Decarbonizing the economy is easy and cheap

Since I wrote my post on good climate news for 2017, a couple of news items have caught my eye

* Britain now generates twice as much electricity from wind as from coal, and around 30 per cent from renewables in total
* More than half the vehicles sold in Norway are now electric or plug in hybrid

My thoughts on these examples over the fold:

TL;DR version: These examples show that, at least for developed countries, massive reductions in CO2 emissions are feasible right now, with no discernible effect on living standards.

Let’s take Norway first. The rapid shift to electric vehicles is part of a program aimed at ending sales of internal combustion cars by 2025. It’s been driven by subsidies of various kinds, as well as easier access to parking. These subsidies are substantial when considered in relation to the purchase price of cars. What matters, however, is that they are quite modest in relation to government budgets and the economy as a whole. They don’t even rate a mention in the summary page of this OECD economic survey. Of course, Norway is rich, even by developed country standards, but only about 25 per cent richer than Australia.

As we’ve seen repeatedly, subsidies for ambitious climate programs are initially set too high, with goals being overachieved as policymakers are surprised by consumer demand and technological progress. Norway is already scaling back its subsidies, but that won’t derail progress towards decarbonization. Countries that move a bit later will be able to start with lower subsidies and draw on Norway’s lessons regarding the best way to encourage a rollout of charging stations, the key infrastructure requirement.

Finally, it’s worth observing that Australia offers some pretty big subsidies to (mostly) large car buyers through our indefensible concessions on FBT, and through inadequate road pricing. The only benefit of these subsidies is to maintain employment in the salary packaging industry and to keep the toll road juggernaut rolling.

Turning to Britain, it’s striking to recall that, only a few years ago, we were having heated arguments about whether an energy sector with 30 per cent renewables could possibly work. Looking in more detail at the numbers, the UK has one advantage in eliminating coal, namely that it generates around 25 per cent of its electricity from nuclear (a high cost source, but the cost of existing stations is sunk), which has constant supply characteristics similar to those of coal. Even so, coal and nuclear combined only account for around 30 per cent of the total, far less than Australian fans of “baseload” assume to be necessary. Against that, Britain has some big disadvantage. It’s a notoriously lousy location for anything solar, and the lack of available land (amplified by NIMBY resistance) means that most of its windpower development is offshore. The British example shows that, with sensible policy, Australia could reduce the coal-fired share of electricity to 30 per cent in a decade or so and at negligible economic cost.

43 thoughts on “Decarbonizing the economy is easy and cheap

  1. @Ikonoclast
    “Universities are dedicated to learning.” Quite so. It’s in all their charters and mission statements and graduation day speeches. Capitalist firms are dedicated to making profits for their owners, and by extension their hired top managers. Some choose one strategy, others another. One of the strategies of some capitalist firms is short selling: that is, to identify other companies that are in trouble and to make their troubles worse. No growth in real quantities is required. Overall, “I don’t see any method, sir”.

  2. Ikonoclast, if you are going to allow the existence of robo-taxis, and they do exist now, then the line between cars, buses, trams, and trains becomes blurred. Self driving vehicles going the same way can form a traffic snake to reduce air resistance that will act like a bus or the rubber wheeled trams that exist in some places. Robo-cars could also have steel wheels so they could use tram or train tracks. Light rails could be put everywhere so rubber wheels won’t be required, but that’s probably not going to happen soon, so for now robo-cars will probably be stuck with synthetic rubber wheels.

    In practice, those who still have jobs are likely to be willing to pay the extra expense of not having to change vehicles on their commute. And because the benefits of technological society will be widely spread, unemployed people will be able to afford to do that too. All citizens with less than $1 million in assets should report to the Soylent Pet Food Company to receive their Universal Benefit. The robots there will take care of you.

  3. Ikon, battery packs are definitely going to fall below $100 US a kilowatt-hour. That’s a foregone conclusion and I’m confident they’ll eventually get a lot cheaper. So I don’t see why long haul road transport would be hybrid and not battery electric. As for emergency vehicles, I don’t think they’d use less powerful, less reliable, more expensive internal combustion engines if electric motors and batteries are available.

  4. @James Wimberley

    “No growth in real quantities is required.”

    Capitalism is not, or need not be, predicated on population growth per se. Capitalist economic growth is possible without population growth. Contemporary capitalism however is predicted on (among other things) continually bringing more of the global population into the capitalist system. As it brings more of the global population into the capitalist system, average global per capita consumption will rise; meaning of food, potable water and all other consumables. If at time t2 as compared to time t1, mobile phones cost half the real materials and energy to produce but four times as many are produced and sold, then material consumption will have risen. This Jevons Paradox type outcome is a consistent feature of capitalism driven by technology. It is even more pronounced in that period where more and more people (think of the entire populations of China and India for example) are progressively being brought from peasant or small farmer subsistence status into the capitalist system.

