Page - 23 - in options, Volume summer 2016

americas 23summer 2016 + optionswww.iiasa.ac.at regional focus Go countercyclical in energy policy The US track record on energy innovation is closely linked to crises; for example the price shocks of the 1970s led to more efficient vehicles and research into alternative fuels. When the price of oil reached an all time high in 2008 there was a surge in investment in wind power and electric vehicles. But a paper coauthored by IIASA researcher Arnulf Grubler with Gregory Nemet and Dan Kammen suggests the opposite approach: countercyclical energy policy. “A simple example would be a flexible fuel tax with increases when prices are low and decreases when prices are high, thus  buffering consumers from price volatility,” says  Grubler. He also notes that when energy prices are low firms basically stop energy R&D spending. “This is the time for the public sector to take up the slack and funding could come from the flexible fuel tax.” The paper recognizes the challenges in turning the cycle of crisis–reaction–crisis into a countercyclical one, among them short election cycles and a lack of immediate rewards. There are also certain to be winners and losers when choices are made between conflicting needs such as affordable, clean, and reliable energy. However by taking the countercyclical approach of bolstering energy innovation when the threat of crisis appears to be receding, “the USA can create options and resilience against future price shocks.” The paper also gives a rationale for a countercyclical approach to climate policy. The  message is: “Prepare for the future when it is easy and cheap to do so,” says  Grubler. KS Further info Nemet  GF, Grubler  A, Kammen  DM (2016). Countercyclical energy  and climate policy for the U.S. WIREs  Climate Change 7(1):5–12 [doi:10.1002/wcc.369]. Arnulf Grubler grubler@iiasa.ac.at Getting the best from biomass Brazil is an ethanol powerhouse, producing around a quarter of the global consumption of ethanol fuel. Most of it is pumped from refineries producing both sugar and ethanol, and this energy from biomass waste leads to important greenhouse gas reductions. However, in a study published this year researchers from IIASA and the Royal Institute of Technology (KTH), Sweden, describe how sugarcane can deliver even more energy if Brazil’s refineries are upgraded to make the most of sugarcane biomass, also known as bagasse and cane  trash. IIASA researcher Sylvain Leduc says the study analyzes technical and economic factors in sugarcane refineries and concludes that an upgraded plant using bagasse “can produce 50% more 2G [second generation] ethanol or 150 kwh of bioelectricity per tonne of sugarcane.” To put it another way, if the available technology is applied under existing market conditions the upgraded refineries could export sufficient 2G ethanol “to  meet 2.5% of the total EU demand.” Using  the cane  trash, says  Leduc, would have a negligible impact on the environment or land use, as it is not used for other purposes. While the study was specific to Brazil, the model developed “could be useful in utilizing other abandoned or un‑utilized agricultural harvest residues for energy production,” says coauthor Dilip Khatiwada from KTH. The study also highlights other advantages: “International trade in biofuels can bring opportunities to both Brazil and the EU when it comes to meeting national renewable targets, enhancing competitiveness of the biofuel industries and promoting sustainable development,” says Khatiwada. KS Further info Khatiwada  D, Leduc  S, Silveira  S, McCallum  I (2016). Optimizing ethanol and bioelectricity production in sugarcane biorefineries in  Brazil. Renewable Energy 85:371–386 [doi:10.1016/j.renene.2015.06.009]. Sylvain Leduc leduc@iiasa.ac.at©