Economics – Page 89 – a sibilant intake of breath

How to rate cities

When I lived in Vancouver, I remember seeing newspaper stories several times a year about some organization or another rating Vancouver one of the most ‘liveable’ cities in the world. While it seems plausible that Vancouver would be high in the global rankings, there are obvious problems of methodology associated with coming up with any particular listing. What should be included? Life expectancy? Weather? Green space per person? And what weight should be given to each?

Over on his blog, Chris Bradford has proposed a more objective measure: the ratio of median home prices to median household incomes. It does make sense that people will be willing to pay a larger share of their income to live in a more pleasant city. Furthermore, this is a much more credible signal than surveys or aggregate indices of the kind described above.

In such a ranking, Ottawa might be a special case, given the relative security of government incomes. Government employees face less uncertainty on both the upside (no chance of bonuses, predictable salary progression) and the downside (little chance of being laid off or demoted). There are also big non-salary benefits that accompany government work, such as a relatively short working week, generous health and medical coverage, and highly generous family benefits.

Societal values and sustainability

In Collapse, Jared Diamond argues that sometimes the only way for societies to survive, despite the environmental problems they create and experience, is for them to re-evaluate and reform their key values. Given the environmental problems we face today – climate change foremost among them – it seems worth asking whether our core values need such revision.

To begin with, it must be recognized that societies with widely differing values are nonetheless contributing to dangerous climate change. Anybody with net positive emissions is adding to the stock of greenhouse gasses in the atmosphere, though naturally those who are emitting tens of thousands of kilograms a year are causing more danger than those emitting mere hundreds or thousands. That being said, both due to the non-renewable nature of the resources and the climatic consequences of their utilization, it is fair to say that all societies that are dependent on fossil fuels are contributing to the problem: a set that includes everyone from Canada to India to Saudi Arabia to Indonesia.

Within such a diverse group, are there any common values at all? Perhaps the most important ‘value’ is more like the absence of a value – an unwillingness to take the welfare of distant future generations seriously. Most people work hard to improve the prospects for their offspring in the next generation or two, but engage in behaviours that are profoundly threatening to all members of generations beyond that, for a period extending into distant geological time.

One ‘value’ that might be both common and problematic is a continued determination to grow with respect to both activities with a high biophysical throughput and those with a low one. The latter isn’t really a problem. It is no more environmentally damaging to produce good paintings or music than bad ones. The former, however, is deeply problematic. There are inevitably physical limits to growth, as well as to the conditions under which people can live present lives. Most societies disregard those limits. As Diamond argues:

Even if the human population of the Third World did not exist, it would be impossible for the First World alone to maintain its present course, because it is not in a steady state but its depleting its own resources as well as those imported from the Third World. At present, it is untenable politically for First World leaders to propose to their own citizens that they lower their living standards, as measured by lowe resource consumption and waste production rates.

If we are to maintain a decent standard of living in developed states, while also alleviating the unjust suffering in the developing world, we need to develop a society that treats both resource demands and waste production as serious issues, to be kept within the bounds of what can be maintained forever.

Are there other deeply held values that conflict with the goal of producing a sustainable global society? Like the Greenland Norse described in Diamond’s book, placing a high status value on eating meat is one, and an especially concerning one when it comes to rapidly rising wealth in developing states. Indeed, the general problem of resource-intensive status symbols is one common to the Easter Islanders and both Chinese and North American people today.

Cheap water and salinization in Australia

Late in Collapse, Jared Diamond makes an interesting point about water in Australia. Apparently, many agricultural areas have salt deposits below the depth of soil reached by plant roots. As long as there is plant cover and irrigation is not excessive, the salt stays down there. When people employ ‘broadcast’ irrigation – which sprays large volumes of water everywhere – soil gets moistened down to the salt layer, causing productivity losses in that land and other land downhill.

As such, the problem is actually not water scarcity, but a level of water abundance that permits broadcast approaches in place of more efficient (and non-salinizing) drip irrigation methods.