    Capitalism is predicated on profit and the concomitant increase in “wealth”. Wealth may be defined as the measure of use value(s) made by market operations. In simple terms, more wealth can be achieved by more market-valued stuff (quantity) and/or better market-valued stuff (quality). In the paragraph above I mentioned the process by which better stuff made at less material cost may still lead to an increase in material consumption, at least until the entire global population is substantially incorporated in capitalist production and consumption.

    The question remains whether this process can be completed before the climate and/or environment are degraded to a point where the entire production system cannot be maintained let alone grown further by the “wealth” measure. I refer again to the continuing incorporation of the peasant / worker farmer subsistence population, and other unfortunate “under-classes” like tip-dwelling scavengers for example (Indonesia, South America and other places), into the capitalist system as workers and hopefully finally as middle-class producers and consumers. This is an entirely desirable result in the sense of human emancipation from misery and poverty. Capitalism is indeed performing this revolutionary work. Capitalism is revolutionary in comparison to the economic systems which came before it.

    The question is how is capitalism performing this revolutionary work and are its methods sustainable? Whenever a method is achieving progressive results it also nevertheless has to be subjected to an analysis of the sustainability of the methods. Capitalism suffers from a tendency for the rate of profit to fall. I do not subscribe to the any simplistic or doctrinaire statement which says the rate of profit has constantly fallen through all stages of capitalism. Clearly this not the case. Counter-tendencies do exist and/or can be developed. Qualitative jumps of the capitalist system to a new higher stage of development can and do occur (especially by technological innovations). These tend to restore the rate of profit, as a counter-tendency.

    However, capitalism also restores profits by drawing more and more (people and natural territories) into its system. The capitalist system grows and envelops and subsumes systems (human and natural) which are not capitalist or not capitalistically exploited. The imperative for more profit drives both quantitative and qualitative expansion. Quantitative expansion like drawing more of the global population into the capitalist system permits both greater profits and a greater rate profit, the later by labour arbitrage. “Global labor arbitrage is an economic phenomenon where, as a result of the removal of or disintegration of barriers to international trade, jobs move to nations where labor and the cost of doing business (such as environmental regulations) is inexpensive and/or impoverished labor moves to nations with higher paying jobs.[1]”

    A discontinuity will be reached when either (a) all of the global population has been drawn into the capitalist system or (b) the biophere’s resources and/or bioservices system prove unable to further sustain quantitative growth. This juncture of discontinuity will be an acid test of the theories held by capitalism’s supporters and apologists on the one hand and Ecosocialists (broadly speaking) on the other. If and when (a) happens capitalism will have lost a major supplementary method of increasing or restoring the rate of capitalist profit. It will then have to rely entirely on technological progress to achieve this end. If and when (b) happens, and it may well happen before (a), this will be another kind of shock to the entire system.

    I don’t want to sound doctrinaire or absolutely certain of my (Ecosocialist inspired) thinking. However, I do feel it is more likely that theories in the zone I read and “work” in (rather, dabble in to be honest) are much more likely to be correct than those that see endless growth (if only of the qualitative kind) as entirely feasible. Even endless qualitative growth mandates ever-increasing complexity and ever-increasing energy consumption to maintain complexity in the face of entropy. The Laws of Thermodynamics are on the side of the Ecosocialists.

    It would take another large post to outline why Ecosocialism (rather than the Ecomodernism which yourself and J.Q. appear to essentially espouse) is very arguably more nearly congruent with the real possibilities of our human and civilizational future.

    Here endeth a slight exposition on some elements of my method. 😉

    Is there method in my madness or just madness in my method. I leave it to others to judge.


    [1] – from Wikipedia.

  5. @Ronald

    Ron, on reflection you are probably right there. Technology has overtaken my assumptions. It is hard to see the military progressing beyond ICE and jet engines in the foreseeable future. However, this is just another good reason for reducing military spending.

  6. Ikon, militaries are looking at hydrogen plus fuel cells. The reason being it can provide more effective energy per kilogram than diesel, kerosene, or petrol. This reduces the number of vulnerable supply convoys or enables people who are defending their country from within another country on the other side of the planet from the country they are defending be entirely supplied by air.

    They are also using solar PV to reduce the need for fuel.

  7. I feel very conflicted reading such posts for several reasons. I would like to believe that we have solutions to climate change, but I find it very hard to reconcile the positive tone of this post with the empirical evidence that emissions are still increasing. It seems like never never land – good things are always going to happen tomorrow.

    Also, the optimistic tone seems to me at risk of obscuring other important issues, such as continuing environmental degradation (the breaching of other planetary limits such as loss of biodiversity and nitrogen phosphorus balance, eg see Steffen et al). It also seems to risk obscuring the continuing and growing problems of inequality.

