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More conversions on global warming

June 8th, 2006

It’s getting lonely for the denialists. According to the Sierra Club, even pollster Frank Luntz, author of an infamous memo urging Republicans to exploit doubt on global warming, has jumped ship.

More interesting perhaps is Tyler Cowen, who concedes that

It is by now pointless to deny that global warming is man-made to a considerable degree.

but is very pessimistic about our ability to do anything about it. (via Brad DeLong)

Since such pessimism is inversely correlated with faith in markets to achieve adjustments to changing prices, I find this quite surprising. Given a reasonable long-run elasticity of demand for C02 emissions, there’s every reason to suppose that very large reductions in emissions (say 60 per cent) could be achieved in the long run at a welfare cost of only a few percentage points of GDP.

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  1. June 9th, 2006 at 00:42 | #1

    If you answered my question in the other thread then I missed it. I’ll try again here:-

    JQ,

    All the evidence, though, is that we can reduce emissions to levels consistent with stabilising global CO2 levels over the next few decades at a cost of around 5 per cent of GDP – a few years worth of economic growth at the most. Quite possibly, as in previous cases, this wll turn out to be an overestimate.

    In order to “stabilising global CO2 levels� don’t we need emissions to drop to roughly zero?

    Regards,
    Terje.

    P.S. For what it is worth I think your exercise in redefining skepticism as denialism is flawed? However if it works out perhaps you could do everybody a favour and help redefine other terms like cynicism.

  2. James Farrell
    June 9th, 2006 at 04:54 | #2

    My only complaint is that I had to read the post three time before I understood it. Consider replacing

    ‘Since such pessimism is inversely correlated with faith in markets…’

    with

    ‘Since Cowan normally exhibits faith in markets…’

    to make it more reader friendly.

  3. June 9th, 2006 at 07:40 | #3

    “Given a reasonable long-run elasticity of demand for C02 emissions, there’s every reason to suppose that very large reductions in emissions (say 60 per cent) could be achieved in the long run at a welfare cost of only a few percentage points of GDP.”

    I don’t understand what that statement means. Over what time frame is the 60 percent reduction in emissions occurring? 10 years? 30 years? 50 years? 100 years?

    And what does “a few percentage points of GDP” mean? Does it mean that every year during the reduction period, “a few percentage points of GDP” would be spent on global warming reduction?

    For example, lets assume the world GDP this year is $60 trillion, and 30 years from now it will be $200 trillion. Assuming “a few percentage points” is 3 percent, would the cost of getting the 60 percent reduction in 30 years be $1.8 trillion this year, increasing to $6 trillion per year in 2030?

  4. Gar Lipow
    June 9th, 2006 at 09:34 | #4

    Actually the evidence is that long term demand response to price increases is pretty strong – around 60%. However a classic market failure of this sort is an argument for regulation and public work.

    Of course you can understand how a market fundamentalist would see “requires regulations and public works” as the equivalent of impossible.

    Note that long term inelasticity of fuel substitution is lower – around 30%. It is specifically in using energy (from whatever source) that you have high demand inelasticy. This is bad news because all the alternatives are on average more expensive that fossil fuels. There a may specific types of renewable energy (such as wind eletricity and solar climate control and water heating) that are competive with fossil fuels – but on average their costs are higher. This is true of nuclear energy as well. So if we are to reduce carbon emissions without harming are economy efficiency has to be a major part of the mix. And that is where really high long term inelasticieis occur.

    Documentation on inelasticities:

    Dermot Gately and Hillard G. Huntington RR#: 2001-01:The Asymmetric Effects of Changes in Price and Income on Energy and Oil Demand Economic Research Reports; January 2001 p23. Tables 6 & 7.
    http://www.econ.nyu.edu/cvstarr/working/2001/RR01-01.PDF

  5. June 9th, 2006 at 10:13 | #5

    The ACF and a bunch of large businesses put out this report urging early action on greenhouse emissions.

    They estimated (not including nuclear power or geosequestration in the scenario) that cutting annual emissions 60% from 2000 levels, by 2050, would knock an average of about 0.1% of annual GDP growth (from 2.2% to 2.1%) every year for that time.
    You could quibble with some of their assumptions as on the optimistic side; but then again the arbitrary exclusion of geosequestration of coal emissions and nuclear power might equally lead to them overestimating the cost to growth.

