Energy Shocks and Emerging Alternative Energy Technologies GrahamMTurnerCSRIOSustainableEcosystems,Canberra,ACT,Australia

Sino-Australian Joint Research Forum, 21-23 July 2010

Collaboration and Governance in the Asia Pacific

Abstract Sincetheavailabilityofcheapandsuitableenergyunderpinsinmanywaysbothdevelopedanddevelopingeconomies,itiscrucialthatnationaleconomiesarepreparedforpotentialenergyshocks.Shocksmayarisefromphysicalconstraints,suchasapeakinnationalandglobalproductionrateofoil,orfrominstitutionalconstraints,suchaseconomicincentivestoreducegreenhousegasemissions.WeexaminepotentialmodelledscenariosforChinaandAustralia,toexploretheextentofsuchshocks.Themodelsarebasedonstockandflowdynamicsofthephysicalactivitythroughoutnationaleconomies.Thewhatifscenariosallowustoanalyseoptionsthataimtoreduceoreliminatetheimpactofenergyshocksthroughtheuseofalternativeenergytechnologiesandotheroptions.Whenconsideringthesealternatives,itisnecessarytoincorporateintheanalysistherateofchangerequiredinanytransition,andpotentialcrosssectoralsideeffects.

Introduction TheimportanceofenergytothesmoothoperationofglobalandnationaleconomiesisevidentinthetightcorrelationofenergyandGDP(e.g.,(Foran,2009)).Developedanddevelopingeconomiesrelyonarangeofenergycarriers,butarecriticallydependentonoilfortransportandelectricityforahostofindustrialandcommercialpurposes.Potentialdisruptionsinsupplyoftheseenergycarriersthereforeimplysignificantriskstoeconomies.

Forexample,theoilshocksofinthe1970sand80sdemonstratedsomeeconomicimpactofconstraintsinoilsupply.However,thenatureofeventheseimportanteventsisperhapslesscriticalthanthosefacingglobaleconomiesincontemporarytimes.Intheearlieroilshocks,whichweretriggeredwhenUSsupplyofoilhadreachedpeakproduction,globalresourceswerestillabundant,andtheshocksweremoreaquestionofestablishingasuitablepriceforoilontheinternationalmarket.Bycontrastincontemporarytimes,thereareconcernsfromsomecommentatorsthatglobaloilproductionmayhavepeakedorbenearingthatsituation.

Energyshocksmayalsooccuratthetailpipeoremissionsendoftheenergysystem.Alargeproportionofgreenhousegas(GHG)emissionsoccursdirectlyfromthecombustionoffossilfuelsintheproductionofelectricity,heatandtransport

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services.ReductionactionstodatehavebeennegligibledespitescientificadvicefromtheIPCCandothers(e.g.,[Stern,Garnaut])advocatingearlyandlargereductionstoavoiddangerousclimatechange.AsGHGemissionsincreaseandclimatechangeimpactsworsen,thereisthepossibilitythatconcernabouttheimpactsofclimatechangemaygrowandgalvaniseactiononreducingGHGemissions.Thismayoccurquicklywithademandforrapidaction,carryingwithittheexpectationthatsubstantialchangesbemadetoelectricitygenerationandotherenergysupplysystems.

Thispaperexaminesthesepotentiallycriticalenergyshocksandtowhatextentemergingenergytechnologiesmayhelpalleviateoravoidtheshocks.Thenextsectionoutlinesthemagnitudeoftheseenergychallengesfacingnationalandglobaleconomies.Anoverviewofalternativeenergyoptionsisprovidedinthefollowingsection,whichalsodescribesotherimpactsorrequirementsthatareassociatedwiththeseoptions,butarerarelyconsidered.Thissuggeststheneedforwidersystemanalysisofalternativeoptions,andthestocksandflowsmodellingsystemofnationaleconomiesforsuchanalysisissubsequentlydescribed.Inthefinalmainsectionofthispaper,resultsarepresentedfromthestocksandflowsanalysisthataredrawnfromacollectionofseparatestudies.Thesearecomparedwithotherrecentstudiesdealingwithtransportfuelandgreenhousegaschallenges,andasummarygivenofcriticalissuesthatwillneedtobeaddressedifenergyshocksaretobeaverted.Thepaperconcludeswithaconsiderationofthelikelihoodofavertingtransportfuelandgreenhousegasrelatedenergyshocks.

Potential Energy Shocks Thissectionoutlinesthemagnitudeoftwopotentiallycriticalenergychallengesfacingnationalandglobaleconomies.

Transportfuel

Theissueofpeakoilhasbeenrecognisedbysomecommentatorsformanydecades(Deffeyes,2001),andhasitsbaseintheestimatesmadeinthe1950sbyHubbertonUSoilproduction.Peakoilreferstothesituationwhenproductionofoilreachesanupperrateandsubsequentlydeclines,andassuchitdoesnotimplyexhaustionofafinitemineralresource.However,theconcernaroundpeakoilissimplythatthesupplyratewillnotbeabletosatisfyanticipateddemandoncethepeakhasoccurred.

ProductionofoilintheUSpeakedintheearly1970s,asforecastbyHubbert(vindicatinghisanalysisaftermuchderisionfromtheoilindustry).AlthoughfuelefficiencymeasureswereencouragedanddomesticoilfieldsexpandedintheUS,thegapbetweendomesticsupplyandgrowingdemandwaslargelysolvedbyimportingMiddleEasternoil.ThiscamewitheconomicdisruptionsasOPECmanipulatedproductionandregionalwarssubstantiallyaffectedpricesontheinternationalmarket.Sincethistime,severalothermajorfields(e.g.,UKsNorthSeaoil)havereachedpeakproductionandareindecline(Sorrelletal.,2010).Despitethisexperience,itisonlyinrecentyearsthattheissueofglobalpeakoilhasgainedcredencebeyondtheprevioussmallnumberofanalystspromulgatingtheissue;for

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example,withthereleaseoftheWorldEnergyOutlook2008(andEnergyTechnologyPerspective2008)theconservativeInternationalEnergyAgency(IEA)formallyrecognisedconstraintsinconventionaloilsupply.InAustralia,domesticoilproductionisforecastbyGeoscienceAustraliatodeclineovercomingyears,evenwithundiscoveredresourcesfactoredin(GA,2009).However,differingviewsremainaboutwhenaglobalpeakmayoccur(orifitisinprogressnow)(see(Owenetal.,2010,Sorrelletal.,2010)forrecentoverviews),andwhattheeffectswillbe(andpotentialgeopoliticalresponsessuchasthoseexaminedin(Friedrichs,2010)).

