Politics – Page 187 – a sibilant intake of breath

Carbon trading, windfalls, and consumers

This background note on carbon trading from the Sightline Institute does a good job of explaining the relevance of different modes of permit allocation to consumers. That sounds terribly dull, I’m sure, but it’s simple and important. The basic idea of carbon trading is that you set some level of allowable emissions for a facility, firm, sector, or economy. Say you want to reduce total national emissions by 2% over the next year. You multiply current national emissions by 0.98 and create permits for that quantity of emissions. What you do next is very important. You can either auction these credits to the highest bidder, requiring firms that produce greenhouse gasses to purchase them, or you give some or all of them away for free to such firms.

The critical point here is that these credits are money. Auctioning them does two things: it requires polluters to pay for their emissions and it raises funds. These can be invested in research, used to subsidize low-carbon technologies, or just used to fund general tax cuts. When these credits are given away for free, they give firms the option of either continuing to pollute for free or selling the right to pollute to someone else.

The point made in this document is that consumers end up bearing the cost from either approach. This is because unless firms are tightly regulated or in competition with other firms that don’t face emissions restrictions, they will both profit from any permits they are allocated for free and pass along the cost of permits to consumers. The analogy used in this document is a good one:

Try buying World Series tickets from a scalper. Would he charge you any less if he found the tickets on the ground? Of course he wouldn’t. Like energy, the street price of World Series tickets is based on supply and demand. The supply and demand for tickets is the same no matter how much the scalper paid for them, and so the price he charges you will also be the same no matter how he got them.

Of course, the scalper would much rather get his tickets for free – and that’s precisely the point. Polluters are financially much better off if permits are given away instead of auctioned, but the cost of cutting emissions and the resulting effect on energy prices will be the same no matter how the permits are delivered.

As such, the superiority of an auction system is further reinforced. Not only does it implement the Polluter Pays principle, but it also provides a mechanism through which governments can compensate consumers for the manipulative behaviour of firms.

Earth Hour, and why it is a bad idea

The news today is full of talk about Earth Hour. Frankly, I think the idea is stupid. Telling people to turn out the lights for one hour one day has a trivial impact. Furthermore, it has nothing to do with approaches that actually would. Shutting down the lights in a brief symbolic gesture does nothing to change the energy basis of our society. Replacing one ordinary light bulb with a compact fluorescent one would have a bigger impact in the long term, and would at least suggest an understanding that brief voluntary abstinence from energy use is no solution whatsoever. Earth Hour is akin to choosing to fast for one hour and hoping that it will send a strong message to the factory farming industry.

Earth Hour reinforces many of the fallacies people believe about climate change, such as:

It will mostly be solved through consumer choices
Voluntary efforts are enough
It’s the visible changes that really matter

As discussed at length here in the past, it is very likely that none of these things are true. Climate change will only be dealt with when the energy basis of society has changed enough that the most greedy and selfish people are nonetheless leading low-carbon lives. That requires massive infrastructure change over the course of decades – the progressive replacement of high carbon options with low carbon and finally zero carbon ones. Earth Hour is, at best, a distraction from this process.

[Update: 25 March 2009] Judging by the Google searches, another ‘Earth Hour’ is coming up. I still think the exercise is a pointless one. Moving to a sustainable society isn’t about reducing energy use for one hour, it’s about reforming the energy basis of society. Tokenistic environmental gestures do no good, and help to convince people that the real changes we need are trivially easy.

[Update: 24 March 2011] Looking back over it, what I have written about Earth Hour before is a bit harsh. Yes, I think the basic idea of turning out the lights for an hour is a weak one. At the same time, environmental groups presumable use Earth Hour as an opportunity to communicate with the public. It might have less value as a symbolic action, and more as a simple advertising opportunity, in terms of direct communication with the public and media exposure.

Green energy ‘war’

A new blog written by a former California energy commissioner chooses to discuss the fight against climate change as a ‘war.’ At one level, this reflects the silly American tendency to discuss non-military problems using military language: the War on Drugs, the War on Poverty, etc. At another, the choice reflects the serious disjoint between what most people have publicly accepted about climate change and what the problem really involves.

