Economics – Page 92 – a sibilant intake of breath

Coal cancellations in the US

The Economist has been bold enough to suggest that ‘the writing is on the wall’ for coal-fired power plants in the United States, unless they can be converted to run on biomass or incorporated into other ‘green’ compromises. While there have apparently been 97 coal plants cancelled since 2001 (and nine so far this year), those that are operating now are long lived; their contribution to US emissions will barely fall between now and 2030. Unusually, the article makes no mention of carbon capture and storage (CCS) technology, which many supporters of fossil-fuel based power hope will soon emerge as a cheap, safe, and effective mechanism for preventing greenhouse gas emissions. The omission is actually a welcome one, given how tempted industry groups, governments, and commenters in general have been to see CCS as a simple silver-bullet mechanism for maintaining the status quo.

Worldwide, there must be an ever-increasing determination to prevent the construction of new coal capacity, except where it incorporates safe and effective CCS technology (if that proves possible). Meeting climate change mitigation targets (including avoiding a temperature increase of more than 2°C above pre-industrial levels) probably also means a fair bit of existing coal capacity will need to be converted to biomass or brought offline before the end of its economical lifetime. That will provoke the fierce opposition of those who have invested in such projects, though that may be a necessary signal to the market at large that coal-fired power is no longer acceptable – the carbon in the world’s coal beds needs to remain there, rather than being added to an atmospheric stock that is already dangerously high.

States like Canada and the US should be working to rebuild the basis of their energy system on the basis of non-emitting and renewable options. In so doing, they will establish the prerequisites for their own prosperity in the future, as well as help develop the technologies and approaches that will make the same transition possible in rapidly growing developing states.

The AECL and new nuclear plants in Ontario

It seems that the province of Ontario is leaning towards having Atomic Energy of Canada Limited (AECL) build their new nuclear reactors, provided the federal government provides some additional support. The recent history of the company isn’t very impressive, given their failure to get two comparatively simple isotope reactors to work, and giving the contract to a Canadian company makes it even more likely that Canadian taxpayers and ratepayers will end up subsidizing them.

Perhaps it would be wiser to give the contract to a French, American, or Japanese firm, and let their citizens help pay for our gigawatts. It seems plausible that using a design that is being implemented elsewhere will have price benefits: both in terms of economies of scale and in terms of learning from the experience of those who began building them earlier. AECL’s Advanced CANDU reactor has not yet been fully designed, and probably never will be unless it wins the competition in Ontario, besting France’s AREVA and Westinghouse, from the US.

Changing Images of Man

First published in 1974, and available for free online, Changing Images of Man is a kind of philosophical reflection on science and how human beings understand themselves. While it does touch on some interesting ideas, the degree to which it is fundamentally lacking in rigour or discipline means that it is also choked with nonsense, impenetrable jargon, and pointless speculation. In short, it does not have the feel of a text whose ideas have been borne out by subsequent history. Rather, it is more like a monument to a kind of faddishness that has long since become dated, though elements endure in the more superstitious aspects of contemporary culture.

Much of the book concerns environmental issues: specifically, how human civilization can cease to be such a destructive force, and how ecology is affecting science in general. Neither discussion is very satisfying. The former discussion focuses on a kind of caricatured extension of the Beatles going to India to lean yoga and discover themselves. While significant transformations in human behaviours and self-understanding may well be necessary to generate a sustainable society, the perspective on those changes offered in this work doesn’t seem either plausible or compelling to me. The latter discussion exaggerates the degree to which the study of complex dynamic systems challenges the practice of science: while they are certainly more challenging to study scientifically than systems that are more easily broken down and understood in terms of constituents, science is nonetheless proving increasingly capable of dealing with complex systems like climate and ecosystems, and is doing so without the kind of radical extension and modification endorsed by this book.

Much of the book is no more comprehensible than a random string of pompous-sounding words strung together in a grammatical way. It seems telling that the chapter on ‘feasibility’ is the least accessible and comprehensible of the lot. The report perceives a crisis in science that I don’t think existed at the time it was written, and I do not think has emerged since. Complex phenomenon are being grappled with using enhanced versions of conventional techniques, while UFOs and psychic phenomena have been effectively rejected as quackery, due to the absence of any good evidence for their existence. Basically, Changing Images of Man is an exhortation to abandon rigorous thought in favour of a kind of wooly inclusiveness, exceedingly open to ideas that are too vague to really engage with. The book has a naive counterculture tone, overly willing to reject what is old and unthinkingly embrace novel concepts that register with a 1960s/1970s mindset. While the questions it considers are generally good and important ones, the answers provided are vague, preachy, and largely useless.

Climate deniers deciding science funding in Canada

In yet another demonstration of the ongoing tensions between conservative political parties and science, Prime Minister Stephen Harper has appointed a couple of climate change deniers to federal science funding bodies. One has claimed that “the climate-change issue is somewhat sensational and definitely exaggerated.” The appointments seem likely to worsen the quality of scientific work being done in Canada, putting us further behind the rest of the developed world, when it comes to comprehending and appreciating the characteristics of the world in which we live, and in which important political choices must be made.