This is a nice demonstration of a point also made by Michael Pollan and others: often, when a commodity is ‘cheap’ to a consumer, it is because the expensive externalities associated with it largely fall on other people. The Australian case also illustrates how natural abundances and scarcities are not necessarily what establish incentives and encourage or discourage different behaviours, but rather the whole collection of both natural and artificial incentives that exist at a particular time and place.

A renewable energy plan for the UK

At the end of the non-technical portion of his book, David MacKay estimates what it would take to renewably power the United Kingdom, switching forever away from unsustainable fossil fuels. With one possible approach, he reckons that it would require the following:

52 onshore wind farms: 5200 km²
29 offshore wind farms: 2900 km²
Pumped storage: 15 facilities similar to Dinorwig
Photovoltaic farms: 1000 km²
Solar hot water panels: 1 m² of roof-mounted panel per person. (60 km² total)
Waste incinerators: 100 new 30 MW incinerators
Heat pumps: 210 GW of thermal energy pumped
Wave farms – 2500 Pelamis, 130 km of sea
Severn barrage: 550 km²
Tidal lagoons: 800 km²
Tidal stream: 15 000 turbines – 2000 km²
Nuclear power: 40 stations
Clean coal: 8 GW
Concentrating solar power in deserts: 2700 km²
Land in Europe for 1600 km of HVDC power lines: 1200 km²
2000 km of HVDC power lines
Biofuels: 30 000 km²
Wood/Miscanthus: 31 000 km²

In total, this adds up to about 300 gigawatts (GW) of energy for transport, heating, buildings, and everything else. What this suggests is that, if you want to maintain population density at levels similar to now along with per capita energy use, you need to turn entire densely populated countries into energy factories even with nuclear and ‘clean coal.’ While he doesn’t estimate costs for the last two, his ballpark estimate for building all the rest are about £870 billion. That number may well be an overestimate, since the costs for many of the technologies are extrapolated from a few pilot facilities.

That may seem like a staggering amount of money and land. On the money side, however, it must be borne in mind that the UK is currently spending £75 billion per year on imported energy. That means the whole conversion would cost as much as about twelve years of continued fossil fuel use, at prices similar to now. The land use change may be a far bigger barrier. Making the UK into a renewably-powered country requires devoting a considerable portion of its total land area to that purpose. That’s a lot of spoiled views and local resistance to overcome.

He offers five other energy plans for the UK, based on different balances of technology. He also has energy plans for Europe, North America, and the world as a whole. To make the figures add up, they all require either nuclear, massive solar farms in the desert (600 by 600km), or both.

Countries are going to need to make some hard choices about population size, energy use, and the maintenance of land for agriculture, wildlife, and human enjoyment.

Collapse: How Societies Choose to Fail or Succeed

In marked contrast to his previous book, I found Jared Diamond’s Collapse: How Societies Choose to Fail or Succeed to be a consistently compelling and worthwhile read. He begins and ends it with discussions of environmental challenges in the modern world – firstly, in Montana and secondly globally – and fills out the book with descriptions of past societies that failed for primarily environmental reasons. These include Easter Island, Pitcairn and Henderson Islands, the Anasazi of North America, the Maya, and the Vikings of Greenland. He sketches out a ‘five factor’ framework for evaluating how both internally and externally induced environmental changes affect societies: environmental damage, climate change, hostile neighbours, friendly trade partners, and how a society chooses to respond to its environmental problems. Diamond makes a strong case that the framework is relevant to contemporary global society.

Diamond makes some good points about psychology. For instance, about how people who become used to abundance can forget that they are benefitting from a temporary blip above the trend line, and can end up getting hammered when things return to normal. Also, how the construction of status symbols can develop a momentum of its own, and carry on well beyond the point where it would be objectively sensible to continue. He also describes some of the many perverse subsidies that have been established by well-meaning rulers, such as the former obligation of Australian landowners to clear native vegetation, ensuring the worsening of their erosion problems.

While Diamond concludes that twelve different environmental problems are of sufficient importance to threaten the future of our society, he doesn’t perform much comparative analysis on their relative urgency and severity. Indeed, a case could be made that he seriously underestimates climate change, when compared to the others. Not only is the need to start mitigating urgent, due to long lags in the climate system, but the impacts of further emissions are irreversible to an extent that is not shared by all the other problems he lists.

