Global Warming Gridlock

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Global Warming Gridlock

Postby Zamfir » Wed Jul 13, 2011 9:27 am UTC

It's a new book, by David Victor, that mainly argues that the current diplomatic approach of climate change is bound to fail. It's interesting I think. Here's a review with a reasonable summary of the book.

In short, he says that the strategy of having a worldwide treaty where everybody abstractly promises reductions is not going to work. It's modelled after earlier succesful environmental treaties, where reductions were far cheaper and more targetted. So governments could reliably promise to make cuts when negotiating. But CO2 reduction is seriously expensive (and badly damaging to your economic status if others don't join you), it is unclear how expensive exactly, and there will be far more concentrated political backlash. So even enthusiast countries are extremely careful not to promise reductions they are not sure they can make, leading to a lowest-common-denominator treaty plus lots of non-binding statements about the importance of cuts.

Extract from the review:
Spoiler:
The quest for a grand solution follows a three-step process. First, scientists determine how much warming is too much and draw a “red line.” Today, that line is typically presented as 2 degrees Celsius warming above pre-industrial levels, the official target of the United Nations Framework Convention on Climate Change (UNFCCC) and the G-8. Second, they determine the level of emission reductions necessary to avoid the red line. Third, diplomats bring the world’s countries together to sign a collective treaty pledging to achieve those reductions.

This top-down strategy is seductive, which is why it’s been central to international climate negotiations since the signing of the Rio Declaration in 1992. But as a practical matter, it’s not working. There have been summits, dialogues, symposia, and great, gushing torrents of talk, but climate-warming emissions have continued their inexorable upward trajectory. Climate diplomacy has yielded “the illusion of action but not much impact on the underlying problem,” Victor writes.

The strategy fails because it is driven by persistent misunderstandings about how nation-states interact with the international community. First is what Victor calls the scientist’s myth, the idea that a clearer, stronger, louder scientific consensus about what level of warming is dangerous will change politics. But national leaders have overwhelming incentives to focus on their countries’ short-term welfare, not on global dangers. “Most of these line-drawing efforts,” he notes, “have very little real impact on policy.”

Second is the environmentalist’s myth that climate change is an “environmental problem,” best addressed by treaties establishing targets and timetables for the reduction of harmful emissions. That model has worked for other environmental problems, most notably the Montreal Protocol reducing ozone-damaging chemicals, but it is badly suited to climate change, which is better seen as a problem of economics, infrastructure, and innovation.

Finally, there’s the engineer’s myth, which holds that climate change will be easy to tackle because inventors will develop new technologies to lower the cost of reducing pollution. Thus the alluring appeal of technological “breakthroughs.” The engineer’s myth “obscures the wide array of factors that determine the rate at which new technologies actually enter into service,” Victor says. Those factors include research and development, early-stage financing, and market barriers and opportunities.

All these myths push strategy toward broad treaties built around pollution targets and timetables. If that strategy cannot succeed, what strategy can? It begins, Victor argues, “by slowing down and refocusing on fundamentals,” namely national interests and capabilities.

Above all, he says, climate campaigners must abandon their scientism and take emission-reduction targets off center stage. National leaders cannot credibly promise particular emission levels in the short- to midterm. Emissions are determined by too many forces outside governmental control, including fossil-fuel prices, trade, and the pace of economic growth. The focus on targets is an invitation to empty grandstanding and lowest-common-denominator agreements. What leaders can credibly promise are policies, and policies, not numerical targets, should be at the center of climate accords, Victor argues.

Policies of any ambition are best coordinated among a bounded group of participants. By requiring unanimous consent among 193 participating countries, the UNFCCC process effectively guarantees treaties that reflect the lowest bid of its least ambitious members. Yet there is no substantive reason to require the involvement of every single country. After all, the top dozen emitters (counting the European Union as a single emitter) account for 74 percent of global emissions from fossil fuels. To make the size of the negotiating table more tractable, Victor suggests a “carbon club” along the lines of the World Trade Organization. Members would “bid in” with policies geared to their own national circumstances and, crucially, add contingent offers predicated on action from other members. Within the club, those contingent offers and shared benefits would create a virtuous cycle. Meanwhile, the club would craft smart incentives to lure in new members. (The Clean Development Mechanism—Kyoto’s main way of offering “carrots” to developing countries for emission reductions—has proved largely ineffectual.)

