Consensus is growing among scientists, policy makers and business leaders that concerted action will be needed to address rising greenhouse gas (GHG) emissions, according to a recent report titled, “Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost?,” by McKinsey and Co., a global management consulting firm.
The report, which was co-sponsored by Honeywell Process Solutions, the Phoenix-based automation supplier, was released in December, and is based upon research done during 2007. Discussion is now turning to the practical challenges of where and how emissions reductions can best be achieved, at what costs and over what periods of time. And Honeywell, for one, believes that its solutions portfolio can help meet the challenges.
Starting in early 2007, a research team from McKinsey & Co. worked with leading companies, industry experts, academics and environmental non-governmental organizations (NGOs) to develop a detailed, consistent fact base estimating costs and potentials of different options to reduce or prevent GHG emissions within the United States over a 25-year period. The team analyzed more than 250 options, encompassing efficiency gains, shifts to lower-carbon energy sources and expanded carbon sinks.
The United States could reduce GHG emissions in 2030 by three to 4.5 gigatons of carbon dioxide equivalent (CO2e) using tested approaches and high-potential emerging technologies, according to the report. These reductions would involve pursuing a wide array of abatement options at marginal costs of less than $50 per ton, with the average net cost to the economy being far lower if the nation can capture sizable gains from energy efficiency. The report concludes that achieving these reductions at the lowest cost to the economy will require strong, coordinated, economy-wide action that begins in the near future.
The report does acknowledge that while the total cost of GHG abatement on a societal basis could be quite low, “Issues of timing and allocation of costs and benefits across the economy—especially during the transition to a lower-carbon economy—would likely result in very different perceptions regarding the cost of abatement. Many costs will likely be incurred early, concentrated in a few economic sectors, and involve ‘real’ outlays that will be offset by future ‘avoided’ outlays. Given the timing of investments relative to savings, and the likelihood that costs and benefits will be shared unequally among stakeholders, some economic sectors and periods will experience significant, visible costs. Certain sectors will likely benefit from abatement options while others are negatively affected, as happens through the normal evolution of a dynamic economy.”
Just the facts
The report attempted to replace conjecture and political posturing with a fact-based approach in the hope that the information will help “policymakers, business leaders, academics and other interested parties make better informed decisions and develop economically sensible strategies to address the nation’s rising greenhouse gas emissions.”
Five clusters of initiatives were discovered that have the potential for abating from three gigatons of greenhouse gases to 4.5 gigatons per year. These include:
- Improving energy efficiency in buildings and appliances
- Increasing fuel efficiency in vehicles and reducing carbon intensity of transportation fuels
- Pursuing various options across energy-intensive portions of the industrial sector
- Expanding and enhancing carbon sinks
- Reducing the carbon intensity of electric power production.
The summary of the report concludes that improving energy efficiency in the buildings-and-appliances and industrial sectors could offset some 85 percent of the projected incremental demand for electricity in 2030, largely negating the need for the incremental coal-fired power plants assumed in the government reference case.
Honeywell was one of seven environmental and corporate sponsors acknowledged in the report for providing expertise, as well as underwriting support for the research. At Honeywell Process Solutions, Vice President of Strategy and Marketing Harsh Chitale detailed the solutions portfolio that the company has for promoting energy efficiency in the industrial sector. He believes that HPS solutions can reduce energy consumption by 1 percent to 3 percent in the chemicals industry, 3 percent to 10 percent in metals and mining, 1 percent to 5 percent in pulp and paper, and 2 percent to 4 percent in refining and petrochemical.
As ideas of places users can look for energy-saving programs, Chitale first notes the use of manufacturing execution systems that improve the decision-making effectiveness of plant staff. The Honeywell system can track and report multiple sources of energy usage against targets in order to enable a single energy-management program. Similarly advanced process control and simulation technology can help operators boost process efficiency. The company also has a “Unified Energy Solution” and an Emissions Monitoring product, as well as burner management systems.
The McKinsey & Co. report can be found at http://www.mckinsey.com/clientservice/ccsi/greenhousegas.asp
Honeywell Process Solutions
McKinsey and Co.