06 August 2012

Climate of Failure

I've got an essay up at Foreign Policy on the state of the climate debate. Here is how it starts:
The heady days of early 2009, when advocates for global action on climate change anticipated world leaders gathering later that year around a conference table in Copenhagen to reach a global agreement, are but a distant memory. Today, with many of these same leaders focusing their attention on jumpstarting economic growth, environmental issues have taken a back seat. For environmentalists, it may seem that climate policy has dropped from the political agenda altogether. 
They're right. The world's biggest emitters have reached a consensus of sorts, but not the one hoped for in Copenhagen.
Please head over there to read the rest, and then please feel welcome to comment there or come back here. Questions/critique welcomed.

29 comments:

charlesH said...

"Natural gas is not a long-term solution to the challenge of stabilizing carbon dioxide levels in the atmosphere, because it is still carbon intensive, but the rapidly declining U.S. emissions prove an essential policy point: Make clean(er) energy cheap, and dirty energy will be quickly displaced. To secure cheap energy alternatives requires innovation -- technological, but also institutional and social. Nuclear power offers the promise of large scale carbon-free energy, but is currently expensive and controversial. "

Game changer: The "green" nuclear. Molten salt thorium nuclear reactors. Much cheaper, safer, and cleaner.

Feb 2011

"China has officially announced it will launch a program to develop a thorium-fueled molten-salt nuclear reactor, taking a crucial step towards shifting to nuclear power as a primary energy source."

"The project was unveiled at the annual Chinese Academy of Sciences conference in Shanghai last week, and reported in the Wen Hui Bao newspaper (Google English translation here)."

"If the reactor works as planned, China may fulfill a long-delayed dream of clean nuclear energy. The United States could conceivably become dependent on China for next-generation nuclear technology. At the least, the United States could fall dramatically behind in developing green energy."

http://www.wired.com/wiredscience/2011/02/china-thorium-power/

June 1012

"The U.S. Department of Energy is quietly collaborating with China on an alternative nuclear power design known as a molten salt reactor that could run on thorium fuel rather than on more hazardous uranium, SmartPlanet understands."

"Proponents of thorium MSRs, also known as liquid thorium reactors or sometimes as liquid fluoride thorium reactors (LFTRs), say the devices beat conventional solid fuel uranium reactors in all aspects including safety, efficiency, waste and peaceful implications."

http://www.smartplanet.com/blog/intelligent-energy/us-partners-with-china-on-new-nuclear/17037

The solution is there. Technology developed in the US in the 60's. Just needs to be updated. Fortunately the Chinese (who do and will burn the most coal) are on to it. We can all breath easier.

W.E. Heasley said...

Dr. Pielke:

Re: a few observations.

Ronald Coase and The Coase Theorem vs. A. C. Pigou and merely tax negative externalities. Why Pigou and rarely Coase?

Further, why always negative externalities and no account for positive externalities? In essence, the following statement can arguably be discussed as millions of people seeking the positive externalities accruing to themselves due to access to energy: “Every major projection of future energy consumption foresees growth in energy demand around the world, which makes sense when you consider that today 2 billion people or more lack basic access to energy”.

Further, if an ultimate answer is available, it’s likely the wisdom of crowds and not a panel of homogenous climate experts that will solve for the ultimate answer. For example, supposed experts making statements as follows only reinforces Hayek‘s observation of the few vs. the many: “Thomas Homer-Dixon, a Canadian economist, cheered on the drought and its devastation, writing "It sounds harsh, but in light of these realities, this year's U.S. drought is good news ... fears about imperiled food security may be our best hope for breaking through widespread climate-change denial and generating the political pressure to do something."

“The heady days of early 2009, when advocates for global action on climate change anticipated world leaders gathering later that year around a conference table in Copenhagen to reach a global agreement, are but a distant memory." One would need to think James M. Buchanan and Gordon Tullock and consult public choice theory and consider if politicos should even be involved in environmental issues. If one seeks a notional answer regarding environmental issues based upon the-way-things-ought-to-be with taxpayer dollars used for political constituency building exercises, logrolling, concentrated small groups with narrow goals…then one should rely on politicos as politicos are the only group in the world that when things fail, they merely do the same thing over again, just bigger.