    Further, it seems to lend credence the widespread belief that technology and industrialisation improves human life with no downsides. This is not correct and should be critically examined. For example, industrial food systems and motorised transport are undoubtedly contributing to the increase in chronic disease.

    You could say that I am reading too much into this one post. However the problems I’ve referred to are all inter-related. They are the result of a complex system, with systemic flaws deriving from its origins in patriarchal capitalism, imperialism and a belief that ‘men’/humans are superior to ‘nature’/environment. The risk of posts like this I think is that by focusing on one bit of the complex system and saying ‘look we can fix this bit’, the systemic problems are obscured.

    We could be looking at the system as a whole, and looking at ways to reduce inequality, promote human and planetary wellbeing, and increase environmental sustainability. My research suggests this is complex, but not impossible, but does involve looking critically at the way we use technology, rather than seeing technological solutions as the entire answer.

  8. I hadn’t seen Ikon’s long post at #30 when I posted. On first glance there seems to some overlap so I will go back and read it to see where we agree or differ.

  9. @Ikonoclast
    Looking at this post, there are many comments I could make and it’s difficult to be succinct. In some ways our approaches are similar because my position is something like ecofeminist socialism or ecosocialism feminism. However there’s also some very basic points of disagreement.

    For one thing, I think you give capitalism too much credit. Certainly some of the developments you are ascribing to capitalism are to do with democracy and human rights. Secondly, capitalism is a historical development and in some ways can simply be seen as a logical continuation of certain historical trends, particularly patriarchal hierarchies, enclosures of the commons and the enlightenment view that men could improve upon nature. I’ve recommended Carolyn Merchant’s ‘The Death of Nature’ before, but if you haven’t thread it, I do strongly recommend it again.

    I agree with you that capitalist systems tend to bring everything into ‘the market’, but you have to remember that ‘the market’ isn’t actually a market where people trade as equals, but a system largely controlled by hierarchical corporations. Again, that’s historically integral to capitalism. For example there’s quite a lot of feminist research on how small scale, local trading by women (eg see Judith Bennett’s work on brewers) tends to become organised into hierarchical male dominated structures in which profit went to dominant men. From a gender perspective, this is partly because were more tied to the local and domestic area, and partly because society and state thought that power should be held by men.

    Capitalism in other words is as much about power as about ‘economics’ in a narrow sense.

    Also Marx didn’t offer a fully developed alternative to capitalism because he accepted some of the basic patriarchal assumptions underlying it, eg that Man improved upon nature and that caring for others (particularly children) was a subordinate form of work (reproduction) which existed to support the (implicitly male) ‘productive’ worker.

    Probably enough for now.

  10. @Val

    On re-reading my own post at #30 there are several assumptions which might not stand up at all. Your comments correctly highlight some of the mistakes and oversights I have made. My post is very poorly written too: poor ideas badly expressed. Maybe, one day, I can re-order my thoughts and write something a bit better and which makes a bit more sense… maybe.

  11. @Val

    With this post of yours, #33, you have nailed it. I can’t support you enough, without simply repeating your sentences… and that would be redundant.

  12. @Ikonoclast
    I don’t think that your post is badly written ikon and I very much agree with you about capitalism bringing everything into the ‘market’ in the sense of trying to turn all human activity into a financial exchange relationship and opportunity for more powerful (or less scrupulous) players to make profit. I was a bit surprised that you seemed to give capitalism a bit too much credit though!

  13. @Val

    I am not sure what excess credit I am giving to capitalism unless it is the statement that it was “revolutionary” in its time. Of course, it is hard to sort out revolutions and assign cause. Indeed simple causation may be the wrong way to think about it. Which revolution came first? The humanist revolution (the Enlightenment), the democratic revolution, the scientific revolution, the industrial revolution, the capitalist “revolution”?

    “Which revolution came first?” is probably the wrong question. It already presupposes simple linear causation rather than a complex inter-related system with feed-backs.

    In practice, capitalism with steering and benefits (meaning government direction, a mixed economy and welfarism) has worked and lifted many out of poverty. It has plunged others into misery and poverty – the “dark satanic mills” to the Saipan scandal to the Apple factory scandal in China.

    The question now is this. At what cost has capitalism worked? Well, some of the costs are the large wars it periodically unleashes plus now global environmental destruction and climate change. It cannot survive the latter two costs. Also, with the rollback of fair wages and welfarism, capitalism has shown any accommodation made with workers is always provisional and temporary. Workers can never feel secure under capitalism. It destroys their livelihood and their world in the long run… even though there were some nice highway eateries on the journey.

  14. Not so small footnote: a Dutch-Belgian inland shipping company is buying autonomous electric barges for shipping containers between Amsterdam and Antwerp. (***** ) You may not have them in dry Australia, but in continents with serious rivers, inland shipping is big business for bulk goods. It’s obviously much easier to solve the charging problem for river traffic than oceanic. Manned barges have to stop for sleep.

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