In Depth: The Future of Energy

Looking for Solutions: MIT center works to shape the future of energy

Industrial chimneys emit pollutants Photo: The MIT Center for Energy and Environmental Policy Research is analyzing the European Union's implementation of the Emissions Trading System (ETS), which aims to reduce the cost of pollution control by providing economic incentives for achieving reductions in the emission of pollutants, like those from these industrial stacks.

It takes a village, the saying goes. In the case of the intensifying energy crises, it takes a community. A collaborative community of thinkers, innovators, and subject experts that can take on the challenges that imperil the planet. MIT is just such a community.

Today, energy solutions come not just from the labs of scientists and engineers, they derive from integrated teams of researchers and knowledge leaders representing scores of disciplines.

MIT Sloan has shown the world just why management is key. Several of its research centers, most notably the MIT Center for Energy and Environmental Policy Research (CEEPR), are front and center in the quest for better, safer, greener ways of powering civilization.

John E. Parsons, executive director of CEEPR and its subset, the Joint Program on the Science and Policy of Global Change, explains why.

“The work on corporate management, energy economics, and public policy by MIT Sloan faculty and students and by interdisciplinary research entities like the Joint Program,” he says, “is an essential component of a comprehensive MIT approach to these issues.”

Innovations for measuring climate change

The Joint Program involves faculty, research staff, and students in the natural sciences, including meteorologists, atmospheric chemists, oceanographers, and hydrologists, faculty and students in the social sciences, and policy analysts from MIT Sloan, the School of Engineering, and the departments of economics and political science.

The group includes decision analysts, energy technologists, scholars of the international policy process, and economists with special expertise in energy and environmental quality.

The work of the program is to analyze the viability of proposed national and international climate policy. Its cornerstone is the MIT Integrated Global System Model, a comprehensive research tool for analyzing potential anthropogenic global climate change and its social and environmental consequences.

CEEPR, which dates back to 1995, has played a significant role in shaping public understanding of acid rain through its definitive study of the U.S. Acid Rain Program, the first large-scale use of tradable permits to achieve an environmental goal.

Fundamental advances in energy policy research

“What distinguishes CEEPR,” Parsons notes, “is its dedication to high-quality, empirically-grounded economic analysis of corporate and public policy issues. This research has contributed to fundamental advances in energy-related policy research for decades.”

Parsons says that as environmental problems have become increasingly complex and the cost of achieving more stringent environmental goals has risen, public policy interest is focusing on alternatives to traditional command-and-control approaches to environmental regulation.

Emissions trading, for example, aims to reduce the cost of pollution control by providing economic incentives for achieving reductions in the emission of pollutants. A central authority — a government agency, for example — will establish caps on each pollutant, recognizing that clean air is a common-pool resource. Companies that intend to exceed the limits may buy emissions credits from companies that have no need of exceeding their own designated limits.

One of CEEPR's tasks is analyzing the European Union's implementation of the Emissions Trading System (ETS), the largest pollution trading system in the world. The EU agreed to this solution for the reduction of carbon emissions under the Kyoto Protocol, the U.N. agreement to cut carbon dioxide and other greenhouse gases. The CEEPR will also evaluate more flexible pollution control mechanisms under consideration in the United States.

Guiding a transition

In a recent white paper, Joint Program faculty report that the world's energy consumption in 2002 was about 400 exajoules (EJ), with fossil fuels contributing about 87% of the total. Typical projections of the world economy show energy demands tripling over this century.

They point out that to make a meaningful contribution to future global needs, new energy sources must operate at a very large scale — 100 or more EJ a year. The economic and technical barriers to developments at this scale are substantial. Even presumed benign sources — wind, biomass, solar, and fossil fuels with carbon sequestration and storage — bring environmental and health risks.

MIT Sloan Professor Henry “Jake” Jacoby, an expert on global environmental issues and co-director of the Joint Program on the Science and Policy of Global Change, represents MIT Sloan on President Hockfield's 16-member Energy Research Council. He believes that the Joint Program and CEEPR are two of MIT's critical forces in helping guide the necessary transition in the global energy system.

As Jacoby puts it, “Without sensible corporate and public policy in these areas, we are in deep trouble, and these two [MIT] Sloan-supported activities are uniquely positioned to provide much-needed research and analysis.”

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