Even if countries do begin moving forward, changes of the scale required are going to be more difficult, expensive, and protracted than most climate hawks believe, Victor warns. When economists model the costs of addressing climate change, they frequently assume market-based policies like a carbon tax that distribute costs in a fair and transparent way. But precisely because such policies are up-front about costs, they tend to be politically unpopular. “The basic logic of good economic design is fungibility and transparency,” Victor notes ruefully. “The basic logic of politics encourages the hiding and channeling of costs and benefits.” Politically powerful constituencies will organize to capture more than their share of benefits and avoid their share of the costs. That pushes politicians toward policies like direct regulation that impose higher net costs but hide those costs better and therefore elicit less blowback. “Political forces strongly favor policy choices that are exactly reverse the advice of expert economists,” Victor writes, thus the cost of tackling climate change is likely to be higher than economists project.

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Re: Global Warming Gridlock

Postby jules.LT » Wed Jul 13, 2011 1:21 pm UTC

Sounds about right. Now, what's the alternative?
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Re: Global Warming Gridlock

Postby Vellyr » Wed Jul 13, 2011 2:19 pm UTC

If I had to guess, I would say "the non-diplomatic approach", whatever that is.

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Re: Global Warming Gridlock

Postby SlyReaper » Wed Jul 13, 2011 2:22 pm UTC

Grey goo.
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Re: Global Warming Gridlock

Postby Dauric » Wed Jul 13, 2011 2:23 pm UTC

SlyReaper wrote:Grey goo.


... Alternately, nuke everything and let the cockroaches sort it out.
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Re: Global Warming Gridlock

Postby mmmcannibalism » Wed Jul 13, 2011 2:32 pm UTC

I'm still a fan of finding something we could put into the atmosphere that would counteract all Co2 effects; seems like that would probably be much cheaper.
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Re: Global Warming Gridlock

Postby Aikanaro » Wed Jul 13, 2011 2:41 pm UTC

mmmcannibalism wrote:I'm still a fan of finding something we could put into the atmosphere that would counteract all Co2 effects; seems like that would probably be much cheaper.

DISCLAIMER: Once again in a not-entirely-awake state.

I wonder if it'd be possible to engineer, well, basically airborne plankton. Tiny plants that live on the wind, and can be sent up into the atmosphere. Probably not enough nutrients for them, even if they could be light/aerodynamic enough to stay up there instead of settling down....aw, well.
Last edited by Aikanaro on Wed Jul 13, 2011 2:51 pm UTC, edited 1 time in total.
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Re: Global Warming Gridlock

Postby Zamfir » Wed Jul 13, 2011 2:48 pm UTC

Vellyr wrote:If I had to guess, I would say "the non-diplomatic approach", whatever that is.

Quite the opposite (there is already a short part in the OP). He proposes to model climate deals on the GATT: start with a small group of large countries (possibly the EU as one block) so you can negotiate far more detailed agreements, aimed at policies instead of targets. With room for conditional extra promises, that countries only have to do if others do something too, and with escape clauses where you don't have to do something if they turn out more far expensive than expected. His argument is that countries will be willing to agree to far more this way, because they can be more sure about the costs of their promises, and whether they can actually achieve them.

Then aim to make access to this club attractive for other countries. Make profitable permit markets that are only accessible for countries that join, offer free technology transfers to members, make club membership a requirement for other trade deals. So other countries will have to negotiate (by offering greenhouse cutting policies of their own) to join the club, like they have when they join the WTO.

No idea whether it would work, but it's very different from the current apporach that aims for worldwide (UN-based) treaties with as large a support as possible.

mmmcannibalism wrote:I'm still a fan of finding something we could put into the atmosphere that would counteract all Co2 effects; seems like that would probably be much cheaper.

Yeah, if the problem would go away it would be less of a diplomatic problem. Question is what do we do if there is no magic cure.

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Re: Global Warming Gridlock

Postby Vellyr » Wed Jul 13, 2011 3:09 pm UTC

start with a small group of large countries (possibly the EU as one block) so you can negotiate far more detailed agreements, aimed at policies instead of targets. With room for conditional extra promises, that countries only have to do if others do something too, and with escape clauses where you don't have to do something if they turn out more far expensive than expected.


That doesn't sound like it will create very much commitment to meaningful climate change policies. I think what would happen in this case is that they would mutually agree to basically put up a token show of effort, which is what we're already doing.

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Re: Global Warming Gridlock

Postby Arrian » Wed Jul 13, 2011 3:23 pm UTC

I think a major part of the problem with cutting CO2 emissions is that, in a cold, hard cost-benefit analysis, it probably costs more to abate now than to deal with the effects of warming later. Especially when we're talking about going to things like sub 1990 emission levels. Especially developing countries, and especially China and India, they're almost certainly better off keeping their growth rate up in the 7-10% range for the next 50-100 years and then spending money to adapt to climate change (sea walls, heat resistant low water crops, desalination plants, air conditioning, etc.) than they would be by cutting their growth rate to 2-3% and adopting less productive, more expensive green technologies. Exponential growth is tremendously powerful

And can you blame them? Huge portions of their populations are still literally peasants, surviving through pre-industrial farming methods, plowing their fields with oxen. They will almost certainly be better off by growing the economy to the point where they're using tractors and combines, then paying extra for GM crops that can handle higher temperatures than to leave them in the fields dodging cow patties in the same temperature range as today.

