I’m working on the environmental policy chapter of my book-in-progress, Economics in Two Lessons, which is a reply to Hazlitt’s Economics in One Lesson, which in turn is a repackaging of Bastiat’s What Is Seen and What Is Not Seen. Hazlitt was aware of the difficulties posed for laissez-faire by pollution, and chose to avoid the issue. But, on Googling Bastiat + pollution, I came across a remarkable package in which Bastiat anticipates the climate change debate and takes the denialist side in advancee.
The most plausible argument put forward by opponents of immediate action to mitigate global warming is that some form of ‘clean coal’ technology will emerge that will obviate any need for costly changes in our current way of doing things.
The term ‘clean coal’ is sometimes used to refer to ‘ultra-supercritical’ or ‘high efficiency, low emissions’ (HELE) coal-fired power stations. Despite these impressive sounding description, HELE plants provide only a 30 to 40 per cent reduction in emissions relative to standard coal-fired power plants. They aren’t as clean as gas-fired fossil fuel plants, let alone renewables (or nuclear power, though this isn’t a viable solution for other reasons).
‘Clean coal’ is also used to refer to the idea of ‘carbon capture and storage’, (CCS) in which the carbon dioxide produced in coal-fired power stations would be captured before being emitted into the atmosphere, then pumped into underground storage, or captured through ‘biosequestration’ into products such as biochar.
CCS was an appealing idea for a coal producing country like Australia. Enthusiasm for the idea led to the establishment of the Global CCS Institute in Melbourne. However, the Institute’s own website shows that CCS is not a viable option. After decades of work, there is exactly one operational power plant using CCS, the Boundary Dam project in Canada. Two more, both deeply troubled, are under construction in the United States.
Even if all the coal-fired CCS power plant projects anywhere in the world that are listed by the Institute as possibly happening by 2030 are included, the total amount of CO2 captured would be less than 20 million tonnes a year. That’s about what Australia generates in two weeks.
To sum up, what’s usually called ‘clean coal’ isn’t clean. The real thing, cost-effective coal-fired power stations with CCS, is never going to happen.
That’s the title of my latest contribution to The Conversation.
While working on my long-forthcoming book, Economics in Two Lessons, I came across an interesting article by Edwin Dolan published (with commendably openness to criticism) in the Quarterly Journal of Austrian Economics. The conclusion
On a theoretical level, Austrian writers delight in claiming the moral high ground, condemning polluters as aggressors against property rights. On a practical level, however, they leave pollution victims in the lurch. They invite them to sue, but propose a set of legal standards that would guarantee that polluters would always win. They oppose all government measures to reduce pollution, whether through regulation or through measures to make polluters pay. As a result, at least in cases of environmental mass torts, the Austrian paradigm is a polluter’s dream and a victim’s nightmare. It offers far too little of any practical value toward securing property rights, too little toward facilitating environmental coordination, and too little toward promoting libertarian justice. Much work remains to be done.
When the SA Royal Commission on the Nuclear Fuel Cycle brought down its report, I welcomed the conclusion that there was no serious prospect that nuclear power generation would be feasible in Australia. That was unsurprising, since my own submission to the Commission had shown this pretty clearly. As regards the Commission’s recommendation for a waste dump, I argued that there could be no objection in principle, given that SA was an exporter of uranium and the waste had already been generated.
That left open the question of whether the waste dump proposal made economic sense. I’ve now looked at the case in more detail and concluded that it doesn’t. Countries with existing nuclear power industries have made arrangements that may not be satisfactory, but are unlikely to change. There is little prospect of any significant growth in the future. So, building a nuclear waste dump in the hope of attracting demand makes about as much sense as the actions of the protagonist in the movie Field of Dreams, who ploughed up his cornfield to make a baseball diamond for the ghosts of disgraced players.
I make the argument in more detail in this piece in New Matilda. Right on cue, Vietnam, which was one of the hypothetical users of the dump, decided that it would be better to dump nuclear power as uneconomic. Expect more announcements along these lines as the economics of renewable energy improve.
