Home > Economics - General, Environment > US climate change policy: not a hopeless case

US climate change policy: not a hopeless case

August 4th, 2012

I’ve let my Monthly subscription lapse (will resubscribe as soon as I get a moment), so I can’t read the latest piece by Robert Manne, only the summary by John van Tiggelen, but the basic argument is simple, and widely shared. Climate change policy in the US has gone nowhere thanks to the intransigent opposition of the Republicans. I have a couple of comments

First, the policy situation isn’t nearly as bad as might be supposed, given the failure of the Waxman-Markey cap-and-trade bill, and the absence of any real push from the Administration. The fact is, that, in the current US situation, achieving coherent outcomes from legislation is just about impossible. Increasingly, the Obama Administration relies on executive and regulatory actions. In the case of climate change, the important ones are fuel economy standards for cars (CAFE), and EPA regulation of CO2 emissions and other pollution from power stations. Obama has pushed through rules requiring a near doubling of fuel efficiency by 2025. The EPA regulations effectively make new coal-fired power stations uneconomic and require the shutdown of many old stations previously exempted from the Clean Air Act. Reliance on executive action has all sorts of problems, and regulation is an inefficient way of reducing emissions. Still, if Obama is re-elected, the US can expect to see continued reductions in emissions over the rest of the decade. It’s important to observe that, even with the current limited policies, US emissions have already peaked and begun to decline. If Obama wins, the EPA and CAFE regulations will be locked in, and there’s the potential to go further, particularly in the context of an agreement with China.

Second, while its unfortunate that climate change has been entangled in the general craziness of the modern Republican party, this process hasn’t been costless for the Repubs. Given the state of the economy, they ought to be looking forward to a whitewash in November. Instead, Romney is expected to lose, and any Repub Congressional majority will be narrow and fragile. That’s not specifically because of climate change, but a result of the entire political approach taken by the Repubs for the last 20 years, of which delusional claims about climate science are just one example. Whereas until the 1990s, there was a steady drift of disillusioned leftists/liberals (both intellectuals and ordinary voters) to the right, the process is now going in reverse.

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  1. August 4th, 2012 at 19:31 | #1

    Graham Readfearn has a piece on ‘desmogblog’ about the article including some Q&A with Manne:

    http://www.desmogblog.com/directory/vocabulary/9825

  2. Ikonoclast
    August 4th, 2012 at 21:23 | #2

    JQ says: “Whereas until the 1990s, there was a steady drift of disillusioned leftists/liberals (both intellectuals and ordinary voters) to the right, the process is now going in reverse.”

    I hope you are right. Is there any any firm empirical evidence of this trend in the US?

  3. Hermit
    August 4th, 2012 at 22:09 | #3

    I understand the biggest single factor in US emissions decline is increasing the percentage of electricity generated by gas from about 20% to 40%. That is a one time only. The gas surplus came from horizontal drilling and fracking of several extensive shale formations primarily for ‘tight oil’ but with large associated flows of gas that had to be sold at low prices. BHP Billiton bought into one of the US shale plays but have just written down their investment.

    Several analysts in the US doubt that low gas prices (natural gas not ‘gasoline’) can last another decade. Then what? Gas is extraordinarly useful in that like hydro it can provide both baseload and peaking power. Combined cycle gas plants have low capex, fast build times and can be air cooled at inland locations. The fuel comes via pipe not railroads or guarded hazmat convoys. With half the CO2 of coal there’s everything to like except the fact it will soon get expensive.

    Therefore I wouldn’t write off coal just yet. Supposedly green Germany is building new coal fired plant and within a decade even a Democrat led US could ease EPA emissions rules. SUVs will probably shrink anyway as fuel prices rise but we can blame on it mileage standards.

  4. PeakVT
    August 4th, 2012 at 23:53 | #4

    Hermit is right about the role of gas in reducing US CO2 emissions. However, I don’t think anybody has a good handle on the scale of the related methane emissions, and it doesn’t take much to wipe out any gains from reduced CO2 (over the short run, at least). I also think that building a lot of natural gas plants for baseload power and burning a lot of suddenly cheap gas isn’t so wise. There are many “higher” uses for gas (nitrogen fixing, for instance), and in a couple of decades the country is likely to regret squandering its gas reserves so quickly.

