Category Archives: Climate

Climate of Fear XVI.

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Coal is an important source of fuel: 38.7 percent of America’s electricity comes from 600 coal-fired generators.[1]

The trouble is that coal is bad for you and other living things. Coal burning for power generation in the United States gives off about 1.575 billion tons of carbon dioxide. That feeds the greenhouse gases responsible for global warming. Burning coal is worse than burning other fossil fuels. All the gasoline-powered vehicles in the United States give off about a billion tons. Burning natural gas gives off about half the carbon-dioxide as does burning coal.

No one is talking about having passed “peak coal”: there is a lot of coal still in the ground. People concerned about global warming want it to stay there. As the former Secretary of Energy Steven Chu memorably phrased it “there’s enough carbon in the ground to really cook us.”

However, the coal industry looked to be in decline for the same reason that gasoline prices have fallen recently. Hydraulic fracturing (“fracking”) has succeeded. Natural gas prices have fallen by 74 percent over the last ten years. Natural gas, emitting half the carbon dioxide as coal, is now price competitive with coal. Thus, a shift from coal to natural gas would achieve a substantial reduction in emissions without harming anyone—except the coal producers of course. The economics certainly tilt in that direction: 150 of the less efficient coal-fired generation plants have shut down already.

For these reasons, it may have looked like an opportune time to push for a reduction in coal-burning. The Obama Administration is pushing hard to cut carbon dioxide emissions by 30 percent from the 2005 level by 2030. In June 2014, the Environmental Protection Agency (EPA) announced a Clean Power Plan to limit coal burning in the United States. Each state would be required to reduce its carbon emissions. The logical thing to do would be to switch to other forms of energy generation ranging from nuclear to natural gas to “renewables” (solar, wind).

The EPA plan has elicited hard push-back from coal-mining states. The efficiency of coal-mining techniques has increased with the introduction of “open cast” mining (knock off the top of a mountain and excavate the coal with machinery). Coal miners will be thrown out of work[2] and coal mine owners will see their investments destroyed. Senate Majority Leader Mitch McConnell (R-Kentucky) has denounced the president’s “War on Coal.”[3] A dozen states have sued the EPA, claiming that it has exceeded its authority.

One way to smooth the path from coal would be to invest more in research into “clean coal” technology. So far, research has shown the process to be expensive and difficult. An experimental “clean coal” plant in Kemper, Mississippi, cost five billion dollars. However, it could both pacify the coal interest and find an international market.

The industrialization of countries like India and China are powered by coal. An estimated 82 percent of global coal reserves are still in the ground. China, which recently promised to reach peak carbon-burning by 2029, plans to build 363 new coal-fired plants before then. India is planning to build more than 450 coal-fired generating plants in years to come. The carbon dioxide emissions from these plants will overwhelm any reductions in the United States. Finding a way to “clean coal” might be one way to avert disaster.

[1] “The end of coal?” The Week, 27 March 2015, p. 11.

[2] Although employment in coal mining in Kentucky has fallen from 38,000 in 1983 to 17,000 in 2012.

[3] Bearing mind the importance of both tobacco and coal for the state’s economy, maybe they could find a new slogan for Kentucky license plates: “Kentucky is for Respirators.”

Climate of Fear XV.

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The “Lima Accord”: Almost 200 countries have agreed to burn less coal, oil, and gas.[1] By the end of March 2015 they will publish national plans to cut emissions after 2020 and will state what laws they will pass to achieve these goals.[2]

How will progress be judged? One solution, proposed by developed countries, would be to establish identical measurements for each country. This would allow easy comparisons between goals and achievements and between one country and another. Developing countries rejected this solution. In order to win the formal adherence of developing countries, the developed countries agreed to scrap the plan. However, economists in developed countries believe that it will be possible to find a way to synthesize disparate information. Countries that fall short of their goals will be identified. Todd Stern, a lead negotiator for the United States, put the best face on this that he could: “We see the sunlight as one of the most important parts of this [agreement].”[3]

How powerful is “peer pressure”? Peer pressure is all that will provide enforcement. The agreement includes neither specific targets nor any enforcement mechanism. It is, in effect, another executive agreement. Like other executive agreements, it is not binding beyond the end of President Obama’s term in office.[4] Countries that submit inadequate plans or which fail to meet their goals will be subjected to the withering moral condescension of foreigners.

