Posted by: bmeverett | February 6, 2016

Paul Krugman fails Climate Change 101

Paul Krugman is a Nobel Laureate and former distinguished professor at my alma mater Princeton University. His February 1 column in the New York Times entitled “Wind, Sun and Fire” is an embarrassment to himself and to Princeton. Professor Krugman is, of course, entitled to express his views, but he should show at least a basic understanding of the issues before he starts pontificating.

The initial argument in the piece is “Last year was the hottest on record, by a wide margin, which should — but won’t — put an end to climate deniers’ claims that global warming has stopped.” Four points in this regard. First, “the record” is only 100-150 years, the time period for which we have instrumental data. That does not mean by any stretch of the imagination that 2015 was the hottest year ever. Second, the “wide margin” is only 0.16 degrees Celsius. Third, 2015 was an El Nino year, during which changes in ocean currents redistribute heat from the ocean around the planet. The relationship between surface air temperatures and ocean currents is one of the key unknowns in climate science. Finally, climate “skeptics” are not basing their case on an absolute pause in temperature increase. Most “skeptical” scientists acknowledge that carbon dioxide has a warming effect on the atmosphere. The argument is about climate sensitivity – how much CO2 leads to how much warming. Climate activists have relied for the last 25 years or so on computer models to tell us what will happen. Over that period of time, however, we have developed actual data that indicate that CO2 causes much less warming than the models predict. Strangely, climate activists still prefer the models to actual data.

Krugman’s next argument is intended to be optimistic. He says that “Most people who think about the issue at all probably imagine that achieving a drastic reduction in greenhouse gas emissions would necessarily involve big economic sacrifices….. But things are actually much more hopeful than that, thanks to remarkable technological progress in renewable energy.” He quotes, for example a Lazard study that claims that the cost of wind power fell 61 percent from 2009 to 2015, while the cost of solar power fell 82 percent. That may or may not be true, but compared to what? A Ferrari F12 Berlinetta currently costs about $325,000. If the price fell 82%, it would still be out of the reach of the average driver. He claims, but does not document that renewable energy is now in “a range where it’s competitive with fossil fuels.” That assertion is too powerful to make without support.
Professor Krugman acknowledges the serious problem of intermittent generation from wind and solar, but just dismisses it with a wave of his hand, claiming “But this issue seems to be of diminishing significance, partly thanks to improving storage technology, partly thanks to the realization that “demand response” — paying consumers to cut energy use during peak periods — can greatly reduce the problem.” Sounds good, but should we believe this? Energy storage, including batteries, has made considerable technological progress in recent years, but it’s nowhere near the point where large amounts of intermittent electricity can be economically and reliably integrated into the power grid. Bear in mind, for example, that an all-electric Nissan Leaf costs twice as much as the similar gasoline-powered Nissan Versa. The Leaf battery doubles the cost of the vehicle. Paying consumers not to use electricity may reduce consumption, but does it increase overall economic welfare? Again, no support for this claim. Climate activists are going to have to provide evidence, not just an assertion that these problems have been solved.
Finally, Professor Krugman reaches for the sky with “But I’d argue that the kind of progress now within reach could produce a tipping point, in the right direction. Once renewable energy becomes an obvious success and, yes, a powerful interest group, anti-environmentalism will start to lose its political grip. And an energy revolution in America would let us take the lead in global action.” In other words, if the renewable energy revolution is successful, then the renewable energy revolution will be successful.
Among the many things I learned in my four years at Princeton are that assertions are not arguments and that calling people who disagree with you “crazies” does not advance knowledge in any way.

Posted by: bmeverett | January 29, 2016

To the New York Times, all stories are about climate change

New York Times articles often start with a headline, followed sometimes by a subheading and then the article itself. In some cases, the body of the article includes what’s known as a “pull quote” – a brief one or two line statement of the key point of the article. The pull quote doesn’t have to be a verbatim quote, but can be paraphrased or shortened. This technique is helpful to most readers who do not read every article word for word, but instead scan the paper and select a few articles to read in full. Titles and pull quotes give the casual reader a quick impression of the article, allowing him or her to note the main point and then move on to other topics.

Journalistic integrity requires care in using these pull quotes. The January 26 edition of the Times shows a case in point. The article is entitled “Argentina Scrambles to Fight Biggest Plague of Locusts in 60 Years” written by Jonathan Gilbert. The pull quote in the article is “An explosion, possibly tied to climate change, is ‘impossible to eradicate’.” The casual reader is thus given the impression of yet another disaster caused by human-induced climate change, added to the ongoing litany of droughts, blizzards, wildfires, hurricanes and other punishments for our fossil fuel sins.

Interestingly, however, that’s not what the article actually says. The piece mentions climate change twice, the first time stating that “Mr. [Diego] Quiroga [Chief of Vegetative Protection of the Argentine State Agricultural Agency] pointed to a warning last November by the Food and Agriculture Organization, a United Nations agency, which said climate change would contribute to locust plagues in Africa. “There is clearly an impact in our country, too,” he said. “We are definitely being affected.” Last time I looked, Argentina was not in Africa, so this statement appears to be no more than Mr. Quiroga’s personal opinion. The scientific basis for his view that Argentina is “definitely” being affected by climate change is unclear.

The second mention of climate change is “There is no study yet that shows climate change has led to the increase in locust populations, said Paola Carrizo, a professor of agronomy at the University of Buenos Aires, explaining that a more likely cause was insufficient pest control by Senasa [The Argentine State Agricultural Agency].” So here are the two sides of the issue presented in the article. A distinguished Argentine professor says there’s no evidence that climate change is involved in the locust infestation and offers a reasonable alternative explanation, while, on the other side, a government bureaucrat offers a personal opinion based on a vague UN comment regarding Africa. So what’s the thrust of the story and what’s the honest pull quote? How about “Argentine agriculture is threatened by an infestation of locusts, probably caused by insufficient government pest control efforts.”? The Times just can’t pass up an opportunity to advance the climate agenda.

