Category: Economics

Matters of money

Putin’s war in Ukraine and nuclear energy

Theoretically, nuclear fission could play a big role in providing energy-rich lifestyles to people around the world without climate change.

At the same time, there are severe economic, social, and political headwinds to even maintaining existing capacity, much less building more.

Now, I fear that Russia’s invasion of Ukraine will add further causes for concern. Ukraine has four nuclear plants and 15 operating reactors — any of which could be damaged intentionally or unintentionally by combat, or which could experience a station blackout if the electricity grid goes down.

Russia’s actions are calling into question longstanding assumptions about global stability. If conflict will again be a feature of life in Europe, the Middle East, and Asia then potentially nuclear operators who already have public acceptance and cost competitiveness against other forms of energy generation as major concerns will have another reason to be wary of reactors. If an incident actually occurs at a Ukrainian nuclear facility, those public and elite concerns will be far more salient.

Canada’s climate change record

I have rarely seen such a concise and numerically-backed summary of Canada’s climate change policy outcomes than this one from Steve Easterbrook’s blog in 2016:

Several things jump out at me from this chart. First, the complete failure to implement policies that would have allowed us to meet any of these targets. The dip in emissions from 2008-2010, which looked promising for a while, was due to the financial crisis and economic downturn, rather than any actual climate policy. Second, the similar slope of the line to each target, which represents the expected rate of decline from when the target was proposed to when it ought to be attained. At no point has there been any attempt to make up lost ground after each failed target. Finally, in terms of absolute greenhouse gas emissions, each target is worse than the previous ones. Shifting the baseline from 1990 to 2005 masks much of this, and shows that successive governments are more interested in optics than serious action on climate change.

At no point has Canada ever adopted science-based targets capable of delivering on its commitment to keep warming below 2°C.

In my July 2021 letter to Environment Minister Jonathan Wilkinson I defined the term “gapology” as: “the process going back to the Chrétien era of setting a GHG reduction target for political reasons and then performing economic analyses to compare potential mitigation measures and the GHG reductions expected to accompany them against the political target, always finding a gap in which some further action would be required.”

Trudeau’s net zero promise is an extension and reiteration of the gapology strategy: safely pushing accountability for meeting the target to long beyond his own time in office.

Related:

Linkages between universities and the fossil fuel industry in Singapore

A group from Singapore called Students for a Fossil Free Future has a new report: “Fossil-Fuelled Universities: A Call for Universities to End Links with the Fossil Fuel Industry.”

There is also a summary.

They found linkages between the fossil fuel industry and universities in terms of endowments; board members; donations; professorships and fellowships; scholarships, bursaries, and student awards; on-campus career events; and industry-linked professional programmes.

Toronto considering a net zero target for 2040

Next week, the Toronto city council is considering a proposal to adopt a net zero target by 2040. I have written to my city councillor and the mayor supporting the idea as better than nothing, but also explaining why net zero promises risk prolonging rather than curtailing fossil fuel use:

Councillor Mike Colle and Mayor John Tory,

I am writing to you in support of the effort to establish a net zero CO2 target for Toronto by 2040, but also to warn you about the risks of the net zero concept and to advocate fossil fuel abolition as a preferable policy. Please do not be mistaken about my intent: a net zero target is better than inaction, and ought to be passed. Addressing climate change, however, will require much more.

There is a major risk that “net zero” is a delay and distraction tactic which aligns with the interests of fossil fuel producing states and corporations. It’s a way of distracting from the cause of climate change — fossil fuels — and to conjure a misleading sense that the problem can be solved without getting rid of them. By endorsing net zero targets, advocates of climate action risk playing the role of doctors advocating low-tar or filtered cigarettes: extending the life and profits of a noxious industry through the false suggestion that we can get the benefits while avoiding the consequences.

