Industrial Sector

AuthorGregg P. Macey
Page 301
I. Introduction
Nearly 20 years ago, atmospheric scientist Paul Crutzen
declared that we live in the Anthropocene—an epoch
where human beings are a geological force unto ourselves.1
Humans have altered everyt hing from the atmosphere to
surface temperature to the acidity of oceans, rst gradu-
ally, then exponentially in the years that followed World
War II .2 We argue over when the epoch bega n. Perhaps
it started in 1784, when James Watt patented the steam
engine. is ushered in several waves of industrial revolu-
tion that, all told, vented 365 billion tons of carbon from
fuel combustion and cement production alone.3 Its roots
may stretch back further to when farming and defores-
tation were rst practiced on a global scale. But there is
little doubt that as ancient biomass was continuously, then
Author’s Note: I would like to thank John Dernbach, Michael
Gerrard, the Deep Decarbonization Pathways Project research team,
colleagues who contributed to this important volume, and three
reviewers for extensive comments on earlier drafts.
1. C B  J-B F, T S  
A 3 (2015).
2. J.R. MN  P E, T G A: A E-
 H   A S 1945 4-5 (2016).
3. N O  E M. C, T C  W C-
: A V F  F 18 (2014).
increasingly, extracted and sent into the sky, and as car-
bon dioxide (CO2) rose from 280 parts per million in the
atmosphere to levels unseen in three million years,4 indus-
try was a central cause.
Industrial activity fuels economic growth, relies on car-
bon-intensive production processes, and raises total energy
use.5 Industry coevolved with the location, availability,
and abundance of fossil fuels, a nd set the course of moder-
nity through the spread of hundreds of steps and sta ges
that take raw materials, subject them to heat and chemical
transformation, and rene and nish t hem as thousands of
products.6 As we pan out from thi s cacophony of behavior,
a handful of processes dominate the landscape. Five fami-
lies of activity account for nearly 70% of the industrial
4. Donald Huisingh et al., Recent Advances in Carbon Emissions Reduction:
Policies, Technologies, Monitoring, Assessment, and Modeling, 103 J. C
P 1, 1 (2015).
5. Wim Naude, Climate Change and Industrial Policy, 3 S 1003,
1005 (2011).
6. Marilyn A. Brown et al., Engineering-Economic Studies of Energy Technologies
to Reduce Greenhouse Gas Emissions: Opportunities and Challenges, 23 A.
R. E E’ 287, 340 (1998). See also Claude M. Summers, e
Conversion of Energy, 225 S. A. 148, 149 (1971) (“A modern industrial
society can be viewed as a complex machine for degrading high quality energy
into waste heat while extracting the energy needed for creating an enormous
catalogue of goods and services.”).
Chapter 12
Industrial Sector
by Gregg P. Macey
Carbon mitigation programs face several contradictions as they turn to the industrial sector. While the Intergov-
ernmental Panel on Climate Change points to industry as a high-carbon pollutant end-use sector, it is already
ecient in some respects. is is a product of dozens if not hundreds of years of improvement in motors and heat
and steam production. Industry plays a declining role in the United States in terms of energy use. Yet, industrial
carbon emissions reductions must mirror deep decarbonization goals that are set for other sectors in order to
hold global average temperature increases within 2°C. And while there are hundreds of cost-eective energy-
eciency measures that manufacturing subsectors such as iron and steel and cement and lime could adopt, rms
often ignore them. ese challenges demand a diverse array of legal and policy responses. is chapter outlines
a suite of legal pathways that must be pursued in concert to achieve massive carbon emissions reductions across
key energy-intensive industries in the United States.
Page 302 Legal Pathways to Deep Decarbonization in the United States
sector’s energy use and 55% of its carbon emissions.7 e
built environment, consumer products, and our quality of
life are sustained by the ceaseless transformation of oil to
olens and aromatics, wood ber to paper, bauxite to alu-
minum, limestone to cement, and iron ore to steel.
