Political markets

Ottawa River sunset

One interesting way to try to predict political outcomes is to allow people to bet on who will win and look at the odds that emerge. A number of sites are allowing people to do this for the 2008 American presidential election, with interesting results. Such sites include InTrade, Iowa Electronic Markets, and Casual Observer.

One option is to buy the right to $100 if a particular candidate wins the presidency. The cost of such a contract is reflective of the market’s presumed probability of that candidate winning. Here are some of the most recent prices:

Hillary Clinton: $46.70
Rudy Giuliani: $17.00
Mitt Romney: $9.50
Al Gore: $7.00
Barack Obama: $6.70
John McCain: $3.50

Newt Gingrich: $0.10

The people betting on Al Gore are probably wasting their money, given his repeated assertions that he will not be running. It will be interesting to see how the figures change when more candidates drop out, people choose running mates, and the two parties finally decide upon their nominations.

It is also possible to bet on which party will win the presidential vote. Bets on the Democrats are selling for $63.00. The Republicans only cost $36.40, reflecting much lower expectations about their probable electoral success.

Some carbon capture and storage numbers

Empty Rideau Canal locks

For the period between now and 2030, the International Energy Agency predicts that energy demand will grow 1.7% annually. The also predict that 85% of the new demand will be met using fossil fuel generation: including a doubling of coal power output from 1,000 gigawatts to 2,200 gigawatts. Given the retirement of old plants, this is a net growth of 1,400 gigawatts of coal capacity. 1,200 of those gigawatts are likely to be conventional coal technologies, while the remaining 200 are expected to be Integrated Gasification Combined Cycle (IGCC) plants.

Since the Industrial Revolution got started in 1750, humanity has released about 150 gigatonnes of carbon dioxide into the atmosphere. This has increased the carbon dioxide concentration of the atmosphere from 280 parts per million to 380. Most scientists and economists agree that avoiding really dangerous climatic effects requires that emissions be stabilized between 450 and 550ppm. Last year, emissions were about 27.2 gigatonnes.

From the period when they are built until the time when they are slated for retirement, these new coal plants will emit 140 gigatonnes of carbon. One mechanism that has been emphasized for dealing with this is carbon capture and storage (CCS): whereby the carbon dioxide contained in the fossil fuels is re-buried once the energy in the fuels has been used.

According to Lynn Orr, director of the Global Climate and Energy Project at Stanford, using a quantity of infrastructure equal to that presently used to extract oil, we could sequester about 14% of humanity’s fossil fuel related emissions. That is about half the combined output from large factories and power stations – the kind of facilities where CCS is most likely to be used. According to an article in Nature, $80 billion dollars of investment per year would be sufficient to capture “several million tonnes of carbon per year.” Burying gigatonnes will presumably cost several orders of magnitude more.

If any meaningful CCS is to occur, those 1,400 gigawatts of new power stations must be built with at least the capability to be easily upgraded to use the technology. This is easier to do with IGCC plants than with conventional coal, though only four plants of the former sort have ever been built. Once power plants have the capability to employ CCS, it will be a matter of internalizing the social costs of carbon to the extent that it becomes more commercially appealing to sequester that to emit.

A ringing phone is a request, not an order

One behavioural tendency that I find odd is how people with whom you are talking in person often expect you to break off your conversation in order to answer any telephone call you receive. In some cases, people have told me they feel that they are being rude to the caller by maintaining your attention.

To me, this seems like a misunderstanding of both politeness and the nature of telephones. While phones are conduits for communication, their existence does not create an obligation to answer at all times. Indeed, when one is already occupied in an activity that should be the focus of one’s activities, it would seem that politeness decrees that the call be ignored.

Today’s best biofuel: Brazilian ethanol

Montreal graffiti

Many people see biofuels as a promising replacement for oil in transportation applications. Indeed, being able to replace the oil that contributes to climate change and must often be imported from nasty regimes with carbon-neutral fuels from domestic crops has a great deal of intuitive appeal. For this process to be worthwhile, however, there is a need to consider both life-cycle energy usage and net carbon emissions.

A study conducted in 2004 by Isaias de Carvalho Macedo at the University of Brazil focused on the production of ethanol from Brazilian sugarcane. This is considered by the majority of commentators to be the most energy efficient source of biofuel currently available. This is because most Brazilian sugarcane requires no irrigation and must only be ploughed up and replanted once every five years. The Macedo study found that producing a tonne of sugarcane requires 250,000 kilojoules of energy. This represents the need for tractors, fertilizers, and other elements of modern mechanical farming. The ethanol from one tonne of sugarcane contained 2,000,000 kilojoules of energy. Furthermore, the plants that produce it burn bagasse (the pulp left over when sugarcane has the sugar squeezed out) and can contribute net electricity to the grid. Corn ethanol (the kind being heavily subsidized in the United States) takes about as much energy to grow as is ultimately contained in the fuel.

In terms of net carbon emissions, cane ethanol is also fairly good. Using one tonne of ethanol instead of the amount of gasoline with the same energy content produces 220.5 fewer kilograms of carbon dioxide, when all aspects of production and usage are considered. Burning one litre of gasoline produces about 640 grams of carbon dioxide. Since ethanol has about 25% less energy than gasoline, the relevant comparison is between 1,000 kilograms of ethanol and 750 kilos of gasoline. The gasoline would emit 460 kilos of carbon dioxide, while the ethanol would emit 259.5 kilos.

