Climate Change is Not Complicated

The reason for this note is that discussions of climate change have splintered into so many directions that the subject appears more daunting than it ought to be.  Neither the current status nor the path to success is actually hard to see.

  1. Current status

– Evidence for climate change is clear and unambiguous.

The increase in global temperature levels goes back decades, as shown in the following chart (Temperature Anomaly just means the temperature increase over 19th century levels).

noaa_temp

Further the relation of temperature and CO2 in the atmosphere is unmistakable and pushing up inexorably with each year’s burned carbon toward the identified 1.5 ºC danger zone:

temp_ppm

Scientists have even demonstrated (using isotopes of carbon) that the increased carbon dioxide in the atmosphere is due to burning of fossil fuels, not some natural process.  Arguments to the contrary have been largely funded by the Koch organization or the oil companies themselves and typically involve doctored data.  Accusations of conspiracy have been debunked, but are still repeated by interested parties.

– Problems are already happening.

There are two kinds of examples.   For temperature alone, as the first chart showed, we’re continuing to set new records for average global temperature.   The effect on sea ice has been dramatic, and farmers are becoming well-aware of changes in growing seasons.

Individual catastrophic events are harder to pin down, just because it’s hard to develop statistics around rare events.  However, scientists have been able to work through the statistics to show the extent to which extraordinary storms, such as hurricane Harvey, were made worse by climate change.

– Role of climate models.

We don’t need climate models to say there is a problem.  We do need climate models to assess specifically what is going to happen.  For example, we can see that glaciers in Greenland and Antarctica are melting, but we need to figure out how quickly this can happen and what the effects will be on weather and ocean currents.  Since the earth hasn’t been here before (i.e. rapid C02 increase like this has never happened), we have to try to figure it out.

A particular concern is that climate change feeds on itself to accentuate the effects of CO2.  An example is melting of permafrost in the arctic.  That releases methane, which is also a greenhouse gas and adds to the increase expected with CO2.  Climate models are extremely detailed to deal with such effects.  The modeling work is supported by a global effort to get data on what is happening now.  This is a major effort by many independent researchers worldwide to get the best possible handle on what’s coming.

– It’s going to get a lot worse unless we start acting now.

An important fact to be emphasized is that carbon dioxide in the atmosphere just adds up.  So even if we stabilize global production of carbon dioxide, things will just get worse as we add to the total.  For a few years 2014-2016 it looked like CO2 production was stabilizing, but then the trend turned worse, and last year accelerated it.  Here is the current chart.

s09_2018_FossilFuel_and_Cement_emissions_1990

As we just noted, even a stable value of CO2 emission means things are getting worse, because it is the total amount of CO2 in the atmosphere that drives temperature change.  The stable value was attractive, because it seemed to indicate that CO2 had finally peaked and might start to decline.  And the decline might mean the total CO2 could be bounded.  We’re now back to worrying about the peak, with no idea how bad things will get.

Scientists have given us a so-called carbon budget—the maximum amount of CO2 we can add to the atmosphere and still escape dangerous, irreversible changes.  Every bit we add counts against the budget.  We have to find a way to get carbon dioxide production down toward zero, and things will continue getting worse until that happens.  According to the last international climate study, CO2 production needs to drop 45%  by 2030 and reach 0 by 2050 if we want to keep the temperature increase under 1.5 ºC.

– Can’t we just pull the carbon dioxide back out later?

There is currently a lot of work in progress on how to capture and store carbon dioxide.  For now, capturing carbon dioxide even in exhaust flues is expensive—it can double the cost of electricity from a coal power plant.  Pulling it out of the air is substantially harder.  Further some effects, like movement of glaciers, are hard to stop even if we pull out the carbon dioxide later.

Earliest use of this kind of technology would be for flue-based solutions in particular industries.  That’s getting cheaper, but it’s no miracle solution.  Large-scale pulling carbon out of the air is not yet available, and the cheapest estimates for a worldwide solution would cost on the order of 10 trillion dollars annually.  Nonetheless, current climate models assume that some use of this technology (expensive or not) will be needed if we are to keep the temperature increase under 1.5 ºC.

– What about geo-engineering?

This approach, which gets sporadic publicity, involves adding chemicals to the atmosphere to block the sun—cutting temperature by putting the whole world in the shade.  A number of different substances have been investigated to do this, and any of them would need to be constantly injected into the atmosphere under supervision by some international body.

As an approach this is much cheaper than carbon capture, but it is regarded as a dangerous last resort even by the people who do the research.  All photosynthesis worldwide would be affected. The closest natural phenomenon, the Mount Pinatubo volcanic eruption in 1991, resulted in a worldwide drought.  It does not address acidification of the oceans, which would continue to disrupt life in the seas.  Further it is a time bomb, as carbon dioxide concentrations would continue to build up, so that the shading and its effects would have to keep increasing, and any interruption would be catastrophic.

 

The bottom line is that there is no silver bullet here; we have to get off burning carbon.   However it’s worth pointing out that this is NOT a death sentence (as we’ll see) and it is also NOT committing us all to a grim world of scarcity.  Even today people buy Teslas because they like them—among other things they’re performance cars—not as sacrifices for the good of mankind.  That’s the right way think about the whole transition.