There’s plenty of bad news around these days, and that’s true of climate policy as of many other things. Turnbull (or Abbott, pulling Turnbull’s strings) has already imposed massive cuts in climate science research in Australia and it seems certain that Trump will do the same in the US.
Happily, it looks as if they have come too late to do real damage. The fact of climate change is now well established. Cutting research will impose all kinds of costs, but it’s not going to change the conclusions of science. Of course, the right will reject inconvenient science as they have done for decades, but more of less research won’t change that.
The big news is that the problem has turned out to be much easier to solve than anyone thought. We’ve long known that, to have a 50-50 chance of limiting warming to 2 degrees C, emissions should peak in 2015, and decline at an annual rate of at least 2.2 per cent thereafter. Hardly anyone thought a peak could happen before 2020 at the earliest, and this would imply a decline so steep (4.6 per cent per year) as to be just about impossible.
It now seems pretty clear, however, that fossil fuel emissions did in fact peak, or at least flatten out in 2015, and have remained stable through 2016.
Of course, stabilization is not enough. Is it possible for emissions to decline at the required rate. We can look at an identity
e = g – t – r
where e is the rate of growth of emissions, g is the rate of growth of output, t is the annual technological improvement in energy efficiency (the ratio of energy use to output, and r is the reduction in emissions per unit of energy, due to renewables).
Currently, these are just about in balance. But installations of renewables (and therefore r) are growing rapidly, while g is declining in the developed world, and probably also in China. It follows that we can expect e to become negative in the near future.
Policy matters, and it is important that the Paris Agreement should go ahead, with or without Trump and Turnbull. But the goals to which governments are willing to commit depend on what they think they can credibly promise. So, the fact that stabilizing the global climate looks to be feasible within the current economic framework is really good news.
UPDATE: A couple of commenters have questioned the math above. So, let’s spell it out. Let
E = Emissions (tonnes CO2)
G = Gross World Product (constant $)
J = Energy used (joules)
T (for technology) = G/J ($/joules)
R (for reduction) = J/E (joules/tonne CO2)
E = G / (T*R)
log (E) = log (G) – log (T) – log (R)
Differentiating with respect to time
e = g – t – r
Anyone wishing to debate this further should do so in the Sandpit
In thinking about how the global economy can be decarbonized, I’ve focused on the electricity sector, and particularly the elimination of coal-fired electricity generation. In the transport sector, I’ve pushed for fuel efficiency standards, but have generally assumed that internal combustion cars are going to be around for a long time to come. That’s consistent with Australian experience where annual sales of electric vehicles are counted in the hundreds, and with the US, where cheap petrol has held electrics to a market share of a couple of percentage points.
So, I was quite surprised to find out that lots of European countries, including Germany, Norway and the Netherlands, are talking about ending sales of petrol driven vehicles in the near future (2025 or 2030), with diesel possibly being banned even earlier.
Obviously, achieving these goals will require some pretty strong policy encouragement, including subsidies and planned provision of infrastructure, and targets are easier to announce than to hit. Still, it looks as if eliminating internal combustion engine cars is not a distant dream but a feasible policy goal.
Climate policy under the Abbott-Turnbull government has been so uniformly grim that it’s sometimes hard to remember how well things are going elsewhere in the world. A few of the most notable developments
* India has ratified the Paris Agreement, a big step for a country which not so long ago was disclaiming any responsibility to act. The EU will follow suit next week, and the agreement will enter into force 30 days after that.
* (H/T James Wimberley) Renewable electricity investment in 2015 was “more than sufficient” to cover the growth in global demand, according a new report by the International Energy Agency (IEA). Unfortunately, fossil fuel capacity is still growing, adding to overcapacity, particularly for coal. But once this idiocy ends, the combination of growing energy efficiency and new renewables will be sufficient to see electricity-related emissions peak and then decline.
