The environment – Page 88 – a sibilant intake of breath

Military fuel use and climate

One of the organizations taking possible future fossil fuel scarcity most seriously is the American military. The Air Force is investigating how to make jet fuel from coal or natural gas. Meanwhile, the other branches of the military are looking for ways to reduce their fuel bills and vulnerability to fuel shortages. There is plenty of reason to do so, given that American forces are using about one million gallons of fuel per day each in Afghanistan and Iraq, and the cost per gallon in the most remote locations can run as high as US$400. The average cost for a gallon of fuel at a forward operating base is about US$15.

Some efforts being made include insulating tents, installing ‘smart grids’ on military bases, increasing usage of renewable forms of power, and investigating ways to use wastes for energy. As with other attempts to reduce fossil fuel dependence, there is no guarantee that these efforts will prove to be beneficial overall from a climatic perspective. If the Air Force manages to produce biofuels that are suitable for use in aircraft, have a decent energy return on investment, and do not compete with food crops, they may develop products and processes with considerable civilian applicability, and potential to mitigate greenhouse emissions. If, instead, they just perfect the oil German and Japanese trick of turning coal into liquid fuel, they may end up making the problem much worse. The very last thing humanity needs is another excuse to burn coal, when we really ought to be working out strategies to leave all that planet-warming carbon safely underground.

Of course, militaries are fundamentally hugely wasteful and destructive things. If we do manage to make a global transition to zero-carbon forms of energy, it seems probable that the world’s various armed forces will be the most resistant to accepting any restrictions on their emissions or fuel use. Much will depend on whether we can find energy sources that are actually cheaper and better than fossil fuels, or whether we manage to content ourselves with inferior options that don’t generate the same sort of climatic risks. In the first case, militaries may largely shift to low-carbon technologies on their own accord. In the latter case, prodding them into environmental responsibility may prove extremely difficult, especially if ongoing climate change has helped to make the world a less geopolitically stable place.

Goodbye to Vancouver, again

My eighteen days in Vancouver were full of wonderful times with family, friends, and Emily. It was certainly worth spending the time on the bus for. As stated before, Vancouver puts Ottawa to shame as a city. It has so much more happening, not just because of the Olympics but because of the size, the location, and the fact that it is a city that has to pull for itself, whereas Ottawa exists to try to organize all the rest. Vancouver is certainly not without problems, but the degree to which it is alive and interesting more than makes up for it in my mind. I will be leaving the city with a lengthy list of appealing activities and places left undone and unvisited, for lack of time.

Given the need to mitigate climate change, I don’t know how often I will be able to visit Vancouver, going forward. While effecting political change is far more important than minimizing our personal emissions, doing the latter does seem necessary for retaining credibility while trying to do the former. That said, it certainly rankles a bit to see people flying halfway across the world for a sunny weekend, while you agonize about whether and how to go see your home city for the first time in two years. An ironic consequence of trying to behave ethically in relation to future generations is that other people raise their expectations of you, without necessarily adopting higher ones for themselves.

My thanks to everyone who helped to make this visit so special and worthwhile. This visit will certainly be a significant data point, while I am trying to solve the puzzle of where and how to spend the next few decades.

The credit crunch and climate change

The credit crunch reveals at least one important thing about major policy decisions: once they are taken, one way or another, it becomes impossible to fully evaluate what the world would have been like without them.

Plenty of people claim that it was terribly necessary to bail out the banks and car companies, cut interest rates, and wreck the public finances by splashing out on every sort of tax cut and government spending program. They argue that doing so made this into a minor recession compared to a decade-long global recession. Having taken those actions, our ability to know what the world without them would have been like is very limited. The unknowable costs of inaction can always be used to respond to examples of cases where action currently seems unnecessary: “Yes, it was regrettable for the investment bankers to pay themselves off with taxpayer money, but the alternative to all this would have been a terrible global depression!”

The same will eventually be true of climate change mitigation policy. Say we eventually make it a real priority – setting a high price on carbon and really focusing on de-carbonizing our infrastructure. At some point in the distant future, we will look at our efforts and at how much climate change occurred. Provided it was a non-catastrophic amount, we will be in the same situation as we are now in relation to the credit crunch. We will be unable to know how bad things would have gotten if we had not taken action,

That being said, the stakes are enormously higher with climate change than with the credit crunch. While global economic turmoil would hurt, climate change risks destroying or severely degrading the capability of the planet to sustain human life. The risks associated with allowing it to occur to an extreme extent are practically incomparable.

It should also be noted that the credit crunch bailouts served a purpose that we must look on with increasing suspicion: maintaining economic growth. While we should certainly hope that human welfare will continue to improve, it is tautologically the case that we will eventually need to move to an economy in a steady state, when it comes to the resources it extracts from the atmosphere, lithosphere, hydrosphere, and biosphere, and in terms of the wastes it ejects into those places.

