Category: Economics

Matters of money

Urban growth

In an interesting recent article on urbanization, The Economist noted:

A huge and growing number of people live somewhere like Mikwambe [“on the edge of Dar es Salaam”]. Between 2005 and 2015 the world’s cities swelled by about 750m people, according to the UN. More than four-fifths of that growth was in Africa and Asia; specifically, on the fringes of African and Asian cities. With few exceptions, cities are growing faster in size than in population. Lagos, the capital of Nigeria, is typical: it doubled in population between 1990 and 2010 but tripled in area. In short, almost all urban growth is sprawl.

Among other things, this suggests environmental and climate change implications. Urban sprawl, whether of the kind experienced in America in the middle of the 20th century or the sort taking place in today’s newly emerging cities, essentially depends on cheap transportation. Furthermore, low urban density is a poor match with public transport.

Countries all over the world may be persisting with urban design choices which will make decarbonization more difficult. As a corollary, if we succeed in fighting climate change, it may make large parts of these sprawling cities economically unviable.

Is environmentalist solidarity with Indigenous peoples opportunistic?

During the last few years, solidarity with Indigenous peoples has been a major area of emphasis for environmentalist, climate change activist, and anti-pipeline groups. In part, this seems to be based on the view that indigenous peoples have the strongest legal tools for blocking new fossil fuel projects, at least in Canada.

This raises the question of how genuine the support for Indigenous people really is. Do these environmental groups provide such support principally for the narrow (yet essential) purpose of avoiding catastrophic climate change? Is it somehow automatically the case that indigenous communities will choose low-carbon energy if given more power to influence political and economic choices? When Indigenous groups support fossil fuel development, for whatever reason, what is the appropriate response for those seeking to prevent catastrophic climate change? And even if the impulse to prevent catastrophic climate change is morally laudable, how should indigenous communities feel about being used as a means to that end?

Olkiluoto, Flamanville, and Hinkley

Both on this site and in academic work, I have done a lot of research and writing on nuclear energy: specifically, it’s desirability as a low-carbon energy option and climate change solution, and perspectives on nuclear energy within the environmental and climate change activist movements.

The European Pressurized Reactor (EPR) was designed by Framatome (now Areva NP) and Électricité de France (EDF), largely with the intention of being safer than previous designs through the presence of additional redundant safety systems and with the intention of being cheaper to build, in part by standardizing power plant designs to a greater extent than in previous projects, and in part by being larger than earlier designs.

Three EPRs are under construction in Europe: a third unit at the Olkiluoto Nuclear Power Plant in Finland, a third unit at the Flamanville site in France, and two reactors at Hinkley Point C in the United Kingdom.

All three projects have encountered major difficulties. All three are seriously over budget and behind schedule. €10.5bn has been spent on the Flamanville facility since 2007. In Finland, the project is a decade behind schedule and three times over budget. Hinkley is expected to cost £18 billion, and back in 2013 the U.K. government agreed to pay £92.50 per megawatt-hour for electricity from the reactor, which was twice the going rate for electricity at the time.

Furthermore, there are concerns about construction quality. In France, they have “found weaknesses in the reactor’s steel“, specifically flaws in the reactor pressure vessel. Many issues have been identified with the Finnish facility, including by their domestic nuclear regulator. There is also concern about the pressure vessels for Hinkley.

All this looks bad for the future of large nuclear power stations in Europe and North America. It’s possible new Russian and Chinese designs will be more successful. Indeed, China is the world’s most active site of nuclear construction. They had 32 operating reactors as of April 2016, and they had 20 reactors under construction. These include an American design (the world’s first Westinghouse AP1000 pressurized water reactor (PWR)) and domestically developed designs like the Hualong One CPR-1000 PWR and the CAP1400 PWR which is being developed from the AP1000. China is also building two EPRs, which are also behind schedule. Russia is also promoting the the VVER PWR for domestic construction and export.

Greenpeace causing harm by opposing GMOs?

When making decisions about technology, both false positive and false negative errors are possible. By that, I mean it’s possible for us to miss or ignore how a technology has unacceptable consequences for people and the rest of nature. DDT or the drug thalidomide were such false negatives: wrongly considered to be acceptable for use until shown to be otherwise. A false positive, by contrast, would be a case where unjustified fears have limited the use of a technology unnecessarily. Silly examples include the idea that women couldn’t ride trains over 50 miles per hour and many other such misapprehensions about the consequences of technology. People who tend to support new technologies emphasize the times when critics have been wrong, and the benefits technology has brought, while those who favour caution tend to emphasize cases where serious consequences have only emerged after time, as with substances that deplete the ozone layer and those that change the climate.

