Ecological Economics

Gas Prices Not 'Outrageous'

On mainstream news this morning I heard our Utah Governor declare US gas prices "outrageous". Memorial Day national news coverage labeled them "sky high." Wrong! Gas prices only seem outrageous to we Americans who George W. Bush correctly noted are "addicted to oil".

Europeans, by contrast, have lived with high gas prices for years, using proceeds to fund social programs, re-build infrastructure, etc. In addition, as noted in a May 21 Senate-side Congressional hearing Exploring the Skyrocketing Price of Oil (3 hrs), Europeans used gas tax differentials to correctly steer transportation systems toward diesel and away from gasoline, which proves ever-more important now that clean diesel is available. And to steer transportation system toward mass transit and away from single-vehicle transportation. Meanwhile we Americans sat around watching TV and partying until world market forces pushed prices upward, allowing most of the recent 'surplus' to be captured as record profits, record CEO compensation, etc. by what I'll call the Petrochemical Industrial Complex. Finally, Europeans are now beginning to look toward a future free of dependence on petrochemicals and their commingled carbon-loading propensities.

Even though we Americans are just now beginning to face the reality of high gas prices, the prices themselves are not the problem. In fact "sky high" prices are finally getting us to pay attention, however feebly, to alternative sources of energy that are compatible with global climate systems and human survival. As noted in the Congressional hearing, planet Earth is not in jeopardy, rather it is we humans (along with myriad other species) who are at risk. The Earth has worked its way through five Great Extinctions in the past and arguable done remarkably well. But it is in no way clear that we humans will survive the Sixth Great Extinction. Tragically, we humans may be contributing to our collective demise by clamoring for lower gas prices.

This is not to say that all is well in petrochemical industrial complex, medical industrial complex, financial industrial complex, military industrial complex America. But that is a story for another post (or several hundred posts). In the meantime 3 hours are well-spent viewing the hearing. If you want a sneak peak, go to 2:15 in the videocast and watch Senator Charles Schumer (D-NY) in action, followed by others as the hearing winds up.

China's CO2 Emissions Staged to Get Even Worse

Via Brad DeLong who says, "This is, I think, very good work--and the worst news about the human future I have learned in months." :

Forecasting the Path of China's CO2 Emissions Using Province Level Information, Maximilian Auffhammer and Richard T. Carson (2008)

ABSTRACT: Our results suggest that the anticipated path of China's Carbon Dioxide (CO2) emissions has dramatically increased over the last five years. The magnitude of the projected increase in Chinese emissions out to 2015 is several times larger than reductions embodied in the Kyoto Protocol. Our estimates are based on a unique provincial level panel data set from the Chinese Environmental Protection Agency. This dataset contains considerably more information relevant to the path of likely Chinese greenhouse gas emissions than national level time series models currently in use. Model selection criteria clearly reject the popular static environmental Kuznets curve specification in favor of a class of dynamic models with spatial dependence.

US Forest Service and Carbon Offsets: Perspective

Writing in High Country News, Rick Craig suggests that the US Forest Service's entry into the carbon offsets game is ill-advised. Here's a snip:

Salvaging the Atmosphere: The Forest Service Joins the Carbon Offsets Game, Rick Craig, High Country News, Oct 15: … On July 25, Forest Service Chief Gail Kimbell announced the launch of the Carbon Capital Fund, which will sell carbon offsets to fund tree planting on national forests. … The idea sounds logical enough. In fact, the theory that forests can suck up excess carbon and cool the planet helps drive a market that doubled its revenues last year to $110 million. But the Forest Service's entry into the carbon offsets game comes as doubts about tree planting mount. Scientists are skeptical about its benefits, and the honesty of the unregulated market has been questioned in congressional hearings. Worst of all, critics feel, is the tacit permission offsets give buyers to continue their carbon-emitting lifestyles.

Visit the Web site of the National Forest Foundation, the Forest Service's nonprofit arm, and its Carbon Footprint Calculator can tell you how many metric tons of CO2 emissions you are responsible for. If the result leaves you feeling guilty, don't worry. For just $6, the fund lets you offset 1 ton of carbon by supporting tree-planting projects on the national forests. The transaction is based on the theory that forests act as "carbon sinks," soaking up the greenhouse gas from the atmosphere.

But in temperate forests, the concept has not held up well to scientific analysis. Forests do take carbon out of the atmosphere temporarily, but they don’t remove it from the active carbon pool, because their carbon is released when they rot or burn. Cambridge botanist Oliver Rackham, author of a history of Britain's forests, has said that telling people to plant trees to stop global warming is like telling them to drink more water to keep down rising sea levels. …

For an agency with increasingly stretched budgets, however, selling that commodity makes a difference. … And with the agency's million-acre reforestation backlog, there's no shortage of places for consumers to relieve their carbon guilt. [NFF hypertlink added]

See also:

Privatization by Many Means: Carbon Offsets Edition, Forest Policy …, Aug 27
Carbon Offsets: Modern Day 'Indulgences'?, Ecological Economics, Feb 20

Cross-posted from Forest Policy …

Go Green! Without "Corporate Giveaways"

Pro Football's Philadelphia Eagles are not only green in color but "green" in commitment and action, voluntarily reducing their environmental footprint and providing a much-needed precedent in the sports arena. This is the right way to go: no big government inducements, no notions that somehow government and industry are "partners" in regulation. Instead we have an enterprise doing things because people involved think it right and necessary.

Big banks and big timber companies, on the other hand, seem to be fishing for big payoffs from cap-and-trade carbon legislation, to allow them to profit from both their extant ventures and from the very "market-based" regulatory schemes they are petitioning for — the type that are currently being debated as cap-and-trade on Capital Hill in Washington DC. This seems to me to be the wrong way to go.

