The One Million Covid Victims Have a Message

At least half of these deaths were due to deliberate misinformation from political interests calling the whole pandemic a left-wing plot.  For month after month the most popular story in the Wall Street Journal was the latest reason why there was really nothing going on:  it was just like normal flu; it was worst in New York because it was only in disgusting cities full of disgusting people.

Everyone in the country suffered, including very many who bought into the party line because they thought the propagandists were on their side.  Since vaccines were coming, deaths delayed could be deaths avoided. What’s worse, almost of half the people who died were unvaccinated when they could have been, convinced by the arguments of people like the Fox hosts-who were actually vaccinated for themselves.

This Covid story is unfortunately typical of what’s happening in this country.  The “populists” are the Kochs and the Mercers and the Thiels—people with the money to fill newspapers with issues they don’t care about (abortion, guns) so they can ride them all the way to the bank.  The only major piece of legislation passed in the Trump years was the monumental tax cut for the rich.  As with Covid, the supporters drawn in with identity issues are the ones who will suffer—in jobs, healthcare, education, climate, you name it.

Taking this one step further, it is worth noting that the damage with Covid was not from action but from inaction.  Most of the endless discussions of our fractured political system are missing the point.  The country is ungovernable because they want it that way.  If government can’t act, the powers that be are running things.  As Steve Bannon put it, all we need to do is create chaos. 

This story isn’t complicated, just lost in the cacophony of bought media.

The Climate Argument Against Gas for Europe is Counterproductive Nonsense

There have been many articles about how the plans to provide US natural gas to Europe will undermine progress on climate.  This is a false conflict between climate progress and support to Ukraine.

First of all there is a timeframe difference.  What matters for Ukraine is a show of Western resolve now.  Even a year from now the situation in Ukraine will hopefully be different.  It’s going to take at least that long for much to happen with natural gas terminals here or elsewhere.  There is no reason to undermine the support for Ukraine now.  

Second the argument that anything we build will be used for years afterwards—however frequently it is made—is wrong.  Terminals will be used as long as there is demand for their capacity.   If Europe, for whatever reason, weans itself off natural gas, then those terminals will not be used even if we want them to be.

Third the gas to be provided by the agreement is both insufficient and expensive.  We would only be providing one third of the current demand and the pricing is expected to be twice what is currently paid.  The agreement in fact provides a very strong incentive for the Europeans to get themselves off natural gas.

People who fight this agreement on climate grounds are doing no cause a favor.

A Serious Climate Scenario

It seems to me more important than ever that we think about real scenarios for dealing with climate change.  There’s so much religion here that we can be missing the boat.  I’m going to take an extreme position in this piece, both because I think it should be on the table and because I think it’s more likely than a lot of what is taken for granted. 

I believe that fusion is going to work and be deployable in about the next ten years.  We’re going to know quite soon where that stands.  Both the Commonwealth Fusion people and Helion (among others) plan to generate net positive energy by 2025. There are also regularly new developments: more powerful magnets, longer plasma retension times, higher energies attained, even AI-based methods for controlling stability of reactor plasmas.  Higher temperature superconductors have been game-changers.  It is time to be serious about fusion.

The consequence is that we are entering (in the relatively near term) into an era not of energy scarcity but of energy abundance.  That’s not just a matter of fusion—solar, wind, and better in-network storage also contribute—but fusion represents real abundance. That’s a different mindset with different conclusions than most of what gets discussed.  I’ve argued earlier that it’s the proper mindset for the long-term, because it is the only serious way to address our worldwide problems.  The difference is that progress in fusion has been such that we can move that indefinite future to the nearer term.

With that point of view, we can view the response to climate change as two distinct issues:

– Keeping things from getting too bad in the interim while the new energy sources get up to speed.

– Deploying abundant energy to combat climate change.

It’s important to look at the second issue first, because the first (assuming we can solve it) is temporary.  The architecture for the second issue is relatively straightforward.   We’re going to have generation stations of significant size with high-capacity interconnection for distribution to users.   Electricity will be the basic form in which energy is delivered, but we’re going to have to deal with significant applications (industrial processes, air travel) where electricity itself is not the answer.  For such applications we’ll need ways to convert electricity to other forms of energy.  That may involve using electricity to make hydrogen or using electricity to achieve climate neutrality by pulling carbon dioxide out of the atmosphere for synthetic fuels. (It’s interesting that carbon capture has value even without large-scale CO2 storage.)

