07 April 2010

Conservation Versus Technology

Does Paul Krugman really think that conservation is the key to stabilizing concentrations of carbon dioxide in the atmosphere?

In an essay for the Sunday New York Times he writes:
. . . there is widespread agreement among environmental economists that a market-based program to deal with the threat of climate change — one that limits carbon emissions by putting a price on them — can achieve large results at modest, though not trivial, cost. There is, however, much less agreement on how fast we should move, whether major conservation efforts should start almost immediately or be gradually increased over the course of many decades.
Lest there be any confusion:
What you hear from conservative opponents of a climate-change policy, however, is that any attempt to limit emissions would be economically devastating. The Heritage Foundation, for one, responded to Budget Office estimates on Waxman-Markey with a broadside titled, “C.B.O. Grossly Underestimates Costs of Cap and Trade.” The real effects, the foundation said, would be ruinous for families and job creation.

This reaction — this extreme pessimism about the economy’s ability to live with cap and trade — is very much at odds with typical conservative rhetoric. After all, modern conservatives express a deep, almost mystical confidence in the effectiveness of market incentives — Ronald Reagan liked to talk about the “magic of the marketplace.” They believe that the capitalist system can deal with all kinds of limitations, that technology, say, can easily overcome any constraints on growth posed by limited reserves of oil or other natural resources. And yet now they submit that this same private sector is utterly incapable of coping with a limit on overall emissions, even though such a cap would, from the private sector’s point of view, operate very much like a limited supply of a resource, like land. Why don’t they believe that the dynamism of capitalism will spur it to find ways to make do in a world of reduced carbon emissions? Why do they think the marketplace loses its magic as soon as market incentives are invoked in favor of conservation?
So technology is favored by those evil conservatives? Emissions are to be treated very much like a limited "resource," like land? The goal of pricing carbon would be to encourage "conservation"? Say what? No wonder climate policy is a complete mess.

Absent from Krugman's discussion is any discussion of energy technology (other than to disparage it) in favor of an almost mystical confidence in the magical effectiveness of the market to lead to conservation. Guess what? We cannot decarbonize the U.S. economy based on "conservation." To suggest otherwise is a pretty clear sign that one really doesn't understand the nature of the challenge.

Paul Krugman may have a Nobel Prize and be an excellent economist. However, his analysis of climate policy is utterly absurd. Someone needs to introduce him to the Kaya Identity;-)

52 comments:

Harrywr2 said...

I was just reading an article today where BMW is building a carbon fiber plant for their new lightweight electric car in Washington State because Washington state has abundant, cheap hydro power as well as nuclear.

The whole 'carbon tax' means people will just move jobs and manufacturing to areas that aren't subject to the tax.

Making energy more expensive doesn't necessarily reduce its usage. It just makes it more expensive.

Unless the 'market' provides cost effective alternatives to fossil fuels a carbon tax is just a tax.

Electricity generation is already subject to massive government regulation. 'Market incentives' don't do anything when one is talking about 'regulated' utilities. Whatever the cost of the regulation is just passed on to end users who have no choice but to purchase from a regulated utility.

david said...

No, your reading of his text is absurd.

If you read his whole piece it is VERY clear that when he talks about "conservation" he means "less emissions" or "conservation of emissions".

How on earth can you write that there is no discussion of energy technology?!? His point is that a market economy is particularly GOOD at coming up with new technologies and that this is the reason to believe emissions can be controlled.

Quite frankly, this piece by Krugman is as mainstream environmental economics as it gets. One can quibble about his conclusions (but he makes it utterly clear that there are other points of view and lays them out clearly and fairly). His points are really text book style common sense.

Your take on this just looks like someone who has not read his piece carefully, or just misunderstood it.

Geckko said...

Sorry Rger. He no longer appears to be a half decent economist.

Krugman states this with regard to Cap and Trade:

"Why do they think the marketplace loses its magic as soon as market incentives are invoked in favor of conservation?"

I can only believe that he knows what an absurd assertion this is and is being deliberately disingenuous.

I believe that because this is very very basic micro economics.

What I am sure Krugman knows is that under a well run and binding and reducing Cap and Trade program the market will find an "effficient solution".

BUT and it is a big BUT. That solution will be the most efficient possible GIVEN FIRMS AND HOUSEHOLDS CANNOT USE THE OPTIMALLY EFFICIENT AMOUNT OF FOSSIL FUELS.