Posted by: bmeverett | January 21, 2016

The New York Times Misses the Point (Again)

The New York Times constantly reports and opines on climate change, but never seems to understand the real issues. Their latest misfire is a January 19 editorial entitled “Proof That a Price on Carbon Works”. The Times editorial board is clearly confused about the meaning of the word “works”.

The first paragraph of the piece claims “Lawmakers who oppose taking action to lower greenhouse gas emissions by putting a price on carbon often argue that doing so would hurt businesses and consumers. But the energy policies adopted by some American states and Canadian provinces demonstrate that those arguments are simply unfounded.” The Times offers three examples of carbon taxes that “work”: British Columbia, the California/Quebec agreement (clearly a rather unusual partnership) and the 9-state Northeast Regional Greenhouse Gas Initiative (RGGI). Let’s start by establishing two metrics to determine if a carbon tax “works.” First and foremost, the tax would provide a meaningful incentive for consumers to reduce energy consumption or prefer lower-carbon fuels, bearing in mind that changing the trajectory of atmospheric carbon dioxide concentrations will require massive not trivial reductions. (As noted in previous posts, I do not support the view that carbon dioxide emissions need to be reduced, but I’ll set that aside for purposes of this discussion.) Second, the tax would not damage the economy or place an undue burden on consumers. A carbon tax should not be regarded as “working” unless both conditions are met.

The Times editorial claims that its examples demonstrate that carbon taxes can achieve the second objective, but makes no attempt to address the first. Let’s stipulate that these carbon taxes have had no adverse effect on the local economies, and have a look at their likely impact on incentives for carbon reduction. British Columbia for example, has instituted a supposedly successful carbon tax of C$30 per metric tonne or $US21 at current exchange rates. Sounds good, but is it meaningful? A gallon of gasoline emits about 9 kilograms of carbon dioxide, so the BC carbon tax is about US$0.19 per gallon. To put this in context, gasoline taxes in BC are US$0.65 per gallon ($0.385 provincial and $0.265 federal). Taxes in the greater Vancouver area, where most of the BC driving occurs, are even higher at US$0.925/gallon. Current gasoline prices in Vancouver are between US$2.60 and $US2.70, so the carbon tax increases gasoline prices by about 7%. According to the Canadian Automobile Association, the average cost of operating a mid-sized sedan in British Columbia is about US$0.60 per mile, assuming 12,000 miles per year of driving and 27 miles per gallon fuel efficiency. A carbon tax of US$0.19 per gallon would cost the driver US$0.007 per mile or just over 1% of the full cost of owning and operating an automobile in British Columbia.

Should we really expect this tax to influence either consumer choice of vehicle or driving habits? If drivers want to reduce their driving cost, they could get a much better result by buying a slightly less expensive car. People choose their vehicle not just to minimize the cost of driving from point A to point B, but also for comfort, safety, performance and style. In 2008, gasoline prices in BC were over US$5.00 per gallon. BC gasoline sales declined only about 2% that year, and recovered almost immediately when gasoline prices fell again in 2009. An article in the Globe and Mail from last March reported that 2014 sales of luxury sport utility vehicles in British Columbia were 50% above the national average. So much for changing consumer behavior.

How about electricity generation in BC? Would this tax help British Columbians replace high carbon power generation fuels with renewables? Hardly. BC obtains 90% of its electricity from 72 hydroelectric stations, which take advantage of BC’s favorable geography, with high mountains and fast-flowing rivers. In the power generation business, BC’s carbon tax is irrelevant.

The BC carbon tax does raise, however, an interesting question. BC produced 29 million tonnes of coal in 2014, including both metallurgical coal used in the steel industry and thermal coal used in power plants. Almost all of this coal was exported either to other Canadian provinces or to other countries. Coal not burned in BC is not subject to the carbon tax nor are its emissions included in BC’s carbon inventory.

I have no problem with BC producing and selling all the coal it wants, but should BC engage in high-minded moral preening about its climate policies when the emissions from its high carbon fossil fuel production are simply generated elsewhere? Atmospheric carbon dioxide concentrations are relatively insensitive to where the emissions occur. How should carbon emissions inventories account for a situation in which fossil fuels produced in one jurisdiction are consumed in another? Just asking.

How about the California/Quebec partnership, in which each places a cap on carbon dioxide emissions and requires emitters to purchase the rights to these limited emissions? The effectiveness of cap-and-trade systems like these depends entirely on the severity of the cap. According to the Times, emission permits are selling for only $13/tonne, which tells us a lot. California already has a gasoline tax of $0.4062/gallon in addition to the federal excise tax of $0.184 for a total of $0.59/gallon. Current gasoline prices in California are $2.77 per gallon, so the carbon tax adds only $0.12 or 4% to a price that has already fallen more than $1.00/gallon in the past year.

I could go through the Quebec gasoline numbers, but the result is the same. The carbon tax is too small to impact consumer behavior in any meaningful way.

How about California electricity? Could the carbon tax help California switch from high-carbon fossil fuels to low-carbon renewables? The data suggest otherwise. California gets almost 70% of its electricity from either hydro, much of it imported from the northwest, or pumped storage units. Another 14% comes from biomass, including wood and municipal landfill gas (both favorites of alternative fuel enthusiasts). Five percent is generated by petroleum, but these units are mainly either peak-shaving turbines for use on hot summer afternoons or back-up diesel generators for hospitals and other critical facilities. In total, almost 90% of California’s electricity comes from sources not influenced by the carbon tax.

About 8% of California’s electricity comes from natural gas, a low but not zero emission source. Could the carbon tax provide a real incentive to replace this capacity with renewables? Let’s do the math. Using the latest cost data from the Energy Information Administration (https://www.eia.gov/forecasts/aeo/electricity_generation.cfm), assuming 80% financing at 6% interest with a 15% return on equity and ignoring all subsidies, electricity from new natural gas plants in California could generate electricity at about 3.8¢ per kilowatt-hour (kWh). Under the same assumptions, the generation cost would be 7.2¢/kWh for onshore wind power and 14.7¢/kWh for large-array solar. A carbon tax of $135/mt would be required to equalize natural gas and onshore wind generation costs, and a tax of $430/mt would be required to equalize natural gas and solar generation costs. (Note that this calculation does not even consider the huge challenges and costs involved in integrating intermittent power into a complex and sophisticated grid.) The actual carbon tax of $13/mt is nowhere near large enough to change basic power generation economics.

