Annual Review of Environment and Resources - Volume 24, 1999

After a first career as Professor of Physics, University of California at Berkeley, working in experimental particle physics at Lawrence Berkeley National Laboratory (LBNL), I was prompted by the 1973 Organization of Petroleum Exporting Countries (OPEC) oil embargo to switch to improving energy end-use efficiency, particularly in buildings. I cofounded and directed the Energy Efficient Buildings program at LBNL, which later became the Center for Building Science. At the Center we developed high-frequency solid-state ballasts for fluorescent lamps, low-emissivity and selective windows, and the DOE-2 computer program for the energy analysis and design of buildings. The ballasts in turn stimulated Philips lighting to produce compact fluorescent lamps. When they achieve their expected market share, energy savings from products started or developed at the Center for Building Sciences are projected to save American consumers $30 billion/year, net of the cost of the better buildings and products. In terms of pollution control, this is equivalent to displacing approximately 100 million cars. We did the analysis on which the California and later the U.S. appliance standards are based, and we also worked on indoor air quality and discovered how radon is sucked into homes. We worked closely with the California utilities to develop programs in “Demand Side Management” and “Integrated Utility Planning.” I also worked in California and New England on utility “collaboratives” under which we changed their profit rules to favor investment in customer energy efficiency (and sharing the savings with the customer) over selling raw electricity. I cofounded a successful nonprofit, the American Council for an Energy-Efficient Economy, and a University of California research unit, the California Institute for Energy Efficiency, and I served on the steering Committee of Pacific Gas and Electric's ACT² project, in which we cost-effectively cut the energy use of six sites by one half. Starting in l994, my third career has been as Senior Advisor to the U.S. Department of Energy Assistant Secretary for Energy Efficiency and Renewable Energy.

The activities of oil and other energy companies are increasingly being challenged by nongovernmental organizations and media to justify their behavior in ethical terms. Activities that visibly damage the environment have long been challenged by advocacy groups. In recent years public interest has broadened into calls to respect “sustainability,” human rights, and other ethical imperatives. This article attempts to set these developments in the context of international promotion of the idea of a global “civil society.” Ethical codes reach, by persuasion, beyond coercive legal obligations. They have the character and role of “repeated games.” Codes of behavior for business are rooted in national and cultural values, which may conflict at the international level. However, many governments following the lead of the United States are often developing sanctions to promote ethical behavior by businesses, to redress the failure of markets to manage common access to resources and to protect aspects of the natural world for its own sake. Examples are efforts to uphold human rights, fight against corruption, and promote sustainability of resources. Business leaders and the nongovernment organizations that advocate international values on these subjects have the opportunity to contribute to the development of global civil society by working together to establish persuasive codes that do not require slow and difficult international intervention by government.

The worldwide future of nuclear energy is a highly disputed subject; one side is certain that nuclear energy will have to expand in the next century to meet energy demand, whereas the other side is equally certain that this energy form is too dangerous and uneconomical to be of longer-term use. By looking at the way such beliefs are formed, the history of nuclear power, and the energy scene in the next century, this paper tests both points of view and concludes that both are flawed, but there is a strong case for keeping the option for nuclear expansion open. Yet, there has to be doubt whether today's technology is adequate for such expansion. There are alternative technologies under development that may make nuclear power more acceptable; however, although there is the time to develop such new processes, the question has to be asked whether such work can be funded, unless public opposition to nuclear power can be reduced and international collaboration improved. The long-term future of nuclear power depends more on successful research and development than on achieving early orders for more nuclear plants.

In the last decade, the economics of existing nuclear power plants have improved in the United States and worldwide. Further economic improvements could be realized by better management of planned outages, understanding of unplanned outages, resource sharing among several plants, and more efficient use of nuclear fuel. Dry spent-fuel storage has removed the limitation of on-site storage caused by the limited size of the originally designed storage pools. However, delays and uncertainty about the date by which the national U.S. program will receive the spent fuel have significant financial penalties that could be mitigated if a central interim facility were established to receive spent fuel. Furthermore, a higher incentive for spent-fuel minimization could be obtained if the waste fees were based on spent-fuel volume rather than on electricity sales. Introducing thorium into the fuel cycle has the potential to improve the economics of the fuel cycle while reducing the volume of spent fuel and improving its proliferation resistance.

Conventional hydroelectric generation uses a renewable energy source and currently supplies ∼10% of the annual output of electricity in the United States and ∼20% of electricity generated worldwide. To provide a significant contribution to sustainable development, the hydropower industry must address a variety of environmental concerns, including water quality and fish passage issues. The paper discusses new technologies for turbine design and control systems to improve dissolved oxygen levels in turbine discharges and survival of fish during turbine passage. The paper describes development, testing, and test results for these technologies, with an emphasis on collaboration of stakeholders and balance between environmental stewardship and economical power production.