* Despite a 60 per cent reduction in the crude oil price, oil demand has barely moved. Admittedly, supply has also been slow to respond, but capital expenditure has been slashed, suggesting that we will see reduced oil production in future.
There’s still the chance of disaster. Should Donald Trump manage to get elected as President of the US, the whole process will be set back (though withdrawing will be difficult to do in a 4-year term of office) as will just about everything else. Currently, that chance is estimated at 30 per cent and falling, which is much better than it was a week or so ago, but still way too high.
But if that can be averted, there’s every chance that the world can reach peak CO2 emissions by 2020 and reduce emissions drastically after that. If that requires sanctions to bring a handful of recalcitrant governments into line, those governments will have well and truly earned it.
With August 2016 setting yet another record for global temperatures, the need for action on climate change is obvious. The good news is that most national governments are finally recognising the urgency of the problem. The bad news is that Australia is not among them. Having commissioned a Special Review from the Climate Change Authority (of which I’m a member) and received recommendations designed with the current policy as a starting point, the government’s response has been that it might take another look at the problem in 2017.
I’ve written the statement over the fold in response. Comments very welcome. I won’t engage in discussion; in this context, I’d rather let the statement speak for itself.
Among other interesting results, the recent election gave a Senate seat to One Nation member Malcolm Roberts. Roberts is notable for his expressed belief that global warming is a fraud produced by a global conspiracy of bankers seeking to establish a worldwide government through the United Nations.
Unsurprisingly, Roberts has copped a lot of flak for these statements. But his position seems to me to be more credible than that of the average “sceptic”.
In a recent post, here and on Crooked Timber, I remarked on the fact that hardly any self-described climate sceptics had revised their views in response to the recent years of record-breaking global temperatures. Defending his fellow “sceptics”, Crooked Timber commenter Cassander wrote
When’s the last time you changed your mind as a result of the evidence? It’s not something people do very often.
I’m tempted by the one-word response “Derp“. But the dangers of holding to a position regardless of the evidence are particularly severe for academics approaching emeritus age. So, I gave the question a bit of thought.
Here are three issues on which I’ve changed my mind over different periods
June 2016 was the hottest month globally since records began in 1880, and marks the fourteenth record month in a row. For the great majority of people who’ve been following scientific findings on climate, there’s no great surprise there. There is very strong evidence both for the existence of a warming trend due mainly to emissions of carbon dioxide, and for the occurrence of a peak in the El Nino/Southern Oscillation index. Combine the two, and a record high temperature is very likely.
But suppose you were a strongly sceptical person, who required more evidence than others to accept a scientific hypothesis, such as that of of anthropogenic climate change. Presumably, you would treat the evidence of the last couple of years as supporting the hypothesis. Perhaps this supporting evidence would be sufficient that you would regard the hypothesis as confirmed beyond reasonable doubt, perhaps not, but either way, you would be more favorably inclined than before. And, if you were a public commentator, willing to state your views honestly, you would say so.
Does such a sceptic exist? I haven’t seen one, although I follow the debate fairly closely. In fact, in the 25 years or so in which I’ve been following the issue, I can only recall one instance of someone described as a “sceptic” changing their view in the light of the evidence. And of course, his fellow sceptics, who’d been promising that his research would reveal massive errors in the temperature record, immediately decided that he’d never really been one of them. In any case, while Muller was and remains a scientific sceptic, he’s no longer a climate sceptic.
Operationally, it’s clear that the term “climate sceptic” means someone whose criteria for convincing evidence are those set out by the Onion.
I’d be happy to be proved wrong (by counterexample), but as far as I can see, if the ordinary usage of the term “sceptic” is applied, the world population of genuine climate sceptics is zero.
Writing in the conservative US magazine National Review, Robert Bryce of the Manhattan Institute criticises the Democratic Party platform for omitting any mention of nuclear power, and accuses the Democrats of failing to “do the math”. Unfortunately, although he throws some numbers about, he doesn’t do any math to support his key conclusion
But even if we doubled the rate of growth for wind and solar — and came up with a perfect method of electricity storage (which of course, doesn’t exist) — those renewables aren’t going to replace nuclear energy any time soon
So, I’ll do the math for him.