This is reminiscent of the appointment of a man seriously invested in the oil sands to the ‘Clean Energy Dialogue’ ongoing with the US. The Conservatives claim that they accept the science of climate change, but they cannot really take it to heart because of the degree to which it fundamentally conflicts with a laissez faire approach to economic regulation.

All we can hope for is for climate change denial to eventually become so patently ridiculous to the electorate that parties that continue to dabble in it seem to be arguing the equivalent of the Earth being flat and orbited by the sun. That may be the only time at which conservative parties have the impetus they need to reform their ideas to be compatible with what we now understand to be the state of the world.

The B.C. election and carbon pricing

From a climatic perspective, it seems that there are two reasons to be glad about the recent electoral victory of the Liberal Party in British Columbia:

Firstly, it shows that carbon pricing (and carbon taxes, specifically) need not mean death at the ballot box. While it is still far too weak, the B.C. carbon tax is at least a progressive example for North America. Some have concluded that it is actually the most effective climate policy in effect on the continent at this time.
Secondly, it shows that an unprincipled stand against carbon pricing can actually cost a party support. This is an essential development, if we are to deal with climate change. Succeeding will depend on carbon mitigation policies enduring and strengthening for many decades. As such, we need to reach the point where the electorate rejects those who would scrap them for non-environmental reasons.

While there are plenty of reasons to dislike both major political parties in B.C., at least this election didn’t prove to be yet another setback for effective climate policy in Canada.

Here’s hoping the US Congress is able to pass a cap-and-trade scheme before the Copenhagen meeting, and that Canada will finally roll out regulations on greenhouse gas emissions nationally.

Australia’s coal and China

All regular readers of this site are familiar with Canada’s energy dilemma, as far as the oil sands, the United States, and climate change are concerned. The US has a huge appetite for oil, and is increasingly anxious about getting it from the Middle East. From a short-term perspective, this positions Canada’s unconventional oil very nicely. Of course, when you think long-term and realize the importance of climate stability, you become a lot more likely to think we would be better off leaving the stuff in the ground.

A similar dynamic seems to exist when it comes to coal, Australia, and China. In March 2009, China imported 1,716,802 tons of Australian coal. All told, it imported 211% more coal between January and March as in the previous year. Like Canada, Australia has extremely high per-capita emissions, a poor record on greenhouse gas mitigation, and a lot of export-oriented resource extraction industry. Also like Canada, it may well be the case that long-term climatic stability requires leaving most of that coal underground.

As such, it is disappointing that Australia has delayed plans to institute carbon pricing. When it comes to the negotiations at Copenhagen in December, dealing with the complexities of energy imports and exports will certainly be among the trickier issues that need to be sorted out in negotiations. While the climatic requirements are clear (sharply reduce global emissions), the economic and moral ones are trickier. After all, a fair bit of the coal China is burning is being used to make products for people in other states. Who, then, bears the moral responsibility for the emissions associated with extracting, shipping, and burning the coal? What sort of legal regime can be established to effectively incentivize decarbonization throughout such complex international production chains?

Biofuels versus electric vehicles

A study published by Science Expressed and discussed on Grist concludes that growing biomass for electricity production, and then using it to run electric vehicles, is more effective per acre than growing crops to produce liquid biofuels for internal combustion engines. This is true even if the liquid fuels are so-called ‘second generation’ or cellulosic biofuels, which it is hoped will provide an improvement over the poor climate change and energy security benefits of fuels like corn ethanol. The study estimates that the miles of travel enabled per acre are 81% greater when growing biomass for electricity, compared with cellulosic ethanol.

It seems like the most probable path to de-carbonized transport is the conversion of all short and medium-range vehicles to electric power, with liquid fuels reserved for vehicles that must travel long distances, aircraft, and vehicles operated in remote areas. Producing energy from biomass has another potential advantage, if carbon capture and storage (CCS) proves viable. By adding CCS to biomass-fueled power plants, net reductions in the atmospheric concentration of carbon dioxide could be achieved.

In time, it seems likely that the many government policies promoting the widespread use of biofuels were an ineffective response to both concerns about climate change and about energy security. In particular, ‘mandates’ that a certain fraction of vehicle fuels be biofuels do not necessarily do a good job of aligning outcomes with climate change objectives, since they are insensitive to both the lifecycle emissions associated with the fuels and to the economics of producing them.

How climate change is like fisheries depletion

Fisheries and climate change are both areas where severe common property failures exist: that is, individuals have an incentive to exploit the system, to the detriment of all. A recent RealClimate post ties the two together in a neat analogy, which also covers the evolving practice of climate change denial (or delay). Specifically, it is alluding to the North-South issues in the ongoing UNFCCC negotiations, and the tensions between developing world states who want the rich world to cut first and most deeply and developed states concerned about seeing any emissions reductions they produce overwhelmed by growth in developing states. Beyond the state-to-state negotiations, the tension also provides cover for those who want to avoid taking any action, no matter how severe the long-term consequences of doing so will be.