All this can be tough to reconcile with the notion of the precautionary principle. Expressed weakly, the principle can be seen as simply an appeal to caution: even if there is no evidence about whether a technology is safe or dangerous, we should err on the side of treating new technologies with skepticism. In the strongest expression, the principle may call for any new technology to be restricted to research only until ‘proved’ safe.

Along with opposition to nuclear power – which may also be a false positive where the benefits of a technology are under-stated while risks are over-stated – groups like Greenpeace have strongly resisted the use of genetically modified organisms (GMOs) in agriculture, claiming that they will harm human health, harm natural ecosystems, or have other potentially unknown risks.

Recently, 107 Nobel laureates (about 1/3 of all those alive) signed a public letter criticizing Greenpeace for its stance. The Nobel winners say:

There has never been a single confirmed case of a negative health outcome for humans or animals from their consumption. Their environmental impacts have been shown repeatedly to be less damaging to the environment, and a boon to global biodiversity.

And:

WE CALL UPON GOVERNMENTS OF THE WORLD to reject Greenpeace’s campaign against Golden Rice specifically, and crops and foods improved through biotechnology in general; and to do everything in their power to oppose Greenpeace’s actions and accelerate the access of farmers to all the tools of modern biology, especially seeds improved through biotechnology. Opposition based on emotion and dogma contradicted by data must be stopped.

They strongly emphasize the potential of genetically modified crops including “golden rice” to combat vitamin A deficiency, which they say causes “a total of one to two million preventable deaths occur annually”.

This is a highly visible development in a long-running debate in which it seems clear that the tangible benefits associated with GMOs seem to outweigh risks which have not been convincingly demonstrated. That said, I would personally feel more comfortable if genetic modification of organisms for agriculture was undertaken by public institutions which are subject to appropriate scrutiny rather than profit-maximizing corporations.

In my experience, Greenpeace tends to be stronger on spectacle than on research, and environmental groups in general have a worrisome tendency to maintain opposition to certain technologies as dogma, specifically nuclear energy and genetic modification. Whenever I find that a Greenpeace website or report is the source of a scientific claim, I search to find a credible source that agrees. They seem especially vulnerable to the general human tendency (ask Tony Blair) to apply less scrutiny to information that supports pre-existing positions and thus use weak or questionable evidence to support strongly-held beliefs.

People may be bad at remembering it (or simply unwilling to tell the truth about it to themselves), but humanity has placed itself precariously. We are running vast uncontrolled simultaneous global experiments: destroying habitat, changing the climate, depleting the seas of life, and changing the chemistry of everything. Only the most optimistic or naive think all these problems will resolve favourably for human beings without active intervention. At the same time, we are left contemplating how to use tools which we don’t fully understand (from genetic modification to geoengineering) to further intervene in physical and biological systems which we also don’t understand. When you factor in questions of distributive justice (Do GMOs currently favour developed over developing countries? If so, is such bias inevitable, or a consequence of the specific modifications we have made?), the appropriate approach to managing risk becomes even more obscure.

The Energy Gang on “clean coal”

For a few months, I have been listening to The Energy Gang podcast. They cover a range of issues, but I think they are distinguished by being wonkier than usual, very U.S.-focused, and more focused on economics and business than most climate change commentators.

Their most recent episode discusses a recent New York Times article questioning the viability of carbon capture and storage (CCS) as a way of making coal-fired facilities compatible with a stable climate. One of the panellists stressed the need for an “all of the above” clean energy strategy, in which CCS may help prevent some coal facilities from becoming stranded assets. Others argued that the economic evidence so far shows that CCS won’t save anything, and that the health impacts alone of coal are sufficient to justify its abandonment.

Ludicrously, the platform adopted at the Republican National Convention calls coal “clean” even without CCS being included.

Recent episodes have also discussed the climate impact of plans in the U.S. to retire 17 nuclear power plants; renewable energy; transport; climate denial; arctic drilling; and many other topics.

Natural gas as a ‘bridge fuel’?

I have mentioned methane before in the context of agriculture (specifically the meat industry) and in terms of the so-called “dash to gas” in Europe.

More broadly, the desirability or undesirability of gas is a major issue in environmental politics. On the basis that electricity produced using gas produces fewer emissions per kilowatt-hour than electricity from coal (or that natural gas vehicles pollute less per kilometre than gasoline or diesel ones), some have argued that more widespread use of natural gas can be part of a transition to a low-carbon future, with some identifying it specifically as a “bridge fuel”.