Regarding the free market, that funny mechanism that allows you to trust strangers self-interest, a funny thing happened on the way to the production of U.S. shale gas: emissions fell. Funny how no central planned - expert related phenomena occurred in the scenario. That nasty old free market and the plans of the many rather than the plans of the few lowered emissions. Go figure.

Possibly the following formula has an error: Emissions = GDP x Technology. GDP is the wrong entry. Rather the formula should be: Emissions = flesh and blood real live people attempting to gain maximum utility in their own self-interest x Technology.

Regarding the failure of a carbon tax and this statement: “Voters typically respond to higher energy prices by voting out of office any politician or party who is perceived to be working against their economic interests. Supporters of carbon pricing have no good answer for the politics“. Ah, a mystery?!? No mystery as Harold Dementz explained the shirking partner phenomena [remember a “firm“ is merely a collection of “households“]:

“A tax levied on corporate profit reduces the care and effort owners put into its operation, since part of the return that would have been received by owners will go to the state. Defacto, private owners of the corporation are saddled with a shirking partner, the state, which takes part of the revenue and provides none of the effort to improve the firm’s return“. - From Economic Man to Economic System, page 158

The failure of the carbon tax is likely, also, related to reciprocity. That the deal seems not 50/50 or 70/30 but rather something less than 80/20 with the proposed taxpayer feeling they are getting less than a fair deal hence no deal due to the reciprocity effect.

Quite the murky quagmire you have attempted to tackle. Good luck!

heyworth said...

Excellent article. The message I took from it is that, no matter how unpalatable it may seem, governments around the world will gradually be converted, no doubt while kicking and screaming, to the inevitability of nuclear power dominating our energy generation.

Salamano said...

You talked about this not long ago, but perhaps one of the motivations that go into changing the "GDP = wealth - happiness" paradigm is precisely to unwind its tether to energy consumption.

If the measure isn't good, then change the instrument kind-of-thing.

I believe John Kerry tried to re-invent the "Misery Index" back in 2004 because the "older" system wasn't giving the right numbers.

As soon as all these statistics about the 'social costs' of GDP and the 'intrinsic value' of 'unspoiled environment' are built into a new formula-- all of a sudden it becomes possible to manipulate the energy consumption number without significantly compromising this "new" definition of wealth-and-happiness.

Joshua said...

==>> ...growth may be the one big habit we finally must break, <<==


In think it is important to reflect on the full context of this argument, rather than to just extract that one talking point (which tends to exacerbate "vitriolic proxy battles).

I think it is reasonable to speculate that growth, as an undifferentiated goal, is problematic - and that pursuing undifferentiated growth is a habit that should be broken.

There are external variables that necessarily impact upon the goal of growth. This would happen, say, with a business that early in its evolution simply needed to get bigger in an rather undifferentiated fashion, but after a certain point in time needed to focus on growth that was carefully differentiated along considerations as, say, competitive advantage, or market segmentation.

I would agree that there is certainly a rhetorical over-reach with saying that growth is a habit that should be broken, but what is really important is digging down to the details of how different visions of growth differ. For example, where are the points of disagreement when McKibben advocates for "smart" or "green" growth.

The flip side of McKibben's rhetoric is that of someone like Larry Summers, who says:

==>> The idea that we should put limits on growth because of some natural limit is a profound error. <<==

Which, devoid of context could be construed to suggest that differentiated growth should not be a goal. Indeed, differentiating growth is, in a sense, a "limitation" on growth. Saying that some growth is more productive than other growth is essentially saying that there are "natural limits" to growth.


Is there a fundamental disagreement with, as a general principle, saying:


==>>

We lack the vocabulary and the metaphors we need for life on a different scale. We're so used to growth that we can't imagine alternatives; at best we embrace the squishy sustainable, with its implied claim that we can keep on as before. So here are my candidates for words that may help us think usefully about the future:


Durable
Sturdy
Stable
Hardy
Robust

These are squat, solid, stout words. They conjure a world where we no longer grow by leaps and bounds, but where we hunker down, where we dig in. They are words that we associate with maturity, not youth; with steadiness, not flash.


<<==


Now those adjectives are somewhat vague, and the difficulty lies contextualizing them in the real world . But I would argue that to the extent that any of us, including you Roger, abstract someone's message in ways that don't reflect full context, it limits the beneficial influence of their efforts.