The possibility exists that the United States will be one of those defaulters. President Obama’s policies already have the United States on-track toward a substantial reduction in emissions by 2025. Further regulations during his last two years in office can reduce emissions still more. Experts appear to doubt that the targets for 2025—a 28 percent reduction—can be brought within reach without Congressional action.

How have developing countries performed with regard to establishing worker-safety laws? This is another example of developing countries responding to pressure from developed countries—often operating through international organizations like the International Labor Office. Like emissions reduction, the worker safety laws work against existing strategies for international development. To take an extreme example, on 24 April 2013 a five story garment factory in Bangladesh collapsed.[5] The disaster killed 1,137 workers. Most were girls aged between 18 and 20 years. They had been working 12-14 hour shifts for 90-100 hours a week. They had been paid between 12 and 24 cents an hour. Most of the clothes they sewed were for export to developed countries. Naturally, this tragedy led to much international criticism.

Do “Name-and-Shame Campaigns”—peer pressure—work, either in domestic or international contexts? To take an extreme example, on 13 March 2015, a factory in Bangladesh collapsed. Fortunately, the building was still under construction and not full of people. At last report, four people had been killed, forty injured, and about one hundred were still missing.

So, the future is still a little cloudy.

[1] Coral Davenport, “A Climate Accord Based on Global Peer Pressure,” NYT, 15 December 2015.

[2] Countries that miss the 31 March deadlines will have until June to publish their plans. Countries that miss the June deadline will have until the next major climate conference in Paris in December 2015. Countries that miss the December deadline,…

[3] So, another step forward for solar power.

[4] However, since 1939, 94.3 % of all international agreements have been executive agreements, rather than treaties. Most appear to have been regarded as remaining valid after a change of government. See: Michael Crittenden and Byron Tau, “GOP Iran Letter Draws Obama Rebuke,” WSJ, 10 March 2015.

[5] See: http://www.globallabourrights.org/campaigns/factory-collapse-in-bangladesh

Climate of Fear XIV.

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In November 2014, China and the United States reached a bi-lateral non-treaty agreement on reducing carbon emissions. President Obama committed the United States to cut carbon emission by 26-28 percent below the level of 2005 by 2025.[1] President Xi Jinping committed China to reach peak carbon emissions by or before 2030. In addition, China agreed to raise its nuclear, wind, and solar energy generation to about 20 percent of the total by 2030.

The Sino-American agreement prompted diplomats negotiating the draft framework for a new international climate-change agreement to change their own approach.[2] They adopted the idea of allowing each country to commit to reducing carbon emissions without specifying how or by how much they will do so. Countries are supposed to announce during March 2015 how much they will cut emissions after 2020. No one thinks they will set ambitious targets. All 196 nations will agree to sign the new agreement in Paris in November and December 2015.

 

All well and good. What are some of the key problems for which people should be looking during 2015?

Currently, China gets about 10 percent of its energy from non-carbon sources. Experts seem to believe that China will need to deploy an additional 800-1,000 gigawatts of “zero emission generation capacity” to get to 20 percent non-carbon energy-generation by 2030. This is more than all the coal-fired power plants that exist in China today. If China is going to massively expand its non-carbon energy generation just to get to 20 percent of the total, then that suggests that China will also massively expand its carbon energy generation at the same time.

The Obama Administration is pressing for a non-treaty agreement because of the doubts it could pass the Senate. However, a non-treaty is non-binding on all of the signatories. Furthermore, China has always resisted international monitoring of its economy.[3] This could end up like the Kellogg-Briand Pact (1928) “outlawing war.”

