Politics – Page 199 – a sibilant intake of breath

Bali talks beginning

Starting tomorrow morning, there will be twelve days of talks in Bali, Indonesia intended to begin the process of drafting a replacement for the Kyoto Protocol, when the period it covers ends in 2012. This particular meeting is mostly about choosing the structure for the real negotiations. Three possibilities are likely:

The parties agree to extend the Kyoto Protocol, keeping in place many of its institutional structures
The parties decide to create a whole new instrument
The talks collapse in acrimony, with no agreement

Which of these takes place will largely depend on the stances adopted by the great powers and major emitters, especially the United States, Russia, China, Japan, Brazil, and the European Union.

Some questions of succession hang over the proceedings. The new Rudd government in Australia has only been in power for a week, and may not have a well developed negotiating position. More importantly, everyone knows the Bush administration will soon be out of power. Leading Congressional Democrats are attending the summit themselves. It remains to be seen what effect that will have.

McKinsey climate change study

McKinsey – a major consultancy – has released a report (PDF) on the costs of reducing greenhouse gas emissions in the United States. The general conclusion is a familiar one: that existing technologies and emerging technologies with a high probability of success can collectively reduce emissions by a very considerable degree at modest cost. Specifically, the study argues that 3.0 to 4.5 gigatonnes of CO2 equivalent can be averted by 2030, at marginal costs of under US$50 per tonne. Business as usual would see present emissions of 7.2 gigatonnes grow to 9.7 gigatonnes by 2030: almost twice what the whole planet can handle.

The executive summary linked above is well worth reading, as it is rich with detail. It stresses how abatement will not happen through a few big changes: many thousands of emitting activities must be incrementally reformed. That said, 40% of the abatement they describe would actually save money in the long term (for instance, by replacing existing systems with more energy efficient varieties).

Perhaps the most interesting element in the whole report is the abatement curve on the fifth page of the executive summary. It ranks a collection of mitigation activities from those that produce the highest level of economic benefit per tonne to those that are most costly. For instance, increasing the efficiency of commercial electronics could save $90 per tonne of CO2 equivalent. Other win-win options include residential electronics, building lighting, fuel economy standards for cars and trucks, and improvements to residential and commercial buildings. Cellulosic biofuels are net winners, though of a lesser magnitude, as is changes to soil tillage to boost the strength of carbon sinks. The most expensive abatement options include carbon capture and storage, the use of solar electric power, and the use of hybrid cars (the single most expensive option listed).

This is quite an encouraging view. Achieving substantial reductions within a developed economy for under $50 a tonne is promising in itself. It also suggests that international abatement prices could be even lower, given how insane things like tropical deforestation are from an economic perspective, once climate change is taken into account.

Climate change and the Inuit way of life

At several points in the past, Arctic native groups including the Inuit have been effectively involved in the development of international regimes for environmental protection. Perhaps most significant was the role of the Inuit Circumpolar Conference in the development of the Stockholm Convention on Persistent Organic Pollutants (POPs). Studies done on the human health impact of Arctic POPs on the Inuit provided a big part of the scientific basis for the agreement. Arctic native groups were also effective at pressing their moral claim: chemicals being manufactured elsewhere were poisoning their environment and threatening their way of life.

A similar claim can be made about climate change, though the probable outcome is a lot more negative for Arctic native groups. Relatively few states and companies manufactured the bulk of POPs and, in most cases, less harmful chemicals can be used in their place. The economic costs of phasing out POPs were relatively modest. While the costs of dealing with climate change are a lot lower than the costs that will be incurred through inaction, they are nonetheless many orders of magnitude greater than the costs associated with abatement of POP use.

The threat posed to the Inuit by climate change is also quite a bit more far-reaching. It is entirely possible that the whole Arctic icecap will be gone within twenty years, or even sooner. 2007 was by far the worst year ever recorded for Arctic sea ice. Without summer sea ice, the Arctic ecosystem seems certain to change profoundly. Given the reliance of traditional Inuit lifestyles upon hunting terrestrial and marine mammals, it seems like such conditions would make it impossible to live as the Inuit have lived for millenia. This isn’t even a matter of worst-case scenarios. Even without significant new feedback effects, summer Arctic sea ice is likely to vanish by mid century. Increasing recognition of this partly explains the ongoing scramble to claim Arctic sub-sea mineral rights.

As with small island states, there doesn’t seem to be enormously much hope for avoiding fundamental and perhaps irreversible change in the Arctic.

The Golden Compass under review

It’s a sad day when a Canadian school board pulls your favourite children’s book from the shelves in dozens of libraries because it is allegedly ‘anti-religious.’ To be fair, Philip Pullman‘s The Golden Compass does take a critical stance on dogma and on hierarchical organizations. Elements can be taken as specific criticisms of the Inquisition and other religious abuses. At the same time, the book is engaging, well-written, and excellent. In characterization, creativity, and content it puts the Harry Potter books to shame, while also tackling much more important themes. The book was recognized by with the Carnegie Medal in 1995, and was selected by the Carnegie judges as one of the ten most important children’s novels in the past 70 years in 2007.