Whatdistinguishesvariousforecastsoffutureoilproductionandpeaking(ifany)isuncertaintyabouttheultimaterecoverableresource(URR)andtowhatextentnonconventionalsourcesofoil,suchasdeepwaterresources,tarsandsandextraheavyoil,shouldbeincluded.Productionfromconventionaloilyettobediscoveredisunlikelytocontributesignificantly,onthebasisofsubstantialfallsindiscoveriessincethemajorfieldsfoundinthe1960s.Consequently,energyagenciesandlargepetrochemicalcompaniesmakeforecaststhatseeproductioncontinuingtoincrease(orpeakingbeyond2020)throughwidespreaduseofnonconventionaloilthatisassumedtobedevelopedtomeetincreasingdemand.Incontrast,independentresearchershaveforecastpeakproductiontogenerallyoccurby2020atthelatest(ifnotalreadytakingplace)(Sorrelletal.,2010).

Demandforoilisexpectedtoincreasedueprimarilytoitsfundamentalroleinpoweringtransport.Theincreaseisbasedonexpectationsofcontinuedeconomicgrowth,increasinguseofcarsandotheroilbasedvehiclesindevelopingcountries,andpopulationgrowth.Somealleviationofdemandislikelyasotherfuelssubstituteforoilbasedheatingsystems.Evenwithoutgrowthindemand,modernanddevelopingeconomiesareclearlycriticallydependentonoilbasedtransport.Withoutadequatetransportservices,essentialcomponentsofsocietyandeconomieswouldbejeopardised,suchasmechanisedfoodproduction,freightmovement,businesstravelandevenlabouraccesstowork.

Aconstrictioninsupplyofoilmayaffectothereconomicfunctions.Forinstance,plasticsandotherbyproductsofthepetrochemicalindustryarewidelyusedthroughouttheeconomy.Anincreasingoilpriceaffectfoodproductionbystimulatingadditionaldemandfornaturalgas,andtherebyputspressureonnitrogenfertiliserswhichusenaturalgasasafeedstock.

Greenhousegasemissions

Shockstoenergysystemsmayalsooccurindirectlythroughpotentialconstraintsappliedtotheemissionofgreenhousegasesinordertomitigateclimatechange.Currently,energyuseaccountsforthemajorityofGHGemissions,withthecombustionoffuelsforstationaryenergyusecontributingalargefraction,alongwithtransportuse.Therefore,anysubstantialreductioninGHGemissionswillinvolvelargechangestotheenergysystem.

Inordertoavoidthepotentialfordangerousclimatechange,theIPCChasrecommendedarangeofreductionsofGHGemissionsthatshouldbeachievedby2050.Relativeto1990levelsofemissions,theglobaltargetreductionin2050is80

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90%.Differentreductiontargetsaresuggestedforreductionsattributedtodevelopinganddevelopednations(e.g.,50%and90%respectively).

Unlesslargechangesaremade,emissionsarelikelytobesubstantiallyhigherthancurrentemissions.RecentmeasurementsindicatethatglobalemissionsarecloselytrackingontheA1FlscenarioproducedintheIPCCFourthAssessment,whicheffectivelyconstitutesbusinessasusual(BAU).RelativetothisBAUsituationin2050,therecommendedemissionreductionsarethereforeevenmoresubstantial.

Alternative Energy Options Anoverviewofalternativeenergyoptionsisprovidedinthissection,whichalsodescribesotherimpactsorrequirementsthatareassociatedwiththeseoptions,butarerarelyconsidered.

Overviewofpotentialtransportfueltechnologies

Arangeofalternativeenergytechnologiesandoptionsexistforprovidingtransportfuels.Arguablythemostsimilarwithcurrentpetroleumfuelsissimplytheexpansionintosocallednonconventionaloils.Theseareliquidfossilfuelsthatexistinformsorlocationsthatrequiresignificantlydifferentprocessestoextractthem.Otherfossilfuelscanbeusedfortransport,mostnotablynaturalgas;andcoalcanbeconvertedtoaliquidfuel.Severaldifferentliquidfuelscanalsobeproducedfromcropsandotherbiomass,andevenpotentiallyfromalgae.Finally,landandseatransportcanbepoweredbyelectricsystemsusingbatteriesorhydrogenfuelcellstostoretheenergy.

Alloptionsfortransportfuels,includingconventionaloil,haveimplicationsthatneedtobeconsideredfortheirfeasibilityanddesirabilityintermsofimpactsontheenvironment,resourcesandeconomy.Inmostcases,theimplicationsmaybesubstantialandcomplex,asTable1summarises.

Forthefuelalternativeslisted,additionalresourcesareoftenneeded,suchaswater,landandminerals.Thesemayalreadybeconstrained,sothattheadditionalimpostassociatedwithfuelproductionwouldincreasestressontheseresources.SomefueloptionsarelikelytoleadtohigherGHGemissionsperunitoffuelconsumption,thoughthiscouldbereversedinthecaseofelectricpowersystemswiththeuseofrenewableelectricitygeneration.WhenhigherGHGintensitiesarecombinedwithincreaseddemandanticipatedwitheconomicgrowth,absoluteemissionswouldincreaserapidly.Asimilarrecentreviewofalternativesisavailablein(Diesendorfetal.,2008).

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Table1.Alternativetechnologyoptionsforprovidingtransportandfuels,andsomerequirements(inputsandinfrastructure)andpotentialenvironmentalimpacts.

Technology Description Resourceinputs Infrastructure Environmental/resourceimpacts

Nonconventionalresources

Petroleumproductsderivedfromdeepwaterresources;tarsands;extraheavyoil

Higherenergyinputs;Water

Extractionandprocessingplant

IncreasedGHG;Waterpollution;Environmentalaccidents(e.g.,GulfofMexicoDeepwaterHorizon)

Lowerfuelconsumptionengines

Modalshift Railbasedfreightandpassengertransit

Electricity(orotherconventionalfuel)

Expandedrailnetwork GHGfromelectricitygeneration

Naturalgas Compressedandliquefiednaturalgas

Energyforcompression,etc.

