One thing for which you need to give Stephen Harper some credit: unlike the American presidential candidates, he is willing to admit that the government cannot do much to reduce gasoline prices. Unfortunately, he is also using those high prices to oppose carbon taxes, probably the most economically efficient economy-wide mechanism for reducing greenhouse gas emissions.
Category: Economics
Matters of money
Polar bears ‘threatened’
As of today, the American Department of the Interior has listed the polar bear as a ‘threatened’ species, on account of the ongoing disappearance of the Arctic ice cap. In making the announcement, Secretary of the Interior Dirk Kempthorne stressed that the decision is not meant to compel the regulation of greenhouse gasses:
Listing the polar bear as threatened can reduce avoidable losses of polar bears. But it should not open the door to use of the ESA [Endangered Species Act] to regulate greenhouse gas emissions from automobiles, power plants, and other sources. That would be a wholly inappropriate use of the ESA law. The ESA is not the right tool to set U.S. climate policy.
In a sense, that is fair enough. Creating something as comprehensive as a greenhouse gas mitigation strategy in response to concern about a single species is definitely a backwards-seeming way to go about it. At the same time, one is reminded of how somewhat awkward justifications have sometimes been used in the past to secure legal outcomes: for instance, the use of the ‘interstate commerce’ clause in the US Constitution to assert federal jurisdiction, or even the indictment of Al Capone on tax evasion charges, rather than those directly associated with organized crime.
The point here is less whether concern about polar bears does or does not create a legal obligation to act on climate change. Rather, this is another demonstration of how virtually all conservation planning now requires the consideration of climate change effects. This is just one of a thousand cuts through which federal reluctance to effectively regulate greenhouse gasses will need to be eliminated.
Electric vehicles in Canada
Dynasty is a Canadian company that builds light, low speed, battery powered cars. Their Dynasty IT vehicle has a range of 50km and a top speed of 40 km/h. Because Transport Canada refused to follow the lead of 44 American states and authorize the vehicles for non-highway use on roads, the company has decided to relocate to Pakistan. There, they will manufacture cars for the American market. The ZENN is in a similar predicament.
There is a real trade-off between producing light vehicles and producing ones that do well in crash tests. That said, we do permit people to ride absurdly unsafe motorbikes – even on the highway. It is incoherent to ban one and permit the other.
Perhaps it would make sense to create a special legal category for small, light vehicles of limited range, intended primarily for urban use. By all means, those purchasing them should be informed that they will not fare as well in a crash with a huge truck as someone in a larger, steel-framed car. That said, the economic and environmental advantages may justify the risk in the eyes of many.
Vehicle efficiency
My friend Mark sent me a link to a book in progress about sustainable energy. One of the more interesting sections is on vehicle efficiency. The author stresses that, while some kinds of efficiency gains are physically possible, others are not:
Could we make a new car that consumes 100 times less energy and still goes at 70mph? No. Not if the car has the same shape. The energy is going mainly into making air swirl. Changing the materials the car is made from makes no difference to that. A miraculous improvement to the engine could perhaps boost its efficiency from 25% to 50%. But the energy consumption of a car is still going to be roughly 40 kWh per 100 km.
The story is a familiar one: efficiency can get you a long way, but there are no free rides. Another interesting comment from this chapter is the major design differences between an efficient city car and an efficient highway car. Since the former is always stopping and starting, low weight is really important. Brakes that regenerate energy also make a big difference. For a highway car that avoids major acceleration and deceleration, the most important thing is reducing drag. Weight is comparatively trivial.
One other interesting assertion is that the energy involved in making a car is actually pretty trivial compared to the amount used in driving it around:
The energy cost of making the raw materials for a one tonne car is thus equivalent to about 3000 km of driving; an appreciable cost, but probably only 1% of the lifetime energy-cost of the car’s fuel.
If correct, that makes it seem a lot more reasonable to upgrade from an old and inefficient vehicle to a newer and less gas-thirsty model. It also suggests that government programs to replace inefficient cars with better ones might have strong justification, in terms of climate change mitigation potential.
In order to move to a low carbon society, we need to do a slew of things. We definitely need to increase the energy efficiency of accomplishing most tasks. We definitely need to reduce the quantity of greenhouse gas produced in the process of generating a unit of energy. We probably need to significantly reduce total energy consumption. Finally, we need to take actions that manage the greenhouse gasses that will inevitably be produced by some actions. The protection and enhancement of carbon sinks (mostly forests and soils) are essential for this.
When it comes to reducing total energy usage, the chapter does make one excellent suggestion: “a cyclist at 21 km/h consumes about 30 times less energy per kilometre than a lone car-driver on the motorway: about 2.4 kWh per 100 km.” Those who cycle more slowly are likely to be even more efficient, since doubling the time it takes to travel somewhere apparently reduces energy usage by three quarters.
The structure of consumer spending
This graphic, provided by the New York Times, is quite interesting on two levels. To start with, it displays some interesting information about the structure of consumer spending. In addition, it provides an excellent example of data being displayed in a concise, comprehensible, attractive, and accessible way.
The first thing that is interesting is the breakdown between spending areas:
- Housing: 42%
- Transportation: 18%
- Food and beverages: 15%
- Health care: 6%
- Education and communication: 6%
- Recreation: 6%
- Apparel: 4%
- Miscellaneous: 3%
Also interesting are the single biggest spending items:
- “Owner’s equivalent rent:” 23.9%
- Rent: 5.8%
- Gasoline: 5.2%
- New cars and trucks: 4.6%
- Full service restaurant meals: 3.0%
- Electricity: 2.8%
- Hotels and vacation homes: 2.4%
- Car insurance: 2.0%
- Used cars and trucks: 1.8%
- Cable: 1.2%
Beer spending is a paltry 0.3% – only three times what is spent on butter or ice cream.