Vancouver update, and travel options

The last few days of Vancouver downtime have been really enjoyable. It is impossible to disentangle the extent to which the enjoyment is the product of broader and deeper networks of friends here, and the extent to which it arises from characteristics essential to the city.

Tristan is on his way back to Ontario via train. While it seems to be a significantly more carbon-intensive way to travel, it is undeniably infinitely more interesting looking than the bus. He has already provided good photographic evidence of that. In my experience, the bus trip offers virtually nothing worth photographing during short winter days. Perhaps one day we will have low-carbon trains, and thus a way of going cross-country that is both environmentally responsible and tolerably pleasant and interesting.

I have been reading an excellent book and play: Tom Stoppard’s wonderful Arcadia (combining amusing talk of sex and science) and Bill Streever’s Cold: Adventures in the World’s Frozen Places. The latter offers an astonishing contrast between stories of success and failure in extreme cold: caterpillars that freeze every winter and take ten years to achieve metamorphosis, versus the final journal entries of doomed expeditions, documenting how the men died one at a time.

Less than four more days, and I will be back on the bus.

Generation IV nuclear

The Economist has an article summarizing a few possible next-generation fission reactor technologies. They include the Supercritical water-cooled reactor (SCWR), the Very High Temperature Reactor (VHTR), the Sodium-cooled fast reactor (SFR), the Gas-cooled fast reactor (GFR), the Lead-cooled reactor (LFR), and the Molten-salt reactor (MSR). Most promise higher efficiency than conventional pressurized water reactors, largely because they run at a higher temperature. Some are also capable of using more esoteric forms of fuel. For instance, the MSR can use thorium once it has been ‘seeded.’

The article doesn’t give too much consideration to the many challenges facing the nuclear industry: cost, chief among them. Given how opaque the costs of nuclear are, it is hard to know whether existing reactor technologies are really cost-competitive with renewables now, much less untested new variants.

India’s voluntary climate actions

In international climate negotiations, India has been one of the states asserting most forcefully that developing countries should not have mandatory emissions caps applied to them. It argues, quite rightly, that states that are now rich largely became that way on the basis of fossil fuel use, and that it still has high levels of extreme poverty to address. That being said, all global emissions will eventually need to be cut. Approaches like contraction and convergence seek to address these practical and ethical issues, by giving states like India and China a bit of space in which to keep increasing emissions, before theirs peak at a level far below where rich states are now, and eventually fall to zero.

While India isn’t signing on to such schemes now, they are taking some voluntary actions unilaterally: “a proposed $20 billion investment in solar energy; a plan to return a third of its area to forest; and many energy-efficiency measures.” These are the sorts of win-win measures that generate positive secondary effects. Solar power doesn’t cause air pollution, and can help countries reduce their dependence on imported fuels. Reforestation protects watersheds and decreases erosion. Energy efficiency might be the single area where it is most possible to actually save money while reducing emissions.

Eventually, India will need to be brought into a binding global emissions reduction regime. For now, whatever actions that can be taken to drive their development process towards a low-carbon course should be undertaken.

Gas by gas, or all together?

The various chemicals that cause the climate system to warm vary considerably in their characteristics:

How strong a warming effect they have
How long they remain in the atmosphere
What processes produce them
Whether they have other positive or negative effects
Etc

For instance, methane is a much more potent greenhouse gas (GHG) than carbon dioxide (CO2), but it stays around a lot less time. CFCs and HCFCs are very powerful greenhouse gasses that are produced by a relatively small number of companies for specific applications; CO2, by contrast, is produced by most forms of economic activity everywhere.

Faced with these sorts of variation, some people have argued that having one regime for all GHGs is not the best approach. Because of the damage they cause to the Earth’s stratospheric ozone layer, CFCs are covered by the Montreal Protocol to the Vienna Convention. That limited agreement has produced about 175 billion tonnes of CO2 equivalent in emission reductions, compared to just a handful from the partially implemented Kyoto Protocol.

The advantage of putting all GHGs into the same legal instrument is that it could allow for mitigation to be balanced in the most efficient way. If Gas X is five times more problematic than Gas Y, the value of the carbon tax paid or auctioned permits purchased would also be five times greater. That way, people would focus on cutting emissions where it is cheapest and easiest to do so. The major disadvantage of bundling the GHGs together is that doing so can distort markets. One gas – HFC-23 – is so powerful and so cheap to get rid of that it has seriously skewed prices in global carbon markets. Rather than paying people huge sums of HFC-23, we should just be sharply limiting how much of the stuff people are permitted to make in the first place.

In an ideal world, it should be possible to have a well designed system that incorporates all GHGs. It should also be possible to have a series of overlapping agreements that do so. In practical terms, what the latter possibility allows is an alternative route that might be taken, if efforts to produce one big treaty continue to prove unsuccessful.