Pipelines;Shipping;Fuelstationrefit;Enginechangeover

ReducedGHGperunitfuelconsumption;Competitionforfiniteresource(similartooilinenergyterms)

Coaltoliquids Oilproducedfromcoal

Coal;Water;Energyforprocessing

Manufacturingplant IncreasedGHG;Competitionforwaterresources

Biofuels(e.g.,Ethanol,Methanol,Biodiesel)

Productionofliquidfuelbasedone.g.:Cropsandstubble;Secondgenerationbiomass;Oilproducingalgae

Land;Water;Fertilisers;Energytoharvestandprocess

Manufacturingplant

Competitionwithfoodsystems(&forests);Soildegradation;Competitionforwaterresources

Compressedairpower Otherenergyusedtocompressair,whichislaterreleasedtodeveloppower

Electricity? Minimal? GHGfromelectricitygeneration

Electricvehicles(andhybrids)

Batterybasedpowerforelectricmotors;Notapplicableforaircraft

Heavymetals(Lithium?);Electricityproduction

Transmission/distributionnetwork;Rechargingstationsorbatteryexchange

IncreasedGHGdependingonsourceofelectricity;Wastebatteriesandtoxicchemicals

Hydrogenfuelcells Fuelcellpowerforelectricmotors;Notapplicableforaircraft

Naturalgas;Water;Catalysts(e.g.,xxx);Electricityforelectrolysis

ManufacturingplantPipelines;Rechargingstations

IncreasedGHGdependingonsourceofelectricity

OftheoptionsandcriteriainTable1,potentiallytheleastdemandingistheuseofnaturalgas.Inthiscase,atransitiontogaswouldnecessitatethecreationofnewinfrastructure(andenginetechnology)toreplacethatforthedeliveryofoil,evenbeforeallowingforexpansionduetoeconomicgrowth.Gasasatransportfuelwouldcompetewiththatusedinelectricityproductionandheating.Whilenonconventionalresourceestimateshaveincreasedrecently,theURRisofthesameorderasthatforoil.Therefore,givenexponentialgrowthindemandthegasresourcecouldreachpeakproductioninseveraldecades.

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OverviewoftechnologiesforGHGreductioninelectricitygenerationanduse

AsimilarsummaryofalternativetechnologyoptionsforreducingGHGemissionsassociatedwithelectricitygeneration(anduse)isprovidedinTable2.Thelistoftechnologiesisnotexhaustivebutcapturesthewiderangeinpotentialoptionsavailable.Thetechnologiesareassessedaccordingtotheirstageofdevelopmentandtherelatedissueofwhenthetechnologiescouldrealisticallybeavailableforlargescaledeployment.Itisalsoimportanttoreviewtechnologiesfortheirimpactsonorrequirementsforresourcesandinfrastructure.

Itisevidentfromthisbriefoverviewofpotentialtechnologyoptionsthatthereareseveralalternativesthatappeartobemorereadilyavailableandcouldbedeployedrelativelyquickly.Alloptionsalsoinvolvesomeimpactonresourcesorinfrastructuredevelopment,tosomeextent.Itisnotclearfromsuchaqualitativereviewhowever,whethertheadditionalimplicationsandtimeframeswouldinhibitrapidreductionsinGHGemissionssufficienttoavoiddangerousclimatechange.

AsimilarhighlevelassessmenthasbeenmadebyMacgill(Macgill,2008),concludingthatenergyefficiencyandgasbasedandrenewableenergyoptionsofferbetterpossibilitiesforreducingGHGemissionsrapidly.Macgillnotestheneedforscenariosimulationsthatdealwiththemanycriticalaspectsofalternativetechnologies,notjusttheultimatesizeoftheresource.

Suchreviewspointtotheneedforsystemwideassessmentofalternativetechnologyoptions.Adescriptionofsuchanapproachisprovidedinthenextsection,andresultsfromaselectionofstudiesusingthissystemgiveninthefollowingsection.

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Table2.CharacteristicsofstationaryenergytechnologiesforreducingGHGemissions.

Technology variations Developmentphase

Potentialdeployment

Resources/infrastructure

Energyefficiency enduse;generation&distribution

maturemature

immediate turnoverofinefficientdevices

Gasfueled CombinedcycleGas

mature immediate accesstogasresources

Nuclearenergy Fission;3rdGeneration

maturewellresearched

immediate uraniumresources,processing,disposalandsecurityissues

Fusion earlyresearch manydecades massiveinfrastructure;seawaterfeedstock

Thorium veryearlyresearch decades? unknowninfrastructurerequirements;largethoriumresourcesareavailable

CarbonCaptureandStorage(CCS)

Geological research,withlittledeploymentatscale

decades pipelinetransmission;compression;securityofstorage(&relatedsizeofstorage)

Biochar earlyresearch yearsdecades potentialsoilimplications(positive&negative?)andlimits

Renewableelectricitygeneration

Wind mature immediate energystorage,redundantfarmsortransmissionnetworkforvariability

Solar(PV&Thermal)

mature immediate accesstospecificmineralsforPVsystems

Hydro mature immediate environmentalwaterresourceimpacts

Biomass earlyresearch,throughtomature

immediatedecades land,water,fertiliser(andother?)inputs

Othertidal research yearsdecades suitablecoastalenvironments

Geothermal Thermalenergy

mature immediate newinfrastructure;

Electricitygeneration

research decades notdemonstratedatscale;electricitytransmissionnetwork

System Modelling of Options Giventheneedforwidersystemanalysisofalternativeoptions,thestocksandflowssystemformodellingnationaleconomiesforsystemwideanalysisisdescribedinthissection.

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TheAustralianStocksandFlowsFramework(ASFF)

TheASFFmodelisatechnologyandprocessbasedsimulationofthephysicalactivityinallsectorsofthenationaleconomy.ItisahighlydisaggregatesimulationofallphysicallysignificantstocksandflowsintheAustraliansocioeconomicsystem(Poldyetal.,2000,ForanandPoldy,2004,Turneretal.,2010a).InthecurrentversionoftheASFFthereover800multidimensionalvariables(about300thatareexogenous).Stocksarethequantitiesofphysicalitemsatapointintime,suchasland,livestock,people,buildings,etc.,andareexpressedinnumbersorSIunits.MuchofthephysicalcapitalintheAPSFF,suchasvehicles,buildingsandfactories,isvintagedaccordingtotheyeartheadditionalcapitalormachinerywasintroduced.Consequently,efficienciescanbeassociatedwithparticularvintages,andtheaginganddecommissioningofvintagedcapitalissimulated.Flowsrepresenttheratesofchangeresultingfromphysicalprocessesoveratimeperiod,suchasthe(net)additionsofagriculturalland,immigrationandbirthrates,etc.

