Category: Economics

Matters of money

Climate change and wildfires

Through a variety of mechanisms, anthropogenic climate change is worsening wildfires. For instance, warm winter temperatures were a key factor in British Columbia’s apalling mountain pine beetle epidemic, and trees killed by the beetles may be more susceptible to fire. More directly, high temperatures dry out forests and raise fire risks.

Page 44 of the divestment brief summarizes some of the research on climate change and wildfires.

Fires also contribute to the worsening severity of climate change, both by releasing large amounts of carbon dioxide and by producing dark soot which absorbs energy from sunlight.

Arming Saudi Arabia

I find the debate about Canadian arms companies selling weapons and vehicles to Saudi Arabia a little perplexing. The media coverage seems to turn on the question of whether the arms and equipment are being used to oppress the civilian population of Saudi Arabia. I find this perplexing because there seems to be ample evidence that oppression at home and abroad is the main business of the Saudi government, and that anybody selling them anything should expect it to be used that way.

On one hand, it’s appealing that moving to non-fossil fuel sources of energy could undermine countries like Saudi Arabia. On the other, it’s frightening to think what would happen to the region in a future where nobody wants or is willing to use their oil.

Keystone XL uncertainty and the environmental movement’s proficiency at saying no

It’s astonishing that the fate of the Keystone XL pipeline remains unresolved.

First, it shows how for activists determined to block a project it’s only necessary to make one jurisdiction say no. This is akin to the argument in computer security that the structure of vulnerabilities favours attackers over defenders; defenders need to protect every possible vector, while attackers just need one way in.

Second, this validates pipeline delay as a strategy. Using all available legal and political means to delay a project raises investor concern and probably the cost of financing. Since the point of blocking pipelines is blocking upstream bitumen sands development, creating uncertainty about any part of production, transport, and sales may help us avoid building inappropriate high carbon infrastructure.

Third, this supports George Hoberg’s concern (also raised by David Mackay) that the environmental movement has become highly capable at blocking projects but often lacks and skills and inclination to say yes to climate safe forms of energy.

Activism as being a catalyst

When we think about global trends, we tend to focus on their importance and how rapidly things are changing. China’s economic rise, along with massive economic development and urbanization around the world, all have unambiguous importance, though we will endlessly disagree about how they will interact and few of us will live long enough to feel confident we saw the final outcome (there are major limits to knowledge and prediction).

If one makes a sincere effort to understand what is happening in the world and feels compelled to try to encourage some of the best possible outcomes, given the state of the world right now, perhaps it makes sense to think in terms of which trends you hope to speed up and which you hope to inhibit.

The key question in effectiveness has to be: am I / are we making a difference in terms of an important objective.

So perhaps it makes sense to think about being a catalyst or accelerant (to choose a more obviously violent analogy) hoping to create as substantial a ∆ifference as possible in the final chemical equilibrium.

Is there an alternative to extracting the bitumen sands?

I only just came across it, but back in January CBC News asked a bold question: can the oil sands be phased out?

Related:

New jurisprudence on the duty to consult

From CBC News: Supreme Court quashes seismic testing in Nunavut, but gives green light to Enbridge pipeline

I think the Supreme Court is erring in maintaining the view that Canada’s Indigenous communities should not have the right to reject proposed resource development projects that affect their territories.

The land that supposedly belongs to the Crown and to private citizens was dubiously acquired by agreements concluded under duress, and never implemented in good faith by government or private industry. Denying Indigenous communities the ability to reject dangerous projects in the lands they retain control over is an unacceptable imposition by any other part of Canadian society. If resource extraction sites or export corridors are to be partly situated in Indigenous territory, it should only take place in the context of a voluntary partnership between those with an interest in the health and integrity of the land and those who are proposing dams, bitumen sands mines, wind farms, concentrating solar and solar photovoltaic sites, high-voltage power lines, nuclear power plants, etc. It’s to be expected that ownership and decision-making of such projects should be a shared undertaking between governments.

Canada’s history of bad faith and exploitation means they are the party to such agreements that ought to be viewed with suspicion and considered on parole. The heart of Canada’s grim legacy of settler-Indigenous relations lies in forcing people to accept the ways we want them to live. Any plausible pathway to reconciliation must be based on consent.

When to cooperate and when to defect

A new simulation called The Evolution of Trust does a good job of introducing the basic concepts of game theory.

As described on BoingBoing, it demonstrates a range of strategies that are possible in a multiplayer game which is iterated and not zero-sum. Most of this was already familiar to me from the international relations and environmental politics literatures, which are full of talk about prisoners’ dilemmas, security dilemmas, common property failures, and tragedies of the commons. The ‘detective’ strategy was new to me, however.

Game theory in general deserves criticism for being an inaccurate representation of actual human behaviour. Nevertheless, it has explanatory power in scenarios ranging from fishery depletion to tax evasion to nuclear war.