By the way, the replacement of high-carbon coal with low-carbon natural gas does not require any carbon tax, since it’s already cheaper to generate power with natural gas throughout most of the US. Politicians like to take credit for this market development even though it has little if anything to do with government policies.

How about electricity in Quebec? Like BC, Quebec obtains most of its energy from hydro. In fact, Quebec generates enough hydropower to supply 99% of Quebec’s requirements and still export significant amounts of power to neighboring provinces and the US. Once again, the province is taxing something that doesn’t exist, namely high carbon power generation.

Having gone through these calculations for BC, California and Quebec, the $7.5/mt tax prevailing in the Northeast RGGI looks laughable, equivalent to less than $0.07 per gallon of gasoline.

If there is no substantive impact of these taxes on carbon dioxide emissions, why bother? The answer is simple. Carbon taxes are presented to the public as a kind of “sin tax” comparable to taxing cigarettes or alcohol. Governments get revenue while telling the public that the taxes bring other social benefits and help save the world. Environmental groups and climate advocates like the New York Times editorial board praise these politicians to the hilt without even looking at the numbers. The Times editorial notes that Ontario and Alberta are considering similar carbon taxes. Why not? Carbon taxes are a political winner, as long as nobody bothers to do any analysis.

Posted by: bmeverett | January 15, 2016

Tufts and Climate Change

“Tufts Now” is the on-line newsletter covering happenings around the campus. The January 12 edition (at http://now.tufts.edu/articles/reaching-global-accord-climate-change?utm_source=Tufts+Now+-+Faculty+and+Staff&utm_campaign=1e1209bae1-Tufts_Now_internal_160113&utm_medium=email&utm_term=0_e2c82ed1e3-1e1209bae1-207305033) included an article entitled “Reaching a Global Accord on Climate Change”. There has certainly been a lot written about the recent Paris Climate Accord, but the interesting part of the “Tufts Now” article is the subtitle “How a pledge signed by Tufts and other colleges nationwide helped pave the way for success at the Paris conference.”

The article quotes extensively from my friend and colleague Professor Kelly Sims Gallagher, who, following the retirement of Prof. Bill Moomaw, has assumed the mantle of chief climate guru at the Fletcher School. In addition to teaching energy and climate policy, Prof. Gallagher is the Director of the Fletcher School’s Center for International Environment and Resource Policy (CIERP), an appointment she received after returning from a stint as a senior policy advisor to the Obama Administration on climate change.

I won’t spend any time here arguing the merits of the Paris Accords. My views are laid out at length in my December 18 post “Alice in Climateland”. The “Tufts Now” article does raise, however, the issue of the appropriate role of a university in advocating for public policy positions. There’s no obvious line of demarcation here. Almost all faculty members and students have strong views on politics, and robust political debates are a healthy part of campus life. Most people would probably object, however, if the university administration formally endorsed a presidential candidate and asked students to work toward his or her election. Universities often take strong stances on issues like genocide, racism, poverty and torture. These positions are easy to take, since there is almost universal support among Americans. Very few members of the Tufts community would endorse genocide, nor would many find a debate on the merits of genocide particularly interesting or useful.

The problem with the climate change issue on campus is its characterization as a moral issue. The “Tufts Now” article discusses Tufts’ decision to sign the American Campus Act on Climate Pledge developed by the White House last November. Signed by over 200 universities, the pledge states, in part, “We recognize the urgent need to act now to avoid irreversible costs to our global community’s economic prosperity and public health and are optimistic that world leaders will reach an agreement to secure a transition to a low carbon future.” When Prof. Gallagher was contacted regarding the pledge, she passed it on to Tufts University President Anthony Monaco. According to Prof. Gallagher, “He immediately thought it was a great idea. The values embedded in the pledge are already those that have informed Tufts’ own sustainability pledge.” These “values” include Tufts commitment to reduce greenhouse gas emissions by 10-25% by 2020 compared to 1990 (See my previous post regarding “slick tricks”) and a 5-7 percent reduction in energy consumption each year for 3 years.

The problem here is that climate change is a scientific, not a moral issue. The reduction of carbon emissions and energy consumption is important only if the scientific basis for catastrophic climate change is valid. As an analogy, there is no moral imperative to help poor Martian refugees unless we can establish that there actually are Martian refugees and that they are in need of assistance. This mischaracterization is a severe disservice to the Tufts University community.

The costs of decarbonizing the world economy would be massive. In addition to threatening the living standard of middle class westerners, the elimination of fossil fuels would put serious obstacles in the path of economic development for the world’s poorest people. Furthermore, the levels of carbon dioxide likely to persist in the atmosphere for the foreseeable future have made a major contribution to the “green revolution” around the world, increasing crop yields and helping the world’s poor escape poverty.

Students come to the University to learn critical skills. A college education is supposed to teach students how to define problems, how those problems have been addressed in the past and what methodologies are available to address them today. Students ought to be taught, in particular, logic and science as the keys to truth in the modern world. The University’s unequivocal support for the catastrophic climate change hypothesis, however, profoundly undermines the University’s mission. Climate activists, including the Tufts administration, argue that consensus, not empiricism, should determine the validity of the catastrophic climate hypothesis. This view is fundamentally anti-science and risks serious confusion on the part of students.

If you’d like to see for yourself how unbalanced the views of the Tufts administration are on this issue, see http://sustainability.tufts.edu/climate-change/#Science. Beyond being terribly out of date, this supposedly informative background material includes a defense of the “Climategate” emails and an article from the Vancouver Sun questioning the credentials of climate skeptics. There are members of the Tufts faculty, myself included, who hold very different views on this issue, but there is no mention of this debate in the University’s material.

