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Melting the Arctic ice

January 31st, 2007

Suppose that someone proposed using nuclear explosions to melt the Arctic ice cap*, with the aim of opening the Northwest passage and reducing shipping costs, and that this proposal was supported by an analysis showing that world GDP could be permanently increased by 1 per cent, or maybe 3 per cent, as a result.

On the face of it, this seems (to me, anyway) like a crazy idea. Should such a proposal be dismissed out of hand or taken seriously and subjected to benefit-cost analysis or ? And, if we did do a benefit-cost analysis, what would be the result?

In all probability, a benefit-cost analysis run on standard lines would come out in support of a proposal like this, assuming the numbers I’ve given. Since the ice is already floating, melting it won’t raise sea levels (remember the ice cubes in An Inconvenient Truth). Very few people live in the area, so direct effects on humans would be small. And while the effects on ecoysystems would be devastating, lots of benefit-cost analyses ignore such effects or impute very low costs to them.

Of course, no one is likely to use nuclear explosions in the way I’ve described, but the melting of the Arctic ice cap is a likely consequence of global warming, not in the distant future, but in the lifetime of most people now living (given a predicted date of 2040, I could well be around to see this). And plausible estimates of the cost of stabilising CO2 levels at 550 ppm (probably enough to stop complete melting, though this is not clear) range from 1 to 3 per cent of GDP.

So, it’s not necessary to look at effects occurring around 2100 and argue about discount rates in order to conclude that we ought to be reducing CO2 emissions drastically. Consequences like the melting of the Arctic ice cap and the destruction of the world’s coral reefs are already visibly under way, and will happen within the next few decades.

The problem is that standard benefit-cost analyses, don’t impute any real significant cost to this predictable outcome. For example, Nordhaus and Boyer (more or less arbitrarily) estimate the value of the entire climate-sensitive human and natural environmnent in the US at $500 billion (about equal to the market capitalization of ExxonMobil) and estimate that protecting it is worth $5 billion per year. This figure includes not only all natural ecoystems but impacts on humans in coastal areas like New Orleans, so the value accorded to the natural environment can’t be much more than $2.5 billion per yea (about equal to annual expenditure on chewing gum).

The Stern report doesn’t really tackle this issue, and implicitly accepts estimates like those of Nordhaus and Boyer. This is a big omission, more than offsetting other modelling choices that tend to produce a fovourable benefit-cost assessment of stabilisation.

At this point there are a range of possible responses. One is to accept the economic analysis and conclude that melting the polar ice caps isn’t really a problem, that the destruction of coral reefs is a problem for the tourist and fishing industries, but otherwise unimportant and so on.

The second is to try to extend economic analysis to include some of the factors that are obviously being left out here, for example, by assessing people’s willingness to pay for environmental protection. Of course, this is somewhat problematic with an issue like global warming, since people’s willingness to pay depends on their views on the issue which in turn are influenced by economic analyses.

A third response is to concede that some of these issues are not well handled by economics in our current state of knowledge. The intuition that allowing the Arctic ice cap to melt is likely to have negative consequences we haven’t considered yet is supported by past experience of large-scale human interventions of this kind. But there’s no good way, at present, of incorporating this intuition into discounted cash flows.**

This piece by Paul Baer is well worth reading as a critique of economic analysis on this issue.

* The idea of melting ice caps with nukes has been put forward seriously, but only, as far as I can tell, for other planets, where it is one of many schemes for terraforming.

** My work on the precautionary principle, still in progress, is aimed at addressing exactly this issue.

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  1. January 31st, 2007 at 04:21 | #1

    In terms of the second response, what do you make of the Millenium Ecosystem Assessment? In addition, Costanza et al. (1997) places a market value of $33 trillion on global ecosystem services.

    *Stuart L. Pimm. 1997. The value of everything. Nature 387: 231-232.
    *Robert Costanza et al. 1997. The value of the world’s ecosystem services and natural capital. Nature 387: 253-260.
    (courtesy of Nathan Sayre – http://geography.berkeley.edu/ProgramCourses/CoursePagesSP2006/Geog130/geog130.html )

