Carbon pricing and economic freedom

Post-Dion, it will take a bold politician to revive the idea of a carbon tax in Canada. One ironic consequence of that is that it is likely to produce more ‘command and control’ style environmental policies. Whereas an economy-wide carbon tax (or cap-and-trade scheme with auctioning) would encourage every individual decision-maker to examine the cost of reducing their greenhouse gas emissions, trying to achieve those reductions based on targetted government initiatives requires that political and bureaucratic decision-makers try to perform that analysis: trying to identify low-cost potential emissions reductions, as well as instruments through which they can be encouraged.

I have argued previously that just putting a price on greenhouse gas emissions is not sufficient to drive the change we need, because other market failures and economic structures need to be overcome. With that caveat expressed, it is more than a touch ironic that an anti-tax ‘free market’ ideology that rejects carbon pricing may lead to centrally planned solutions emerging, as opposed to market-directed ones.

A related irony concerns the timing of mitigation. As Joseph Romm has repeatedly pointed out, we have the opportunity today to begin the transition towards a low-carbon economy in a relatively voluntary way. Nobody needs to be banned from doing essential; rationing is not required. All we need are sensible economic instruments and accompanying policies, provided we get started right away. By contrast, if we squander the opportunity we have now, achieving the stabilization of the atmospheric concentration of greenhouse gasses will require that far more onerous burdens be placed on individuals. In short, today’s unhampered freedom to emit greenhouse gasses is inexorably linked to the necessity of sharply dimininished freedoms in the future.

Fatih Birol on peak oil

In an interview with British journalist George Monbiot, Fatih Birol, the chief economist of the International Energy Agency made the following predictions about when peak oil output for non-OPEC and OPEC states would be reached:

“In terms of non-OPEC [countries outside the big oil producers’ cartel]”, he replied, “we are expecting that in three, four years’ time the production of conventional oil will come to a plateau, and start to decline. … In terms of the global picture, assuming that OPEC will invest in a timely manner, global conventional oil can still continue, but we still expect that it will come around 2020 to a plateau as well, which is of course not good news from a global oil supply point of view.”

Coming from a representative of this particular organization, that is quite a surprising statement. Traditionally, the IEA has downplayed any suggestion that global oil output could peak before 2030. A peak in 2020 suggests that we have a lot less time than most firms and governments have been expecting to transition to a post-oil, post-gasoline, post-jet fuel future.

An early peak in oil output could have an enormous effect on both the development of the global economy and climate change. What effect it will have depends on many factors: three crucial ones being the timing of the peak, the severity of the drop-off in output afterwards, and the investment decisions made by states and firms. If we want to continue to produce enough energy to run a global industrialized society, and we also want to avoid the worst effects of climate change, we need to ensure that renewables (and perhaps nuclear) are the energy sources of the future, and that efficient means of energy storage are developed for vehicles.

Power, oversight, and photography

As this disturbing alleged situation demonstrates, you may be ordered at some point to delete photographic or videographic evidence of an event without appropriate justification.

While there may be situations in which security concerns are justifiably paramount, there are also many situations in which those who have authority simply wish to avoid facing any accountability for their actions. Given the conflict of interest involved for those law enforcement officers on the scene, it seems prudent to retain any photographic or videographic evidence you have produced, even if you are asked by them to delete it.

After all, any impartial evidence that exists can only help in any subsequent official proceedings. The absence of such evidence is likely to strengthen the bias of impartial adjudicators towards those with authority, as opposed to those who simply happened to be witnesses.

Prior relevant posts:

[18 December 2008] Zoom has posted an update about this matter.

Unions and seniority

Given the very high level of interest people have had in this previous discussion of the OC Transpo strike and unions in general (78 comments so far), it seemed worth initiating a second discussion on the matter. Since the union is saying that the major purpose of this strike is to retain the right to have bus routes assigned on the basis of seniority, the general issue of seniority and unions seems to be worth considering.

There do seem to be some valid reasons for supporting higher pay and greater privileges for more senior individuals. Among those are the issue of experience, which those who are senior to an organization can be expected to have in greater amounts, and perhaps the facilitation of standard lifestyle transitions: from youth to adult life, and from that to retirement.