 

  1. What to do about it

To understand what we need to do about climate change, we first have to think about the kind of world we would be going toward.

A point worth emphasizing is that the future is electric.  If we’re getting off fossil fuels, we’re not going to have people burning stuff all over the place.  So we will be generating power by suitable technology (more on that in a minute), and electricity is the means of storing and distributing that energy.  All renewable sources today generate electricity as the common currency of power.

Since the electric grid is the core for what we need to do about energy, we have two primary tasks:  strengthening the electric grid and getting all users of energy on that grid.  Each needs to be discussed separately.

– Strengthening the electric grid

This is about generating and distributing power.   We of course need a grid that is reliable and safe, but for climate change we’ll need more.  There will have to be considerable growth in electrical power generation (since we’re taking on new roles), and we will want to optimize opportunities for renewables even in the near-term.

At present there are ongoing activities to strengthen our current patched-together national electric infrastructure, but these are long-term projects and not primarily driven by climate change.  Power generation is largely a per-state matter and is quite literally all over the map.  For climate change we have benefited from the near-term improvement of substituting natural gas for coal, but there are still many coal plants and nothing says we have optimized opportunities for renewables.  Ideally we should have a nation-wide plan for growth and modernization that would allow renewable power to be generated where appropriate and used wherever needed.

It’s also worth saying something about the longer-term picture.  Ultimately this is not a story about scarcity and conservation; it’s about alternative power.  Renewables will improve, and there will be other significant new sources of power.  Fusion power in particular has been slow to develop, but should be taken seriously.  It has had a recent impetus with higher-temperature superconductors (for the magnets that contain the fusion reaction), and current international projects target 2033 for a demo system and 2050 for commercial system deployment.  Initial systems will be heat-based, like conventional power plants, but later generation systems may generate electricity directly —a mind-boggling concept.  We have a near-term job to do in saving the planet, but there’s no reason to fear we will ultimately lack for power.

– Making electricity the universal power source

The point of departure here is the following chart showing energy use by sector and energy source.  Our task is a prioritized migration to renewably-generated electricity in all sectors, with the maximum possible bang for the near-term buck.  In this transportation is an obvious target. It is a large consumer of energy (28% of US energy usage) with negligible current penetration of renewables.  Electric cars can be a big win.

consumption-by-source-and-sector

Given the complexity of energy usage overall, the single most important step to encourage migration is to stop pretending that carbon dioxide production is free, i.e. to stop subsidizing the fossil fuel industry.

We can be pretty specific about what CO2 costs us.  We are rapidly reaching the point where each new ton of CO2 in the atomosphere is a ton that will have to be removed.  The cheapest estimates of what it takes to remove CO2 from the air (average of upper and lower bound estimates) is $163 per ton.  Multiply that by the US annual production of CO2 = 5.4 B tons, and the silent subsidy to the fossil fuel people falls out as $880 B annually.  That’s no small distortion of our economy.  Essentially a trillion dollars a year.

The usual approach to this subject goes by the name of a carbon tax, but that’s actually a misnomer.  A tax is money collected to fund some government activity, and that’s not the point here.   We’re stopping a government-funded subsidy of products that produce CO2, and any money raised should be used to mitigate the effect of fuel price increases on the population.

Because raising fossil fuel prices is regressive, balancing costs and benefits is tricky and has led to voter rejection (spurred by massive Koch campaign spending) of several carbon tax proposals.  (The yellow-vest protest in France was from something worse, a budget-balancing regressive tax masquerading as a climate measure.)  The magnitude of the silent subsidy is such that it is necessary to get this right.

One example proposal worth discussing is the Carbon Fee and Dividend from the Citizens Climate Lobby.  They start with a low fee of $15 per ton of generated CO2 at fuel production or port of entry, but raise the value $10 per year afterwards.  That money gets returned per adult with an added allowance for children.  The gradual increase is in part a low entry but it also allows for increasing maturity of competing technologies.

That proposal is now a bill in Congress, and there was a recent endorsement by a number of economists and other public figures.  It may or may not become part of the Green New Deal from the Congressional Democrats.  One way or another carbon pricing is so fundamental it just has to be fixed.

 

  1. Outline of a plan

The energy use chart from the last section says a lot about how this has to work.  Going down the chart, we can say the following:

– Transportation

Thus far this sector has had virtually no penetration of renewable energy sources, so its importance cannot be overestimated.   The only alternative is electric power, so we need incentives to finally get a non-trivial market share.  Carbon pricing will help, but we may need more. We’ve had incentives in the past to help electric car makers get into business.   Now the issue is the continuing cost of carbon.

– Industrial

The ongoing migration to natural gas shows the price sensitivity of this sector.  That trend toward gas should continue, and we need to start more movement onto the electric grid.  Carbon pricing should help here too, and there should be active discussion with industry to determine what form it should take.  Flue-based CO2 capture may also be appropriate in some cases.

– Electric power

We already noted the major contribution from this sector in the conversion from coal to natural gas.  That should continue with the non-trivial number of remaining coal plants, but we still have to get to renewables.   Everything that happens in this sector should flow out of a national plan for evolution of the power grid, as discussed before.  Some coal plants or even gas-powered plants may be supplanted by renewables elsewhere.