  2. BilB
    January 31st, 2007 at 04:57 | #2

    Probable outcome
    The ice is there for a reason. It’s cold up there. A small burst of heat from an anything human is hardly likely to be lasting on a global scale. The ice would be back. The only thing that would stay hot would be the red faces.
    Ethics
    The days of being able to make massive changes to the face of the earth over single issue ideas are past. Only runaway dictators can still get do such things ie Saddam Hussein’s draining of the marshes to allow his troops to invade Iran. Public scrutiny is the primary complexifying moderator of inadequate action evaluation. For my money the only things that do not have equal right to life are flies, mosquitoes, cockroaches, and spiders that invade my space. All other creatures rights to life must be considered in all infrastructure decisions. Blowing up a few million creatures just to let some ships pass more easily is not acceptable.
    Economics
    Most if not all cost benefit analyses are incorrect due to their falure to include all variables as well as their time scales usually cover a conveniently specific time frame, not a total consequences time frame.
    Global strategy
    Globalisation is in all probability destined to fail in the medium term, simply because it depends entirely on a known to be limited resource, oil. Globalisation can only survive with the advent of fusion nuclear powered shipping and a substantially renewable energy powered industry. This is some time off. It is far more important for civilistion to last with minimum loss until that time if human survival is important. All resources of technology and funding should be applied to the aim of preventing runaway global warming. The development of solar thermal power facilities, ethanol and biodiesel fuel production, all on a massive scale, must become our primary focus. Clearing a passage to allow ships to transport predominatly plastic and electronic consumer goods from china to Europe and eastern USA can not be a serious objective.

  3. derrida derider
    January 31st, 2007 at 06:53 | #3

    In principle I’ve got nothing against the idea. But its the sort of thing you need to think long and hard about both the unintended consequences and how to value the environmental effects. IOW, make sure the costs in the CBA are done properly.

    I’ve always been amazed that the Yanks haven’t built an extra-wide canal through Nicaragua. The economics of it (being able to run supertankers from the Atlantic to the Pacific) are good and the national security benefits of a duplicate to Panama are obvious.

  4. conrad
    January 31st, 2007 at 07:10 | #4

    I don’t see why it couldn’t be analyzed. I just think problem is that people’s opinion of these things is different depending on the time scale (often illogicaly so), and the function of economic gain versus the amount people want to stop the destruction probably follows some sort of power function which makes things hard to interpret and probably makes people want to err on the conservative side.

    I think this sort of scenario is really common in multiple areas. For example you could look at % of species loss versus economic gain — a lot of people would accept, say, 10% for 10% gain but not 50% for 50%. Other examples (just from environmental areas) that follow a similar pattern might be salinity, exposure to toxins, a small channel for a small amount of destructionm, etc. You can look at them, but the function is hard to determine.

  5. January 31st, 2007 at 07:18 | #5

    I wouldn’t be prepared to entertain using nukes in this way irrespective of a CB conclusion. Too many ‘unexpecteds’ might occur that could have enormous environmental consequences. For the same reason I am uninterested in CB calculations for placing ‘mirrors’ in space to deflect 1% of the world’s sunlight to relieve global warming.

    CB analysis is rough and approximate and sometimes works in simple situations – it is inappropriate in areas of huge uncertainty and complexity.

  6. January 31st, 2007 at 08:53 | #6

    A new report coming out from British Scientists (see below) says that we may be at a tipping point in moving from one stable state to a different unknown stable state with respect to the earths atmosphere. The problem is that we have little idea what the next state is going to be like but we can be assured the costs of changing to adapt to the new state is very high. I suspect – but don’t know – that most economic theories cannot help us much with such large sudden changes. It seems that the best strategy for humans is to try to make sure that we do not move from our current stable state. Luckily there is a solution and that is to simply change one technology for another. If we change from producing energy by burning to producing energy without burning then we may be OK. The cost of doing this seems reasonable – my guess is a 30% surcharge on existing energy costs for 10 years.

    Study: Next decade ‘crucial’ on warming

    EXETER, England, Jan. 28 (UPI) — Climate effects from global warming will be irreversible in 10 years without “serious reductions in carbon emissions,” British researchers have concluded.

    Britain’s Intergovernmental Panel on Climate Change will publish a report this week — based on the work of thousands of the world’s top scientists — warning that humanity has 10 years to avoid massive climate change, The Sunday Times of London reported.

    “The next 10 years are crucial,” said Richard Betts, the head of a British climate research team. “In that decade we have to achieve serious reductions in carbon emissions. After that time the task becomes very much harder.”

    Such an unstoppable climate change could occur if greenhouse gases continue to grow and temperatures increase in kind, researchers warn, causing the planet’s once stable natural systems to lose their equilibrium permanently.

    The researchers maintain that if specific changes do not occur soon, Earth’s once stable environment could become increasingly inhospitable and potentially disastrous during the 2040s, the newspaper said.