As well as posting here, I have a couple of articles in the Conversation about the end of the coal era (I’ll give links in a subsequent post, if I get time). In all cases, I’m getting lots of people saying that the reduction in coal use in is entirely/overwhelmingly due to low gas prices caused by the rise of shale gas. So, I thought it was time for a post on the subject. I want to make three points
(1) This claim is presented in global terms, but it’s really specific to the US. There is no global market for gas, and the expansion of fracking is not global (it’s big in the US and in Queensland, but not many other places).
(2) The claim is out of date as applied to the US. New electricity generation capacity there is now dominated by renewables (still true even after capacity factors are taken into account, I think)
(3) The continuing low price of gas (like that for coal and oil) is being drive, in large measure, by competition from renewables
I also want to talk about different views on the role of gas in the decarbonization process, but I’ll leave that for another time.
Looking back, the G20 meeting in Brisbane marked a historic turning point in global climate policy. Before G20, the big problem had been the unwillingness of any of the big emitters (US, China and India) to make the first move. The joint statement by Obama and Xi Jinping broke the logjam, with the result that India moved away from its longstanding position that poor countries should have the opportunity to repeat the mistakes of the past before dealing with the problems of the future. This shift was reflected in the successful outcome in Paris, and with the arrival of Peak Coal in both the US and China. India is still expanding its use of coal, but renewables are growing much faster, and imports are already declining.
With all the big players on board, the immediate problem in climate change policy is what might be called the awkward squad – a group of second- and third-rank countries that are, for one reason or another, trying to push ahead with fossil fuels. These include Poland, Saudi Arabia, Turkey, Vietnam and, of course, Australia. Until the recent election, the Harper government in Canada was part of the awkward squad and a comfortable ally for Abbott and the LNP denialists. But Harper’s defeat appears to have provoked a broader rethinking with even the Conservatives moving to a pro-planet position.
As the awkward squad shrinks (Vietnam is already showing signs of rethinking) the remaining members are going to find their position in the international community less and less comfortable. That is, of course, unless the Republicans win the US Presidential election. In that case, the whole world will have a lot to worry about.
Adani Mining has just received the final approval from the Queensland government for the Carmichael mine in the Galilee Basin. According to this report from February, citing a “top Adani Group executive”, operations should start in August 2016, which would be a disaster for the global environment.
But wait! Now it seems yet more “secondary approvals” are needed (it appears this refers to a bond for cleaning up the mess afterwards), and “we hope that construction would start any time in 2017”.
There’s more interesting stuff in the report.
He said the price of coal was not the main issue in determining the viability of the project, but rather the cost at which the coal could be mined as the company already had a price agreement with the Indian government.Adani Mining CEO Jeyakumar Janakaraj claims there’s no need to worry about the price of the coal they produce “We are an integrated player. We have sold electricity in India on a long-term price.
‘‘It is not about the price point of coal, it is about the cost point, at what cost can we produce coal so that we will always be able to make a profit with the electricity price that we have already sold,”
The reference to the Indian government is pretty cheeky, given the government policy of eliminating coal imports over the next few years, which looks to be on track to succeed. (it’s currently a little behind its targets for increased production, but that’s because of weak demand).
More importantly, Janakaraj’s claim that “We are an integrated player” suggests he does not know much about his own business. Adani was an integrated enterprise when the project began. But the restructuring of the Adani Group in 2015 separated Adani Power (the electricity producer with a diversified portfolio of coal-fired power and renewables) from Adani Mining, which holds the stranded assets like Carmichael. This analysis from IEEFA spells it all out. Adani Power would be breaching its fiduciary obligations to shareholders if it paid an above market price for coal from Adani Mining.