It will be a CONSTRAINED solution, albeit found by the market.

All that is economic jargon for saying that an effective Cap will make economic agents will require more resources to produce the same amount of output. That is a loss of income.

The more draconian the Cap (i.e. the more binding it is) the greater the loss of income/output.

It simply comes back to your energy intensity arguments Roger. Any Cap that tries to constrain energy use beyond that which occurs naturally through tyechnological progress over time will be costly to us.

This is a truly shameful piece from a Nobel Economic prize winner.

Frontiers of Faith and Science said...

Krugman makes a pretty good living about misrepresenting what others say, and then doing a bad analysis of it.
But the insights he gives to his lack knowledge in most areas are amazing to read when he tries to actually promote something, and not deconstruct something he has decided he dislikes.

Brian said...

Gotta get me one o' them Nobel Prizes! It’s a ticket to be one o’ those “really giant fish” (Roger’s tag for Krugman 10/20/09) dispensing approvals upon the like-minded, writing afield for near bankrupt newspapers, and providing Sunday talk shows with non-economic analysis about the “other end” of the political spectrum.
Watching Krugman for any length is also somewhat irritating. He has the demeanor of one ready to flinch at a second poke – seemingly unsure of his utterances (reminiscent of Meryl Streep testifying before Congress about the sins of alar).

Roger Pielke, Jr. said...

-2-David

Thanks for your comment, but from Krugman's discussion of modeling, it is clear he is referring to energy conservation.

Anyway, the concept of "conservation of emissions" makes no sense. When people talk about conservation of old growth forests do you think that they mean reduce them by 80%? ;-)

I know many economists and most are plenty more thoughtful than Krugman is in this piece -- I suggest taking a look at the work of people like Helm, Hepburn, Stavins, Tol, Green . . .

david said...

Lets not get hung up over the "conservation" term (used just twice in the whole piece). After rereading the piece, he probably just meant conservation of the atmosphere. Would certainly be typical resource economcis slang in this case.

And actually, there can be very little doubt that Krugman sees technology as one key part of limiting emissions:

"And in general, what the models do not and cannot take into account is creativity; surely, faced with an economy in which there are big monetary payoffs for reducing greenhouse-gas emissions, the private sector will come up with ways to limit emissions that are not yet in any model."

This is the passage just before your second quote. It says that he believes new technology will be key in limiting emissions. (I actually disagree that these model do not try to take that into account, but that is not important for the question whether Krugman believes technology is key for lowering emissions)

The whole episode you quote reads to me as follows (if you include the paragraphs preceding your quote):

1. Technology is the key solution to lowering emissions
2. Technological advance will happen in the private sector once it pays for private firms to innovate
3. It pays for private firms to innovate when there is a price on carbon emissions
4. This is in line with conservative believes about how the economy operates
5. Why on earth do conservatives then believe that a price on carbon will wreck the economy?


I'm pretty sure that the economists you quote would agree with the general framework of Krugman and his assessment of mechanisms etc. They might disagree with his reading of precise quantities (i.e. the quantity of costs and the quantity of damages), but all the rest could be copied out of an economics textbook.

Jacob B said...

Please tell the folks in charge sulfur dioxide allowance trading that that conservation of SO2 emissions makes no sense. I'm sure they'd be interested to hear why their successful program is doomed to fail?

Roger Pielke, Jr. said...

-7-david

Thanks again, from your comments I take it that you are an economist? I say this because you are reading things into what Krugman has written that he does not say. Such as:

"1. Technology is the key solution to lowering emissions
2. Technological advance will happen in the private sector once it pays for private firms to innovate
3. It pays for private firms to innovate when there is a price on carbon emissions
4. This is in line with conservative believes about how the economy operates
5. Why on earth do conservatives then believe that a price on carbon will wreck the economy?"

However elegant your (not Krugman's) theory is, it founders on the reality of politics in that there will never be a high enough price on carbon to stimulate the innovation necessary to decarbonize economies to levels consistent with low stabilization targets. This is Poli Sci 101.

However, if Krugman wants people to understand flawed economics as you present them, he should probably write in ways that normal people understand, and not resort to "resource economics slang."

He uses the work "conservation" more than the word "technology" ;-)

I guess the bottom line is that prescriptions that you say are from economics textbooks are hopelessly inadequate for the task of reducing emissions. There are some boundary conditions that need to be taken into account that I mention briefly in my post on South Africa today.