The case against gas is multi-faceted. First, there is an argument about fossil fuel dependence. Gas may be less polluting per unit of output than other fossil fuels, but building new infrastructure to extract, transport, and burn gas arguably perpetuates fossil fuel dependence. In part, this could be by crowding out investment in options which are better from a climate change perspective including renewables and, possibly, nuclear. A second major argument is that natural gas, which is primarily composed of methane, is a powerful greenhouse gas itself. One estimate recently cited in The Economist is that 2-2.5% of all the methane produced in America leaks into the atmosphere (“fugitive emissions” – “much higher, and that would endanger the argument that natural gas is over all time periods cleaner than coal”. A third argument centres on how most new gas production in North America comes from hydraulic fracturing (fracking), which in turn contaminates ground water and causes health and environmental problems. On this basis, numerous environmental groups have called gas “a bridge to nowhere”. A paper by Robert Howarth concludes:

Using these new, best available data and a 20-year time period for comparing the warming potential of methane to carbon dioxide, the conclusion stands that both shale gas and conventional natural gas have a larger GHG than do coal or oil, for any possible use of natural gas and particularly for the primary uses of residential and commercial heating. The 20-year time period is appropriate because of the urgent need to reduce methane emissions over the coming 15–35 years.

A last argument might be that since the fossil fuel industry is implacably opposed to the kind of government action which would keep temperatures to less than 2 ˚C or 1.5 ˚C of warming, the profits they derive from gas maintains financial and political strength which will continue to make climate action impossible.

Perhaps the most plausible argument in favour of gas doesn’t concern rich states like Canada and the U.S. but rapidly developing states like India, China, and Brazil which continue to deploy new coal-fired generation. If the choice really is between coal and gas, and methane leaks can be controlled, then gas may be an improvement in some situations. Rich states that are looking to build energy systems which can be counted on indefinitely, however, need to be working to move beyond fossil fuels entirely, reducing the policy-blocking power of the fossil fuel industry and avoiding the imposition of new forms of social injury through fracking.

Open thread: Brexit

Will it really happen? Or will the U.K. find some way to pull out before invoking Article 50?

The consequences of the leave vote were evidently predictable. This is from June 18th: “If Remain wins on June 23rd, Brexiteers will tell voters they were conned. If Leave wins, Mr Cameron will go and his successor will negotiate a Brexit that does not remotely resemble the promises of the Leave campaign, which trades on the lie that Britain can have full access to the European single market without being bound by its regulations and free-movement rules.”

Also — what impact will this have on global climate efforts? Early signs are not encouraging.

Rhodes on the nature of nuclear war

So much confusion, so much paranoia, so many good intentions, so much hard work, technical genius, cynicism, manipulation, buckpassing, buckpocketing, argument, grandstanding, risk-taking, calculation, theorizing, goodwill and bad, rhetoric and hypocrisy, so much desperation, all point to something intractable behind the problem of how to deploy sufficient and appropriate nuclear arms to protect one’s nation from a nuclear-armed opponent. There was such a beast. It was quite simply the fundamental physical fact of nuclear energy: that such power is relatively cheap to generate and essentially illimitable. Nuclear warheads cost the United States about $250,000 each: less than a fighter-bomber, less than a missile, less than a patrol boat, less than a tank. Each one can destroy a city and kill hundreds of thousands of people. “You can’t have this kind of war,” Eisenhower concluded. “There just aren’t enough bulldozers to scrape the bodies off the streets.” It followed, and follows, that there is no military solution to safety in the nuclear age: There are only political solutions. As the Danish physicist and philosopher Niels Bohr summarized the dilemma succinctly for a friend in 1948, “We are in an entirely new situation that cannot be resolved by war.” The impossibility of resolving militarily the new situation that knowledge of how to release nuclear energy imposes on the world is the reason the efforts on both sides look so desperate and irrational: They are built on what philosophers call a category mistake, an assumption that nuclear explosives are military weapons in any meaningful sense of the term, and that a sufficient quantity of such weapons can make us secure. They are not, and they cannot.

Rhodes, Richard. Arsenals of Folly: The Making of the Nuclear Arms Race. p. 101 (hardcover, italics in original)

Federal Court of Appeal overturns Northern Gateway Pipeline approval

The Federal Court of Appeal just ruled that the Canadian government had failed to adequately consult indigenous peoples and so quashed the 2014 federal approval for the project.

As one of the subjects of my PhD thesis, all developments on NGP are of great interest. It’s certainly a fast-moving as well as an important topic.