Reducing the amount of coal burned will have effects on several societies as well as on the environment. As of 2012, China got 81 percent of its electricity generation from coal; India got 71 percent; Australia got 69 percent; Indonesia got 48 percent; Germany got 44 percent; the UK got 39 percent; and the US got 38 percent. Shifting some of these countries off coal-burning will require heavy investment in new technologies. There is no sign that any cheap alternative to fossil fuels is at hand. Then coal is an important export for some counties. In 2013 Indonesia exported 426 million tons of coal; Australia 336 million tons; Russia 141 million tons; and the US 107 million tons. Dissuading countries from burning coal for energy will have an effect on the incomes of these countries. If coal turns out to be too dug- in[4] to be abandoned, then attention will have to turn to “clean coal” technologies, and to emissions capture and storage.

In the absence of serious commitments to substantially reduce carbon emissions, climate scientists now believe that it will be impossible to hold back some of the effects of climate change. Glaciers will melt, sea levels will rise, and problems with drought and harvests will increase.

[1] In June 2014, EPA proposed guidelines for existing power plants that would reduce emissions 30% below 2005 levels by 2030.

[2] Coral Davenport, “With Compromises, a Global Accord to Fight Climate Change Is in Sight,” NYT, 10 December 2014; William Mauldin, “Coal Clouds Talks on Climate,” WSJ, 13-14 December 2014.

[3] “A verbal contract isn’t worth the paper it’s printed on.”—attributed to Sam Goldwyn.

[4] HA! Is joke.

Climate of Fear XIII.

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A decade ago, back when climate change began to emerge as a serious concern, scientists and environmentalists composed a menu of possible future alternatives to burning carbon. Both solar power and wind power seemed likely to be massively expensive. In contrast, biofuels—the conversion of plants into fuel—seemed like it might be a low-cost winner. Both the government of the United States and European governments have invested billions of dollars in developing biofuels. In Britain, for example, subsidies and mandates were used to stimulate a shift to burning wood pellets made from sawdust and tree waste.[1] In the United States, the government mandated and subsidized the mixing of ethanol—a biofuel made from corn—with gasoline. Anywhere from 30 to 40 percent of America’s corn crop now goes to ethanol.

In fact, costs for wind and solar power dropped sharply over the same period that biofuels were being developed. However, until we transform battery technology it will not be possible to use solar or wind power for transportation. Many people continue to count on biofuels as a substitute for carbon-burning.[2] A 2014 report from the Intergovernmental Panel on Climate Change (IPCC) urged replacing carbon with biofuels as an affordable means to hold back climate change. The International Energy Agency speculates that it may be possible to provide over a quarter of world transportation fuel needs by 2050. More immediately, the United States projects that 12 percent of its transportation fuel will come from biofuels within a decade. Similarly, the European Union projects a sharp increase in the role of biofuels to power transportation between today (2.5 percent) and 2020 (10 percent).

Now people are re-thinking this strategy.[3] For one thing, biofuel production has turned out to be massively inefficient: a huge amount of land is required to produce a meager amount of energy. (The 30-40 percent of the American corn crop devoted to ethanol reduces gas consumption by only about 6 percent.) The energy content of all current biomass (food crops, fodder for animals, lumber, biofuels) is about 220 exajoules. The IPCC estimates that the biofuels component alone will have to reach 250 to 300 exajoules by the end of the 21st Century to hold back climate change. This implies a massive expansion of biofuel acreage.

Skeptics believe it unlikely that farm productivity can actually be increased much on the ground, as opposed to on a chalk-board. The world faces an increasing demand for food as both population and incomes in developing countries rise. These will more than eat up any increase in productivity, leading to continued expansion of lands devoted to crops. The American bet on ethanol has driven up world food prices. Harvesting trees for biofuel seems like even more of a losing proposition. It reduces the amount of carbon dioxide captured by trees while increasing the amount of carbon dioxide emitted.