MIKE MCHENRY said...

There is a way to test some of these theories of market innovation when an energy resource becomes scarce or expensive. The most recent one was S.Africa under apartheid and the embargo. In the more distant past Germany during world war II. Both resorted to coal liquefaction for example.

caveat emptor said...

I am not sure how a full reading of Krugman's article would conclude that he is all about conservation vs technology for reducing emissions. He specifically mentions technology once in the article and also has the passage that david quotes above.

"the private sector will come up with ways to limit emissions that are not yet in any model."

You could knock me over with a feather if that passage isn't about new technologies.

bernie said...

Roger:
Roger Pielke SNr has an interesting piece on the consequences of conservation when there are fixed costs or utilities are not willing to reduce their variable costs.

david said...

Lets not get into a discussion what I think or what economists in general think.

My point simply was this: If I understood you (Roger) correctly, you interpreted Krugman as saying that we should conserve energy, and that he downplayed technology as an option.

That is simply not what he wrote.

MIKE MCHENRY said...

I guess I need to be more provocative. Neither S. Africa or Germany resorted to exotic technology. They stuck to the known.

jae said...

The liberal elitists need to get it through their dense heads that energy is a basic human necessity, just like food, clothing and shelter. We don't raise the price of foods, so we can push food production technology (or conservation); and we shouldn't be playing such games with energy, either. This is a matter of life or death for many people!

Roger Pielke, Jr. said...

-13-david

You might consider the possibility that we are reading the same text and are arriving at different interpretations.

Whether Krugman supports energy conservation or not, you might take a look at this column highlighting "energy conservation":

http://select.nytimes.com/2007/02/23/opinion/23krugman.html?_r=1

And this:

http://krugman.blogs.nytimes.com/2009/12/29/energy-gaps/

Does he deemphasize technology? Well, yeah:

"You might say that this is my answer to those who cheerfully assert that human ingenuity and technological progress will solve all our problems. For the last 35 years, progress on energy technologies has consistently fallen below expectations. "
http://krugman.blogs.nytimes.com/2008/04/22/limits-to-growth-and-related-stuff/

These earlier views expressed by Krugman are consistent with how I read him here.

So maybe this is all inside economics slang for downplaying conservation and emphasizing technology. But it sure doesn't read that way to me!

Scott Saleska said...

Roger, I have to agree with David, it is your reading of the Krugman piece that is absurd, not the piece itself. Krugman is not advocating for any particular energy technology (e.g. energy efficiency) over another (e.g. reduced-carbon energy production), but is simply making an economic cost-benefit argument that paying the costs for sufficient carbon-reducing technologies of all kinds will likely be worth the benefit in terms of reduced climate damages and insurance against worst-case climate outcomes.

You can certainly disagree with that argument, but saying that he means something other than what is written by twisting his use of the word “conservation” is just silly. He clearly means “environmental preservation” (first definition in Google dictionary), a meaning that has been around a lot longer than the energy conservation meaning (the third Google dictionary definition). If there is any doubt, that doubt should be removed by the economic models he is relying on to make his case (e.g. Nordhaus’s DICE model), which derive CO2 abatement costs from a mix of technologies that promote both energy conservation (i.e. your sense of the word) and low-carbon energy production.

Cheers,
Scott

Roger Pielke, Jr. said...

A comment that Google might have eaten from Scott Saleska:

"Roger, I have to agree with David, it is your reading of the Krugman piece that is absurd, not the piece itself. Krugman is not advocating for any particular energy technology (e.g. energy efficiency) over another (e.g. reduced-carbon energy production), but is simply making an economic cost-benefit argument that paying the costs for sufficient carbon-reducing technologies of all kinds will likely be worth the benefit in terms of reduced climate damages and insurance against worst-case climate outcomes.

You can certainly disagree with that argument, but saying that he means something other than what is written by twisting his use of the word “conservation” is just silly. He clearly means “environmental preservation” (first definition in Google dictionary), a meaning that has been around a lot longer than the energy conservation meaning (the third Google dictionary definition). If there is any doubt, that doubt should be removed by the economic models he is relying on to make his case (e.g. Nordhaus’s DICE model), which derive CO2 abatement costs from a mix of technologies that promote both energy conservation (i.e. your sense of the word) and low-carbon energy production.