  7. observa
    January 31st, 2007 at 10:14 | #7

    “Climate effects from global warming will be irreversible in 10 years without “serious reductions in carbon emissions,â€? British researchers have concluded.”

    Well that’s it then. There’s nothing we can really do about it and we’ll just have to adapt to GW. After all serious global GG reductions would require international unanimity of purpose and even with Kyoto, GG emissions have climbed inexorably. It was all just feel-good hand wringing. There’s no point in developed countries cutting their demands for fossil fuels (by price or quantity controls)if that merely reduces their price and for more Chinas and Indias. Besides, apparently we’ll need those fossil fuels for subsidised air conditioning for our needy and frail, so they won’t die like flies or Sydney-siders http://www.news.com.au/story/0,23599,21146834-1702,00.html

  8. observa
    January 31st, 2007 at 10:19 | #8

    Actually I think we’ll all be better off adapting to GW than the new Ice Age we were supposed to be coming to grips with some years ago. Desalinating water to grow food sounds easier than nuking ice and snow.

  9. wilful
    January 31st, 2007 at 10:45 | #9

    Observa, you’re taking the piss with the “new Ice Age” if you’re trying to equate that not particularly popular or credible idea in the 70s with the current understanding of ACC.

    But, gloomily, you have the realpolitik of it with your comment #7.

  10. observa
    January 31st, 2007 at 10:45 | #10

    I heard somewhere about 80% of Adelaide households now have air conditioners. In middle class Glenelg where I live it’s more like 99.9% where I’ve been the 0.1% missing link so to speak. That’s all about to change with me currently installing a dirty great big split system in the living areas (I flatly refuse to have it in the bedroom)I have finally had to roll over to the weight of MrsO and her girlfriends’ irrational opinions on the matter. I don’t like AC and prefer to sleep on the back lawn for the odd stinker after the house has warmed up intolerably. With Mrs O going menopausal that all has to change unless I want to sleep on my own for good. Her girlfriends are in total agreement that I couldn’t really love her without air-conditioning. End of story and no further correspondence will be entered into. Oh I tried to appeal to her better, lefty, public school teacher side with- “What about the planet and the kiddies’ futures?” Daggers and don’t go there O meboy! And that ladies and gentlemen is why all this GW hand wringing and hair tearing is absolute effing bullshit. Oh that and the sign in the paddock on the outskirts of Canberra stating “This is a wind turbine free zone.” It’s like Iemma signing on to the 60% GG reductions and then saying the PM’s got to get cracking on the target. Give me strength!

  11. derrida derider
    January 31st, 2007 at 12:19 | #11

    On AGW, I reckon we need to think hard about technological fixes like the mirrors – if we’re faced with really big changes in temperatures they’ve gotta be worth the (not inconsiderable) risks. The main thing is that the method used has to be incremental so you can gradually up the dose while you monitor its effects (eg lots of smaller mirrors rather than one big mirror), and also readily reversible if problems arise (eg a ready made scheme for getting rid of the mirror at short notice).

    But then there’s probably a lot of easier tech fixes than the mirrors. We could mandate high-sulphur fuels for jets. Maybe remove the scrubbers from coal power stations. Hell, maybe even start atmospheric nuclear testing again – a few 50MT bombs a year should do the trick :-)

  12. Sean
    January 31st, 2007 at 13:11 | #12

    This discussion wasn’t inspired by the USA’s plan to adapt to GW by blocking out the ****ing sun, per chance?

  13. January 31st, 2007 at 14:31 | #13

    Observa there is something we can do about it. We “only” need to stop investing in systems that create energy through burning fossil fuels and invest in systems that produce energy without producing green house gases. True we have to get all countries to do it but if one or two started to do it and showed it did not create an economic meltdown then it may well happen. The numbers even with existing technologies and not assuming any improvements is affordable (a 30% surcharge on existing energy for 10 years where the money has to be invested in green house gas free energy technologies).

  14. January 31st, 2007 at 15:08 | #14

    Kevin,
    Do you have any support for that 30% figure? Is it going to be enough, too little or too much? Do you charge it equally across all sources (including GHG free)?
    Lots of questions, some wooly thinking, few answers.
    .
    On the main topic, though – before you do a full C/B analysis, it should pass firstly a plausibility test and then a back of the envelope calculation, at a bare minimum. The chances of nuclear blasts in the atmosphere actually having no, or limited, downstream effects is so close to zero I do not think that it would even pass the plausibility test.

