Category: Economics

Matters of money

Evaluating existing climate change information

This may strike some people as abstract, but perhaps it will be of interest to someone.

Assume, to start with, that climate change is a major threat to humanity and that concerted global effort is required to deal with it. In that case, I see two possibilities:

  1. If all of humanity and all human knowledge were put in an abstract place together and given all the time they needed to educate one another, consider the data, and deliberate, they would come to a conclusion that strong climate change mitigation action ought to be undertaken.
  2. Even with all our current information and unlimited time, this conclusion could not be widely endorsed. It may, however, be the case that the people in this abstract space would reach the conclusion that we must act, if only they had some new information that we have not yet observed or collected.

Part of the answer involves the depths of human ideological and theological beliefs. If there are people who can never be shaken in their belief that the world is benevolent and concerned about humans, they could never be convinced otherwise by education or information. Part of the answer may have to do with the overall relationship in human beings between perceived risks and the willingness to take precautionary action. That said, I am convinced that an impartial assessment of climate science and the situation we are in would lead most any rational human being to endorse a precautionary approach.

I am similarly convinced that people in my ideal case would eventually overwhelmingly support aggressive mitigation actions. I don’t think human beings would be happy to expose all future generations to the risk of misery and possible extermination, just so they can avoid a transition to renewable energy that would be necessary regardless of climate change, and which can probably be accomplished for a few percent of GDP, spread over many years.

Of course, the real world is very different from my little imagined experiment. Time is important here. If climate change deniers can keep the public confused for another 20 years, that will have a huge impact, even if they could eventually have been unmasked as self-interested charlatans in my infinite-time case. Time can also work to our advantage, however. Striking new information can come to light and, in so doing, it can have an effect on what beliefs and priorities people hold faster than old information would be able to do in an education-and-discourse manner. For example, if we were to observe a drought of unprecedented scale and severity, it might have a big impact on the willingness of people to endorse the kind of high-level policies and actions necessary to curb the harmful influence of human beings on climate (or perhaps not).

What do you think? Would people reach a consensus in favour of strong mitigation action, given all the information and infinite time? If not, what further information might they require? In either case, what is the effect of the differences between my ideal infinite-time case and the real world, in which our choices in the next couple of decades will do much to determine where the climate ends up?

Obama’s nuclear loan guarantees

President Obama has announced that the federal government will provide $8 billion in loan guarantees for two new reactors: the first to be built in the United States since 1979. The guarantees mean that, in the event that plant owners cannot ultimately pay their bills, the government will step in with the promised funds.

There are many reasons to be wary of nuclear power as a climate change solution, with cost and deployment times perhaps the most important (climate change is more threatening than waste, accidents, and proliferation). That said, we need to nearly phase out fossil fuel emissions by the middle of the century. Despite the thirty-year gap in construction, nuclear is still the most important zero-carbon source of electricity in the United States.

It remains impossible to know the true cost of nuclear power, once all the explicit and implicit subsidies are taken into account, as well as connections between military and civilian programs. That said, it looks like we need every low-carbon energy option available.

China and other developing states

Leaked Chinese documents claim that Canada and other developed nations have “connived” in a “conspiracy to divide the developing world.” It’s not surprising that China wants to be treated in the same way as extremely poor developing states, from whom no costly action is expected. At the same time, we just cannot afford to treat China and India like Mali or Guinea. The kind of climate future generations will live in is being affected strongly by choices made in Beijing and Delhi. That needs to be recognized – as does the need for India and China to accept emissions curbs.

This isn’t to say that India and China don’t have any claim to special treatment. Their per-capita and historical emissions are both low. That being said, the special treatment they receive cannot take a form that allows them to pursue the sort of high-carbon development track they have been. Unfair as it may be, they are going to need to develop primarily on the basis of low- and zero-carbon forms of energy (at the same time as developed states are aggressively cutting back on fossil fuel use) or we will get into a situation where it becomes very difficult to imagine how catastrophic climate change could not occur.

The great majority of the world’s emissions come from a dozen or so countries. Getting them on track towards carbon-neutrality is essential. That isn’t the case when it comes to small and very poor states who can be brought in line later without serious consequences. There is no need to be conspiratorial about it, but China and India really must be divided from the rest of the developing world.

BuryCoal.com

In brief, I am starting a new group blog at BuryCoal.com. It exists primarily to make the case for leaving coal and unconventional fuels underground, where they cannot harm the climate.