  6. Hermit
    June 9th, 2006 at 12:49 | #6

    Clearly Sen. Campbell doesn’t buy this argument, unless he has a better plan. He says carbon taxes are stupid.
    http://www.abc.net.au/news/newsitems/200606/s1658808.htm

  7. still working it out
    June 9th, 2006 at 12:51 | #7

    I don’t think you should be surprised. Tyler has very little faith in governments, yet the only way a carbon emissions market will exist is if governments actively create and enforce one.

    Its why free market fundamentalists and the economic right are so uncomfortable with global warming. Its sort of the ultimate example of a problem that cannot be fixed without government intervention.

  8. David Michie
    June 9th, 2006 at 13:34 | #8

    Its why free market fundamentalists and the economic right are so uncomfortable with global warming. Its sort of the ultimate example of a problem that cannot be fixed without government intervention.

    I couldn’t agree more … and this is why I am so pessimistic about our chances of reducing carbon emissions. Government intervention in the market is frowned upon almost universally these days, and while this remains the conventional wisdom I can’t see policy makers having the courage to intervene in the market through carbon taxes etc.

    I am doubly pessimistic about reducing emissions from coal-fired electricity generation. The world has way too much coal for its own good, and as other fossil fuels are depleted we will use more coal not less in the future.
    The graph in this story from Harvard Magazine illustrutes our dilemma.

    Later, in his office, Schrag reveals the nub of the problem, pointing to a graph that plots global energy demand in the next hundred years (below). Beneath the curve, the graph is shaded to show the relative contributions to supply of each and every possible energy source as it grows during the century or, as in the case of oil and natural gas, peaks and then tails off slightly. Presented in such a graph—the one he uses happens to assume a mid-range 1.5 percent annual growth in global energy demand—what immediately jumps out is the enormous contribution of coal by 2100. By then, nearly half the world’s energy supply is projected to come from coal alone. As Schrag puts it, during the next 100 years, “The climate problem is a coal problem.�

    (I’ll try inserting the graph below, dunno if its gonna work)

    I am much more optimistic about reducing CO2 emissions from transportion, because oil (unlike coal) is expensive and is becoming increasingly difficult to find. High fuel prices will naturally drive innovation, increase fuel efficiency and reduce emissions. Of course, a “rational” economist would tell you that the obvious solution is to make oil from coal :)

  9. David Michie
    June 9th, 2006 at 13:36 | #9

    Didn’t work: Click here to see the graph.

  10. jquiggin
    June 9th, 2006 at 14:01 | #10

    Oddly enough, the Fin has Campbell welcoming the idea of emissions trading, which is in important respects the same as a carbon tax.

  11. David Michie
    June 9th, 2006 at 14:50 | #11

    Ian Campbell says a lot of things about greenhouse, but they don’t turn into policy … and that won’t change while Howard and Costello are non-believers.

    Did you see Costello on the nuclear enquiry? Carbon taxes and emissions trading is not on his radar….

    JOURNALIST:

    Treasurer with the inquiry into nuclear energy – do you think it should be broadened to have a look at a tax on fossil fuel emissions?

    TREASURER:

    Look I don’t think the purpose of this inquiry is to come up with new taxes. No. I most definitely do not think that. The purpose of this inquiry is to see, given our current energy and our current taxation system which is a low taxation system, whether a new entrant will become competitive. Now you can make any new entrant competitive if you are willing to bag the existing players down with enough taxes. We all know that. But that is not the purpose of this inquiry. The purpose of this inquiry is to see whether the current fuel sources on the current taxation regime are more economical, the same or less economical than nuclear energy.

    JOURNALIST:

    If they set the reference to a carbon tax into their report do you think they would be going outside their terms of reference?

    TREASURER:

    What they would then be telling you is it is not economical and it will only become economical if we bag the current energy source. Now as I said, you can make anything competitive if you are willing to weigh down all of the alternatives with crippling taxation, of course you can do that, that doesn’t tell you anything. But that is not the purpose of this and I don’t think we should be answering this with that in mind.

  12. Dogz
    June 9th, 2006 at 15:10 | #12

    The only way I’d vote for a carbon tax is if every additional dollar raised was taken off personal income taxes. Otherwise we’ll just end up with more overpaid and underworked public servants.

  13. Chris O’Neill
    June 9th, 2006 at 16:48 | #13

    “In order to “stabilising global CO2 levelsâ€? don’t we need emissions to drop to roughly zero?”

    The need to ask questions like this shows that global warming skepticism is based on a large amount of ignorance. However, the answer is that we don’t need to reduce CO2 emissions to zero because about 40% of emissions are being absorbed by the oceans. So on the face of it if we reduced emissions by 60% then the level of CO2 in the atmosphere would stop increasing.

