Short and Long Term Issues for Climate Change

In addressing climate change, one problem is that short and long term issues are not always the same.  As we’ve noted before, conservation is a legitimate short-term issue but not a primary long-term goal.

You can go a step farther with that:  there is technology we don’t want at all long-term that is still the best we’ve got for now.  That’s not just a matter of saving a little extra carbon dioxide; more importantly it’s buying time.

What the scientists have given us is not so much a schedule as a carbon budget—how much CO2 we can produce without irretrievable harm.  Many of the technologies we need to get off of fossil fuels completely are not 100% up to snuff.  What that means is that we can’t jump immediately into what we see as the right solution—more money won’t help.  That means accepting non-optimal technologies that cut some CO2 now.

Cutting CO2 buys time.  We need that time.

Here’s are a few areas that need work.  It’s too easy to wish them away:

– Electric cars are still too expensive and slow-charging to replace current technology.  This is a little like self-driving cars—the expectations have gotten ahead of the reality.

– Solar and wind may be cheap, but they’re not everywhere and not all the time.  For electric power generation that’s a problem.  In-network power storage is not up to the task of twenty-four hour operation.  With the current US grid, solar power in Arizona is not going to drive the rest of the country.

As an example, California’s aggressive deployment of solar electricity has forced external contracting to handle power peaks.  Currently the peaks are supplied by CO2-intensive fossil fuel plants in nearby states.

Local power generation can displace some residential and commercial demand, but at best that’s only 10% of the picture:

consumption-by-source-and-sector

– For heavy industry—steel and cement for example—CO2 production is not just a matter of power consumption, it’s intrinsic to the industrial processes.  There are no simple solutions to change that.  Flue-based carbon capture just has to get better.  (Direct air capture of CO2—despite much enthusiastic press—is even farther off.)

Prospects for fixing all of this are good, but we’ve got to buy time to get there.  That means taking steps with what we’ve got now.  Here are a few examples:

– We should think more about hybrid cars.  That’s increasingly cheaper technology, it saves considerable gas, and recent plug-in hybrids save more (perhaps leading even to upgradeable batteries).   The biggest problem with the technology is that, despite improving sales, we’re still not selling enough of it.  Initial carbon pricing should be aimed at universal hybrid penetration.  Tesla is great, but it’s not going to have a big enough impact now.

– Replacement of coal by gas saves 50% of CO2 production.  There aren’t always alternatives, for the reasons listed above.  Furthermore, lumping all fossil fuels together makes it easy to excuse coal.  When Germany and Japan closed nuclear plants, they didn’t go to gas, they went to coal.

While we’re currently seeing more growth of CO2 emissions with gas than with coal, it’s easy to draw the wrong conclusion.  Coal and oil still represent the vast part of CO2 production, and any replacement is a win.

s20_2019_Coal_Oil_Gas_Cement

– Carbon capture is unavoidable.  The first focus is on flue-based technologies, even if direct air capture is sexier.  This needs real money, because the industrial sector is huge worldwide.

To those items we should add one more difficult bit of reality:  the US needs a vastly improved national electric power network as a near-term prerequisite for much future work.  That means more high-voltage power interconnections.  That in turn means dealing with environmental issues and protection for the poorer neighborhoods that normally bear the brunt of such things.  One way or another this has to be made to happen, even though it involves competing concerns.

All of this underlines the need for a real plan—with both domestic and international aspects.  That needs to be a step-by-step prescription for what we should do about climate change.  That is what money needs to be spent on what technologies when and where.  For all their strengths, neither the Green New Deal nor the CCL’s carbon pricing is anything like a comprehensive plan.

Carbon pricing in particular remains a source of considerable confusion.  Since it is a critical component, we end with a few comments to avoid misunderstanding.

– Carbon pricing has to be a clear signal to industry of where the world is going.  It may start relatively low (as we’ve just discussed), but planned increases must send the message that the fossil fuel world is ending.  We need to get to at least $100 a ton in 5-10 years.  As such, proposals of $40 a ton with only nominal increases (coming from oil industry sources among others) are dead on arrival.  Carbon pricing is not good or bad in the abstract; it’s good or bad based on the numbers.