It's kind of like fractals: undifferentiated messaging about undifferentiated growth.

Mike said...

Very good essay. I hope it has an impact.

Tom said...

Some of the innovation needed to spur improvements is not necessarily technological.

Solar began to spread in the U.S. because of innovations in finance--leased residential systems.

Removing impediments to adoption might help supplement better technology.

Pirate said...

Good article. Perhaps the climate activists should study tai-chi and take lessons from it: basically ignore impossible challenges and go forward where the resistance is less and move in agreement with the opposition.

That of course means giving up the pulpit, incriminations and "I told you so" .... a step too far for some.

Salamano said...

Joshua

Re: "Undifferentiated Growth"

Regardless about the attempt to recast future growth in a more savory direction, it's also important to carry your abstraction further to note that the 'future' growth of which you speak must preserve the growth already occurred. Otherwise, it's not called growth, but rather a transformation or a new direction.

I think the Kaya Identity indicates that, depending on that new direction, there may be trade-offs in growth that can't be waved away by declaring a new system of wealth/happiness.

In fact, the idea of moving it to a different system after a certain point bespeaks a tinge of insensitivity. A significantly large portion of the world's population (billions) is still desperate to partake and experience the GDP-type growth that those who 'have' are now declaring should be limited for the sake of the planet.

Imagine if your one-company example grew large enough that it decided it now needed 'differentiated growth' to continue in a more targetedly prosperous (or culturally satisfying) direction-- but also took the liberty of forcing the same upon all other companies of lesser maturity. Perhaps they all decide to 'cheat' the new system instead of going out of business, hmm?

Brian said...

Joshua (#5),

I don't quite follow what you mean by differentiated versus undifferentiated growth, but I would suggest that your doubts about continued (economic) growth are no more justified than doubts about other types of growth. Suppose someone said

"I think it is reasonable to speculate that knowledge increase, as an undifferentiated goal, is problematic - and that pursuing undifferentiated knowledge increase is a habit that should be broken."

or "There are external variables that necessarily impact upon the goal of knowledge increase."

or "Saying that some knowledge increase is more productive than other knowledge increase is essentially saying that there are "natural limits" to knowledge increase."

Would you agree with any of these statements? I doubt it. You are probably more likely to agree with the critic who might say

"The idea that we should put limits on knowledge increase because of some natural limit is a profound error." No?

Mark said...

For example, where are the points of disagreement when McKibben advocates for "smart" or "green" growth.

If green growth was actually growth it would be called plain and simple "growth". It would need to qualifier.

It is a code for "we will count the growth part (new windmills, new techy plants) and ignore all the attendant losses (more costly power, old style plants that could have been built for half the money)".

Generally when people talk about "green" they are not talking about just anything durable and sustainable. Concrete is cheap, durable and in effectively infinite supply, yet is not green. Iron has long been a product heavily recycled, yet a new iron smelter is not "green" growth. A water purification plant is not "green".

"Green" instead signifies a change from the old industrial paradigm, towards resources that are inefficient and difficult. It is therefore automatically anti-growth, because any activity that is economic is already being done (and so isn't new enough to be green).

When the likes of McKibben realise the important part of green growth is the growth, and not how green the project is, we might get some. But that means excluding any projects that are inefficient – even if terribly green in credentials. That is a mind shift they are a long way from making.

Joshua said...

#10 - Brian -

Creating an analogy to "knowledge" takes a somewhat overly abstract discussion and makes it even more abstract, but actually, I would say that some kinds of knowledge are significantly more valuable than others. That isn't the same thing as saying that more knowledge is not desirable.

Consider the GDP growth that we had in the years just prior to the recent economic collapse. Is it naive to think that a more differentiated growth, say growth not so predominantly built upon irresponsibly leveraging assets 40 to 1 to buy risky (bad) debt, would have been more beneficial? Would you say, for example, that economic activity generated from people buying mortgages they couldn't afford (buy overpriced homes) was good growth?

Perhaps if the energy and expertise that had been channeled into massive growth in financial sector had gone, instead, into growth in more sustainable business enterprises, or into early childhood education (which economic studies show can bring up to a 20 to 1 return to society through well-considered investment), in the long-term the returns would have been greater?