In the Middle Ages, the Catholic Church took the view that major issues, including those regarding the natural world, should be addressed by asking committees of scholars, invariably clerics trained in the scripture, to consider the issue and resolve any controversy. Different viewpoints were always welcome, provided everyone accepted the Church’s findings as definitive, a requirement that Galileo ignored to his peril. The Church did not object to Galileo’s argument that the Earth revolved around the Sun, but it would not tolerate his argument that empirical evidence, rather than Church Committees, should have the final word.

The Tufts Administration is effectively supporting the Church’s view with regard to climate change. Freshmen students entering Tufts are told in no uncertain terms that climate science is settled, that climate skeptics are without exception paid spokesmen for the fossil fuel industry and that raising questions about the climate agenda violates Tufts’ core values. A key scientific issue has been settled by official committees, and their conclusions should not be questioned. A Tufts student taking any course in the physical sciences might be tempted to question this apparent contradiction, but these kids are highly intelligent and understand the negative reactions such questions would provoke from the administration, faculty and even their fellow students. Better to avoid this issue altogether.

An interesting irony here is that Tufts was founded in 1852 by Christian Universalists who saw a need for a non-sectarian university. Harvard at the time focused on training clergy, predominantly Congregationalist and Unitarian. The Tufts Administration’s climate advocacy is a betrayal of its original mission. The University is now explicitly training climate clergy. Think that’s an overstatement? Check this out: http://sustainability.tufts.edu/get-involved/.

Posted by: bmeverett | January 5, 2016

Farewell to a Friend

Just a short post today to acknowledge the passing of Steve Bosworth, a good friend of 40 years. When I first went to work at the Federal Energy Office in Washington in 1974, the US was struggling to develop an international energy policy in the midst of a Middle East War, a drastic cut in Arab oil production and consequent price increase and a President in the Middle of the Watergate crisis. Responsibility for energy policy was scattered around the bureaucracy with no central focus. Enter Steve Bosworth, then Assistant Secretary of State for Energy who managed this impossible situation with intellect and professionalism. Some of the very few energy policy successes, including the Strategic Petroleum Reserve and the International Energy Agency, were developed under Steve’s leadership and remain in force today.

I won’t go into all of Steve’s professional accomplishments, including his three Ambassadorships, but I was delighted when Steve was appointed Dean of the Fletcher School, where I teach, in 2001. Given our longstanding friendship, I always gave Steve an hour of my class time to come and speak to the students on whatever issues were on his and their minds. Always worthwhile.

Steve was a very quiet individual, who spoke only when he had something meaningful to say. He was always a role model to me of how to manage complicated problems under crisis conditions. I will really miss him.

Posted by: bmeverett | December 18, 2015

Alice in Climateland

‘Twas brillig, and the bureaucrats
Did gyre and gimble in the wabe…

(apologies to Lewis Carroll)

The issue of climate change is at its heart a scientific debate. This week, however, the focus has not been on the scientific uncertainties or the costs and benefits of carbon dioxide, but on politics. The December 13 New York Times ran the headline “Nations Approve Landmark Climate Deal” in large type. Sounds great, but what actually happened? Not much.

We’ve seen this movie before. The New York Times edition of December 11, 1997, proudly stated “Meeting Reaches Accord To Reduce Greenhouse Gases”. That headline trumpeted the Kyoto Protocol, which set a standard for climate negotiations with lots of noise and no substance. Kyoto set binding targets for the industrial countries plus Russia and some of the former Soviet states, known as the Annex I countries. The US signed, but did not ratify the treaty and thus avoided its obligations. The reaction from climate activists was to howl about American irresponsibility and ultimate guilt for the annihilation of mankind. In 2012, the end of Kyoto’s first assessment period, the Annex I countries announced that their targets had been met. Champagne sales soared and the backslapping could be heard around the world. In 1997, when the treaty was signed, carbon dioxide emissions from the Annex I countries (excluding the US) totaled 8.8 billion metric tonnes (mt) per year. By 2012, emissions had declined to, oh, wait a minute, increased to 8.9 billion mt annually. The only slight flaw in Kyoto’s otherwise successful performance was that there was no reduction in greenhouse gas emissions. How exactly did this miracle occur?

Kyoto was based on promises plus a number of accounting “slick tricks”, which allowed participating countries to meet their targets without actually reducing emissions. The most important slick trick was the use of 1990 as the base year for measurement. In 1990, the total emissions from the Annex I countries (ex US) were 9.9 billion mt, compared to 8.8 billion mt the year the treaty was signed. In other words, the Kyoto participants were credited with a reduction of 1.1 billion mt of CO2 emissions, which occurred before signature. Smart, no?

There were other tricks. The Clean Development Mechanism, for example, gave Annex I countries credit for projects in non-Annex I countries that helped those countries reduce their emissions. Sounds reasonable, but the system was easily gamed. In many cases, chemical projects were built solely to obtain the credits available for the destruction of greenhouse gas byproducts. In other cases, credits were taken for land use changes without any evidence that the changes had reduced greenhouse gas emissions.

Why would governments spend so much time and effort on an agreement like Kyoto with so little substance? The answer is the fundamental dilemma of climate policy. On the one hand, politicians, particularly on the left side of the spectrum, face a committed and vocal constituency of climate activists from environmental groups and academia, whose views are amplified by the media. On the other hand, the global economy has been weak ever since the 2008 recession and climate policies are all based on raising energy costs, which represent an additional impediment to a stronger economy. Climate activists are a pretty demanding lot, but all politicians know that the quickest pathway to losing power is a stagnant economy. Hence, the effort to craft a climate policy that looks good but has no teeth.

With this dilemma in mind, let’s look at what was agreed in Paris. According to proponents of the new agreement, its most important aspect is the number of countries that have agreed to sign on – supposedly 196. Each of these countries has agreed to its own individual voluntary program, called its Intended Nationally Determined Contribution (INDC). (Note: If climate negotiations produce nothing else, they certainly produce a lot of acronyms. My favorite is “common but differentiated responsibilities and respective capabilities or CBDRRC.) The agreement also commits rich countries to begin paying poor countries around $100 billion per year by 2020, although it’s not entirely clear what this means. Almost all of the 196 countries agreed to offer their voluntary targets only on the condition that they receive some of the money in return. Progress will be monitored, presumably by a new UN climate bureaucracy, and every ten years, the countries will meet again to review the targets and make even more serious commitments. A step in the right direction? Let’s have a look at the arithmetic.

