Geek stuff – Page 15 – a sibilant intake of breath

Ethics and discount rates

The discount rate is a basic tool of accounting and economics: people and institutions often need to deal with costs and benefits which will arise in the future, and it doesn’t usually make sense to simply value them as if they were happening today. A person expecting pension payments of $1,000 per month in thirty years probably shouldn’t value them as though they had the money in hand today, and neither should the organization that will be making the payouts.

To adjust for the time difference, people doing accounting choose an annual discount rate by which to reduce the value of things expected in the future.

Problematically, however, the compounding effects of this across long periods of time can make the specific rate you choose into the most important feature of the calculation. This has an extreme effect in climate change economics.

In the context of pensions, a recent Economist article explained:

The higher the discount rate, the less money has to be put aside now; American public plans tend to use a discount rate of around 7.5%, based on the investment return they expect to achieve…

A promise to pay a stream of pension payments in the future resembles a commitment to make interest payments on a bond. A bond yield is thus the most appropriate discount rate. But given how low bond yields are, pension deficits would look larger (and required contributions would be much higher) if such a discount rate were used. A discount rate of 4%, for example, would mean the average public pension plan would have a funding ratio of only 45%, not 72%, according to the CRR.

That last bit means that American institutions which owe pensions to employees in the future may have only 45% of the money which is necessary for that purpose, rather than the 72% which they currently believe themselves to possess.

While there is an intellectual and even a moral case for discounting the future, it seems clear that it’s a practice with considerable moral risks associated. We are in a situation where simply by making optimistic assumptions we can reduce the burden which we owe to future generations. If we get things wrong, especially in the multi-century case of climate change, they will have no way to hold us to account.

Psychologically, this may also lead to us ‘discounting the future’ in other ways. If people expect corporate and government pension plans to be broke by the time they retire, it may inspire a super-cautious response of independent personal pension saving, or it may lead to people writing off any hope of financial stability in old age and simply ignoring the risk. Such temptations may be even greater for those who see the massively inadequate response the world is undertaking in relation to climate change and ask whether – even if governments, firms, and individuals did set aside adequate retirement savings in the near future – the world will still be intact enough in the second half of the 21st century for those funds to be meaningful.

Hive-LMP

The lethal ladybug

My new library

Since moving out of Massey College, the great majority of my books have been inside a heap of banker’s boxes, both cluttering my room and impeding access to them for PhD purposes.

A few days ago, I finally received delivery of a custom bookcase from INOVA, designed to fill the largest available space in my room. It’s pretty close to capacity with my existing collection of books, and it greatly improves the visual appeal of my room and ease of reference.

Three additions to the Hive

For about nine months now I have been enjoying John Yianni’s excellent strategy game Hive, both online (on boardgamearena.com and more recently boardspace.net) and in person with Amanda, Nada, Ainslee, Tristan, Anna, and other friends.

In the basic version of the game each player has a queen bee, which they must protect at all costs; ants which are highly mobile but can’t squeeze through small openings; spiders which must always move three spaces in the same direction; grasshoppers which can jump straight over other pieces; and beetles which can climb atop the hive. Together, these set up a complex strategy game where the implications of every choice must be carefully considered, and where one surprise move can easily reverse the tide of the game.

In addition to the five classic bugs, there are three bug expansions available which I recently received as gifts. The ladybug is a cross between a spider and a beetle: able to move atop the hive, but only in a specifically prescribed pattern in each turn. It’s especially useful for endgames, when you need to fill in the last remaining spaces around the enemy queen. The mosquito adds a lot to the complexity of the game by inheriting the movement abilities and special abilities of any adjacent piece, friendly or enemy. I find it especially satisfying to force a win by placing a mosquito which is then able to surround the queen in either of two ways.

The real game-changer, however, is the pillbug. It’s the only bug that can pick up and move an adjacent piece, which adds considerable complexity. With a pillbug beside your queen, you are often able to make her escape when your opponent is on the cusp of victory. As such, any game with one or more defensive pillbugs becomes dominated by the need to neutralize your opponent’s.

I strongly recommend the game — especially to people who enjoy the chesslike combination of a game with no random chance (no dice throws, no cards to shuffle) and no hidden information. It works especially well for annotated play, in which players collaborate to choose the strongest move for each player in each turn, yielding a game at a much higher skill level than either could manage alone.

If anyone wants to give it a try on boardgamearena or boardspace, with or without the expansion pieces, please let me know. Especially with the new pieces in play, I am not yet consistently as good as boardspace’s ‘Dumbot’ AI, but that should progressively change with practice and further perusal of Randy Ingersoll’s How to Play Hive Like a Champion.

Hive on the beach

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.

Cyber warfare between the US, Israel, and Iran

I recently saw the documentary Zero Days about state-sponsored cyber warfare in general and the Stuxnet attack against Iran’s enrichment facility at Natanz in particular.

The documentary doesn’t really contain any new information for people who follow the news in this field, but it’s well put together and has some compelling interviews.

A couple of New York Times articles cover much of the same ground: Obama Order Sped Up Wave of Cyberattacks Against Iran and U.S. Had Cyberattack Plan if Iran Nuclear Dispute Led to Conflict. These, respectively, cover ‘Olympic Games’ (the Stuxnet operation) and ‘Nitro Zeus’, a much broader plan for an across-the-board cyber attack against Iranian civilian and military systems in the event of war between Iran and the US.

An interesting discussion in the film concerns US-Israeli relations. It alleges that US support for Stuxnet was motivated in part by a desire to prevent attempted airstrikes against Iranian nuclear facilities by Israel. In part, this was allegedly motivated by the thinking that Israel would initiate such attacks not to destroy Iranian capabilities themselves (since that would be beyond Israel’s military means), but to force the US into a war with Iran.

The film also discusses alleged Iranian retaliation for Olympic Games, including attacks against Saudi Armaco and American banks. There’s also some interesting material about the Abdul Qadeer Khan proliferation network.