Clearly, there are no simple solutions to the climate problem. It is going to take time to discover the best approaches, even though we seem to be short of time. Government hasn’t entirely succeeded at picking “winners” from among contending solutions. Decisions can have unanticipated consequences that turn out to be hard to un-do. Rather like the origins of the climate problem in the first place.

[1] The chief beneficiary of this effort may have been the members of the U.S. Industrial Pellet Association, which supplies much of the European demand.

[2] Eduardo Porter, “A Biofuel Debate: Will Cutting Trees Cut Carbon,” NYT, 11 February 2015.

[3] Justin Gillis, “New Report Urges Western Governments to Reconsider Reliance on Biofuels,” NYT, 29 January 2015. The story reports on a World Resources Institute study released on Friday.

 

What is globalization?

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“Globalization” has been going on for a very long time, but in the last quarter of a century the degree of globalization has increased dramatically.

The ancient “Silk Road” trade route connected East Asia, South Asia, the Middle East and Europe. Sailors, caravan drivers, missionaries, and the odd tourist carried word of one civilization to another. (Bits of Roman armor have been discovered in Vietnam.)

The “Voyages of Discovery” created European empires of Trade in Asia and of Settlement in the Americas. Europeans (willing) and Africans (unwilling) moved to the Americas; cotton, coffee, corn, tomatoes, tobacco, potatoes, and Aedes aegypti all crossed the oceans for the first time.

Industrialization in the 19th Century spread Western power, ideas, and patterns of economic development all over the globe in new ways and to a greater degree than before. European investment poured into American, Indian, and Chinese railroads, and into the Suez and Panama canals; the telegraph eliminated time in sending messages; millions of people migrated.

The rise of Communism between 1919 and 1989 sealed off much of the world from Western Capitalism. These places needed scientists, doctors, and engineers, so they built up an educated elite. Then the collapse of the Communist model led to the opening of Russia, Eastern Europe, and China to the world market. Countries like India, much of Africa, and Latin America had all copied parts of the Communist model. After 1989 they also opened up. Low-skill jobs flowed toward low-cost producers who had to employ and feed poor people as best they could. Making steel, sneakers, T-shirts; assembling computers; and processing chicken all migrated.

The collapse of Communism roughly coincided with the development of the Internet for commercial uses. This, too, wiped away barriers. Call centers in India sprang up, making my afternoons a living hell. At the same time, angry Russian techies who had lost their cushy jobs with NepoCom went in for cyber-crime against Western businesses.

The whole world suddenly became more like One World than ever before.

 

It always has been driven by economic forces, but it always has had huge effects in every other aspect of human life. Here are a few examples.

On the one hand, the world is organized into nation-states, but there aren’t any borders in the atmosphere. Green-house gases emitted by one country affect every country. On the other hand, hundreds of millions of people live in environmentally-fragile places, but they are driving for industry as the path to a better life. What happens when 1.3 billion Chinese decide that they all want a car, just like 300 million Americans? I suppose we could tell them to stick to bicycles, but that seems kind of racist. Maybe we should go back to bicycles to set a good example?

Millions of people in poverty-stricken “failed states” want to get to some place that is successful. Even if they don’t speak the language, can’t read or write beyond an elementary school level, belong to a traditional culture that devalues women, and have spent their working lives behind a water buffalo. It will get worse if their country is about to go under water.

You can get a kidney transplant done for $5,000 in India (plus airfare and hotel); you can get SRS done for $16,000 in Thailand (plus airfare and hotel).

Rihanna is from Barbados; Frankie Joe Rukundo is from Rwanda; “Narcocorrida” is popular on both sides of the Mexican-American border; some of the most interesting American students consider themselves “otaku”; three French brothers produced “Assassin’s Creed.”

Shock Waves.

