Environment

The Bigger Story from Rare Earths

/ ontheoutside / 1 Comment

The Rare Earth affair tells us a very important simple truth:  contrary to the endlessly-repeated Republican message, the unfettered private sector (AKA the “free market”) does NOT solve all problems.  The private sector by itself is not sensitive to national security concerns and isn’t terribly worried about single sourcing so long as the price is right. After all there has never been a problem.  Tough luck.

This isn’t some strange outlier issue—it’s the main story.  The business community serves its own interest and generally with a short-term focus.  No one gets promoted for wasting money on what isn’t going to happen, which includes low probability events and any significantly different futures.  The private sector is good at optimizing its own operation.  It’s not good at providing for the population, the environment, or even the conditions for its own long-term success.  There is no “free market” magic to make that happen.  If the government doesn’t do it, it won’t get done.  And that is terrible for the future of the country.  We’re going to get one Rare Earth problem after another (and not just for security reasons), because we’re making sure not to look out for them.

We should be very clear about what we have today.  Trump wants to run everything, but that doesn’t mean we have government doing its job.  On the contrary what we have is business capture of government, so government is making sure that what business wants and nothing else gets done.  That’s why we can’t have government-sponsored basic research or any consideration of consequences of climate change.  Instead we have a whole bunch of protectionist tariffs and business tax cuts—just what business always wants.  There’s a juicy story of golden futures for everyone, but that comes cheap.  There’s no serious logic behind it, just what businessmen always want to believe.  Trump wants to mess with the business environment, but he hasn’t taken his businessman’s hat off.  He just thinks he’s such a genius he can tell all those big shot execs how to run things. Even the H1B affair fits here—there’s no strategic issue, since those pointy-headed engineers are a dime a dozen.

You don’t have to be a PhD economist to understand this.  Adam Smith understood it in 1776. I won’t give the usual long quote.  We just need a shorter one: “The government of an exclusive company of merchants is, perhaps, the worst of all governments for any country whatever.” — Book IV, Ch. VII

Things Aren’t Okay—We’ve Been Here Before

/ ontheoutside / Leave a comment

It strikes me that comparisons of Trump with other would-be dictators are actually a distraction from a more important historical parallel.  Unless we can stop it, we seem hell-bent on replaying the 1930’s with even more at stake.

This isn’t just an economic story; it’s a story of response to worldwide crisis.  When the US stock market collapsed in 1929, it wasn’t inevitable that the entire world would move to disastrous depression and then war.  That it did so was a failure of national and global governance.  We humans did it to ourselves.

There’s a problem with human psychology.  When something bad happens, we pull in and defend what we’ve got.  In societies, that means in downturns those on top focus on defending themselves (e.g. with austerity) from what they see as the moral failings of the rest.  That’s why countercyclical policies are so hard to do—they’re the last thing ruling classes want to see. However austerity itself breeds more declines and a vicious cycle to the bottom.  In international relations the corresponding phenomenon is xenophobic retrenchment in a cycle of increasing grievance, paranoia, and hostility.  All that matters is to make sure you end up on top.

That’s pretty much what happened in the 1930’s. It drove the world to economic disaster and then World War II. (World War I contributed, but dire times in Germany elected Hitler.) The post-WWII institutions—whatever their shortcomings—were an attempt to prevent it all from happening again.  They gave us an unprecedented period of worldwide economic growth.  Even with the 2008 crash the US and China basically cooperated in keeping the world economy afloat.  But we’re a long way from that now—all we hear about is being on top.

We haven’t had 1929-style crash, but there are problems that can’t be papered-over. Even before the current AI explosion, technology change was making working populations obsolete far faster than governments could cope. In the West there is nostalgia for a simpler, somewhat-mythical past—a fertile ground for anyone willing to lie about recreating that past and to blame others (elites, immigrants, other countries) for lost status and security.  For the East and global south it is a time to get even with past oppressors.  It’s a hard time for global action when everyone is looking to get ahead in a hostile world. As many have noted, Trump’s high tariffs recall the Smoot-Hawley tariffs of 1930.  Those tarrifs should be recognized as a sign of danger above and beyond the immediate damage that they do.