– Residential and Commercial

We should recognize that this sector is significantly smaller and with many subsectors to be considered.  The conversion to natural gas is already well-underway and the remaining petroleum sectors (e.g. New England) may not be easy to change.  So we need to map out conversion to electric or possibly even flue-based CO2 capture.   The first step is a more detailed plan.

 

We also need to call out the need to support research, as it is an unavoidable part of the picture.  That applies both for new energy sources and storage, and to the various activities underway to understand climate change and how we will have to adapt.

 

  1. International coordination

Thus far our discussion has focused on the US, but we’re only one piece of the puzzle.  Despite the nationalist rhetoric, there is only one atmosphere for everyone.   Helping other countries helps us, and poorer countries have fewer resources.  The following chart underlines the importance of that effort—the “others” are becoming the biggest piece.

s11_2018_Projections

There are actually two points to be made.   First, the Paris Agreement included an initial arrangement between rich and poorer countries, so that progress could be made.  That codified a fund (trashed by Trump) to help poor countries meet their targets.  However the issue will continue to be contentious, and one way or another we will have to contribute.  The just-completed Polish meeting was able to end without a breakdown on this subject, but it wasn’t easy.

Second, our contribution may turn out to be more than just money.  Other countries will have energy use charts that won’t look anything like the one we’re been considering.  They may need different forms of technology to support different evolution plans.  We should use our resources to see what can be done.

In the past the US recognized a responsibility to lead this process.  In Poland, the process managed to keep going without us, but it was certainly touch and go.

The world needs our contribution to leadership. That means it is doubly important to put our own house in order .  We need to know where we’re going for ourselves, and so that we can help the rest of the world in this effort to preserve our common future.

Don’t Pretend This Election is Normal

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On the economy:  We’ve embarked on an unprecedented binge of deficit-financed stimulus in good times.  In just the past fiscal year the deficit ballooned by an extra $300 B, far more than foreseen.   That’s a great stimulus for the election, but it will be a long, cold winter.

Erratic tariff policy is already causing layoffs and market swings, with the major impact delayed until after the election.  George Bush’s 2002 steel tariffs cost 200,000 jobs;  this time effects will go much wider.  And there is no pot of gold from these trade wars.

Finally we’re setting ourselves up for the very considerable economic consequences of ignoring climate change.

On personal welfare:  Last year’s attack on ACA showed no commitment to do anything serious about healthcare—other than remove the progressive tax that funds it.

The huge business tax cuts have produced no wage increases beyond inflation (and no jump in business investment either).  Further those tax cuts have left no room for education, infrastructure, or social services, leading to recent plans to cut Medicare and Social Security.

Supreme Court justices were chosen to fight unions and satisfy the moral pretensions of the evangelical right.  Roe v Wade is only the beginning.

On freedom: We’ve had ongoing and increasingly brutal attacks on truth and the media.  Trump’s attempts to control the FBI have not succeeded, but by all accounts a win in the mid-terms means replacing Sessions with a more obliging alternative.  We’re reached the stage where we actually have to worry about the Justice Department!

On democracy:  It needs to be emphasized that the Kavanaugh appointment completes Trump’s control of government.  With a committed majority on the Court and capitulation by Republicans in both Houses of Congress, there is effectively no check on what he does.  We haven’t had time yet to understand how bad this is going to be.  Even Constitutional limits only work if the Court will enforce them.  Without a Democratic majority in the House, there is nothing protecting the nation from whatever comes into his head—trade wars, real wars, silencing of opposition, personal vendettas, whatever.

Our founding fathers chose democracy for a good reason.  They knew all about one-man rule.  Democracy is inherently fragile, but that’s what made us what we are.  We need to preserve it.  VOTE.

Never-Never Land

You can’t turn around today without someone talking about how great the economy is.  Low unemployment and low inflation.  What could be better?

In fact you don’t have to look far to know something’s wrong.  For once this is less a matter of lies than of myopia.   We’re living in an artificially-created bubble, and while we don’t know exactly when it will end, this is never-never land.   We’ll go through it step-by-step:

– The bubble

We incurred $985 B of deficit this fiscal year as short-term stimulus to an economy already at full employment.  That’s a monumental $300 B over last year—in good times. As in every other such case, the tax cuts are NOT paying for themselves.  During the year we had a small reduction in unemployment from 4. 1% to 3.7%, but at no faster rate than last year and with no increase in inflation-adjusted wages (one-time bonuses from the tax cuts were negligible in the statistics).  You might ask why we would do such a thing—$1 T is a lot of money—but one thing the deficit certainly delivers is that much more economic activity in an election year.  The same people who starved recovery from the 2008 crisis to help with the 2016 election gave themselves a big boost for this one.

You might also ask how long we can continue doing it, and the following budget chart makes that unmistakably clear:

deficit3a

We’re running up unimaginable deficits in good times, with consequences we’ll talk about in a minute.  And the chart actually understates the situation.  The underlying figures come from a CBO report written in April, when their estimate of the 2018 deficit was $805 B. With a final 2018 deficit of $985 B, the situation now looks considerably worse. The CBO report said that we would reach deficit = $1T by 2020 and then reach the sinister milestone of debt = total GDP by 2028.  With the current deficit, we have reached the $1 T value in 1/3 the time, so that second milestone looms sooner now too.

