Politics – Page 199 – a sibilant intake of breath

Carbon pricing and GHG stabilization

Virtually everyone acknowledges that the best way to reduce greenhouse gas emissions is to create a price for their production that someone has to pay. It doesn’t matter, in theory, whether that is the final consumer (the person who buys the iPod manufactured and shipped across the world), the manufacturer, or the companies that produced the raw materials. Wherever in the chain the cost is imposed, it will be addressed through the economic system just like any other cost. When one factor of consumption rises in price, people generally switch to substitutes or cut back usage.

This all makes good sense for the transition from a world where carbon has no price at all and the atmosphere is treated as a greenhouse gas trash heap. What might become problematic is the economics of the situation when greenhouse gas emissions start to approach the point of stabilization. If we get 5 gigatonnes collectively, that means a global population of 11 billion will get about half a tonne of carbon each.

Consider two things: Right now, Canadian emissions per person are about 24.3 tonnes of CO2 equivalent. Cutting to about 0.5 is a major change. While it may be possible to cut a large amount for a low price (carbon taxes or permits at up to $150 a tonne have been discussed), it makes sense that people will be willing to pay ever-more to avoid each marginal decrease in their carbon budget. Moving from 24.3 tonnes to 20 might mean carrying out some efficiency improvements. Moving from 20 to 10 might require a re-jigging of the national energy and transportation infrastructures, carbon sequestration, and other techniques. Moving from 10 to 0.5 may inevitably require considerable personal sacrifice. It certainly rules out air travel.

The next factor to consider if the effect of economic inequality on all this. We can imagine many kinds of tax and trading systems. Some might be confined to individual states, and others to regions. It is possible that such a scheme would eventually be global. With a global scheme, however, you need to consider the willingness of the relatively affluent to pay thousands or tens of thousands of dollars to maintain elements of their carbon-intensive lifestyles. This could mean that people of lesser means get squeezed even more aggressively. It could also create an intractable problem of fraud. A global system that transfers thousands of dollars on the basis of largely unmeasured changes in lifestyle could be a very challenging thing to authenticate.

These kinds of problems lie in the relatively distant future. Moving to a national economy characterized by a meaningful carbon price is likely to take a decade. Moving to a world of integrated carbon trading may take even longer. All that admitted, the problems of increasing marginal value of carbon and the importance of economic inequality are elements that those pondering such pricing schemes should begin to contemplate.

Mosul Dam

The Mosul Dam is one element of Iraq’s infrastructure that has survived the war so far, but which is apparently seriously threatened. Because was built on gypsum, which dissolves in water, it threatens to fail catastrophically as the result of small initial problems. A report from the US Army Corps of Engineers warned that the dam’s failure would drown Mosul under nearly 20m of water and parts of Baghdad under 4.5m. The 2006 report explained that:

In terms of internal erosion potential of the foundation, Mosul Dam is the most dangerous dam in the world. If a small problem [at] Mosul Dam occurs, failure is likely.

According to the BBC, the US Special Inspector General for Iraq Reconstruction (SIGIR) has stated that the dam’s foundations could give away at any moment. The report from the Corps of Engineers states that the dam’s failure could cause 500,000 civilian deaths. General David Petraeus and the American Ambassador to Iraq have both written to the Iraqi government expressing their severe concern.

The dam is 2,100m across and contains 12 billion cubic metres of water. It generates about 320 MW of electricity. Previous attempts at addressing the gypsum issue seem to have been botched. According to the Washington Post “little of the reconstruction effort led by the U.S. Embassy has succeeded in improving the dam.” Stuart Bowen, the special inspector general reviewing the efforts has said that “[t]he expenditures of the money have yielded no benefit yet.”

Today, the Iraq government has officially stated that concerns about a possible collapse are misplaced and that the dam is constantly monitored. Ongoing actions include reducing the amount of water in the reservoir and pumping grout into the foundation (a liquefied mixture of cement and other additives). Work is meant to begin next year on wrapping the foundations in concrete to make them more secure.