The most important conclusion is straightforward:  we’re going to have to vastly increase and improve the facilities to generate and distribute electricity!  That is job number one and the most essential thing to be spending money on.  Existing technology will contribute to but not solve that problem.  We also need to figure out how to move everything that isn’t currently electric onto that network.  Note that ultimately it is much less important how efficiently we use electricity than that electricity is what’s used.  We’re not getting rid of air conditioners, and we’re not making sure that every electric hot water heater has a heat pump.

As to how we’re going to survive until then, the most important message is that survival means focusing on heavy hitters.  It is not the case that every little bit helps.  I’ve given this chart before for energy use in the US:

The key sectors are transportation, industrial, and electric power—not residential.  Electric cars are clearly an important contributing technology, but even they are only an infrastructure investment until the underlying power plants are converted.

For the rest of the world, the corresponding charts can be quite different, often tilted toward industrial uses. Focusing exclusively on the US distorts the issue.   We have to get world CO2 emissions down overall, regardless of where it comes from.  This is not a question of “every country needs to do its part”.  It’s a question of the most effective way to get the CO2 total down fast

We have to think about where all the sources are and how to get at them.  Carbon pricing schemes such as CCL are particularly helpful because of their wide impact. In this country a simple calculation tells you that the current annual subsidy to fossil fuel interests is about a trillion dollars, so we’re a long way from a rational economy. Putting solar panels on suburban roof tops—however useful—is not commensurate with the problem.  Furthermore, as the following chart indicates, we rich countries need to get used to the idea of helping the others in a big way or the job will never get done!

s11_2018_Projections

As the latest IPCC report (2/28/2022) put it: “Rich governments must quickly and dramatically scale up the level of adaptation finance for low-income countries.”

Or else—there’s no getting around it—we’ll end up stuck with geoengineering and hope for the best.  Simply stated (for those who haven’t heard) geoengineering delays global warming by filling the atmosphere with chemicals that put the whole world in shade. That can stop most (but not all) aspects of climate change, but with many known and unknown risks. 

It’s hard to come to a proper judgment of geoengineering. On one hand, it’s exceedingly scary to start messing with the whole world’s atmosphere, but on the other hand we don’t yet have all the technologies we need and we’ve been slow to deploy the ones we do have, so we may well need to be buying time. One can argue that geoengineering reduces the motivation for alternative energy progress, but that work today seems to have its own motivation. So in the end there is nothing immoral about geoengineering, and we may have to use it.  But given the risks and the fact that all that extra CO2 has to come out before we can quit, we had better do as little of it as possible. (These systems require regular replenishing, so turning them off isn’t a big issue; getting rid of the extra carbon dioxide is.)

You might wonder at this point why we brought up geoenginerring instead of the much-discussed topic of carbon capture? There’s a good reason. Despite all of the publicity around it, there’s no near-term silver bullet with carbon capture. For the yearly CO2 production in the US we would need huge infrastructure of processing plants full of giant fans—a multi-trillion dollar project using enormous amounts of energy to build and run it. And that’s before you even start to talk about where to put the output. The main reason carbon capture has such prominence is that it plays to the fossil fuel companies’ delaying tactics—if we can get rid of the carbon dioxide later, why worry about creating it now? Carbon capture is a project of energy abundance, AFTER we have somehow managed to survive. Going forward, unburning everything you burn is only sensible in particular application areas (e.g. air travel) where there is nothing else to be done.

Climate change unavoidably means a huge, expensive project—which is why it is important to be clear about what we’re doing.  As general principles, conservation for conservation’s sake is wrong, a focus on local issues is wrong, and an exclusive focus on current technology is wrong.  What’s right is to recognize that the future requires an electrical infrastructure capable of driving everything and that in the near-term we have to avoid distractions and focus on heavy hitters—worldwide—to keep from going over the edge.  Near-term and long-term projects are not necessarily the same. Finally we should realize that despite our current concerns, we are actually moving toward a period of abundant energy with enormous benefits for all—if we can stop fighting over the pieces of a pie that will become much bigger.

