No regrets

Another quick reaction piece, this time on Obama’s climate policy, for The Conversation. My key observation is that, despite its ambitious goals, Obama’s policy is still in the “no regrets” class. That is, the domestic benefits for the US, disregarding climate effects, outweigh the costs. More over the fold

The really striking feature of Obama’s climate change plan is the calculation that the local environmental and health benefits of reducing the use of coal to generate electricity will far outweigh the direct economic costs, even without considering the impact on CO2 emissions. This is consistent with economic research on the subject, most notably this 2011 review, which concluded that the overall damage done by coal is potentially several times larger than the benefits.

A similar assessment is reflected in the Chinese government’s decision to close down all the coal-fired power stations in the vicinity of Beijing and other major cities.

This means we are still in the region of “no regrets” policies on climate change, in which measures to reduce CO2 emissions are beneficial even without taking climate change into account. The fact that so much can be achieved with so little downside is largely due to the availability of so much “low-hanging fruit” in energy efficiency measures, and even more to the startling reductions in the cost of renewable energy, particularly solar photovoltaics. These reductions have rapidly reached the point, where, depending on the vagaries of electricity pricing, renewables are often cheaper than new coal-fired power plants.

On the other hand, it’s sobering that no national government has yet been prepared to incur any substantial economic cost (say, more than 1% of national income) in the effort to stabilize the global climate. If it were not for the fortunate availability of so many “no regrets” policies, the planet would already be facing a quite literally unmitigated disaster.

6 thoughts on “No regrets

  1. This is the (pdf) link for “most notably this 2011 review“.

    Some other links can be found in the original for those interested.

    PS: The “no regrets” theme always reminds me of the cartoon of the guy standing up at the climate change solutions conference and saying: “But what if it’s all a big hoax and we create a better world for nothing?”

  2. Lynette Molyneaux’ companion piece says this:
    “Obama and the EPA may well have to run the gauntlet of many years of litigation before this can be enacted.”

    This must be wrong. It’s a regulation, adopted yesterday by Gina McCarthy as EPA Administrator in pursuance of the Clean Air Act. It’s valid law today (actually from the date they get round to publishing it in the Federal Register, not just the White House website). This makes a huge difference. State officials are under an obligation to draw up state implementation plans. Company directors have I suppose a fiduciary duty to take account of the regulation’s impact as current policy on their business and its shareholders. These duties hold regardless of their political views. There’s a risk the regulation may be voided by SCOTUS under one of the many challenges it will attract from Day 1, but that’s life in the USA for Democrats in office.

  3. A true “no regrets” policy would take account of the climate change benefits to the adopting state. These won’t be very large – the reductions in emissions are not great and the USA is only responsible for a share of the world total – but they are there.

    The size of the net benefits suggests that a more ambitious plan would still have paid in national cost-benefit terms. The benefit goes all the way to 100% renewables by 2050, according to Mark Jacobson’s detailed state-by-state models. Obama quietly raised the emissions target from a 30% reduction from 2005 to 32%. I assume this was a political calculation.

    On all past experience, once industry stops whining and gets to work implementing tougher standards, costs turn out less than expected. Expect HRC, if elected, to tighten the regulation after 5 years, unless she has a landslide win in Congress and can get through a carbon tax.

  4. @James Wimberley

    A curious aspect of Obama’s announcement is that he used the phrase “carbon pollution”. Was he channelling Christine Milne? He was not. Apparently he could only regulate in this way after the EPA declared carbon emissions to be a pollutant, which they did only recently.

  5. When you look at the impact of the coal industry on the Latrobe Valley, seemingly locked into poverty and poor health, you have to suspect the same outcomes would be true in many parts of Australia. Where the mines are exporting high quality coal from pits remote from towns, I suspect this may be less true. That is not to say I support coal power, but clearly its export has made Queensland richer.

  6. There was good news today about the Carmichael coal mine.

    From Get Up:

    “About an hour ago, Adani’s Carmichael Mine approval was ruled invalid by the Federal Court!

    Faced with overwhelming evidence, both Environment Minister Greg Hunt and Adani have conceded defeat and withdrawn the approval for the largest coal mine in Australia. Minister Hunt must now make a new decision to accept or reject the mine.

    The case, run by the incredible Mackay Conservation Group, was funded by thousands of GetUp members across the country. It leaves Adani without an approval for the monstrous mine, no approval for dredging in Great Barrier Reef waters at Abbot Point, and no investors. It’s not over yet, but we just landed one almighty blow.

    This is an historic, landmark victory. It couldn’t have happened without GetUp members like you. Thank you.

    The Mackay Conservation Group fought the mine on three fronts. They argued that Minister Hunt didn’t consider the impacts of the mine on climate and the Great Barrier Reef, didn’t consider Adani’s poor environmental record, and didn’t consider the impact on vulnerable species. It was a rare, stunning victory that will reverberate across the country.”

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