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Re: Global Warming Gridlock

Postby Zamfir » Wed Jul 13, 2011 3:37 pm UTC

Vellyr wrote:That doesn't sound like it will create very much commitment to meaningful climate change policies. I think what would happen in this case is that they would mutually agree to basically put up a token show of effort, which is what we're already doing.
There are two different things here: in the first place, getting people to want to solve the problem at all (or at least spend money and effort at making it smaller). In the second place, solving the free-rider problem, where people and countries are only willing to spend money and effort if others do so too.

This is about the second problem, not so much the first. Governments are fairly capable of solving free-rider problems within their borders, but global warming is an international free-rider problem. Even for the largest countries cutting greenhouses gases at home is a purely symbolic gesture if there is no combined international effort.

It works in both directions: international coordination will be more likely if more people want to solve the problem. But people are also more willing to accept measures if they are part of a meaningful larger effort. A lot of resistance to measures is based on the (sadly rather accurate) idea that it's pissing money away while others keep polluting.

Especially developing countries, and especially China and India, they're almost certainly better off keeping their growth rate up in the 7-10% range for the next 50-100 years and then spending money to adapt to climate change (sea walls, heat resistant low water crops, desalination plants, air conditioning, etc.) than they would be by cutting their growth rate to 2-3% and adopting less productive, more expensive green technologies. Exponential growth is tremendously powerful

I have never seen estimates that talk about cutting growth from 7-10% to 2-3%, or cutting growth at all. Most estimates of the costs are in the order of 1 to 3% of GDP each year. Not 1-3% less growth, but continuously spending (or not having) 1-3% while growth rates stay the same. That's a tremendous amount of money, but is has nothing to do with growth rates. At Chinese growth rates, we're talking about a loss comparable to not having growth for several months.

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Re: Global Warming Gridlock

Postby iChef » Wed Jul 13, 2011 4:29 pm UTC

Isn't this treaty pretty much the prisoner's dilemma? If all countries sign and abide by it everyone gains a better climate and competes on an even economic playing field. If a small number of countries abstain they gain some climate advantages and get a foot up in economic competition. If no one signs then they are still on even economic footing and get no climate benefit.

It seems that it would make sense for everyone to opt in, but each player sees the benefit of being the only one or one of few to stay out, which causes the whole thing to crumble.
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Re: Global Warming Gridlock

Postby Not A Raptor » Wed Jul 13, 2011 4:48 pm UTC

GATT won't work because the USA has its balls in the hands of the Republicans who, for the most part, deny the need for any remedy at all. Without the USA, there will be no meaningful cuts, because without the USA, I can see a lot of other nations balking (China, for one). So, the ways out would likely have some sort of dependency on what the US does.

The only way things will get done will be if it suddenly becomes possible on a short timescale for large corporations to make a larger profit from cutting than from not cutting. (Pessimist? Cynic? Why, me? Never! :p)

iChef: Sort of. The specific name for this sort of scenario is the Tragedy of the Commons.
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Re: Global Warming Gridlock

Postby Zamfir » Wed Jul 13, 2011 7:02 pm UTC

Sure, thats politics. You have to work to achieve things. Convince as many people of the issue as possible. Democrats so that progress is made when they are in power. Swing voters, so that republicans can't make it a spearpoint of their campaigns. And republicans. It's not a fixed law that conservatives oppose climate change measures.

Conservative christians can be surpisingly green, they often are in Germany for example. The kind of people who like the countryside, hunting, like to talk about responsibility, leaving a heritage for the children, don't mess with the Lord's creation. You need people who speak their langauge, not people who act superior, but it can be done. And young people who have grown up with global warming as a given all their life. Half of the liberals in college will be conservative after ten years of paying taxes, but they'll still think global warming is a problem to be solved, if it's not too expensive. Throw in 'market approach' and 'energy security' for extra kudos. Young republicans like gays too nowadays.

And sure, you can bribe companies. Companies don't mind regulations, as long as their competitors face them too and they can get loopholes and cozy relations with the regulators. Carbon credits are perfect for that: give them free to existing polluters. The best thing for corporations are regulations for newcomers but not for them, and they'll gladly lobby in favour of them. And the newcomers don't have lobbyists yet. In ten years time, budget constraints will mean that gradfather clauses will be eradicated adn every has to pay for their credits. Companies know that perfectly well, but as you say they are in it for the short time scales.