While the Halton Catholic District School Board clearly does have some responsibility for the selection of books in its school libraries, this choice is a mistake. If their students are going to have any kind of meaningful religious life, they are going to need to engage with criticisms of faith. That doesn’t necessarily mean giving them each a copy of The God Delusion, but it does require maintaining an atmosphere where questioning and discussion are possible. Simply stripping out high quality books that raise awkward questions is educationally irresponsible and theologically dubious in a faith supposedly based on personal relationships between individuals and God.

[Update: 4 December 2007] Emily has written a post about this book and another about the process of reading it.

Four Economist articles on climate change

Sorry to post a bunch of links from one source, but this week’s Economist is unusually dense with worthwhile articles about climate change:

There is one on federal legislative efforts in the United States – focusing on the Lieberman Warner bill that has been dominating attention in the Senate. It isn’t as tough as a superior proposal from Bernie Sanders and Barbara Boxer, but it stands a better change of thrashing its way through committee and onto the Senate floor. Of course, even a bill that gets through the Senate would need to be made compatible with a bill passed by the House of Representatives and avoid being vetoed by the President. Even so, the kind of cap-and-trade bills that are appearing in the Senate may well be indicative of the kind of legislation to expect from the next American administration.

American states have traditionally been ‘policy laboratories’ and have often developed environmental policies that were later adopted federally. Examples include rules on automobile emissions and sulphur dioxide emissions which cause acid rain. A second article briefly discusses the Regional Greenhouse Gas Initiative (RGGI): one of the two most important regional initiatives in the US, along with the Western Climate Initiative. Again, this is more a sign of what may be to come than a hugely influential thing unto itself.

A less encouraging trend is demonstrated by an article on the increasing popularity of coal. What is especially distressing is that coal plants are even being built in Europe, which has gone further than anyone else in regulating carbon emissions. Clearly, prices are not yet high enough and regulatory certainty is not yet firm enough to effectively discourage the use of coal for electricity generation. The new plants aren’t even being built in a way that can be easily modified to incorporate carbon capture and storage.

One last story is more tangentially related to climate change: tomorrow’s federal election in Australia will partly turn on voters responses to the positions adopted on climate change by the Labor and Conservative candidates, respectively.

In general, I don’t think The Economist takes the problem of climate change seriously enough. They write good-sounding articles in situations where it is the focus, but often miss it completely or mention it only trivially in articles on energy trends, business, or economic growth. That said, their ever-increasing coverage of the issue is probably representative of its ever higher profile in the planning of the world’s most influential people.

Problems with carbon markets

A recent article in Scientific American makes a lot of good points about carbon markets and emission trading. Perhaps most important among them is the recognition that the simple existence of a market cannot ensure good environmental outcomes: there must be strong and appropriately designed institutions backing it up. Otherwise, well-connected firms will be able to wriggle through loopholes, fraud will occur at an unacceptable level, and cheating will be endemic.

The article points out some of the big failures in carbon markets so far. Within the European Union Emission Trading Scheme, far too many permits to emit were distributed for free. As a result, their price collapsed in April 2006. Even worse, coal companies in Germany and elsewhere were given free permits to pollute, able to sell some of those permits for cash, and willing to charge their customers for carbon costs that never existed. Also problematic has been the prominence of HFC-23 (trifluoromethane) projects within the Clean Development Mechanism of the Kyoto Protocol. Getting rid of HFC-23 entirely should have only cost about $136 million. It has an absurdly high global warming potential (12,000 times worse than CO2), and is easy to destroy and replace with less problematic chemicals. So far, firms have been able to earn $12.7 billion for partial elimination. The authors of the article suggest that simply paying for the $136 million worth of equipment would be far more sensible than allowing firms to exploit the price difference between the value of emission reduction credits and the cost of eliminating HFC-23.

Other problems with markets include the difficulty of working out what emissions would have been in the absence of some change (the approach used for many carbon offsetting systems) and the way markets can encourage incremental approaches to emission reduction rather than the fundamental overhaul of industrial sectors and energy infrastructures.

None of this is to say that markets are not important. Indeed, carbon pricing is an essential component in the fight against climate change. What it shows is that participants in markets cannot be implicitly trusted, and neither can the governments operating them. There must be mechanisms for oversight and enforcing compliance and a constant awareness about possibilities for cheating or gaming the system. Insofar as it has helped people to develop a better sense of these things, the Emission Trading System of the EU has been a valuable front-runner.

I Am America (And So Can You!)

Stephen Colbert is famously critical of books. He should probably have retained his skepticism rather than publishing I Am America (And So Can You!). Without the benefit of his live delivery, his style of humour is not particularly effective and most of what the book covers is well worn ground for avid watchers of The Colbert Report. Colbert is at his best when he is dynamic; he does not sit well on motionless pages.

The book is not entirely without entertaining elements, but does not do enough overall to justify the price or the time.

Discarded cod in Europe

Once again, there is a big stink in the media about cod. This time, it is prompted by a report that between 40 and 60% of the cod caught in the North Sea are caught inadvertently and must be discarded, dead, in order to comply with EU quotas. Apparently, 117 million of the 186 million fish caught in UK waters last year were thus discarded. Some people are calling for the quotas to be raised, so that fishers can keep the fish rather than discarding them. Of course, that would encourage more ‘accidental’ catches.