The IEA on peak oil and climate policy

The International Energy Agency (IEA) has recently charged its public position on peak oil. It now claims that output of conventional oil will peak in 2020, if demand continues to grow in a business-as-usual way:

After analysing the historical production trends of 800 individual oilfields in 2008, the IEA came to the conclusion that the decline in annual output from fields that are past their prime could average 8.6% in 2030. “Even if oil demand were to remain flat, the world would need to find more than 40m barrels per day of gross new capacity—equal to four new Saudi Arabias—just to offset this decline,” says Mr Birol.

A daunting task. Peak-oil proponents point out that the average size of new discoveries has been declining since the mid-1960s. Between 1960 and 1989 the world discovered more than twice the oil it produced. But between 1990 and 2006 cumulative oil discoveries have been about half of production. Their opponents argue that long periods of relatively low oil prices blunted the incentives for exploration. A sustained period of higher prices, they argue, should increase discoveries. They point out that the first half of 2009 saw 10 billion barrels of new discoveries, an annual rate higher than any year since 2000. The pessimists retort that recent discoveries are still not enough.

Insofar as climate change mitigation policies could help control demand growth, they could thus extend the timeframe during which humanity will address fossil fuel depletion.

The IEA argues that coordinated action to prevent more than 2°C of climate change would reduce global demand for oil in 2030 from 105 million barrels per day to 89 million.

Climate economics and the discount rate

Perhaps the most long-running debate in climate change economics concerns what discount rate ought to be used, when working out what the probable costs of future climate change mean in the present. The basic idea of a discount rate is that things are often worth more acquired immediately than they are delivered at some future time. This is reflected in the existence of positive interest rates, which compensate people for waiting.

In the context of climate, the discount rate is basically a measure of how much we care about future generations, and what burdens we are willing to accept in order to improve their lives. If a 1% sacrifice in our generation will avert catastrophe for people a few generations off, it is probably something we should do. By contrast, if a massive sacrifice now only creates incremental improvements later, we may want to hold off. The Stern Review of climate change economics attracted both praise and criticism for choosing a very low discount rate. This choice was made on the basis of the moral argument that we should be equally concerned about the welfare of all generations. Even if climate change won’t become a disaster for a hundred years, or more, we should still be willing to consider the costs imposed by our emissions as meaningful. If you choose the sort of high discount rates used for business decisions, you basically shrink the importance of anyone living more than a few decades away down to almost zero. William Nordhaus is one economist who advocates such a rate, despite how using the 3% rate he prefers makes costs in 25 years half as significant as costs now.

One problem with using formal discount rates is that they can produce strange results when applied mathematically:

Paul Klemperer, an economics professor at Oxford University, points out that very long-term securities carry very low interest rates. When the British government recently issued 40-year index-linked bonds, for instance, it did so at a 0.5% real rate. And over the very long term standard discount rates lead to strange conclusions. At a modest 2% rate, for instance, a single cent rendered unto Caesar in Jesus’s time is the equivalent of about $1.5 quadrillion (or 30 times the value of the entire world economy) today.

Another major reason for which people advocate high discount rates is because they believe that people in future generations will almost inevitably be richer than those alive now, and thus able to deal with any particular physical problem using a smaller fraction of their wealth. While building coastal defences for low-lying cities might use up a lot of our wealth now, the argument goes, people in the future will be better able to cope. Personally, I don’t think we can assume any longer that people decades from now will be richer than us. Firstly, the costs associated with climate change are going nowhere but up. Secondly, the bonanza of cheap fossil fuel energy is ending. Future generations are going to have some big hurdles to jump.

The choice of discount rate has a massive effect on whether your economic modeling tells you that mitigating climate change is a better deal than trying to adapt to it. If you have discounted away the welfare of people in 50 or 100 years, the fact that they could be put into an intolerable situation is largely unimportant. Personally, I think climate economics is given too much credibility due to the false precision it seems to offer. Rather than abstracting down to a single number and then giving it so much importance, perhaps we should think about risk management in a more qualitative way. Rather than using math to investigate the question of whether we should take the lives and welfare of those in the future seriously, we should acknowledge the strong moral case that we should not seriously damage the planet for all those who will follow us.

The cost of avoiding loss

Ken Caldiera has come up with a nice reversal of the “does it make sense to spend money fighting climate change” question:

“If we already had energy and transportation systems that met our needs without using the atmosphere as a waste dump for our carbon- dioxide pollution, and I told you that you could be 2% richer, but all you had to do was acidify the oceans and risk killing off coral reefs and other marine ecosystems, risk melting the ice caps with rapid sea-level rise, shifting weather patterns so that food-growing regions might not be able to produce adequate amounts of food, and so on, would you take all of that environmental risk, just to be 2% richer?”

You would have to be mad to say ‘yes.’