– Carbon pricing is not a tax, it’s killing a silent subsidy.  Carbon in the atmosphere costs all of us money in current and future climate change disasters.  Keeping it free represents an annual subsidy to the fossil fuel industry in the US of approximately $1T yearly (lower numbers are based on flawed cost models and just plain wrong).  That huge perversion of the economy has to end.  The money belongs to the public; it’s not there for the taking.  It needs to be given back in a way that mitigates the regressive effect of higher oil prices.  If we need more money for climate change or anything else, that needs to be done through the tax and budgeting system.  That’s where we make decisions about who pays.

– Carbon pricing will not solve all problems.  Government has many active roles to play, for example in putting together the new national electric power infrastructure that will be critical for progress.  Also government will need to address the enormous social consequences of remaking the economy.  We need to have carbon pricing to prevent perversion of the economy, but it’s only one element in a comprehensive plan.

 

The True Cost of CO2

It seems perfectly reasonable.  Each ton of CO2 added to the atmosphere causes damage.  We can estimate that damage by looking at what’s happening.

The Obama administration went through that exercise in some detail to justify environmental protection measures—and came up with $42 per ton.  The Trump administration people reduced that number to less than $7 and increased the future discounting factor from 3% to 7%.  That’s certainly a problem.

However the $42 figure is also wrong, and the whole notion of a dollar cost of CO2 undermines much of the discussion of the costs of climate change.

One way to see that is to look at the language we use to talk about hurricanes.  For starters I’m going to reference the usual storm class definitions:

hurricanes

As the wind speed increases, the damage rises by orders of magnitude.   At each stage the damage rises to such a degree that damage at the previous level becomes negligible.  There is no single number that tells you how much extra damage you’re going to get from a 5 mph increase in wind speed—it gets dramatically worse with each stage.  This is basically an exponential model; it is certainly not multiplication of windspeed by a number appropriate for category 1.

You can see how this argument plays with climate.  Starting with hurricanes, we have a basically linear relation of CO2 concentration and water surface temperature:

sea-surface-temp-download1-2016

And essentially the same is true for water surface temperature and maximum windspeeds. To that gets added the exponential relation of windspeed with damage.  Put it all that together and you get an exponential relationship between added CO2 and hurricane damage.

The same kind of relationship holds for almost any kind of climate damage you can think of.  Sea level rise first affects marginal districts but then more and more of mainstream society.  Droughts first affect marginal areas and gradually more and more of the breadbasket.  Health threats first affect the most vulnerable but eventually everyone.   Accelerating costs are the rule, not the exception.

How does this affect how we think about costs of climate change?  In fact we’re missing most of the damage.  The cost of a ton of carbon today has two components:  the costs that we measure today and the extra damage incurred by raising the CO2 level for all subsequent tons of CO2.  That second part is what you won’t get with any fixed value for the cost of CO2.  It may be harder to calculate, but it’s ultimately the main thing—because it’s adding CO2 that gets us to catastrophe.  We’re missing the step-ups in the hurricane example.

There’s a weird dichotomy between the science and the cost models.  On one hand we have scientific studies about truly catastrophic consequences of going beyond a global temperature increase of 1.5 degree C—even to 2.0 degrees C—and on the other hand we have the fixed value of $42 per ton.  In the second case we’re not charged for contributing to glacial melting that can’t be stopped before inundating both Bangladesh and Manhattan.  It’s beyond ludicrous that we’re applying discounting factors to future costs but not charging for the long-term consequences of that ton of CO2 that remains in the atmosphere!

For now the only viable number for the cost of a ton of CO2 in the atmosphere is actually how much it will cost to take it back out.  That number is currently about $1000 a ton. There are many people trying to do better; the current (undoubtedly overoptimistic) estimate is about $150 per ton.  That’s the lower bound.