The public consensus seems to be: climate change is happening and it will have some bad effects. Technology and consumer choices will probably deal with it. Hybrids and fluorescent lights for all! Some of the big issues missed in this viewpoint are:

Stabilizing greenhouse gas concentrations is a massive undertaking. It requires deep cuts (50-95%) in emissions from all countries, rich and poor alike.
Time is of the essence. Stabilizing at an atmospheric concentration likely to avoid catastrophic impacts probably requires global emissions to peak within the next ten years and fall dramatically within the next forty.
Once concentrations are stabilized, continued effort and restraint will be required to maintain that. Human emissions will need to be kept in balance with natural absorption of carbon dioxide forever.
Abrupt or runaway climate change could completely undermine the basis for the global economy. Potentially, it could even make the planet uninhabitable for human beings for thousands or millions of years.

Referring to the situation as a war does have some potential benefits. People expect sacrifice and the suspension of normal ways of operating during wartime. The lower quality of light from fluorescent bulbs seems less significant when the future of humanity is at stake; the same goes for bans on short-haul flights or inefficient cars. At the same time, there are huge problems with the war analogy. Wars end. While it is possible that we will eventually have such excellent zero-emission technology that the world’s coal reserves and tropical forests will not tempt us, that seems a distant prospect.

What this underscores is the degree to which climate change is a challenge of an altogether new and different type for humanity. It’s one that our previous ideas about collective action, the ethics of an individual in society, and the cooperation of sovereign entities need to grow to accommodate. While the seriousness and focus sometimes applied to warfare will surely be required, the metaphor probably ultimately distorts more than it clarifies.

Population and GDP

The Economics Focus in this week’s Economist makes some excellent points. Most importantly, it demonstrates the degree to which looking at national rates of GDP growth independently from national rates of population growth produces a misleading impression of what is really happening.

America and Australia usually have the kind of economies that people understand to be growing rapidly – a fact often attributed to their dynamism, lack of enthusiasm for income redistribution, etc. By contrast, Germany and Japan tend to be lamented as low-growth laggards. If you consider the changes in GDP per capita, Japan grew more quickly than either Australia or the United States between 2002 and 2007. Because of relatively high rates of population growth, the American economy needs to ‘run just to stand still.’ The problem is even more acute in places with still higher rates of population growth.

Arguably, this offers one more reason to cheer falling populations as a sign of national maturity. While an aging population does put strain on pay-as-you-go pension and health care systems, that is a one-time cost of adjustment. Once it has been borne, a diminishing population means fewer resource constraints, a higher level of physical and financial capital per person, and a increased factor price for labour, yielding improved economic returns for workers.

For both environmental and economic reasons, we may thus have good reason to hope for fewer members in each subsequent generation.

Car standards in China and North America

The Toronto Star has reported that: “No gasoline-powered car assembled in North America would meet China’s current fuel-efficiency standard.” Even the proposed tougher Californian standards – the ones about which there is a big fight with the Environmental Protection Agency – will not do so. In the United States, there is a proposal to require 35 mile per gallon (14.9 km/L) performance by 2020. Today, all Chinese cars are 36 mpg (15.3 km/L) or better. Canadian cars average 27 mpg (11.5 km/L), and don’t have to meet any minimum standard of that type.

That’s certainly something to consider the next time you hear that tougher standards will maul the auto industry. Judging by the relative performance of Japanese and American car companies, it might be fairer to say that continuing to pump out dinosaur vehicles is more likely to leads to its demise on this continent.

Climate blogs

For those wanting more information on climate science and policy than they are getting from here, these are some blogs to consider:

Gristmill: Diverse, accessible, and very frequently updated
R-Squared Energy Blog: Written by an oil expert, mostly about petroleum and biofuels
RealClimate: Usually very detailed and quite technical, raw climatic science
ClimateEthics: Infrequent posts, but long and complex ones
DeSmogBlog: Fairly similar to Gristmill. Sometimes has very interesting information
The Oil Drum: More than you will ever want to know about hydrocarbons

No matter what your appetite for climate information in blog form, those should satisfy it.

Are there any others that people read and would recommend?

Two perspectives on air power and insurgency

These two articles provide contrasting views on the use of air power by coalition forces in insurgency situations, such as those in Afghanistan and Iraq:

The first is much more personal, written by a woman who spent months living with soldiers in the Afghan valley where the campaign is ongoing. It does a good job of capturing the chaos and violence being endured by coalition soldiers, as well as the psychological toll of doing so. The second is more removed and – unsurprisingly – more straightforwardly critical.