Cheers,
Scott"

Scott- How do you interpret this column?

http://select.nytimes.com/2007/02/23/opinion/23krugman.html

Also, can you point to anything Krugman has ever written on the importance of technology?

It is funny to see people claiming that I am twisting Krugman's use of the term "conservation" when I am simply interpreting it in the normal way, and you guys are coming up with silly notions of "conservation of the atmosphere" and "environmental preservation>" Especially when Krugman has a track record of using the term "conservation" in this context on many occasions!

Any answers to the above questions appreciated, many thanks!

Rebecca said...

Much of the debate over the interpretation of whether Krugman meant this or that misses the point of why we should listen anymore. Look, Krugman, with his Nobel Prize represents a mainstream economist. As a group, economists failed miserably in predicting the global economic meltdown. Since the end of WWII economists have claimed Western economic growth is proof positive of their understanding of economic principles; that they can model the unpredictable impulses of human nature, that under their oversight of money supply, inflation was defeated, currency valuations no longer needed “the barbaric relic” of gold to set uniform values and so forth. But what have we seen in reality: a global economic meltdown that has vaporized trillions of dollars of value, traders gaming the system, countries manipulating their currency valuations, government limits on debt and spending hidden from public view. All the while the gatekeepers of the system, including Professor Krugman failed to raise one predictive word of warning.

So why now when there is so little confidence in Krugman's chosen field should we extend the courtesy of believing him and his prognostications on the subject of climate modeling and alternative energy?

The emperor has no clothes on, and it is not a pretty sight.

Scott Saleska said...

Roger, I interpret that column you link to as saying that high levels of energy conservation in California has reduced carbon emissions there, and that the country as a whole would be better positioned to address climate change if it were like California in this respect. But that even Californian levels of energy conservation would be just a first step, because by themselves they are not nearly enough to tackle the climate change problem.

Seems pretty unexceptional to me. And contrary to your new post this evening focusing on this topic, I don’t see that it gives much insight into whether Krugman has a position in the full debate over how far conservation vs alternative energy can take us -- except that perhaps we should pursue the former first. I am no expert in this area and I don’t have a stake in the arguments about it like you apparently do, but from my reading around that seems to be a pretty standard position of energy technologists and economists: energy conservation is the low-hanging fruit, so we should do it first, but at the same time recognize that it is not going to be nearly enough.

I don’t know if Krugman has a position on technology (if he is like most theoretical economists, he may consider it beneath his pay grade to worry about such details: you know, get the price right, and the market will figure it out! What else do you expect from a Nobel economist??) But what does that have to do with the Sunday NYT magazine piece, which is not about the technology debate? (by the way, why do you cast it as “conservation” vs. “technology”? -- don’t you mean technologies for conservation vs. technologies for energy production?). There are two clauses in 10 pages that use the word “conservation” ambiguously. Delete those two clauses, and the article still says that CO2 mitigation will come from some combination of energy conservation and alternate energy (without arguing anything about how much there should be of each), and that the cost of doing that aggressively will likely be worth the benefits. And that it says this doesn't depend on your or my interpretation of a single word that is (maybe) used ambiguously exactly two times in the whole article.

Best,
Scott

david said...

Roger, we were talking about the climate article by Krugman. I'll go over Krugman's other articles in a second comment, but lets stick to what Krugman wrote in the climate article and what you claim he wrote.

For a second, lets ignore the word "conservation". Clearly the two of us cannot agree what he meant by that. And after all, he used it twice, so maybe we can also agree it is not the core of his argument?

What is left then in terms of discussion of technology? Lets see:

1. "But while the direct regulation of activities that cause pollution makes sense in some cases, it is seriously defective in others, because it does not offer any scope for flexibility and creativity."

-> flexibility and creativity, i.e. new technologies are something one should use and therefore not prohibit by direct regulation.

2. "When businesses decide how much to spend on insulation, they will take into account the costs of heating and air-conditioning that include the price of emissions licenses or taxes for electricity generation. When electric utilities have to choose among energy sources, they will have to take into account the higher license fees or taxes associated with fossil-fuel consumption. And so on down the line."

-> All examples of technology options he argues will be brought about by a market-based system.

