Category: The environment

Atmosphere, biosphere, lithosphere, hydrosphere, etc – everything about life and the state of this planet

Carbon pricing and competitiveness

Writing in The Globe and Mail, Roger Martin and Alexander Wood argue that carbon pricing could make Canada more economically competitive:

The logic underlying such an argument is fairly straightforward. Carbon pricing can help drive innovation in technologies and business models that promote resource efficiency, particularly in relation to energy. For a country such as Canada, which annually ranks among the most energy-inefficient economies in the world, this presents a huge opportunity. That is because there is an increasingly strong case for how improving resource efficiency translates into improvements in productivity, which is the Holy Grail of competitiveness for economies such as Canada’s.

Every new argument in favour of carbon pricing is potentially useful, given the key role such policies seem likely to play in encouraging the transition to zero carbon forms of energy. Quite possibly, it is especially useful to develop strong economic arguments, so as to be able to respond to the frequent assertion from those who don’t want to take action on climate change that carbon pricing would cause serious economic harm.

Emotional responses to oil production

When I was a child, I remember seeing working on terrestrial or offshore oil rigs as an heroic profession: using knowledge and technology to do something difficult and important, at considerable risk to your personal safety. No doubt, that view was partly formed through exposure to advertising. Like the military and space programs, oil companies realized a long time ago that the combination of high technology with human dedication is an image that people find compelling. Throw together footage of people in hardhats riding helicopters between giant machines, with intense music in the background, and you can pretty easily create a sense of your company and personnel as impressive. Nonetheless, it still has a certain emotional validity, as long as the interactions you think about are all the voluntary ones: companies accessing oil reserves and then upgrading their crude contents into useful products that serve important functions.

Of course, when you start to think about the involuntary interactions, the waters get substantially muddied. Oil producers and users are both guilty of putting their own needs and desires ahead of those who are inevitably harmed as a consequence of their activities, through routes like air and water pollution and climate change.

Now, when I see ads for oil companies, I respond to them like personal insults. They look like taunts from powerful and politically influential companies that are fully aware of how much damage they are causing, but are happy to continue to do so, while continuing to try to foster the image I used to hold of them as brave technical experts.

Of course, there are still people out there who factually reject the idea that oil production and use causes significant suffering for third parties. From that mindset, it is almost inevitable that you would end up with a profoundly different view of oil producers and consumers. It is not all that surprising, then, that deep aesthetic and political disagreements about how the industry should be treated are ongoing.

Now, it seems like a real shame that so much energy, effort, and money have gone into building up an industry that has proven to be so harmful. If all the intellectual effort that has gone into extracting and processing fossil fuels during the last few decades had been applied instead to the development and deployment of renewable forms of energy, we would be a lot farther along the path to carbon neutrality today.

Climate change and capitalism

A number of times, discussions on this site have questioned how the reality of climate change should affect our political philosophy, when it comes to supporting or opposing capitalism. For both practical and theoretical reasons, I have been of the view that replacing capitalism is not a sensible goal, for those deeply concerned about climate change. Capitalism has virtues that may not be present in alternative systems – and what serious alternatives really exist at this point? – and there is no reason to be confident that an alternative system will be able to address climate change, even after we have put in all the time and effort that such a major societal reorganization would require.

Capitalism also includes powerful tools that could be applied to problems like tackling climate change. By establishing a carbon price, emissions reductions can be made to occur in the places where doing so is cheapest. That has benefits in terms of how quickly and cheaply emissions can be cut. It also has benefits for liberty, since it changes the incentives that people face, without forcing them to make one choice or another.

The urgency of climate change is another major reason to focus on the changes that are absolutely necessary, while leaving grand experiments for a more relaxed period in history. Preventing temperature increase of over 2°C above pre-industrial levels requires very aggressive cuts in global emissions. They need to peak as soon as possible (the sooner, the lower total costs will be) and fall to a dramatically lower level by 2050. Given that this is the lifetime of assets being constructed right now, from highways to buildings to power plants, the need to start changing incentives is urgent. It is much more plausible that this could be achieved by incorporating carbon pricing into our existing economic and political framework than it is to think we could launch a whole alternative structure quickly and effectively enough to achieve that result.

Must capitalism be discarded in order to address climate change, or is reform sufficient? Thinking strategically, what should those who are intensely concerned about climate change work to achieve, in terms of political and economic reforms? What real alternatives to capitalism as now practiced are there, and what would the likely benefits and problems associated with them be?

The historical parallels of climate change

Dealing with climate change requires abandoning fossil fuels – a big challenge, given how integral they are to the functioning of our society.