Environmentally aware cap-and-trade advocates continually stress moving, through time, away from corporate giveaways, else starting without corporate giveaways from the beginning. Still, most legislative proposals allow for some carbon credits to be given to polluter firms as does this week's spotlight bill, the Liberman/Warner sponsored America's Climate Security Act. (S.2191)

Cap-and-trade v. carbon tax was debated in two important forums this week. On Oct 30, The Brookings Institution's Hamilton Project hosted a very lively and informative debate of carbon tax v. cap-and-trade. Policy papers included:

• An Equitable Tax Reform to Address Global Climate Change, Gilbert E. Metcalf
• A U.S. Cap-and-Trade System to Address Global Climate Change, Robert N. Stavins

It isn't clear where any of this is headed in the US: even if a legislative proposal emerges in either form, there is a big question of whether it gets past a G.W. Bush Presidential Veto. Still it is worth the effort to read the policy papers, and even the transcript (pp 1-62 or 103 [PDF]).

Since I advocate for carbon taxes over cap-and-trade, I'll post up this one comment from the transcript, from panel moderator Sebastian Mallaby (Council of Foreign Relations):

… [I]f people focus in on [the debate over "carbon tax" and "cap and trade"] more and they perceive the cap and trade mechanism as being partly a way to distribute free vouchers to industry, as consumers wake up to that, they may prefer the tax system with a rebate that Gib [Metcalf] is talking about. So the political dynamic could flip when consciousness goes up.

On Nov 1, Amy Goodman, Democracy Now hosted Carbon Trading: Practical Solution to Global Warming or Corporate Greenwash? A Debate. Goodman engaged Annie Petsonk (International counsel with Environmental Defense) and Daphne Wysham (Fellow at the Institute for Policy Studies). The debate gives us some insight into why both sides strongly support their positions. Supporters, like Petsonk believe that carbon taxes and cap-and-trade leglislation without some "give" to corporate pollutors are non-starters.

Dissenters, like Wysham (and me) believe that cap-and-trade while well-intentioned will never get to desired results due to the overly-complex nature of the proposals and the inability to ratchet up the "caps" through time, and ratchet down the "corporate giveaways" through time. Here are Snips from the "debate":

… ANNIE PETSONK: We've had great experience with cap-and-trade for controlling air pollution in this country since 1990, when Congress passed the Clean Air Act amendments. We put a cap on acid rain pollution and adopted this kind of system to cut acid rain pollution from coal-fired power plants. So, in that program, we essentially put the training wheels on the bicycle and learned how to ride the bicycle. That program has cut acid rain pollution far faster than industry and many environmentalists predicted could be done. And it's done so at a fraction of the cost that people projected.

Setting up a carbon trading system for the world and for the United States is more complicated. There are more polluters. I agree with Daphne that companies should not be allowed to get credit in a developing country which has no caps on emissions for doing what they were supposed to do anyway. … [O]ne of the reasons why we're looking forward to the markup [of the Liberman/Warner "America's Climate Security Act"] in the Senate Environment and Public Works Committee today is that the bill now being considered there doesn't create that system. It's better than that. …

DAPHNE WYSHAM: I tend to disagree with that perception, as do quite a few number of groups. Friends of the Earth has recently produced an analysis on the windfall profits in the Lieberman-Warner global warming bill [FOE Press Release], and according to their calculations, 38% of the giveaways, the free giveaways in this bill, would benefit the fossil fuel industry over the lifetime of the program. That's — and roughly $268 billion of that would go directly to the coal industry alone. …

[O]ne of the failures of the EU emissions trading system is that they essentially — the governments essentially gave the right to pollute to certain industries. They set the tap high, and as a result industry was able to emit as much as they had been emitting in the past and make a profit buying and selling these emissions rights. Similarly, in this — and there was no auctioning.

Now, in the current Lieberman-Warner bill, there is some auctioning, but about 50% of all of the permits are just being given away for free. Now, these permits are valuable. They are basically being turned into a commodity. So now what we have is essentially the most carbon-intensive of the fossil fuels, the coal industry, is one of the largest beneficiaries of the Lieberman-Warner bill. And an additional $522 billion will potentially go to what they call zero and low carbon energy technologies. Now, if we are optimistic, we would say, "Wonderful! That's going to go to renewables." However, the legislation is vague. It could go to either the fossil fuel industry for carbon capture and storage, which is a very expensive and unproven technology, or it could go to the nuclear energy. And that is not specifically ruled out in this legislation.

So we have problems with this also because it essentially is a tax on the working poor. It's not a tax on the very corporations that are causing the problem.

AMY GOODMAN: How is it a tax on the working poor?

DAPHNE WYSHAM: Well, because we will see the windfall gains. Instead of having those go to, say, subsidize an increase in the price of power or to public transportation or to other incredibly important solutions to the climate problem, we will see billions and billions of dollars worth of profits going back to the very industries that are causing the problem.

AMY GOODMAN: Annie Petsonk?

ANNIE PETSONK: We believe that the Americas Climate Security Act that's going to be voted on this morning in the Environment and Public Works Committee is a very good first step. Is it perfect? No. Are senators moving to improve it? Yes. Senator Lautenberg announced yesterday he wants to broaden the coverage of the bill so that more parts of the economy come under that cap on fossil fuel emissions. …

DAPHNE WYSHAM: … I think it's important to take some specific examples. I think it’s instructive to look at, for example, the World Bank, which I have been monitoring for over ten years now. Now, they have invested over fifteen times as much in fossil fuels as renewable since 1992. Originally, it was a hundred to one. Now, they are getting into the carbon trading market. The US Treasury back in 1997 said this is a clear conflict of interest for a financial institution to both profit from financing fossil fuels and profit from carbon trading. They're actually charging somewhere on the order of 13% commission on all carbon trading transactions. Now, what the World Bank could have done and should have done instead of getting into the carbon trading market is they should have set a higher energy efficiency standard, they should have stopped subsidizing fossil fuels, they should at the very least be calculating their climate footprint, which they are not doing. So they're calculating the carbon credits, but they're not calculating the carbon debits.