This year, the world will emit about 33 billion mt of carbon dioxide from energy use. According to a recent projection by the Energy Information Administration of the US Department of Energy, in the absence of new policy initiatives, emissions will increase to about 50 billion mt per year by 2050. The UN Intergovernmental Panel on Climate Change (IPCC), which is supposedly the font of all wisdom on climate science, states unequivocally that the world can stay below the dangerous level of global warming (2 degrees C above the pre-industrial level) only by reducing emissions to no more than 60% of the 2010 level by 2050. Emissions in 2010 were about 31 billion mt, so the maximum the IPCC thinks we can emit in 2050 is 20 billion mt (60% of 31). If true, the world has to find 30 billion mt of reductions in the next 35 years.

The four largest carbon dioxide emitters in the world in 2014 were China (10 billion mt), the US (6 billion mt), the European Union (3½ billion mt) and India (2 billion mt). Together, these countries accounted for 21½ billion mt or about two-thirds of the world total. What have these countries offered as their INDC’s?

Let’s start with the US. President Obama has committed the US to reduce its emissions 26-28% by 2025 versus 2005. Note the “slick trick”. He is measuring our emissions reduction over a 20 year period, half of which has already occurred. In 2005, US emissions were 6.5 billion mt, but have since fallen to 6 billion mt, an 8% reduction accomplished mainly by the substitution of natural gas for coal, a process many environmentalists oppose. The President’s 26% reduction by 2025 implies a target of 4.8 billion mt by 2025, or about 20% below today’s level. The latest projection by the Energy Information Administration shows US carbon dioxide emissions in 2025 of 5.5 billion mt without any further policy initiatives. The US is therefore proposing cuts of 0.7 billion mt (5.5 minus 4.8) or 2.3% of the amount the IPCC considers necessary to avoid disaster.

How about the European Union, the inventor of the Kyoto slick tricks? The EU INDC targets an impressive 40% reduction by 2030 versus 1990. Note the serious base year problem here. The EU’s carbon dioxide emissions have already declined by about 20% since 1990 from 4.2 billion mt to 3.4 billion metric tonnes, mainly because of the substitution of natural gas for coal in the UK and Germany and a prolonged economic slump. A 40% reduction by 2030 implies a further reduction of 0.9 billion mt to 2.5 billion mt. The EIA forecast assumes flat carbon dioxide emissions for the EU, so the net savings would be 0.9 billion mt.

The EU’s NIDC, however, carefully reserves the right to define the metrics of land use changes at a later time. In other words, the EU will be able to have a look at how they are doing and then introduce some fictitious land use credits if required.

China’s INDC includes three promises: (1) China’s carbon dioxide emissions will peak in 2030, (2) China’s carbon intensity (carbon dioxide emissions per dollar of GDP) will decline by 60-65% by 2030 compared to 2005 and (3) non-carbon technologies will contribute 20% of primary energy supply by 2030. These goals certainly sound substantive, and President Obama heaped lavish praise on China for making these important steps. Not so fast.

Some projections, including a 2011 study by the DOE’s Berkeley Lab in California, have concluded that China’s emissions are likely to peak around 2030 anyway. China is essentially promising to do what it already expects to do.

How about China’s energy intensity? First of all, notice the “slick trick” of using 2005 as the base year. According to the EIA, China’s GDP in 2005 was about $US5 trillion (purchasing power parity, $2005). With carbon dioxide emissions of 5 billion mt, carbon intensity was about 1 kilogram of carbon per $ of GDP. The DOE projections assume China’s GDP reaches $33 trillion by 2030. With carbon emissions projected at 14 billion mt, carbon intensity would be around 0.4 – a 60% reduction. In other words, China has once again promised to do pretty much what it expects to do anyway.

That leaves us the third promise – increasing non-carbon technologies to 20% of total energy use by 2030. According to the EIA projections, China’s total primary energy consumption will increase from about 130 quadrillion British Thermal Units (quads) today to about 200 quads by 2030. Meeting their Paris promise would thus require 40 quads of non-carbon energy. The EIA projections indicate 10 quads of nuclear power and 22 quads of hydro and other renewable power for a total of 32 quads with no new policy initiatives. To keep its promise, China therefore needs an additional 8 quads of non-renewable power. Assuming that the Chinese accomplish this goal by switching 8 quads of energy from coal (the fuel with the highest carbon emissions) to a zero carbon fuel and assuming that coal emits 93 kilograms of carbon dioxide per million Btu, this switch would reduce Chinese carbon dioxide emissions by about 0.8 billion mt per year, equivalent to 6% of their projected emissions or 2.5% of the IPCC’s minimum required reduction.

Even if China were to take its INDC promise seriously and accomplish its goals, about 80% of Chinese energy demand in 2030 would be met by fossil fuels.

Finally, let’s look at India. India’s INDC is to (1) reduce the carbon intensity of its economy by 33-35% by 2030 compared to 2005 (slick trick!) and (2) increase the share of installed non-fossil power generation capacity to 40% by 2030.

According to the EIA numbers, India’s GDP in 2005 (purchasing power parity, $2005) was $2.4 trillion. With carbon dioxide emissions of 1.2 billion mt, carbon intensity was 0.5 kilograms of carbon dioxide per dollar of GDP. The EIA projections indicate that in 2030 India will have a GDP of about $13 trillion and carbon dioxide emissions of 2.7 billion mt per year. Carbon intensity would therefore be about 0.2 kg of carbon dioxide per dollar of GDP, less than half the 2005 level. India’s carbon intensity promise is therefore meaningless.