As nations, regions, and global gat herings work to avoid
catastrophic climate change,8 industry oers three key
contradictions. First, while the industria l sector accounts
for only a third of global energy demand,9 even reasonable
climate goals cannot be met if industry reductions do not
mirror those of other sectors. is is because les s aggressive
targets for industry would render necessary carbon emis-
sions reductions in the transportation, building, a nd other
sectors exceedingly dicult.10 Second, while smelters and
stacks are symbolic stand-ins for emissions in the popular
press, and while the Intergovernmental Panel on Climate
Change (IPCC) considers industr y a more carbon-inten-
sive end-use sector than, say, transportation or building,11
manufacturing is in some respects already highly energy
ecient. is is the product of 80 (e.g., plastics), even 200
(e.g., iron and steel) years of eort, driven by cost as well as
changes in heat and stea m production and motor ecien-
cy.12 A s a result, several industrial processes approach their
thermodynamic eciency limits.  is leads to a sobering
conclusion: ener gy eciency alone w ill not suciently rein
in carbon emissions by industry or, by extension, the econ-
omy. ird, even when they are cost eective, eciency
and conservation measures —early elements of U.S. energy
policy—are often ignored by rms.13 e “eciency gap,
and barriers to resolving it, are well known in the eld of
environmental management.14 If anything, the eciency
gap reveals that set ting a cost of carbon with an energy or
carbon tax will not alone wring out remaining eciencies
in the industrial sector. A combination of external (e.g.,
performance standa rds) and internal (e.g., private law solu-
tions such as carbon management) measures will need to
7. E.A. Abdelaziz et al., A Review on Energy Saving Strategies in Industrial Sector,
15 R  S E R. 150, 154 (2011).
8. Adoption of the Paris Agreement, U.N. FCCC, Conference of the Parties, 21st
Sess., Agenda Item 4(b), U.N. Doc. FCCC/CP/2015/L.9/Rev.1 (2015).
9. Birgit Fais et al., e Critical Role of the Industrial Sector in Reaching Long-Term
Emission Reduction, Energy Eciency, and Renewable Targets, 162 A
E 699, 699 (2016).
10. Jonathan M. Cullen & Julian M. Allwood, e Ecient Use of Energy: Trac-
ing the Global Flow of Energy From Fuel to Service, 38 E P’ 75, 76
11. Manfred Fischedick et al., Industry, in C C 2014: M
 C C, C  W G III   F
A R   I P  C
C 749 (Ottmar Edenhofer et al. eds., Cambridge Univ. Press 2014).
12. Timothy G. Gutowski et al., A Global Assessment of Manufacturing: Economic
Development, Energy Use, Carbon Emissions, and the Potential for Energy Ef-
ciency and Materials Recycling, 38 A. R. E’  R 81, 92
13. Ki-Hoon Lee, Drivers and Barriers to Energy Eciency Management for
Sustainable Development, 23 S D. 16, 17 (2014).
14. Ralf Martin et al., Anatomy of a Paradox: Management Practices, Organiza-
tional Structure, and Energy Eciency, 63 J. E. E.  M. 208,
209 (2012).
supplement an economic approach. ese complex ities
demand a diverse array of legal and policy responses.
is chapter presents such a legal strateg y, in service of
the Deep Decarbonization Pathways Project’s (DDPP’s)
carbon emissions reduction work, which relies on ecient
end use in the industrial sector, energy supply strategies
such as electricity supply decarbonizat ion, and fuel switch-
ing (e.g., from coal to electricity and pipeline gas). Among
these strategies, my focus wi ll be energy eciency and fuel
switching, leaving supply decarbonization and electricity
balancing to other chapters in this volume. is chapter
will also addre ss steps that are mentioned but not included
in DDPP scenario building, most notably material e-
ciency and carbon management. e goal is to maximiz e
the industrial sector’s contribution to a low-carbon transi-
tion through diverse legal tools, including carbon pricing;
ad hoc or comprehensive regulatory regimes where a car-
bon price is set through market mecha nisms that respond
to emissions standards; subsidies that target emissions at
the high and low ends of the carbon emissions abatement
cost curve; a sectoral crediting mechanism for beyond-
best available technology (BAT) emissions reductions;
improved federal motor and boiler minimum eciency
performance standards (MEPS) to address cross-sector
leakage in national emissions trading; harmonized state
equipment eciency standards that are not addresse d, and
potentially preempted, by federal mandate; and a regula-
tory oor to encourage material eciency.
e aim is to account for carbon emissions reduction
gains that approach or exceed the DDPP’s budget for
allowable 2050 emissions from the industrial sector. e
DDPP’s models are organized around three primar y energy
choices—High Renewables, Hig h Nuclear, and High Car-
bon Capture and Sequestration (CCS) Scenarios— as well
as the Mixed Scenario that balances those resources.15 Each
scenario yields steady energy dema nd in the industrial sector
of 23 to 26 exajoules (EJ) in 2050, compared to 27 EJ in the
DDPP’s 2050 reference case. ey fur ther result in a rising
electricity share of nal energ y, between 20.4% and 28.2%
compared to 18.9% in the 2050 reference case. Finally, the
models show steep declines in CO2 emissions that by 2050
would measure between 220 mil lion metric tons (MMT)
CO2 and 555 MMT CO2, compared to 1,503 MMT CO2
in the 2050 reference case.16 e DDPP nds industrial-
sector carbon emissions reductions could reach between
806 MMT CO2 (a 59.2% reduction achieved in the High
CCS Scenario) and 1,141 MMT CO2 (an 83.8% reduction
achieved in the Mixed Scena rio) from a 2014 baseline, all of
15. J H. W  ., P  D D  
U S, U.S. 2050 R, V 1: T R 16-17
(Deep Decarbonization Pathways Project & Energy and Environmental
Economics, Inc., 2015), available at
technical-report.pdf [hereinafter DDPP T R].
16. Id. at 19.

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