Now, if you globalize that particular model and look at how that would play out with bank after bank, whether it's Citibank or the European Bank for Reconstruction and Development or other public or private banks, you see how these banks are going to be gaming the system. They will be profiting from selling — from giving loans to the likes of Chevron, and then they'll be profiting again from charging a commission on the CO2 that is captured from those operations in developing countries or potentially in the US.

So, you know, what I think people need to understand is, yes, the time is urgent. We need to take action very soon on this issue. However, we need to learn the lessons from the failures of the EU emissions trading system. And the bill that's on the Senate floor this morning is not the best way to move forward. It's a corporate giveaway, and we need to do better. Boxer needs to hear from people on this

AMY GOODMAN: Last word, Annie Petsonk, on this. Is this just a corporate gift, a subsidy, a giveaway?

ANNIE PETSONK: If America doesn't take the lead, beginning to tackle our global warming pollution — excuse me — other nations won't either. I strongly support getting rid of fossil fuel subsidies for big coal-fired power plants in China and India and in the US. We've got to start. We cannot afford to delay. This bill is not a corporate subsidy or giveaway. It's a first step in getting America on a track to a cleaner energy future and a safer climate.

AMY GOODMAN: Fifteen seconds, Daphne Wysham, then what's your alternative, since you are so critical of this?

DAPHNE WYSHAM: Well, I think, you know, what we have is a political opportunity here. We know that the President is going to veto any kind of legislation that comes from the Senate. He has made clear his opposition to any kind of legislation —

AMY GOODMAN: Even Lieberman and Warner?

DAPHNE WYSHAM: Even Lieberman and Warner. So why aren't the Democrats — why are they just — why are they kowtowing to Bush? Why aren't they pushing forward the most aggressive piece of legislation that they can get as a benchmark and say this is what we're going to be pushing for in the next administration? And, you know, we can do better. We should be debating these issues. We should be setting much more stringent targets, at least 80% below 1990 levels by 2050. This bill gets us nowhere near that. And so, that's my concerns with it.

James Hansen Pleads for: Better Policy, Better Government, Less Spin

Every now and again I see something that strikes close to home. In addition to good policy recommendations for global climate change, James Hansen adds additional recommendations for use of science in policy discussion, including this: "I don't think the Framers of the Constitution expected that when a government employee — a technical government employee — reports to Congress, his testimony would have to be approved and edited by the White House first. But that is the way it works now. And frankly, I'm afraid it works that way whether it's a Democratic administration or a Republican one."

(via Mark Thoma, Economist's View, 4/20/2007)

James Hansen, one of the leaders in raising awareness about global warming, has five recommendations for solving the problem including a call to reduce the gap between what the scientific community understands and what the public and policy-makers are led to believe:

Why We Can't Wait, by James Hansen, The Nation: There's a huge gap between what is understood about global warming by the relevant scientific community and what is known … by … the public and policy-makers. We've had, in the past thirty years, one degree Fahrenheit of global warming. But there's another one degree Fahrenheit in the pipeline due to gases that are already in the atmosphere. And there's another one degree Fahrenheit in the pipeline because of the energy infrastructure now in place—for example, power plants and vehicles that we're not going to take off the road even if we decide … to address this problem.

The Energy Department says that we're going to continue to put more and more CO2 in the atmosphere each year—not just additional CO2 but more than we put in the year before. If we do…, even for another ten years, it guarantees that we will have dramatic climate changes…

I've arrived at five recommendations for what should be done to address the problem. If Congress were to follow these recommendations, we could solve the problem. …

First, there should be a moratorium on building any more coal-fired power plants until we have the technology to capture and sequester the CO2. That technology is probably five or ten years away. It will become clear over the next ten years that coal-fired power plants that do not capture and sequester CO2 are going to have to be bulldozed. …

Second, and this is the hard recommendation that no politician seems willing to stand up and say is necessary: The only way we are going to prevent having an amount of CO2 that is far beyond the dangerous level is by putting a price on emissions. …

But a price on carbon emissions is not enough, which brings us to the third recommendation: We need energy-efficiency standards. That's been proven time and again. …

The fourth recommendation—and this is probably the easiest one—involves the question of ice-sheet stability. …The concern is that it's a very nonlinear process that could accelerate. …[T]his problem with the stability of ice sheets is so critical that it really should be looked at by a panel of our best scientists. Congress should ask the National Academy of Sciences to do a study … The National Academy of Sciences was established by Abraham Lincoln for just this sort of purpose, and there's no reason we shouldn't use it that way.

The final recommendation concerns how we have gotten into this situation in which there is a gap between what the relevant scientific community understands and what the public and policy-makers know. A fundamental premise of democracy is that the public is informed and that they're honestly informed. There are at least two major ways in which this is not happening. One of them is that the public affairs offices of the science agencies are staffed at the headquarters level by political appointees. …

Another matter is Congressional testimony. I don't think the Framers of the Constitution expected that when a government employee—a technical government employee—reports to Congress, his testimony would have to be approved and edited by the White House first. But that is the way it works now. And frankly, I'm afraid it works that way whether it's a Democratic administration or a Republican one.

These problems are worse now than I've seen in my thirty years in government. But they're not new. I don't know anything in our Constitution that says that the executive branch should filter scientific information going to Congressional committees. Reform of communication practices is needed if our government is to function the way our Founders intended it to work.