At the same time, there seem to be valid reasons to oppose perks based on seniority. In situations where something worth rewarding is often correlated with seniority, but can be measured easily, it seems to make sense to measure and reward it directly. That way, rather than assuming that ten years on the job makes you more capable, you can reward those who actually demonstrate capability in a day-to-day manner. Another argument is that basing a large share of pay and benefits on seniority rewards the mediocre at the expense of the excellent. Those who are very active and engaged get paid no better than those who perform the minimum obligations of the job. Aside from providing a disincentive for talented people to be part of the organization, that seems basically unfair.

I am not disputing the freedom of unions and employers to negotiate whatever terms seem best to them. I am simply seeking to open a discussion on the advantages and disadvantages of favouring seniority: from the perspective of union members, management, and those who consume the products of services the union members and management provide.

Level and rate targets for greenhouse gas mitigation

When greenhouse gas mitigation commitments are made, the standard form is to ‘reduce by a certain percentage below the level in a base year by a target year.’ For example, 5% below 1990 levels by 2012. This can be easily converted into a target in absolute emissions. Say, cutting from 1,000 megatonnes (MT) in 1990 to 950 MT in 2020.

I have criticized the process of target-setting before, arguing that the ability of organization to set targets that look ambitious can obscure the absence of plans to actually achieve those reductions. In the end, it makes sense to focus our efforts on cutting emissions, rather than haggle over whether to cut by 65% or 70% by 2050.

Given that targets won’t be vanishing any time soon, I do have a proposal for improving one aspect of them. Rather than expressing targets are just an absolute level of emissions at a set date, they should be expressed as both an absolute level and a rate of reduction to be achieved by a target date. A financial equivalent would be to say: by 2010, I will have paid off 50% of my mortgage, and will be paying more off at a rate of $10,000 per year. What this avoids is the theoretical situation in which a state or other entity limps across the finish line, meeting a 2020 target with no new ideas and initiatives for reaching their 2050 target. This would be akin to a pharmaceutical company that has all its blockbuster drugs go off-patent simultaneously, at the same time as it has no promising new ones in the pipeline (not a hypothetical scenario for a significant number of drug companies right now).

Having a double rather than a single target doesn’t affect the disjoint between commitments and achievements, but it may help foster the kind of mindset required to build a low-carbon society.

Obama and manned spaceflight

Apparently, Barack Obama is thinking of curtailing NASA’s future manned spaceflight activities. Specifically, there has been talk of canceling the Ares 1 rocket and scaling back the Orion Crew Exploration Vehicle. If true, the news is welcome. There is very little evidence that ongoing manned programs – including the Space Shuttle and International Space Station – are generating useful science or providing other benefits. There is even greater doubt about the usefulness of returning to the moon.

Space exploration is an activity best undertaken by robots. They are cheaper to send up than humans and more capable. Given the very limited value provided by sending live people into space, it is something the United States should discontinue. At the very least, it is something that should be sharply scaled back while the government works to address America’s severe debts and other problems.

Ranking energy technologies, from wind turbines to corn ethanol

Mark Z. Jacobson, a professor of civil and environmental engineering at Stanford, headed up a study to quantitatively evaluate different electricity generation options, taking into consideration their impacts on climate, health, energy security, water supply, land use, wildlife, and more:

The raw energy sources that Jacobson found to be the most promising are, in order, wind, concentrated solar (the use of mirrors to heat a fluid), geothermal, tidal, solar photovoltaics (rooftop solar panels), wave and hydroelectric. He recommends against nuclear, coal with carbon capture and sequestration, corn ethanol and cellulosic ethanol, which is made of prairie grass. In fact, he found cellulosic ethanol was worse than corn ethanol because it results in more air pollution, requires more land to produce and causes more damage to wildlife.

It is naturally very difficult to assess the validity of any particular research methodology, given uncertainties about matters like the future development of technologies, the evolution of the global economy, the availability of fossil fuels, and so on. Nonetheless, it is good to see serious work being done on comparing the overall appropriateness of different energy technologies. Given the unwillingness of many states to impose serious carbon pricing solutions, and the tendency of governments to ‘pick winners’ when it comes to technologies being subsidized, the more high quality data available, the better.

While I haven’t looked over the study in detail, it does seem like the strongest objections raised against nuclear (which is ranked very badly) aren’t really about the environment or economics. The risk Jacobson highlights most is that of nuclear proliferation, and the dangers associated with making fissile material more widely available. Proponents of a nuclear renaissance probably won’t be keen to see discussion of “the emissions from the burning of cities resulting from nuclear weapons explosions potentially resulting from nuclear energy expansion.”