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The implications and possible effects of the drop in oil prices are complex and hard to predict.[1]

One effect of falling oil prices is to hammer oil producing countries at odds with the US (Russia, Venezuela, Iran). The fall in oil prices is putting far more pressure on Russia than are the international sanctions imposed over the unpleasantness in Ukraine. Both the Saudis and the Americans are quietly amused by the difficulties being encountered by the Iranians and the Russkies.

At least over the short-term (but likely over the longer-term) the fall in oil prices will reduce the revenues earned by the established oil producers. The effects could ripple through Middle Eastern politics. Saudi Arabia buys off domestic discontent with a high standard of living paid for by oil sales. Less revenue could translate into more discontent. When the United States scaled back aid to Egypt after the overthrow of the Morsi government, Saudi Arabia stepped in with generous assistance. Egypt plowed ahead with its suppression of the Muslim Brotherhood and other dissidents in open defiance of the United States. How long and how generously will Saudi Arabia be able to continue to support Egypt and other conservative regimes if the money stream starts to fall? Other Muslim states—like Algeria—are in something like the same boat in their dependence on oil revenues to fend-off unrest.

What does this suggest about climate politics in the United States? Will falling gasoline prices lead to more driving in bigger vehicles—with more emissions? Will the deflation of predictions about having passed “peak oil” reduce the pressure for the development of alternative energy sources?

What are the implications for the business-government relationship going forward? Eduardo Porter argues that government support for the development of the technology behind “fracking” endorses smart industrial policy. He suggests that this can offer a model for the development of new technologies to limit climate change. In particular, he endorses raising the gas tax during the period of low oil prices. The revenues “could be leveraged into a boon in tax revenues that the government could use to pick some of the winners that will help solve the [environmental] problems.”

The problem with “industrial policy” is that it’s just like other forms of politics. Established interest groups have a stronger position than do rising interest groups. The winners “picked” by the government are likely to be big campaign donors or the pet causes of political leaders. When government picks winners, we get farm subsidies and Solyndra. Porter’s own account of the development of fracking technology emphasizes the importance of research into new technologies paid for by the government, not that government picked winners. One thing that goes unmentioned by Porter is that government labs and subsidies were spread over a wide area. They didn’t focus on one technology or energy source. Continued investment in research certainly sounds like a good idea. So does an increase in the gas tax. Within that framework, however, would it be better to let the market pick the winners?

Why was this a surprise? Between 2008 and 2015 American domestic production of oil doubled. The European economy has been stagnant for a bunch of years. “Fracking” has been a loudly contested issue in American domestic politics for years. These are the key factors in the price decline. Yet markets, media, environmentalists, and politicians all seem equally surprised. Did no one see the rise in production/fall in prices coming? It’s a sort of Pearl Harbor in reverse.

[1] Eduardo Porter, “Behind Drop in Oil Prices, A Federal Role,” NYT, 21 January 2015.

Thoughts for the New Year.

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I don’t know anything. So, here are my thoughts on a couple of issues.

Climate change is a grave reality. However, I doubt that people can entirely hold back (let alone turn back) global warming. Carbon-burning is central to the industrialization of developing-economies. There aren’t a lot of cheap and ready-to-use alternatives. Instead, there is going to be a long period of adaptation to worsened conditions. It is going to make environmentalists, intellectuals, and other “progressive” people very angry that there will turn out to be market-driven profit opportunities when statist restrictions might have provided more desirable outcomes.

In terms of foreign policy, Vladimir Putin is considerably more of an adult than are American leaders. Balance-of-power politics and spheres of influence are realities in world politics. Power and influence are not the single and permanent prerogative of the United States. For one thing, Ukraine is to Russia as Mexico is to the United States. (“Pity poor Mexico. So far from God, so near the United States.”) For another thing, Putin has tried to help the US out of a couple of ditches into which American leaders have driven it. Syrian chemical weapons and a possible solution to the Iranian nuclear problem are the key examples. All the while he has been vilified because he isn’t a democrat at home and he’s resisting the onward march of Western power around the borders of Russia.