I found a response from Adani, which illustrates one of my favorite points. When you have no answer to a damning report, say that it is “flawed“. That’s true of just about anything, and saves you the trouble of an actual response.
Although China has been moving away from coal-fired power for some time, provincial governments didn’t get the memo. They’ve been approving new plants at a cracking pace, with as many as 250 on the books, through a combination of inertia and desire to keep construction going. Now the national government has started pulling them into line, banning new coal plants in 15 provinces.
As this report shows there’s a similar tendency in many developing countries, with a long-standing push for coal running into the reality that it’s economically and environmentally disastrous. The result is a potential trillion dollars in stranded assets.
Still, progress in reducing carbon emissions has been much greater than seemed possible even five years ago. The problem is that the news from the scientists keeps getting worse. I haven’t had time to digest the discussion around the Hansen et al paper on sea level rise, but it’s certainly alarming. Closer to home and undoubted is the disastrous coral bleaching in the Great Barrier Reef.
And of course, while the world is moving to cut emissions, Australia is going backwards under the Abbott government (now notionally led by Malcolm Turnbull). The defeat of this government would be an important step towards saving the planet.
Of the 20 years or so that I’ve been observing climate change policy, global developments over the past year have been the most hopeful I can remember, particularly as regards electricity generation
* The Paris Conference was a big success, at least relative to expectations
* Coal-fired power stations are shutting down around the world
* China has reduced its coal use for two years in a row
* India has increased its coal tax, and greatly expanded use of renewables
Whether emissions reductions will be big enough and fast enough remains to be seen, but at least we are going in the right direction.
As far as climate science is concerned, the string of temperature records broken recently has killed any idea that we are in a ‘pause’ or ‘hiatus’. Even the favorite source of deniers, the satellite data from UAH, is now showing a new record. The only remaining issue is the second-order debate over whether there was a pause or perhaps slowdown at some point in the first decade of the 2000s.
At the same time, following the US election, I’ve been paying more attention than usual to rightwing blogs, most of which run climate denialist pieces fairly regularly. Given that nearly all the major US coal companies are now bankrupt, and that coal-fired electricity is declining rapidly, I’d have expected a lot of “wrecking ball” pieces on the supposed damage to the economy (in reality, the effects are small and mostly offset by the expansion of renewables) now that mitigation policies of various kinds are taking effect.
But I don’t see anything like that. Rather, most of the articles I’m reading are claims of victory in the debate over both science and policy. Here’s a fairly typical example, with the title “Is the Climate Crusade Stalling?”
We really do live in parallel universes.
I’ve recently published a piece in Aeon, looking at the peak in global paper use, which occurred a couple of years ago, and arguing that this is an indication of a less resource-intensive future. Over the fold, a longer draft, with some links.
aking account of future demand and anticipated costs of nuclear power under the existing electricity market structure, it would not be commercially viable to generate electricity from a nuclear power plant in South Australia in the foreseeable future.
However, Australia’s electricity system will require low-carbon generation sources to meet future global emissions reduction targets. Nuclear power may be necessary, along with other low carbon generation technologies. It would be wise to plan now to ensure that nuclear power would be available should it be required.
The detailed findings are sensible (that is to say, largely in line with my submission and evidence. A crucial para:
If nuclear power were to be developed in South Australia, a proven design should be used that has been constructed elsewhere, preferably on multiple occasions, and should incorporate the most advanced active and passive safety features. This is likely to include consideration of small modular reactor (SMR) designs, but exclude for the foreseeable future fast reactors
Given that Barry Brook, a leading enthusiast for fast reactors was part of the Commission’s Expert Advisory Panel, this finding should make it clear that fast reactors are an option for the distant (beyond foreseeable) future.
The finding is striking because South Australia is, or ought to be a test case for those arguing that a carbon-free electricity system must rely on “baseload” nuclear. South Australia has high and increasing reliance on renewables, is close to phasing out coal, and has limited interconnection capacity. It’s exactly the modle that anti-renewable sites like Brave New Climate have “proved” time after time can’t possibly work without nuclear power. Yet, it seems, even a sympathetic inquiry finds nuclear power to be an option for the distant future, if that.