TheASFFsimulatesthedynamicsofmajorcapitalandresourcepools,andtheflowsassociatedwiththesestockssuchasinputsofnaturalresources,manufacturingoutput,andchangesincapitalincludingbuildings,infrastructureandmachinery(Figure1).Naturalresources(land,water,air,biomassandmineralresources)arerepresentedexplicitly,andflowsofrawmaterialsareharvestedorextractedfromthedomesticenvironment(bottomofFigure1).Materialsaregenerallyprogressivelytransformedtobecomegoodsandtoprovidethebasisforservicesforthepopulation(followingflowsupwardinFigure1).Partoftheframeworkincorporatesaphysicalinputoutputmodelforthetransformationofbasicmaterialsandenergytypes(Lennoxetal.,2005).Sometransformationsinvolvethecreationofsecondaryenergyflows(totheleftinFigure1),whichareusedthroughouttheeconomy.Allowanceisalsomadeforrecyclingofwasteflows,andforimprovementsoradditionsmadetotheenvironmentalresources(e.g.,forests).Otherwise,wastesandemissionsreturntotheenvironment.Materialsatvariousstagesoftransformationsandenergymayenterorexitthenationaleconomyasimportsorexports(totheleftandrightofFigure1respectively).Likewise,immigrationandinternationaltravellersaddtothepermanentandtemporarypopulationdynamics.Finally,thepopulationprovidesalabourforceforthevarioussectorsoftheeconomy(topofFigure1).

Geographically,theASFFcoverscontinentalAustralia,includingthemarineareawithinAustraliaseconomicexclusionzone(forfishingandfuels).Withinspecificsectorsoftheframeworkdifferentgeographicresolutionsareused.ThetemporalextentoftheASFFislongterm:scenariosoverthefuturearecalculatedto2100,andthemodelrunsoverthehistoricalperiodtoreproducetheobserveddata.

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Figure1.Flowsofphysicalquantitiesinto,outof,andthroughanationaleconomy,modelledintheAustralianStocksandFlowsFramework.

TheAsiaPacificStocksandFlowsFramework(APSFF)

AsimilarstocksandflowsframeworkwasdevelopedtocovertheAsiaPacificregionforaUnitedNationsEnvironmentProgramstudyintotheregionsresourceuseandemissions(Turneretal.,2010b).Structurally,theAPSFFborrowsmanyofitsfeaturesfromthedetailedAustralianframework.Geographically,theAPSFFrepresentsnationsasdiscreteentities.Distinctionsarealsomadebetweenruralandurbanareas,butthesearenotexplicitlylocated.Scenariossimulationsextendto2050,andthemodelisalsorunoveranhistoricalperiodof19702009.

TheAPSFFiscalibratedfortheperiod19702009,inannualstepsusingdatafromawiderangeofsourcese.g.,UNtradestatistics,FAOfoodandagriculturedatabase,IEAenergyproductionandconsumptiondata,andUSGSmineralresourcedatabase.Inthisapproach,theaimofcalibrationistoreproducehistoricaldataexactlyateachtimestep,inordertopreservewidelyrecognisedandavailabledata.Thisisquitedifferentfromthecalibrationofaneconometricorregressionmodelwheretheaimistofitmathematicalfunctionstodata.Calibrationtodatehasfocusedoneightmajoreconomies,representing74%oftheAsiaPacificpopulationand84%ofitseconomicactivity.

Interactionsandfeedbacksbetweenthephysicalandeconomicsystems

Thestocksandflowssystemsdescribedaboveareverysuitabletoexaminewhatiftypequestionssurroundingalternativetechnologyandconsumptionbehaviour.Inthissensetheyareanalogoustoflightsimulators,whereoperatorscantrydifferentstrategiesandcompareoutcomes.Thismoderequiresotherconditionsofthescenario,suchaseconomicgrowth,tobesuppliedexogenouslyasinputstothesimulations.

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Inrecentadvances,twoseparateapproacheshavebeentakentoincorporateeconomicsettingsinternallywithinthescenariosimulations.Thismeansthateconomicgrowthisendogenoustothesimulationsitisanoutcomeratherthananassumptionofthesimulation.

Inthefirstapproach,bothproduction(primaryandsecondaryindustryoutput)andfinaldemandconsumptionareadjustedtosimultaneouslymaintainatargetunemploymentrateandatargettradebalance(relativetoGDP).Thelevelof(un)employmentisaresultofthepopulationsize,itsageprofile,theparticipationrate,labourproductivity,andthevariouseconomicactivitiesrequiringlabour.IfnootherchangeismadetotheASFFinputs,thenincreasedproductivity(labourinputperunitoutputandotherefficiencies)leadstoincreasedunemploymentduetothesimplefactthatthesameeconomicoutputcanbeachievedwithfewerworkers.Withtheproductivitygrowthassumedabove,massunemploymentoftheorderof50%occursafterseveraldecades.

Toachieveastableunemploymentlevelandreplicatepasteconomicconditions,thebackgroundscenariosincorporatereemploymentofdisplacedlabourthroughincreasedeconomicactivity.Itwasassumedthatthetrendsinlabourparticipationratesarenotchangedfromtheirbackgroundsettings.Consequently,inthebackgroundscenarios,finaldemandconsumptionwasincreased(ordecreased)inordertolower(orraise)theunemploymentrate.Themodellingcalculationsallowforserviceworkerssupportingthephysicallyproductivesectorsoftheeconomy.

Theotherkeymacroeconomicindicatorsimulatedistheinternationaltradebalance(relativetogrossdomesticproduct,GDP).Thenetforeigndebt(NFD)relativetoGDPhasincreasedoverrecentdecades,to52%in2006(Kryger,2009).Highratesofdebt(andsurplus)areconsideredtobecontrarytoastablenationaleconomy.Inonemeasureoftheeconomy,thenetforeigndebtiscomparedwiththenationsGDPinordertojudgewhetheraneconomyisoverstretchedtopayitsinternationaldebt.

ThenetforeignbalanceintheASFFwasadjustedbychangestoexportsandimports,andinternationaltravel(inboundvisitors,andoutboundAustralians),andinvestment.ItispossibletoachievethesameNFDthroughdifferentcombinationsofchangestoexports,importsandinvestment;however,thisstudy(todate)hasnotexploredthissensitivity.Adjustmentstoexportsweremadebyalteringactivityinbothprimaryandsecondaryindustry,afterallowingfordomesticrequirementstobemetfromtheseindustries(whereAustralianexportsarealargefractionofAustralianproduction).Internationaltravelandinvestmentwereadjustedbythesameproportionasexports.Importswereadjustedbychangingthefractionofthedomesticdemandforgoods/commoditiesthatisobtainedfromoverseas.ThesechangesalsoalterGDP,sothataniterativefeedbackcalculationisnecessarytoachievethespecifiedNFD:GDPratio.