In the Middle East we are witnessing a re-writing the Sykes-Picot Agreement. Iraq is fragmenting into Shi’ite, Sunni, and Kurdish enclaves. This fragmentation is being papered-over during the current emergency. The Shi’ites will never be able to repair their behavior during the Maliki period. Syria is going to fragment into Alawite, Sunni, and Kurdish enclaves. A Kurdish state will emerge. This new country will have trouble with both Turkey and Iran. Will Jordan or Saudi Arabia absorb the unstable and impoverished new Sunni micro-state in western Iraq?

The “two-state solution” to the Israel-Palestine conflict isn’t. Israel cannot afford to have a Palestinian state created. That state would be implacably revanchist, regardless of whatever professions its spokesmen might make in order to obtain sovereignty. Over the centuries, many people have felt that the problems of the world could be resolved if only the Jews would die and stop bothering people. Well, the Israelis aren’t buying this line.

The United States gets much less from the US-Israel alliance than does Israel.

ISIS isn’t a serious problem. The enthusiasm for “jihad” among many Muslims is a serious problem. It is likely to be around for a long time. I’m not sure that it can be de-legitimized by Western propaganda. I’m not sure that playing military whack-a-mole with every new outbreak will solve the problem.

Much as I agree with the objectives being pursued by President Obama on some key issues, I don’t believe that he has the authority for some of his actions. The Supreme Court is likely to overturn the authority-grab carried out by the EPA. The immigration problem wasn’t/isn’t a crisis. It’s just a stick with which to beat the Republicans and an effort to keep Hispanic-American voters on the side of the Democrats. American liberals are going to rue the day that they celebrated his unilateral actions on coal-burning energy generation and immigration. One day, a Republican president will invoke the Obama example.

A Marina on Baffin Island.

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Global warming is causing the polar ice-caps to melt. There is forty percent less summer ice now than in the 1970s. By 2030 the Arctic could be free of ice during summer. And I ask, “What is the good in this?” Well, it creates all sorts of opportunities. Some of these come from resources exploitation. Some of them come from adapting to climate change.

In the case of the North Poles, this is freeing up access—after a fashion and in relative terms—to the seas north of Canada, Russia, and the Scandinavian countries.[1] In 1982 the United Nations adopted a “Convention on the Law of the Sea.” This grants signatories ownership of undersea resources up to 200 miles off their shores. One area of interest is oil and natural gas drilling.[2] Because the ice cap and terrible weather prevented people from exploring for gas and oil beyond Alaska’s North Slope, geologists are not sure how much oil and gas might be found as the ice cap retreats. One estimate is that 20 percent of the world’s as-yet-undiscovered gas and oil lay under the Arctic ice. This might include a third of the world’s natural gas and 90 billion barrels of oil.[3] Oil companies have rushed in to explore where angels fear to tread: Exxon, BP, Statoil (Norway), and Eni (Italy) have all begun exploration of the fields north of Russia. Since the “Deepwater Horizon” disaster in the Gulf of Mexico, they have been giving a lot of thought to how to deal with the inevitable spills that will happen in such a harsh environment. So far, they don’t have any good answers.[4]

Similarly, the retreat of the polar ice caps is liable to open a mining boom in Arctic areas. Ice, snow, permafrost, and brutal winters have kept people from exploiting some of the Earth’s resources. Russia stands to profit from a warmer, greener Siberia. Separatists in Greenland are already speculating on seeking independence from Denmark.

