Environment General Courses (ENVIRON)

graduate level, taught in Durham

298.24 Energy, Technology and Climate Change

Spring 2006
Mon-Wed 1:15-2:30 plus selected weekday evenings 6:00-7:15
Instructor:
James Rabenhorst, Executive-in-Residence
james.rabenhorst@duke.edu

Teaching Assistant: TBD
Climate Change Partnership Liaison: Hallie Katarski, hallie.katarski@duke.edu

Course Description
As concern over the threat of global climate change spreads, some type of action on greenhouse gas emissions seems increasingly likely. As a large and easily identifiable source of greenhouse gas emissions, the electric utility industry is likely to be targeted by any such “action”. Yet uncertainty remains: How will our understanding of the impacts of climate change evolve? What types of policies will be enacted? Which technologies exist—or will be developed—to tackle greenhouse gas emissions?

Under these uncertain conditions, utilities are faced with difficult decisions that will impact their business for years to come. What options are available to them as to how they act or react? How do they make associated changes to their internal organizations? The objective of this course is to provide broad insight into this situation and to facilitate the in-depth exploration of one or more associated issues. The course is based on the “living case” of Duke Energy (a diversified energy company based in North Carolina) as it confronts the challenge of climate change.

Students will learn in three ways. First, academic lectures will provide a broad base of understanding in science, technology, economics, policy and business as it relates to the situation of electric utilities vis-à-vis climate change. Academic lectures will be delivered by Duke faculty from several disciplines. Second, the “living case” component will be presented by Duke Energy and other relevant public and private third party organizations and through local field trips and a spring break trip to Washington, D.C. Third, students will complete a substantial team research projects that help inform business, technology and/or policy strategies that seek to reduce emissions of greenhouse gases.

This course is explicitly designed to be multi-disciplinary, and is open to graduate students from Duke, UNC-Chapel Hill and other local universities. It is supported by the Climate Change Policy Partnership at the Nicholas School of the Environment and Earth Sciences. Specific partners include Duke Energy, the Nicholas Institute for Environmental Policy Solutions, and the Center on Global Change. More information on the Climate Change Policy Partnership can be found at: <http://www.dukenews.duke.edu/2005/09/dukeenergy.html>.

Enrollment Process
This course is available to students by instructor’s permission only. Interested students should send a resume and brief cover letter explaining interest and qualifications for the course. Please send to Hallie Katarski at hallie.katarski@duke.edu.

Class Structure & Logistics
The course is composed of:
 A core class of faculty lectures that meets twice per week. Sessions will meet M/W from 1:15 to 2:30, in room XXX. These classes will all have required pre-reading.
 A required evening “living case” lecture series that meets on approx. ten weekday evenings from 6:00 to 7:15 in room XXX. (Students who have a conflict with a given evening presentation will be required to view a recording.)
 A required trip to Washington DC, which will happen over Spring Break. The trip is tentatively planned to leave the evening of Sunday, March 12th and wrap-up the evening of Tuesday, March 14th. To compensate for time spent on field trip, students will have off two sessions of the core class to work on research projects.
 Selection and completion of a substantial team research project.

Grading and Assignments
Your grade will be based on:
 Performance on Team Research Project
(Including an evaluation by fellow team members) 50%
 Class participation, as measured by TA and faculty 25%
 Analysis and selection process for team research project proposal 10%
 Team presentation of research project conclusions 15%
Research Projects
 Teams and topics are self selected; the partners of the Climate Change Policy Partnership will present the issues that they will be exploring to the class and student teams will be able to select issues related to their work, as well as other relevant topics of interest
 Teams will “recruit” a faculty sponsor, normally from among the faculty lecturing in the course
 A description of topic and research methodologies will be due before spring break
 A final revision of the proposal will be due right after spring break
 Students will present their final proposal to the class right after spring break
 Project results will be formally presented during the final week of class.
 The final report will be due at the normal exam time for the course

Blackboard
Readings, class announcements and schedule changes will all be posted to the course blackboard site. Students are also encouraged to use Blackboard’s discussion boards to continue the discussion of course issues beyond the classroom.

Readings
To provide each student with basic knowledge of key subject areas, the following should be read before the first class meeting:

Climate Change Science and Impacts
• IPCC Third Assessment Report, Working Group I “Science,” Summary for Policymakers. IPCC, 2001.
• IPCC Third Assessment Report, Working Group II “Impacts, Adaptation, and Vulnerability,” Summary for Policymakers. IPCC, 2001.
Climate Change Policy
• “Thirteen Plus One: A Comparison of Global Climate Policy Architectures.” Aldy, Barrett, and Stavins, March 2003.
• “Market Mechanisms and Global Climate Change: An Analysis of Policy Instruments.” Environmental Defense and Pew Center on Climate Change, 1998.
Mitigation Options
• Pacala and Socolow. “Stabilization Wedges: Solving the Climate Problem for the Next 50 Years with Current Technologies.” Science 305, August 2004.
• IEA. “Energy Technologies at the Cutting Edge.” IEA, 2005.

Also, for students unfamiliar with structure and operation of the electric utility industry, two lectures will be posted on the course blackboard site to provide background information.

Other required and recommended reading assignments will be posted on Blackboard in advance of each class. Required reading should be read in advance of the specified session; recommended readings should be read if additional background is desired. Besides pre-reading requirements, we will try to make all other readings available in electronic format via blackboard.