The stock market is a similar case. The corporate tax cuts went directly to company bottom lines, raising price/earning ratios and stock values. What’s more corporations turned around and used all that money for stock buybacks, increasing demand for stocks and further enhancing stock prices.

None of this is sustainable.

– The deficit

Much discussion of deficits seems theoretical, but the consequences of our current deficits are real.  Republicans are already talking about cuts to Medicare and Social Security as counterpart to last year’s tax cuts.  Just imagine now we’ve reached a downturn in the economy—not even necessarily as bad as 2008.  We’ll have the massive deficit-induced debts shown in the prior chart, and now—on top of that—tax receipts that have just collapsed with the economy.  In that case we’re not talking about changes around the edges of Medicare and Social Security, we’re talking about no money for it and “taking the hard choices we just have to do.”   That means dramatic change in what it means to be living in this country.

Further (as noted in the CBO report) the deficit is a time bomb.  As interest rates rise in good times, the yearly cost of financing the deficit rises accordingly.  We’re already talking about deficit finance costs higher than the defense budget.  And it will just continue up, eating into available money for healthcare, education, opioid crisis even before a downturn.  There are good reasons not to incur deficits in good times!

– Our economy

With all Trump’s talk about the private sector and relief from regulation you might think that the country has been liberated from misguided government meddling with private enterprise.  But you’d be wrong.  The current executive-imposed tariffs and trade wars constitute the most extreme government intervention in the economy within memory.

The steel tariffs hit anyone building anything out of steel—basically forcing export-directed activities off shore.   The new USMCA regulations have already caused layoffs at Ford (and the touted benefits to labor are so far from clear that the unions can only wait and see).  The trade war with China disrupts values chains of any corporations not sufficiently well-connected to get exemptions.  The government is choosing winners and losers in the economy based on impulse (coal and steel sound good) or lobbying (the Apple watch).  And established companies have been winning out over newer, innovative ones (net neutrality) any time the issue comes up.

All of that, together with xenophobia and lack of support for education, augurs poorly for the state of our economy going forward.  And we’re even waging economic war with the largest, most rapidly growing economy in the world—in the name of protectionism!

– Our population

Since the subject is the economy, we’re talking here about the related topics of personal and national economic success.  It is of course a truism that the world economy is changing.  Good jobs, and the jobs that maintain our national standard of living, are changing.  Very many of them require more and different training.  (One list of the top ten growing job categories is given here.)  Economists going back to Adam Smith have recognized the responsibility of government to educate the population.

However with the tax cuts we took a very different tack, essentially trusting private sector prosperity to raise all boats.  There is no evidence that works.  The tax cuts went primarily to stock buybacks (see the mind-boggling level of buybacks below), leaving issues such as education (including the student loans crisis), infrastructure, and healthcare up for grabs.

stock buyback2c

For now, protectionism is the solution to job retraining, consequences of automation are unaddressed, and instead of preparing people for good jobs we’re busy fantasizing about the past.

– Climate Change

Climate change belongs on this list, because inaction will just make the economic effects worse.  Climate change may have morphed into a partisan issue, but nature isn’t fooled.

Consequences will be in many forms—severe weather, changes of temperature and rainfall, sea-level rise.   Turning around today’s carbon-based economies takes time, so if we don’t start acting now, we’re talking many trillions of dollars of expenses for repair and to forestall truly disastrous consequences.  The recent IPCC report found more serious effects than previously recognized by 2040.   As the following chart shows, the US currently generates twice the per-capita CO2 of any other major player, so we have a long way to go.

s12_Top_FF_Emitters_percapita

For now we are doing worse than nothing.  Climate change is an issue where international unity of purpose is extremely important, because cheaters—with cheap coal—can prosper.   We have not only endorsed coal for ourselves but actively encouraged cheating.  Further our departure from the Paris Agreement process—and in particular our disavowal of the whole idea of rich countries helping poorer ones act in our common interest—leads directly to dangers such as Brazil abandoning protection for the Amazon.

Ignoring climate change means more damaging effects of warming, and more drastic (and expensive) action in the end.   Furthermore, as a purely economic issue, by denying the issue we are sidelining our own companies’ participation in this necessary multi-trillion-dollar enterprise.  The day will soon come (we’re now talking just 20 years to get off coal, oil, and gas) when this moves to page 1 of the news, and stays there.

 

Our never-never land economy is good only so long as we keep our eyes closed.  But if we don’t open them soon, we won’t recognize what we’ll find later.

If Not Now When?

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We are ten years into the current business cycle.  We have not repealed the law of gravity.  The cycle will end, and history says sooner than we would like to think.

It’s important to recognize what that means.  Very simply we have to be realistic about what we’ve put off for tomorrow.  If we’re not serious about something today, there is a fair chance that tomorrow isn’t going to come any time soon.

Let’s make a short list of what we’re not serious about:

Education:  Funding for education has never recovered from the 2008 crash.  This affects all aspects (building, salaries, equipment) and all levels.  It directly contributed to the student loan crisis.  It affects the well-being of young people and our competitiveness as a nation.