Some of the adaptive responses have a comical note to them. Artificial snow-machine makers face rising demand from imperiled ski resorts. Others responses have potentially bigger pay-offs. Environmental disasters in the 1950s spawned ideas that have great relevance today. In 1952 the British forester and conservationist Richard Baker proposed creating a tree-belt along the southern edge of the Sahara to hold back desertification. In 1953 a gigantic storm in the North Sea led to massive flooding in Holland and eastern Britain. Holland responded with a thirty year campaign of dike and storm surge barrier construction; Britain built the Thames Barrier downstream from London.[5]

In 2002, the African Union adopted Baker’s idea of a tree barrier against the Sahara. Then it was taken up by the African Union. To make this plan work, somebody is going to pay to plant a belt of trees thirty miles deep and four thousand miles long. Foresters, nurseries, and irrigation engineers will be in demand. In 2012, Hurricane Sandy demonstrated New York City’s vulnerability to storm surges and rising sea levels. Builders experienced with massive sea-gate flood control projects are likely to be in demand in a host of places.

If people don’t adapt to climate change one way, they will adapt another way.

[1] It hasn’t become the Gulf of Mexico yet. In summer there is still a lot of drift ice floating around for the high winds to blow into off-shore rigs; in winter the temperature still drops to 50 degrees below zero and the whole place ices up.

[2] The US Senate has not ratified this convention. Which isn’t the same as saying that the US will not defend what it conceives to be its national interests.

[3] So, you burn the gas and oil; that heats up the planet even more; it gets progressively easier to access the gas and oil. Neat. Sort of.

[4] “The battle for the Arctic,” The Week,” 6 December 2013, p. 11.

[5] McKenzie Funk, Windfall: The Booming Business of Global Warming (New York: Penguin, 2014).

Climate of Fear XII.

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What is the “price” of one ton of carbon-dioxide pollution emitted into the atmosphere? According to Obama administration economists, it is $37.[1] If you add that cost into the price of carbon, then market forces will nudge people to burn less carbon and will create a market for alternative energy sources. A government can either tax carbon burning directly or it can dodge around the formal tax by establish a system in which companies have to buy what amount to licenses to pollute. (These are usually labeled “cap-and-trade: solutions.)

People who depend on carbon-burning for jobs, profits, and comfort see carbon-pricing as getting their ox gored for the sake of scientific predictions in which they cannot afford to believe. Australia is a good example. It produces 5.5% of the world’s coal, most of it for export. Prime Minister Julia Gillard, a climate change believer, pushed through a carbon tax. In 2013, she lost her office. Her successor immediately got the tax repealed.

In 1990 the Country-Formerly-Known-As-East-Germany merged with West Germany.[2] East German had been an environmentalist’s nightmare, owing to its reliance on burning coal for energy. Many of the polluting electricity-generating plants were soon shut down. Nevertheless, Germany relied on coal for much of its fuel. In 1997 Germany adhered to the Kyoto Protocol. Angela Merkel was then serving as environment minister. Since then she has committed herself to cutting greenhouse gases. In 2007, as chancellor, she committed Germany to making substantial cuts in emissions. Cutting across this effort, however, was a desire to move away from nuclear energy. Germany had 17 nuclear plants, but started to shut them down as they aged, without building additional production capacity. The disaster at Fukushima in 2011 gave this slow movement a strong shove. As a result, Germany’s reliance on coal has returned to the 2007 levels. In 2013 Germany got 45 percent of its energy from burning coal and 25 percent from renewable energy. Moreover, coal miners and electrical plant workers are a big and well-connected constituency. It remains to be seen whether Merkel can push through real cuts.

The United States offers another good example. It produces 11.7% of the world’s coal.[3] In 2010, President Obama tried to get a cap-and-trade bill through the Senate, but was defeated by Republican opposition. The new Republican Congress isn’t likely to change course now.

If a carbon tax isn’t saleable in Western democracies with diverse economies, how will it fair in developing countries that rely heavily upon coal and oil to fuel their advance? India produces 7.7% of the world’s coal. China produces 46.4% of the world’s coal, all for domestic consumption. China signed a declaration sponsored by the World Bank that called for a price on carbon that reflected its real cost. China has begun cap-and-trade policies in some of its provinces. Loud snorts of derision followed the gestures: China continues to expand its burning of carbons and the declaration it signed was non-binding. Is it more than just window-dressing?