3. "But while it’s unlikely that these models get everything right, it’s a good bet that they overstate rather than understate the economic costs of climate-change action. That is what the experience from the cap-and-trade program for acid rain suggests: costs came in well below initial predictions. And in general, what the models do not and cannot take into account is creativity; surely, faced with an economy in which there are big monetary payoffs for reducing greenhouse-gas emissions, the private sector will come up with ways to limit emissions that are not yet in any model."

-> So here is one of Krugman's major arguments: He thinks existing estimates of the costs of climate policy are too high because he believes costs will be lower due to new technologies (I actually disagree with this, but if anything, one can say he is too optimistic about technological progress, right?)

4. "Why don’t they believe that the dynamism of capitalism will spur it to find ways to make do in a world of reduced carbon emissions?"

-> This from the passage you quote. That whole passage is an attack on conservatives for technological pessimism with respect to climate change. You seem to read it as if Krugman is a technological pessimism, which is just not correct.

So, leaving aside the "conservtion" word, there is AMPLE evidence in the text that Krugman argues for technology here. He attacks conservatives to be too pessimistic about technology. He attacks the modelers that come up with the costs of climate policy for being too pessimistic about technology (and thereby overstating the cost of climate policy).

You just picked one word out of his text, misunderstood it and then ignored the whole arguments in the rest of his essay.

I'm not saying that Krugman is right. But don't attack him for things he didn't write.

david said...

-18-

"Also, can you point to anything Krugman has ever written on the importance of technology?"

Yes, gee. He has for example written two (widely used) textbooks that have chapters on that.

His chapter on long-run growth discusses technology and its key role (http://www.worthpublishers.com/krugmanwellsnew/pdf/KrugmanMacroCh08_pp18_95A70.pdf)

And his other book also has a chapter on technology:

http://www.worthpublishers.com/krugmanwellsnew/pdf/chapter22.pdf

david said...

-16-

On the Limits to growth stuff:

This is a specific comment on a paper by Nordhaus that predicted low costs in energy technology that didn't happen. The quote you pull says that he doesn't believe that technology will solve ALL OUR PROBLEMS (my emphasis). This seems to be a no brainer. I also believe that technology cannot solve all problems. But that does not imply that I believe it cannot play an important role. He is talking about "extreme optimism", and that he doesn't believe in that. You seem to read it as implying extreme pessimism on his part. Why??

On Energy gaps:

How does that support your point?!? The McKinsey study says there are lots of technology options that would reduce emissions that are not being employed. Krugman attacks someone who thinks the McKinsey study is crap. Again, I actually think the McKinsey study is crap, but clearly Krugman here is on the side of the guys that believe that there ARE technology options.

On Colorless Green Ideas:

"Behind this claim lies the assumption, explicit or implicit, that any substantial cut in energy use would require a drastic change in the way we live. To be fair, some people in the conservation movement seem to share that assumption." (Krugman)

And then he goes on to debunk that position in that article:

"But the assumption is false. Let me tell you about a real-world counterexample: an advanced economy that has managed to combine rising living standards with a substantial decline in per capita energy consumption, and managed to keep total carbon dioxide emissions more or less flat for two decades, even as both its economy and its population grew rapidly. And it achieved all this without fundamentally changing a lifestyle centered on automobiles and single-family houses."

Roger Pielke, Jr. said...

-20-Scott Saleska

There is a big difference between "energy conservation" and "energy efficiency"

Energy conservation is not going top play any meaningful role in decarbonization. Efficiency will, but it won't be the most important factor.

Cap and trade is a bad idea to begin with, Krugman's interpretation of how it works is even worse.

Roger Pielke, Jr. said...

-22-david

Of course, I meant "energy technology" -- where has Krugman written about "energy technology"?

I appreciate your passionate defense of Krugman. However, while I have never thought he has a good handle on the climate issue, after going further into his writings motivated by your comments.

Krugman clearly believes that we can get a good start on emissions reductions by reducing energy consumption via conservation, which he defines in changing individual behavior. This is so obvious in his writings that it is not worth arguing about. Further, Krugman thinks that a cap and trade program will provide the economic motivation for reducing consumption via conservation. He never really addresses technology explicitly, leaving it to be deciphered by fellow economists who understand the hidden messages.

These views are unambiguous in his writings. They are also a good indication that he understands textbook economics and has very little idea about climate policy.

david said...

-25-Roger

How do you read the quotes from Krugman in my -21-?

Is he attacking policy-cost-modelers for technological pessimism? [my 3)]

Is he attacking conservatives for technological pessimism? [my 4)]

The examples of individual behaviour change he gives in the climate text are ALL examples of changing technology. Right? [my 2)]

david said...