The entire study was published in Energy & Environmental Science, and can be accessed online.

A few Canadian climate news items

The last couple of days have been an active period in Canadian climate science and policy:

  • An expedition led by David Barber concluded that the Arctic is likely to be ice-free in the summer, as of 2015.
  • Environment Canada scientist Don MacIver resigned from the group organizing the next World Climate Congress after the federal government revoked his permission to attend and speak at the ongoing United Nations Framework Convention on Climate Change (UNFCCC) meeting in Poznan, Poland.
  • Gordon McBean, a prominent Canadian climate scientist, speculated that Environment Canada is not “functioning in a way that is conducive to providing the kind of leadership that we need.”
  • Chief Phil Fontaine told Indian Affairs Minister Chuck Strahl that: “The actions of Canada in Poland are designed to undermine the rights of indigenous people here and elsewhere.”

Certainly, Canada’s negotiating position has been a problematic one. Many people have pointed out the disjunction between demanding binding emissions reductions from ‘all major emitters’ (including India and China) and stating that Canada has no intention of meeting the target it chose for itself under the Kyoto Protocol.

It is very hard to say that any Canadian government has played a constructive role in the development of international climate policy. Hopefully, that will begin to change as we are dragged reluctantly into the mainstream.

Rich and poor, under the Kyoto Protocol

This article in Slate makes a convincing case that the definitions of rich and poor states under the Kyoto Protocol make no sense and produce distorted outcomes:

The original climate negotiators had a simple way of defining wealth. First, they took the list of 24 countries that were part of the Organisation for Economic Co-Operation and Development, a pre-eminent club of wealthy, democratic, free-market states that was formed in 1961; these included the United States, most of Western Europe, Japan, and a few others. Then they added several states of the former Soviet Union, like Russia and Belarus, as well as a handful from Eastern Europe, like Poland and Slovenia. This was basically Cold War logic on cruise control: First World and so-called Second World countries were rich; Third World countries were poor. The Kyoto Protocol, concluded six years later, maintained the same division. Rich countries agreed to institute caps on their greenhouse-gas emissions while poor countries agreed to do nothing.

The resulting deal had its flaws then. It makes absolutely no sense today. Belarus, for example, is lumped together with the rich countries, despite a GDP per person of about $10,000. As a result, it has an emissions cap like those in place for Europe and Japan. Kuwait, meanwhile, is considered poor. That means the oil-rich emirate is spared any obligations, despite the fact that its residents are about five times wealthier than the Belarussians.

Future climate deals will need to do a better job of distinguishing between those who have already developed and become wealthy (largely on the basis of CO2-generating greenhouse gas emissions) and poor states that are likely to suffer the worst effects of climate change after contributing disproportionally little to its emergence.

It makes sense to shift some states from the poor category to the rich one, and vice versa. It also makes sense to establish a special category for states that are (a) major emitters (b) relatively poor and (c) experiencing relatively rapid growth in emissions. An effective climate change treaty will need to address emissions from these states (such as India and China) as well as those from unambiguously rich states like Canada, Australia, and the United States. While the biggest issues in relation to the very poorest states concern how people will adapt to climate change, starting all major emitters (regardless of wealth) on the path to low carbon economies is the only way to avoid the worst consequences of climate change. Of course, establishing a new category doesn’t answer the tricky moral question of who ought to pay how much, in order to achieve the stabilization of atmospheric greenhouse gas concentrations.

Extreme environmental recklessness

As a metaphor for better understanding the relationship between humanity and nature, some people have used the image of a lifeboat. A more appropriate one is that of a submarine. It captures the complexity of our surroundings, as well as the real danger that messing around with critical systems in an unenlightened way will have dire consequences. Right now, humanity is in the process of setting fires that test the air filtration capabilities of the machine, altering the gas mixture in ways likely to produce unexpected results, and banging away at the outer hull with wrenches, based on the unthinking assumption that our ignorant pounding won’t produce critical leaks.

When one looks at the state of our resource, pollution, and climate policies and actions, one is left with little hope that the future will be a long or pleasant one for humanity. This is not a matter of protecting endangered species or pristine areas of forest; it is about not compromising the basic physical and biological systems that provide the fundamental requirements of human prosperity and existence.