The reading I have done in the last year has highlighted a few important perspectives for me, when it comes to climate change. The most important thing is humanity’s total cumulative emissions. As such, it is not enough just to use fossil fuels more efficiently. We need to stop using them long before they run out: particularly, before the world’s massive reserves of coal and unconventional fossil fuels are tapped. The warming that would arise from burning all the coal, oil sands, shale oil, and methane clathrates would be far greater than that caused by burning conventional oil and gas.

Government plans that include serious restrictions on the use of coal and unconventional fossil fuels have a chance at being compatible with avoiding dangerous climate change, while those that treat this as a side issue do not.

In order to spread the word about the importance of leaving coal and unconventional fossil fuels in the ground, I have launched a new website at BuryCoal.com. It will be accepting submissions on all matters relating to coal and unconventional fossil fuels, including extraction, air and water pollution, climate change impacts, politics and activism, and more. I don’t think there is any other site out there with its main focus on the message that these fuels must be left in the ground, for the sake of improving our chances of experiencing catastrophic or runaway climate change, and on account of the other benefits that accompany moving beyond them. Those include reduced pollution and destruction of habitat, as well as reduced dependence on fossil fuels which will inevitably run out anyhow.

I would really appreciate if visitors to this site would do three things to help with the new project:

  • Please read and comment on the entries on the new site
  • Please let other people know about it
  • If you have something to say on a topic within the subject area, please submit a contribution

The kind of world our grandchildren and great grandchildren end up living in will depend a great deal on what proportion of these fuels we dig up and burn. BuryCoal.com has been established to be the antithesis to “Drill, Baby, Drill” and make a forceful and well-reasoned case for leaving all that carbon safely underground, while moving to a zero-carbon, renewable global energy system that can sustain human prosperity and civilization indefinitely.

Does Canada see the north as a colony?

Writing in The Globe and Mail, Doug Sanders makes the interesting and probably not inaccurate observation that Canada treats the far north like a colony:

We own the Arctic but, unlike most of our northern neighbours, we are not Arctic. Rovaniemi is a serious city of 60,000 people, with a major university, a large airport and important ties to the mainstream of Finnish life. Like the Arctic cities of Tromso, Norway (60,000) and Murmansk, Russia (325,000), it’s a major centre of business, learning and tourism.

So when Canada tried to impress the world’s finance ministers and media with its Arctic identity by holding a summit in Iqaluit, a remote and somewhat inaccessible town of 7,000 just below the Arctic Circle in Nunavut, it didn’t completely work. “It looked like the Canadians had just arrived there – they didn’t seem to know the place any better than we did,” one European official told me.

What those leaders realized, and what Canadians instinctively know, is that we relate to the Arctic not as a part of our identity or culture or traditional economy, but as a foreign, faraway land we happen to control. The Far North is, in short, our colony.

To me, it does seem plausible that both Canadian decision-makers and the Canadian public at large see the north through the twin lenses of romance about the place and excited anticipation about what good things we are going to be able to do with it, once that ice is less of a problem and we can get at the shipping routes and fossil fuel resources.

The profound transformation of the Arctic is now all-but-inevitable, probably to an extent that few people realize. It will be interesting to see whether the inhabitants start taking a stronger and more visible stance once it becomes inescapably obvious that the whole region is being transformed, or whether they will just take that as a given and start scrambling for a share of oil and gas revenues.

Johnny Appleseed and our present predicament

The first version of the song ‘Johnny Appleseed‘ I learned was the secularized version, in which Appleseed thanks ‘the Earth’ for giving him the things he needs: “the sun, and the rain, and the appleseed.” He concludes that “the Earth is good to [him].”

Later, I learned that this is a stripped-down version of a Christian song about ‘the Lord’ being good to Appleseed. I can understand why this song wasn’t sung at the province-run Outdoor School I briefly visited, but I have to say in retrospect that it makes more sense. It is at least internally coherent to thank a conscious, benevolent entity for giving you things you need. By contrast, it makes very little sense to thank ‘the Earth’ for anything. The Earth is a 5.97 x 10^24 kg ball of iron that has existed for about 4.54 billion years. For most of its history, it would not have been at all hospitable to Appleseed, or any other human.

Indeed, for most of its remaining history, Earth is likely to be terribly hostile to human beings. The carbon cycle may cease, when erosion overcomes volcanoes, killing everything. The sun may become a red giant, burning away the oceans and atmosphere. Much sooner than either of those, human beings may kick off a runaway greenhouse effect, killing ourselves and maybe even all life.