In addition we’ve got something new.  Climate change is an existential threat to everyone, but a hard sell for real action.  It requires real money in the present to prevent locked-in damage in the future.  It’s all too easy to claim it’s all unnecessary or can be put off to some unspecified future—with immediate benefits as a sweetener.  The US may win prizes for foolhardiness (no real businessman would tell his investors that no risk contingencies are needed because of his personal genius and intuition), but there are few countries whose expenditures match the danger or even the Paris agreement objectives.  No one can be beyond the risks of climate change, but with Trump’s incessant hawking of US fossil fuels we’re sure are trying to believe we’re special—like the 1930’s rich people who couldn’t be bothered with the problems of the depraved poor.

Given that, what is the world working on today?

  • It’s certainly not working toward global governance and not effectively working on climate change.
  • It’s not working on political stability, since the UN is now extraneous to most of what is going on.
  • It’s not working on peace (despite Trump’s many claims), since the most basic rule of the post-war system—that countries shouldn’t invade each other—has pretty much fallen by the wayside.  It was never fully obeyed, clearly not even by us, but we’re now in new territory.  Russia is making no apologies in Ukraine, and the same is true for the US in Venezuela. If anything the new stated mantra is about spheres of influence where the strong have a right to do what they want to the weak.
  • However there is one thing that the world IS definitely working on:  a desperate competition for dominance in artificial intelligence, and that is serious enough for a discussion of its own.

Where is AI taking us?

  • Since AI has both military and economic consequences, this amounts to a full-scale arms race.
  • The money spent on data centers is phenomenal even compared with total investment in the participating countries.
  • As such, it drains resources that would otherwise be used to the benefit of the population, accelerating the disaffection noted earlier.
  • Its massive energy use accelerates the timetable for climate change (and takes money from climate-oriented activities). In this country of course wind and solar contributions are banned.
  • Most importantly its objective—Artificial General Intelligence, basically surpassing human capabilities for reasoning—is ill-defined, and the work to get there is hard to predict.
  • Because of the huge level of debt financing, it raises the specter of financial collapse if gains don’t match revenue expectations in predicted timeframes.
  • Even more dangerous, the military consequences are considered so important that the arms race threatens to become more and more serious, with competitive positions extremely difficult to assess—raising risks of instability and preemptive war.

The story is not exactly the same as the 1930’s, but the parallels are too clear to ignore.  We’re not addressing the festering problems, and we’ve created new opportunities for economic collapse and unimaginable war.  That isn’t okay.

We, the human race, can’t aford to fail as we did last time.

I’m not going to propose any simple answer, but there a few things worth saying.

  • I believe that climate can be a model for international cooperation, because it is a true common problem that can only be effectively solved if everyone benefits.  We have a lot to walk back, since Trump killed the original Paris Agreement unanimity, but we have to do it.  The US had a big role then, and needs to play a big role now.
  • The best way to address a full-blown arms race is to diminish the incentive to use them.  The world needs a workable notion of fair trade that will allow all countries to succeed.  We were a lot closer to that than self-interested propaganda would have people believe.  The test for success is shared prosperity, including labor standards and environmental protections.
  • The biggest barrier to that endeavor is how prosperity reaches national populations—obviously a problem today even in developed economies.  Ruling elites everywhere want a big share and have many means to get it.  What’s more AI will make the problem even more pressing, since future job losses can destabilize any progress. Maybe trade groups such as the EU can stand as models, where considerable national autonomy has been ceded in exchange for what has been a very large gain for all. That may sound strange but in fact the US only got going when the states gave up part of their independence for the Constitution, and the EU has managed to unite age-old enemies for something better than war.

Obviously none of this is going to happen tomorrow.  But unless we do something, we can see all too well how this story can end.

Trump’s Tariffs are a Dry Run for the World’s Future

/ ontheoutside / Leave a comment

As the Trump administration ramps up its efforts to sabotage climate action, we have to think about what that means.  There is only one atmosphere, and the consequences of climate change are becoming ever more obvious.  Our policies are not just putting the US at risk, we’re putting everyone at risk.

So it is only a matter of time before the rest of the world will have to react.  The US has become not just a rogue state but a criminally insane one.  The only reasonable action is a global embargo.  The US has to be treated as a matter for quarantine.

Fortunately for the rest of the world, Trump is providing an excellent transitional strategy.  As exports to the US become subject to draconian and unpredictable risks, the world has a chance to live without us. The supposed lifeline we’re throwing to the rest of the world is actually worthless—building factories in the US just increases the exposure to Trump’s whims, and further the fossil-fuel-privileged industries of the US (e.g. cars) will have little future elsewhere.