Adani has finally received environmental approval from the Queensland government for its proposed Carmichael mine in the Galilee Basin. At this point, in a standard news story about a multi-billion project, we’d be reading about the domestic and global banks that were competing to be the lead financiers for the project, and those who would have to content with the crumbs. Along with that, there would stories about the partners and subcontractors who would get the lucrative work of construction.
Instead, we have a long list of banks and other funding sources that have announced that they won’t finance the project, or have pulled out of announced and existing finance arrangements. The list includes the Commonwealth (formerly a big lender to Adani), NAB, the Queensland Treasury, the State Bank of India, and global banks including Standard Chartered (another former big lender), Citigroup, JP Morgan Chase, Goldman Sachs, Deutsche Bank, Royal Bank of Scotland, HSBC, Barclays, BNP Paribas, Credit Agrilcole and Societe Generale. The US and Korean Export-Import banks have been touted as possible sources, but appear to have backed away. Even the Abbott-Turnbull $5 billion slush fund for Northern Australian boondoggles, seen when it was announced as a rescuer for Adani, now appears unlikely. At the recent Northern Australia Investment Forum, the fund was the centre of attention, but Adani apparently didn’t get a mention, unless it was implicit in Frydenberg’s claim that the government wouldn’t be investing in “white elephants”.
The situation with suppliers is just as bad. Adani sacked the engineering team from Worsley Parsons and the construction group from Posco (also a supposed equity partner) last year. A $2 billion announcement of work for Downer EDI seems to have vanished into thin air. And at Abbot Point, Adani, as owner, is engaged in a nasty brawl with Glencore, the current operator.
In summary, we appear likely to find out what happens when a dog catches the car it has been chasing. Adani and its backers have been denouncing green tape and “lawfare” as the only obstacles to the bonanza they have on offer. Now, the legal and administrative obstacles are gone, so they have only to line up the money, rehire the contractors and announce the starting date. My guess is that this will never happen.
While thinking about decarbonizing transport, I dug out this old post from 2005. It’s interesting to see how the debate has evolved (or not) since then.
The big change has been that the prospects for technological alternatives like alternative energy sources and electric vehicles have improved dramatically. As regards transport, I don’t see much reason to change the analysis I presented in 2005. Unfortunately, while some progress has been made along the kinds of lines I suggested, it’s been very limited compared to the radical changes in electricity generation. So, we are only at the beginning of the process of decarbonizing transport.
As I mentioned in a previous post, I’ll be talking to the Victorian Transport Economic Forum on decarbonizing transport on Wednesday, 10 February 2016 from 5pm at the Public Transport Victoria Corporate Centre, 750 Collins Street, Docklands. I thought I’d start with the policy issue implying the smallest change in existing transport patterns, increasing the fuel efficiency of petrol-engined vehicles. The primary choice here is between relying on a carbon price and imposing fuel efficiency standards. For those who want the shorter version, I think we need both but standards are probably going to be more important.
I’ll be talking on this topic to the Victorian Transport Economic Forum on Wednesday, 10 February 2016 from 5pm at the Public Transport Victoria Corporate Centre, 750 Collins Street, Docklands. I’m still formulating my thoughts, so I’ll be happy to read those of anyone who’d like to comment. Here are a few observations to get started
* The process of decarbonizing electricity supply is well under way and, I think, just about unstoppable. To some extent at least, this process provides a template for an approach to transport. In particular, there’s a close analogy between cars and coal. Both have negative local effects (air pollution, congestion, negative amenity and so on) that haven’t been properly taken into account, in addition to generating CO2 emissions. Focusing on the local effects may be a more effective way of reducing CO2 emissions than attacking the problem directly
* By contrast, although we have the technology to greatly reduce the use of carbon-based fuels in transport, we haven’t made nearly enough progress, and it’s not clear what is the best way to go. Should the focus be on improving existing modes of transport (for example, with electric cars), or in switching modes (public transport instead of private) or in reducing the need for travel (with urban design, telepresence and so on).