Ethanol made from lignocellulosic biomass sources, such as agricultural and forestry residues and herbaceous and woody crops, provides unique environmental, economic, and strategic benefits. Through sustained research funding, primarily by the U.S. Department of Energy, the estimated cost of biomass ethanol production has dropped from ∼$4.63/gallon in 1980 to ∼$1.22/gallon today, and it is now potentially competitive for blending with gasoline. Advances in pretreatment by acid-catalyzed hemicellulose hydrolysis and enzymes for cellulose breakdown coupled with recent development of genetically engineered bacteria that ferment all five sugars in biomass to ethanol at high yields have been the key to reducing costs. However, through continued advances in accessing the cellulose and hemicellulose fractions, the cost of biomass ethanol can be reduced to the point at which it is competitive as a pure fuel without subsidies. A major challenge to realizing the great benefits of biomass ethanol remains to substantially reduce the risk of commercializing first-of-a-kind technology, and greater emphasis on developing a fundamental understanding of the technology for biomass conversion to ethanol would reduce application costs and accelerate commercialization. Teaming of experts to cooperatively research key processing steps would be a particularly powerful and effective approach to meeting these needs.

About two-thirds of primary energy today is used directly as transportation and heating fuels. Any discussion of energy-related issues, such as air pollution, global climate change, and energy supply security, raises the issue of future use of alternative fuels. Hydrogen offers large potential benefits in terms of reduced emissions of pollutants and greenhouse gases and diversified primary energy supply. Like electricity, hydrogen is a premium-quality energy carrier, which can be used with high efficiency and zero emissions. Hydrogen can be made from a variety of feedstocks, including natural gas, coal, biomass, wastes, solar sources, wind, or nuclear sources. Hydrogen vehicles, heating, and power systems have been technically demonstrated. Key hydrogen end-use technologies such as fuel cells are making rapid progress toward commercialization. If hydrogen were made from renewable or decarbonized fossil sources, it would be possible to have a large-scale energy system with essentially no emissions of pollutants or greenhouse gases. Despite these potential benefits, the development of a large-scale hydrogen energy infrastructure is often seen as an insurmountable technical and economic barrier. Here we review the current status of technologies for hydrogen production, storage, transmission, and distribution; describe likely areas for technological progress; and discuss the implications for developing hydrogen as an energy carrier.

This chapter on fuel cells covers the following topics: (a) fundamental electrochemical aspects and performance analysis; (b) technology research and development and demonstrations of fuel cell power sources for power generation, transportation, portable power, and space applications; (c) the role of fuel cells vs competing technologies, and (d) prospects for the applications and commercialization of fuel cell technologies in the twenty-first century. Although the fuel cell was invented in the nineteenth century, the twentieth century has been the period for technology development rather than widespread use. The fuel cell faces a great deal of competition in the proposed applications of power generation, transportation, and portable power. Significant work is still necessary, but intensified research and development activities could lead to the dawn of fuel cell commercialization and widespread use in the early part of the twenty-first century.

Six methods for attributing ambient pollutants to emission sources are reviewed: emissions analysis, trend analysis, tracer studies, trajectory analysis, receptor modeling, and dispersion modeling. The ranges of applicability, types of information provided, limitations, performance capabilities, and areas of active research of the different methods are compared. For primary, nonreactive pollutants whose effects of concern occur on a global scale, an accounting of emissions rates by source type and location largely characterizes source contributions. For other pollutants or smaller spatial scales, accurate estimates of emissions are needed for identifying the emissions reduction potentials of possible control measures and as inputs to dispersion models. Emission levels are frequently known with factor-of-two accuracy or worse, and improved estimates are needed for dispersion modeling. The analysis of regional or urban-scale trends in emissions and ambient pollutant concentrations can provide qualitative information on source contributions, but quantitative results are limited by the confounding influence of variations in meteorology and uncertainties in the areas over which emissions affect concentrations. Tracer studies are useful for quantifying dispersion characteristics of plumes, qualitatively characterizing transport directions, and providing empirical data for evaluating trajectory and dispersion models. Data are usually temporally limited to a short study period, typically do not provide information on vertical pollutant distributions, and are most applicable to the transport of primary, nonreactive pollutants. Trajectory analyses are routinely used to estimate atmospheric transport directions. Trajectory errors of about 20% of travel distance are considered typical of the better models and data sets. Receptor models use measurements of ambient pollutant concentrations to quantify the contributions of different source types to primary particulate matter or volatile organic compounds, or to characterize source-region contributions to a single pollutant. Accuracy rates of ∼30% are often achieved when quantifying the contributions from different types of emission sources. Dispersion models are well-suited for estimating quantitative source-receptor relationships, as the effects of individual emission sources or source regions can be studied. Lagrangian and Gaussian dispersion models are computationally efficient and can simulate the transport of nonreactive primary or linear secondary species. Eulerian models are computationally intensive but lend themselves to the simulation of nonlinear chemistry. Careful evaluation of modeling accuracy is needed for a model application to fulfill its potential for source attribution. Accuracy can be evaluated through a combination of performance evaluation, sensitivity analysis, diagnostic evaluation, and corroborating analyses.