The global warming problem has brought into focus an overall problem: the pervasive influence of special interests on the functioning of our government and on communications with the public. It seems to me that it will be difficult to solve the global warming problem until we have effective campaign finance reform, so that special interests no longer have such a big influence on policy-makers.

Global Climate Change Fixes Prove Politically Vexing

(via Naked Capitalism, Yves Smith, 4/18/07)

Gideon Rachman, in "Climate change is not a global crisis — that is the problem," works through the implications of the fact that global warming will create winners and losers. He discusses first order effects – the benefits of warmer weather in Russia, and higher sea levels for Asia — and some second order effects, such as mass migration and increased instability.

It is disheartening as it is to consider that the asymmetrical impact of global warming will lower the sense of urgency and shared sacrifice, particularly since I suspect the impact of climate change could well be worse than is now envisaged. The second IPCC report was negotiated, and China called for some of the findings to be watered down. Moreover, while the report did contemplate the effects of changed weather upon agriculture, it did not consider the effect on other creatures. We are already in the midst of one of the greatest loss of species in planetary history, and at a certain point, the entire ecosystem become precarious. And on a mundane level, I am also not certain enough allowance has been made for the impact of unstable weather patterns on the grain belts, and the resulting lower yield and increased cost of staples.

From Rachman:

Here is another inconvenient truth. Global warming is good news for parts of the world. This is truly awkward. A "planetary emergency" that affected everyone equally would be much easier to tackle. However, climate change that hurts some places but helps others opens the way for dangerous political conflicts.

The latest report from the Intergovernmental Panel on Climate Change, issued this month, confirms that global warming puts large parts of the world at risk from the biblical woes of famine, flood and disease. The places most at risk are those that are already poor — sub-Saharan Africa and parts of Asia.

But in northern Europe, agriculture will become more productive and the climate will improve. From a parochial British point of view, the latest IPCC report sounds like good news. It has taken off the table the single most threatening scenario — the paradoxical threat that "global warming" was going to make Britain much colder by shutting down the Gulf Stream, the ocean current that gives the UK a much warmer climate than its latitude implies. The latest thinking from IPCC scientists is that this is very unlikely to happen during the next century.

Global warming offers a positive bonanza for Russia. The legendary Russian winter gets more tolerable. As the permafrost retreats in Siberia new mineral resources are revealed — and huge new areas become available for settlement and cultivation.

In an irony that will infuriate environmentalists, oil companies are also likely to benefit from global warming. The US Geological Survey estimates that 25 per cent of the world’s known oil and gas reserves are in the Arctic Circle. As the ice melts, they become easier to exploit.

As a new paper in Environment and Urbanization, an academic journal, makes clear, three-quarters of the 634m people deemed to be most at risk from rising sea levels connected to global warming live in Asia.

Coastal cities in the developed world, such as New York and Los Angeles, may be at risk. But wealthy countries are best placed to adapt to the problem. Certainly the Dutch, who have long experience of keeping the sea at bay, are not panicking. They are simply planning to spend billions more on flood defences.

Of course, even countries that may benefit directly from global warming could suffer indirectly — as other parts of the world descend into chaos. Britain is not an island (well, technically, Britain is an island — but you know what I mean). Dealing with refugees and desperate immigrants will only get harder as life becomes tougher in Africa and the Asian subcontinent.

In fact, it is now dawning on the world's politicians that global warming could transform international relations — introducing a range of new issues and conflicts.

The most obvious problems are struggles over refugees and resources. Some argue that the Darfur conflict is partially caused by global warming, as settled farmers and nomadic herders fight over failing land. This sort of conflict could proliferate in the future.

Last month, a conference arranged by the US Army War College heard that: "Within a century, extreme drought will affect 30 per cent of the world, up from 3 per cent today."

Water shortages are a particular threat. They have long been an underlying source of conflict in the Middle East. But as India and China run short of water, their neighbours are worried that struggles may arise over the diversion of rivers and the building of dams.

The idea that the Chinese are oblivious to the threat of global warming is untrue, as I discovered on a recent trip to Beijing. Officials were openly concerned that the Yangtze and Yellow rivers were at their lowest levels for years. Much of the problem is to do with irrigation and industrial use. But the Chinese believe that global warming is also contributing to water shortages because of its effect on rainfall and the glaciers that feed into Chinese rivers.

The government in Beijing faces a dilemma. Terrified of social unrest, it is reluctant to do anything that might slow economic growth — such as stopping the building of coal-fired power stations. Yet, water shortages are already causing social unrest in the countryside and the water table is falling fast in Beijing. One western analyst based in China speculates that the next political upheaval there could come "when people in Beijing turn on their taps in 2009 and find there is no water coming out".

Global warming will not just provoke conflicts over scarcity. It may also cause struggles over the emergence of new resources — in particular, the oil and gas that lies underneath the Arctic. Outstanding territorial disputes between Canada and the US, between Russia and Norway, and between Denmark and Russia have taken on a new urgency in recent years, as these countries develop a new interest in hitherto unpromising stretches of ice.

Struggles over territory and borders are, at least, familiar ground for politicians and diplomats. But the new diplomatic world will increasingly be dominated by debates over the environment and international regimes for combating climate change.

The argument over global warming could quickly turn into the latest and bitterest struggle between the traditional industrialised countries and the developing world.

Any successor to the Bush administration is likely to be much more concerned about global action on climate change. And in 2009, just as a new administration settles down in Washington, China is likely to surpass the US as the world’s leading source of carbon dioxide emissions.

Although rich northern countries are best placed to cope with global warming, domestic public opinion means they are also likely to be the countries pushing hardest for new international regulations to tackle carbon dioxide emissions. In the US and Europe, climate change is becoming a new issue to berate China about — merging with protectionist concerns about exports from Chinese companies that practise "environmental dumping".