Inthesecondapproach,adynamicnonequilibriumfinancialmodeloftheeconomywasused,andlinkedtothephysicalstocksandflowsmodel.Amultisectoralmodelofadynamicmonetaryeconomybasedonnonequilibriumassumptionsisusedto

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simulateeconomicgrowth(asopposedtoitbeinganinputassumptiontoCGEmodels)andtocapturetheinherentlycyclicalnatureofthisgrowth.TheeconomicmodelisbasedonMonetaryCircuitTheory(MCT)andcapturesthenonequilibriumdynamicsofthemonetaryeconomy(loans,investment,etc.),anditsinteractionwiththeproductiveeconomy(labour,consumption,etc.)(Keen,1995,Keen,2009).Thisenablesscenarioswithrealisticeconomiccyclestounderpintheresourceusetrajectoriesinthebiophysicalmodel.Suchanintegratedapproachdescribesdifferentaspectsofasingleoveralleconomicreality(i.e.materialandmonetary).

Themonetarymodelisadynamicsimulationofthefinancialandphysicalflowsthatmustoccurinaneconomy,augmentedbysimplebehaviouralrelationships.Thisisthefirstevereconomicmodeltoworkexplicitlyintermsofmonetaryflows.Therefore,thesimulationisdrivenbythefinancialsector,whichistreatedasanaggregateprivatebankthatmaintainsbankaccountsforitselfandthetwomainclassesinsociety,firms(orcapitalists)andhouseholds(orworkers).Thefinancialsectorcreatescreditmoneybycreditingeachfirmsectorwithmoney(andsimultaneouslythedebtofeachsectorisincreasedbythesameamount).Thisenablesfirmsittoinvest,purchaseintermediateinputsfromtheothersectors,andhireworkers.Themoneysupplycanexpandinresponsetofirmsdemands,andthelevelofdebtgrowscommensuratelywiththisincreaseinthemoneysupply.

Theuniquemonetarynatureofthemodelmeansthatthreeadditionalmonetarybehaviouralfunctionsexist:therateofloanrepayment,therateofcirculationofexistingmoney,andtherateofcreationofnewmoneyareallmodelledasnonlinearfunctionsoftherateofprofit.

LinkagefromtheMCTtotheAPSFFgivesthelattercyclicalpredictionsoffuturedemandratherthansmoothlygrowingdemandfrompopulationgrowth,technicalchangeandchangesinlivingstandards.Thislinkageiscommunicatedviaunemploymentlevels,usingthesamebackgroundassumptionsofgrowthinlabourproductivity.ThisapproachwasappliedtoanalysisoftheresourceuseandemissionsoftheAsiaPacificregion,asdescribedinthenextsection.

Scenario Simulations of Options and Assumptions Inthisfinalmainsectionofthispaper,resultsarepresentedfromthestocksandflowsanalysisthataredrawnfromacollectionofseparatestudies.Theapproachofotherrecentstudiesdealingwithtransportfuelandgreenhousegaschallengesissummarisedandcomparedwiththepresentanalysis,andasummarygivenofcriticalissuesthatwillneedtobeaddressedifenergyshocksaretobeaverted.ThefirstsubsectionexaminestheissueofGHGemissionsandthepotentialintheenergysystemtoreducethese.Analysisispresentedatregional(AsiaPacific),national(China,Australia)anddowntosubnationallevels(StateofVictoria).Thesecondsubsectionlooksmorecloselyattheissueoftransportfuelandtransitionstoalleviatedependenceonoil.

SystemsimulationsofenergyandGHGemissions

ResultsarefirstpresentedinthissectionfromthemodellingoftheAsiaPacificregionusingthecoupledbiophysicalandeconomicmodels(Turneretal.,2010b).

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Theyshowthesimulationresultsforthescenariosover20102050,aswellasthesimulatedhistoryfrom1970.Threescenarioshavebeenconstructedtoillustratefutureresourceusepossibilitiesandtheirconsequences.Thebusinessasusualorreferencescenariorepresentsthecontinuationofcurrentpoliciesandprovidesameasureofthescaleofsomeoftheproblemsthathavebeenanticipatedtoflowfromthem.Theessentialfeatureofthebusinessasusualscenarioisthatmajorhistoricaltrendsarecontinued.

Asecondscenarioinvolveswidespreadtechnologicalprogress,intheformofefficiencygains.Thishighefficiencyscenarioappliestophysicalprocessesusedintheextanteconomicstructure.Theamountofmaterial,energyandwaterresourcesusedperunitoutputiscontinuouslydecreasedincompoundingannualgrowth.

Thethirdscenarioaddstothechangesintheresourceefficiencyscenariobyalsoinvokingstructuralchange.Thissysteminnovationscenarioincorporateschangestoconsumptionandlifestylehabits,urbanform,transportationmodes,energyproductionandeconomicstructure.Theseincludefoodconsumptionshifts/reversiontolowermeatdiets,andtotalfoodintakeratesthatarelowerthantheexcessivelevelsofaffluentdevelopedcountries.Thegrowthinpercapitaconsumptionofmaterialgoodsisalsocurbed.Urbanformisassumedtochangetowardgreaterdensityhousinginnewdevelopments.Wherepossible,allowanceismadeforlocalfoodproduction,resultingindecreasedfreight.Passengertransportshifts/revertsfromgrowingdependenceonthecar,towardbicycleandpublictransit.Electricitygenerationcomesincreasinglyfromrenewablesourcessuchassolarandwind,whicharephasedinasfossilfuelbasedthermalpowerstationsaredecommissionedattheendoftheirlife.

PrimaryenergyconsumptionisshownforBusinessasUsual(BAU)andHighEfficiency(HE)andanintermediatescenarioinFigure2.TheintermediatescenarioistheoutcomeofmovingfromBAUtohighresourceefficiencywithoutmakinganyotherchange.Aconsequenceisahighandgrowinglevelofunemploymentbecauselesslabourisrequiredasthroughputofmaterialsandenergyislowered.Theefficiencyimprovements(50%lessinputsperunitoutputby2040comparedwithrecentvalues)aresufficienttokeepprimaryenergyuselower.(NotethattheBAUscenarioalsoemploysefficiencygains,achieving25%lessinputsperunitoutputby2050).

However,withoutanyotherchangeintheunderlyingeconomicorsocialconditions,veryhighlevelsofunemploymentareanathematostablesocieties.Therefore,inboththeBAUandhighresourceefficiencyscenarios,excessivelevelsofunemploymentwereeliminatedbyincreasingconsumptionandprimaryproductionrates(usingafeedbackprocessdescribedabove).Theconsumptionandproductionratesareadjusteduntilthebiophysicalmodelachievestheunemploymentratesimulatedbythedynamiceconomicmodel.Consequently,cyclicvariationsareevidentintheresourceindicatorspresented,clearlyillustratingthelinkagebetweentheeconomicandbiophysicalmodels.