As an analogy I remember the early days of voice over IP networks, where the whole focus was how we would ever meet the realtime performance needs of speech.  It wasn’t so many years later that those same networks were handling realtime video to hundreds of millions of people worldwide—and voice was an almost invisible blip.   That’s the kind of transformation we’re talking about.  Limitless clean energy will change the world.

Ukraine in Our Future

The dangers in Ukraine are enough to make one wonder about the current world order.  We’d like to believe that it’s beyond the pale for one country to invade and take over another on the flimsiest of pretexts.  Despite some current rhetoric, Crimea was not that:  it had been an essential part of the Russian military infrastructure for centuries.  Ukraine is different—what does it mean?

Regardless of how the Ukraine affair ends, the change it signifies is enormous.  In the wake of the horrors of World War II, the US as remaining unscathed power helped put together a system of rules and organizations aimed at preventing another one.  The idea was to prevent economic collapse and to resolve conflicts before they became wars.  We got a UN, an IMF, and rules to govern international trade.  The result was an extended period of world prosperity.  The communist bloc stood outside all of that, but even in the days of the Cold War overt seizures of other countries were avoided.

Over the intervening years much of that liberal economic system remained, even as the world became much more complicated.   Standards for permitted behavior lived on.   In some sense, the Paris climate agreement was a kind of last hurrah.  There was no enforcement mechanism, but the idea was that unanimity would shame the cheaters into compliance.

Trump broke that idea in a way that only an American President could.  He asserted that there was no reason to obey any of those (US-initiated) international rules, and he got away with it.  Until Trump people cared about WTO trade rules, climate progress, and democracy worldwide.  Now essentially all of that is off the table.  And the powerlessness behind many international institutions has been laid bare.  If Putin decides to invade Ukraine, we’re in a world where the only consequences are the ones we manufacture for the event.  The UN is manifestly irrelevant. Shaming has no force. There are no rules, and your friends can cover for you.  It’s just the way things are. Military threats can be the first not the last of options.

This is a problem generally and for us in particular. Under Trump we developed adversarial relationships with just about everyone, with the view that they were all against us, and we had to show who’s boss. That limits our power. Most serious is what happened with China. Xi may be a megalomaniac and an autocrat, but we empowered Chinese hardliners and contributed to his nationalistic program by delivering threats echoing the imperialist past. When Trump said he would destroy the Chinese economy they took it seriously. The newly-revived alliance with Russia—a thorn in our side for Ukraine—was at least in part our own doing.

We have replaced our successful efforts for peace and stability with a new world view where we need no one, and any constraint on our ability to act is unacceptable. It’s easy to say (and many do say) so much the better. Every country needs to stand up for itself, and all of that international stuff just gets in the way. That’s an appealing slogan. It wasn’t just Trump’s line; it was behind Brexit and all the populist movements of the both the left and the right. However we’re not the only ones playing that game. That “freedom” is a freedom for any country to do anything, and the Ukraine affair is an early indicator of where that goes. We seem to have forgotten World War II and the Depression, and that’s just for starters.

Our own history gives an excellent example of what happens. That ocurred after the American Revolution, under the so-called Articles of Confederation.  It took only a few years for the American states that had fought the British together to be at each other’s throats, torpedoing economic progress for everyone.  Things got so bad that the states had no choice but to give up power to a new Constitution and a national government.  In Europe there were centuries of wars that only ended when cooperation became manditory in the post World War II recovery.

It’s a fact that the liberal economic system has gotten a bad name in this country—”Bill Clinton let China in the WTO and there was nothing we could do about the Chinese assault on American jobs”—but that universally-repeated story is false. (It’s one example of what you might call bipartisan revisionist history—the left and right united against the center!)  The main issue raised with China’s behavior has always been currency manipulation, which was in no way permitted under WTO rules.  And as the following job loss chart makes clear, the loss of American jobs was 100% a phenomenon of the George W. Bush presidency:

That’s no accident.  The radical neocons had us preoccupied with fighting a $3T war, and the same deregulation mania that produced the 2008 crash had us actually encouraging outsourcing abroad.  For the business-friendly Bush people cheap off shore labor was good. All subsequent efforts to help the people hurt by that process were blocked by Congressional Republicans bent on sowing dissatisfaction ahead of the 2016 election.  The liberal order conspiracy is a convenent fiction for both the right (to cover its tracks) and the left (to attack the center).