Obviously, a catastrophic dam collapse is the last thing Iraq needs. Hopefully, the dam will hold until a sensible refit can be carried out, and it will not find any wayward coalition munitions or insurgent bombs helping it towards disintegration.

Index of climate posts

For the last while, my aim on this blog has been both to entertain readers and to provide some discussion of all important aspects of the climate change problem. To facilitate the latter aim, I have established an index of posts on major climate change issues. Registered users of my blog can help to update it. Alternatively, people can use comments here to suggest sections that should be added or other changes.

The index currently contains all posts since I arrived in Ottawa. I should soon expand it to cover the entire span for which this blog has existed.

Geoengineering: wise to have a fallback option

Over at RealClimate they are talking about geoengineering: that’s the intentional manipulation of the global climatic system with the intent to counteract the effects of greenhouse gasses. Generally, it consists of efforts to either reflect more solar energy back into space or enhance the activity of biological carbon sinks. It has been mentioned here before.

The fundamental problem with all geoengineering schemes (from sulfite injections to plankton tubes to giant mirrors) is that they risk creating unexpected and negative side-effects. That said, it does seem intelligent to investigate them as a last resort. Nobody knows at what point critical physical and biological systems might tip into a cycle of self-reinforcing warming. Plausible examples include permafrost melting in the Arctic, releasing methane that heats the atmosphere still more, or the large-scale burning of tropical rainforests, both producing emissions and reducing the capacity of carbon sinks. If physical or biological systems became net emitters of greenhouse gasses, cutting human emissions to zero would not be sufficient to stop warming; it would simply continue until the planet reached a new equilibrium.

Given linear projections of climate change damages, we would probably be wisest to heed the Stern Review and spend adequately on mitigation. Given the danger of strong positive feedbacks, it makes sense to develop some fallback options for use in desperate times. It seems to me that various forms of geoengineering should be among them. Let us hope they never need to be used.

Mechanism design theory

The 2001 Nobel Prize in Economics was awarded to George Akerlof, Michael Spence, and Joseph Stiglitz for their work on asymmetric information. One standard assumption in neoclassical economic models is that all participants in a transaction have ‘perfect information’ about the goods or services being exchanged. The field of behavioural economics is now seeking to deepen such models, so that they can better reflect the kind of dynamics that exist in real markets.

Asymmetric information is a key factor in the functioning of real markets. When you buy a used car, the person at the lot probably knows more about it than you do. The salesperson knows more about used cars in general, may have spoken with the original seller, and may have investigated this specific car. Conversely, you know more about your health risks than your health insurer (provided you live somewhere where health insurance is private). You might know, for instance, that all your relatives die of heart attacks on their 35th birthdays and that you personally drink 3L of whisky per day.

This year’s Nobel Prize in Economics was awarded to Leonid Hurwicz, Eric S. Maskin, and Roger B. Myerson for their work on mechanism design theory. The basic purpose of the theory is to deal with problems like those of assymetric information: take a situation where people would normally have an incentive to behave badly (lie, cheat, etc) and establish rules to make it no longer in their interest to do so. We might, for instance, require used car salespeople to provide some sort of guarantee, or we might allow health insurers to void the policies of individuals who lie about their health when premiums are being set.

Reading about mechanism design feels a bit like watching engineers try to create religious commandments. This section from the Wikipedia entry illustrates what I mean.

Mechanism designers commonly try to achieve the following basic outcomes: truthfulness, individual rationality, budget balance, and social welfare. However, it is impossible to guarantee optimal results for all four outcomes simultaneously in many situations.

While it does seem a bit counterintuitive to try to achieve these things through economic means, it is probably more durable than simply drilling axioms into people’s heads. That is especially true when the counterparty they are dealing with is some distant corporation; people who would never cheat someone standing right in front of them are much more willing to deceive or exploit such a distant and amorphous entity.

‘Enduring Freedom’ and Afghanistan

Last night, I got into a brief conversation about the Taliban. It reminded me of a statement quoted at a Strategic Studies Group meeting I attended in Oxford:

People are being very careful not to be against the Taliban and ‘keep the balance’ so that they will not be punished for helping foreigners when the Taliban return.