One of the clearest signals that net zero is being used to extend rather than constrain the history of the fossil fuel industry has been the enthusiasm with which such targets have been adopted by fossil fuel producers. For example, Saudi Arabia has made a net zero promise for 2060 while Saudi Energy Minister Prince Abdulaziz bin Salman has said: “We are still going to be the last man standing, and every molecule of hydrocarbon will come out.” This ought to be a warning sign that net zero is a Trojan horse designed to delay policies and regulations to abolish fossil fuels before we catastrophically destabilize the climate.

An examination of scale also calls into question the plausibility of achieving net zero by any means other than ending fossil fuel use. Global oil production was about 88.4 million barrels per day in 2020. That’s about 32.3 billion barrels, each with about 136 kg of oil. That adds up to about 4.3 billion metric tonnes (gigatonnes) of oil taken from the ground every year. Even with COVID-related reductions, global CO2 output in 2020 was about 34.81 gigatonnes. That means to bury all the CO2 from our fossil fuel use, we would need to replicate the global oil industry more than eight times over, except with equipment to extract, compress, and bury CO2. All of this would cost energy and money to run and would produce no profit. It has also taken a century to build that level of oil infrastructure. The idea that we can solve our CO2 problem by burying it simply doesn’t make sense physically, even before you start comparing the cost of avoiding the emissions in the first place to the cost of separating and burying them.

In addition, there are enormous non-climate co-benefits from fossil fuel abolition. A 2021 journal article estimated that just the fine particulate pollution from global fossil fuel combustion causes 10.2 million premature deaths annually. This is another demonstration of how the apparent profitability of the fossil fuel industry arises only because we do not deduct the amount of harm arising from their products. Fossil fuel abolition has the promise of saving ten million lives per year, and more when pollution beyond just particulate matter is factored in.

The other risk of a net zero as opposed to a fossil fuel abolition approach is that it will fail to incentivize the right investments. If families and businesses in Toronto knew that fossil fuel use was going to be coming to an end before mid-century, it would no longer make sense to construct new buildings heated with gas, or countless other pieces of infrastructure that reinforce and prolong our fossil fuel dependence. If we let that investment continue and only get serious about fossil fuel abolition later, it will raise the total cost because we will have wasted money on inappropriate infrastructure which we will need to scrap and because we have delayed the deployment of appropriate infrastructure compatible with a stable climate.

To repeat my main point: adopting a net zero target by 2040 would likely have some benefits and is better than inaction. At the same time, the city council must be mindful of the risk that net zero targets are a concealed fossil fuel promotion strategy, not a strategy to stabilize the climate. It is always tempting to be told that you can get the benefits of a damaging activity while avoiding the harms, but with net zero there are strong reasons to fear that it is a marketing strategy designed to keep letting fossil fuel producers profit while others absorb the costs.

Thank you for your attention,

Milan

We’re not going to bury our way out of the fossil fuel catastrophe. What needs burying is the fossil fuel industry itself.

The Economist on fossil fuel abolition

I have written before about The Economist‘s inconsistent positions on climate change and fossil fuels. When writing about science or climate change specifically — and in most of their leading editorials — they stress the potential severity of the crisis and the need to take action. In their broader coverage, however, they tend to prioritize economic growth and to celebrate fossil fuel discoveries as potential boons.

In a recent issue, they included some strong and convincing language on how fossil fuel abolition is ultimately a means to protect human prosperity:

The UNFCCC and its COPs, for all their flaws, play a crucial part in a process that is historic and vital: the removal of the fundamental limit on human flourishing imposed by dependence on fossil fuels.

…

The main reason the UNFCCC and COP process matters is that the science, diplomacy, activism and public opinion that support it make up the best mechanism the world currently has to help it come to terms with a fundamental truth. The dream of a planet of almost 8bn people all living in material comfort will be unachievable if it is based on an economy powered by coal, oil and natural gas. The harms from the cumulative emissions of carbon dioxide would eventually pile up so rapidly that fossil-fuel-fired development would stall.

…

In the long run, therefore, the only way to keep growing is by leaving fossil fuels behind. That requires Asian countries, in most of which emissions are still surging, to forgo much more by way of future emissions than the countries of the developed world, where emissions are already declining.

