To meet climate-change goals, is it time to think small?

When the latest climate change conference (COP25) finally ended in Madrid on December 15, there were some big questions left: Had it made any difference? Are the Paris accords, signed in 2015, going to be fulfilled? What’s going on?

The facts on the ground (or in the atmosphere) are glum: global emissions have risen for the past three years, according to the Global Carbon Project, an international research consortium, and hit a record high of 55.3 giagtonnes of CO2e in 2018. According to the United Nations, the “emissions gap”—the difference between what the world is doing and what it needs to do to meet the obligations it made in Paris in 2015—is as wide as it has ever been.

While some countries have and are reducing emissions, no one is doing so at anywhere near the rate the UN says is necessary—7.6 percent a year for the next decade—to limit temperature rises to 1.5 degrees Celsius. Few are even on track to meet the cuts required (2.7 percent a year) to meet the more modest goal of 2 degrees. “We’re blowing through our carbon budget the way an addict blows through cash,” Rob Jackson, a professor of Earth science at Stanford University and chair of the Global Carbon Project, told the Washington Post. And it’s important to remember that the longer action is delayed, the steeper the cuts will need to be. That already improbable 7.6 percent figure rises to 15.5 percent if action is delayed to 2025.

It’s not as if the world has ignored the problem: Germany has spent at least 160 billion euros in the last five years alone (not including higher costs to consumers) to decarbonize its power system. China and India are both investing massively in renewables, particularly solar. The United States has shut down much of its coal capacity; coal now accounts for only 25 percent of electric generation, compared to 48 percent in 2008. The numbers of conferences, white papers, and op-eds is numbing. And yet… it’s clearly not nearly enough.

To reach the Paris targets, the UN estimates that energy efficiency and the greater use of renewables could reduce emissions by 12 gigatonnes, and that electrifying transport could pretty much take care of the rest of the gap. But it occurred to me that I’ve been hearing about these two solutions for years… and yet, we are running far short of the Paris commitments. Why? One reason is that in much of the developing world, even as clean-energy investments have indeed widened and deepened, the need for reliable power has meant that a great deal of emissions-intensive capacity has also been built. And in the richer world, emissions outside the power sector have not got nearly as much attention.

The modest proposal

I believe it’s critical to keep one’s mind (and markets) open to the unexpected. Unknown and undreamed of innovations might make all the difference a decade or two or three from now.

So, if one were to think more broadly, what might be some other ideas? Here’s one.  Let me be clear: I am not giving this my seal of approval (for what that’s worth). Climate-change and energy technologies are devilishly complicated, and I have not dug into the details.  All I am trying to do is to expand the notion of what kinds of things could theoretically be done. So here goes.

One of the drawbacks of most renewables, including wind and solar, is that they cannot be turned on or off at will; they are not, in short, what is known as “baseload power.” In the United States, baseload power is composed of gas (35.2%), coal (27.5%) and nuclear (19.4%); only the latter is emissions-free. But very little nuclear is being built in the United States—only one in the last 23 years. Existing plants are aging and progress has been slow on a number that were under construction. Building big nuclear plants is expensive, and they never seem to be done anywhere near on time. NIMBY issues can be forceful. So what is small, safe, flexible, and economic nuclear could be built? That could be a real game-changer.

And that is the idea behind a small-scale modular nuclear reactor that is 1% of the size of a typical plant. NuScale is just that. It won’t need the cooling towers that are such a contested symbol of nuclear; now does it need much land, either to site the plant or for emergency zones. It’s just … normal. The 60-megawatt plant can be bought more or less off the shelf, and shipped anywhere. Need just a small amount of energy to run an industrial park or a remote area? Fine. Need more to power a growing city? Just snap on a few more. At 65 feet tall and 9 feet wide, it takes up less space than wind turbines, while providing much more power per foot. That preserves land and open space. They can be built on site, making construction faster and cheaper. And because such small modular reactors (SMRs) sit in pools of water, any leak just goes into the pool. According to Wired magazine, “About the size of two school buses stacked end to end, you could fit around 100 of them in the containment chamber of a large conventional reactor.” As of December, NuScale has completed four phases of review so far and has an agreement with the state of Utah to build a 12-module plant. Westinghouse, which has had economic problems selling its big nuclear plants, is also developing an SMR, known as the eVinci.

The US Energy Department is supporting the development of “plug-and play” micro-reactors that could be transported on the back of a truck. These are even smaller than SMRs—generating one to 20 megawatts—and the department thinks some could be rolled out in the five to 10 years. South Korea and China are also developing small-scale nuclear. So is Westinghouse. The company, which has had economic problems selling its big nuclear plants, is also developing an SMR, known as the e-Vinci, with capacity starting at 5 megawatts. It seeks to  deploy it commercially by 2025.

For small nukes to get a shot, the regulatory environment will have to change; the current process is designed to address the behemoths that have been the norm. In January, Congress did take a step in this direction; the bill requires the Nuclear Regulatory Commission to come up with guidelines for emerging innovations.

I suspect some readers are going to hate this idea. And that’s fine; in fact, feel free to let me know. But the larger point is this: Right now, global climate policies and actions are not getting the planet anywhere near where it needs to be. It’s time to think differently.

All views are mine and not those of McKinsey & Co.