Technology to the Rescue ?

There’s been a fair bit of buzz about an article in New York Magazine with an apocalyptic picture of climate change over the next century. I’ll for a more complete response later. But as it happens, I was already thinking about a much more optimistic post.

From the Climate Change Authority, of which I was a Member until recently, here’s a set of emissions trajectories consistent with a 67 per cent probability of limiting warming to 2 degrees.

There’s a pretty good case to be made that we are on the blue trajectory, and that, with decent political outcomes, we will be able to go below it and hold warming to the Paris aspirational target of 1.5 degrees. That would still have plenty of negative effects, for example on coral reefs, but it would not be an existential threat to humanity.

The points that are critical in the blue trajectory are a peak in emissions, right about now and a drop to zero net emissions by 2050. The first looks to have been achieved. As for the second, we are already seeing commitments to this goal from developed countries and jurisdictions, and there’s every reason to think it can be achieved at low cost.

As an economist, this is about the outcome I would have expected given a global commitment to an emissions trading scheme with a carbon price on a rising trajectory to $US100/tonne or so. In fact, we’ve seen nothing of the kind. There has been no real global co-ordination, and where carbon prices have been imposed, they have been low and limited in scope.

Instead, we’ve had a series of favorable technological surprises of which the most striking have been the plummeting cost of solar photovoltaics, and advances in battery technology allowing both low-cost electricity storage and affordable electric vehicles. There’s no reason to think these advances have run out, or that any of the remaining problem areas (air transport, cement manufacture and so on) will prove insuperable.

What these developments mean is that carbon-based electricity generation is on the way out, and that the end of the internal combustion engine is in sight, probably well before 2050.

Should this have been a surprise? In one sense, perhaps not. There were a lot of potential technological options out there, and we only needed a couple to work. There were plenty of failures and disappointments (nuclear fission and fusion, carbon capture and storage, biofuels, geothermal) and more limited successes (energy efficiency, solar thermal and wind power) along with the surprise success of PV. The same point may be made in the particular case of storage. Any reversible process involving energy can form the basis of a storage technology, so there is a huge range of possibilities, from flywheels to pumped hydro to batteries based on many different chemical reactions. Viewed that way, it would be a surprise if we couldn’t find a good one.

On the other hand, there’s no obvious technical reason why we couldn’t have developed most of these technologies decades ago. So, it clearly needed a push from policy and public concern to get them to happen. Solar feed-in tariffs of 50c/kwh may look excessive now, but policies like this, in Australia and elsewhere, gave the industry the start it needed. Even without price incentives, the importance of the problem attracted attention from researchers and technologists that might otherwise have been allocated elsewhere.

So, I think we will escape the cataclysm, but more through technological luck than successful policy management.

Final note: This assumes minimal political good sense. That’s not always in evidence, most obviously from the Trump Administration in the US and its Australian allies, but, thankfully, neither of these look set to endure for long.

38 thoughts on “Technology to the Rescue ?

  1. If only GHG concentrations were cooperating with those pretty curves. It makes one wonder about the accuracy of emissions reporting.

    A more basic problem has been alluded to above, which is the lack of (mainly carbon) feedbacks being accounted for in the calculations underlying those curves (and a number of similar efforts).

    In particular, they don’t include the 204 Pg C/2100 consensus permafrost estimate of Schuur et al. (2015). Why? Were CCA members even made aware of that? A potentially larger problem is that all other presently unquantifiable feedbacks (soil, boreal forests, tropical forests, some others) are assumed to be zero even though there are good reasons to think they won’t be. (FWIW this lack traces back to failure to include these feedbacks in CMIP 5 back in 2013. It could and should have been done using estimates, but I guess nobody likes unalloyed bad news.)

    The permafrost and boreal forests are extremely vulnerable to fire. Fire in the latter is increasing, and more disturbingly fire in the former has undergone abrupt onset after having been absent during the Holocene (including during the warm mid-Holocene interval). Not to alarm anyone, but this has the potential to be the first step toward a hyperthermal. This boreal fire feedback may have already become a self-sustaining process (i.e. its own emissions being sufficient to keep it going regardless of whatever we do).