If we’re going to avoid economic and even potentially military disaster, we’ve got to get past the electoral propaganda and understand what we’ve done right and wrong.  In particular we’ve got to wean ourselves from the siren-call of nationalism.  We’re not going to “win” the future, but we can certainly all lose it.   The real challenge is getting internationalism right, so that everyone has a stake in the action.  We built unprecedented peace and prosperity after World War II.   That job needs to be done again before we give it all up—in a way that has happened many times before. Both prosperity and peace are in question.

One important lesson of history is that economics precedes politics.  The EU, for all its imperfections, is a vast improvement over centuries of status quo.   What got that going was a step-by-step economic union, long before there was anything political on the table.  In that sense, strangely enough, you can argue that the WTO is more important than the UN.  Getting the WTO back on track is going to take considerable doing, but it has to happen. And perhaps climate change can yield an appropriate model.

Climate change is an unusual situation in that practically every country has veto power of the result.  We all share the same atmosphere, and the CO2 concentration is only controlled when everyone cooperates.  So the solution has to get a buy-in from everyone, rich countries and poor.  In fact it can only work when rich countries recognize that—like it or not—they’re going to have to help the poor ones.  Everyone will have to get used to the idea of an international project where the focus is less on who gets the best deal than on whether it delivers the necessary benefit for all.

A functioning WTO is a similar balancing act.  As starting point there is one basic reality to be acknowledged:  self-sufficiency is not a desirable or realizable goal even for large countries.  Despite all the discussion of the evil Chinese, we would be vastly worse off if they just went away.  Just in general, we are not always going to be the best at making everything, and our own industry will be crippled if we can’t build on what’s best.

Furthermore discussions of self-sufficiency tend to include a strong dose of the always-dangerous delusion “my people aren’t like that.”  In fact domestic manufacture does not guarantee availability, quality, price, or appropriate technology.  The single worst problem during the first stage of the Covid crisis was a lack of testing equipment—because the American manufacturer with a CDC contract to produce the tests had decided they could make more money doing something else.  Similarly, self-sufficiency can do little to guarantee the well-being of the national workforce, as there is no substitute for government dealing with all relevant labor issues. Trade is more like climate change than it seems—it’s something we’ve got to make work.

The balancing act is in the many factors that have to be taken into account for fair trade:  labor conditions, environmental rules, government involvement, and so forth.  Those are both impediments and opportunities—they make the negotiations harder, but they are also leverage opportunities for a better world.  Elizabeth Warren in her Presidential campaign made a long list of items she wanted to make as preconditions for trade with the US.  Her standards were very high—it was pointed out at the time that no country met them—but her list was an indication of potential opportunities. Also, it is important that these rules should apply to everyone—including to us.

What this comes down to is that globalization, despite the rhetoric, is only anti-labor if we make it so—which is precisely what happened under George Bush. Instead of using it to establish worldwide labor standards, we used it deliberately to undermine workers everywhere. In other words thus far we’ve had globalization exclusively for the rich. If we don’t step in to control it, it will stay that way—populist movements or not. And if we don’t start learning how to create a world order for the benefit of humanity, no amount of national chest-beating will save us.

The Ukraine affair is dangerous in its own right, but even more dangerous as a symbol of a world out of control.  What the world needs now is neither uncontrolled chaos nor world government, but a set of mutually-agreed rules to forestall a fight to the bottom.  As with climate change, there is no way out other than to acknowledge we are now one interconnected world, and we will all either stand or fall together.

China in the World Order

With China it’s unsettling enough that for the first time since the end of World War II our worldwide hegemony is under challenge.  However that’s just the beginning.  As we’ll see, that change is coupled with technological and economic factors that intensify both risks and upsides.

We need first to be clear that the challenge of China is real.  We have had other challenges in the past, most notably from the USSR, but none have had the economic might to back them up. This time we’re talking about an economy that by some measures is already larger than ours.  Those others look puny in retrospect, although the Russian collapse is dangerously seductive.  According to Bob Woodward, the Trump people were convinced that China was just like Russia, and the trade wars would cause a complete collapse in the same way.  When Xi said that the US is the barrier to Chinese national success, he was just restating Trump’s declaration that he would destroy the Chinese economy.  That of course didn’t happen, and the result was a policy that ultimately produced nothing.  Whether we like it or not, we simply don’t have that power.  The Chinese are not going away as an economic, technological, and military force.