Of the thousands of species of microalgae that form the base of the marine food chain, only a small number are toxic or harmful. However, when these toxic species proliferate, they can cause massive kills of fish and shellfish, mortality among marine mammals and seabirds, substantive alterations of marine habitats, and human illness and death. Currently, six distinct human clinical syndromes associated with harmful algal blooms are recognized: ciguatera fish poisoning, paralytic shellfish poisoning, neurotoxic shellfish poisoning, diarrhetic shellfish poisoning, amnesic shellfish poisoning, and Pfiesteria-associated syndrome. Human illnesses are caused by toxins produced by these microorganisms, acquired either by passage through the food chain or direct skin or respiratory contact. Syndromes frequently include debilitating neurologic manifestations and, in some instances, may progress to death. There is a perception among investigators that the number of harmful algal blooms is increasing, as is the range of toxic species. It has been postulated that this increase is caused by human-related phenomena such as disruption of ecosystems, nutrient enrichment of waterways, and climatic change. In environmental studies, attention has traditionally focused on direct human health effects of pollutants. Harmful algal blooms are an example of an alternative paradigm, in which human-induced stress on complex ecologic systems leads to the emergence of new, potentially harmful microorganisms (or the reemergence of “old” pathogens from previously restricted environmental niches), which, in turn, cause human disease. Although data are lacking to fully substantiate this latter model, it provides a useful conceptual framework to assess data needs and consider public health interventions.

This paper reviews the empirical evidence for the following five hypotheses from the economic growth-liberalization-pollution debate: (a) economic growth will lead to a worsening pollution problem; (b) tighter environmental regulation will reduce economic growth; (c) trade liberalization will exacerbate environmental degradation, especially in developing countries with weak environmental protection; (d) tighter environmental protection in the developed countries will lead to a loss of competitiveness compared with that of countries with lower standards, especially in polluting industries; and (e) tighter environmental protection in the developed countries will lead to relocation of investment to developing countries with lax regulation, especially in polluting industries (the pollution haven hypothesis). Overall, the evidence for these hypotheses is found to be ambiguous and weak. It is further suggested that the growth-liberalization-environment empirical literature has neglected three important elements: (a) environmental innovation, (b) the international diffusion of environmental technologies, and (c) the economic benefits of a cleaner environment. Future research should integrate these elements into the debate. Analyses of endogenous environmental innovation in response to environmental policy, the tradable nature of environmental technologies, the role of trade and foreign direct investment as channels of environmental-technology transfer to developing countries, the effects of local environmental policies in encouraging the adoption of such technologies in developing countries, and the economic benefits of a cleaner environment would contribute to the development of sound, well-coordinated economic and environmental policies.

This paper focuses on the desirability, from an economic perspective, of setting fixed and relatively short-term targets and timetables, such as those contained in the Kyoto Protocol, as a means of achieving longer-term climate change mitigation goals. The paper argues that whatever long-term policy goals are adopted, greater flexibility lowers implementation costs. Lower implementation costs, in turn, increases the likelihood that the policies will actually be followed and the goals achieved. Importantly, the Kyoto Protocol incorporates key elements of both “what” and “where” flexibility. That is, the “Kyoto basket” includes all six of the major greenhouse gases plus sinks, and the Protocol incorporates several mechanisms that allow emission reductions to take place at the least-cost geographic location, regardless of nation-state boundaries. The Protocol also provides substantial “how” flexibility in the sense that countries can use a variety of means to achieve domestic policy goals. However, the Protocol does not allow emission reductions to take place at a point in time when they can be achieved at lowest cost as long as they are consistent with the long-term environmental goals (“when” flexibility). Additionally, it does not allow the use of efficient price-based policy instruments to define targets and, thereby, balance environmental goals and compliance costs (which could be thought of as a broader version of “when” flexibility). Instead, the Protocol relies exclusively on strict, short term quantity targets. The relative inflexibility of the Protocol with respect to the timing of reductions and definitions of the targets may derive, in part, from a misplaced analogy between the global warming issue and the highly successful effort to phase out CFCs under the Montreal Protocol. The lack of when flexibility may be a key barrier to achieving the broader goals of the Kyoto Protocol, particularly if where flexibility is constrained in the implementation process.