That is the rub. In this day and age, we shouldn’t be thanking the uncaring Earth for bounty. We should be thanking other human beings for not quite killing us yet, often despite their best efforts to destabilize the climate, kill off species, and poison the air and water. The dangerous implication of the thin-soup version of Johnny Appleseed is that the planet itself somehow determines whether or not any particular person gets the things they need. This is demonstrably less and less true.

In conclusion, it is increasingly pointless to thank or condemn any abstract entity for what happens to people. To an ever-greater extent, what happens to people depends on what those people and other people decide to do. As a result, libertarianism is dead, and we really need to learn how to live together.

When a cap-and-trade system stops biting

The relative merits of cap-and-trade versus a carbon tax for pricing carbon have been discussed here before. One characteristic that was not mentioned, and which is a blow against cap-and-trade, has to do with incentives to go beyond the minimum. Specifically, when the government sets a cap and auctions permits, you can be pretty sure the actual level of emissions will not fall lower than the cap. If it did, the market price for permits would plummet and people would rush in to buy the right to pollute.

A carbon tax wouldn’t have this problem, since people would be paying for every tonne of emissions, regardless of where the whole country was relative to the target. Also, a cap-and-trade system could probably be designed in a way that eliminates or eliminates this problem. For instance, the government could mandate a price floor, below which point permits are automatically withdrawn from sale.

Personally, I think it is possible to design either system well. It would also be possible to use an alternative cap-and-dividend or fee-and-dividend system, with automatic recycling of revenues. The key thing is to put a price on carbon domestically, and do so in a way that can eventually be integrated with systems elsewhere. By itself, carbon pricing won’t be enough. The volume of coal and unconventional fossil fuels out there makes them too dangerous to allow continued growing use. Before carbon prices, I would be happier to see both developed and developing states adopt moratoriums on new coal-fired facilities, except perhaps those that actually capture and store the great majority of their greenhouse gas emissions.

Cash versus goods donations

Over on the RedCrossBlog, Claire Durham has an interesting post on why non-cash donations are unhelpful. It seems important, given the continued willingness of people to send things that are less than useful, expensive to transport, and liable to jam up logistical systems. Providing some guidance to those trying to help the victims of the earthquake in Haiti also makes sense at this time.

As an example of how non-cash donations can be useless or even harmful, Durham highlights how donated pharmaceuticals often end up being worse than useless:

Drugs that are not required, those that have expired or have no expiry date have to be destroyed. Incineration is preferred as this prevents the hazard of land filled medicines contaminating water supplies or drugs being collected and sold on the black market. In Eritrea after the war of independence, seven truckloads of expired aspirin took six months to burn. The real tragedy is the cost of this process. In the Venezuela floods in 2000, seventy percent of donated pharmaceuticals had to be destroyed. To be able to cover this cost, a support line to provide psychological support to the survivors had to be shut down.

None of this is overly surprising. The chaotic and uncoordinated efforts of the general population, being undertaken after a disaster has occurred, is no substitute for the strategic pre-positioning of plans and resources. In addition, longer-term planning allows for greater standardization (easing training difficulties), cost effectiveness, and the matching of goods to local tastes and needs. Providing regular funding to professional organization with the skills to do this well is probably the single best thing ordinary people can do to lessen the human suffering that accompanies disasters.

Storms of My Grandchildren

Writer Robert Pool has defined a ‘witness’ as “someone who believes he has information so important that he cannot keep silent.” In the preface to his book, Storms of My Grandchildren, climatologist James Hansen identifies himself using the term. It is truly worrisome to be living in an age when such a prominent climate scientist sees his role in this way – and sees himself as having uncovered information of such importance that he cannot remain an adviser on the political sidelines. Storms of My Grandchildren is the most frightening thing I have ever read, and may end up being one of the most important.