A German mining union official spoke for more than just German miners when he asked, “Is it worth it if we as a country succeed in reaching our targets in reducing carbon emissions, but sacrifice good jobs and our industrial base?”

 

[1] Coral Davenport, “President’s Drive For Carbon Pricing Fails to Win at Home,” NYT, 28 September 2014.

[2] Melissa Eddy, “Missing Its Own Goals, Germany Renews Effort to Cut Carbon Emissions,” NYT, 4 December 2014.

[3] http://en.wikipedia.org/wiki/List_of_countries_by_coal_production

Climate of Fear XI.

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The International Energy Agency (IEA) issues reports on critical energy issues. It’s “Energy Technology Perspectives” reports offer an insight into climate change issues. So, is the glass half-full or is it empty?

The power industry produces almost 40 percent of America’s carbon dioxide emissions. There have been big technological gains in reducing greenhouse gas emissions. These improvements are what allowed President Obama to order a 30 percent reduction in emissions from a 2005 baseline by coal-burning power plants by 2030. (His recent agreement with the Chinese apparently merely ratified changes already underway.)

People have stopped believing in some of the alternative energy sources touted by environmentalists. All these technologies hold promise, but they are not yet anywhere near price competitive with carbon energy generation. Funding for things like bio-energy, offshore wind,[1] and geo-thermal dropped more than twenty percent between 2011 and 2013. It can be dangerous to extrapolate from brief periods of change. The price of photovoltaic solar cells dropped sharply from 2008 to 2012 because a land-rush of producers into the market led to savage price competition. The subsequent shake-out has led to a stabilization of prices. The “levelized” costs of solar energy generation have fallen by 40 percent from their 2010 estimate. Thus, as part of the stimulus, the Obama administration heavily subsidized alternative energy generation sources. As a result, in 2010, the US added 5 gigawatts of energy generation from wind-power; in 2011 it added 7 gigawatts; and in 2012 it added a whopping 13 gigawatts. The end of the stimulus left wind-power generation becalmed: in 2013, the US added only 1 gigawatt from wind-power, and 2014 isn’t shaping up to be much of an improvement. Lesson: in the current state of technology, alternative fuels are only competitive with carbon-fueled energy generation when the government “levels the playing field” by tilting it in one direction.

What are the real possibilities?

By 2019, onshore wind generation could cost $71/megawatt, “even without subsidies.” By 2040, in exceptionally windy places (Washington, DC?) the cost might be as low as $63.40/megawatt. By 2040 nuclear-generated power might cost $80.00/megawatt. By 2040 solar might generate power at $86.50/megawatt. None of this is going to amount to much.

The IEA predicts that by 2040 only 16.5 percent of energy will be produced from renewable resources. More than 65 percent will come from the burning of coal and gas. This means that “carbon capture” technology must develop rapidly. However, “carbon capture” technologies are failing to develop at an adequate pace. Costs are high relative to the return, so no one is interested in investing. Similarly, we need a 24 percent increase in nuclear power generation by 2025 to fend off drastic climate change.[2] Instead, nuclear generating capacity is falling.

The best solution to this problem is a severe carbon tax. Today the US emits about 5.4 billion tons of carbon dioxide. If carbon emissions were taxed at $25/ton beginning in 2015, with a 5 percent/year increase (i.e. rising to about $60/ton by 2040), lots of alternative energy sources would start to look more attractive—if not attractive.

Eduardo Porter, “A Carbon Tax Could Bolster Green Energy,” NYT, 19 November 2014.

[1] Migrating birds and drunken pleasure-boaters alike are happy about this.

[2] Build a lot of nukes in Maine. No one lives there and the winds aloft will carry the fall-out from the inevitable accident across the Atlantic to Portugal and Spain. Bad for the cork oaks and cod donuts I’ll grant you.