There is a remarkable consistency in US policy—we are doing everything we can to turn ourselves from a world power into an afterthought.  That’s not just the tariffs, it’s the attacks on education, healthcare, and forward-looking research.  The demonizing of all immigrants. It’s amazing what dreams of past imperial greatness can do.

Maybe it’s in part an Anglo-Saxon thing.  The parallels with Britain are close, although our fall is much greater.  Brexit was Britain’s effort to restore its nineteenth century dominance by withdrawing from cooperation with the EU.  The result was an instantaneous economic downturn that took about five years for the population to understand.  There may well be no way back—with more Farage populism in the offing, the downward spiral could continue.

We voted for Trump to bring back the glories of the post-war fifties.  He has promised to make everyone rich by shaking down the rest of the world.  With tariffs, we are in essence doing our own Brexit with everyone else. Whatever the evangelicals may believe, there is no God protecting us from folly.

Clarifying Some Issues for Climate Change

/ ontheoutside / Leave a comment

It bothers me how much confusion there still is about what it takes to fight climate change.  A recent article in Bloomberg was a case in point.  They rank new EV’s by “greenness”.  I’m not going to talk about the details of what they call green, but the problem is that the whole idea is wrong.  All EV’s are green in the only way that matters, and a ranking by “greenness” just confuses the issue.

I’ll try to be organized about this.  First of all, the primary change that has to take place is the replacement of fossil fuels by sustainable sources of power.  In practice that comes down to moving everything to the electric grid, with a beefing up of that grid to handle the greatly increased demand and with sustainable sources.

The timescale for this transformation is dictated by a carbon budget—there is only so much more carbon dioxide we can put into the atmosphere before the consequences become catastrophic.  All that carbon dioxide just adds up, and the results continue to get (exponentially) worse. To succeed we have to stop burning fossil fuels before we hit the carbon budget limit.  That process has three parts:

  1. Make the electric grid what it has to be:  sustainably generated with much more capacity and much better connectivity.
  2. Move all applications to the electrical network. (Note that hydrogen apps fit here since most of the hydrogen will be electrically-generated.)
  3. Cut down on usage for all of the remaining fossil fuel applications.

The first thing to note is that most conservation efforts fit under item #3, so it’s worth stating unequivocally that conservation by itself is not the solution to climate change. It’s only a piece of what has to happen, and the rest is most of the problem.  And conservation for EV’s doesn’t fit here at all. Item #1 has to happen for all energy uses, so “greenness” of particular car models is an insignificant blip on a much bigger issue.  Finally, it should be obvious that despite what the oil companies tell you, climate change is not primarily a matter of everyone’s personal responsibility:  governments have to take large-scale action.

It’s worth saying a little more about items 1 and 2.  There is quite a lot of #1 that can start now:  improving and expanding the capabilities of the network as well as deployments of solar and wind power.  There are of course limitations to what we can currently get done.  The biggest current issue is in-network energy storage, to handle periods where there isn’t sun or wind.  However, this is an area of such active work that one can expect big improvements in the next few years.  For that reason it’s fair to regard item #1 as mostly a matter of money and commitment. (That’s not to say there can’t be big contributions from new technologies—such as fusion—as they become available.)

Item #2 is harder.  This involves not just familiar issues such as heat pumps but also industrial processes, such as for steel, cement, and plastics.  For these there is still research to be done before we can talk about worldwide deployments.  Overall this is an area with many different application-specific issues and deployment scenarios, so lots of work has to be organized and done in parallel.  Again this goes way beyond individual responsibilities. Note that EV’s fit under item #2—changing to an EV is a contribution regardless of whether your electric utility has done its work yet or not.

Finally there is the international aspect to the whole problem.  It’s amazing how much of the discussion of climate change is about us doing our part–as if our atmosphere were somehow detached from everyone else’s.  This really needs to sink in:  there is only one atmosphere, and we will only succeed if everyone else succeeds too.  Helping poorer countries to cope is not a matter of charity; it’s a matter of our own survival.  Obviously there are going to be negotiations over whose money gets spent on what, but rich countries are going to have to do what it takes for poor countries to redo their infrastructures.  Like it or not we are going to have to help with technology development and deployments worldwide.