  14. Hermit
    June 9th, 2006 at 17:22 | #14

    The great unknown with restraining domestic coal use (say by 60%) is that it comes at the same time as a global liquid fuels problem. At the moment coal-to-liquids is minor (eg in S Africa) but without carbon caps it would take off. Canada is more than 30% above its Kyoto target in part due to tar sands as an oil replacement. All the realistic alternatives will be bitter pills to swallow. Some much hyped techno fixes will be slow or just won’t deliver. The PM seems to understand this better than some of his critics.

  15. June 9th, 2006 at 17:58 | #15

    I wonder when Fyodor will back-flip? He got a hiding on this issue last time he showed his face in publog. Perhaps thats why he has been in hiding ever since.

  16. June 9th, 2006 at 20:17 | #16

    The word ‘conversions’ is interesting in the title to this post.

  17. June 9th, 2006 at 20:51 | #17

    The only way I’d vote for a carbon tax is if every additional dollar raised was taken off personal income taxes. Otherwise we’ll just end up with more overpaid and underworked public servants.

    Given my preference for taxing consumption instead of personal income I would quite likely support it on those terms. That is in essence what the Greens in New Zealand have been proposing for years. However our Green party is mostly filled with watermelons. For the watermelon crowd there is only one correct change to any tax rate and it never seems to be a reduction.

    In any case I am reasonably confident that within a decade Solar will be getting close to economically competetive without such policy assistance.

    ~~

    My question for JQ remains unanswered. In order to “stabilising global CO2 levels� don’t we need emissions to drop to roughly zero?

  18. Sj
    June 9th, 2006 at 21:53 | #18

    My question for JQ remains unanswered.

    No it doesn’t. Chris O’Neill answered your question. Stop whinging.

  19. Ernestine Gross
    June 9th, 2006 at 22:17 | #19

    “In any case I am reasonably confident that within a decade Solar will be getting close to economically competetive without such policy assistance.”

    Depending on individuals’ preferences, and other personal circumstances, solar is already ‘economically competitive’.

    Solar energy fits more easily into the ‘market economy’ idea because individuals can be both producers and consumers.

  20. June 9th, 2006 at 22:38 | #20

    SJ (& Chris),

    He did indeed. For some reason I did not see it when I placed my post. I am not sure it was even visible but I may have been mistaken.

    Thanks Chris for answering the question. In my experience asking questions can be an effective way to cure ignorance. If blogs like this are not for asking questions and sharing knowledge then I don’t know what they are for (SJ thinks they are for insulting people but thats a whole other discussion). I would suggest that skepticism is not the same as being closed minded. For his own reasons JQ has a different agenda with the word.

    I do recall reading about oceanic absorption of CO2 and my recollection was that it was poorly understood. You seem to imply otherwise. What you are in essence saying is that there is a threshold effect with regards to oceanic absorption of CO2. In crude terms it can take everything we throw at it up to some point (40% of current emissions) and then beyond that point it rejects anything more.

    I would guess that the specific rate of absorption into the oceans is not related to emission levels but to the actual atmospheric concentration of CO2. Any clarifing information you can offer would be helpful.

    Regards,
    Terje.

  21. Hans Erren
    June 9th, 2006 at 23:16 | #21

    “The ACF and a bunch of large businesses put out this report urging early action on greenhouse emissions.

    They estimated (not including nuclear power or geosequestration in the scenario) that cutting annual emissions 60% from 2000 levels, by 2050, would knock an average of about 0.1% of annual GDP growth (from 2.2% to 2.1%) every year for that time.”

    Why did they calculate “not including nuclear power or geosequestration in the scenario “, does anybody seriously think that, with rising oil prices, the nuclear powers India and China will not opt for large scale nuclear power?

    get real.

  22. June 10th, 2006 at 10:13 | #22

    Hans, they were doing the sums for Australia.

  23. Simonjm
    June 10th, 2006 at 11:49 | #23

    To Terje & Chris I was listening to The Science show the other week and it had a scientists talking about how the take up of CO2 is acidifying making life harder for sea life with shells and could get as bad in the future where it starts to actually dissolve their shells.

    I’m not sure what impact this would have on the global environment if we lost most of the sea animals with shells or exoskeletons but I don’t think it would be good. Not sure but this may have large impact on krill and if so and you understand food chains it ain’t good.

