The Importance of a Portfolio Approach

Stabilizing radiative forcing from greenhouse gases and other atmospheric constituents will require massive changes in the design and operation of the energy system, in the management of forests and agriculture, and in several other important human activities. No single technology or approach will be sufficient to accomplish these changes (Hoffert et al. 1998, 2002). Successful control of greenhouse gases will thus require the development of a portfolio of options, potentially including greater efficiency in the production and use of energy; expanded use of renewable energy technologies; technologies for removing carbon from hydrocarbon fuels and sequestering it away from the atmosphere; a mixture of changes in forestry, agricultural, and land use practices; a reduction in the emissions of the non-CO2 greenhouse gases; and other approaches, some of which are currently very controversial, such as nuclear power and certain types of "geoengineering."

A failure to adopt a portfolio approach runs the risk of dramatically increasing the cost of controls and needlessly polarizing public discourse. Thus, for example, if the proponents of carbon capture and sequestration were incorrectly to suggest that these technologies could resolve all of the problems of limiting emissions, their claims would likely alienate members of the environmental community, who tend to be strong proponents of conservation and renewables, and might impede development of an understanding of this important option. At the same time, arguments that the entire problem could be solved by expanded use of conservation and renewables fail to recognize important technical, economic, and behavioral realities and could unnecessarily confuse the public debate.

Just as a mixed portfolio of solutions will be needed, so too a portfolio approach is needed in research and development. Not every nation need make substantial investments in every technology—indeed few, if any, can afford to do so. Across the world, however, it is essential that substantial investments be made in all promising technologies since there is considerable ambiguity about which ones will ultimately prove most useful, socially acceptable, and cost-effective. Indeed, because of the high diversity across the world's nations, peoples, and ecosystems, different mixes of options are likely to prove desirable in different locations.

It is important that experts remain cognizant of the considerable uncertainties that confront this field. It is incumbent upon the technical community to provide leadership to maintain a wide search for options. It would be a serious mistake if work on promising options were prematurely foreclosed by incomplete expert or public understanding or by short-term political or business agendas. Developing practical hands-on experience with many different technologies is essential. Equally important is the recognition that markets are good at commercializing existing intellectual capital, but they are generally not very good at making sustained investments in the basic research needed to develop this capital. Investments in basic technology and environmental research will be crucial for providing the intellectual capital that the world will need over the next century as it grows progressively more serious about addressing this problem.

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