Q&A: Avoiding carbon lock-in from energy-using infrastructure

In a new journal article, they present a simple approach to assessing the speed, strength, and scale of carbon lock-in for major energy-consuming assets in the power, buildings, industry, and transport sectors. They pilot the approach at the global level, finding that carbon lock-in is greatest for coal power plants, gas power plants, and vehicles. Below, the researchers answer questions about their work.

Q: When people talk about carbon lock-in, coal power is often the top concern. Is that justified, and what can be done to avoid this kind of lock-in?
PE: Our research confirms that there’s very little, if any, room for new coal power plants in a low-carbon future. Moratoria on new coal plants, or aggressive performance standards for new power plants such as have been implemented in the US, should be seriously considered, particularly in higher-income countries. Countries that have already taken this step and have large coal deposits (again, the US is a good example) may want to go further by moving away from coal extraction, so that their coal resources don’t flow to other countries and contribute to carbon lock-in there. (We explore carbon lock-in risks on the supply side in a separate discussion brief.)

Q: You find a relatively low carbon price could “unlock” coal plant emissions. But wouldn’t that just create stranded assets?
ML: Indeed, lock-in and stranded assets are like the opposite side of the same coin. Moving rapidly to a low-carbon energy system will necessarily mean retiring some coal plants early. By ceasing to build new coal plants now, government and industry decision-makers can avoid both lock-in and further stranding of assets. The problem is that few countries today even have high enough carbon prices to send this signal (30 USD/tCO₂ and up).

Q: Does carbon lock-in affect the prospects for carbon pricing?
SK: Yes, the fundamental concern is that carbon lock-in is self-reinforcing. The more we invest in long-lived high-carbon assets, the more powerful the political interests that benefit from them, and the greater the resistance to a low-carbon transition. The flip side is also true: the more we adopt measures that encourage investment in renewables, the more momentum will build toward a transition. It will create constituencies (such as employees and investors), expand networks (e.g. denser supply chains), and affect the market (e.g. building consumer familiarity). This is why we’ve looked at the institutional dimension of lock-in.

Q: Why do you emphasize higher-income countries as the main focus for restricting coal lock-in?
SK: It is true that coal is resurgent throughout the world, and that if a global low-carbon transition is ever to happen, coal use will have to be curbed worldwide. But if high-income countries don’t take the lead in demonstrating the technical and economic feasibility of a transition from coal, and if they are instead doubling down on coal with new mining and power-plant investments, it will be very difficult to get that transition started. The rest of the world is unlikely to forgo the cheap and abundant coal resources and the mature coal technologies that fueled the process of industrialization and urbanization for the high-income countries. With a clear demonstration it is possible, and with some financial and technological support, it becomes much easier to imagine.

Q: Could one plan a way to transition from coal to biomass, or to “clean coal”, in the future?
PE: One could, and that may be possible in areas with plentiful low-GHG biomass, or should carbon capture and storage retrofits become economic, though neither of these conditions is expected to be widespread in the near future. Furthermore, there are even fewer situations in which even more-efficient (e.g. ultrasupercritical) coal is part of a low-carbon future. Building coal plants – regardless of whether they are somewhat more efficient – still contributes to continued lock-in of the political and technical institutions that support coal, and effectively starves the equivalent institutions in low-carbon, renewable power that are desperately needed to advance the low-carbon transition.

Q: You show that gas power plants may present a significant lock-in risk. Can’t a shift from coal to gas be an important part of a low carbon pathway?
ML: Yes, new gas power can roughly halve the emissions of a new coal power plant. And to the extent that gas serves to replace coal, it can important role to play. Gas plants can come online more quickly, create less air pollution, and can be operated to help “balance” the intermittent output of wind and solar power. But as we show here and in our paper for the New Climate Economy project, gas power has its own risks: the potential to displace renewables rather than coal, to spur increased energy use, to emit significant amounts of methane if improperly managed, and to create added lock-ins from the upstream infrastructure required (such as gas pipelines or LNG facilities). So yes, it can play an important role, but only with strong policies to protect against lock-in.

Q: You also talk about lock-in risks from road infrastructure, and with low oil prices, we’re already seeing increases in driving and in sales of large vehicles. What can policy-makers do?
PE: Our study found that, after coal and gas power, lock-in of personal, oil-based passenger transport (gasoline and diesel cars) is the most troublesome globally. Policy-makers, especially at the urban scale, need to avoid planning sprawling, car-based infrastructure. Policy-makers at all levels can adopt stringent fuel economy or CO₂-intensity standards for new vehicles.

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