    As to any leftward drift of the country, that is happening slowly on some social issues. However, most policy is still heading to the right. Conservatives had substantial victories at the state level in 2010, and have enacted a wave of abortion restriction and voter suppression laws. They have also made progress in de-unionizing in some states, and a very deceptive anti-union bill has been put on the November ballot in California. Louisiana has embarked on a large-scale experiment with vouchers, which are ultimately aimed at destroying the public school system. As a result of the recent SCOTUS ruling on the PPACA, several Republican-run states have declared they will not participate in the Medicare expansion, which partially negates a major Democratic victory and will leave millions to remain without insurance. And so on.

    I think it is also a mistake to view the almost certain Republican control of the House of Representatives as “fragile.” The House is a dictatorship, and whoever controls the Speaker’s gavel can do whatever they want. However, what the Republicans will want to do if Obama wins and Democrats control the Senate (both likely) is absolutely nothing, and there is no way to force them into action. That’s been the case for the past year and a half, which has seen the least productive Congress in modern history. If House Republicans do agree to do something, it will come only after they’ve extracted considerable concessions from Obama. There are also a lot more Democrats who are willing to vote with Republicans than the other way around, so a Republican majority is always somewhat larger than it appears.

  5. Freelander
    August 5th, 2012 at 01:31 | #5

    But will the turn around be too late? And will what they are willing to do be too little? Have we now left a committed serious global response too late? How inevitable is it that we know go way beyond 2° C? Will we hit any catastrophic triggers?

    The GFC and the ‘war on terror’ are both in part responsible for diverting our attention. And then there are the fully funded deniers.

    Things are definitely looking ugly. What will the world look like in five years time?

  6. August 5th, 2012 at 01:54 | #6

    While President Obama may be re-elected in a close election, it looks as if the Republicans may have the majority in the House of Reps.

  7. Ikonoclast
    August 5th, 2012 at 07:41 | #7

    @Freelander

    “What will the world look like in five years time?” – Freelander.

    Various trends which are already apparent will progress and even accelarate. The U.S. is clearly in terminal decline. The anti-intellectualism and anti-science agenda of the US oligarchs and religious fundamentalists is now so great that it threatens all science and all intellectual achievement in the US. This will essentially collapse the US into a dark age expecially when combined with resource depletion. This process could take 50 years to substantially complete. But even now we can see the US busily destroying everything that made it great.

  8. Adam M
    August 5th, 2012 at 09:36 | #8

    JQ, given the declining cost of renewables, especially Solar PV, do US climate change policies really matter in a global context? When grid parity is consistently achieved won’t renewable energy substitute for fossil fuels (isn’t that happening in South Australia already with the wind farms?) and in turn that would likely drive massive R&D into storage technologies to overcome intermittency of renewable electricity vs fossil fuels.

    I’m paraphrasing Ray Kurzweil’s commentary from a year or so ago that he isn’t worried about climate change:

    http://www.guardian.co.uk/environment/2011/feb/21/ray-kurzweill-climate-change

  9. August 5th, 2012 at 11:22 | #9

    Adam M, it’s really unfair on the rest of the world if the US doesn’t curb its emissions. Given the amount of CO2 we’ve dumped in the atmosphere already, US emissions alone could destabilise climate even if the rest of the world goes carbon neutral. While the US is reducing carbon emissions, a lot more could be achieved if the bulk of their leadership would grow up and face reality stop pretending that global warming is some sort of hippie plot.

    I would like the US to reduce emissions as cheaply as possible. This would make the US richer and a richer US is a happier US. The cheapest way to reduce emissions is a carbon price. A carbon price solves many problems. Many existing coal plants only pay a few dollars a tonne for coal. Without a carbon price there will be very little incentive for them to shut down or convert to peak or load following mode. And without a carbon price there would be less incentive to reduce emissions from transportation and land clearing and there would be little incentive to remove carbon dioxide from the atmosphere.