This is an improvement over the direct use of fossil fuels, but not a massive one. The Macedo study concludes that widespread ethanol use reduces Brazilian emissions by 25.8 million tonnes of carbon dioxide equivalent per year. Their total carbon emissions from fossil fuels are about 92 million tonnes per year – a figure that increases substantially if deforestation is included.

The conclusion to be drawn from all of this is that ethanol – even when produced in the most efficient way – is not a long-term solution. Producing 259.5 kilos of carbon is more sustainable than producing 460, but it isn’t an adequate reduction in a world that has to cut from about 27 gigatonnes of carbon dioxide equivalent to five. Bioethanol may become more viable with the development of cellulosic technology (a subject for another post), but is certainly no panacea at this time.

References:

[Update: 8:54am] The above numbers on carbon dioxide emissions produced by gasoline per kilometre are disputed. If someone has an authoritative source on the matter, please pipe up.

Lunchtime update: slightly pavement-battered

Last night, a car heading east on Rideau Street decided that it was a good idea to make a right turn at speed without signaling or checking if there were any cyclists behind them and to the right. On the positive side, I learned that the brakes on my bike are very effective. On the negative side, the forward momentum of my bike, body, and panniers was more than enough to throw me over my handlebars: feet still set in the cages on my pedals. Naturally, the car didn’t even slow down.

I actually managed to land pretty well, taking the bulk of the force with my right arm. Still, I managed to bruise my arm and ribs, as well as give my elbow joint a painful knock. My wrist and jaw are also somewhat sore, as a result of their contributions to the nullification of my forward and downward momentum. A group of drunken men dressed as Smurfs gave me a round of applause when I stood up (it was 8pm on Halloween).

I was impressed to see how durable my MEC Aegis jacket really is: despite my entire weight and that of the bike and despite scraping along for a few feet, it is not visibly worn. Irksomely, my bike no longer shifts properly into higher gear. Making it do so requires much more force than before, and sometimes requires shifting twice, waiting for the first shift to actually happen, and then preventing the second shift.

I will take it to the bike store over the weekend to see if they can return it to normal functionality. The uber-smooth gear shifting was one of my favourite aspects of the new bike.

[Update: 3 November 2007] I had my ribs checked out and the obvious was confirmed: they are not broken but may be fractured. If they still hurt in a month, the latter possibility will be confirmed. They could hurt for as long as six months.

The shifting on my bike seems to have largely been fixed simply on the basis of riding around. It isn’t perfectly smooth, but it is adequately reliable. Nonetheless, I will take the bike in for a tune-up soon.

Carbon pricing and GHG stabilization

Montreal graffiti

Virtually everyone acknowledges that the best way to reduce greenhouse gas emissions is to create a price for their production that someone has to pay. It doesn’t matter, in theory, whether that is the final consumer (the person who buys the iPod manufactured and shipped across the world), the manufacturer, or the companies that produced the raw materials. Wherever in the chain the cost is imposed, it will be addressed through the economic system just like any other cost. When one factor of consumption rises in price, people generally switch to substitutes or cut back usage.

This all makes good sense for the transition from a world where carbon has no price at all and the atmosphere is treated as a greenhouse gas trash heap. What might become problematic is the economics of the situation when greenhouse gas emissions start to approach the point of stabilization. If we get 5 gigatonnes collectively, that means a global population of 11 billion will get about half a tonne of carbon each.

Consider two things: Right now, Canadian emissions per person are about 24.3 tonnes of CO2 equivalent. Cutting to about 0.5 is a major change. While it may be possible to cut a large amount for a low price (carbon taxes or permits at up to $150 a tonne have been discussed), it makes sense that people will be willing to pay ever-more to avoid each marginal decrease in their carbon budget. Moving from 24.3 tonnes to 20 might mean carrying out some efficiency improvements. Moving from 20 to 10 might require a re-jigging of the national energy and transportation infrastructures, carbon sequestration, and other techniques. Moving from 10 to 0.5 may inevitably require considerable personal sacrifice. It certainly rules out air travel.

The next factor to consider if the effect of economic inequality on all this. We can imagine many kinds of tax and trading systems. Some might be confined to individual states, and others to regions. It is possible that such a scheme would eventually be global. With a global scheme, however, you need to consider the willingness of the relatively affluent to pay thousands or tens of thousands of dollars to maintain elements of their carbon-intensive lifestyles. This could mean that people of lesser means get squeezed even more aggressively. It could also create an intractable problem of fraud. A global system that transfers thousands of dollars on the basis of largely unmeasured changes in lifestyle could be a very challenging thing to authenticate.

These kinds of problems lie in the relatively distant future. Moving to a national economy characterized by a meaningful carbon price is likely to take a decade. Moving to a world of integrated carbon trading may take even longer. All that admitted, the problems of increasing marginal value of carbon and the importance of economic inequality are elements that those pondering such pricing schemes should begin to contemplate.