And there is day-to-day politics: porky test projects for new clean technologies for Republican districts, abuse the DoD budget for hybrid vehicles, use the money from carbon taxes for tax cuts for the rich, or other popular Republican projects. The wind mill and nuke manufacturers can buy politicians just as hard as others.

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Re: Global Warming Gridlock

Postby Heisenberg » Wed Jul 13, 2011 7:11 pm UTC

Aikanaro wrote:I wonder if it'd be possible to engineer, well, basically airborne plankton. Tiny plants that live on the wind, and can be sent up into the atmosphere. Probably not enough nutrients for them, even if they could be light/aerodynamic enough to stay up there instead of settling down....aw, well.

That would increase the possibility of my current plan for world domination: Zeppelin-Whales.

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Re: Global Warming Gridlock

Postby Triangle_Man » Wed Jul 13, 2011 7:12 pm UTC

Heisenberg wrote:
Aikanaro wrote:I wonder if it'd be possible to engineer, well, basically airborne plankton. Tiny plants that live on the wind, and can be sent up into the atmosphere. Probably not enough nutrients for them, even if they could be light/aerodynamic enough to stay up there instead of settling down....aw, well.

That would increase the possibility of my current plan for world domination: Zeppelin-Whales.

Can these whales fire lasers from their blowholes?
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Re: Global Warming Gridlock

Postby bundd » Wed Jul 13, 2011 7:24 pm UTC

Which industries would be directly affected in case of a hardcore cut in gas emissions ?

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Re: Global Warming Gridlock

Postby Triangle_Man » Wed Jul 13, 2011 7:30 pm UTC

bundd wrote:Which industries would be directly affected in case of a hardcore cut in gas emissions ?

The Oil and Natural Gas industry to begin with, I'd imagine.
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Re: Global Warming Gridlock

Postby Dauric » Wed Jul 13, 2011 7:46 pm UTC

Triangle_Man wrote:
bundd wrote:Which industries would be directly affected in case of a hardcore cut in gas emissions ?

The Oil and Natural Gas industry to begin with, I'd imagine.


Coal would be hit harder, as would any electricity company with a coal-fired generator.

Across the board though costs for power and transportation would rise, which ultimately would hit everybody from every angle.
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Re: Global Warming Gridlock

Postby Arrian » Wed Jul 13, 2011 9:24 pm UTC

Zamfir wrote:I have never seen estimates that talk about cutting growth from 7-10% to 2-3%, or cutting growth at all. Most estimates of the costs are in the order of 1 to 3% of GDP each year. Not 1-3% less growth, but continuously spending (or not having) 1-3% while growth rates stay the same. That's a tremendous amount of money, but is has nothing to do with growth rates. At Chinese growth rates, we're talking about a loss comparable to not having growth for several months.


If your GDP grows 7% one year, and carbon abatement cost you 5% of GDP, you are growing less. 0.95*1.07= 1.0165: Your GDP only grew 1.65% over what it would have been without the abatement costs and before any growth.

The only way to reduce carbon output is to reduce output. At least to levels that climate scientists say are necessary.

Think about it logically: What is cap and trade or a carbon tax meant to do? It's meant to reduce the amount of carbon generated. How do you generate less carbon? You either make less stuff or you make the stuff using less carbon. Do we have the technology to make the same amount of stuff with less carbon at the same price/same amount of resources consumed? No.

The US and Europe are less (far less?) carbon intensive than China or India or any other developing country, true. But that doesn't mean we can costlessly copy our technology and replace all theirs in any reasonable amount of time. There isn't enough money in the world to outright rebuild all that infrastructure, and they don't have a workforce that can run and support it. And even if we did replace all of China and India's technology with top of the line western tech, it would still be producing far more carbon than scientists say the planet can deal with. We would have to replace fossil fueled power plants with an equal capacity of non-polluting generators. And we aren't even close to matching the price of coal or natural gas with a carbon neutral energy system.

So yes, hitting the carbon targets requires sacrificing economic growth. Both due to the "broken window" costs of replacing existing functional capital with carbon neutral capital, and to the higher cost of production under carbon neutral energy.

I got my numbers from a survey article in the December 2010 issue of the Journal of Economic Literature, "Designing Climate Mitigation Policy" by Joseph Aldy, Alan J. Krupnick, Richard G. Newell, Ian W. H. Parry, and William A. Pizer. The estimated abatement costs range from 1.4 to 16.1% of world GDP to keep CO2 to 450ppm by 2100, and 0.7 to 6.8% world GDP for 550ppm CO2. 5% is a median. Contrast that anticipated costs of warming around 1.5-2% world GDP in 2100 for 2.5C warming (with high variability, going as high as about 4.5% GDP for 4C warming to effectively 0 impact for anything from 2.5-7C warming to a 2%+ GDP increase for 1C of warming.)