    Personally, I am an optimist with regards to the future cost of low emission energy and the cost of removing carbon dioxide from the atmosphere, but I definitely want the US to put a price on carbon to cut emissions quickly and cheaply as this will save lives in the short term. (For example, less drowned Thai people, at least in a stochastic sense.) And I want the US to put a price on carbon in case I am wrong about improvements in technology. The cost of being wrong is just too high to muck about on this and as hard as it may be to believe, I have been wrong in the past.

    I also want the US to put a price put on carbon to increase our chances of survival in the future from non releated threats. If one of the most powerful nations in the world can’t face reality and organise itself enough to take strong action against a threat as clear and as persistant as global warming, what chance is there that it will face reality and take steps to protect us against nanobots or pissed off roboprostitutes or whatever threats the future holds for us?

  10. Adam M
    August 5th, 2012 at 12:56 | #10

    @Ronald Brak
    I agree on the unfairness of the US impact on global emissions; I guess us Aussies can’t really get on a high horse though given our per-capita emissions are the highest in the OECD (ref. Garnaut Report). But at least we have some sort of carbon pricing scheme in place that hasn’t yet destroyed the economy and turned us all into potato-farming peasants!

  11. Hermit
    August 5th, 2012 at 14:12 | #11

    Multiple factors in the slowing of US emissions are discussed here
    http://grist.org/climate-policy/u-s-leads-the-world-in-cutting-co2-emissions-so-why-arent-we-talking-about-it/
    To put the numbers in perspective Australian emissions are about 550 Mtpa CO2e and those of the US about 7,700 Mt. The reduction target for Australia is a woeful 5% for the period 2000-2020 and for the US 17% for the period 2005-2020.

    Would a PIGS style recession significantly slow emissions in Australia, China and the US? Probably not enough since there is a core level of demand for electricity and transport, recession or not. Fossil fuel burning has to be replaced at a deep level, not just trimmed. I suspect with the first hint of a slowdown there will be calls to reduce carbon tax with too many misgivings to switch to an ETS. We have another decade of dithering ahead before the world takes carbon seriously.

  12. Bring back Birdy at Catallaxy
    August 6th, 2012 at 09:58 | #12

    Ikonoclast @2, here is an individual case of a Republican who has been demoralised by the capture of his party by anti-intellectual religious fundamentalists:

    http://www.salon.com/2012/08/05/republicans_slouching_toward_theocracy/

  13. Daniel
    August 6th, 2012 at 16:37 | #13

    Given the right data and evidence even highly educated doubters can be turned. The interesting thing about this story is that Prof. Muller is partly funded by a right-wing group
    http://www.nytimes.com/2012/07/30/opinion/the-conversion-of-a-climate-change-skeptic.html?pagewanted=all

  14. Ken Fabian
    August 7th, 2012 at 10:15 | #14

    Hermit, I can’t share an enthusiasm for gas. Whilst it reduces emissions intensity compared to coal it’s widespread deployment still locks in future emissions that are still so high as to be problematical.

    A shift to gas over the next decade would lock that emissions pathway in for the next half century, unless we are prepared to still heavily invest in other energy technologies at the same time with the intention to shut gas down well ahead of their use by date, skewing the costs of both emissions reductions by using gas as a transition and of the infrastructure it is a transition to. Plant operators won’t be pleased to build them only to have them as overnight standby and bad weather back-up and will remain, as they have been all along, foot-dragging impediments to getting the minimum necessary done. Having invested in them, they will want to maximise the use of their expensive investment by full time operation.

  15. August 7th, 2012 at 12:03 | #15

    Ken, fortunately there is no real need to worry about getting ‘locked in’ any time soon. Solar PV is preventing new gas plants, and coal plants, from being built. Residential demand is down due to increased efficiency and point of use PV. Importantly, PV has high output when it is hot and sunny which is when our total electricity demand is highest. This means there is no need for new gas power plants, or coal plants for that matter.

    New gas capacity is unable to compete with solar. The new Darling Downs gas fired power plant has been under utilized for the last two years, partially because of mild weather but also because of reduced residential demand due to improved efficiency and solar power systems. Its financial situation will have improved now that the carbon tax has been introduced,

  16. August 7th, 2012 at 12:04 | #16

    Gosh darn it! Once again I have left a paragraph at the bottom of a comment that I meant to edit out but didn’t! Oh well.