Elon Musk as Time’s Person of the Year

/ ontheoutside / Leave a comment

There is nothing wrong in celebrating Elon Musk, who has achieved much of real value.  There are even good messages to be drawn from those achievements.   However there are also plenty of wrong conclusions that can and are being drawn about Musk.  So it’s worth thinking about what’s wrong and what’s right.

Wrong message #1:  We don’t need government involvement in the economy; the private sector can be counted on to get the job done.

Fact:  Tesla was started with Obama-era seed money and Obama-era price subsidies for electric car sales.   SpaceX got going with NASA contracts.  Without government involvement we would have had neither. The major US automakers had to be dragged kicking and screaming to electric cars.   The private sector is not good at supporting novel projects without a near-term payoff.

Wrong message #2:  We can count on smart people like Musk to tell us what to do.

Fact:  High achievers have their limitations and blinders just like everyone else.  Musk’s statement that we don’t need “Build Back Better” because he himself never needed help from anyone is actually typical blindness of the class.  I worked for a successful startup where the four principals fell out with each other almost immediately after we went public—because each was sure he was the reason for success!

Wrong message #3:  In the end we can always count on American ingenuity.

Fact:  Musk is one more example of the importance of immigrants and children of immigrants to the American economy.   Same for Apple and Google.

Wrong message #4:  A few big heroes are what makes for national success.

Fact:  Musk was important as a technical visionary.  No one else recognized that the technological basis existed for an electric car company.  However he also fostered an environment where he could attract the best and brightest to his companies.   The achievements of Tesla and Space X have that broader basis.

What’s more, the Person of the Year could equally well have been given to the many scientists and technologists who gave us the Covid vaccines.  There are more than a few single heroes in our midst.  Big achievements reflect individual contributions of many able people.

I’ll limit the right messages to two:

Right message #1:  Technology matters, and things really can change

Both Tesla and SpaceX are fundamentally new businesses, rethought from the bottom up.  In a very few years they have changed the US economy.

As contrast, a recent book about the Boeing 737 MAX shows what happens a company loses track of the reality of its business in a blind race for profit.

Right message #2:  At all levels individuals can make a difference and should be rewarded accordingly

This is particularly important in technology-driven companies, but not only there.  As noted, that was important not just for Musk himself but also within Musk’s companies.   For contrast, my contacts at NASA and even JPL have described them as stiflingly bureaucratic.  The difference between the SpaceX and the SLS project is undeniable.

Both companies and countries have a tendency to ossify into hierarchical structures that declare themselves to be meritocracies.  Equality of opportunity—including opportunity for real success—is necessary both for individuals and for the success of the overall enterprise.   For society as a whole, we need both a safety net and true opportunities for individuals to succeed.

That, not the pronouncements of Elon Musk, is what makes for success as a nation.

Short and Long Term Issues for Climate Change

/ ontheoutside / Leave a comment

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

/ ontheoutside / 4 Comments

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.

Regulation

/ ontheoutside / 1 Comment

27981970171_ba4af4c88b_b

“Boeing 737-8 MAX at BFI (N8702L)” by wilco737 is licensed under CC BY-NC-SA 2.0

I was struck by an article in today’s NY Times about a new scandal around the Boeing 737 MAX.  Apparently there was another Boeing 737 crash in 2009 where similar issues (for an earlier 737 version) were hushed up under US pressure.

The scandal was shocking enough, but what provoked this piece was the discussion of cultural issues at Boeing—specifically the attitude toward the FAA.   There were many quotes from emails talking about regulators as barriers to be overcome by any means necessary.  If you believe the project manager emails, there was no recognition of any legitimate concern at all.

That’s horrifying.  It’s a serious problem with Boeing’s culture. However, it’s important to recognize that the situation is not unique.  The relationship of a regulator with the regulated company is always adversarial and difficult.  The issue goes beyond Boeing.

I worked for some years for telephone companies, at Bell Labs and later at GTE.  We were a regulated utility.  The role of the regulator was less critical—what was at stake was service quality and cost—but they did have a significant influence on what happened.  We didn’t regard them as hostile exactly, but overall the culture was that we provided good service more despite them than because of them.  From the inside that’s what happens.  Even at a working level, you see your side of the picture.  And phone companies are anything but angels.

That’s precisely why regulation is important.  You can’t let the regulated companies tell you in all sincerity that the regulators are idiots and the process is nuts.  They always will.

At the EPA and elsewhere we’ve now decided that the only people worth listening to are the regulated.  We’re all passengers on a 737 MAX.