Abatement is expensive. It's supposed to be expensive because that's how it reduces carbon emissions.

Spoiler:
Spoilering for off topicness:
Not a Raptor wrote:Sort of. The specific name for this sort of scenario is the Tragedy of the Commons.

It's not that, either. Prisoner's Dilemma is probably a closer model to how you would game it out, though the specifics aren't right (PD has only two players, climate policy has many, in PD the payouts are known, cilmate change is probabilistic, etc.) Tragedy of the commons isn't really that good of a model for climate change since tragedy of the commons is a race to the bottom type situation. Greenhouse gas emissions aren't valuable on their own, so players won't try to maximize them, compared to, say, maximizing fish catch in a tragedy of the commons game. Also, there isn't really a hard cap on climate change, it just gets worse as things go along, whereas in tragedy of the commons the Nash equilibrium leads to simply depleting the resource.

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Re: Global Warming Gridlock

Postby Dark567 » Wed Jul 13, 2011 9:26 pm UTC

Dauric wrote:Across the board though costs for power and transportation would rise, which ultimately would hit everybody from every angle.
That's the real killer. I mean the prisoner's dilemma we are in prevents countries from adopting stricter controls because free riders could always take advantage. Even if we solve that, the world will nearly certainly see a lower standard of living due to the increase costs of energy. The only way to solve that is to find a way to make renewables cheaper then coal.

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Re: Global Warming Gridlock

Postby Dauric » Wed Jul 13, 2011 9:49 pm UTC

Arrian wrote:
Think about it logically: What is cap and trade or a carbon tax meant to do? It's meant to reduce the amount of carbon generated. How do you generate less carbon? You either make less stuff or you make the stuff using less carbon. Do we have the technology to make the same amount of stuff with less carbon at the same price/same amount of resources consumed? No.


Carbon is an element, it is not casually generated nor destroyed by modern industrial processes. Carbon Dioxide (CO2) which is a combination of one carbon atom with two oxygen atoms, released in to the atmosphere in such a way that it rises to specific altitudes (usually by virtue of it being hotter than the surrounding atmosphere as the exhaust of combustion) is where it becomes a problem, because in high enough concentrations at those altitudes CO2 reacts with other gasses common at those altitudes to gain certain refraction/reflection properties for infrared radiation (heat). *

*Brief and oversimplified, but the point is that it's not about "Generating Carbon" as the mass-media shorthand goes.

Carbon by itself can be terribly useful stuff, as can oxygen. Potential solutions may lie not just in reducing consumption of power from CO2 generating sources, but also through finding economical ways to harvest and recycle exhaust.**

** Yes, most of these that have been proposed are pipe-dreams that require breaking the laws of thermodynamics, but if someone did find a way to do it it would potentially be as much a solution as reduction of consumption.
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Re: Global Warming Gridlock

Postby Thesh » Wed Jul 13, 2011 10:54 pm UTC

jules.lt wrote:Sounds about right. Now, what's the alternative?


Instead of just spitting out a number, we need to look into specific things that can be done: building solar and nuclear plants so that we can move away from coal for power generation, projects to grow trees (especially within cities) in order to consume CO2, improving public transportation, especially in highly populated areas like Los Angeles where public transportation is horrible resulting in everyone having to drive everywhere, looking into cleaner alternative fuels that can be used in existing gasoline and diesel engines and can be produced in large enough quantities and for a low enough cost to be practical, having government focus on reducing their own emissions, and we need to work on reducing emissions from airlines.
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Re: Global Warming Gridlock

Postby ++$_ » Thu Jul 14, 2011 1:12 am UTC

Arrian wrote:
Zamfir wrote:I have never seen estimates that talk about cutting growth from 7-10% to 2-3%, or cutting growth at all. Most estimates of the costs are in the order of 1 to 3% of GDP each year. Not 1-3% less growth, but continuously spending (or not having) 1-3% while growth rates stay the same. That's a tremendous amount of money, but is has nothing to do with growth rates. At Chinese growth rates, we're talking about a loss comparable to not having growth for several months.


If your GDP grows 7% one year, and carbon abatement cost you 5% of GDP, you are growing less. 0.95*1.07= 1.0165: Your GDP only grew 1.65% over what it would have been without the abatement costs and before any growth.
Only in the first year. Your GDP can grow 1.65% in the first year and then 7% thereafter, which taken over 50 years comes out to an annual growth of about 6.6%.

