers by charging them high on the fossil fuel sourced energy (Freebairn 2014). To effectively improve efficiency, direct action may be appropriate as it provides incentives on those that reduce emissions. However, McKibbin (2012) argues that direct action policy does not allow scaling up of renewable energy programs since it is budget-capped unless the cap is revised upwards. The direct action plan also uses the "reverse auction" that rules out price increases on large emitters (Wight, 2013), yet the efficiency of the policy is based of taxing the emissions. Under the direct action plan, emitters are subsidized as a reward for reducing emissions. Appropriate Adaptation Strategies The is an urgent need for mitigation strategies for climate change due to the irreversibility of the impacts, for example, melting of ice is the result of the massive release of greenhouse gases methane and carbon dioxide (Schaefer et al. 2011). The current efforts have had difficulty in reducing emissions and other carbon dioxide generating technologies. Unless some mechanisms are put in place to ensure that larger emitter cut emissions. However, the government can introduce regulations that can correct market failure that prevents efficient energy use. The government can also play an important role in the promotion of research and development in renewable energy because the innovators may be unable to recover appropriate profits. In fact, the Coalition government has committed funds to help vulnerable sectors to know the adverse impacts of climate change and come up with response mechanisms. The government has also invested funds in helping improve the resilience of our land to the impacts of climate change. Renewable energy shares can also be increased, for instance, in transport biofuel may be complemented in the fuel system, in building solar energy can be used in heating and cooling and in agriculture they can use bioenergy to meet power demands. Conclusion The argument dismissing the carbon pricing as the main approach to reducing the greenhouse gas emissions are not accurate because they are based on the short-term effects. However, its long-term effect will be crucial in reaching the necessary emission target in 2020 and 2050. Carbon pricing encourages action that minimizes emissions, and renewable energy may be the biggest beneficiary of such action. However, to ensure consumers and businesses to improve efficiency, direct action may be appropriate as it provides incentives on those that reduce emissions. References List Australian Government (2014), Emissions Reduction Fund White Paper, Commonwealth of Australia, Canberra. Freebairn, J 2012, ‘Tax Mix Changes to Reduce Greenhouse Emissions’, Australian Journal of Agricultural and Resource Economics, 56(1), 102–16. Freebairn, J 2014, 'Carbon Price versus subsidies to reduce greenhouse gas emissions', Economic Papers, 33(3): 233-242. Gillard, J, Swan, W. & Combet, G 2011, Securing a Clean Energy Future: The Australian Government’s Climate Change Plan. Australian Government, Canberra Harrison GP, Whittington HW 2002, 'Vulnerability of hydropower projects to climate change'. IEE Proc. Gen. Transm. Dist. 2002;149(4):249-55 IEA 2010, Renewable Energy Essentials: Hydropower. International Energy Agency, Paris, France. IPCC 2014, Climate Change 2014: Impacts, Adaptation, and Vulnerability. Contribution of Working Group II to the Fifth Assessment Report of the Intergovernmental Panel. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA. McKibbin, W 2012, ‘Media soundbytes: Professor Warwick McKibbin on Australia’s carbon tax’, Lowy Institute for International Policy, viewed from . Schaefer, K., Zhang, T., Bruhwiler, L. and Barrett, A.P 2011, ‘Amount and timing of permafrost carbon release in response to climate warming’ viewed from . Wight, J 2013, ‘Liberals Part 2: Their “Direct Action” is neither’. Viewed from . Read More