The real solution is to create and enforce a tax on by-catch. If killing a bunch of cod neither makes money for fishers nor costs them anything, they will essentially be indifferent to doing it. If they needed to pay for what they killed, they would be more careful about choosing where to fish and what sort of gear to use. Even fish that do not have commercial value in the way that cod do have ecological value as part of marine ecosystems. Killing them in unlimited numbers is not compatible with sustainability.

Producing sustainable fisheries requires limiting by-catch, which in turn requires effective measures. A by-catch tax could play such a role. Of course, the fishers would protest any such move, citing threats to their economic livelihood. In the end, however, natural resources, including fish, do not belong to whoever grabs them; they belong to everyone in trust. As a consequence, nobody has the right to loot or destroy a resource, even if the economics of their present way of life require it.

Climate sensitivity and stabilization concentrations

The European Union has a widely quoted objective of avoiding anthropogenic temperature rise of more than 2°C. That is to say, all the greenhouse gasses we have pumped into the atmosphere should, at no point, produce enough radiative forcing to increase mean global temperatures more than 2°C above their levels in 1750.

What is less commonly recognized is how ambitious a goal this is. The difficulty of the goal is closely connected to climate sensitivity: the “equilibrium change in global mean surface temperature following a doubling of the atmospheric (equivalent) CO2 concentration.” According to the Intergovernmental Panel on Climate Change, this is: “likely to be in the range 2 to 4.5°C with a best estimate of about 3°C, and is very unlikely to be less than 1.5°C. Values substantially higher than 4.5°C cannot be excluded, but agreement of models with observations is not as good for those values.”

Taking their most likely value, 3°C, the implication is that we cannot allow the doubling of global greenhouse gas concentrations. Before the Industrial Revolution, carbon dioxide concentrations were about 280ppm. Today, they are about 380ppm.

Based on the IPCC’s conclusions, stabilizing greenhouse gas levels at 450ppm only produces a 50% chance of staying below 2°C of warming. In order to have a relative high chance of success, levels need to be stabilized below 400ppm. The Stern Review’s economic projections are based around stabilization between 450 and 500ppm. Stabilizing lower could be quite a lot more expensive.

Finally, there is considerable uncertainty about climate sensitivity itself. Largely, this is the consequence of feedback loops within the climate. If feedbacks are so strong that climate sensitivity is greater than 3°C, it is possible that current GHG concentrations are sufficient to breach the 2°C target for total warming. Some people argue that climatic sensitivity is so uncertain that temperature-based targets are useless.

The 2°C target is by no means sufficient to avoid major harmful effects from climate change. Effects listed for that level of warming in the Stern Review include:

Failing crop yields in many developing regions
Rising number of people at risk from hunger, with half the increase in Africa and West Asia
Severe impacts in marginal Sahel region
Significant changes in water availability
Large fraction of ecosystems unable to maintain current form
Rising intensity of storms, forest fires, droughts, flooding, and heat waves
Risk of weakening of natural carbon absorption and possible increasing natural methane releases and weakening of the Atlantic Thermohaline Circulation
Onset of irreversible melting of the Greenland ice sheet

Just above 2°C, there is “possible onset of collapse of part or all of Amazonian rainforest” – the kind of feedback-inducing effect that could produce runaway climate change.

George Monbiot has also commented on this. The head of the International Energy Agency has said that it is too late for the target to be met (PDF).

Trade and greenhouse gas emissions

Countries that are short on land and water import wheat from countries that have lots of both. In a way, you can see this as the small dry country ‘importing’ land and water in the conveniently transportable form of edible grains. The conveyance is an indirect one (you do not pay a ‘water surcharge’ on a bag of flour), but differences in relative factor prices can lead to opportunities for universal gains from trade.

Something similar happens with greenhouse gas emissions, though it takes the form of an externality rather than a priced component of a transaction. When manufacturing or primary commodities takes place in one state and the products of those industries are consumed in another, the total emissions in the exporting countries include some component for which the importing country arguably bears moral responsibility. When a Canadian buys an iPod made from Chinese energy and Sudanese oil, it seems fairest to say that the Canadian is responsible for the associated emissions.

A 2003 OECD study attempted to quantify such transfers using data from 1993 to 1998. For that span of time, the United States effectively imported an average of 263 megatonnes of carbon emissions per year: about 5% of their domestic total. China, by contrast, exported about 360 megatonnes: a figure equivalent to 12% of their GHG production. Canada, with all its forest and hydrocarbon industries, apparently exported about 54 megatonnes: about 11% of our emissions during that period.

Trying to calculate these on an ongoing basis and transfer responsibility from makers to buyers is simply impractical. Thankfully, the establishment of a global price for carbon would achieve the same effect without all the paperwork. It doesn’t matter if the tax is imposed at the point of production or the point of consumption. In the former case, producers would pass the cost to consumers anyhow.

Source: Ahmad, Nadim. “A Framework for Estimating Carbon Dioxide Emissions Embodied in International Trade of Goods.”