At the same time it is equally important not to get hysterical about Chinese competition.  It’s strange how we periodically become obsessed with the idea that some centrally-organized economic system is going to leapfrog us by running things in a way that we can’t.  That happened in the fifties with the USSR (hard to imagine now) and in the eighties with Japan.  In reality the US economy succeeded by reinventing itself many times over, in a way that others did not.   For China, it is historical fact that state-run enterprises have been corrupt disasters, and the current economic miracle got its impetus from an unintended burst of local free enterprise.  Xi’s consolidation of control is no miracle cure.  China is a competitor with strengths and weaknesses. As one recent paper put it, China is not ten feet tall.

If we play to our own strengths, the worry is not that we’re going to be outcompeted by the Chinese (or undermined by Chinese stealing our secrets). It’s that we won’t succeed in creating a workable framework for international competition, and we’ll all lose.

Risks

We begin with the most basic of risks.  We’ve now had many years of Pax Americana, and people forget that history shows that world-power peace is the exception—not the rule.

The reason we’ve had peace is not human progress, international institutions, or even the rise of democracy.  It’s the threat of mutually-assured destruction.  And however much we may want to believe that all-out war is obsolete, that’s in fact a technology issue.

We can be specific.  Much has been written recently about hypersonic missiles, that would fly low at many times the speed of sound and be virtually impossible to detect by radar.  That sounds like a whole new arms race, but there’s actually no point to it so long as the balance of terror remains intact.  That we’re talking about it at all means we’re not so sure.  Reagan’s old “star wars” anti-missile shield was never more than an electoral fantasy, but now there’s plenty of current technology that’s relevant:  networks of satellites for detection, AI for decision-making, precision targeting for lasers.  China already has a nominally-defensive, satellite-linked system that enables ballistic missiles to be used against moving targets (e.g. US carriers in the South China Sea).  

A missile shield would be enormously destabilizing—North Korea could defeat the US in minutes.  (It’s interesting that as long as the system was going to be ours, we never thought seriously about what it meant!)  Who knows when or if something similar could be real.  However the world has been surprised many times by revolutionary changes in the technology of war (Vikings, Mongols, gunpowder, nuclear weapons).

We can’t assume peace; we can’t dictate the world order; we can’t wish away the image of a world trapped in a ruinous and deadly competition for dominance.  An encouraging fact is that everyone is much better off not living in such a world.  However for now we’ve chosen to divide the world into no-holds-barred competing camps.  Avoiding that division requires an act of creation—establishing a workable framework for cooperation and competition.  There are many examples of countries that failed such a challenge with disastrous consequences.   That’s our challenge here.

Making Progress

The first step to progress is to recognize that just as the risks today are higher than one might think, the potential rewards are also.  There’s actually quite a lot to say about the upside, although in the last decades it has been hard to see.

Why is that?   To repeat the obvious, the working classes in the West have been hit by two simultaneous body blows:  globalization and technology.  The result was dramatic, as shown by the following chart

Globalization has been going on forever, but China’s sudden economic development produced a major hit.  For technology the effects have been not only dramatic but accelerating.  Thomas Philippon’s recent book has a chart comparing highest valuation companies over the past six decades.  For the decade of the 1970’s the five highest valuation companies collectively were responsible for 2.4% of total employment.  For the decade of the 2010 the corresponding figure was down to .4%.  The bedrock upwardly-mobile manufacturing jobs are going away, as we continue toward a world where highly-skilled product development is the issue, and production is not.  That’s true for obvious software enterprises like Facebook, but also for pharmaceuticals, integrated circuits, and many other areas. And it’s getting worse.  AI puts a whole new class of jobs at risk, and electric cars (for example) will be much simpler in both manufacturing and maintenance. 

Thus far it has been convenient to blame everything on China, with the consequence that both political parties are promising to bring back the good old days once we stare down the evil Chinese.  (On the left  a 2018 paper by Susan Houseman is cited everywhere to support this position, though it’s actually about weakness in the US manufacturing sector!)  That mindset is dangerous on two grounds:  it’s a kind of scapegoating that gets in the way of rational action, and it obscures other serious problems that need to be addressed.  To get past that we need to discuss national prosperity and population welfare as separate issues.