But the Chinese will not lack allies in any struggle over who bears the costs of global warming. The Russians — with an economy based on fossil fuels, and a society that benefits from a warmer climate — may well stand with them. So could India and much of the developing world. Global warming presents a formidable environmental and scientific challenge. The political consequences may prove just as vexing.

Al Gore at the US House of Representatives

Global Warming, March 20, 2007:

Al Gore: … "The Day will come when our children and grandchildren will … ask one of two questions. Either they will ask, "What in God's name were they doing? Didn't they see the evidence? … What were they thinking?  Or, … How did they find the uncommon moral courage to rise above politics and redeem the promise of American democracy — [to] do what's right?"

Hat Tip: Brad Ewing, Environmental Economics and Sustainable Development
More from Grist, The Goracle by Amanda Griscom Little, 3/22/2007

Disaster Data

(Via Resilience Science, Garry Peterson, 1/28/2007):

The World Resources Institute’s EarthTrends weblog points to some data on trends in natural and manmade disasters.

Although natural and manmade disasters occur in all countries regardless of income or size, not all governments have the resources necessary for prevention and emergency response. For those regions already battling widespread poverty, disease, and malnutrition, disasters are a significant constraint on social and economic development. Understanding the trends that describe disasters through time and space is very important, particularly in light of climate change, which threatens to alter both the distribution and severity of disasters worldwide.

EarthTrends links to an interesting/scary figure on Trends in disaters below from UNEP.

With growing population and infrastructures the world’s exposure to natural hazards is inevitably increasing. This is particularly true as the strongest population growth is located in coastal areas (with greater exposure to floods, cyclones and tidal waves). To make matters worse any land remaining available for urban growth is generally risk-prone, for instance flood plains or steep slopes subject to landslides. The statistics in the graph opposite reveal an exponential increase in disasters. This raises several questions. Is the increase due to a significant improvement in access to information? What part does population growth and infrastructure development play? Finally, is climate change behind the increasing frequency of natural hazards?

A 'Stern' Look at Uncertainty, Novelty, and Surprise

Via Greg Mankiw: "Economists Joe Stiglitz, Nicholas Stern, and Martin Weitzman [PDF] have new pieces on global warming. The most interesting (as well as the most technically demanding) is the one by Weitzman. His conclusion: 'The Stern Review may well be right for the wrong reasons.'" I agree. In particular, I agree with Weitzman's conclusions. Here's a condensation:

… If the conclusion from the last section — that what to do about global warming depends greatly on the imposed interest rate — is seen as disappointing, then a second conclusion is likely to seem downright unnerving. …[E]ven if we had an infinite time series of past observations, they are of limited relevance in an evolving world where the environment is changing and the past never fully repeats itself. With this interpretation of the puzzles, people are willing to pay a lot for relatively safe stores of value that might represent a bit of insurance against out-of-sample or newly-evolved rare disasters.

There is little doubt that the worst-case scenarios of global warming are genuinely frightening. The Stern Review goes over several of these unlikely disasters associated with abrupt large-scale irreversible changes in the climate system: sudden collapse of the Greenland and West Antarctica ice sheets, weakening or even reversal of thermohaline circulations like the Gulf Stream, runaway amplification of global warming due to the many potential reinforcing feedbacks…. More gradual but still very serious are elevated sea levels, drowned coastlines, extreme weather patterns, flood risks, catastrophic tropical-crop failures, new humidity-nourished contagious diseases — and the list goes on and on.

Translated into the language of the simple model used here, such rare disasters are far out in the left tail of possible low, or even negative, or even possibly very negative values of …. The net result is thicker left tails for growth rates under dynamically-evolving global climate change than we are accustomed to dealing with in our much-more-familiar dynamic-stochastic-general-equilibrium macro models, which in practice are based upon the stationary thin-tailed stochastic processes that we use to model a rational expectations equilibrium whose structure is fully known. …

… [I]n lumping together objective and subjective uncertainties and thereby obscuring their distinction — to the extent that a graduate student today hardly knows, or even cares, what kinds of probabilities are legitimate to plug into a rational expectations equilibrium and what kinds of probabilities are illegitimate for this purpose — I think that contemporary economic practise goes too far and leads to a mindset that all-too-easily identifies subjective probabilities with sample frequencies from past data. …

… The upshot of this uncertainty about uncertainties is that [we are dealing with thick left tails] whose exact thickness depends not only on how bad a catastrophe global warming might induce and with what probability, but also on how imprecise are our probability estimates of the probabilities of those bad catastrophes. …

… [T]o ignore or suppress the significance of rare tail disasters in an application of expected utility theory like cost-benefit analysis of climate change, where there is so obviously limited data and limited information about extremes, is to ignore or suppress what theory is telling us is potentially the most important part of the analysis. … The take-away message here is that the burden of proof in the economics of climate change is upon whomever wants to model optimal-expected-utility growth under endogenous greenhouse warming without uncertainty tending to matter more than risk. Such a center-or-the-distribution modeler needs to explain why the necessarily-thickened tail representing rare disasters under uncertain structure does not play a critical role in the analysis. …

IPCC and the Politization of Climate Science

Yesterday, as I was running around trying to better understand the "junk science" debates, I ran into Kerry Emanuel's Phaeton’s Reins: The human hand in climate change, Boston Review, January/February 2007. Long fascinated with complexity theory, I was captured by Emanuel's contrast of "stability myths" to complexity, chaos, complex systems, dynamics, feedback loops, etc., and to the modeling of complex systems—in this case climate- and weather-change modeling.