-24-

"Cap and trade is a bad idea to begin with, Krugman's interpretation of how it works is even worse."

Do you mind sharing with us what part of his interpretation is so bad?

david said...

Oh, and by the way, I'm not defending Krugman's position here. I disagree with a couple of major points of his essay. I just think you misrepresent what he wrote.

Roger Pielke, Jr. said...

-26-david

[your 3] - Maybe he is referring to innovation, hard to say based on what he wrote. However, the analogy to acid rain undercuts that, as that cap and trade program mainly motivate fuel-source switching and installation of existing technologies, but very little innovation. To say that the quote endorses technological innovation is a tough sell.

[your 4] This one is easy, and it is clear that he is attacking conservatives for their lack of faith in market mechanisms. technology is just an example here. There is nothing in this passage to suggest support for technology, and arguably it is a swipe at conservatives for their faith in technology.

[your 2] You won't get much if any technological innovation from individual behavior change. Further, you won't get much decarbonization from individual behavior change, even Al Gore recognizes this by now.

Roger Pielke, Jr. said...

-27-david

At the risk of going around in circles ... Krugman is way off base if he thinks that cap and trade can be used to motivate individual decision making based on higher-priced energy that will lead to energy conservation and that such actions will lead to emissions reductions.

Every step in this causal chain fails in the real world, regardless of what might be found in Env Econ 101 textbooks.

I presume that you are well aware of the difference between "energy conservation" and "energy efficiency" -- that Krugman (on a generous reading) seems to use them interchangeably is telling.

david said...

[my 3] "fuel-source switching and installation of existing technologies" to me sound like... uh, using technology to reduce emissions, not conservation.

Now, somewhere along the discussion you replaced "technology" with "innovation". In your original blog you claim that Krugman doesn't believe in technology as a solution. Can we agree that he seems fine with switching technology, like it happened for SO2?

But fine, lets talk about innovation. What could he possibly have meant when he writes about creativity that is not in the models, when he previously lays out that these models include a) estimates of the costs of changing technology (like fuel switching) and b) estimates of how much consumers would cut back their electricity consumption (conservation). Could he maybe have meant innovation by creativity here? Any other, better suggestion?

[my 4] To me Krugman uses a classical argument style here of saying: "You guys (conservatives) believe in markets and technologies everywhere but in the area of emission reductions. A consistent conservative would not make an exception in the case of emission reductions and believe that markets and technology can solve this problem, like I do"

david said...

-30-

You're skeptical that a cap and trade bill could be passed that ever looked remotely like economists imagine it should look like, right? I.e. you don't believe a "textbook capand trade" bill stands a chance of passage, but rather that either the cap would be lax, or there would be loopholes added left and right etc, or it would be watered down later on by congress, or something like that, right? I'm with you a 100%, if that is your concern there. I actually think Krugman is with you as well, at various points he discusses the opposition to a cap-and-trade bill, how politics can decrease the design of a bill etc.

Or are you saying that Krugman is wrong in his prediction of what would happen, IF a cap-and-trade bill that has a tight cap and no loopholes had passed the house?

david said...

By the way, much appreciated that you stick in here :)

Roger Pielke, Jr. said...

-31-david

"Can we agree that he seems fine with switching technology, like it happened for SO2?"

Yes we can, sorry for any confusion on this point.

This post would have been better written had I said "energy technology innovation" at the outset.

I do note that in -7- above you referred to "technology advance" so I thought we were on the same page.

Krugman seems fine with existing technologies, which is part of the problem with his view.

david said...

Ok, now here is what you need to do to convince me. You need to square your interpretation that Krugman thinks existing technology is sufficient with

"And in general, what the models do not and cannot take into account is creativity; surely, faced with an economy in which there are big monetary payoffs for reducing greenhouse-gas emissions, the private sector will come up with ways to limit emissions that are not yet in any model."

Two paragraphs above he points out that these models do have a) deployment of existing technology and b) conservation (e.g. consumer cut back of electricity consumption) accounted for.

So, what does he mean by "creativity"? To me, "innovation" is the easiest, most straightforward (entirely non econ-geek talk) interpretation. Any better idea?

Roger Pielke, Jr. said...