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Figure2.PrimaryenergyconsumptionfortheAsiaPacificregion,fortwoscenarios(andanintermediateone).Resultshavebeenaggregatedovercountries,activitiesandfueltypes.

Besidethecyclicvariations,substantialincreaseinthroughputofmaterialsandenergyoccurs,evenwhenhighresourceefficiencyisemployed.Primaryenergyconsumptiondoublesoverthescenarioperiod.Thefactthatstronggrowthinresourceuseandemissionsoccursevenwithhighresourceefficiencyfollowsfromthereboundeffectcausedbyeconomicgrowthrequiredtokeepunemploymentlow.

ThecorrespondingGHGemissions,whichincludetheeffectsoffuelcombustion,areshowninFigure3.Inbothbusinessasusualandhighefficiencyscenariostherearesubstantialincreasesinemissions,thoughthelatterscenarioachievessomestabilisationatcontemporarylevelsforabouttwodecadesbeforegrowthintheeconomicactivity(andpopulation)drivesemissionshigher.Asaresult,emissionsinbothscenariosaresubstantiallyhigherthanlevelssuggestedtoavoiddangerousclimatechange.

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Figure3.GreenhousegasemissionsfortheAsiaPacificregion,fortwoscenarios.

Thecorrespondingscenariotrendsforindividualnationsaresomewhatdifferent,asshownforChina(generalincreaseforsomeyears,followedbyadecreaseformorethanadecade,thenasustainedincrease)Figure4.Additionally,asubstantiallydifferentalternativeispresentedintheSystemInnovationscenario.Incontrastwiththeotherscenarios,substantialemissionreductionsdooccurintheSystemInnovationscenario.Butevensosuggestedtargetsof6090%reductionrelativeto1990levelsarenotachieved.Asdescribedabove,thisscenarionotonlyemployshighresourceefficiencybutcombinesthiswithstructuralchangessuchasshiftsinmodesoftransport.Additionally,theSystemInnovationscenarioalsoseekstoavoidthereboundaffectbynotemployingdisplacedlabourintraditionaljobs.Theimportantsocialquestionconcerningtheroleoroccupationofthepopulationnototherwiseemployedisnotexploredinthisanalysis.Thereareseveraldifferentwaysthatloweremploymentmightbeabsorbedwithinsociety,suchasgeneralreductioninworkinghours.Thescaleofthechangeisillustratedinthebiophysicalmodelbytheabouta50%decreaseinlabourparticipationratesbymidcenturyfromcurrentlevels,inordertoeliminatetheexcessunemploymentlevel.

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Figure4.GreenhousegasemissionsforChina,forthreescenarios.

Inseparate,earliermodelling,thedematerialisationpotentialoftheAustralianeconomy(SchandlandTurner,2009,HatfieldDoddsetal.,2008)wassimulatedusingtheAustralianStocksandFlowsFramework.Inthis,theASFFwasusedtomodellargescalechangestomaterialandemissionintensivesectors,includingconstructionandhousing,electricitygeneration,andtransportandmobility.Averageenergyuseintensityofallhousingwashalved(assumingretrofitandadoptionofsimplesolarpassivetechnology),newdwellingswereoflighterconstructionandthetrendsforincreasingfloorareareversed;electricitygenerationwastransformedby2050toamixofwind,solarandgasasagingcoalbasedpowerplantsweredecommissioned;andcommutingbycarwasreducedfrom85%to60%,withcommutingdistancesreduced30%toreflectimprovedurbandesign,andmodalshareoflongdistancetravelswitchedfromairtobus.

Theseandotherchangesmanagedtostabiliseaggregateenergyconsumptionandgreenhousegasemissionsforabouttwodecades(seeFigure5).Subsequentlythough,overalleconomicgrowthoffsettheenvironmentalgainsandledtoemissionshigherthancontemporarylevels,albeitsome30%lowerthanifnotransformationshadbeenattempted.TheAustraliandematerialisationscenarioandthesysteminnovationscenariofortheAsiaPacificsharedasimilarmechanismfordealingwithgrowingunemploymentthatresultsfromongoingefficiencygains,wherebydisplacedlabourwasassumedtobeengagedinserviceactivitiesthatdonotresultinphysicalactivityintheeconomy.

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Figure5.Comparisonofgreenhousegasemissions(fromfuelcombustion)forAustraliaunderBAUandDematerialisationscenarios.Emissionsareindexed(100at2010).

Inathirdstudy,thepotentialforreducingGHGemissionswasalsoexaminedfortheelectricitygenerationsectorintheStateofVictoria(WestandTurner,2010).Thisidentifiedtheimportanceofconsideringthetimingorrateatwhichchangemayberequired,particularlywhenassociatedwithlonglivedinfrastructure.Analysisoftheturnoverofpowerplantunderdifferentelectricityconsumptiongrowthratesindicatesthatplantintroducedafter20112018mustbecapableofnearzeroGHGemissionsin2050ifproposedreductiontargets(intherange6090%of1990levels)aretobeachieved.Itisnecessarytohaveinplaceintheneartermplanttechnologythatispreparedforcarboncapture,eventhoughitmaynotbeemployedinitially,becauseasignificantfractionofoldplantmaybeoperatingin2050.

Systemsimulationsoftransportfueltransitions

FromtheAsiaPacificsimulationsandscenariosdescribedabove,dependencyonoilcanalsobeillustrated.Figure6showsthestronggrowthinChineseoilconsumptionthatcouldbeexpectedunderBAU.Rapidlyimplementingfuelconsumptionefficiencycouldstabiliseconsumptionforabouttwodecades.However,onlysysteminnovationresultsinlowerratesofoilconsumption.Whetherthisissufficienttoavoidtensionswithpotentialratesofdeclineinsupply(assumingearlierrealisationofpeakoil)hasnotbeeninvestigated.

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Figure6.TotalconsumptionofoilinChina,forthreescenarios.

ThesituationforAustraliawasexaminedseparatelyusingtheASFFandspecificscenariosettingsdevelopedforreviewoftransportfueloptions.Thebackgroundscenarioincorporateskeypopulationandeconomicconditions;insummary:36millionin2050;5%unemployment;andnetforeigndebt:GDPratioof~52%.Averagefuelconsumptionefficiencyoftheprivatevehiclefleetisassumedtoincreaseoveracoupleofdecadestoequalgoodhybridperformance.However,sinceoverallpercapitaconsumptionratesgrowinordertomaintainunemploymentatasteadylevel,carownershipandtraveldistancesincrease.