Toward the end of the article, Emanuel turns his attention to the contemporary dilemma of what some call "the science wars", wars of words that are really more the stuff of media, politics, and social activism than of science. Here is a snip (with some red highlights from me):

Science, politics, and the media
Science proceeds by continually testing and discarding or refining hypotheses, a process greatly aided by the naturally skeptical disposition of scientists. We are, most of us, driven by a passion to understand nature, but that means being dispassionate about pet ideas. Partisanship—whatever its source—is likely to be detected by our colleagues and to yield a loss of credibility, the true stock of the trade. We share a faith—justified by experience—that at the end of the day, there is a truth to be found, and those who cling for emotional reasons to wrong ideas will be judged by history accordingly, whereas those who see it early will be regarded as visionaries.

The evolution of the scientific debate about anthropogenic climate change illustrates both the value of skepticism and the pitfalls of partisanship. Although the notion that fossil-fuel combustion might increase CO2 and alter climate originated in the 19th century, general awareness of the issue dates to a National Academy of Sciences report in 1979 that warned that doubling CO2 content might lead to a three-to-eight-degree increase in global average temperature. Then, in 1988, James Hansen, the director of NASA’s Goddard Institute for Space Studies, set off a firestorm of controversy by testifying before Congress that he was virtually certain that a global-warming signal had emerged from the background climate variability. At that time, less was known about natural climate variability before the beginning of systematic instrumental records in the nineteenth century, and only a handful of global climate simulations had been performed. Most scientists were deeply skeptical of Hansen’s claims; I certainly was. It is important to interpret the word “skeptical” literally here: it was not that we were sure of the opposite, merely that we thought the jury was out.

At roughly this time, radical environmental groups and a handful of scientists influenced by them leapt into the fray with rather obvious ulterior motives. This jump-started the politicization of the issue, and conservative groups, financed by auto makers and big oil, responded with counterattacks. This also marked the onset of an interesting and disturbing phenomenon that continues to this day. A very small number of climate scientists adopted dogmatic positions and in so doing lost credibility among the vast majority who remained committed to an unbiased search for answers. On the left, an argument emerged urging fellow scientists to deliberately exaggerate their findings so as to galvanize an apathetic public, an idea that, fortunately, failed in the scientific arena but which took root in Hollywood, culminating in the 2004 release of The Day After Tomorrow. On the right, the search began for negative feedbacks that would counter increasing greenhouse gases: imaginative ideas emerged, but they have largely failed the acid test of comparison to observations. But as the dogmatists grew increasingly alienated from the scientific mainstream, they were embraced by political groups and journalists, who thrust them into the limelight. This produced a gross distortion in the public perception of the scientific debate. Ever eager for the drama of competing dogmas, the media largely ignored mainstream scientists whose hesitations did not make good copy. As the global-warming signal continues to emerge, this soap opera is kept alive by a dwindling number of deniers constantly tapped for interviews by journalists who pretend to look for balance.

While the American public has been misinformed by a media obsessed with sensational debate, climate scientists developed a way forward that helps them to compare notes and test one another’s ideas and also creates a valuable communication channel. Called the Intergovernmental Panel on Climate Change, or IPCC, it produces a detailed summary of the state of the science every four years, with the next one due out in February 2007. Although far from perfect, the IPCC involves serious climate scientists from many countries and has largely withstood political attack and influence.

The IPCC reports are fairly candid about what we collectively know and where the uncertainties probably lie. In the first category are findings that are not in dispute, not even by les refusards:

Stern Report Buzz

Almost three months after publication, The Stern Report on the costs of climate change still generates much buzz. Some of the buzz echoes methodological concerns we have aired earlier about use and abuse of cost-benefit analysis. (Or, if in a hurry: Top 10 Reasons why CBA fails ….) Here is an condensed version of Jane Galt's recent commentary:

Discount rates, again, Jane Galt, Asymmetrical Information, 01.09/2007: …[T]hough I essentially agree with the Stern Report's conclusions, I am bothered by its methods. …

It is really, really hard to price the costs of climate change. This is true for many reasons. First, some regions will benefit: Siberia and Canada will probably blossom under global warming. A true cost benefit analysis would net those benefits out, but how do you price them? How do you price losing Bangladesh? Is that a one-time loss, or should be impute to each generation a new cost for not being able to visit Bangladesh, and how do we counterbalance that against the new pleasures of visiting the Minnesota Tropical Rainforest? Should we take into account happiness research which indicates that people are roughly as happy after a big loss as they were before?

The uneven distribution of the benefits presents another pricing problem, particularly since there are wide income disparities between the affected countries. I'm not entirely clear which way this cuts, since Britain and Ireland get hosed along with Bangladesh, but it's hard to dodge the moral injustice that the United States, which produces more carbon per capita than these countries, may end up a net beneficiary of global warming.

The biggest problem is the easiest one to state: what is a cost and what is a benefit? How do you value the changes?

Global Warming Blamed for Increasingly Destructive Wildfires

Global Warming gets tagged for increased frequency and destructive character of wildfires:

Science News Online
Week of July 8, 2006; Vol. 170, No. 2 , p. 19

The Long Burn: Warming drove recent upswing in wildfires
Ben Harder

Major forest fires in the western United States have become more frequent and destructive over the past 2 decades. The trend has occurred in step with rising average temperatures in the region.

WILDFIRE WEST. Rising temperatures and earlier snowmelts have intensified forest fires.    AP/Wide World

… Western snow packs now typically melt a week to a month earlier than they did half a century ago, recent studies have shown.

The northern Rockies have borne the brunt of the shift in fire patterns. In 1988, midsummer infernos torched 600,000 hectares in and around Yellowstone National Park; 25,000 firefighters battled the blaze, which continued until that winter's first snows fell.

About three-fifths of the largest U.S. wildfires since then have struck the same region. Government agencies spend up to $1.7 billion per year on wildfire control, and annual damages sometimes exceed $1 billion.

To understand the factors behind this mounting hazard, Swetnam and three colleagues examined fire, weather, and snowmelt data from 1970 to 2003.