…

Anyone who dreams of a reprieve for fossil fuels must be disabused. It suits Narendra Modi, prime minister of India, Scott Morrison, prime minister of Australia, and Joe Manchin, a senator from West Virginia, never to speak of an end to the fossil-fuels age. But for them to duck the responsibility of planning a transition is rank cowardice. True, oil and gas cannot vanish overnight, but their day is closing. And coal’s day must be done.

This strikes at at least three crucial points: it is acting on climate change and not ignoring it which provides the best guarantee of long-term prosperity; states will need to find a contraction and convergence solution where pollution falls rapidly in rich states which poor states find a development path where their per capita pollution never gets nearly so high; and that for the sake of equity we will need much more energy at the global level, highlighting the need to actually build climate-safe options at an unprecedented rate.

Trudeau’s 2021 SFT

The Trudeau government has released the Speech From the Throne to open the 44th Parliament.

There’s a section on climate action, but it goes on an on about “growing the economy” and doesn’t even mention fossil fuels, much less the need to abolish them.

It’s not super encouraging that the speech is called “Building a Resilient Economy: A Cleaner & Healthier Future for our Kids,” while an infamous 2002 memo on how to cultivate climate change denial was called “The Environment: A Cleaner, Safer, Healthier America.”

This kind of constant prioritization of economic growth over planetary security demonstrates the government’s unwillingness to talk about the implications of what climate change mitigation requires. Arguably, it also feeds a sense in the public that the problem ought to be solvable without major societal or lifestyle changes. It doesn’t apply anything like the standard which I suggested to recent environment minister Wilkinson: “Is every project the government is supporting something which we will be glad to have in a post-fossil fuel world?”

Theories for why the University of Toronto divested from fossil fuels

Not mutually exclusive:

  1. They are about to launch a bicentennial fundraising campaign with themes including healthy lives, sustainable future, and the next generation. They feared negative public relations attention if they launched the campaign while continuing to refuse to divest
  2. The university’s investment managers have decided that they can better retain authority and control by choosing how to divest on their own terms, and particularly with little reference to the culpability of the industry
  3. In trying to implement the prior environmental, social, and governance (ESG) screening method, the investment managers at the University of Toronto Asset Management (UTAM) corporation decided that divestment would be easier or better based on their secret internal metrics
  4. The Harvard announcement and COP26 have added to the pressure to announce new efforts
  5. U of T perceived that it was increasingly behind when a growing number of Canadian schools had made divestment commitments
  6. A student-led volunteer campaign persisted through multiple setbacks and core cohort graduations and was sustained by the University of Toronto Leap Manifesto chapter and subsequently the Divestment & Beyond faculty- and union-led campaign after the Toronto350.org / UofT350.org effort

As in the campaign as a whole, the university’s penchant for secrecy makes it challenging to explain or understand their actions. In particular, that includes the parlour trick of setting up your own investment management corporation as a means of evading oversight, by pretending that somehow the advice from this organization should only be available to the administration in secret.

The pro-carbon chorus at COP26

From today’s Globe and Mail:

I know Canada’s major media sources tend to be reflexively pro-fossil, but it’s still remarkable to see people insisting that the industries causing climate change should not be targeted as we try to keep it from destroying us.

Reading about the resistance dilemma

Today I received and began reading George Hoberg’s new book: The Resistance Dilemma: Place-Based Movements and the Climate Crisis.

The usefulness is threefold. It speaks directly to my concern about how the environmentalist focus on resistance isn’t a great match with building a global energy system that will control climate change. It references much of the same literature as my dissertation, so it provides a useful opportunity to check that I haven’t missed anything major. Finally, it’s an example of a complete, recent, and successful piece of Canadian academic writing on the environment and thus a model for the thesis. It’s even about 300 pages, though a lot more fits on a published book page than a 1.5-spaced Microsoft Word page in the U of T dissertation template.