-Police commander, Kandahar

This idea raises an important question about longevity. If the Taliban can outlast any deployment NATO will be able to maintain, it becomes essential to produce a government that will be able to hold its own against them in the long term. Otherwise, we are just delaying the transition back to Taliban rule. While I am definitely not an expert on the military or political situation in Afghanistan, it does not seem like the present Karzai government has that kind of capability, in the absence of direct military support from NATO.

The question thus becomes what, if anything, NATO can do to produce a (preferably democratic) Afghan government capable of enduring after their withdrawal. If that does not prove possible, the question becomes what we are hoping to achieve in Afghanistan, and whether any lasting good will result for the population as the result of the initial displacement of the Tabliban and the Al Qaeda elements they were supporting.

The foolishness of the International Space Station

On Tuesday, the space shuttle launched once again on a mission to add another piece to the International Space Station (ISS). As I have said before, it is a needlessly dangerous, unjustifiably expensive, and rather pointless venture. The science could be equally well done by robots, without risking human lives, and without spending about $1.3 billion per launch (plus emitting all the greenhouse gasses from the solid rocket boosters and related activities).

More and more, the ISS looks like a hopeless boondoggle. The lifetime cost is being estimated at $130 billion, all to serve a self-fulfilling mandate: we need to put people into space to scientifically assess what happens when we put people into space. Furthermore, the window between the completion of the ISS in about 2012 and the potential abandonment of the station as soon as 2016 is quite narrow. Robert Park may have summed up the whole enterprise best when he remarked that:

“NASA must complete the ISS so it can be dropped into the ocean on schedule in finished form.”

Normally, I am a big supporter of science. I think funding the International Thermonuclear Experimental Reactor and Large Hadron Collider is wise; these machines will perform valuable scientific research. Likewise, I support the robotic work NASA does – especially when it comes to scientists looking down on Earth from orbit and providing valuable research and services. I support the James Webb telescope. I also support the idea that NASA should have some decent plans for dealing with an anticipated asteroid or comet impact. The ISS, by contrast, is a combination between technical fascination lacking strategic purpose and pointless subsidies to aerospace contractors.

Of course, the Bush plan to send people to Mars is an even worse idea with higher costs, more risk, and even less value.

Securing against the wrong risk

This week’s Economist includes an unusually poor article on security. It explains that the upcoming Swiss election will be using quantum cryptography to transmit the results from polling stations to central tabulation centres. It alleges that this makes the whole electoral process more secure. This is wrong.

What this is essentially saying is that there would otherwise be a risk of manipulation of this data in transit. The chief polling officer at one station might send a set of figures that get altered by a malicious agent en route to the tabulation centre. Having an encrypted link prevents this man-in-the-middle attack. It does not prevent the polling officer from lying, or the person at the tabulation centre from manipulating the results they input into the counting machines. It doesn’t prevent ballot-stuffing, vote buying, or the compromise of computer systems used to collect or tally votes. In short, it provides no security for the parts of the electoral process that are actually vulnerable to attack. In the absence of good security at the more vulnerable points in the electoral process, using quantum cryptography is like putting a padlock on a paper bag.

Hopefully, they will print my brief letter taking them to task for allowing themselves to be seduced by technology, rather than think sensibly about security.

[Update: 29 October 2007] Bruce Schneier has written about this. Unsurprisingly, he agrees that using quantum cryptography does not increase the security of the Swiss election.

Knowledge brokers get the Nobel

The hot news today is that the Intergovernmental Panel on Climate Change and Al Gore (though not Sheila Watt-Cloutier) have been awarded the Nobel Peace Prize. While some have questioned the appropriateness of awarding the prize on the basis of achievements not directly related to armed conflict, it does seem that the conflict potential connected with migration, water scarcity, and so forth makes this less of a stretch than some previous awards.

What is most notable about all this, for me, is that neither Gore nor the IPCC have actually contributed to climatic science. The IPCC exists to review the published academic literature on climatic science and agree upon a consensus position; Gore has acted as an effective advocate and representative, though his overall contribution has been far more in the area of information transmission than the area of information generation.