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Re: Global Warming Gridlock

Postby Adacore » Thu Jul 14, 2011 2:56 am UTC

Dauric wrote:Carbon is an element, it is not casually generated nor destroyed by modern industrial processes. Carbon Dioxide (CO2) which is a combination of one carbon atom with two oxygen atoms, released in to the atmosphere in such a way that it rises to specific altitudes (usually by virtue of it being hotter than the surrounding atmosphere as the exhaust of combustion) is where it becomes a problem, because in high enough concentrations at those altitudes CO2 reacts with other gasses common at those altitudes to gain certain refraction/reflection properties for infrared radiation (heat). *

*Brief and oversimplified, but the point is that it's not about "Generating Carbon" as the mass-media shorthand goes.

This is obviously true, but I think pretty much everyone with any interest in the subject knows this. You'll just have to accept that the term 'carbon' is used just as frequently as 'carbon dioxide' in climate change discussions. Even in the scientific literature, figures are frequently discussed in terms of tonnes of carbon released, and abatement of carbon emissions. Everyone understands that it means carbon-as-CO2.

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Re: Global Warming Gridlock

Postby nitePhyyre » Thu Jul 14, 2011 5:32 am UTC

Dauric wrote:Carbon by itself can be terribly useful stuff, as can oxygen. Potential solutions may lie not just in reducing consumption of power from CO2 generating sources, but also through finding economical ways to harvest and recycle exhaust.**

** Yes, most of these that have been proposed are pipe-dreams that require breaking the laws of thermodynamics, but if someone did find a way to do it it would potentially be as much a solution as reduction of consumption.
Well think about it. People say that electric cars will become viable when we invent 'super batteries'. That's because fossil fuels already are. Just have to make carbon recycling cost about the same as these hypothetical super batteries.
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Re: Global Warming Gridlock

Postby Arrian » Thu Jul 14, 2011 3:46 pm UTC

++$_ wrote:Only in the first year. Your GDP can grow 1.65% in the first year and then 7% thereafter, which taken over 50 years comes out to an annual growth of about 6.6%.


Abatement isn't a one time cost. If you could just pay 5% of GDP once and never worry about climate change again, there wouldn't be nearly the debate over whether or not to do anything about it. You could probably convince the majority of Congress to pay for China's abatement if it were a one time cost.

But you don't tax carbon for just one year, you don't produce electricity more expensively through wind or solar for just one year. You do it in perpetuity. That 5% GDP cost is 5% per year, meaning it slows your GDP growth over the long run, not just starting you out at a lower point.

Dauric: If you want to get really pedantic, they're talking about lowering emissions so the atmosphere stabilizes at 450 or 550ppm CO2 equivalent. That includes not only CO2, but methane and all other greenhouse gasses. But I didn't define terms like "carbon abatement" and "carbon intensity," and while they might not be entirely accurate scientifically (though you could make a case for it, after all, if you removed the carbon from the molecule you would end up with O2 which nobody worries about,) they are the terms used in both the economic literature and the public discussion. This may annoy you the way using "alcohol" for any alcoholic beverage or using male/female as nouns annoys me, but that's life.

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Re: Global Warming Gridlock

Postby Ptolom » Thu Jul 14, 2011 4:18 pm UTC

One alternative would be to give up on energy conservation and drive the economy as fast as possible, but put vast sums into climate research and engineering (as well as science in general), in the hope that we can engineer our way out of this mess before it gets too bad.

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Re: Global Warming Gridlock

Postby Zamfir » Thu Jul 14, 2011 6:52 pm UTC

Arrian wrote:Abatement isn't a one time cost. If you could just pay 5% of GDP once and never worry about climate change again, there wouldn't be nearly the debate over whether or not to do anything about it. You could probably convince the majority of Congress to pay for China's abatement if it were a one time cost.

But you don't tax carbon for just one year, you don't produce electricity more expensively through wind or solar for just one year. You do it in perpetuity. That 5% GDP cost is 5% per year, meaning it slows your GDP growth over the long run, not just starting you out at a lower point.

Yes, when people say that it cost 5% of gdp, they mean every year. But they don't mean "growth will 5% lower every year". They mean that if in the unabated production over the next century is equal to P, it will be rough 0.95P with abatement procedures.

Let's say the rate of production C (so the derivative of P, roughly what we measure by GDP) without special measures can be written as an exponential function (too simple, but it gets the point across),[imath]C_1=k(1+g)^T[/imath]. So k is current production, g is yearly growth and T is time in years.

The claims that measures will cost 5% of GDP mean that they expect that the curve with abatement will resemble [imath]C_2 \approx 0.95 k(1+g)^T[/imath]. More precisely, that the integral of C2 over the time period of interest will be 0.95 of the integral of C1. So the same long term growth rate, but as if it starts from a lower base.

Of course, the transition to the lower curve would take time, so there would be a limited period of lower growth, as the economy moves closer to the second curve. ++$ gives the example if that transition period would be one year, which is hardly realistic since that would imply a costless switch of th capital base. In practice, the transition would be best spread out over decades, so old capital goods can be replaced gracefully. Downside of a slower transition is of course the higher greenhouse gas production during the transition.