Infrastructure:  Both candidates raised the issue in the election, but nothing serious has been done.

Opioid crisis:  This is a monumental problem that has thus far received only lip service.

Wages:  Businesses got a huge tax break with the Trump tax plan, but nothing has shown up in wages.  We can’t even talk about raising the minimum wage from its historic (inflation-adjusted) lows.

Medical coverage:  ACA has been deliberately crippled with nothing coherent to replace it.

Climate change:  We can pay now or pay more later, but we won’t be able to run away from it.  Thus far we’ve just closed our eyes, but the changes will be non-trivial.  Carbon capture—the least drastic path in the most optimistic estimates—would be at least 5-10 Trillion dollars a year worldwide.

 

In these good times we’ve chosen not to address any of those issues.   Tax cuts for businesses (now turned into stock buybacks) took precedence.

Unless something changes soon we should recognize that we have chosen to live with all of those problems—for as long as anyone can see.

Tesla and Ice

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This is a short note on a couple of issues related only in that they say something relevant about the future we should be planning for.

The first relates to Tesla and its production difficulties with the new, lower-priced model 3.  The highly-automated production of the model 3 is well-behind schedule, to the point where it is a big hit to the cash flow of the company.  We mention it here, though, because the delay is an indication that mass production of electric cars is something fundamentally new.

An electric car is a much simpler machine than an ordinary, gas-powered vehicle.  In principle the construction should be both cheaper and easier to automate.  Current production of Teslas is intrinsically a low-volume operation.  The model 3 will be the first indication of what newly-imagined electric car production is like.

I don’t know if we’re in for a shock or not (this is after all a first go at it), but this could be another big change to conventional middle-class employment.  And there will be follow-on effects for gas stations, and especially maintenance and repair.  This is another of many indications that broad, technology-based disruption of jobs is going to happen.

 

The other story is about the commissioning of a new class of Russian icebreaker—targeted at clearing northern ship lanes freed up by the retreat of polar ice with global warming.  The phenomenon is already clear, although the amount of traffic is still small.  The Russians are preparing for the opportunity with multiple classes of new machines planned for release up to 2025.  The Chinese have announced cooperation with the objective of reducing shipping times to Europe by a third.

The US is of course uninterested in consequences of climate change.  The only Coast Guard ice breaker is 40 years old, and they have a hard time getting authorization to get a new one.  The Bering strait, however, could be a shipping lane.

This is a very small example, but climate change affects many things, and as a country we’re trying to avoid finding out about them.

 

The current federal budget is put together for a world where the private sector will take care of everything.  That has always been a fantasy—the efficiency of the private sector comes in large part from its ability to ignore everything not relevant to immediate financial success.  It is particularly false for a world undergoing fundamental change.  We either recognize it and help people through it, or we fall behind and revert to the nightmares of the nineteenth century.

Update on Climate Change

s09_FossilFuel_and_Cement_emissions_1990

This note is an update to the climate change article from last year.  The story hasn’t gotten any better, but there is enough that’s new to warrant a revisit.

The most fundamental piece of bad news is the opening figure, which comes from the Global Carbon Project.  After three years of seeming stability, the world production of carbon dioxide increased significantly in 2017.  (The figure says “projection” just to indicate that the final computations are in process.)  Without too much evidence we might as well call that the Trump bump.  As we noted last time, worldwide unanimity on climate change is important precisely because the advantages of cheating are so obvious.  We—with probably the most to gain from the Paris Agreement process—are the cheaters in chief.  So it’s not surprising others will have fewer second thoughts as well.

We have to put this change into perspective.  Even a stable value of CO2 emission means things are getting worse, because it is the total amount of CO2 in the atmosphere that drives temperature change, and it all adds up.  The stable value was attractive, because it seemed to indicate that CO2 had finally peaked and might start to decline.  And the decline might mean the total CO2 could be bounded.  We’re now back to worrying about the peak, with no idea how bad things will get.

Two more new slides from the Global Carbon Project show what we stand to gain from Paris Agreement unanimity.  The first shows the current per capita production of carbon dioxide.

s12_Top_FF_Emitters_percapita

As has been true for many years US per capita usage sits way above everyone else, more than twice both Europe and China.  That is a direct expression of our carbon-powered standard of living.

The second slide shows who is going to have to make changes to protect that US standard of living from the effects of climate change.

s11_Projections

This shows that the major growth in carbon dioxide production is not from the biggest economies (note that even China has stabilized), it’s from the have-nots trying to achieve some fraction of our standard of living.   We are asking them to ignore not only our past exploitation of fossil fuel resources but even our current high per capita use and to delay their own immediate hopes for a better life in order to make the world a safer place for everyone.  So much for the question of who benefits from the Paris Agreement process!

That introduces the next topic—public attitudes to climate change.  There were enough strange weather events in the past year to give people pause, so we’re getting close to—but still not over—the hump.  The latest poll numbers have both good news and bad.  First the good news:

Overall, 45 percent of those surveyed said global warming would pose a serious threat in their lifetimes, the highest overall percentage recorded since Gallup first asked the question in 1997. Despite partisan divisions, majorities of Americans as a whole continue to believe by wide margins that most scientists think global warming is taking place, that it is caused by human activities and that its effects have begun.