How about the promise of 40% of power generation capacity. The use of capacity as opposed to actual generation is another slick trick. With proper maintenance, a coal plant can operate 80-90% of the time. Thus, one kW of coal capacity can generate at least 7,000 kilowatt-hours (kWh) per year (24 X 365 X 0.9). Solar power, on the other hand, generates power only about 15% of the time, and not necessarily when you need it. A kW of solar capacity will therefore generate on average only about 1,300 kWh per year – less than 20% of what coal plant can produce. Wind is a little better, but 1 kW of wind capacity still generates on average only about 45% of what a coal plant can produce. In tracking India’s INDC, however, each kilowatt would be counted as the same.

Today, India has about 300 billion watts (GW) of installed electrical generation capacity. Of that amount, about 5 GW are nuclear, 43 GW hydroelectric and 23 GW other renewables, mostly wind. India’s starting point is thus about 24% non-carbon generating capacity. Note that the figures for generation look quite different. India currently generates about 1,200 billion kilowatt-hours (BkWh) of electricity, but only 190 BkWh or 16% is from non-carbon sources.

The EIA does not publish specific forecasts of electrical generating capacity, but the International Energy Agency in Paris does. According to their 2015 outlook for India, based on India’s official government plans and policies, generating capacity will increase from today’s 300 GW to about 750 GW by 2030. That amount includes 24 GW of nuclear, 83 GW of hydro, 102 GW of wind power, 100 GW of solar and 18 GW of other renewable energy. The total non-carbon is thus 327 out of 750 or 44%. India’s INDC promise is therefore their base case. It’s also worth noting that non-carbon generating plants would produce only about 30% of India’s electricity from 44% of its installed generating capacity. Even with these ambitious targets for nuclear and renewables, almost 90% of India’s energy in 2030 would be met by fossil fuels.

The INDCs of the US, the EU, China and India, which together account for two-thirds of global carbon dioxide emissions, would thus total 2.4 billion mt per year or just 8% of the IPCC’s minimum required reduction. In other words, the IPCC says that we have 35 years to reduce emissions by 30 billion mt per year, and the top emitters are promising 8% of that amount in the first 40% of the available time, assuming no slick tricks are applied to ease the way and assuming that countries bother even to try to keep their promises.

The Paris agreement also “strongly urges” rich countries to finance low-carbon energy in poorer countries to the tune of $100 billion annually between 2020 and 2025. Even if these funds are actually forthcoming, however, how significant would such a fund be?

The world currently consists of about one billion people in wealthy countries and 6 billion in poorer countries who would benefit from the fund. $500 billion over five years is thus about $83 per person. Experience tells us that the bulk of this money would be stolen or wasted, but let’s assume it all goes to energy infrastructure development. If the poor countries rely on fossil fuels for their energy supply, the International Energy Agency estimates that they will need roughly $25 trillion in energy infrastructure investments over the next 20 years to provide adequate electricity, oil and natural gas for their populations that are growing in both number and wealth. That works out to roughly $4,000 per capita. The climate activists in Paris are asking poor countries to base their economic growth on an energy supply system which is 3-4 times as expensive as the traditional fossil-fuel system, suggesting that a non-carbon economy will need energy infrastructure investments of $75-100 trillion or $12-16,000 per capita by 2035. In return, the wealthy countries promise to finance roughly 0.5% of that amount. Seriously?

In summary, the world has just negotiated a climate agreement that provides negligible carbon reduction without any binding obligations or enforcement mechanism. Rich countries promise to toss in a few bucks 5 years from now to encourage poor countries to participate. The reply of the climate activists to this criticism is twofold. First, Paris is just a first step. After 10 years, countries will come together and agree to even more stringent carbon reduction targets. In other words, we have made a promise to make a real promise in the future. Remember that Kyoto, which was signed 18 years ago, was also supposed to be a first step.

The second argument is that this agreement sends a “signal to the marketplace”. This argument is valid, but not in the way climate activists think. Businesses, investors and consumers respond to two signals: (a) regulations with the force of law and (b) price. The Paris agreement contains neither of these things. In fact, the agreement signals to the marketplace that governments have no intention of making serious efforts to decarbonize the economy. That allows corporations to green up their reputations by supporting an effort that carries no real risk for them. More than 70 companies have now signed the White House’s American Business Act on Climate Pledge. Why not? ExxonMobil’s experience has already taught them that opposing the climate agenda can hurt your brand.

Governments have kicked the can down the road because they understand that carbon mitigation is prohibitively expensive and has no upside. Perhaps 10 years from now the pause in global temperatures will have ended, the global economy will be growing rapidly, budget deficits will have disappeared, entitlement programs will have been fully funded and radical new technologies will be available to provide zero carbon energy at low cost. Under any circumstances, almost all the politicians who negotiated the Paris agreement will have retired, and the problem of keeping and extending the climate promises will fall on someone else.

For the last 40 years, US energy policy has been a long string of broken promises, starting with Richard Nixon’s 1974 promise of US energy independence by 1980. In 1980, Jimmy Carter promised 2 million barrels per day of synthetic fuels within five years and commercial fusion energy by the year 2000. The synthetic fuel program was abandoned in 1985, and we still can’t make a fusion reactor that really works. In 2007, George W. Bush promised commercially viable cellulosic ethanol by 2017. We’re still waiting. In 2011, President Obama promised one million electric cars on the road by 2015. We will miss that target by 65%.

Politicians have come to understand that the real value of these promises is in their short-term political impact. They create an impression of action, which will last for a little while anyway. By the time the promise comes due, most people (and the media) will have forgotten all about it, and the promise will already have served its political purpose.

In a sense, the US is a true leader in climate policy. We have shown the world that most climate activists can be appeased with strong talk and symbolic actions. The Chinese and Indians, who have never bought into the climate change agenda, have learned this lesson well. The US is asking them just to talk the talk, and they are happy to oblige, provided there’s a little cash in it for them.

The Paris agreement is not a disaster, just a waste of time and money. Most of us would prefer an honest policy debate about real risks and trade-offs, but both politicians and climate activists have avoided such a debate like the plague. If the public fully understood the immediate benefits of carbon dioxide, the non-existent science behind climate catastrophe and the damage to their living standards implied by serious attempts at decarbonization, the climate change agenda would evaporate. If a meaningless international agreement is all it takes to keep the climate activists happy, they are welcome to it. The rest of us can get on with our lives.