Perhaps, even, if better-differentiated growth meant overall less economic growth, we would have been, as a society, better off?

My point is not to support the argument that growth is bad, but to suggest that an undifferentiated outlook on growth, e.g., growth without limitations, does not strike me as less naive than thinking that the way to solve the threat represented by ACO2 is to take an undifferentiated perspective on limiting growth.

Creating an undifferentiated caricature out of the arguments of those who advocate for "green growth" is no better, IMO, than saying that those who advocate for economic growth are (necessarily) indifferent to the potential danger of ACO2.

Caricature-mongering begets caricature-mongering. It isn't a particularly smart way, IMO, to diminish the negative return from "vitriolic proxy battles."

Joshua said...

- 11 - Mark -

==>> "Green" instead signifies a change from the old industrial paradigm, towards resources that are inefficient and difficult. It is therefore automatically anti-growth, because any activity that is economic is already being done (and so isn't new enough to be green). <<==

Particularly if we're going to reduce ACO2 (and I would argue realistically for other reasons also) trade-offs need to be made. Assuming that a continuation in (substantially) similar rates of ACO2 emissions will have detrimental environmental and climate impact, sacrifices, at some level will have to be made. The question is where will the sacrifices come from.

The old industrial paradigm is not maximally efficient or easy. It is naive, IMO, to think that it is. So the question becomes whether, perhaps, some degree of increasing already existing "inefficiency" or "difficulty" (I think those terms are not particularly instructive - people on both sides like to demagogue about efficiencies and externalities - but I will use them for the sake of argument) is warranted as a trade-off for emitting less ACO2, (or perhaps addressing other problems resultant from undifferentiated growth).

In my view, a binary mentality, such as one that doesn't want to consider differentiation - no matter which side of the debate it emanates from - is more of a problem than a solution.

Joshua said...

Lest I be misunderstood, I guess I should add that a viable position is to say that any form of sacrifice isn't really necessary because maximizing growth will either buy us time to find alternatives or give us the economic means to find alternatives.

As a logical argument - that makes sense to me. But it is also a logical argument that needs to be substantiated (through good faith effort even though certainty could not be attained) via a quantification of risk, just as logical arguments that sacrifice needs to be made have to be substantiated through a quantification of risk.

As a practical argument, just like the argument that sacrifice needs to be made, I think it's problematic, however. For the same reasons I've stated: Growth, as an undifferentiated measure, has positive as well as negative impact - particularly when you consider how growth impacts different people, differently.

Temperance Legislate said...

In response to Tom #7

I was surprised to see the percent of third party ownership residential PV installs in CA was up to 72% as noted on page 30 of this report- http://www.cpuc.ca.gov/NR/rdonlyres/0C43123F-5924-4DBE-9AD2-8F07710E3850/0/CASolarInitiativeCSIAnnualProgAssessmtJune2012FINAL.pdf

I was glad to see that a maximum Kw (CEC AC rated) price was put in place for either a homeowner or a lease holder to obtain a rebate for their PV system. I would of set the maximum at +1 sigma on the average price for a couple of different system sizes, but at least there is a limit.

The large utility scale PV facilities that are coming on line are going to have an impact on the costs of a Kwh for PG&E customers- see "Slide 5- Historic and Projected Electric Rates From 2011 Integrated Policy Report" to see what PG&E expects rates to be in a few years.

http://apps.pge.com/regulation/SearchResults.aspx?NewSearch=True&CaseID=1153&DocType=&PartyID=4&fromDate=MM%2FDD%2FYY&toDate=MM%2FDD%2FYY&sortOrder=FileName&currentPage=1&recordsPerPage=100&searchDocuments=Search

Harrywr2 said...

11. Mark said...

If green growth was actually growth it would be called plain and simple "growth". It would need to qualifier.

Lack of growth..green or otherwise hinders innovation in the energy sector.

There is no money to be made in producing a better mouse trap if no one is buying mousetraps. Hence, investment in developing 'better mousetraps' disappears.

Mark Bahner said...

"They conjure a world where we no longer grow by leaps and bounds, but where we hunker down, where we dig in."

The trend in world economic growth over the last 300+ years is that growth has speeded up, not slowed down.