* Relatedly, is it better to rely on prices, direct controls such as vehicle fuel efficiency standards, or on some other approach?
Having jumped a number of legal hurdles, Adani is now seeking approvals from the Queensland state government, necessary for the Carmichael coalmine/rail/port project to proceed. This presents the government with a nasty dilemma.
On the one hand, refusing approval would be a PR disaster. Adani, and the government’s opponents, would blame obstructive regulation for the failure of the massive bonanza that has been promised. Adani continues to claim that project will give Queensland $22 billion in royalties and taxes, and up to 10 000 jobs, even though its own expert refuted these claims in court.
On the other hand, everyone (even the International Energy Agency, notably until recently for its stubborn faith in the coal of the future) knows that this project is uneconomic, and unlikely to proceed before 2020, if ever. And while the government has said it won’t subsidise the mine, it appears that it may be forced to spend some money on the Abbot Point upgrade.
So, |irony alert on| I have a simple suggestion to resolve the government’s problem. Just ask for a downpayment of, say, 5 per cent of the promised benefits ($1.1 billion). In the unlikely event that Adani pays up, this will be money for jam. If, as is virtually certain, the money isn’t forthcoming, the government can rightly claim to have protected the interests of the Queensland public.|irony alert off|
Taking the question more seriously, the government should seek evidence from Adani that the project has sufficient finance to proceed before issuing any approval. That will be enough to ensure an indefinite delay.
The agreement just announced from the Climate Conference in Paris isn’t by any means, a solution to the problem of avoiding climate change. But, along with other developments over the past year, it signals the fact that the world community has turned the corner on this issue. Barring a catastrophe[^1], the world is now on the path to near-complete decarbonization of the economy by the middle of this century, and to stabilization of the global climate with less than 2 degrees of warming.
The big developments of the past year include:
* Peak Coal. Not only has global consumption of coal begun to fall, but the pressure to abandon coal, exerted at every stage from the initial financing of mines to the burning of coal in power stations has grown in intensity.
* Continued progress in renewables, notably including the appearance of commercially viable battery storage systems. It’s now obvious that, taking all the costs into account, renewable electricity is cheaper than the fossil fuel alternatives, and capable of completely replacing them.
* The political eclipse of leading denialists, most notably Abbott and Harper, and the disarray of US Republicans on the issue
* Looking at the agreement itself, it’s as ambitious as could reasonably have been hoped. Big points include
– The adoption of 1.5 degrees as a goal towards which efforts will be aimed
– The “ratchet” mechanism of 5 year reviews
– The acceptance that all countries need to act to reduce emissions over time.
Taken together, these developments put the world on a path to steadily more ambitious reductions in greenhouse gas emissions, consistent with stabilization of the global climate at 2 degrees of warming or less.
[^1]: The most obvious possible catastrophe would be a Republican victory in the 2016 US elections. But the momentum for change is such that even four years of unified Republican rule would probably not be enough to stop it.
For quite some time, I’ve argued that, if nuclear power is to make any substantial contribution to reducing CO2 emissions, its growth will have to accelerate in China and to be based on the AP1000, the only Gen III+ design likely to be built in numbers significant enough to achieve any kind of scale economy.
It now appears highly unlikely that this will happen. Although China notionally restarted its nuclear program in 2012, a year after Fukushima, approvals have slowed to a crawl. This article, from Nuclear Engineering International, explains some of the reasons.
More significantly, China appears to have abandoned the idea of using a Western design, and is instead pushing two designs of its own, the CAP-1400 (an adaptation of the AP1000) and Hualong 1, Chinese design with French antecedents, variously rated as Gen II, Gen II+ and “comparable to a Generation III”.