Climate change, Alberta politics, and hydrocarbon producers unwilling to act

The decision of Alberta’s Wildrose and Progressive Conservative parties to merge threatens the ability of Rachel Notley’s NDP government to stay in power. Almost certainly, the climate change policies the new party would implement are worse than those currently being implemented by the NDP, though it doesn’t necessarily follow from that that those concerned about climate change should support Notley, particularly in her plans to build new pipelines and keep expanding the bitumen sands.

The NDP government’s proposal to expand bitumen sands production from 70 megatonnes to 100 is simply unacceptable morally, politically, and economically. Given how rich it is and how disproportionately large our contribution to climate change has been, Canada should have started cutting fossil fuel production decades ago. To keep enlarging it now is to contribute to a global political climate where nobody is willing to take appropriate action, even as the impacts and injuries arising from climate change become more and more serious.

The problem of die-hard jurisdictions is going to be a difficult one in climate politics, both when it comes to sub-national jurisdictions in federalist states like Canada and in terms of hydrocarbon-dependent countries like Russia and Saudi Arabia.

It is hard to imagine a political change within these jurisdictions which will lead to them being willing to cut their fossil fuel production and use aggressively enough to contribute their fair share to a safe global pathway. Rather, it seems more likely that they will resist any plans to constrain climate change and demand compensation for any fossil fuels they are compelled to leave unburned.

Such intransigence could be overcome with sufficient concern and action by the world’s major economies. A handful of states collectively represent the majority of global fossil fuel consumption and thus a majority of demand for hydrocarbon producers. At the same time, domestic consumption is rising rapidly in many major fossil fuel producers, and there will probably be rogue states for a long time who are willing to buy and use cheap fossil fuels, regardless of the climatic consequences for others.

There seems little alternative but to try to constrain the fossil fuel output of recalcitrant jurisdictions externally, to the greatest extent possible. That’s part of why the fight against pipelines makes sense in North America, since both Alberta and jurisdictions active in hydraulic fracturing are unwilling to accept that they must leave most of their reserves underground. Unfortunately, such external resistance is virtually certain to breed resentment and feed the popularity of political parties who are determined to ignore the climate problem.

The climate movement and “100% renewables”

350.org recently sent around a strategic planning survey to people on their email lists. It sought to inform their planning on which campaigns to prioritize. The questions, however, took for granted that the only plausible or desirable way to prevent catastrophic climate change is to commit to an immediate transition from our mass dependence on fossil fuels to a global economy 100% based on renewables like hydro, wind, and solar.

I’ve written before about how climate change policy planning requires the consideration of multiple dimensions of uncertainty simultaneously. We shouldn’t choose strategies where we only succeed if other unknowns work out favourably for us (reducing the cost of renewables, dealing with the intermittancy problem, rebuilding energy grids). Even in terms of researching geoengineering, I can see the sense of evaluating whether it could be a backup plan if mitigation proves too hard, or if powerful positive feedbacks kick in. (That said, Gwynne Dyer paints a frightening picture where disputes over how quickly and energetically to begin geoengineering could be the spark for global conflict.)

I can see why pledging 100% renewables makes life politically simple for environmental non-governmental organizations (eNGOs) and activist groups. Most of their supporters and allied organizations are deeply opposed to nuclear energy, though the threat of climate change has brought some around. Likewise, they tend to oppose big dams and (arguably) most large industrial projects. Too often, they assume that massive reductions in energy demand will be achieved through improved efficiency, though considerable evidence suggests that as people around the world get richer, their demand for energy rises substantially as they choose air conditioning, high-energy forms of transport, and other lifestyle benefits long taken for granted in rich socities. (Though activists sometimes do support large solar farms, wind farms, run-of-river hydro projects, electrified transport, and other large-scale climate-friendly infrastructure.)

Rejecting low-carbon energy options like nuclear power stations and large dams (both of which are very expensive and carry with them a variety of forms of damage and risk, from methane release from hydroelectric reservoirs to the risk of nuclear weapon proliferation) makes for a more harmonious coalition among groups demanding aggressive action on climate change, but it introduces new risks into our long-term planning. In his excellent Sustainable Energy – Without the Hot Air, David MacKay convincingly argues that a future where energy use levels are adequate and more equitably shared around the world requires us to “say yes” to big electricity sources that do little or no damage to the climate:

Because Britain currently gets 90% of its energy from fossil fuels, it’s no
surprise that getting off fossil fuels requires big, big changes… Given the general tendency of the public to say “no” to wind farms, “no” to nuclear power, “no” to tidal barrages – “no” to anything other than fossil fuel power systems – I am worried that we won’t actually get off fossil fuels when we need to. Instead, we’ll settle for half-measures: slightly-more-efficient fossil-fuel power stations, cars, and home heating systems; a fig-leaf of a carbon trading system; a sprinkling of wind turbines; an inadequate number of nuclear power stations.

Solving climate change quickly enough to avoid intolerable damage requires the rapid deployment of all low-carbon energy generation options. It’s better to spend the money and accept the other costs and impacts of multiple pathways to a sustainable future than it is to bet everything on one possibility and hope to our good luck.