  15. observa
    January 31st, 2007 at 15:55 | #15

    “We “onlyâ€? need to stop investing in systems that create energy through burning fossil fuels and invest in systems that produce energy without producing green house gases. True we have to get all countries to do it..’
    What and not so much as one nuclear power staion on the drawing board in Oz Kevin? Yet Mr ‘sign on to 60% reductions’ in my state, Rann believes we should dig the stuff up and flog it but not use it.

    Iemma is the classic-
    “Last week I embraced a national approach to water – pledging to work with the Commonwealth to improve the management of our water resources,” Mr Iemma said.
    “We must do the same on climate change.”
    And what would that be Morris? Flick everything in the too hard basket to the Feds? What a tosser. Oh I’m all for that approach too. Handball it to some UN committee to pass some more motions, along with banning poverty, AIDS, terrorism, stinking leftist/muslim/psychotic despots, natural disasters, racial jokes and cask wine. Yeah why not give them a real challenge?

    Why the hell do you think guys like Bush and Howard are so late at conversion to the true believers? It’s called incumbency folks and every opposition’s full of gunners with no ammo.

  16. BilB
    January 31st, 2007 at 16:51 | #16

    Don’t get too comfortable with the idea of adapting to global warming. It does not mean that you are going to live.

    It would be better right now to let go of the idea of conserving the environment as it is now, because it will change out of sight before you can blink. If we go into over drive on ethanol production now there is a real chance of doing some good. South Africa, India and Brazil will all be significant players in this direction, but Australia has the maost scope to make a difference relative to our population. The people to drive the plantations are going to arrive unannounced because they will have little choice. John Howard or no John Howard.

    From the ALP the news is all bad. A Chris Evans press release talks up Clean Coal Technology above all else, which means that the ALP has completely missed the point and have told Peter Garret to shut up and be a good little boy.

  17. Mike Hart
    January 31st, 2007 at 20:43 | #17

    JQ,and Harry
    Interesting proposition to intro the issue of CB analysis, perhaps a little extreme by way of example. Do not think that economic theorem can dodge the issue of off balance sheet costs much longer or the deficiency of GDP measurements which dodge the negatives to always produce a growth outcome. The GPI people have had a go but the results (effectively global growth has been negative for two decades when planetary resource limits are factored in) but are still generally unsatisfactory as HC states; ‘uncertainty and complexity’. There’s the rub, the need to continously reduce human behaviour to a symbolic equation repeatedly leaves either a truncated form of analysis or n=infinity. It is perhaps not so much the issue of uncertainty and complexity; uncertainty has some reducible form by means of math -probability theory or chaos mathematics but complexity is not. Roger Penrose did a pretty comprehensive intro this problem with the issue of artificial intelligence and computers and was able to provide the proofs. I think the issue is a matter of ideology, to start with a decent treatment of the PP curve (global overshoot analysis shows the way here) would do wonders to the notional argument that the factors of production are effectively limitless. The issues always seem to defer to the future or arguments about the ideas of political economy. Have yet to see any serious economic analysis that actually comes to grips with the laws of thermodynamics, which demonstrate the fiction of any system being able to run in perpetual motion. Any form of balance sheet analysis that subscribes to the fiction of unmeasurable externalities will remain a piece of analytical fiction, illustrative but useless. This was the Stern reports achilles heel. I think Peter Corning’s work on Bioeconomics and Thermoeconomics offers an imaginative starting point, as does John Meynard Keynes,who I am rereading in detail. Til a similar general theory is forthcoming I think CB analysis in current form is a dead duck.

  18. conrad
    February 1st, 2007 at 07:46 | #18

    I’m not an economist, but I’m not sure why so people are against complex models of complex things (and hencefore conclude to leave them alone). Simply because there is a large degree of uncertainty doesn’t mean to say you can’t have a model with some preditive power. In addition, this is the way the analysis of many complex problems start. People propose models that are often poor to begin with, lots of smart people work on them, and a few decades later we have quite decent models with far less error. Global warming models are classic example of this — and I don’t see why this sort of problem would be any less tractable for people to provide some sort of analysis of.