While Diamond does an excellent job of chronicling reasons for historical societal failures – and argues convincingly that an appreciation of this history is important for understanding our current situation – he doesn’t do much of the work of considering what societal changes are necessary now. In particular, his assertion that a deep change in values may be required doesn’t extend to listing which of our values are problematic, or what changes to them might help society overcome the problems he anticipates will threaten it in coming decades.

Diamond’s final position is a very forceful one: for a constellation of reasons, our present global society is deeply unsustainable, and much of economic ‘growth’ is illusory. We are ‘mining’ renewable resources, in a way that will destroy them in the long term. As such, we are not earning a living off the ‘interest’ accrued to natural capital – we are cutting into the capital itself, dooming future generations to a worsened standard of living, or worse, unless we change our ways. That, plus the lesson that successful past societies were undone by failures to heed such lessons, is information that needs to be more widely absorbed and appreciated within our society.

Pumped hydroelectric storage in Wales

Snowdonia contains more than just some of the United Kingdom’s finest mountains. From a climate and energy perspective, the Dinorwig Power Station is rather interesting. It has a maximum output of about 1800 megawatts (MW) and was intended to store excess power from nuclear stations, during periods when their output exceeded demand.

The system takes only 16 seconds to ramp up to full output, and can maintain it for six hours. Because of backup batteries and diesel generators, Dinorwig is also able to restart itself even if the rest of the national grid has failed. The facilities two reservoirs are separated by 500m of vertical distance, and it stores about nine gigawatt-hours (GWh) of total energy. It is 75% efficient at turning surplus electrical energy into gravitational potential energy in raised water, and then back into electricity again at times of peak demand. Since it can buy electricity at times when demand is minimal (thus making the power cheap) and sell it when power was expensive, it was able to pay itself off in ten years. Along with three other British facilities, there is a total pumped storage capacity of 2.8GW.

This is a technology that could make a lot of sense for Canada. As we build more renewables – such as wind farms – there will be periods of excess energy production. By building new pumped hydroelectric facilities, or adding the capacity to existing dams, we will have a way to store some of that for when it is needed.

Could China alone add 2.7 degrees by 2050?

I would like to see the climatic model that David Sandalow, the Assistant Secretary of State for Energy in the US, used to project a 2.7°C degree temperature rise by 2050 as the result of business-as-usual emissions in China and an 80% cut elsewhere. Firstly, it seems like too early a date to see such a big rise. Lags in the climate system mean that decades pass before the full effects of emissions are felt. If we saw an increase of 2.7°C by 2050, there would presumably be a great deal more warming in the pipeline. That would probably mean hugely catastrophic impacts by 2100. Secondly, while China is important, it is still only about 20-25% of global emissions. If emissions by every other state fell by 80%, China’s would need to grow massively to compensate.

If you believe that climate sensitivity is very high it is indeed possible that such a rise could occur that quickly, and primarily as the result of emissions from one very large state. That being said, Sandalow’s analysis would be much more convincing if he provided the details on the simulation he used to get the 2.7°C figure. What does he think China’s business-as-usual emissions pathway will be? How quickly does he assume that other states will cut by 80%? What does he think the sensitivity of the climate to greenhouse gasses really is?

If the climate really is so sensitive that China alone could push us into seriously dangerous territory by 2050, then we have all the more reason to be deeply concerned about rising global emissions and the ineffective efforts that have been made so far to reduce them. That being said, a lot more details of Sandalow’s methodology would be necessary, before we can accept the validity of his claim.

Japan’s lacklustre 2020 target

People are right to say that Japan’s new commitment to cut emissions to 15% below 2005 levels by 2020 is inadequate. It is not in keeping with the ultimate goal of preventing dangerous anthropogenic climate change, largely because it isn’t compatible with a stabilization pathway and the need for per-capita emissions to contract everywhere and converge between developed and developing states. To avoid dangerous climate change, we probably need to stabilize atmospheric concentrations of greenhouse gasses below 450ppm (and possibly lower still). Doing that fairly will require deep cuts from developed states by 2020 – at least in the region of 25-40%.