    The other thing which I thought I heard was that the take up of the oceans of CO2 is slowing down so in fact we may have to have larger cuts as we can no longer count on the ocean to keep acting as a carbon sink.

  24. David Michie
    June 10th, 2006 at 17:25 | #24

    Depending on individuals’ preferences, and other personal circumstances, solar is already ‘economically competitive’.

    Seriously?! I would love it to be otherwise, but you’d need to spend at least $20K for a PV system that would power a typical family home. The payback period is *decades* not years. The average Aussie just isn’t going to spend that kind of money just to feel good about the environment, they’d much rather put in a pool or a new kitchen. This situation won’t change while coal-fired electricity is so cheap.

    For example, this mob (SunTechnics) have a 2.1kW grid-connected PV system for $19,999 (with govt rebates) which they claim would generate 2896kWh per year. Probably two-thirds what a typical family home would use, but if it much supply enough for an energy efficient home.

    For people in Sydney I recommend the Greenbuild and Eco Show on at Rosehill racecourse this weekend. Lots of free entertainment for the kiddies as well.

  25. Ernestine Gross
    June 10th, 2006 at 21:26 | #25

    Yes, seriously, depending on individuals’ preferences and other personal circumstances, solar is already ‘economically competitive’ in a market economy as distinct from an ‘economic rationalist’ economy (where only financial costs count).

    And, the financials may not look that bad for someone who spends time away from home on business and is connected to the grid.

    Not everybody had a fridge or a washing machine when these white goods were invented. There were times when V8 motors were fashionable. Who knows how long granite kitchen benches will remain fasionable. Big pools, spread across the backyard, are already considered ‘out’ in some circles.

    Incidentally, the local government area of Ku-ring-gai excelled in water saving during the worst part of the drought and residents did not object to the council imposing a levy to install water tanks for public parks. Much of this water saving was voluntary. But residents don’t like the NSW State Government imposing its medium density and other rabbit-hole housing development strategy.

  26. June 11th, 2006 at 22:03 | #26

    I am not going to argue with anybody putting in a $20K PV system at their own cost. However I suspect that these systems are manufactured using conventional energy sources (eg coal) and I wonder what they would cost if they were manufactured using electricity at solar costs. A lot great deal more I would guess.

    I think photovoltaics is a very promising technology. However I don’t think it is ready to replace coal just yet. Although the Solar Tower concept looks very promising: http://en.wikipedia.org/wiki/Solar_Tower

  27. Hans Erren
    June 14th, 2006 at 22:59 | #27

    robert,

    It doesn’t matter wat australia does.

    A you are not part of Kyoto
    B your future emissions dwarf compared to India and China

  28. StephenL
    June 15th, 2006 at 10:37 | #28

    Terje, I’m not an expert on ocean absorption of CO2, but I have interviewed scientists who were, and if my memory is correct we know fairly well how it works at the moment, but are not confident in predicting what will occur at higher levels of CO2 in the atmosphere.

    Initially, as CO2 levels rise I gather the ocean absorbs more, just as would occur in a simple laboratory experiment. However, it is thought likely that at a certain point this capacity for increased absorption will level off and probably turn around. We don’t really know where that point is, although some evidence suggests we might be getting close.

    BTW, on solar, PV are not cost competitive for people on the grid, although they are increasingly a cheaper option than getting grid connection if you’re not already on. However, for most Australians solar hotwater makes economic sense, yet most people don’t have it. If we could get people to adopt solar hot water the country would be financially better off, and make a huge cut in it’s greenhouse emissions in one go.

  29. Yartrebo
    August 30th, 2006 at 06:58 | #29

    Just switching from electricity to propane/fuel oil/natural gas will save most of energy wasted by a water heater, and if the electricity comes from coal, something like 75% of the CO2 emissions.

  30. Sid Saxby
    September 7th, 2006 at 12:07 | #30

    A light water nuclear energy power station requires a supply of 5% enriched uranium-235 rods over the life of the power plant, first to have rods as a heat source and then to replace rods once they are depleted.

    This enriched uranium takes electrical energy to produce. At the moment this energy has to come from another energy source, i.e. power stations burning carbon. Other, “renewable� energy sources are marginal and currently do not supply the quantity of energy required. If existing nuclear power plants were used, a rapid loss of generating capacity would result, as much more energy is required to enrich the uranium than is supplied from it, once enriched.

    A 1000 MW output light water power station requires 7,500 MWh of energy each year, in electric energy required to make initial rods and for replacement of depleted rods.