For each year, the number and total area of major forest fires closely correlated with average spring and summer temperatures and with the date on which snowmelt peaked, reports the team, which was led by Anthony Westerling of the Scripps Institution of Oceanography in La Jolla, Calif.

Since 1987, fires have burned 6.5 times as much area per year as they did between 1970 and 1986, the researchers report in an upcoming Science. The average temperature increased 0.87°C between the two periods, and the average length of the fire season grew by 78 days.

"Warmer temperatures seem to be increasing the duration and intensity of the wildfire season in the western United States," comments ecologist Steven Running of the University of Montana in Missoula. …

… Fire-control efforts need to be adjusted accordingly … says Constance I. Millar of the U.S. Forest Service in Albany, Calif.

---

Science Express
Published Online July 6, 2006
Science DOI: 10.1126/science.1128834

RESEARCH ARTICLES
Submitted on April 17, 2006
Accepted on June 28, 2006

Warming and Earlier Spring Increases Western U.S. Forest Wildfire Activity
Anthony Leroy Westerling, Hugo G. Hidalgo, Daniel R. Cayan, Thomas W. Swetnam
[Abstract and link to PDF]

The Three Lenses of Threat Perception

Thanks to Jeff McIntire-Strasburg of Sustainablog for referring us to this LA Times op-ed piece that offers some insight into how people tend to evaluate the extent to which something like terrorism or global warming is a threat.  According to psychologist Daniel Gilbert:

NO ONE seems to care about the upcoming attack on the World Trade Center site.  Why?  Because it won't involve villains with box cutters.  Instead, it will involve melting ice sheets that swell the oceans and turn that particular block of lower Manhattan into an aquarium.

The odds of this happening in the next few decades are better than the odds that a disgruntled Saudi will sneak onto an airplane and detonate a shoe bomb.  And yet our government will spend billions of dollars this year to prevent global terrorism and … well, essentially nothing to prevent global warming.

Why are we less worried about the more likely disaster?  Because the human brain evolved to respond to threats that have four features — features that terrorism has and that global warming lacks.

What, in Gilbert's estimation, are the four features of perceived threats? 

1. they are the product of human intention
2. they violate our moral sensibilities
3. they represent an immediate problem
4. they appear suddenly or grow rapidly

Geoengineering A Climate-Fix

Yesterday's New York Times brings us How to Cool a Planet (Maybe), by William J. Broad, Jun 27, 2006 — explaining the whats and whys or a resergence in looking for engineering solutions to global warming threats.

In the past few decades, a handful of scientists have come up with big, futuristic ways to fight global warming: Build sunshades in orbit to cool the planet. Tinker with clouds to make them reflect more sunlight back into space. Trick oceans into soaking up more heat-trapping greenhouse gases.

Their proposals were relegated to the fringes of climate science. Few journals would publish them. Few government agencies would pay for feasibility studies. Environmentalists and mainstream scientists said the focus should be on reducing greenhouse gases and preventing global warming in the first place.

But now, in a major reversal, some of the world's most prominent scientists say the proposals deserve a serious look because of growing concerns about global warming.

Worried about a potential planetary crisis, these leaders are calling on governments and scientific groups to study exotic ways to reduce global warming, seeing them as possible fallback positions if the planet eventually needs a dose of emergency cooling. …

Many scientists still deride geoengineering as an irresponsible dream with more risks and potential bad side effects than benefits; they call its extreme remedies a good reason to redouble efforts at reducing heat-trapping gases like carbon dioxide. And skeptics of human-induced global warming dismiss geoengineering as a costly effort to battle a mirage.

Even so, many analysts say the prominence of its new advocates is giving the field greater visibility and credibility and adding to the likelihood that global leaders may one day consider taking such emergency steps. …

[In an earlier era] critics of geoengineering argued that it made more sense to avoid global warming than to gamble on risky fixes. They called for reducing energy use, developing alternative sources of power and curbing greenhouse gases.

But international efforts like the Kyoto Protocol — which the United States never ratified, and which China and India as members of the developing world never had to obey, freeing the current and projected leaders in greenhouse gas emissions from its restrictions — have so far failed to diminish the threat. Scientists estimate that the earth's surface temperature this century may rise as much as 10 degrees Fahrenheit.

Geoengineering's advocates say humankind is already vastly altering the global environment and simply needs to do so more intelligently. …

"Climatic engineering, such as presented here, is the only option available to rapidly reduce temperature rises" if international efforts fail to curb greenhouse gases, Dr. Crutzen [Nobel laureate from the Max Planck Institute] wrote.

"So far," he added, "there is little reason to be optimistic."

Inconvenient Truth

Last Thursday night, my wife Karen and I saw Al Gore's new movie, An Inconvenient Truth.  It is, in my opinion, a very clear, compelling, and heartfelt documentary that profiles one man's authentic effort to educate people around the world about the need to deal with the global warming crisis. 

   

Thanks to the superb direction of Davis Guggenheim, the film offers an unexpectedly pleasant balance and interweaving of technical and factual analysis, moral and ethical challenges, and personal introspection and disclosure, with Al Gore speaking through all three of these voices in a manner that sounds completely authentic and genuinely above the deplorable politics of this controversial issue.  In philosophical terms a la the universal pragmatics of Jurgen Habermas, there is in this film a very effective differentiation and integration of validity claims in the three domains of what is true, what is right, and what is sincere--the critical ingredients of the shared understanding and coordinated action that is the apparent goal of this film.