Like Canada, Japan is failing to meet its domestic commitments under the Kyoto Protocol. Rather than being 6% below 1990 levels, it is 9% above. Canada is doing even worse, with emissions about 30% above where they were in 1990. This shows that even targets built into past international agreements weren’t taken seriously enough to be met. At Copenhagen and beyond, both developed and developing states will need to do better. Hopefully, an agreement will come together with the necessary key elements: a commitment from developing states to emit less than they would under a business-as-usual scenario, serious hard caps for all major developed states, measures to protect forests, financing and technology for global mitigation efforts, etc.

‘Resistance’ versus ‘abstinence’ in responding to climate change

During the course of our extended discussion on the ethics of travel, given climate change, the idea came up that living in a high-carbon society has similar ethical characteristics to living under an unjust regime. For instance, an aggressive totalitarian state that attacks its neighbours. In both cases, people are born into the society without any say in its character. In both cases, people can become aware of the harm their society is causing to others. In both cases, individuals face the question of how to respond to the injustice.

Right now, our society is engaged in harming future generations for our own personal and economic self-interest. We are doing so by emitting greenhouse gases that profoundly threaten the quality of life of future generations. In a way, it is as though we are mining the health, welfare, and prosperity of those who will come after us, so that we can continue to live in the way to which people have become accustomed.

While living in such a society probably creates moral obligations to assist those who are being harmed, and who will be harmed in the future, it does seem like the primary moral impetus is that of resistance. Given that our society operates in a fundamentally unjust way, those of us who have come to understand this have an obligation to change the nature of that society. Obviously, there are a wide variety of possible approaches – everything from working to reduce your personal impact to working to reform government from within to armed insurrection. Similarly, there are a wide variety of personal costs that may be borne by those who choose to act. They might sacrifice more lucrative careers for ones which offer more scope for promoting societal change. They might give up luxuries that they and others once took for granted. They may bear even more acute costs, if they choose to resist in less socially acceptable ways. For instance, those who climb buildings to deploy banners – or who choose to protest peacefully in places where governments have forbidden it – could find themselves facing legal consequences.

Rather than seeing the problem of responding to climate change as an exercise in personal harm reduction, it may make more sense to think about it as an exercise in driving societal reform, through whatever means seem to be effective and ethically acceptable.

Is the above a sensible framework for thinking about climate change? Is it preferable to an ethic that calls upon us primarily to reduce our own emissions? In what ways are the ethical obligations that arise from a ‘resistance’ view different from those that arise from an ‘abstinence’ perspective?

$3,500 for old cars

Automobile makers and dealers apparently want the federal government to pay people $3,500 if they give up an old car and get a new one. What industry wouldn’t want that? I am sure Sony would like the government to give $1,000 grants to anyone buying a new laptop, just like Apple would appreciate $200 grants for those replacing music players. The only justification for such a public subsidy is that the environmental damage done by the new cars will be lessened to an extent worth more than $3,500 to society at large.

Here are two ideas I think would be better:

Offer anybody $500 in exchange for recycling any car, regardless of whether they get a new one or not. This would both lead to a reduction in the total number of vehicles out there (especially those in a very poor state of repair) and set a floor price on used-car sales. After all, nobody would sell a car for less than $500 if the government would give them that much to scrap it.
Offer grants if people recycle and old car and buy a zero-emission vehicle, with the amount increasing along with the efficiency of the vehicle per passenger-kilometre. For instance, trading in a car might get you a $500 credit towards a bicycle, a smaller credit towards an electric scooter, and an even smaller credit towards an electric car.

Of course, the supporters of either of these approaches are a lot less politically influential than car companies and car dealers, making it unlikely that any government would embrace these approaches. Still, I hope this doesn’t emerge as yet another policy designed to extend the lifespan of yesterday’s carbon-intensive transport, production, and consumption. What we need are policies to help drive the economy towards modes of energy production and use that are sustainable and compatible with a stable climate.