Economics – Page 113 – a sibilant intake of breath

EU taxing aviation carbon

The European Union has agreed to start integrating air travel into its emissions trading system. This is a big step, given how the industry has often been excluded from carbon pricing schemes – especially where international travel is involved.

Arguably, the biggest piece of news is that they want to charge non-EU carriers for emission permits when they enter EU countries. This is certainly going to kick up a stink in the WTO and other multilateral trading bodies. That being said, if a global regime of carbon pricing is not to be forthcoming, the regional arrangements will need mechanisms for ensuring that imports meet their standards.

Hashing out how such standards can be applied is sure to be a difficult and extended affair.

Pigs eat more fish than all of Japan

Apparently, 17% of wild-caught fish ends up getting fed to livestock. That’s pretty astonishing, given the increasingly dire state of global fish stocks, and it underscores the way in which most modern agriculture is fundamentally unsustainable.

As long as it is dependent on outside inputs where the supply is growing scarcer, it won’t be a mechanism for feeding humanity indefinitely.

Much better to leave those fish in the sea or, failing that, at least feed them to people.

CCS skepticism

The headline of a recent Economist article is one that policy-makers around the world should pay heed to: Carbon storage will be expensive at best. At worst, it may not work. There are two over-riding reasons for which the danger of a CCS-flop needs to be borne in mind:

First, many governments are assigning a big chunk of their planned emissions reductions to the new technology. If they find themselves in need of alternatives later, it may prove to be quite a scramble. Likewise, being able to ‘bank’ the CCS reductions now may make their plans seem both more viable and more certain than they really are.
Secondly, the very prospect of CCS is a lifeline to the coal industry. Power plants built to be ‘carbon capture ready’ may never do anything of the kind. If so, citizens should be even more concerned about the greenhouse gasses they are going to spew. Those financing the construction should also be wary, since carbon pricing is more likely than not to be on the way.

None of this is to say we shouldn’t welcome cheap, effective CCS if it does emerge. Not only could it allow the US and China to use their coal reserves while not wrecking the climate (local pollution is another matter), CCS coupled with biomass-fired generating stations could be carbon-negative.

Just don’t count those megatonnes before they’re buried.

Hansen on 350ppm

The most common position among climate change analysts is that we need to stabilize the atmospheric concentration of carbon dioxide somewhere between 450 and 550 parts per million (ppm). That is, for instance, the target range endorsed by Nicholas Stern. It is also thought by many to be compatible with the EU goal of generating less than two degrees Celsius of temperature increase, though that is only really plausible at the low end.

In recent Congressional testimony, James Hansen, director of the NASA Goddard Institute for Space Studies, argued that we actually need to cut concentrations from the present 385ppm to 350ppm or less. Basically, his argument is that even stabilization at the present level would have unacceptable consequences: both directly, in terms of impacts on physical and biological systems, and by kicking off feedback loops that will further worsen things. The distinction between the numbers may seem abstract to those not familiar with climate policy, but the practical differences between stabilizing between 550, 450, or 350ppm are massive. Each scenario requires that emissions peak at a different date, and that they fall more or less rapidly afterwards. Even staying below 450ppm requires that global emissions peak within 10-15 years, and that they fall to a small fraction of present levels by 2050.

If accurate, the 350ppm target invalidates a great deal of climate change planning. The general view is that we still have a cushion for additional emissions, to be split up between developed and developing countries. The former would lead the way, showing the latter how they can also do so once they reach a somewhat higher level of affluence. Getting back to 350ppm in a reasonable amount of time requires much more aggressive cuts, universally. It would also require that India and China move to a low-carbon economy long before any significant proportion of their population has reached Western levels of affluence.

Personally, I hope Hansen’s most recent testimony is not as prescient as that he gave twenty years ago. If we need to get the planet on a rapid path towards 350ppm, the disjoint between what is physically necessary and what is politically possible is far wider a chasm than has hitherto seemed to be the case.

Tomorrow’s electrical generation: distributed or concentrated?

There is an interesting debate ongoing on the Gristmill blog about whether the future of electrical generation lies primarily with big centralized power plants, like today, or with distributed systems.

Naturally, there are many factors that influence which is more attractive, many of which are regulatory rather than inherent to the physics or economics. I suspect the key dynamics will be the relative efficiency of differently sized facilities, the rate at which low-loss high voltage direct current (HVDC) transmission emerges, and the rate at which financing options for small facilities proliferate. Other important considerations will be the rate of improvement in the economics of solar photovoltaic systems, as well as the development and deployment of demand management and energy storage options for the grid.

In any event, it is doubtful whether one approach or the other will ever truly dominate. In all probability, a low-carbon society will incorporate both approaches in keeping with the strengths of different technologies and the needs of different areas.

Overfishing and the EU

Long-time readers will remember the saga of the ‘fish paper’ – my research piece on the sustainability and legality of European Union fisheries policy in West Africa, eventually published in the MIT International Review.

Fisheries being an area of acute concern for me, I was gratified to see an unusually hard-hitting column in this week’s Economist about fish and the EU. It argues that EU goverments have shown “abject cowardice” in relation to their fishers for years. Meanwhile, overcapacity and unsustainable quotas have put the industry into a “suicidal spiral.” The article reports straightforwardly that: “More subsidies would reduce the already slim chance that Europe will ever have a sustainable fishing industry.”

I have argued previously that fishing should never be subsidized. There are far too many dangers of people selfishly exploiting a common good even without them. Indeed, I don’t have much hope when it comes to the long-term viability of world fisheries. That being said, if more people develop the understanding and candour displayed in this article, perhaps the madness can eventually be brought to heel.