Then the bad—the improvement is only partisan:

Gallup asked whether people agreed that most scientists believe global warming is occurring, and 42 percent of Republicans said yes, down from 53 percent a year earlier and back to a level last seen in 2014. Just 35 percent of Republicans said that they believe global warming is caused by human activities, down from 40 percent.

This seems like another proof of a much-discussed feature of human nature—when people are confronted with proof that their beliefs are wrong, they double down on defending those beliefs.   Unfortunately those are the people running the show.

How can that turn around?  A recent Steven Pinker book made an interesting point.  Much of the rhetoric around climate change focuses on conservation and a new world view of collective responsibility.  But conservation actually isn’t the main point—since we’re not repealing the industrial revolution, the main point has to be new energy sources.  We’re not creating a new world where no one drives Chevy Suburbans anymore, we’re just changing the power source.  Conservation, however important, is about buying time until we can get there.  Perhaps that’s one way to get climate change out of the culture wars (as it should be).

In any case the focus has to be on the reality of climate change, and everything else is tactics. With tactics it’s easier to be bipartisan.   One indication is that Congress, over Trump’s objection, passed a bill continuing tax breaks for solar, nuclear, geothermal, and carbon-capture projects.  This effort united left-wing and right-wing approaches to climate change largely under the radar.  However, it must be recognized that even with such efforts the US is now lagging far behind in support for the technology of climate change.

Carbon capture (separating out CO2 and storing it underground or elsewhere) deserves some special mention, because it has become a bigger topic in the past year.  On one hand this is an idea that has been around for decades without going very far, and what’s more the coal industry supports it as a lifeline.  On the other hand the technology seems to be improving, the Obama administration supported it as a transitional technology, and even the IPCC climate studies assume some form of it will be used.  It currently exists as an expensive add-on for power plants, and some still-speculative variants have been proposed to pull carbon dioxide straight out of the air.  Both the power plant and out-of-the-air applications have a common need for CO2 storage technology, of which there are many variants.

The biggest issue with carbon capture is that it can be (and is being) used to delay doing anything about climate change—why worry about carbon getting into the atmosphere if we’ll pull it all out later.  The problem is that the technology still has such big questions about cost and scaling, that “later” could be very late or never (and some effects, such as melting glaciers, are irreversible).  Even the cheapest estimates say it will cost continuing trillions.  What you have to say is that the technology investment is necessary and at worst it at least gets the climate dialog past the hoax stage.  And if we could just get the Kochs interested in that business (which is largely oil industry technology), it would settle the Republican perception of climate change once and for all!

Returning to reality, we have to conclude the past year seems like a pause for progress.  After Trump took the US out of the Paris Agreement, many wanted to talk about all that could be done to maintain momentum nonetheless.  The chart at the beginning shows the limits of that point of view.  There are other indicators as well:

– The auto industry’s step back from future fuel efficiency standards

Exxon’s declaration that climate change is no risk to their profits

– Business as usual in the International Energy Agency’s World Energy Outlook:

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– Even the new preoccupation with carbon capture has to be viewed as a vote of no-confidence in the progress of conservation.   If prevention isn’t going to happen, then repair is all we’ve got.

What’s more than there has even been a preoccupation with a more drastic step, so-called geo-engineering.  This means injecting chemicals or particles into the atmosphere so as to dim the sun and cool the earth despite the increasing CO2 concentration.  There are many risks:  continuing ocean acidification, reduced photosynthesis and food supply, and weaponization of the technology.  Since CO2 would continue to accumulate, any loss of protection would have disastrous effects.  These are desperate measures.

As to what we should be doing, the picture is not too different from last year, but we can be perhaps more explicit.

  1. Because burning carbon is now recognized to have definite costs (i.e. whatever is necessary to counteract the CO2 increase), we need some kind of carbon tax so that the free market economy can react correctly. Since that cost is not currently captured, our economy is incurring a significant distortion that needs to be fixed.
  2. We need to get back into the Paris Agreement process to return focus to the goal. To repeat the obvious, the Paris process was always intended to be iterative—with countries readjusting their goals to eventually reach the target. We’re only at step one, so we had better help the world get back on-track.
  3. We have to recognize that at this stage we’re in no position to judge winners and losers among contributing technologies. So the solution has to be all of the above: nuclear, solar, wind, geothermal, batteries, carbon capture, even substituting gas for coal as a temporary measure.  The IPCC gave us what they called a carbon dioxide budget—the amount of CO2 we can add and still stay below a global temperature rise of 2 ⁰ C.  In 2014 (the year of the report) it was 800 giga-tons.  It is now below 700.
  4. People have to recognize that despite confusing news reports, we are all in this together. Some people will be hit by sea-level rise, some by drought, some by sheer temperature, some by storms, some by an effect we haven’t seen yet. Some may even be a little later.  But ultimately there’s nowhere to hide, and even “later” comes fast.
  5. There is no excuse for not funding research in all the contributing technologies and also research to understand the climate effects we are going to live with for however many years it takes to get past fossil fuels.
  6. Ideally all elements of society should be involved in planning such major changes. The carbon tax will help make that happen, but it’s not the whole story. We can’t keep fighting about this.