  17. Hermit
    August 7th, 2012 at 12:52 | #17

    @Ronald Brak
    I think you might have this back to front. Without flexible gas backup wind and solar don’t really help. In other words intermittent power supply works because reliable gas can be throttled back when those other sources choose to perform. Solar doesn’t help much with the breakfast rush, in chilly rain or when late afternoon air conditioning is needed.

    In the case of SA it will be interesting to see if new wind and solar build actually reduces emissions because studies in Texas, Ireland and elsewhere show diminishing returns to emissions at high penetration. That’s the the short run. Medium term both SA’s gas sources the Cooper and Otway basins will dry up though fracking may help. Wind and solar are not going to keep the lights on when gas is gone. By the way SA now has one of the world’s highest electricity prices.

  18. August 7th, 2012 at 13:22 | #18

    “Wind and solar are not going to keep the lights on when the gas is gone.” Is this a joke? Tell you what, let’s shut down all fossil fuel electricity generation and electricity imports in South Australia and Queensland and see which state manages to keep the most lights on. Queensland will have next to no grid electricity, while South Australia will have rolling blackouts, but consumers will still have power over a third of the time, which is enough to keep food cold, charge laptops, charge an LED light to use when the power is out at night, and enough to get a significant amount of work done. In fact, under the right conditions, South Australia would export electricity.

  19. Ken Fabian
    August 8th, 2012 at 09:27 | #19

    Gas remains the electricity industry’s preferred fall back position should government policy force coal out of the game, but they are going to keep heels dug in to prevent such policy. Energy storage continues to lag but it’s beginning to catch up, with a (claimed) cheaper than pumped hydro trial plant to be built in Britain – http://www.isentropic.co.uk/news/46/66/UK-Government-backed-body-invests-in-Isentropic-s-revolutionary-low-cost-energy-storage-system

    Flow capacitors are being developed that overcome the capacity limits of capacitor storage technology – another step forward. Other novel energy storage solutions are emerging too.

    But in the meantime an inadequate grid is currently being upgraded on the assumption of increasing demand for coal and maybe gas – not into smart grids suited to load leveling renewables .

    The energy industry – especially the corporatised version – is a willful impediment to a transition to low emission and will spin their own failures to proactively deal with a changing energy mix as ‘evidence’ of the inadequacies of wind and solar. They really are doing their best to act like the denialist victory Robert Manne talks about will be a permanent state of affairs.

  20. August 8th, 2012 at 12:46 | #20

    Ken, cheaper storage would definitely be useful, but it’s not actually necessary, as we should be able to remove the CO2 relesed by generating a kilowatt-hour of electricity from natural gas from the air and sequester it for under 5 cents. But if even if we use a less optimistic figure of 10 cents that still makes it pretty painless for a rich country like Australia to meet its evening demand. And of course at a CO2 clean up cost of 10 cents a kilowatt-hour, biomass, biogass, and storage become very attractive. Even hydrogen produced using surplus electricity during the day looks good.

    I’ll also mention that cheap electricity from solar and or wind can be used to improve the efficiency of existing fossil fuel capacity. For example it let’s us do things like use electrical resistance heating to maintain boiler pressure in coal plants when they’re sitting idle waiting for the price of electricity to go above their fuel and carbon price cost. And it can be used to create ice to cool air fed into gas turbines to increase their operating efficiency when it becomes worthwhile to use them.

  21. Ken Fabian
    August 8th, 2012 at 15:14 | #21

    Ronald if Carbon Capture and Storage can be considered a viable technology it’s news to me. Always sounded more like a “we can fix the emissions later” excuse to keep on emitting without restriction, usually accompanied with the failure of energy producers to invest in it’s development. But I take the point that there are ways to incorporate a lot more renewables into the grid without seriously impacting reliability. My point is that the big producers and grid operators don’t want to do so and (with dire alarmist predictions of energy insecurity and economic ruin) advise governments not to insist they do so. With an impending landslide victory for the Coalition likely they can plan on government support for that position. If they get a majority in both Houses – not enough Labor and Greens combined numbers in the Senate – policy efforts will be taken backwards.