Trapping Carbon from Coal-Fire Plants

As reported yesterday on Mark Thoma's Economist's View, News on the technology front:

Trapping Carbon, Freeing Coal, SciAm blog:  There is a lot of carbon in the ground. For eons, life forms ranging from microbes to Homo sapiens have trapped the element as part of their fundamental molecular makeup... Some of that carbon has been recycled into descendant organisms and soil, and some has been transformed by temperature, pressure and time into coal, natural gas and oil--the fuels of our modern economy. Keeping that carbon safely underground to fend off climate change is one of the current goals of modern industry and has given rise to a seeming oxymoron: clean coal. The idea is to burn the coal but capture the carbon that the burning produces and pump it back underground.

It sounds simple. But millions of dollars have been spent--with the promise of billions more--in the thus far vain pursuit of a technology that can capture a diffuse gas (carbon dioxide), concentrate it and render it suitable for transport. Now the R.E. Burger Plant in Shadyside, Ohio, stands on the threshold of becoming the first coal-fired power plant to test both the capture and storage of the leading greenhouse gas...

[T]his would be the first time the CO2 was pumped underground simply to store it--as much as 7,000 feet beneath the surface and safely away from the atmosphere and oceans. Powerspan plans to have its capture and compression technology in place by next year; Batelle will drill a test well shortly thereafter if all goes well. Then, if the geology and technology work, pumping could begin by the end of the decade. Because there is no cheap, reliable and easy to build alternative to coal-fired power plants--particularly in the U.S., China and India, where it is most needed--such carbon capture and storage represents a critical technology fix for the pollution that is warming our world. ...

Global Warming: Fixing our mess or not?

Last night I was watching PBS' Newshour and caught a glimpse of what some believe may be a way to save us from a self-induced Global Warming Hell.

PAUL SOLMAN, NewsHour Economics Correspondent: Global warming. Almost all climatologists agree it's a clear and future danger. Wallace Broecker, a geochemist at Columbia University, has been blaming his fellow humans for over 30 years.

WALLACE BROECKER, Lamont-Doherty Earth Observatory: The way we're going now, we're not being responsible. We're saying, "We want energy as cheap as we can get it, damn the future."

PAUL SOLMAN: Meanwhile, says Broecker, the world's population is heading toward nine billion. If current trends continue, carbon in the atmosphere may triple by the end of the century.

WALLACE BROECKER: And triple is something like a six-degree centigrade warming. We would certainly melt the Greenland icecap and probably release the West Antarctic ice sheet, which together would raise sea level about thirty-six feet. …

PAUL SOLMAN: … Columbia physicist Klaus Lackner, is working on one of many solutions: a way to actually remove carbon dioxide from the air. …

KLAUS LACKNER: Such a device could collect the CO-2 from 4,000 people or, alternatively, the CO-2 from 15,000 cars.

PAUL SOLMAN: Because greenhouse gases, once emitted, spread hither thither all over the globe, Lackner says his carbon-capture devices could be planted literally anywhere.
He claims 250,000 of these things worldwide -- admittedly, a huge number -- could neutralize all the carbon dioxide currently being emitted. Half a million could get carbon dioxide back down to pre-industrial levels in a matter of decades, he says. And, as the technology develops, the cost figures to go down.

KLAUS LACKNER: With off-the-shelf items we have right now, I can drive the cost of CO-2 capture from air below $100 per ton of CO-2. And I feel that, if you pursue this longer, the ultimate end game will be below $30 per ton of CO-2.

PAUL SOLMAN: That would be about 25 cents extra for a gallon of gas, says Lackner, but plenty of questions remain: how to cheaply get the CO-2 out of the sodium that's soaked it up; what to do with the CO-2 once you've isolated it.

And if you're going to sop up carbon, mightn't it be better to do so where it gets burned, at power plants, when the air is thick with carbon? But whether it's Lackner's vision or someone else's, the key idea is the same: remove carbon from the air and sequester it back in the ground.
And why not? We've pumped carbon fuels out of the Earth all this time, so there's plenty of room down there for stuffing it back in.

WALLACE BROECKER: We have to really go at it and have a lot of competition so the people who learn how to do it the cheapest and environmentally the safest win out.

PAUL SOLMAN: That might be Klaus Lackner; then again, it might not be.
How many other labs like yours are there in the world, let's say, where someone is doing something that could have a substantial impact on global warming?

KLAUS LACKNER: Probably thousands by now. Without competition, you get some second-best solution and there's no need to make it any better. With competition, it really will get there.

PAUL SOLMAN: In the end, then, economics, which has created global warming, could conceivably save us from it. A comforting thought, anyway, when the next glacier melts down right before our eyes. ...

Lest we fall into the trap of thinking that it is as easy as a 25 cent/gal gas tax – as if that itself would be easy – let's also bring in a bit of perspective from Lawrence Bender, producer of An Inconvenient Truth, (Al Gore's recent documentary):

... There's a lot that has to be done. And it's not just one thing. I mean, yes, the fuel efficiency of cars has to dramatically change. We need to go from gas to biofuel, ethanol. We need solar, wind, other renewable-energy technologies. We need to carbon capture and sequester the carbon dioxide coming out of the smokestacks.

There's not one solution. The thing that's challenging about this is that we need solutions at every level, every area. One of the things I believe could happen on a grass-roots level is for people to learn what it means to have a carbon footprint. Your carbon footprint is the car you drive, the house you live in, the way you travel. You can calculate how much carbon dioxide you put out by living.

If you go to our website, climatecrisis.net, you can calculate it yourself and see how you can reduce your carbon output. ...

So what's it going to be? "Eat, drink and be merry for tomorrow the world comes to an end." or "Let's put our heads together and work out something individually and collectively, beginning today that will mitigate some of the worst of our self-induced Global Warming Hell (GWH)? Assuming that we have now, finally, reached consensus that the GWH threat is indeed real. Which is not a universally held position.

PS.. Here a little something from William Nordhaus titled Buying a Stairway to Heaven that I just found on RealClimate.