What this shows is how vitally important the layer between scientists and policy-makers or the general public is. Scientists are looking (with great skill and detail) at the individual elements that make up the climatic system. Translating that into a comprehensive understanding of relationships and risks – of the sort that can guide policy development – is critical and challenging. As such, these Nobel prizes are well earned.

Previous related entries:

Hot Air

Hot Air: Meeting Canada’s Climate Change Challenge is a concise and virtually up-to-the-minute examination of Canadian climate change policy: past, present, and future. Jeffrey Simpson, Mark Jaccard, and Nic Rivers do a good job of laying out the technical and political issues involved and, while one cannot help taking issue with some aspects of their analysis, this book is definitely a good place to start, when seeking to evaluate Canada’s climate options.

Emission pathways

Hot Air presents two possible emissions pathways: an aggressive scenario that cuts Canadian emissions from 750 Mt of CO2 equivalent in 2005 to about 400 Mt in 2050, and a less aggressive scenario that cuts them to about 600 Mt. For the sake of contrast, Canada’s Kyoto commitment (about which the authors are highly critical) is to cut Canadian emissions to 6% below 1990 levels by 2012, which would mean emissions of 563 Mt five years from now. The present government has promised to cut emissions to 20% below 2006 levels by 2020 (600 Mt) and by 60 to 70% by 2050 (225 to 300 Mt). George Monbiot’s extremely ambitious plan calls for a 90% reduction in greenhouse gas emissions by 2030 (75 Mt for Canada, though he is primarily writing about Britain).

While Monbiot’s plan aims to reach stabilization by 2030, a much more conventional target date is around 2100. It is as though the book presents a five-decade plan to slow the rate at which water is leaking into the boat (greenhouse gasses accumulating in the atmosphere), but doesn’t actually specify how to plug the hole before it the boat sinks (greenhouse gas concentrations overwhelm the ability of human and natural systems to adapt). While having the hole half-plugged at a set date is a big improvement, a plan that focuses only on that phase seems to lack an ultimate purpose. While Hot Air does not continue its projections that far into the future, it is plausible that the extension of the policies therein for a further 50 years would achieve that outcome, though at an unknown stabilization concentration. (See this prior discussion)

Policy prescriptions

Simpson, Jaccard, and Rivers envision the largest reductions being achieved through fuel switching (for instance, from coal to natural gas) and carbon capture and storage. Together, these account for well over 80% of the anticipated reductions in both scenarios, with energy efficiency improvements, agricultural changes, waste treatment changes, and other efforts making up the difference. As policy mechanisms, the authors support carbon pricing (through either a cap-and-trade scheme or the establishment of a carbon tax) as well as command-and-control measures including tightened mandatory efficiency standards for vehicles, renewable portfolio standards (requiring a larger proportion of energy to be renewable), carbon management standards (requiring a larger proportion of CO2 to be sequestered), and tougher building standards. They stress that information and subsidy programs are inadequate to create significant reductions in emissions. Instead, they explain that an eventual carbon price of $100 to $150 a tonne will make “zero-emissions technologies… frequently the most economic option for business and consumers.” This price would be reached by means of a gradual rise ($20 in 2015 and $60 in 2020), encouraging medium and long-term investment in low carbon technologies and capital.

Just 250 pages long, with very few references, Hot Air takes a decidedly journalistic approach. It is very optimistic about the viability and affordability of carbon capture and storage, as well as about the transition to zero emission automobiles. Air travel is completely ignored, while the potential of improved urban planning and public transportation is rather harshly derided. The plan described doesn’t extend beyond 2050 and doesn’t reach a level of Canadian emissions consistent with global stabilization of greenhouse gas concentrations (though it would put Canada on a good footing to achieve that by 2100). While the book’s overall level of detail may not satisfy the requirements of those who want extensive technical and scientific analysis, it is likely to serve admirably as an introduction for those bewildered by the whole ecosystem of past and present plans and concerned with understanding the future course of policy.