Yucca Mountain, NV, is being characterized for disposal of U.S. high-level nuclear waste, which consists predominantly of spent fuel from nuclear reactors and radioactive waste from reprocessing. In this paper, the program is presented in the context of global and U.S. nuclear energy systems and of international plans for high-level waste disposal. The potential impact of the proposed repository is discussed in the context of the U.S. Department of Energy's Total System Performance Assessment-Viability Assessment, the primary tool for assessing how the repository might operate.

In this paper, we estimate the value of energy technology research and development (R&D) as an insurance investment to reduce four risks to the United States. These four risks are (a) the costs of climate stabilization, (b) oil price shocks and cartel pricing, (c) urban air pollution, and (d) other energy disruptions. The total value is estimated conservatively to be >$12 billion/year. However, only about half of this total may be warranted because some R&D is applicable to more than one risk. Nevertheless, the total Department of Energy investment in energy technology R&D [∼$1.5 billion/year in fiscal year 1999 (FY99)] seems easily justified by its insurance value alone. In fact, a larger investment might be justified, particularly in the areas related to climate change, oil price shock, and urban air pollution. This conclusion appears robust even if the private sector is assumed to be investing a comparable amount relevant to these risks. No additional benefit is credited for the value to the economy and to the competitiveness of the U.S. from better energy technologies that may result from the R&D; only the insurance value for reducing the potential cost of these four risks to society was estimated.

Climate policy is often discussed as a lever with which to bring about climate-friendly technical innovation and diffusion. However, quantitative policy assessments routinely treat technological change as a factor that is independent of policy. Stabilizing atmospheric concentrations of CO2 cannot be achieved through marginal changes in the way we supply and use energy. The only path to stabilization of climate over the next century that is consistent with widely accepted population and economic-growth scenarios involves substantial decoupling of energy services from carbon emissions. The required rate of structural and technical change for such a goal has been experienced only in the wake of economic and resource crises and for periods of a decade or less. Historic rates of structural and technical change averaged over a century are far from adequate for stabilizing climate. In this paper, we review technical changes in the energy system and a few instances in which energy economic models have begun to include technical change as an endogenous feature of their assessments. Finally, we consider the implications of considering endogenous technical change for critical climate policy questions, such as the cost of control and the appropriate timing of the emissions mitigation effort.

Technology largely determines economic development and its impact on the environment; yet technological change is one of the least developed parts of existing global change models. This paper reviews two approaches developed at the International Institute for Applied Systems Analysis, both of which use the concept of technological learning and aid modeling of technological change. The first approach is a micromodel (“bottom-up”) of three electricity generation technologies that rigorously endogenizes technological change by incorporating both uncertainty (stochasticity) and learning into the model's decision rules. This model, with its endogenous technological change, allows radical innovations to penetrate the energy market and generates S-shaped patterns of technological diffusion that are observed in the real world. The second approach is a macro (“top-down”) model that consists of coupled economic- and technological-system models. Although more stylistic in its representation of endogenous technological change, the macro model can be applied on a worldwide scale and can generate long-term scenarios that are critical for policy analysis. Both the micro- and macro models generate radical departures from currently dominant technological systems (“surprises”), including long-term scenarios with low carbon and sulfur emissions. Our focus is modeling, but for policy, the work underscores the need for huge investments before environmentally superior technologies can compete in the market.

A total of 176 countries have ratified the United Nations Framework Convention on Climate Change, thereby agreeing to limit emissions of greenhouse gases that threaten to interfere with the Earth's climate. While compliance procedures are being developed, the best indicators of implementation of the Convention are the emissions inventories of greenhouse gases that member countries must submit to the Convention as part of their national communications. We review some of the first emissions inventories from non–Annex I (developing) countries. We focus on land-use change and forestry because these activities are responsible for the major emissions of carbon in many non-Annex I parties, and because they are the only activities with the potential to remove carbon from the atmosphere and sequester it on land. The review shows first, that some developing countries have already begun to reduce emissions and second, that there are significant discrepancies between the data used in the emissions inventories and the data available in international surveys. Conceptual uncertainties also exist, such as distinguishing anthropogenic from nonanthropogenic sinks of carbon, and these will require political rather than scientific resolution. We discuss several options for counting terrestrial sources and sinks of carbon in light of the Kyoto Protocol.

The US-Mexico border region illustrates the challenges of binational environmental management in the context of a harsh physical environment, rapid growth, and economic integration. Transboundary and shared resources and conflicts include limited surface water supplies, depletion of groundwater, air and water pollution, hazardous waste, and conservation of important natural ecosystems. Public policy responses to environmental problems on the border include binational institutions such as the IBWC, BECC and CEC, the latter two established in response to environmental concerns about the North American Free Trade Agreement (NAFTA). Environmental social movements and nongovernmental organizations have also become important agents in the region. These new institutions and social movements are especially interesting on the Mexican side of the border where political and economic conditions have often limited environmental enforcement and conservation, and where recent policy changes also include changes in land and water law, political democratization, and government decentralization.