CAMBRIDGE, Mass.–Lars Josefsson is the CEO of an electricity utility and a self-described climate activist.

He leads Vattenfall, a Swedish state-owned utility that has set a goal of making its power generation carbon-neutral by 2050. He delivered the opening keynote address at the MIT Energy Conference here on Saturday.
Vattenfall, which means waterfall in Swedish, already gets 22 percent of its electricity from renewable sources, largely hydropower and offshore wind in Sweden, and an additional 31 percent from nuclear energy.

In the utility industry, Vattenfall is well know for being the first to test carbon capture and storage technology at a coal-fired power plants outside Berlin, Germany. When European electricity markets were deregulated earlier this decade, Vattenfall acquired power companies in Europe that rely on coal.

Vattenfall has worked with consulting firm McKinsey on an influential study that examines the most cost-effective technologies for reducing carbon dioxide concentrations in the atmosphere.

Through that work, Vattenfall, like others, have determined that pumping carbon dioxide gas underground at coal-fired power plants–so-called clean coal technology–is necessary to stabilize carbon dioxide concentrations at 450 parts per million. The current concentration is approaching 400 parts per million and was under 300 parts per million before industrialization, said MIT president Susan Hockfield in her conference introduction on Saturday.

Sequestering carbon–an expensive and experimental technology that is still not done at commercial scale–is part of of an economywide transformation that will need to happen to stabilize greenhouse gas concentrations, Josefsson said. If businesses and policy makers wait 10 years to pursue low-carbon technologies, achieving the 450 parts per million target will not be possible, he said.

“This is not a small correction. It’s a total redesign of society and the way it’s been. It’s a totally new infrastructure and for that, you need time,” he said. “We think in 40 years, we can change everything as a power company–it’s a question of how and in what order.”

The company is on a path to reducing its carbon emissions by 3 percent from 2008 to 2010. It projects that it can cut emissions by 50 percent from 1990 levels by 2030 by investing in offshore wind, ocean power, biomass, new nuclear power, and carbon storage at fossil fuel plants, Josefsson said. Those same technologies will allow it to hit its carbon-neutral target by 2050.

At its site in Germany, Vattenfall has found that the oxyfuel technology being tested can effectively cut carbon dioxide emissions by 100 percent by pumping gases underground through pipelines. But it’s not clear that this can ever be done economically, Josefsson said.

He argued that the cost of developing carbon storage technology should be shared by government and industry.

“Companies with shareholders and boards cannot take such a loss to get a gain in 20 years. This is a perfect example of a public-private partnership,” Josefsson said. “Things will not happen by themselves in the time required if we don’t get that match” between industry and government.

In the U.S., there are no functioning carbon-capture facilities. The Department of Energy pulled funding for a research project in Illinois called FutureGen last year. In the Obama administration’s stimulus plan and budget, there is $3.4 billion set aside for research in “low-carbon coal technologies,” such as carbon storage at coal power plants.

Abatement strategies
To address climate change, the world’s economies need policies that manage the “cost and speed of change” to low-carbon technologies, Josefsson said. He mentioned specifically the need for a carbon cap-and-trade system designed to put a price on emitting carbon dioxide.

The European Union has set a goal of three 20s by 2020: 20 percent more efficiency, 20 percent renewable energy, and 20 percent emissions reduction. The government of Sweden recently proposed increasing the country’s renewable energy output to 50 percent of power generation.

Josefsson said the McKinsey study found that the cost of emissions abatement by 2030 is about half of 1 percent of global gross domestic product. That’s about as much money as a $10 change in the price of oil, which the global economy has shown it can absorb, he said.
Vattenfall CEO Lars Joseffson shows results from a McKinsey study on how to reduce carbon dioxide concentrations and continue economic growth.
(Credit: Martin LaMonica/CNET News)

“It’s not a question of money. It’s not a question of technology. It’s a question of leadership and policy. That is what is in short supply,” he said. He argued that businesses need to take an active role in dealing with climate change, not just policy makers.

During her introduction, MIT’s Hockfield said that energy technology has “the most immediate potential by far for catalytic innovation” to help revive the troubled economy.

Asked why energy technology cannot change as fast as information technology, Josefsson said that entrenched investment in energy industry means that things move slowly.

“The energy system is such a big system and the inertia so enormous and the investment in it so enormous that the time to change, even if you had innovation, is also very long. So it’s not a quick fix,” he said.