Posted by: bmeverett | July 17, 2015

Op-ed on the Oil Export Ban

I recently ran an op-ed piece in Politico on the proposal to lift the oil export ban. You can find it at http://www.politico.com/agenda/story/2015/07/the-problem-with-elizabeth-warrens-oil-arguments-000141

Posted by: bmeverett | June 30, 2015

Climate Op-ed

The Cape Cod Times recently ran an op-ed of mine on climate change, which my readers can find at http://www.capecodtimes.com/article/20150530/OPINION/150539996. I think the piece is self-explanatory.

The paper subsequently printed two responses. The first, which you can find at http://www.capecodtimes.com/article/20150603/OPINION/150609968, is rather snarky and not very constructive. The second, full of errors but more thoughtful, is at http://www.capecodtimes.com/article/20150615/OPINION/150619782

Posted by: bmeverett | May 24, 2015

Climate Guilt

I was a freshman in college at the time of the Great Northeast Blackout in November of 1965. Nearly 30 million people in New York, New Jersey, New England and Ontario lost power for up to 13 hours. The cause was simple human error. Transmission lines have safety relays set to disconnect the line if power exceeds the line’s capacity. One of the relays at a power station in Ontario had accidently been set too low, causing the line to cut out unnecessarily. The power from that line was diverted to other transmission lines, overloading them and causing a cascade of tripped relays.

A few days later, a friend told me a story about an 8 year old boy in New Jersey who was walking home from the playground hitting telephone poles with a stick along the way. One whack coincided with the blackout, convincing the young boy that he was responsible for the Manhattan skyline going dark. His frantic parents had to search for him for hours before finding him hiding in fear of the terrible punishment he knew he would have to face. Today that boy is probably a climate activist.

Irrational fears and magical worlds are, alas, not confined to small boys. At the time of the Great Blackout, John Fuller, a 52 year old writer for the Saturday Review, suggested that the blackout may have been caused by extraterrestrials. Hector Tobar joins this august group with his op-ed in the May 22 New York Times entitled “The Sins of Angelenos.” Mr. Tobar believes that the climate of Los Angeles has fundamentally changed because of human behavior – specifically his behavior. He notes that an arborist at the University of Oregon bemoans the loss of campus birch trees destroyed by rampaging bronze borer beetles thriving in our newly hot climate. Furthermore, in a heart-rending mea culpa, Mr. Tobar believes that “The plague of insects is my fault. So was the poor snow season in Oregon resorts, and Hurricane Sandy, and the rising tides threatening assorted Micronesian islands. As a native of Los Angeles, I am significantly more responsible for global warming than your average resident of planet Earth. We pioneered an energy-guzzling lifestyle for the masses and taught the world to follow our lead. Now a parched, endless summer is our punishment.”
While he’s being fitted for his hair shirt, Mr. Tobar might have a look at the facts. According to the National Oceanographic and Atmospheric Administration (NOAA), average temperatures in the US have increased by about 2° F since 1895. This warming, however, has occurred in two distinct periods. The first increase of about 1° F took place between 1895 and about 1935. Between 1935 and about 1970, average temperatures actually fell before starting to rise again. By around 2000, average temperature had risen by about 1° F compared to the level in the mid-1930s, and there it has stayed for the last 15 years.
Climate activists have been arguing for the last 20 plus years that carbon dioxide emissions will lead to temperature increases of 8-10° F with catastrophic results in terms of sea level increases, more severe weather, the spread of disease and general mayhem. To be clear, Mr. Tobar, the catastrophic predictions have not actually happened. Over the last 40 years, Los Angeles has experienced temperature increases similar to those of the early part of the 20th century, which did not seem to bring climate catastrophes. For the last 15 years, there has been no temperature increase at all. The temperature increase in Los Angeles over the last hundred or so years has been approximately the same as the temperature difference between LA and Santa Barbara 100 miles to the north.
The events Mr. Tobar notes, including the bronze borer beetles, the California drought, the poor snow in Oregon and Hurricane Sandy are all well within the natural variability of our climate. We need to remember that climate variations occur over hundreds, thousands and millions of years. None of us has a data base of personal experience sufficient to judge whether every individual event is somehow unnatural. Only proper, scientific analysis can determine that, and science is not showing us anything out of the normal range.
The consequences of this confused and magical thinking are potentially severe. The United States is a free society. Throughout our history, government has been seen as the servant of the people, not as their parent. Apparently, Mr. Tobar believes that “the masses” should not have been allowed to develop an “energy-guzzling lifestyle”. A modern industrial lifestyle derives from the substitution of massive amounts of chemical energy for human and animal power. Fossil fuels allow us to eat well, live well and to travel as we please. What does Mr. Tobar think we should have instead? Perhaps he has an idyllic vision of peasants living and dying within a few miles of where they were born? The Duke of Wellington, hero of Waterloo, disliked railroads, which he believed “only encourage the common people to move about needlessly.” Well, Your Lordship, the common people actually like moving about and don’t regard their mobility as needless.
I’ll grant Mr. Tobar this. If it turns out that increased carbon dioxide emissions actually do bring catastrophic temperature increases, he is welcome to say “I told you so!”. The American people, however, are highly doubtful that this will happen, and they have good reason for their skepticism. For now, however, let’s not pretend that the “parched, endless summer” is already here. Our climate is demonstrating normal variability, and the fervent wishes of climate activists can’t make it otherwise.

Posted by: bmeverett | May 7, 2015

Friedman Watch 5-6-2015

It’s been a while since I’ve addressed one of Tom Friedman’s crazy green columns, but this week he’s offering us a doozy entitled “Germany, the Green Superpower” in the New York Times’ May 6 issue. Mr. Friedman is absolutely giddy over Germany’s green energy program and suggests that they deserve a Nobel Peace Prize for a “world-saving achievement”. Really? Well, let’s have a look.