Course Schedule
The exact course schedule remains TBD, but will cover the topics listed below. A list of faculty, possible topics for the living case, and sample readings are also provided.
Topics
1. Electric Utility Industry Overview
a. Historical Perspective—evolution of the utility sector over time, response to previous technology or policy shifts
b. Economics of electric utilities (natural monopoly; commodity product; externalities)
c. Traditional Electricity Generation: Technology & Environmental Impacts
d. Common fuels (coal, natural gas, uranium)—current status and future trends
e. Historical and current regulation of electric utilities (market & environmental regulations)
2. Climate Change Background—Science & Policy
a. Climate Science
b. GHG emissions: electric utility emissions in context of all emissions
c. Current climate policies: international, domestic (pending legislation, federal vs. state action)
d. Evolution of corporate strategy vis-à-vis climate change
3. Policy & Politics Overview
a. Basics of policy process
b. Interaction of politics and policy
4. Mitigation Options
a. Alternative technologies (nuclear, IGCC, renewables, distributed generation, LT future options like fusion)
b. Carbon sequestration—carbon capture and geologic storage, offsets via biological sequestration, oceanic)
c. Energy efficiency and conservation (demand-side)
d. Geoengineering & adaptation
5. Mitigation Strategy
a. Incorporating Environment into Organizational Strategy
b. Business & Government R&D Strategy
c. GHG emissions policy options (tax, cap&trade, RPS, subsidies, etc.)
d. Organizational Change Management (incentives, culture, etc.)
e. Carbon markets and trading
6. Basic Tools
a. Energy Analysis (units, conversions, trends, etc.)
b. Economic analysis (regulation vs. deregulation; tax vs. cap & trade; etc.)
c. Finance: project analysis & financial instruments
d. Decision making tools under uncertainty
e. Comparative policy analysis
f. Energy & Climate models and forecasts
g. Systems modeling

Participating instructors (contingent on availability, changes to syllabus)
Duke University Faculty:
Rob Jackson (Nicholas School) Climate change science, sequestration
Lincoln Pratson (Nicholas School) Geology (sequestration, energy resources)
Bill Schlesinger (Nicholas School) Climate change science, sequestration
Erika Weinthal (Nicholas School) Climate Change Policy (Kyoto Protocol)
Jonathan Wiener (Nicholas/Law School) Climate Change Policy design (videoconference)
Jim Salzmann (Nicholas/Law School) Regulation (Clean Air Act, New Source Review)
Chris Schroeder (Law School) Policy and Regulatory Processes
Michael Lenox (Fuqua School) Organizational & Environmental Strategy
Scott Rockart (Fuqua School) Systems Modeling
Jim Smith (Fuqua School) Decision Analysis; assessment of gov’t R&D
Charles Harman (Pratt School) Energy Technology (esp. traditional sources)
Hadley Cocks (Pratt School) Energy Technology
Other instructors
Tim Profeta (Nicholas Institute) Politics & Policy
Jeff Johnson (Nicholas School visiting executive) Markets: Electricity (trad., green) & Carbon
John Ahearne (Sanford visiting lecturer) Nuclear Energy Policy
Stephen Green (former exec, Progress Energy) Utility industry structure & incentives
Joe DeCarolis, PhD (EPA) Energy/Climate Analysis & Modeling
Tim Johnson, PhD (EPA) Energy/Climate Analysis & Modeling
Samudra Vijay, PhD (EPA) Renewable Energy Impacts
Bill Rosenberg (Harvard Kennedy School) Natural Gas & IGCC Economics & Policy
Bob Price (former Fuqua executive-in-residence) Corporate Innovation Strategy

Living Case: possible topics
1. Duke Energy overview
2. Case Study: SOx trading system (during DC field trip?)
3. Case Study: NC Clean Smokestacks legislation
4. Changing industry attitudes towards climate change and possible climate policies
5. NGO view on climate change policy and industry performance (during DC field trip?)
6. Examination of previous technology shifts in electricity sector
7. Lobbyists/advocates (nuclear, IGCC, climate, renewables, etc.) (during DC field trip?)
8. NC Utility commission
9. Integrated Resource Planning process
10. Eastman Chemical gasification business (possible site visit, Kingsport TN)
11. Investor views on industry “carbon exposure” (during DC field trip?)
12. Utility views on realistic mitigation options
13. Politics behind the policy (during DC field trip?)
14. Experience of other utilities (Progress Energy, AEP, etc.)

Sample Course Readings:
Utility Perspective
• “Air Issues: Report to Stakeholders. An Analysis of the Potential Impact of Greenhouse Gas and Other Air Emission Regulations on Cinergy Corp.”. Cinergy Corp., December 2004.
• “An Assessment of AEP’s Actions to Mitigate the Economic Impacts of Emissions Policies.” AEP, August 2004.
• “Environment, Health & Safety and Community Relations: 2004 Report.” Duke Energy, 2004.
• “Capital cycles and the timing of climate change policy.” Lempert, et al. Pew Center on Climate Change, 2002.
Mitigation Options
• Jackson and Schlesinger. “Curbing the US Carbon Deficit.” PNAS, 2004.
• Hoffert, et al. “Advanced Technology Paths to Global Climate Stability: Energy for a Greenhouse Planet.” Science 298, November 2002.
Policy and Politics
• “A Climate Policy Framework: Balancing Policy and Politics” A Report of an Aspen Institute Climate Change Policy Dialogue. Aspen Institute, November 2003.
• Hahn, “The Economics and Politics of Climate Change.” AEI, 1998.
• CBO, “Uncertainty in Analyzing Climate Change: Policy Implications.” CBO, January 2005.