    Each MWh of electricity from a carbon-burning power station will produce 8,500 tonnes CO2.

    So the carbon dioxide output per year of a 1000 MW nuclear power plant is likely to be:

    7,500 x 8,500 = 63,750,000 tonnes CO2/year

    A petrol-burning motor car produces 2.28 tonnes CO2 per tonne petrol. Over a 50-week year, travelling at 400-500 km/wk, the car will consume about 2 tonnes petrol and so produce about 4.6 t CO2.

    How many cars produce the same output of CO2 as a nuclear power plant?
    63,750,000 ÷ 4.6 = 13,858,696

    The annual CO2 output of a single 1000 MW nuclear power plant is equal to the annual carbon dioxide output of almost 14 million cars each travelling about 400-500 km/week and using 40L unleaded petrol per week.

    That is 35% more annual CO2 output than the total from all cars on Australia’s roads at the moment….

  31. Tom Davies
    September 7th, 2006 at 13:45 | #31

    Sid, it simply isn’t true — on your figures — to say that ‘much more energy is required to enrich the uranium than is supplied from it, once enriched’.

    You say that 7.5GWh of energy is required to keep a 1GW nuclear plant in fuel for a year. If we assume that the plant runs 24/7, it will produce 1GW x 365 x 24 = 8760GWh of electricity per year, roughly 1000 times the energy input.

  32. Ken Miles
    September 7th, 2006 at 16:15 | #32

    My question for JQ remains unanswered. In order to “stabilising global CO2 levels� don’t we need emissions to drop to roughly zero?

    This would be true if CO2 sinks didn’t respond to atmospheric CO2 levels (ie. they remove x amount of CO2 per year).

    Fortunally, this isn’t the case. For one example, a high CO2 world will have more plant growth, so the rate of removal of CO2 from the atmosphere will increase.

    So, emissions don’t have to go to zero to stabilise CO2 concentrations.

  33. Brian Bahnisch
    September 8th, 2006 at 15:39 | #33

    For one example, a high CO2 world will have more plant growth, so the rate of removal of CO2 from the atmosphere will increase.

    Ken, doesn’t this depend on how high the level goes? If it goes high enough you start to get factors like:

    1. Seas rising to flood productive land.

    2. Drying up and dying of the Amazon rainforest.

    3. Increase in desertification.

    Also a recent Science Show broadcast included this statement:

    “The soil holds lots and lots of carbon, much more than there is in the atmosphere, but, again, if the Earth warms too much, then the microbes that live in the soil like the high temperatures and they begin to decompose the organic carbon in the soil and again we get a massive pulse of carbon into the atmosphere.”

    Against that I’ve heard that if we adopted organic rather than the normal industrial farming the soil would hold much more carbon. I’m not sure how significant this is.

    But most of all I’d like an explanation of this statement from the same program:

    “It’s been kind of assumed that it would continue into the future and there would always be this buffering mechanism and that Gaia would slow down climate change indefinitely. What our modelling results… suggest is that that may not happen, that in fact climate change itself could suppress the ability, particularly of vegetation to remove carbon dioxide from the atmosphere. Carbon dioxide could therefore could go up faster and global warming could accelerate because of interactions between biology and the physical climate system.” (Emphasis added.)

    I have no idea what he’s talking about and would appreciate it if you or anyone else can enlighten me.

    btw the author of that last quote was Andrew Watson, Professor of Environmental Science, University of East Anglia

  34. Brian Bahnisch
    September 10th, 2006 at 10:47 | #34

    I’m not sure whether this is what Watson had in mind but this article from 2002 and this one from 2006 indicate that there is no simple linear relationship between extra CO2 in the atmosphere and plant growth.

  35. Ken Miles
    September 12th, 2006 at 11:38 | #35

    Brian,

    A combination of high temps + high CO2 will decreases the ability of carbon sinks. Which will be very bad. However, this isn’t likely to happen in a significant way, until we get to quite large warming.

    There are different types of tilling which can alter the carbon content of the soil. It isn’t necessary organic farming, but elimination of plowing (ie. just inject seeds where they are needed, rather than plowing long rows) which could a significant effect on increasing the carbon content of soils.

    I suspect that your quote refers to vegetation changes. There is some evidence that a high temp high CO2 world will encourage the growth of scrub like plants at the expense of other (higher carbon content) plants, leading to the biosphere changing from a carbon sink into a carbon source as the larger plants rot and are replaced by smaller weedier plants.

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