The formula you use a few psts above would be [imath]C3 = k(0.95(1+g))^T[/imath], so a cut in growth forever. Sure, that's enormous, a fast continuous shrink for most economies. But luckily that's not what the papers you refer to mean by "5% of GDP".

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Re: Global Warming Gridlock

Postby the_mean_marine » Fri Jul 15, 2011 11:37 am UTC

I've always thought that trying to sell Global Warming/Climate Change to the public as such is a mistake, I think that a better way of combating the same problem is to sell it as energy efficiency. That way you can side step the climate change problem and any questions that people may have of the science involved* and instead work on rather simple systems to save energy (such as automated lighting systems, reducing standby power, more moderate use of air conditioning/ heating, etc.) that you can then sell on the basis that this is a small capital expenditure with large returns.

In other words you can make a business case for it with relatively short term results as opposed to trying to make a case for future damages that may or may not occur 25, 50 or 100 years down the track. In dealing with efficiency not the carbon, I believe you can make significant difference in CO2 output without actually directly dealing with the CO2.

*Disclaimer: I fully believe in the climate science however the past decade or so has shown that the general public is not so easy to convince

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Re: Global Warming Gridlock

Postby Soralin » Fri Jul 15, 2011 12:54 pm UTC

the_mean_marine wrote:I've always thought that trying to sell Global Warming/Climate Change to the public as such is a mistake, I think that a better way of combating the same problem is to sell it as energy efficiency. That way you can side step the climate change problem and any questions that people may have of the science involved* and instead work on rather simple systems to save energy (such as automated lighting systems, reducing standby power, more moderate use of air conditioning/ heating, etc.) that you can then sell on the basis that this is a small capital expenditure with large returns.

In other words you can make a business case for it with relatively short term results as opposed to trying to make a case for future damages that may or may not occur 25, 50 or 100 years down the track. In dealing with efficiency not the carbon, I believe you can make significant difference in CO2 output without actually directly dealing with the CO2.

*Disclaimer: I fully believe in the climate science however the past decade or so has shown that the general public is not so easy to convince

Except there's only so much you can do with efficiency, even if everything was as efficient as is allowed by physics, it would still be using energy. At some point you're better off using those resources to actually solve the problem, i.e. get power from a source that doesn't produce CO2, like switching to nuclear from coal. If we do that, it won't matter how much energy is used, or how efficient things are, with regards to global warming, since it won't produce any CO2 regardless.

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Re: Global Warming Gridlock

Postby the_mean_marine » Fri Jul 15, 2011 1:33 pm UTC

Soralin wrote:Except there's only so much you can do with efficiency, even if everything was as efficient as is allowed by physics, it would still be using energy. At some point you're better off using those resources to actually solve the problem, i.e. get power from a source that doesn't produce CO2, like switching to nuclear from coal. If we do that, it won't matter how much energy is used, or how efficient things are, with regards to global warming, since it won't produce any CO2 regardless.


I understand your point, but what I'm trying to say is effectively go for (what I perceive to be) the low hanging fruit before reaching for the moon. I know that the problem needs to be dealt with but I believe that for the same effort you would get a greater reduction in CO2 emissions by targeting energy efficiency than the CO2 emissions themselves (at least in the near future barring a paradigm shift in human energy creation and usage) as a lot of the infrastructure required to significantly reduce power consumption is simple, proven and inexpensive compared to the investment required into alternative power sources. There is also absolutely no reason the two cannot be conducted concurrently eg. use only 90% of the current power usage and instead of building 10 nuclear reactors or solar thermal plants etc. build only 9 and also save the cost and CO2 footprint of 1 power plant.

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Re: Global Warming Gridlock

Postby Deep_Thought » Fri Jul 15, 2011 1:45 pm UTC

@Soralin/the_mean_marine: There is also evidence that increasing efficiency doesn't actually decrease overall usage. Because energy efficiency usually implies reduced costs, people just spend the saved cash on other stuff, so you end up with the same net energy expenditure. After all, what else are you going to do with the cash? However energy efficiency is still definitely worth pursuing, for exactly that reason!

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Re: Global Warming Gridlock

Postby Arrian » Fri Jul 15, 2011 4:06 pm UTC

Zamfir wrote:The formula you use a few psts above would be [imath]C3 = k(0.95(1+g))^T[/imath], so a cut in growth forever. Sure, that's enormous, a fast continuous shrink for most economies. But luckily that's not what the papers you refer to mean by "5% of GDP".


I think you're meaning C3=k(1+0.95g)^t)? Otherwise your C2 and C3 come out to the same result.