World per-capita GDP increased in every 50 year period from 1700 onward:

Period.........Annual per capita GDP growth, %
1700-1750.......................0.16
1750-1800.......................0.18
1800-1850.......................0.87
1850-1900.......................1.65
1900-1950.......................1.76
1950-2000.......................2.83

Annual per-capita GDP growth rates are likely to continue to increase, not decrease.

Brian said...

Joshua (#12),

You say "some kinds of knowledge are significantly more valuable than others. That isn't the same thing as saying that more knowledge is not desirable."

I agree with both statements. Unfortunately, I was sensing that you are using the term "differentiated growth" as a way of saying that more growth is not desirable, and you confirmed my suspicions by then saying

"Perhaps, even, if better-differentiated growth meant overall less economic growth, we would have been, as a society, better off?"

This is where you run off the rails. While some areas of growth might be better than others, all growth is good and limiting overall growth is always bad. It's bad for everyone, but especially bad for those who need it most--the poor.

Now, is it naive to think that economic growth can go on without limit? I have no idea. But surely no more naive than to think that growth in knowledge has no limit. Do YOU think there's a limit to what we can learn?

In any case, whether a limit exists or not doesn't matter. We should grow until the limit is reached and then deal with it then. Doing otherwise is to assume. without evidence, that we can anticipate the natural limit of things. History suggests we cannot, and the belief that we can, far from being naive, is gross arrogance.

Mark said...

Particularly if we're going to reduce ACO2 (and I would argue realistically for other reasons also) trade-offs need to be made.

Sure. Let's just not pretend that the solutions is "green growth". Let it be clearly stated that the alternative at the moment is green and less growth.

Such truth would be quite a hard sell to the idealogically uncommitted. But a democracy should be allowed to make the choice, not tricked into thinking we can be "green" and keep up our growth rates.

(Note: as I said above, it would help if "green" was redefined to include any industry that recycles efficiently and uses materials that are not likely to ever run out, not just trendy new ones.)

================================

Your comments about undifferentiated growth are well taken, but rather beside the point. We all know that growth needs to be long-term and build on solid foundations, not be speculative and ephemeral.

The problem is that non-capitalist "solutions" tend to work out worse at everything, even down to not avoiding bubbles (albeit ones driven by bureaucrats foibles, rather than financiers).

Joshua said...

==>> We all know that growth needs to be long-term and build on solid foundations, not be speculative and ephemeral. <<==

Well, my main point was that the problem that decontextualized quotes - such as the one Roger included in his article - give the impression that we don't all know that.

I'm saying that in reality, our values are in much more accordance than most climate combatants can see - because they're too busy banging their drums whilst sticking their fingers in their ears and saying "I can't hear you."

TheTracker said...

"Make clean(er) energy cheap, and dirty energy will be quickly displaced."

Or, and obviously, you make dirty energy more expensive via a carbon tax. Achieves the same thing, directly and predictably, rather than chasing "innovation," which may or may not work.

MattL said...

-21- TheTracker,

It absolutely doesn't do the same thing. After making "dirty energy" more expensive, you might get lucky, and someone will make cleaner energy cheaper, but if they don't, you've caused all sorts of trouble.

The only question is how much worse do you make things?

Joshua said...

- 22- Matt.

==>> After making "dirty energy" more expensive, you might get lucky, and someone will make cleaner energy cheaper, but if they don't, you've caused all sorts of trouble. <<==

Maybe. But let's apply the same logic in the other direction.

Waiting for cleaner energy to be cheaper than dirty energy may have an exponentially more troublesome impact, long term, than making dirty energy more expensive in the short term (particularly if the revenue is used to develop new technology).

==>> The only question is how much worse do you make things? <<==

Indeed. And I'll add...

The only question is how much worse do you make things ...in the short term to collect a long term benefit...

MattL said...

-23- Joshua,

The difference is that the effects of making energy expensive are pretty clear and known, e.g., poverty, which has all sorts of bad consequences, including a worse environment than even "dirty" fossil fuels, at least in the way that we tend to use them today.

You're exchanging the known awful consequences of poverty for extremely uncertain consequences (which may even be net positive!) of AGW.

So really, purposefully making energy expensive makes no sense, unless you choose to assume all sorts of fantastic things.

Joshua said...