National Prosperity

For prosperity the key point is that China has actually turned a corner in its effect on the rest of the world.  Although in aggregate terms China remains a very poor country (number 108 in per capita income, far below Mexico for example), the country is so large that its new middle class now buys enough to be a positive driver for the rest of the world economy.  Even with the current market access restrictions, China is the largest national market for Mercedes-Benz and a major market for film industries from everywhere.  The balance of payments deficit was reduced by half under Obama.  For the EU, more export-oriented than we are, the effect is even more pronounced.  (Intellectual property theft was also down under Obama.)

What this means is that, as opposed to the situation in the past, China has the potential for transforming itself from a drain on the world economy—producing more than it consumes—to the opposite.  Raising the living standards for a billion people is an enterprise with potentially many benefits for everyone concerned.  Nothing says that’s going to happen, but the difference is real.  The current situation is no longer dictated by the poverty of China, it is instead an expression of the relationship with China as it stands.  How do we make things better?  Well, if we want China to play by the rules, we need better rules.  As for motivation, growth in the West means growth for them (and, whether we like it or not, success for the ruling party).

The precondition for progress is establishing appropriate conditions for trade, that is to say a notion of fair trade which is comprehensive and up-to-date.  The comprehensive part means we need to cover many items that are not currently included, including labor conditions, environmental issues, international standards for taxation.  There is the potential for trade policy to become a vehicle for raising living standards worldwide.  Stated simply, we’ve had globalization for the rich; we need globalization for everyone else

There are of course no guarantees.  Some elements, such as environmental issues, may be clear areas of common interest.  Labor conditions will be more difficult.  Details of market access will need to be worked out.  It’s important to have everything on the table.  It is particularly important that these are not rules imposed by us on others but norms of behavior for everyone in a common enterprise.

That difference is important in any kind of negotiation, but it is of particular importance for China.  We don’t talk much about it, but China experienced some of the worst of Western imperialism extending well into the 20th century.  That shared history makes Xi’s nationalism easy.  If we want to get what we want, the last thing we should be doing is pretending it’s still true.

What Trade Rules Won’t Fix

Just as China wasn’t responsible for all problems, fixing China (even in the best case) won’t fix everything.  Two points in particular should be emphasized.  First, the kind of national prosperity we’ve been discussing thus far says little about personal welfare.  People are still going to lose jobs both from ever-accelerating technology changes as well as remaining international competition—regardless of fairness.  We’ll still be stuck with the prevailing inequality in society.   We’ll still have all of the dislocations that will result from the economic transformations with climate change.  Those are our domestic problems to solve. 

Blaming China has made it possible to ignore that reality.  Until recently in fact the prevailing ideology was that there is no additional problem of population welfare—the private sector would do it all.  So for loss of good jobs the only issue was globalization, and the only means to address it were tariffs and tax cuts.  Four years of a deficit-funded bubble with huge tax cuts to business did almost nothing for real wages or upward mobility.

Currently there are outlines of a solution.  Particularly with the transitions required by climate change, there is no shortage of work.  With the increases in corporate profit margins and high-end incomes there is no shortage of money—but workable taxation is a big issue.  The public sector needs to put all that together:  to see that the necessary work gets done and the population is supported with a national infrastructure that includes education at all levels, healthcare, so forth.  It’s a work in progress.

The second point to make is that we have tacitly assumed we will maintain our national competitiveness.  While we can see what has been successful in the past, there is no guarantee it will continue in the future.   That isn’t theory.  We just spent four years fighting science, demonizing foreigners, and favoring existing companies over new entrants.  All of that hurts.  It’s our job to play to our strengths.

Parallels with Climate Change

With that we return to the first issue—national prosperity.  For that we want to stress parallels with what’s happening for climate change.

With climate change we’re also presented with a very strong common interest, but a non-trivial task in breaking that down according to individual national interests.  As a country we haven’t thought much about that, since the national dialog has been primarily about getting our own act together, with the assumption that all the others just have to do their jobs too.  However the reality of the situation is that we in the US have twice the per capita CO2 production of any other major emitter in the world,

and we in the West are almost 100% responsible for the level of CO2 currently in the atmosphere.  The vast portion of humanity is going to have to sacrifice for our benefit, and it’s non-trivial to define acceptable justice.