Both positions have validity, and the mechanisms for resolving the views remain under debate. That being said, the outlines are clear. Every significant emitter will have to take action. Rich states need to start doing so first and more sharply. They also need to provide assistance to developing states, in the form of technology and funding. Through coordinated global action, dangerous climate change can be avoided, and the world economy can be set on a path where it maintains climatic stability in the long term.

Capping or taxing fossil fuels at import or production

Responding to a Nature article mentioned here before, George Monbiot has raised the issue of limiting fossil fuel extraction as a way to gauge the seriousness of governments in fighting climate change. It’s an idea with some virtues, both on climate change and energy security grounds.

Targeting emissions means keeping track of a mind-boggling array of activities: from cement manufacture to vehicle use to landfill gasses. By contrast, targeting fossil fuels would mean dealing with a modest number of firms. Instead of applying a carbon tax or cap-and-trade system to emissions, the alternative would be to use those instruments for fossil fuel imports and production. Doing so would require only that the output from gas fields, oil fields, and coal mines be recorded, along with imports of fuels. In the tax scenario, each fuel would require payments proportional to the greenhouse gasses it will produce when burned. In a cap-and-trade scheme, a set amount of carbon would be permitted to be extracted from the ground or imported, with firms competing for the permits in auctions. This would have the same prioritization effect as a carbon tax on emissions: firms that absolutely needed particular fuels would be willing to bid for permits, while those with alternatives would start to employ them.

Ideally, the scheme would also incorporate land-use change. Those wanting to convert land rich in biomass into something else would need to pay a tax or buy credits equivalent to the gasses being released. Conversely, firms planting forests on land previously poor in biomass could be given grants (under a tax scheme) or permits (under a cap-and-trade scheme).

It might also make political sense to differentiate between imports and domestic production, with the former getting stricter treatment. That would somewhat lessen the opposition of domestic industry, while also accelerating the movement of the state imposing the policy towards energy independence. It would probably be less economically and environmentally effective, but it might be a mechanism for gaining domestic support, while still making it clear that the overall objective is to reduce fossil fuel use to zero. Such a policy could also be justified with reference to higher volatility in fossil fuel prices and availability from abroad, as well as the implicit subsidies to users of imported fossil fuels in the form of military aid and military operations in oil-producing regions. Of course, there is a good chance that it would violate the equal treatment provisions in agreements like NAFTA and the enabling legislation for the WTO.

In the event that carbon capture and storage proves to be a safe, economically viable, and effective technology, it could easily be incorporated into such a system. You would simply make payments or grant permits to firms doing the storing, contingent on them providing whatever maintenance the sites require.

By creating incentives for an unending push towards the non-use of fossil fuels, such policies would make it clear that our ultimate objective must be complete global carbon neutrality. Nothing else is compatible with long-term climatic stability.

[Update: 8 March 2010]. BuryCoal.com is a site dedicated to making the case for leaving coal, along with unconventional oil and gas, underground.

A steady state economy

One key tenet of ecological economics is that we need to move from a political and economic system focused on the growth of production (GDP) to one focused on constant biophysical throughput. The latter concept is basically an amalgamation of everything humanity takes from the physical world and all the wastes that are returned to it. On the first side of the ledger are withdrawals like ore and hydrocarbons; on the other are wastes including greenhouse gasses and other forms of pollution. While it could not be expressed in the form of a single number, it is fairly easy to imagine a suite of key physical and energy flows through which the aggregate size of human throughput could be summarized.

The basic idea has appeal for several reasons. Most obviously, it addresses the concerns that exist about how much impact humanity can have on the world without causing key biological and physical systems to fail. It also partially addresses the question of how to ensure that human lives become sustainable without becoming unnecessarily unpleasant. It’s the human throughput that actually weighs on the world, not GDP. Even in a situation where the throughput was constant, welfare per person could still increase in many ways: things could become more technologically advanced, better designed, more elegant, etc. They could also be improved significantly by more effectively eliminating situations of needless suffering, as with the treatable diseases that continue to take a terrible toll in the developing world. Of course, per-capita improvements could also be achieved with constant throughput and a falling population.

One objection to the idea is that, when it comes to renewable power, we are nowhere near the physical limits of what is possible. The total quantity of solar, wind, and tidal energy available is momentous, and it doesn’t seem sensible to focus on the total size of human withdrawals from those flows. As such, perhaps the steady-state approach is better suited to non-energy resources, while on the topic of energy, the drive must be from unsustainable forms (oil, gas, coal) to semi-sustainable forms (nuclear fission, etc) and eventually to fully sustainable options like concentrating solar thermal, hydroelectric, and geothermal.

In the end, the prescription for humanity seems to resemble a cheesy grocery store magazine diet: avoid carbon-intensive fuels, manage resource use and waste flows, and feel free to use all the renewable energy and carbon- and resource-neutral technological advancement as you can manage.