    It’s very early days for the science on boreal fire trends, but this video is informative. Probably the key question is return period for the fires, and early indications from the first big tundra fire (Anaktuvuk in 2007) is that regrowth is going very well (normally a good thing, but in this case it points to earlier reburning; that’s important because repeated burning accesses deeper and deeper carbon).

    Fires need ignition sources, and the lack thereof is probably what prevented tundra fires in the past, but unfortunately lightning is moving north with warming. See also this post from the folks surveying the Anuktuvuk fire aftermath this summer; that big thunderstorm was practically over the Beaufort Sea.

    It’s not clear boreal feedbacks are even necessary to lighting off tropical biomass (fire once again), but they’ll certainly speed the process way up; if that does happen in turn we’re on our way to a hyperthermal (with some lag since the oceans have to warm enough to trigger a self-sustaining loss of shallow methane hydrates). Before we even see the hyperthermal starting, the tropics will become uninhabitable. Eocene-like baseline conditions are quite enough for that.

    Did someone mention we’re in a climate emergency and need a WW2-scale mobilization ASAP?

  2. @Stephen Luntz

    A couple of observations on methane from cows

    1. Some recent research suggests that the problem could be solved at minimal cost by adding seaweed to the diet of cattle and ruminants

    2. We could always switch to eating chicken. Not something that would happen by moral suasion alone, but it would scarcely be equivalent to imposing martial law.

  3. Rog, those are wholesale spot prices, which tend to average a little above the actual average wholesale price of electricity. We don’t know the actual average wholesale price of electricity. It is a secret.

    Looking at the average wholesale spot price for June for the National Electricity Market the states in order of most expensive to least expensive are SA, TAS, VIC, NSW, QLD.

    Victoria normally has the lowest average wholesale spot prices due to their brown coal capacity, but that’s not the case at the moment.

  4. Methane production in ruminants is a sign of digestive inefficiency. So decreasing the amount of methane they produce should improve feed conversion efficiency and so could be an improvement that pays for itself even without considering climate benefits.

    But even if methane production from ruminants can’t be eliminated, there is still no need for monstrous humans to stop eating the flesh of cattle animal slaves, provided they pay the cost of removing the greenhouse gas emissions that result from the atmosphere. If this costs $100 per tonne of CO2 and producing one kilogram of beef currently results in emissions equal to 13 kilograms of CO2 equivalent, then that would add $1.30 to the cost of a kilogram of steak.

    If it is easy to cut emissions from beef production by half, then that would cost 65 cents per kilogram. While those who consume the flesh of cattle might prefer no increase, no one who can afford 19.5 cents per 300 gram steak will have to go without beef if they don’t want to.

    Note – This assumes world climate at least resembles what it does today. If things get out of hand cows will die across a large portion of the planet. It’s a heat stress thing. The good news is humans are more heat resistant than cows, so outlasting cows is something some of use can aspire to.

  5. @Ronald B Given the variables it’s difficult to prove, or disprove, politicians and var media entities’ statements on energy prices.

    On another tack, our own bills attract a discount of ~22% if we pay by the due date. This makes me think that the rates given in the invoices are

    a) inflated by an amount equal to the “discount”
    b) the energy provider is making a large profit from cash flow
    b) the energy providers’ main business is not energy

  6. Rog, it is easy in the sense that it can be done given a bit of effort and definite answers can be arrived at. If Prime Minister of a country can’t be bothered to sit down with a pad and pencil for a few hours and work it out, then that is rubbish.

    Actually, the Prime Minister could probably get someone to work it out for him. If he doesn’t even have to spend the time working it out himself, but still can’t be bothered to find out whether he is talking rubbish or not, then that is rubbished cubed.

    The reason why your electricity bill has a discount of 22%, which most likely applies only to the GST exclusive marginal cost of electricity, is to deliberately make your electricity bill more confusing.

    Currently about 40% of the price of electricity is retailing. In this age of computers that can add up whole columns of numbers without human intervention, 5% might be enough if states simply supplied electricity, as they used to.