Greenpeace on carbon capture and storage
On Monday, Greenpeace released a report entitled: False Hope: Why carbon capture and storage won’t save the climate (PDF). The points made are fairly familiar, though it is good to see them considered in combination:
- CCS cannot deliver in time to avoid dangerous climate change.
- CCS wastes energy and resources
- Storing carbon underground is risky
- CCS is expensive and undermines real solutions to climate change
- CCS and liability: risky business
- The alternative to CCS: renewables and energy efficiency
Joseph Romm probably has the most sensible overall view of CCS. He argues that it can serve as one of the fourteen ‘wedges’ that are required to stabilize global concentrations of greenhouse gasses, acknowledging that even that role will require pumping infrastructure equivalent to all that presently being used to extract oil. Think about the total expenditures of the world’s oil companies on equipment, construction, and labour and you begin to appreciate the costs that are likely to be associated with widespread use of CCS. That being said, it is only fair to say that the cost projections are approximations based on huge assumptions. It is like being in the era of the Wright brothers and trying to project what the finances of a major airline will resemble, in terms of thinks like capital use and equipment life cycles.
CCS needs to be thought about in the context of an overall strategic push to stabilize greenhouse gas levels. It is possible that it will have a modest effect at an acceptable cost. It is also possible that it will be unfeasible at a commercial scale, or simply too costly. The most dangerous possibility is that the very idea of CCS gives people the false sense that the problem can be solved, particularly that we can keep burning coal while waiting for a low-cost technological solution to magically appear. As one strategy among many, CCS might have a future. One future that CCS cannot permit is one where the nature of the world’s energy use remains similar to today, with the awkward greenhouse gasses simply swept under the rug.
One more reason to support American gas taxes
One reason for which cutting gasoline taxes in the United States is especially unjustifiable is that the taxes don’t go into general revenue. Rather, they go into a Highway Trust Fund that pays for road construction and maintenance. Not only would cutting gasoline taxes encoruage people to use fuel inefficiently at a time of ever-greater scarcity: it would also shift the burden of paying for roads from those who use them most heavily towards the population as a whole.
The Fischer-Tropsch process
Those hoping to understand energy politics in the coming decades would be well advised to read up on the Fischer-Tropsch process. This chemical process uses catalysts to convert carbon monoxide and hydrogen into liquid hydrocarbons. Basically, it allows you to make gasoline using any of a large number of inputs as a feedstock. If the input you use is coal, this process is environmentally disastrous. It combines all the carbon emissions associated with coal burnings with extra energy use for synthetic fuel manufacture, not to mention the ecological and human health effects of coal mining. If the feedstock is biomass, it is possible that it could be a relatively benign way to produce liquid fuels for transport.
The process was developed in Germany during the interwar period and used to produce synthetic fuels during WWII. The fact that it can reduce military dependence on imported fuel is appealing to any state that wants to retain or enhance its military capacity, but feels threatened by the need to import hydrocarbons. The US Air Force has shown considerable interest for precisely that reason, though they are hoping to convert domestic coal or natural gas into jet fuel – an approach that has no environmental benefits. By contrast, biomass-to-liquids offers the possibility of carbon neutral fuels. All the carbon emitted by the fuel was absorbed quite recently by the plants from which it was made.
Such fuels are extremely unlikely to ever be as cheap as gasoline and kerosene – even with today’s oil prices. The fact that there are parts of the world where you can just make a hole in the ground and watch oil spray out ensures that. That said, Fisher-Tropsch-generated fuels could play an important part in a low-carbon future, provided three conditions are met: (a) the fuels are produced from biomass, not coal or natural gas (b) the energy used in the production process comes from sustainable low-carbon sources and (c) the process of growing the biomass is not unacceptably harmful in other ways. If land is redirected towards growing biomass in a way that encourages deforestation or starves the poor, we will not be able to legitimately claim that synthetic fuels are a solution.
NIN’s The Slip available for download
Following in the footsteps of Radiohead, Nine Inch Nails is giving listeners the option of downloading their latest album for free. Their approach differs from that of Radiohead in two ways: whereas Radiohead asked people to pay whatever they felt was fair, NIN is just sending the files for free. Also, while Radiohead offered their music in the form of DRM-free MP3 files, NIN is offering the choice of “high-quality MP3, FLAC or M4A lossless at CD quality and even higher-than-CD quality 24/96 WAVE.”
Like this blog, the album is available under a Creative Commons attribution non-commercial share alike license.
Collier on biofuels
Paul Collier’s comment on this Financial Times article is one of the best examples I have seen of the value of letting members of the public contribute in that way. As is generally the case with him, the comment is engaging and very candid. He argues that the most important way to keep the poor from suffering because of the drive towards biofuels is to encourage more large-scale industrial agriculture in the developing world:
We laud the production style of the peasant: environmentally sustainable and human in scale. In respect of manufacturing and services we grew out of this fantasy years ago, but in agriculture it continues to contaminate our policies. In Europe and Japan huge public resources have been devoted to propping up small farms. The best that can be said for these policies is that we can afford them. In Africa, which cannot afford them, development agencies have oriented their entire efforts on agricultural development to peasant style production. As a result, Africa has less large-scale commercial agriculture than it had fifty years ago. Unfortunately, peasant farming is generally not well-suited to innovation and investment: the result has been that African agriculture has fallen further and further behind the advancing productivity frontier of the globalized commercial model.
It is definitely a comment at odds with the new fashion for the local within environmentalism. That being said, there is a strong argument to be made that the rich world is going to press on with biofuels regardless of how much suffering it creates in the poor world. If that is taken as true, an unfashionable but effective counter-strategy might be the most suitable response.