==>> The difference is that the effects of making energy expensive are pretty clear and known, e.g., poverty, which has all sorts of bad consequences, including a worse environment than even "dirty" fossil fuels, at least in the way that we tend to use them today. <<==

I think that is an overstatement. Progressive taxation to make dirty fuel proportionally more expensive for those well above the poverty line will not, by any means necessarily, increase poverty - particularly if those progressive taxation on dirty energy stimulates conservation (reduces waste) and/or enhances efficiency in other ways.

==>> You're exchanging the known awful consequences of poverty for extremely uncertain consequences (which may even be net positive!) of AGW. <<==

I think that is also, an overstatement. The issue of importance is to dig down into the details so as to not oversimplify the risks on either end of the scale.

My basic argument is that overstatements, decontextualizing in ways that miscasts or simplifies complex arguments, or demonizing others' values because their positions are different, are all counterproductive - no matter where they emanate from.

MattL said...

-25- Joshua,

You're right, if you enact "[p]rogressive taxation to make dirty fuel proportionally more expensive for those well above the poverty line," then you possibly will not increase poverty much, but if so then you will not have done not enough to make a difference in the direction you were hoping. Enforcement of such a beast sounds like a nightmare, too.

I was assuming that you were actually trying to accomplish something, but now you're describing something that I would describe as Climate Policy Theater, to paraphrase Bruce Schneier.

Maybe you were thinking of something that can live within Roger's Iron Law that would attempt to fund innovation. Well, again, that isn't really meant to do much as far as behavior modification, so I don't think I would describe that as "making dirty energy more expensive than clean energy."

Whatever challenges you think may lie ahead, we'll deal with them better by richer and more propsperous. Why make our lives more difficult on purpose?

My basic argument is that overstatements, decontextualizing in ways that miscasts or simplifies complex arguments, or demonizing others' values because their positions are different, are all counterproductive - no matter where they emanate from.

I don't disagree with this. But I stand by what I said.

Unknown said...

The problem with progressive taxation - and I say this as someone who believes progressive taxation is necessary - is that the levels of progress are highly political, and that any levels set are easily disrupted by outside influences.

For example: putting high taxes on gasoline. In order to make this progressive, you first need to identify what 'regular' people are, and how much these 'regular' people should consume, before buiding your progression. And how do you set a level which is correct for a 'regular' in a warm climate like Arizona or Florida vs. a 'regular' in Minnesota?

Ultimately this is a perhaps impossible challenge.

Cheap energy which is 'clean', however, removes this as an issue. Achieving cheap clean energy isn't going to happen by subsidizing horribly expensive systems - especially when the primary beneficiaries are those who can afford to prepay their energy expenses for years at a time (see Prius). This in essence is the failure of the current alternative energy programs all over the world.

Mark Bahner said...

"Or, and obviously, you make dirty energy more expensive via a carbon tax."

Carbon dioxide isn't "dirty." If one was really interested in health effects, one would tax particulate emissions.

Another huge problem is that the U.S. taxing carbon at any rate that is politically conceivable will have no effect on world CO2 emissions.

Pasteur01 said...

Roger,

There are cases when governments have intended to put CO2 ahead of economic growth. Cases currently pending include Australia and the UK.

But on a smaller scale the state of Rhode Island is moving quickly towards higher electricity costs. The Block Island Sound offshore wind farm - scheduled to have 1,000 megawatts of capacity - continues to move forward. This despite many good reasons, economic and environmental, to proceed with extreme caution.

-The state generates 98% of its power from natural gas;
-CO2 emissions per capita are among the lowest in the nation;
-residential electric rates have recently fallen as the supply of natural gas has increased.

In this context how can a government damage its economic prospects by increasing electric rates and decreasing competitiveness? If you have nothing to lose...

The state has the second highest unemployment rate in the nation. Good economic times and bad for the last 20+ years the unemployment rate has been mostly higher than the national rate. RI is regularly ranked among the least business friendly states in the nation.

Interestingly the state has adopted your thinking on manufacturing vs. other sector jobs. Manufacturing in the state has been decimated - mills and metalworking are gone. On the other hand financial planning and services jobs have been the greatest area for growth. The gaming industry also has a large footprint - with casinos and a lottery system management company.

The people are apparently happy with the status quo. The water is crystal clear on Narragansett Bay, the sailing is good, and the wind is blowing. Who needs a job?

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