Nonetheless the Paris agreement shows that with good will it’s possible to make progress.  It will require continuing work, with more commitment from the developed world, and also with a mechanism for follow-through on commitments (in the absence of any such system today).  But thus far the strength of common interest seems motivation enough to keep it going.  It’s worth noting that the Montreal Protocol to ban CFC’s (and preserve the Ozone Layer)—one of the most successful efforts at international cooperation ever—also proceeded as a series of successively more demanding steps:

So it’s no surprise—and no cause for panic—that the current Paris goals don’t yet get as far as we need to go.

The parallel with China is precise.  To keep the world economy sane and growing, everyone needs a stake in the game.  In practice it needs to be negotiated between the West and China with at least some account taken of the interests of the rest of the world.  But the issue is less a resolution of differing national interests than a recognition of the magnitude of common interest.  One can even argue that the climate discussions are a necessary prelude to the broader economic discussions that need to take place.

The WTO seems the appropriate vehicle for negotiations, although its capabilities need to be extended to deal with the broader definition of fair trade. Before Trump’s election all parties expected such discussions would begin—including of China’s continuing special status as a developing country.  Instead we got a repudiation of all international rules, in favor of an imagined omnipotent USA.  We’re now going back to the game with the doubled leverage of allies beside us, but with an adversary who views us (particularly after January 6) as weaker and less reliable.  What’s more we’ve spent four years strengthening the militant anti-western side of the Chinese Communist Party.  Certainly there’s a job to do.

It may seem strange to put such emphasis on the WTO since “Bill Clinton let China in the WTO and there was nothing we could do about the Chinese assault on American jobs.”   That truism is actually an example (among others) of what you might call bipartisan revisionist history (the left and right united against the center).  In fact the main issue raised with China’s behavior has always been currency manipulation, which was in no way permitted under WTO rules.  And as the job loss chart (from earlier) makes clear, the loss of American jobs was a phenomenon of the George W. Bush presidency—when we were too busy with the Iraq war and the financial crisis to press our case about anything else.  The WTO is what we make of it; the vast majority of US WTO cases have in fact succeeded.  For now it’s the best game in town.

Issues for Today

As a last topic, we want to be clear that we are in no way minimizing the seriousness of the immediate issues that divide the US and China.  One short list makes that clear:

– Taiwan

– Uighurs

– Hong Kong

– Islands in the South China Sea

– Regime-incited nationalism

The first point deserves special comment, because it shows how high the stakes can be.  On one side it is a matter of Chinese national pride, instilled by state propaganda for every school child.   On the other it is not only a matter of US national commitment, it’s also critically strategic.  As one example, Taiwan is the home of TSMC—the worldwide leader in IC manufacturing technology.  Every new iPhone has an TSMC processor.  (This example also shows we can’t solve global supply chain issues by just assuming we’ll bring it all home!)

Other articles have talked about scenarios for de-escalating this complicated situation.  We’re not going to go through those here, but it is nonetheless worth saying a few words about how each of the issues fits with the strategies we’ve just discussed.

The Uighurs and Hong Kong are issues that the Chinese view as internal matters.  Outside of China we can attempt to exert pressure by economic threats, but we’re in no position to change that point of view.  Four years’ worth of dictates have instead made it worse–a matter of sovereignty versus capitulation.  Ideally by bringing China into a broader realm of international standards for behavior, we can attempt to make both—and particularly the Uighurs—a different class of issue:  what it means to belong to the international order.  Hong Kong is the harder issue, because the threat to the national control is bigger.  However it’s easier to think about compromise once the sovereignty isn’t the main story.

The South China Sea is a national security question.  More than two-thirds of Chinese trade comes via the South China Sea.  China, like us, wants complete control of its immediate strategic environment.  We after all have the Monroe Doctrine.  Thus far we’ve taken the worst possible approach, asserting US control of the seas for any purpose we choose.  That’s going to be hard to walk back, but the only way to do it is by making freedom of the seas a matter outside of national whim, perhaps linked to some kind of regional agreement.  It won’t be easy, but we can at least dial down some of the immediate pressure.