  7. @Geoff Edwards

    The green car myth

    How government subsidies make the white elephant on your driveway look sustainable

    …One company that has benefited enormously from these policies is Tesla. In 2008, Tesla applied for a 465 million dollar loan from the Federal government. This allowed Tesla to produce its car, which then allows Tesla to raise 226 million in an IPO in June 2010, where Tesla receives cash from investors willing to invest in risky ventures as a result of central bank policies. A $7,500 tax credit then encourages sales of Tesla’s Model S, which in combination with the money raised from the IPO allows Tesla to pay off its loan early.

    In 2013, Tesla then announces that it has made an 11 million dollar profit. Stock prices go through the roof, as apparently they have succeeded at the task of the daunting task of making green cars economically viable. In reality, Tesla made 68 million dollar that year selling its emission credits to other car companies, without which, Tesla would have made a loss.

    Tesla in fact receives $35,000 dollar in clean air credits for every Model S that it sells to customers, which in total was estimated to amount to 250 million dollar in 2013.4 To put these numbers in perspective, buying a Model S can cost anywhere around $70,000, so if the 35,000 dollar cost was passed on to the customer, prices would rise by about 50%, not including whatever sales tax applies when purchasing a car.

    We can add to all of this the 1.2 billion of subsidy in the form of tax exemptions and reduced electricity rates that Tesla receives for its battery factory in Nevada.5 The story gets even better when we arrive at green cars sold to Europe, where we find the practice of “subsidy stacking”. The Netherlands exempts green cars from a variety of taxes normally paid upon purchase. These cars are then exported to countries like Norway, where green cars don’t have to pay toll and are allowed to drive on bus lanes.6

    For freelancers in the Netherlands, subsidies for electrical cars have reached an extraordinarily high level. Without the various subsidies the Dutch government created to increase the incentive to drive an electrical car, a Tesla S would cost 94.010 Euro. This is a figure that would be even higher of course, if Dutch consumers had to pay for the various subsidies that Tesla receives in the United States. After the various subsidies provided by the Dutch government for freelance workers, Dutch consumers can acquire a Tesla S at a price of just 25,059 Euro.7

    The various subsidies our governments provide are subsidies we all end up paying for in one form or another. What’s clear from all these numbers however is that an electric car is currently nowhere near a state where it could compete with a gasoline powered car in a free unregulated market, on the basis of its own merit.

    The image that emerges here is not one of a technology that receives a gentle nudge to help it replace the outdated but culturally entrenched technology we currently use, but rather, of a number of private companies that compete for a variety of subsidies handed out by governments who seek to plan in advance how future technology will have to look, willfully ignorant of whatever effect physical limits might have on determining which technologies are economically viable to sustain and which aren’t.

    After all, if government were willing to throw enough subsidies at it, we could see NGO’s attempt to solve world hunger using caviar and truffles. It wouldn’t be sustainable in the long run, but in the short term, it would prove to be a viable solution to hunger for a significant minority of the world’s poorest. There are no physical laws that render such a solution impossible on a small scale, rather, there are economic laws related to scalability that render it impossible.

  8. Currently South Australia is exporting around 600 megawatts and at around 3 am EST the price of electricity is expected to go negative as SA demand falls around 400 megawatts below what it is now and presumably the state will be producing more electricity that will consume and can export. I don’t think that’s happened for a while. Since the Heywood interconnector’s capacity was increased SA has generally been able to export any excess renewable power it produces.

    I don’t think negative pricing would be happening if the state wasn’t now required to have two large gas generators operating at all times, by order of the Premier. This is driving up electricity prices in the state and rewarding gas generators the state government wants to punish for not maintaining supply by transferring large amounts of money to them.

    I’m not sure they’ve thought this through.

  9. Svante, it’s a great thing that Tesla is charging around the same price in Australia as they do in the US for the Tesla S where subsidies to electric car makers consist of bugger plus all. I’m going to take this as a clear admission by Elon Musk that Australians are just sexier and more deserving than people’s elsewhere.

  10. @Svante
    Subsidies are just money – the only reason to worry about them is if they’re distorting people’s behaviour in ways we don’t want to support. Buying electric cars is very much something we /want/ people to do, and hence throwing money at them is a good idea. If that results in misallocation of resources we should review the subsidies, but at the moment they appear to be fixing some of the current misallocation of resources towards fossil fuels, so they’re a good thing.

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