James Hansen explains why we know as much as we do about the climate: not from computerized climate models, but from the evidence of climatic history laid down in ice cores and sediments. The story they tell is one of a dynamic system capable of amplifying small initial changes, and one in which rapid swings have taken place. Hansen identifies the greatest risks from climate change as the destabilization of ice sheets and the loss of biodiversity accompanying the many effects of climate change. On sea level rise, he explains:

If humanity burns most of the fossil fuels, doubling or tripling the preindustrial carbon dioxide level, Earth will surely head toward the ice-free condition, with sea level 75 meters (250 feet) higher than today. It is difficult to say how long it will take for the melting to be complete, but once ice sheet disintegration gets well under way, it will be impossible to stop. (p. 160 hardcover)

Hansen also highlights how positive feedback effects could lead to a runaway climate change scenario, and how the methane locked up in permafrost and methane clathrates has the potential to stack a second gigantic warming on top of the anthropogenic greenhouse gas warming, in the event they ever substantially melt:

[T]he world, humanity, has reached a fork in the road; we are faced with a choice of potential paths for the future. One path has global fossil fuel emissions declining at a pace, dictated by what the science is telling us, that defuses the amplifying feedbacks and stabilizes climate. The other path is more or less business as usual, in which case amplifying feedbacks are expected to come into play and climate change will begin to spin out of our control. (p. 120 hardcover)

In the most extreme case, in which all coal and unconventional oil and gas are burned, the stacked-up positive feedbacks could be sufficient to boil away the oceans, eventually leaving Earth in a state similar to that now inhabited by Venus, a planet formerly adorned with liquid water before a brightening sun induced runaway climate change there.

In addition to the scientific story, Hansen tells some of his own: about the censorship he witnessed at NASA, about his recent civil disobedience actions against mountaintop removal coal mining, about is perceptions of American politics, and about the grandchildren whose prospects have left him so concerned. Sometimes, these asides can seem secondary to the main thrust of the book, though they do underscore the extent to which this is an impassioned personal plea, not a technical scientific assessment. The insight into the scientific process and the operation of the Intergovernmental Panel on Climate Change (IPCC) are also interesting.

The most dubious part of the book may be Hansen’s optimism for fourth-generation fast breeder reactors. He highlights their possible advantages, namely in terms of stretching our uranium fuel supplies, but doesn’t give serious consideration to the practical and economic issues with a massive nuclear deployment. He is also overly pessimistic about renewable forms of energy. I would recommend that he take a look at David Mackay’s excellent book on different routes to a zero-carbon energy future. People who read Hansen’s book may also be well-advised to do so.

Hansen makes some key points about climate policy: notably, that emissions targets and cap-and-trade schemes are meaningless, if governments continue to allow coal use and the exploitation of unconventional oil and gas to continue. Those are the fuels that contain enough carbon to threaten all life on Earth; meaningful climate policy must, among other things, ensure that they remain underground. As an alternative to cap-and-trade schemes that are potentially open to manipulation and which offer no incentive to cut faster than prescribed by the cap, Hansen endorses a fee and dividend system where a tax is applied to all fossil fuels at the point of production or import. His overall view is not so different from the fantasy climate change policy I wrote earlier, though I hadn’t been fully aware of all the risks Hansen enumerates when I wrote it.

In the end, Hansen has provided as clear and compelling a warning as anybody could ask for. We are putting the planet in peril and endangering the lives and prospects of future generations in a deeply immoral way. Governments are misleading people with the sense that they are handling the problem when, in reality, even states taking climate change seriously are doing nowhere near enough to ensure that catastrophic or runaway climate change goes not occur. We need to change the energy basis of our society, and keep the carbon in coal and unconventional fossil fuels in the ground. In so doing, we may be able to stop the warming we are inducing, before it generates the devastating feedbacks that are the key message of Hansen’s book.

Those interested in reading this book should consider taking me up on my offer for a free copy. For those unwilling to commit the time to go through a 275-page book, Hansen has a more concise presentation online in PDF form.

Partly prompted by this book, I am in the middle of starting up a new personal project, intended to help with the planet-wide coal phaseout that is necessary. I will make more information on it public, once it is developed further.

[16 February 2010] Now that I have a fuller understanding of the importance of not burning coal and unconventional fossil fuels, because of their cumulative climatic impact, I have launched a group blog on the topic: BuryCoal.com. Please consider having a look or contributing.

Tackling coal emissions

Speaking of taking action against climate change, a strong case can be made that the single most important thing we can do to reduce the chances of catastrophic climate change is to phase out coal. Coal is the one fossil fuel that is definitely abundant enough to cause catastrophic climate change. As such, we need to:

  1. Prevent the construction of new coal plants that emit carbon dioxide, including in the developing world
  2. Convert existing coal plants to run on biomass, greatly reducing their net climate impact
  3. Encourage the early shutdown of existing coal facilities, partly through a carbon price
  4. If possible, develop carbon capture and storage technologies

What actions can we as individuals undertake to advance the decline of emissions-intensive coal, both in Canada and around the world?