Regime-incited nationalism is the usual face of fascism.  We heighten it by continuing to act as an imperialist power—asserting that it is our decision whether to continue to allow Chinese economic development.  We have limited ability to change the issue, as it is a tool the regime uses to maintain its power.  However, the more contacts there are and the less rabid our own vocabulary, the better the chance to cool it.  It’s worth noting that in the Nazi era, most Germans justified Nazi aggression by a belief that Germany had been purposely shoved aside.

Finally we return to Taiwan.  The only thing you can say is that it’s clear how much the issue means for both sides.  If cooperation is necessary for continued prosperity, then both sides need to find a way to save face.  That’s what we were doing for decades.  Trump and Pompeo were part of the change, but it was probably happening on Chinese side anyway.  The only way out is to strengthen the motivation for sanity.  For that, common interest (with a united West) is always better than military threats.  Even today, the impediment to invasion is more economic than military.  International institutions strengthen both the carrot and the stick—you’re giving up more and making retaliation more comprehensive and certain.

All that being said, we end by again emphasizing the parallel with climate change.  Climate change is a pending catastrophe that is forcing the world to come together in a more closely-coordinated way than ever before.  As with climate change, the China-US relationship constitutes a critical issue that can only be resolved by strengthening international frameworks for both cooperation and competition.   The world can be a better place, or we’ll all face the consequences.

The Coronavirus Message for Climate

Since the coronavirus is at the top of everyone’s consciousness, there has been a lot written about what the coronavirus experience has to say on a great many issues.  After a while you start to get numb.  However for climate change the parallels are so explicit and telling that they need to be emphasized.  The argument in this piece is not new, but it’s worth spelling out in detail.

The coronavirus shows just how hard it is for us as a country—or as a world—to act ahead of a disaster even when the evidence is clear.  We were unprepared when the crisis came, because we just didn’t want to believe it could happen.  Our reluctance not to believe was of course encouraged by players (foreign and domestic) who felt there was something to be gained by delay.

The result is measured both by the numbers of dead and by the economic consequences of the drastic measures taken to stop the exponential growth of cases and deaths.  In the US that means on the order of 200,000 deaths and the worst job loss since the Great Depression.  The weeks of delay made this situation exponentially worse.  You can argue about the details, but there is no question that failure to act early cost us dearly on both counts.  We’ll muddle through, but badly wounded.

The parallels to climate change are explicit—but for climate the muddling through is no sure thing.  There are two primary points:

  1. CO2 in the atmosphere just adds up—which means that whatever problems finally force us to act will keep getting worse until we can manage to stop fossil fuels completely.  In other words from whatever time we recognize a crisis, we will be locked-in for many further years of worsening crisis.
  2. That’s even worse than it sounds because—as with epidemics—there is an exponential growth aspect here too.  To see this we can start with the example of hurricanes.  For hurricanes, the damages in the wind-speed categories are such that each step makes the previous look trivial.  In other words, as wind speed grows in a regular, linear way, damage goes up exponentially.

This isn’t just a matter of hurricanes; it’s typical for damage.  For floods you go from marginal areas affected to major cities.  In any category you can think of, damage goes up exponentially.  The bottom line is that for all those years of lock-in, every additional ton of carbon dioxide we add to the atmosphere will pack a wallop.  This is the stuff of nightmares.

The latest climate report gives us the timescale.  To avoid catastrophic consequences CO2 production needs to drop 45%  by 2030 and reach 0 by 2050.

We couldn’t get ourselves to believe the coronavirus would really happen, and climate disaster is even further from our past experience.  So the tendency to disbelieve is even stronger.

There are plenty of well-connected, interested players out to convince us to wait.  The oil companies and their allies are doing quite a good job of it.  Pence and Pompeo (among many others) are Koch organization soldiers in a Trump organization out to sabotage all efforts to control climate change.  Another indication of oil company power is Harvard University’s recent announcement of a commitment to fight climate change—by making their investment portfolio carbon-neutral starting in 2050, the year when the scientists say we need to be done!

That’s where we are.  Climate change is the coronavirus on a bigger scale.  It’s much more dangerous and with even more powerful forces out to convince us to wait, and wait, until it’s too late to matter anymore.  We’ve been warned.

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.  And even that low-ball estimate says we’re currently subsidizing the fossil fuel companies by about a trillion dollars a year.

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.