It appears that the cost of imported inputs to the current projects is seen as prohibitive. The hope that the Hualong will generate an export market, and the British government has just agreed in principle to the construction of one such plant, conditional on approval of the design. In the absence of any operational plants, that looks problematic, to put it mildly. The announcement looks to be driven more by diplomatic considerations than by economics, which suggests that actual construction may be a long way off.
The announcement that the UK government is cancelling funding (budgeted at stg 1 billion) for its proposed competition for carbon capture and storage (CCS) marks the end of the last best hope that we can mitigate CO2 emissions while continuing to burn coal. If follows the abandonment of similar programs in Australia and the US.
Two thoughts on this.
First, it makes a nonsense of one of the justifications for supercritical coal-fired power stations, namely that they can be made “CCS-ready”.
Second, lots of projected paths to decarbonization involve substantial reliance on CCS. Those will need to be scrapped or changed substantially. The simplest change would be to replace coal+CCS with nuclear (the UK government now seems to be chasing the mirage of Small Modular Reactors) but that is only marginally less unrealistic than CCS (a new post on this shortly, I hope). The alternative is to rely on a combination of storage and smart grid pricing to adapt our current electricity system to one driven mostly by wind and solar PV, with hydro and limited amounts of gas as the dispatchable sources.
Over the last few weeks, there have been quite a few reports that the US, Japan, Australia and Korea are negotiating an agreement that would greatly reduce the availability of concessional funding for new coal projects. Recent reports, though, suggest that the US and Japan will make an agreement on their owmsn ter, leaving Australia (and perhaps also Korea) to go its own way. That has some pretty big implications for the Turnbull government and its position at the Paris Conference.
National and international development banks and export credit agencies, including Export-Import Banks in (South) Korea and the US, the Japanese Bank for International Cooperation and the Export Finance Insurance Corporation in Australia have been a major source of finance for coal plants in developing countries like the Phillipines and Vietnam. With Chinese coal demand having peaked, and India shifting emphasis to renewables, the coal industry is counting on rapid demand growth in countries like these.
The reported US-Japan deal would eliminate funding for coal-plants that don’t use supercritical technology, and would require ultra-supercritical technology for all but the poorest countries. Apparently, Korea has proposed weaker restrictions, and Australia weaker still. But rather than split the difference, Politico reports that the US and Japan will make a deal without Australia and Korea.
As far as I can tell, we are still in the stage of preliminary posturing. Some sort of compromise, or perhaps capitulation, may be reached. But if the US-Japan deal goes ahead without us, that will be a pretty clear signal that Turnbull is going to stick with Abbott’s anti-climate policies.
If such an outcome is possible in these talks, it’s also possible in Paris. Until now, I’ve assumed that the imperative for a global deal is such that even Australia’s weak proposals, and rejection of any credible policy, will be treated as acceptable. But now that Harper is gone in Canada, and Japan is working with the US, Australia is unlikely to find much backing for a recalcitrant position. While Korea might hold out on export financing, it is unlikely to want to be seen as sabotaging the entire agreement.
Hopefully, this is one of those situations where the export finance negotiations are still on a dynamic set under Abbott. Hopefully, Turnbull can see that the merits of being a global citizen in good standing, notably including continued friendly relations with Obama, outweigh any grumbles he might face from the LNP right.
Update An agreement has been reached. It looks pretty close to capitulation by Australia, though the government extracted enough concessions to call it a compromise. (Hat Tip: Cambo in comments).
fn1. I wasn’t clear about Australia’s involvement, since we don’t export or finance power plants, AFAICT. It appears that the agreement was formally made by the OECD, which requires unanimity. That makes the threat by the US and Japan to go it alone even more significant, I think.
fn2. Despite the impressive sounding name, ultra-supercritical plants still emit a lot of CO2, only about 10 per cent less than the subcritical plants they replace.
I have a piece in The Guardian, pointing out that the moral case for coal only works after you’ve ruled out, for amoral reasons of self-interest, the genuinely moral options for helping poor countries and saving the planet.