Thisresultsinincreasingtotalrequiredoilvolume(fordomesticconsumptionandexport)asshowninFigure7.Thegapbetweendomesticproductionandthisdemandgrowsrapidlyoverthecoming12decades.ProductionistakenfromGeoscienceAustraliaforecasts(at50%probability).Consequently,Australiawouldsoonbe100%reliantonimportedoil,assumingitisavailableateconomicallyfeasiblepricesontheinternationalmarket.Thisisnotnecessarilythecase,asrecenteconomicmodellinghasindicated(Graham,2008,Grahametal.,2008).Theeconomicmodellingincorporatedsomeelementsofbiophysicalassessment,suchaslandusechangeforbiofuels,butnototheraspectse.g.,waterresourceimplicationsofthechangedlanduses,orconstraintsintheultimategasresource.

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Figure7.ComparisonbetweenAustraliandomesticproductionofoil(andcondensate),andthetotalofdomesticconsumptionandexport,forabusinessasusualtypescenario.Thegapbetweenthetwocurvesisimpliedimportofoil.

Thereforethereisanimportantroleforsubsequentscenarioanalysistoinvestigatethepotentialfortransitiontootherfuelswithinthesystemwidebiophysicalcapabilityoftheeconomy.Fromthereviewaboveofpotentialtransportalternatives,asuitableoptionforearlysubstitutionistheuseofnaturalgas.ThishasbeenpartiallysimulatedintheASFF,andshowsthatAustraliandomestictransportrequirementscouldbemetforseveraldecadesfromdomesticproductionofnaturalgas(Figure8).Thesimulationincludestherecent34foldincreaseineconomicallydemonstratedresourcesofgas(CuevasCubriaetal.,2010).Exportsareassumedtoincreaseinproportionwiththedomesticdemandforgas.

Productionofdomesticgascanmeettheexportanddomesticconsumptionwithstrongincreasesinvolume,untilabout2040.Atthistime,arapidfallinproductionoccurs.Therearelikelytobeuncertaintiesaroundthistimingpotentialfurtherdiscoveriescouldextendthepeakyear,althoughextractionratesmayslowsomewhatasthefieldsdeplete(thisislessprevalentingasresources,thaninoilfields)andadvancethepeakyear.Nevertheless,continualgrowthindemandwouldreducetherangeinwhichpeakingoccurs.Consequently,inAustraliadomesticgascouldplayaroleasatransitionfuelforsomethreedecades,beforeanothertransportfuelsystemisrequired(orfuelsimported).Theoiltogassimulationhasnotinvestigatedthedetailsofinfrastructureturnoverrequired,suchasnewrefuellingoutlets,pipelinesandcompressionfacilities.

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Figure8.ComparisonofAustraliandomesticproductionofandexportofgasresources,inascenariothatassumesatransitionfromoiltogasastransportfuel.Domesticconsumptionisthe

gapbetweenthetwocurves.

CurrentresearchusingtheASFFtoinvestigatefoodsupplysecurityisexaminingtheimpactofbiofuelproductioninAustralia.Simulationstodateindicatethatfirstgenerationbiofueloptions(e.g.,convertingcropssuchaswheatandcanolatoethanolandbiodiesel(Stucley,2010))couldsubstituteforabout10%offuturedomesticoilrequirements(whichiscomparablewithotherestimates(Deborah,2007)),andinvertAustraliastradepositiontothatofnetimporterbefore2040.

Otherstudies

Inrecentyearstherehavebeenincreasingnumbersofstudiesintonationalandglobalenergysystems,examiningthepotentialtoreducedGHGemissionsandachieveenergysecurity.AsummaryofthesestudiesisgiveninTable3.Thoughitisbeyondthescopeofthispapertocomprehensivelyreviewthese,abriefcomparisonwiththeanalysispresentedabovefollows.

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Table3.CharacteristicsofrecentstudiesintopotentialreductionsofGHGemissionsandachievingtransportfuelsecurity.

Proposal Approach Technologies/sectorsconsidered

Potentiallimitations

Reference

ZeroCarbonAustralia2020StationaryEnergyPlan

Detailedsupplydemandgridmodelling;Separateadhocanalysis

Wind;SolarThermal;Biomass;Electrifiedtransportation

Employmentofnonelectricitysectorseffectivelyheldconstant

(anon,2010b)(BeyondZeroEmissions)

ZeroCarbonBritain2030

Separatetechnologyassessments?

tobereviewed Noreboundeffectconsidered

(KempandWexler,2010)

IEAEnergyTechnologyPerspective

Separatetechnologyassessments?;Scenarios

Fossilfuels;Nuclear;Renewables;Transmission;Buildings;Transport;Efficiency;CCS

tobereviewed (Taylor,2010)

LowCarbonGrowthPlanforAustralia

Economicscostbenefit(costcurves)

Fossilfuels;Renewables;Buildings;Transport;Efficiency;CCS;Agriculture;Forestry

Nophysicalassessmentoftechnologicaloptions;Noreboundeffectconsidered

(anon,2010a)(ClimateWorks)

TheEconomicsofClimateChangeTheSternReview

EconomicsIntegratedAssessmentModelling;Scenarios

tobereviewed AssumesahigherrateofGHGemissionsin2050;Nophysicalassessmentoftechnologicaloptions;

(Stern,2006)

TheGarnautClimateChangeReview

Economicmodelling tobereviewed tobereviewed (Garnaut,2008)

Fuelsfocus ARoadmapforAlternativeFuelsinAustralia

Separatebiophysicalanalysis

Efficiency;fossilfuels;biofuels;electrical;fuelcells

Nophysicalassessmentoftechnologicaloptions;Noreboundeffectconsidered

(Diesendorfetal.,2008)

PowerfulChoicesTransitiontoabiofueleconomyinAustralia

Embeddedenergyanalysis,withmacroeconomicfactorsincluded;Scenarios

Biofuels Controlsreboundeffectusingafuturesfund;Nophysicalassessmentoftechnologicaloptionsbeyondenergyimplications

(Foran,2009)

FuelforThoughtTheroleoftransportfuels:challengesandopportunities

Paritalequilibriumeconomicmodelling,withsectoralbiophysicalmodelling

Fossilfuels;Electricity;Biofuels

Limitedphysicalassessmentoftechnologicaloptions;Noreboundeffectconsidered?

(Graham,2008,Grahametal.,2008)

Fromthereviewofotherstudiesandproposals,itappearsthatthetechnicallikelihoodforimplementingalternativeenergyoptionsisnotakeyissue.TheseanalysesfindthatitispossibletoachievelargereductionsinGHGemissionsortoestablishalternativetransportfuelsystems.Theoptionsexploredaregenerallydeemedtechnicallyfeasible,andoftenillustratedbygraphsshowingparallel

20

wedgesoftechnologicalchangeoverthecominghalfcenturyenablingthedesiredchange.