Mr. Friedman notes approvingly that Germany has increased the share of renewables in its electric power generation from nearly zero to 30% (actually 26.2% in 2014 according to German government statistics). True enough, but what does that really mean for Germany? Mr. Friedman admits that this accomplishment was very expensive, costing billions of Euros. He claims, however, that the purpose was to “drive down the cost of solar and wind to make them mainstream, affordable options”. Mission accomplished, since “With price drops of more than 80 percent for solar, and 55 percent for wind, zero-carbon energy is now competitive with fossil fuels here.” True, but very misleading.

According to the Energy Information Administration, at the end of 2014, electricity prices in the US were 12.2¢ per kilowatt-hour (kWh) for residential consumers and 6.65¢/kWh for industrial consumers. According to Eurostat, comparable year-end 2014 prices in Germany were 33.8¢/kWh for residential consumers and 22.6¢/kWh for industrial consumers. (Please note that these numbers reflect the recent strengthening of the dollar to 0.88 Euros. Otherwise, this comparison would have been much worse for Germany.) In other words, Germans pay nearly three times as much for electricity as Americans do. Is this really an accomplishment?

A Mercedes S-Class sedan starts at around $94,000, while a Ford Taurus sells for around $30,000. Alas, most Americans can’t buy the S-class, but according to Mr. Friedman’s logic, we could make the S-Class affordable by imposing an $80,000 per vehicle tax on the Taurus. The $94,000 S-Class would now be a bargain compared to the $110,000 Taurus. Would Americans really be better off? Seriously?

Mr. Friedman would have a better argument if he could claim that the German economy could thrive even with these high electricity prices, but it hasn’t. US GDP growth has averaged 2.7% per year over the 2013-2014 period, and Americans have been complaining (justifiably in my view) that we are experiencing the weakest economic recovery in modern history. The German economy grew at an annual rate of only 1.3% over the same period – half the US rate. Is this really the pathway for Germany to become a superpower?

OK, so the German public has taken a hard hit from its renewables policy, but isn’t it worth it to take the lead in fighting global climate change? Not so fast. The German emphasis on renewable energy must also be seen in the context of their other major energy policy – the phase out of nuclear power. According to German government statistics, in 2014, Germany generated 160.6 billion kWh of electricity from renewables and 97.1 billion kWh from nuclear plants. According to Chancellor Merkel, the nuclear component is to be shut down by 2022. The nuclear phase-out is expensive. Most of the plants shut-down so far are less than 40 years old, and the remaining capacity is 30-35 years old. The US has reactors that have been operating well for nearly 50 years. In essence, Germany must replace fully depreciated, low-cost power plants with something new and expensive. To accomplish this goal, Germany must grow renewable power by 6% per year through 2022 just to hold the zero-carbon component of its energy mix (nuclear plus renewables) flat.

Mr. Friedman is also ignoring Germany’s dirty secret – its increased coal use. German coal use declined for many years, mainly from closing high-cost domestic mines. According to BP’s annual statistical review for 2014, Germany coal consumption declined from 163.5 million tonnes of oil equivalent (Mtoe) in 1965 to a low of 71.7 Mtoe in 2009. Coal use then began to grow, reaching 81.3 Mtoe in 2013 and is still rising. Several new coal-fired power plants are under construction in Germany today. Why would a country so committed to fighting climate change increase its use of the highest carbon fuel? Economics. The Germans have started to feel a real pinch from the high cost of renewables and need to do something about it. Coal may also be the only economical way of incorporating large amounts of intermittent and unpredictable renewable power into a modern electricity grid requiring precise voltage and frequency control.

The Climate Community generally approves of high electricity prices, regardless of their impact on economic competitiveness. After all, they argue, we must engineer drastic cuts in greenhouse gas emissions to save the world, but just how “world-saving” is the German experience? Germany has indeed reduced its carbon dioxide emissions from 930 million metric tonnes (mt) in 1997 (the year Kyoto was signed) to 842 million mt in 2013, a decline of about 9.5%. Over this same period, Germany’s population has actually fallen from 82.1 million to 80.8 million. As a result, per capita carbon dioxide emissions have decreased from 11.3 mt in 1977 to 10.4 mt. Not bad, and much lower than US per capita carbon dioxide emissions at 18.6 mt, but is Germany the model for a low carbon world? Hardly. Current global carbon dioxide emissions are about 35 billion mt per year. With the world’s population now at about 7.125 billion, per capita emissions on a global scale are just under 5 mt. China’s per capita emissions are only 7 mt and India’s only 1.5. If every person in the world had the carbon footprint of the average German, global greenhouse gas emissions would double. To achieve a 50% reduction in carbon dioxide emissions by 2050, when the world’s population is estimated to be 10.5 billion (UN projection, medium estimate), per capita emissions for the world as a whole would have to be less than 1.7 mt. In other words, Germany would still have to reduce its per capita emissions by over 80%. Many in the Climate Community are demanding even more drastic reductions. In other words, if the Climate Community’s catastrophic scenarios are correct, rather than India aspiring to look like Germany, Germany must aspire to look like India. I doubt the average German would find this prospect appealing.

Perhaps the most extraordinary assertion in Mr. Friedman’s piece is that forcing modest amounts of expensive renewables into your economy coupled with denuclearization somehow makes you a world power. Germany is currently choking on the costs of these policies and facing a stagnant economy. How exactly does this enhance their ability to lead the EU into building a military capable of confronting Russia and China?

Military capability requires two things: lots of money and political will. Germany has neither. The average American household spends about $5,000 per year on the US military. The average German household spends about $1,600. How exactly would the German green energy program, which suppresses GDP growth and reduces the discretionary income of German households, support higher military costs? Moreover, how does a “green” Germany convince its EU partners, who are in even worse economic shape to join them?

Mr. Friedman has a really strange answer to this question. He predict that Germany will become the first “green, solar-powered superpower” because “They have to.” Mr. Friedman is right to worry about American disengagement in Europe in the face of increasing Russian and Chinese military power. If the US does not reverse course, the likely outcome is an uncomfortable European accommodation with China and Russia, not a revival of German military might.

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