-35-david

So if the nub of our debate is whether or not the models that Krugman refers to include a component for innovation, then we agree -- such models do have such compenents (but those also are problematic, as Pielke et al. 2008 suggested).

But we should be able to agree that Krugman does not explicitly emphasize technological innovation, and the only public comments that I can find that he made on the subject he disparages it as a delaying strategy.

By contrast, Krugman does -- on many occasions -- explicitly single out "energy conservation."

Whether Krugman think existing technology is sufficient, or the degree to which it is so, does not appear to be resolvable empirically as he just hasn't said anything on that, so we are both reading tea leaves.

Fair enough?

Scott Saleska said...

Roger, you are just wrong when you insist energy conservation is always different from energy efficiency. You may define it that way for yourself, and generate confusion and provocation thereby, but the broader energy debate often uses the terms synonymously. That's just a fact. If you don't like it fine, you can argue that people should use the terms differently, but what do you expect to gain by misrepresenting others use of “conservation” as excluding technology-based improvements in energy efficiency when they demonstrably unequivocally mean otherwise (as in the Krugman article)?

Roger Pielke, Jr. said...

-37-Scott

The US EIA helpfully characterizes the difference between efficiency and conservation:

http://tonto.eia.doe.gov/kids/energy.cfm?page=about_energy_efficiency-basics

"Efficiency and Conservation Are Different but Related

The terms energy conservation and energy efficiency have two distinct definitions. There are many things we can do to use less energy (conservation) and use it more wisely (efficiency).

Energy conservation is any behavior that results in the use of less energy. Turning the lights off when you leave the room and recycling aluminum cans are both ways of conserving energy.

Energy efficiency is the use of technology that requires less energy to perform the same function. A compact fluorescent light bulb that uses less energy than an incandescent bulb to produce the same amount of light is an example of energy efficiency. However, the decision to replace an incandescent light bulb with a compact fluorescent is an act of energy conservation."

The Alliance to Save Energy also has a nice page describing the difference between efficiency and conservation:

http://ase.org/content/article/detail/938

Specifically:

"The OPEC oil embargo and related energy shortages and gas lines in the 1970s…

The President of the United States sitting in a cardigan asking all Americans to turn down their thermostats and industries to run factories at partial capacity…being somewhat less comfortable…

Sacrificing…

These are such graphic images of energy and national security in the American consciousness that they often are the first thoughts that come to mind when the words "energy conservation" are heard.

But energy efficiency is a far cry from the energy conservation images and practices of old - of doing with less or doing without, of being uncomfortable or less comfortable. Not unlike the tremendous technological strides on the computer, electronics, and other fronts, energy efficiency takes advantage of advances in technology to provide significantly better, smarter services."

Scott Saleska said...

Roger,
I agree with you that there is certainly an important distinction between the idea of reducing energy use by getting by with less through sacrifice, and the idea of using less through more efficient technology. But "conservation" is not the best word that makes this distinction, as the definition of energy conservation you cite from EIA clearly shows: "the decision to replace an incandescent light bulb with a compact fluorescent is an act of energy conservation." I.e. conservation is the broader category, specifically encompassing changes in technology to increase energy efficiency.

This is completely inconsistent with how you have been using the word, which is precisely to *exclude* (rather than encompass) technological change.

-Scott

Roger Pielke, Jr. said...

-39-Scott

Glad we've agreed on definitions.

By "technological change" I mean innovation, see -34- above. I do not mean switching light bulbs.

Conservation is not generally used (that I am aware of) to refer to energy technology innovation. I'd be surprised if anyone uses it in this way. Krugman certainly does not:

http://rogerpielkejr.blogspot.com/2010/04/does-paul-krugman-advocate-energy.html

Scott Saleska said...

Fine, Roger. Except that in the NYT piece, energy technology innovation IS explicitly included in what Krugman is talking about.

Roger Pielke, Jr. said...

-41-Scott

And so we come full circle;-)

If Krugman is really talking about "energy technology innovation" in his NYT piece he sure has a subtle way to go about it;-)

Let's just agree to disagree. Fair enough?

david said...

-36-

Uh, no...

You just keep ignoring the passage where Krugman talks about innovation in the piece. How do you read the creativity part? You've ignored that passage for quite a while now...

david said...

-36-

In general, with respect to the models.

I believe they assume a great deal of tech innovation. I believe Krugman gets it wrong there, in that he believes they are too conservative with respect to tech innovation.