However,ingeneralthereareseveralkeyaspectsthatarenotwelladdressedorrecognisedinthesestudies,including:

rateofchangeo aboutthesameaspastgrowthrates,butintheoppositedirection;o manysimultaneouschangesrequired;o strandedassetsarelikely;

physicalimplicationso crosssectorimpactspotentiallyincreaseenvironmentalpressures;o impactoflowernetenergygains;

socioeconomicconditionso employmentandreboundignored;o financialinvestmentandservicingdebt;o institutionalarrangementsandgovernance.

Whilethechangesproposedappearfeasiblewithinthecontextofthetechnologiesandsectorsanalsysed,thesizeorrateofchangeisdramaticallydifferenttowhathasbeenexperiencedinthepast.Insomecases,thisislikelytorequiretheearlyretirementofpowerplantandotherinfrastructure,despitetheeconomicincentiveofownerstoobtainrevenuesforlonger.Infrastructureinertiaiscompoundedbythegeneralproposalfromthesestudiesformultiplenewtechnologiestobeimplementedvirtuallysimultaneously,insomecontrastwithpreviousexperienceandthegeneralobjectiveofseekingsimplicityandmarketdominance.Otherelementsoftechnologicaloptimismareevidentinestimatesofthereadinessofnewtechnologiestobedeployed.Incontrast,evenwithmaturetechnologies,some1020yearsarelikelytoberequiredtoenabledevelopmentofinfrastructureandsystems.Thisallsuggestsaradicaltransformationisneededinthewayeconomiesoperateandsocietyisengaged,andonascalethatwouldarguablymatchaworldwarfooting.

Sincethefocusofthesestudieshasbeenonenergy,otherenvironmentalandresourceimplicationstendtobeneglected.Whileitisnotuncommontoseelandarearecognised,otherresourcessuchaswater,fertilisersandscarceminerals,foodcompetition,forestryandbiodiversityarenotsystematicallyconsideredintheseotherstudies.Additionally,afullsystemassessmentwouldincorporatenetenergyintheanalysis,toallowforthehigheruseofenergythatisrequiredtoproducealternativeformsofenergy(bothfortransportandelectricity)(Heinberg,2009).Netenergyforoilwasoriginallyveryhighwhenoilwasfirstextracted,buthasdroppedasfieldshavebeendepletedormoredifficultoilaccessed.Mostotherenergysourceshaveevenlowernetenergy,andthereareconjecturesthatmoderneconomiesarepredicatedonthefreeenergygiftofoilandcoal.Inparticular,itisnotclearifthesestudieshaveconsideredtheoverallenergythatisrequiredtoputthenewtechnologiesinplace.Further,ifenergyandoilalternativesaretobeimplementedthenthesechangesmustoccurbeforethesupplyofoilisseriouslyconstrained,otherwisetheremaynotbethetransportservices(andthewiderangeofeconomicfunctions)thatareneededtofacilitatethechange.

21

Anothercommonaspectmissingfromotherstudiesordealtwithpoorlyarethesocioeconomicconditionstypicallyrequiredinmoderneconomies.Importantly,employmentandthereboundeffectdonotfigurehighly,ifatall.Typically,aslabourisdisplacedbytechnologicalprogress,higherconsumptionandeconomicgrowthprovidesanopportunitytoreemploythedisplacedlabour.Thisresultsinfurtherresourceuseandemissions,thatoffset(orevensurpass)theanticipatedgainsfromthetechnologicalprogress.

Whileeconomicanalysestypicallyindicatethelevelofinvestmentrequiredintheproposalsandscenariosputforward,theissueofbeingabletoraisethefinancialinvestmentrequiredisnotraised(theIEAsETPisanotableexception).Withinvestmentequivalenttotrillionsofdollars,andtheeffectsoftheglobalfinancialcrisisstillunresolved,thereisconcernthatthelarge,numerousandchallengingprojectswillnotbeabletofindsufficientfinancialsupport.

Conclusions ThispaperhasfocusedontransportfuelsecurityandimplicationsofGHGemissionreductionsastwokeyshockspotentiallyfacingnationalandglobalenergysystems.Aplethoraofalternativetechnologyoptionsareoftenputforwardfordealingwithoravertingtheseshocks.Systemwidebiophysicalanalysisusingstocksandflowsframeworksimulationssuggeststhattechnologicalalternativesaremorelimitedinsystemicsensethangenerallyanticipated.Thisappearstocontrastsomewhatwitharangeofotherstudies,whichgenerallyproposeamultitudeoftechnologicalactions.Thelikelihoodofenergyshocksbeingavertedbythesetechnologicalactionsmustincorporatearealisticassessmentofthemanyfactorsthatareinvolved,notleast:

thesubstantialrateofchangeandmultiplicityofactionsrequired,comparedwithinertiaassociatedwithinfrastructureandinstitutions;

thetransferofenvironmentalimpactsandotherresourceconstraintsduetocrosssectoraldependencies;

theimpostofincreasingenergyinputsunderlyingeachunitofenergydelivered;

theunemploymentimplicationsofmovingtoeconomicsystemswithdrasticallyreducedthroughputofcommodities;and

thesubstantialfinancialinvestmentthatwouldberequiredineconomiesalreadyladenwithdebt.

Systembasedanalysisundertakentodatewiththesefactorsincorporatedpointstowardtheunlikelyoutcomethatenergyshockswillbeaverted.

Acknowledgements Theauthorwouldliketoacknowledgetheresearchofcolleaguesuntakeninprojectsthatthispaperdrawson.Inparticular,A/ProfSteveKeenoftheUniversityofWesternSydney(forhisMCTmodelling),andDrsFranziPoldyandHeinzSchandl(APSFFdatacalibrationandprojectmanagement)arethanked.ThisworkwassupportedbyCSIROsClimateAdaptationFlagship,andtheUNEnvironmentProgram.

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Energy Shocks and Emerging Alternative Energy TechnologiesSino-Australian Joint Research Forum, 21-23 July 2010Collaboration and Governance in the Asia PacificAbstractIntroductionPotential Energy ShocksTransport fuelGreenhouse gas emissions

Alternative Energy OptionsOverview of potential transport fuel technologiesOverview of technologies for GHG reduction in electricity generation and use

System Modelling of OptionsThe Australian Stocks and Flows Framework (ASFF)The Asia-Pacific Stocks and Flows Framework (APSFF)Interactions and feedbacks between the physical and economic systems

Scenario Simulations of Options and AssumptionsSystem simulations of energy and GHG emissionsSystem simulations of transport fuel transitionsOther studies

ConclusionsAcknowledgementsReferences