Believe the scientists.  A catastrophe is a catastrophe.  You can’t make it go away with cost models that sweep it all under the rug.

The Coronavirus and the Limits of Capitalism

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“Lankenau Hospital” by Montgomery County Planning Commission licensed under CC BY-SA 2.0

It’s easy to look at the coronavirus as a one of a kind.  After all, who expected this cataclysm that came from nowhere?   How could anyone have predicted it?

In fact the world is full of low-probability events that you have to care about.   The coronavirus is on a par with airplane crashes and oil-rig explosions.  Capitalism is not good at dealing with any of them.

There’s a myth about that sort of thing.  Of course we don’t need airline or aircraft regulation, because the companies in question know what a disaster would mean and will take care that such things don’t happen.  That’s a nice story, but it’s false.   People don’t get promoted because of events that didn’t happen.  They do get promoted by saving money wasted on something that’s never going to occur.

If you’re going to stop that sort of thing from happening, you need a different mindset.  Government has to spend money on regulation and public health and safe, comprehensive infrastructure.   No one else is going to do it.  We now know unequivocally that we decided we didn’t have to care about the CDC.  It has come back to haunt us.  There’s more where that came from.

In fact there’s a whole bunch of other things we’ve decided we don’t have to care about.  After all, “I don’t have to care” has been the liberating elixir of our age.  Many of these we’ve talked about before, but it’s worth recalling some here:

Climate change

Avoiding a depression (clearly relevant now)

Nuclear proliferation

Losing our edge in science and technology

We’ve washed our hands of all of this, blithely punting to a private sector that is no more prepared than for the coronavirus.

The message from the coronavirus is that bad things really can happen, no matter how much we may want to avoid thinking about them.

The coronavirus is the canary in the mine.   We’ll get over it somehow, but we’ve had our warning.

The Next 5G

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The scandal of the mobile 5G affair is not that the Europeans refused to give in to Trump administration pressure to cease all purchases from Huawei.  Who knows how bad the security issue is—the Trump people have no specific examples—but the main point is that we have no alternatives to propose.  We dropped the ball.  That’s the scandal.

The scandal is real.  Not only are there no 5G infrastructure products to recommend, but deployment of 5G equipment in our own networks is well-behind other countries.  (The TV ads for 5G are for limited and pre-standard implementations.)  That means we will be similarly late with the 5G applications that should be our bread and butter.  That’s an infrastructure problem.  Government is not doing its job.

This is happening all over the place.  Climate change is an obvious example.  The US has singularly low gasoline prices and no thought of carbon pricing.  For the auto industry we’re even rolling back fuel efficiency standards.  We’ve created an environment where US companies cannot use the US market to achieve world status.  Tesla—our shining light in this area—is the exception that proves the rule:  created with Obama seed capital and almost forced out of business.  The Chevy Bolt is a South Korean technology product.  China is already building a 21st century electrical backbone.  It’s all a great big 5G.

We ourselves have proved over and over again that government needs to lead—before there’s profit to be had.  Sure we’re now funding AI, but that’s late in the game.  By contrast the Energy Department research budget is nowhere near what’s needed:  next year—for the first time—we are funding work on in-network electrical power storage.  Research universities were specifically hit by Trump’s 2017 tax plan.

Dominant countries have a tendency to believe their position was given by God.  (My favorite example is the 17th century Brits who wasted fortunes looking for gold in South America, because they couldn’t believe God would have given it all to the Spanish!)  It’s all too easy to get complacent, and with the ever-more-powerful Evangelicals it’s even doctrine.  In the current technology environment, our ascendance could disappear in a heartbeat.  We’ve got to stop believing in our divine anointment (and also stop counting our aircraft carriers on defense).

Our business-minded leaders need a business metaphor.  As a country we’ve gotten ourselves stuck in a harvesting strategy—with all the benefits flowing (literally!) straight to the investors.   We’d better get back to reinvesting for growth.