Solar panels at 30 metres a minute

If solar photovoltaic power is going to emerge as a major source of electricity, it will be necessary to start manufacturing solar panels in a far more efficient and economical way. The model needs to shift from how glass was once made (as individual panels) to how it is now made (as a sheet being continuously produced and split at the cool end).

Nanosolar (a company mentioned here before) claims to have a process that will print solar panels onto aluminum backing at a rate of 100 feet per minute. Their hope is to eventually produce panels at a cost of $1 a watt and complete solar systems at $2 a watt – a price lower than that of coal-fired electrical capacity.

This is a goal in keeping with Google’s admirable RE < C project, which aims to displace coal with solar because the latter is cheaper, as well as far more environmentally benign.

Genetically modified potatoes

As is virtually always the case when reading Michael Pollan’s work, The Botany of Desire makes me want to share virtually every page and idea with friends. While a full review will have to wait, one thing that struck me while reading tonight is the situation with genetically engineered Bt crops, as discussed in the last section of the book.

Monsanto’s spuds

Bt is short for Bacillus thuringiensis: a soil bacteria that produces a poison that slays many crop-eating insects. Because it is naturally occurring, the bacterially derived poison is even permitted in many systems of organic agriculture. Genetically modified crops like Monsanto’s NewLeaf tomatoes have had the gene for the manufacture of the poison introduced into their own genetic material.

This is done in one of two relatively crude-seeming ways. Either the gene is inserted into a pathogen that is then allowed to infect the cells of the plant to be modified or DNA is literally shot into the target plant using a .22 caliber ‘gene gun.’ In most cases, the genes don’t end up in the right part of the target plant’s genome. In no cases do we comprehensively appreciate what kind of changes we are creating.

What we do know is this: when we create an environment where pests are exposed to a monoculture of Bt-generating plants, the pests will eventually evolve resistance. According to Pollan, Monsanto expect this to happen to Bt in about thirty years.

This is shocking when you think about it. Firstly, it reveals a kind of extreme short-termism in planning – the expectation that we can keep running on the treadmill and finding new solutions. Secondly, it reveals considerable unethical selfishness. Bt is used by many people other than Monsanto and Monsanto’s customers. The Bt-modified plants threaten to ruin the substance for everybody. Thirdly, it should be remembered that it is not only the resilience of the GM crops that may be undermined. Naturally occurring organisms defending themselves with Bt toxin and similar compounds may suddenly face invulnerable pests, with unknown consequences for nature.

Perhaps the most depressing thing about this section in Pollan’s book is the convincing argument that the above is actually an improvement over conventional potato production. To take the most egregious example, potatoes are regularly sprayed with an organophosphate pesticide called Monitor in order to kill aphids. This is because aphids carry a virus that gives potatoes brown spots inside. People don’t want to eat such potatoes, so farmers respond by spraying the plants with a substance akin to the deadliest of military nerve gasses.

The bigger picture

The more I read about energy usage, climatic science, agriculture, and fisheries, the more deeply green I become. It is pretty challenging to read something as compelling as Michael Pollan’s accounts of industrial agriculture and not begin to profoundly question the kind of soft-green liberal environmentalism that claims that there are just a few environmental externalities that we need to sort out before capitalism as practiced becomes sustainable.

P.S. Names like NewLeaf remind me instantly of Margaret Atwood’s excellent novel Oryx and Crake: essential reading for those trying to make sense of biotechnology’s brave new world.

Dion on gas prices and carbon taxes

Asking a politician to defend climate change policy in courageous moral terms may be asking too much. Just today, Stephane Dion had to go to great lengths to argue that the carbon tax being contemplated by his party will not increase the cost of gasoline. Designing the tax in such a way may be politically necessary now, but what it fails to communicate is the basic rationale behind taxing carbon at all. It isn’t something the government does to raise revenue. Rather, it is an intelligent intervention to correct a market failure. Even with gasoline at current prices, consumers are not paying the full costs associated with their choices. They are paying for oil exploration and the expansion of expensive alternative fuel options. They are paying to outbid increasingly affluent and fuel-thirsty people in rapidly developing countries. They are not paying the costs associated with the huge risks greenhouse gas emissions pose for future generations.

If we are to deal with climate change, there must be a profound societal acknowledgement of two things: that present-day lifestyles are profoundly harmful to others and that people do not have the right to impose such harm, even when they have been mindlessly doing so for a long time. That moral case is at the very heart of carbon pricing and climate change mitigation in general. Pretending otherwise cheapens the debate, as well as making it shallower. Carbon taxes now may indeed be a useful vehicle for encouraging people to make smart investments in the face of rising fuel prices, but that is not and should never be the core of the justification for them.

Fuel cells are a pipe dream

Seven reasons why hydrogen fuel cell cars will never be a commonly deployed technology:

You get hydrogen by cracking hydrocarbons or electrolyzing water. In either case, you are better off cutting out the hydrogen production step. You can burn the hydrocarbons directly (or make liquids from solid ones) and you can use the electricity to drive electric vehicles. Pretty much any time you make hydrogen, you are using up a better fuel.
Cooling and compressing hydrogen for storage takes a lot of energy. Even liquid hydrogen has less energy per litre than gasoline.
We would need to build an infrastructure of hydrogen liquification stations and pipelines.
Storing enough hydrogen to travel a decent distance is difficult.
Arguably, storing that quantity of hydrogen in a car is quite dangerous.
Fuel cells are very expensive, partly because they require platinum catalysts. They are also relatively fragile.
Fuel cells that produce water as a by-product might have trouble in freezing cold conditions.

Granted, a few of these factors might change. We might develop an ideal system for storing hydrogen or develop fuel cells with cheaper catalysts. Even so, the number of objections is large. Forced to bet, my guess for the ground transport of the future is electric vehicles and plug-in hybrids for urban areas and biofuel or coal-to-liquid powered vehicles for long-distance travel.