Both do a good job of setting up questions about how to ethically, legally, and effectively use air power when fighting insurgent wars. At the end, it’s pretty clear that no unproblematically ‘good’ answers to them exist.

Monbiot on British carbon capture plans

Of all the comprehensive plans I have seen to reduce greenhouse gas emissions from developed states, the one in George Monbiot’s Heat is the most ambitious. Whereas most people aim at stabilizing atmospheric GHG concentrations by 2100 or so, he thinks it must happen before 2030 is we are to avoid a mean temperature increase of more than 2°C and the very serious (potentially catastrophic) consequences such an increase would have. Part of Monbiot’s plan does involve continued use of fossil fuels, specifically the use of natural gas coupled with carbon capture and storage (CCS) for electricity generation.

While Monbiot stands behind the belief that CCS can work and can contribute to climate change mitigation efforts, he is increasingly critical of how the British government is planning to use the technology:

In principle, carbon capture and storage (CCS) could reduce emissions from power stations by 80% to 90%. While the whole process has not yet been demonstrated, the individual steps are all deployed commercially today: it looks feasible. The government has launched a competition for companies to build the first demonstration plant, which should be burying CO2 by 2014.

Unfortunately, despite Hutton’s repeated assurances, this has nothing to do with Kingsnorth or the other new coal plants he wants to approve. If Kingsnorth goes ahead, it will be operating by 2012, two years before the CCS experiment has even begun. The government says that the demonstration project will take “at least 15 years” to assess. It will take many more years for the technology to be retro-fitted to existing power stations, by which time it’s all over. On this schedule, carbon capture and storage, if it is deployed at all, will come too late to prevent runaway climate change.

He also suggests that using CO2 from power plants for enhanced oil recovery risks actually increasing emissions. On the one hand, that is because it will allow extra oil to be extracted from declining fields, which will subsequently emit CO2 when burned. On the other, he touches upon concerns that CCS using depleted oil and gas fields will not be safe or permanent enough to effectively and indefinitely sequester carbon.

As with nuclear power, the issue of timelines is critical. Even good technology, when installed at a plodding rate, could propel us into very serious danger. Even if it does prove possible to start slow and late and still make the transition to a low-carbon economy, it seems highly likely that the total costs of adjustment will be much higher: a crash-building program akin to the one undertaken by Russia after Germany turned against it during WWII, rather than an economically optimal trajectory towards a low-carbon global economy.

Adding Dennis the Menace to the crime bank

Apparently, Scotland Yard wants schools to collect DNA samples from five year old children who “exhibit behaviour indicating they may become criminals in later life.” While there are plenty of reasons for opposing the Orwellian scheme, the more interesting implication is that the police think they can anticipate criminality in adulthood on the basis of the behaviour of five year olds. If so, to what extent can we consider a predisposition towards criminal behaviour to be a manifestation of an individual’s choices? The premise behind our justice system is that people generally commit crimes as an act of will, and it is the wilful disobedience of law that is being punished. If the police believe that crime can largely predicted on the basis of problematic behaviour beginning in childhood, it calls into question the overall validity of our concept of what crime and criminals are.

Cooperation tipping points?

All regular readers of this blog will be familiar with the idea that there are physical tipping points in the climate system: places where one additional unit of warming produces much more harm to people and natural ecosystems than the previous units did. Politically, it is worth considering the possibility that another kind of tipping point exists, namely one beyond which the willingness of various actors to cooperate on climate change alters dramatically on the basis of some critical increment of climate change effects.

It’s possible that the effect could be one of rallying – the world suddenly realizing the seriousness of the issue and thus taking immediate action. States previously obsessed with exactly who should pay how much and exactly what timeline should be followed might just buckle down and do what needs to be done. A fair number of people seem to think that only a pretty substantial disaster will make the threat of climate change sufficiently concrete for enough people for the hard work of stabilization to begin.

The other possibility (mentioned here) is that the world will pass from hesitation and avoidance of the issue directly into conflict, accusation, and counter-productive action. Severe climatic impacts could drive states and individuals to focus on their own short term internal and external security, rather than making serious efforts to address the root of the problem. This is a classical prisoner’s dilemma scenario and, unless it flips to a state of desperate cooperation once things got really bad, it could push the world across the physical thresholds that are so worrisome.

In any case, it is as necessary to be aware of the existence of hidden feedbacks within public sentiment and government planning as within ecosystems or patterns in air and water currents. Of course, that just adds additional uncertainty to a very threatening brew.