[First, assuming constant growth and constant abatement costs is a huge simplifying assumption. They're bound to vary, and of course, that is a major driving force behind the extreme levels of uncertainty in both costs of abatement and costs of climate change. But it's a reasonable simplification for this discussion, I believe.]

The papers aren't entirely clear. They could mean C=0.95(k(1+g)^t), or they could mean c=k(1-cost)^t*(1+growth rate)^t

The first case is a relatively light burden: a 5% cost of abatement would yield a GDP only 5% lower 100 years from now than no abatement would have yielded. The latter is catastrophic, the same numbers would result in a GDP only 6 tenths of a percent of what GDP would be without abatement. Even the least expensive estimate of 0.7% cost of abatement leaves you with a GDP of about half what it would be after 100 years.

Looking at the way abatement is meant to work, the second formula seems much more likely to me. In order to lower CO2 emissions, you have to replace our current capital equipment with new equipment that isn't as productive. (This cost will also scale with the economy, the more low productivity capital you use, the greater the gap between what you could be producing and what you are producing, the more opportunities you pass up and roads not taken, the larger the forgone growth.) That's why it's more expensive: It produces less with the same amount of resources. This is a drag on the economy equivalent to exponential growth with a negative interest rate, and it's going to go on for a long time. That's the result of changing to less carbon intensive capital, then you add the CO2 tax or cap and trade, which are direct, government imposed costs...

You could model it as interest: GDP is your principal, at the beginning of the year you pay 5% of your principal for abatement costs. Then at the end of the year you grow your principal by 7%.

Sure the abatement costs will eventually fade as clean technology catches up to dirty technology, and that will happen at different rates in different countries. But abatement is a continuous effort and therefore a long term drag on the economy. To stabilize CO2 equivalent levels at 450ppm, or even 550 ppm by 2100, western nations will have to start abating now and will actively be abating the entire time, keeping emissions well below 1990 levels. Developing countries like China and India will have to start abating some time in the next 10-30 years.

This is a tremendously expensive proposition, and again, it's entirely understandable if a dispassionate cost/benefit analysis, especially for a developing country, says growing your economy now and dealing with the effects of global warming later is a much better decision than abating now and not having as much climate change.

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Re: Global Warming Gridlock

Postby Zamfir » Fri Jul 15, 2011 5:48 pm UTC

The papers aren't entirely clear. They could mean C=0.95(k(1+g)^t), or they could mean c=k(1-cost)^t*(1+growth rate)^t

I had short job a few years ago working in this stuff, using the same models and approaches as in that paper. Not that I now know a lot about it, but it taught me a bit about the jargon, about what people are trying to do. So I am fairly confident here. Look at the "c3" formula again, it's the same as your 1.65% percent growth calculation: the 0.95 is inside the brackets, and outside in the "c2" formula

In fact, I think the models used might not even include growth as an intrinsic factor. They are a series of static general equilibrium models, made larger each year by extrinsic growth factors. So if you set a 'carbon price', the model estimates deadweight losses compared to a zero price baseline for each year separately.

Basically they are the models people use to estimate deadweight tax losses, but now coupled with a a toybox climate model.

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Re: Global Warming Gridlock

Postby Soralin » Sat Jul 16, 2011 2:31 am UTC

It doesn't seem like it would be as expensive as some people think it would be, if you have the political ability to go about solving it in an efficient way. If you're actually serious about solving the issue, it seems a good way to do so would simply be to ban all new fossil fuel power plant construction. The ones that are currently running can keep going until they break down or are decommissioned, but all new and replacement power has to be nuclear, or some other power source. This wouldn't take a huge amount of money, since these power plants need to be built anyway to add capacity, or replace old ones, so the only cost is the difference in cost between nuclear and coal power plants.

US estimates for new power plants, gives an estimate of advanced nuclear costing about 4% more than advanced coal power plants. Electricity, from what I can figure from price and total generation amounts, is about 2.8% of GDP. Put them together, and If we assume that all new power would have been coal, but is instead nuclear, then for about 0.1% of GDP we could reduce CO2 produced by electricity generation down to 0 over the course of 50-60 years or so, or however long those old power plants last. And assuming all the costs end up the same. With new nuclear power plants being common, producing them could easily even become cheaper than coal would be, or coal prices could increase over that span of time as well, and it could easily end up net positive. Now that's not all the CO2 that's produced, but it is a significant chunk of it.

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Re: Global Warming Gridlock

Postby Thesh » Sat Jul 16, 2011 6:30 am UTC

Soralin wrote:Now that's not all the CO2 that's produced, but it is a significant chunk of it.


Yep, getting rid of coal power plants is the easiest and most significant change we could possibly make. In the US, coal power plants contribute more to CO2 emissions than transportation, according to the EPA:

http://www.epa.gov/climatechange/emissi ... tml#fossil
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