This administration likes to talk about itself as bringing business practices to government.   The evidence for climate change is such that any reasonable business would be doing its best to quantify the risk, so as to take appropriate action.   Businesses that choose to ignore disruptive new technologies or entrants are the ones that disappear—along with their disparaging comments on how the new stuff will never amount to anything.

Unless we choose to wake up—that’s us.  We’ll act now or pay far more dearly later.

 

The State of Our Future

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After the many other commentaries on Trump’s State of the Union speech, there are two reasons for this one:

  1. Trump seems to have gotten away with more than he should have.
  2. We seem to understate the magnitude of the danger.

On the first point it seems that Trump has pulled a truly remarkable sleight of hand.  The whole first part of the speech was about economic success.  He cited record low unemployment numbers as proof that his program was working and that the tax cuts would bring success.  To some extent this was the kind of distortion of reality we’ve come to expect, since Trump’s own job creation numbers were actually below all of Obama’s last five years.  What’s really shocking though is that he seems to have succeeded in using the ongoing mainstream world-wide recovery as a validation for the radically different and dangerous economics embodied in his tax plan!

Presidents generally can’t do much to change the economic situation in a first year, just because the ship is too big to turn around.   The numbers in the following job creation chart show just that for Trump.

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You can give the Republicans points for creative packaging of the results, but nothing more. (Today’s January statistics show more of the same.) That’s not surprising, since on economic policy Trump’s fights with Congress left him unable to enact much of anything before the tax cuts.  And the stock market had its own reasons for upswing—it has been overhanging the tax cuts all year, and that money will be going straight into profits.

By contrast, one cannot overstate the dangers posed by Trump’s economic plan.   We are doing a massive, deficit-funded stimulation of an economy at essentially full employment while eliminating all oversight of speculation and other bad behavior.  Economists expect that cannot end well.  It is at the least inflationary and likely worse.  The giddiness is beyond the level that gave us the 2008 crash, and this time there’s no guarantee that the people managing the crisis will remember the lessons of the 1930’s.  This is not a natural disaster or other unforeseeable event.  We are choosing to do this.

One revealing point: in his speech Trump boasted of the current strength of the American economy and talked about the urgent need to cut business taxes in order to make American companies competitive.  Say what you will, that doesn’t add up.  There’s a good reason why American companies are doing ok—in the aggregate they aren’t paying those high tax rates because of all the loopholes and other special provisions engineered by decades of lobbyists.  Real tax reform would have eliminated the loopholes, made the tax code more equitable, and paid for much of the rate reduction.   We didn’t do that; instead we just delivered a gift to companies and investors.  And we’re so excited about the gift that we can’t be bothered to look at consequences.

At this point in the business cycle we should be using our resources to make the country stronger.  Trump himself mentioned some of the problem areas that need focus:  the opioid crisis, infrastructure, job training (his first acknowledgement that business profits won’t help everyone).  All of those take money, and Trump’s speech said very little about that part.  The current Trump opioid plan is an unfunded joke.

This country and the rest of the world have come back from the 2008 crash to the point where we now have money to invest in infrastructure and people—including Trump supporters—and instead we’re giving it away and borrowing more to solve a problem that we don’t currently have.  That stimulus would have been handy five years ago; now it is a lost opportunity as well as an invitation to inflation (which certainly costs jobs) and another crash.

 

The economy, however, is only one of the danger areas mentioned at the beginning.  In an earlier note on policy risks we listed four areas of concern:  the economy, war, Russia, and climate change.  Trump’s State of the Union speech was worrisome in the other three areas as well.

War:  Trump spent a considerable portion of the last half-hour talking about North Korea.  This included two different sets of invited guests (the parents of murdered Otto Warmbier and the injured Christian defector Ji Seong-ho) to underscore his message of evil.  He blamed his predecessors for the North Korean problem, but presented nothing at all to show what he intended to do about it.  That omission made the episode eerie, particularly when we learned just before the speech that the administration ended the nomination process of a proposed ambassador to South Korea when the person expressed uneasiness about plans for “bloody nose” limited military actions.  Some commentators worried about preparation for war.

Russia:  Here the problem was not what was said but what wasn’t.   Russia was simply absent as a major concern.   In all the repeated military chest-beating there was no acknowledgement of past Russian behavior as a current threat.  The Russian regime has demonstrated its ability and willingness to penetrate public and private data networks including the NSA.  And Russians (inside and outside the state) are a major source of viruses as a kind of private cyberwarfare.  As a threat Russian cyberwarfare ranks with North Korea, but somehow it gets a pass.  (This recent article finally shows some concern in the press.)

Climate change:  Trump’s speech was a frontal attack on the whole idea of climate change.  He began with a list of natural disasters the country had overcome—including hurricane Harvey and the wildfires in California.  All his examples were cases that had been linked to climate change, and his mentioning them without comment showed how politically confident he felt in his climate denial.  He then went on to gloat about his (questionable) successes in pushing the energy sector and “clean coal” in particular.   For climate change there are many valiant efforts to work around Trump, but we should not believe that US behavior doesn’t matter.  International unanimity on climate change is crucial to stop cheating, and we—with probably the most to gain from the process—are the cheaters in chief.