    By the time it is an issue some forethought and planning should have some solutions in the pipeline but it takes a genuine mainstream political commitment to solving the emissions problem, something that, like the US conservatives, is absent in the case of our LNP and like the US Democrats, half-hearted in the case of Labor.

  22. August 8th, 2012 at 15:52 | #22

    Ken, carbon capture and sequestration is quite viable, just not at actual power plants. But it is a question of economics. Currently I can have Queensland sorghum loaded onto a ship for about $200 a tonne. After that it’s just a matter of heading off the continental shelf and dumping it into deep ocean water where the carbon in it should stay at or near the bottom for centuries. As sorghum is roughly 50% carbon this gives a cost of about $400 per tonne of carbon or about $110 per tonne of CO2. Presumably it will be cheaper to use plant materials other than grain, so $110 per tonne of CO2 should be an upper limit. A modern combined cycle gas plant will produce roughly 100 grams of CO2 per kilowatt-hour so removing this carbon for at least a few centuries should cost less than 11 cents per kilowatt-hour. Possibly 5 cents. So it looks like it is currently cheaper to burn natural gas using existing capacity and then remove it from the atmosphere than it is to use energy storage combined with renewables. But I do expect the price of energy storage and renewables to come down so energy storage might win before too long.

    I do agree with you that the approach we’ve taken in Australia with regards to electricity has often been quite sub-optimal and if things go badly there is certainly room for it to become much more sub-optimaler.

  23. Fran Barlow
    August 8th, 2012 at 17:10 | #23

    @Ronald Brak

    Ken, carbon capture and sequestration is quite viable, just not at actual power plants.

    years ago I was quite keen on the economics of algae farms. Spurred by the promise of the “Aquatic Species Program” I fancied the farms drawing down Co2 and then using the resultant algae to produce biodiesel and butanol. As it turns out, the economics weren’t that good. The last analysis I saw suggested that in order to compete with liquid fuels, the price of these fuels would have to be between $250 and $400 per barrel. Oh dear … There was a better chance of producing food, or a range of other products from such sources at commercial viability, just not fuel.

    One of the key problems was the cost and process implications of keeping the algae strain uncontaminated with far less lipid-rich competitors. Yield and lip concentration turn out not to be in the same algae strains. It did occur to me though that if one were not going for any particualr starin — and one merely wanted to maximise biomass (i.e. draw down as much CO2 as possible) then perhaps the cost of producing a tonne of CO2-bound algae and disposing of it at depth in the ocean might fall under the cost of CO2 abatement in the next 25 years or so. You raise it in raceway pionds on some marginal land not far from a railway link to a deepwater port, harvest, dry it in sheds, compress it and dump it at sea. It doesn’t sound technically difficult or expensive or especially energy-intensive.

    I wish someone would look at that.

  24. August 8th, 2012 at 19:03 | #24

    Fran, growing algae and then drying and sequestering it would certainly work. It’s just a matter of whether or not it would be competitive with other methods of removing CO2 from the atmosphere. One thing that might be possible to do with algae in the future is creating algal blooms in the Southern oceans with iron seeding that actually works. It doesn’t work well at the moment because while we can make algal blooms, very little of the CO2 absorbed enters deep ocean waters where it will be locked up for an extended time. But if we altered algae, or made our own from scratch, so that it was booby trapped so that in each generation say one in four cells committed suicide by storing carbon (perhaps in the form of cellulose) so that it grew big and heavy and sank into the depths, then that could make artiifical blooms much more effective at removing carbon dioxide from the atmosphere. We’d add fertilizer and booby trapped algae at the same time and let it do its thing. Sure, wild strains would start to outcompete it before long, but that’s okay, we’d just move on to a fresh stretch of ocean. And there’s no chance of these booby trapped algae growing out of control as wild strains will outcompete it as they don’t kill themselves one quarter of the time. Now whether or not this will ever be practical, I don’t know. But it does seem to be something that we’re not too many years away from being able to do.

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