What historical parallels are there for such societal re-organizations? Obviously, there isn’t anything that perfectly matches this situation. That being said, it seems plausible that there are historical incidents and periods worth studying, in order to help develop better strategies for going forward.

The obvious example is the abolishment of slavery, which was also an important part of the economic basis for societies at one point. Relevant environmental examples include ozone depletion, acid rain, and persistent organic pollutants.

What other examples are there?

David Mitchell on climate change

A couple of years ago, the issue of the consequences of climate change being very depressing came up here, given how dealing with the problem means giving up some excellent things, like being able to visit China or Hawaii on a whim and being able to concentrate our scientific efforts on neat things like space travel.

More recently, David Mitchell (of Mitchell and Webb) produced a funny video with a similar message:

David discusses why tackling climate change is always presented to us by people who either tell us off or patronisingly try to convince us that tackling it is “cool” or “fun”, when actually it’s just something we have to do, because of facts.

I don’t entirely agree with him – since I do see moving to renewable forms of energy as an opportunity. That said, I do like the delivery of his message.

Liability caps

Often, states choose to cap the liabilities of companies operating dangerous facilities like oil rigs or nuclear power stations. They recognize that companies are hesitant to build or own such things, as long as they might be called upon to pay the full cost associated with any accidents.

Of course, providing these caps is a deeply anti-market thing to do. There are very good reasons to worry about oil spills and nuclear disasters, and heavy costs are borne by many people when they occur. Those risks should be foremost in the minds of people who choose to invest in these facilities.

When governments grant companies ‘protection’ against massive claims in the event of disasters, they are saying that building these facilities is so important that it should be done even if there may ultimately be serious uncompensated harm imposed on the general public. This takes the illusory profits associated with environmentally harmful economic activities to a new level, by saying that even in cases where companies can be proven to have directly caused harm to third parties, in the pursuit of their own profits, those profits will be protected by the wealth and authority of the states.

How cynical should Obama make us?

As the Bush administration was coming to a close, Barack Obama looked like an almost ideal leader for the United States: internationalist, concerned with the constitution and rule of law, apparently concerned about the environment, and so on.

Now, a year and a half after Obama was inaugurated, there are a lot of disappointments to deal with. Guantanamo Bay remains open, the United States maintains an active policy of assassinations in Pakistan, the war in Afghanistan has been a failure in relation to our original aims, and nothing significant has been done on climate change. Instead, the administration can point to its response to the economic crisis and health care as its accomplishments.

As I have said before, I think the credit crisis was a real waste of this administration. It seems like they could have devoted their energy in so much more productive ways, if the banks hadn’t terrified politicians into pulling out all the stops to save them. The unpopularity of doing so has revitalized the Republican Party and sapped public support for the Obama administration. Furthermore, very little has been done to prevent the occurrence of such crises in the future.

What should we take from all of this? Is Obama really as promising a figure as we thought, blocked in his efforts by the political system? Do we need to give the administration more time to effect its policies? Or was the kind of optimism that fueled the Obama campaign misplaced? Perhaps the world simply doesn’t permit the success of idealists.

In fairness, Obama did make an effort to stress how difficult real change would be, while he was campaigning and after he was elected. There is a huge amount of momentum bound up in the status quo, and changing the direction of things in meaningful ways is always difficult. Hopefully, there has been more happening in the background than has been immediately observable to outsiders and the years Obama has left will be filled with meaningful accomplishments.

Palm oil

Depending on exactly where it comes from, the oil extracted from the oil palm (Elaeis guineensis) may be the worst fuel on Earth, insofar as it affects the climate. Once this oil is pressed from the fruit of the trees, it can be conversed into a form of biodiesel for use in internal combustion engines.

Nominally, biofuels are carbon neutral, as long as the same amount of biomass is being grown per unit time as fuel is being burned. The big problem with palm oil is that the plantations where it is produced (overwhelmingly in Indonesia and Malaysia) take the place of rainforests and peatlands that previously held massive amounts of carbon dioxide. As such, there is one gigantic burp of greenhouse gas when an area of forest becomes a palm oil plantation. This has been happening on an enormous scale, with the area under cultivation in Indonesia expanding from under 2,000 square kilometres in 1967 to over 30,000 square kilometres in 2000.

In addition to the climatic consequences, palm oil is a prime example of the food versus fuel debate. When food products are converted into vehicle fuels, they raise the price of those crops and increase the cost of food for those who depend on them. That effect is especially acute for the very poor, who spend a large proportion of their income on food. Palm oil is also found in 50% of all packaged supermarket products.

Quite probably, one appropriate approach would be for developed countries concerned about climate change to ban palm oil from former rainforest as an acceptable fuel. It is even worse than the very poor option of ethanol from corn, even before you take into account issues of international equity.