Abstract

Manufacturing a Stable Climate:

Drivers of Industrial Sector Greenhouse Gas Mitigation

By

Nathaniel Thomas Aden

Doctor of Philosophy in Energy and Resources

University of California, Berkeley

Professor Daniel Kammen, Co-Chair

Professor Arpad Horvath, Co-Chair

As the primary means for growth and development over the past two centuries, industry has played a central role in generating our current Anthropocene. The increasing impacts of climate change bring industry to the fore as the largest global emitter of greenhouse gases and as a potential manufacturer of transformational technologies and infrastructure. While energy efficiency improvements are driving industrial sector emissions and cost reductions, additional switching away from fossil fuels and capture of carbon emissions is needed for climate stabilization.

The decline of U.S. industrial sector carbon dioxide emissions by one-fifth between 2000 and 2015 was driven by multiple economic and technological transitions. Five megatrends that contributed to the reduction of U.S. industrial and manufacturing sector emissions include: structural shift from goods to services, energy transition to electricity, natural gas, and renewables, increased trade and globalization, introduction of new technologies, and changing norms, regulations, and policies. These interrelated megatrends provide context for decomposition and facility-level analysis of U.S. manufacturing GHG emissions.

Achieving the Paris climate goal of limiting warming to well-below two degrees will require substantial greenhouse gas (GHG) emissions reductions and economic transformation. A growing group of countries are moving toward the Paris goal by reducing GHG emissions while continuing to grow their economies. However, existing metrics such as carbon emissions intensity of gross domestic product (GDP) do not capture dynamic country contributions to economic transformation and global emissions reductions. This dissertation develops an index of GHG-GDP divergence (ICGGD) to characterize country performance and explore the role of industry and trade in low-carbon economic transformation between 2000 and 2015. In addition to assessing historical drivers, the index is also used to identify factors that can enable a growing group of countries to delink their GHG emissions and GDP growth. One unexpected finding of the ICGGD empirical results is that larger growth in merchandise imports is correlated with lower levels of country-level emissions performance. This appears to contravene the “leakage” theory that countries have reduced local production-based emissions via import growth; it is one of several topics addressed in this dissertation that could benefit from further research.

Finally, the global political swing towards populism in 2016 was largely resultant from real and perceived changes to industry and manufacturing employment. The global redistribution of industrial activity and jobs between 1990 and 2015 undermined the previous social contract whereby government legitimacy rested on provision of economic growth and opportunity for all. Rather than attempting to turn back the clock with nostalgic shibboleths about fossil-fueled manufacturing greatness, a new social contract is needed based on inclusive, climate-focused industrial policy. The fourth chapter assesses the role of industrial policy mechanisms in achieving inclusive low-carbon transformation.

The report summarizes the history and nature of China s standardsand labeling program in the Introduction in Section 1. Trends in domestic production, exports, penetration rates, unit energy consumption and the history of S&L technical levels by product are discussed in great detail in Section 2. The national energy impactsanalysis found in Section 3 concludes that overall China s standards and labeling programs reduce total electricity consumption in 2020 by an annual 106 TWh, or 16 percent of what would otherwise been expected in that year in the absence of standards and labeling programs.In total, the report concludes that the S&L programs currently in place in China are expected to save a cumulative 1143 TWh by 2020, or 9 percent of the cumulative consumption of residential electricity to that year. In 2020 alone, annual savings are expected to be equivalent to 11 percent of residential electricity use. In average generation terms, this is equivalent to 27 1-GW coal fired plants that would have required around 75 million tonnes of coal to operate. In comparison, savings from the US appliance standards program alone is expected to save 10 percent of residential electricity consumption in 2020.