  19. observa
    February 1st, 2007 at 08:34 | #19

    Unlike say wanting to cure poverty, the solution to GW is a simple and straightforward one, in terms of cause and effect. However the scale of the problem is the main problem. It’s not as if it came along in the decade or so we have become increasingly aware of the nature of it. It started with the Industrial Revolution and as the PM of that country stated recently, if his country produced NO GG from this moment on, China would have swallowed that global saving in GG emissions in 2 years. Therein lies a very unpleasant truth about the solution. Without developing countries like China and India signing on to agreed GG emission targets, no serious solution to GW exists. Of course to get them to do that would mean developed countries having to give up so much of their lifestyle, that the cure for them would, in all likelihood, be worse than the disease. As Britain’s Environment minister pointed out, a Brit flying from London to NY emits the same amount of GG as he would for a year heating his home. Now he might be prepared to give up flying on holiday for the sake of the planet, but not simply for some Chinese or Indian to take his seat. Forget any other remedy to solve GW. The immediate answer lies in what India and China want from us, for them to sign on. When we’ve established that, only then will we understand the nature of the problem and that isn’t 1-3% of our lifestyle folks, no matter what those econometricians massage out of their computers. If it were John Howard and George Bush, etc would have been knocking their doors down quite some time ago, you can be certain of that.

  20. February 1st, 2007 at 08:41 | #20

    Andrew and observa I do not claim to know how to generate clean energy nor do I think it necessary to guess how it might be done. My 30% came from the published figures for energy from geothermal energy production. It was derived from the capital cost to build enough energy generating capacity to supply a person with 70,000 kwh in one year. The 30% would be much lower if all the power could be generated from solar hot water heaters and about 90% if the energy was from existing solar panels.

    What is proposed is a form of carbon credits but where the carbon credits remain with the people who purchase energy from green house gases plants but credits can only be used on investing in greenhouse free energy infrastructure.

    The market then becomes a market for infrastructure funds. How they will be spent will depend on what arises to serve the market. A problem at the moment is that funds for energy infrastructure has to compete with greenhouse gas generating energy and that is going to win everytime. The solution proposed is to require the funds to be spent on greenhouse gas free energy infrastructure.

    Collecting a green house gas tax and then allowing the government to disburse the funds does not create a market because there is effectively one seller and there is the problem of who owns the infrastructure when it is built.

    Carbon credits derived from selling emissions seems to be a roundabout way that requires too many people to have to agree before it can be done. The approach of directing investment seems much simpler and can be measured for efficiency and to see if we reduce greenhouse emissions. Also because the money “remains” with the buyer and is in effect a form of savings then it may not contribute as much to inflation as a tax because of the mechanics of how inflation is calculated – but I may be wrong.

  21. February 1st, 2007 at 09:11 | #21

    My take on this is that if anyone in a spaceship messes with the air supply, they get pushed out the airlock.

  22. February 1st, 2007 at 11:30 | #22

    The intuition that allowing the Arctic ice cap to melt is likely to have negative consequences we haven’t considered yet is supported by past experience of large-scale human interventions of this kind.

    The same insight is applicable to large scale initatives like Kyoto.

    If CO2 is really a huge problem it might be simpler to just ban the construction on any new coal fired power stations. It would require less beaurocracy and would be a decision that was much easier to reverse. The ALP could ban them and if we don’t like the price of electricity under the new regime we could vote in the Liberals to unban them. Not my prefered approach but better perhaps than Kyoto.

    On the technology front the news this week of a new ultracapacitor from EEStor with a claimed energy to weight ratio of about 1 MJ/kg is massively promising for the transport sector. They claim that commercial production will commence this year. This sort of storage capacity in a capacitor is a leap across serveral orders of magnitude over existing technology. Of course it could be all hot air.

    http://gizmodo.com/gadgets/gadgets/eestors-worldchanging-super-battery-to-ship-this-year-230362.php

  23. February 1st, 2007 at 13:04 | #23

    Looks like Wilson Tuckey’s up to his usual tricks again

  24. February 1st, 2007 at 16:16 | #24

    Terje: I’ve actually been considering posting at Larvatus Prodeo about EEStor. I’ve read people who seem to know what they’re talking about express great skepticism towards their claims.

    However, if EEStor’s product delivers on its claims, the principals in the company will make the founders of Google look like paupers, their product will be so commercially significant. With such a technology we could completely eliminate emissions from both the transport and stationary energy sectors of the economy, because electric cars would be cheap and have acceptable range, and intermittant renewable energy sources could be stored for later use.

    But it’s like carbon nanotubes. I’ll believe it when somebody independent gets an engineering sample and sticks a multimeter in its guts.

  25. stephan harrison
    February 2nd, 2007 at 00:42 | #25

    Space mirrors are a non-starter. Even without GW we would still have the problem of acidification of the oceans (a topic which would be on everyone’s lips if GW wasn’t the main concern) and space mirrors can’t stop that.

  26. Pete from Perth
    February 9th, 2007 at 14:26 | #26

    I’ve been waiting for the neocon Right to start suggesting Nuclear Winter as a response to Global Warming. A few large nuclear strikes on Iran might just about be enough.

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