 

Many people, including TV commentators, tend to discount State of the Union speeches as political hullabaloo without real consequences.   This one was more than that.   Not because Trump announced anything really new, but because it confirmed the crazy and dangerous path where he the “genius” is taking us.

As we’ve said before—people easily forget what happened with the last set of geniuses under George W. Bush.   We barely avoided catastrophe that time.   This time we have ample evidence that it will be worse.

As a country we have had many years of stability, so we tend to think somehow things will just work out.  In practice that means we try to normalize the craziness around us.  But we are abandoning peace and prosperity to follow lies and fantasy.  And once again, unless we change course, there will be hell to pay.

Shock and Awe

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It’s odd how people seem surprised at the level of corruption and outright incompetence coming from the Republican party.  We need to remember a bit.

The arrival of George W. Bush was not as traumatic as Trump’s, but then as now we got a new troupe of players (remember the neocons?) who were convinced they were geniuses, and that every other idea represented the stupid old world they were here to transcend.   That affected both the economy (government regulation does nothing good) and international relations (let’s remake the world for freedom and democracy).

It took a little while, but they were a catastrophe on all fronts.  The deregulation movement’s hands-off treatment of the economy produced a new, unregulated banking system—mortgage-backed securities—that ultimately crashed, producing the worst downturn since the great Depression.   $6T of “safe as banking” securities were wiped out.  Only the Democrats’ support of the bank bailouts kept us out of a real depression.

And of course we fought a $3T war that was justified by lies, produced no benefits to the US, and undermined US interests everywhere in the Middle East.  (ISIS was one consequence.)  Even today it’s hard to know what was really behind that war, but it is a fact that the only place in the world where people think it was anything but oil is here!

There are two other important but largely unstated points to be made about that war:

– That fact that it was unbudgeted contributed mightily to the difficulty of recovering from the crash.  In general terms governments need to act countercyclically, i.e. they should save in good times, because they need to spend in bad.   This is not rocket science, but we did exactly the opposite and in a big, untransparent way.   So recovery from the crash had to be all deficit, which made it easier for the Republican balanced-budget hypocrisy to prolong the pain.

– The result of the war was not just what was done, but also what couldn’t get done.  That affected the Middle East, where the greatest opportunity for change was for US money to grease the peace process.   That opportunity was lost forever.  ($3T would have created a true land of milk and honey!)  But that wasn’t the end of it.  That lost opportunities were here too.   Post 2008 we have found we have money for nothing, not even education.  Part of that problem has been Republican party priorities, but the fact remains we are not the first country to impoverish ourselves with a stupid war.

 

Fast forward to the present.   We’ve got a new bunch of geniuses who have no need for either information or expertise.  They’re smart!

We are now at a stage like the “shock and awe” of the Iraq war.  Reality has not yet had time to intrude on the fantasies.  But we need to remember, it can be that bad!

Where will we go from here?   The picture has a lot in common with the story just told:

– The economy

We seem to have learned nothing from 2008.  With the tax plan we are stimulating the economy at the wrong stage of the business cycle and running a deficit to do it.  Further we are removing Dodd-Frank and everything else enacted to control bad behavior.   There’s also little evidence that these people will do what it takes in case of a crash.

– War

This administration seems even more cavalier about war than Bush people.  We’ve had continuing belligerence with North Korea and Iran and a budget with an untargeted military buildup.  There’s real risk of a crazy war on impulse—with as little planning or understanding of consequences as last time.   We have to hope it won’t be nuclear.

– Russia

Russian is a constant adversary, and our buddy-buddy relationship with Putin is problematical.  Russians are proven experts in cyberwarfare, and the demonstrated impact of viruses points out the threat.  There is even a possible Russia-North Korea connection.  We stop watching them at our peril.

– Climate change

The evidence behind climate change is more than considerable.  As a risk, it is well past the point where any serious business would start paying attention to it.   We have instead decided we’re too smart to have to think.   We are risking our own future, and handcuffing our businesses that would be part of the solution.  The Chinese have taken our place and are running with it, while for us even planning is out of the question.  This is a double whammy—more heat, storms, and drought combined with loss of industrial preeminence.

Those items are not just speculation.   We’re all set to pass the economics into law.  The war rhetoric is if anything more pronounced than with the Bush administration.   For climate change this is stated and active policy.    The Russian case is a little different, but it underlines the seriousness of the dangers.  We just barely escaped with Bush; this time it looks worse.

Again we’re powerless in dealing with geniuses who can’t be bothered with facts, expertise, public opinion or anything else that gets in the way of their greatness.  We can have no confidence, for example, that Trump either understands or takes seriously the fact that a nuclear attack on North Korea will have consequences for the US even without retaliation.  Trump’s statement on deregulating Wall Street, just like his statement on leaving the Paris Accords, acknowledged no risks.

It’s all too easy to forget the past, but we’ve learned that such “genius” has consequences.  The end of this story will not be pretty.

No segment of the population—Republican or Democratic—should believe anything else.