I believe you and I are actually on the same page with respect to our assessment of these models.

But, that means that we both would think that Krugman is too optimistic about tech innovation, just the opposite of what you claim in the blog.

david said...

-39-

This whole term confusion is a bit silly. Roger, by the definition you yourself quote in -38- "energy efficiency" is ONE form of "energy conservation". So, when you deploy technology that is more energy efficient, you conserve energy. So, generally, there are two ways to conserve energy: You can use more energy efficient technology or you can just consume less (i.e. sacrifice). You get more efficient technology by innovation. So, when you create new, innovative technology, and deploy it, you increase energy efficiency and thereby conserve energy.

Energy conservation is the super term. Energy conservation can happen because someone just consumes less, because someone uses more efficient technology or because someone invents new and more efficient technology and uses it.

To conclude that if someone says "I'm for energy conservation", he is AGAINST energy tech innovation is a basic error of logic.

Now, you might use these terms in a different way in your specific field of research (although surely your quote for a definition is in line with what I wrote here). But keep in mind that Krugman's piece is for a general interest audience. You rightfully objected to econ-geek slang. So, please no (I don't exactly know the field where you think your definition applies)-slang either.

david said...

Now, actually, I think it is probably time to put this to rest. We are not going to agree on this. I'm still baffled how one can so misread Krugman's text, though...

I think you wasted an opportunity to make the point you normally make, namely that these models, if anything, underestimate the cost of climate policy, because they assume a high degree of carbon intensity decrease to occur spontaneously. So, that would have been a nice, clear, fair and accurate accusation of the Krugman piece: He claims these models do assume no tech innovation and therefore overestimate the cost of climate action, you say (and I agree) these models assume a high degree of decarbonisation by default and therefore underestimate the cost of climate action.

Roger Pielke, Jr. said...

-43-david

Let's postulate that the passage that you refer to includes an nod toward technological innovation. Let's go further than that and just assume that passage says explicitly "technological innovation is really really important" (it doesn't, but no matter).

I would still conclude that in the context of an 8,000 word essay, as the only mention it represents a downplaying of technological innovation.

We are firmly in the realm of interpretation here. I accept that you have read Krugman's essay and concluded that he is championing technological innovation. However, please do recognize that I have read the text and arrived at a very different interpretation.

At that point, we should simply agree to disagree.

Roger Pielke, Jr. said...

-44-david

This is a very general statement about "the models" ... some assume a lot and others little, as I would guess you know.

Following from the analysis of Pielke, Wigley, Green 2008, I would argue than many climate policy scenarios assume that technological innovation will either occur spontaneously (absent policies focused on innovation) or will be "induced" via a carbon price of various magnitudes. If you believe either of these things, then you are apt to downplay the importance of policies focused explicitly on technological innovation.

I happen to think that technological innovation in energy is unlikely to happen at a pace sufficiently rapid to support attainment of low stabilization targets. I also doubt that a carbon price can be implemented anywhere near the level necessary to "induce" innovation at a similarly sufficient rapid pace.

What does Krugman believe about all this? Who knows. Someone should ask him.

Roger Pielke, Jr. said...

-45-David

"So, when you deploy technology that is more energy efficient, you conserve energy"

Not necessarily. The much debated notions of "rebound" and "backfire" suggest that the marco-consequences of certain improvements in efficiency gains may in fact be to increase overall energy use.

You write: "To conclude that if someone says "I'm for energy conservation", he is AGAINST energy tech innovation is a basic error of logic."

I suppose it is inevitable in such a discussion, but you have now grossly misrepresented my argument here. Look at what I wrote in this post:

"Does Paul Krugman really think that conservation is the key to stabilizing concentrations of carbon dioxide in the atmosphere? ... We cannot decarbonize the U.S. economy based on "conservation.""

In the follow on post I wrote:

"I read [Krugman's] latest piece as emphasizing energy conservation and de-emphasizing technology."

So critique away, but please focus on what I said, not a straw man caricature of what I said ;-)

Roger Pielke, Jr. said...

-47-david

Agreed, many thinks for the exchange. Have the last word if you'd like. All best ...

david said...

Krugman has posted a follow up:

http://krugman.blogs.nytimes.com/2010/04/13/growth-and-greenhouse-gases/

Roger Pielke, Jr. said...

-51-david

Thanks for the pointer. More nonsense from Krugman. New post coming soon!

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