Imagine a group of 100 fisherman faced with declining stocks and worried about the sustainability of their resource and their livelihoods. One of them works out that the total sustainable catch is about 20% of what everyone is catching now (with some uncertainty of course) but that if current trends of increasing catches (about 2% a year) continue the resource would be depleted in short order. Faced with that prospect, the fishermen gather to decide what to do. The problem is made more complicated because some groups of fishermen are much more efficient than the others. The top 5 catchers, catch 20% of the fish, and the top 20 catch almost 75% of the fish. Meanwhile the least efficient 50 catch only 10% of the fish and barely subsist. Clearly, fairness demands that the top catchers lead the way in moving towards a more sustainable future.
The top 5 do start discussing how to manage the transition. They realise that the continued growth in catches – driven by improved technology and increasing effort – is not sustainable, and make a plan to reduce their catch by 80% over a number of years. But there is opposition – manufacturers of fishing boats, tackle and fish processing plants are worried that this would imply less sales for them in the short term. Strangely, they don’t seem worried that a complete collapse of the fishery would mean no sales at all – preferring to think that the science can’t possibly be correct and that everything will be fine. These manufacturers set up a number of organisations to advocate against any decreases in catch sizes – with catchy names like the Fisherfolk for Sound Science, and Friends of Fish. They then hire people who own an Excel spreadsheet program do “science” for them – and why not? They live after all in a free society.
After spending much energy and money on trying to undermine the science – with claims that the pond is much deeper than it looks, that the fish are just hiding, that the records of fish catches were contaminated by being done near a supermarket – the continued declining stocks and smaller and smaller fish make it harder and harder to sound convincing. So, in a switch of tactics so fast it would impress Najinsky, the manufacturers’ lobby suddenly decides to accept all that science and declares that the ‘fish are hiding’ crowd are just fringe elements. No, they said, we want to help with this transition, but …. we need to be sure that the plans will make sense. So they ask their spreadsheet-wielding “advocacy scientists” to calculate exactly what would happen if the top 5 (and only the top 5) did cut their catches by 80%, but meanwhile everyone else kept increasing their catch at the current (unsustainable rate). Well, the answers were shocking – the total catch would be initially still be 84% of what it is now and would soon catch up with current levels. In fact, the exact same techniques that were used to project the fishery collapse imply that this would only delay the collapse by a few years! and what would be the point of that?
The fact that the other top fishermen are discussing very similar cuts and that the fisherfolk council was trying to coordinate these actions to minimise the problems that might emerge, are of course ignored and the cry goes out that nothing can be done. In reality of course, the correct lesson to draw is that everything must be done.
In case you think that no-one would be so stupid as to think this kind of analysis has any validity, I would ask that you look up the history of the Newfoundland cod fishery. It is indeed a tragedy.
And the connection to climate? Here.
I’ll finish with a quotation attributed to Edmund Burke, one the founders of the original conservative movement:
“Nobody made a greater mistake than he who did nothing because he could do only a little.”
See here for a much better picture of what coordinated action could achieve.
bobberger wrote: “One example for storage. Lets assume you get high quality batteries for rediculously low prices …”
Why not assume utility-scale molten salt thermal storage for concentrating solar thermal power plants?
Why not assume utility-scale compressed air storage in underground caverns for wind turbine farms? Or residential-scale compressed air storage for that matter?
Why not assume utility-scale flywheel storage like Beacon Power is already building, or residential-scale distributed flywheel storage?
Why don’t you look at the actual real-world utility-scale wind and solar power systems that are being deployed right now, today, in large and rapidly increasing amounts, rather than basing your arguments on shaky assumptions?
#1219 Jim Eaton
We burn more natural gas in California due to public law that effectively limits coal. That costs California people money. We like to pretend it is not a tax because the money is taken from us through special charges on our electric pbills and through rates allowed by the State Public Utility Commission. Under the broad definition that I use, this is still a tax.
Since this coal restriction is quite meaningless, it might be better to rescind the coal restrictions and use the money for medical care for children, school lunch programs, education, and protection for disabled elederly. These kinds of things are on the budget chopping block, as we speak.
Your might ask, “Why is it meaningless?” Due to restrictions on coal, we simply use more natural gas and less coal. Sounds good huh? However, the commodity market acts as a leveling mechanism where the extra natural gas that we buy comes from the same set of suppliers that the rest of the country uses. The incremental upward price pressure on natural gas simply drives other fuel users to use less of that higher priced commodity, but replace it with the much lower priced coal. For the global environment, the effect of California’s action is thus erased.
Though functionally meaningless, maybe this law was good as an act of symbolic leadership when money was growing on trees; now it is a foolish empty gesture. Given the choices, perhaps even a criminal extravagance.
Better solutions are needed.
#1230 L. David Cooke,
Hi again Dave,
Regarding your comment, “– a personal Nat. Gas fired Alternator to power these devices would be slightly more efficient — ”
I need to more clearly point out that the cogeneration process changes the efficiency of making electricity from something in the 30% – 50% range to 95% – 100% due to the fact that the heat from the process is used. The word “slightly” is an incorrect description of this increase.
And thanks Dave for helping me describe my approach.
#1227 Anne van der Bom
I am not really that sensitive. The “ouch ooch” was meant to be more kidding around.
You mention what the installers will charge to build a system. Does this include adjustment for rebates that the installer arranges?
I am just looking for real numbers that represent true cost of the system that have to be paid from whatever combination of money sources.
> “Sure. That’s 10,000 4KW installations, or about 1/75th of what California is committed to doing.”
And has California found a way to do it somewhat cheaper? Or what is California prepared to pay for a mere 3GW?
> “This is why RENEWABLE energy is so important — without RENEWABLE energy there is no modern economy.”
I don’t follow you there at all. Electricity is electricity. For whatever you’re using it, the source doesn’t matter – only the price. And if the way we create electricity turns out to be bad for the planet, then we have to find the fastest and cheapest way around that issue. Creating a green economy for the sake of the color alone, is like trying to build a perpetual motion machine.
If you run, say, an IT center and use electricity for that, then higher prices will only decrease your profitability – nothing else.
The renewable lobby over here says they have created 250.000 “green jobs”. When you point out to them, that 250.000 people working in order to cover a mere 1% of our energy requirements sounds like a pretty bad deal, they claim that our green industry is the world’s market leader and that most of these jobs can therefore be attributed to exports. Strangely enough, most of the other countries who have reached similar levels do claim exactly the same.
Mark, nothing was “free market” about the controlled competition that California fostered on the energy industry and the populace. Enron got away with bad stuff mainly because the state hung a sign that said ‘come screw me.’ ;-)
re 1243, uh, that the ability of Enron to create pauperism in California was brought about by the people making decisions wanting or allowing a more direct democracy doesn’t stop Enron being the one that dropped a HECK of a lot of dosh down the drain.
www dot pkarchive dot org slash economy slash Wolak dot html
(spamfilter’s hyperactive on this subject)
Gaming the system (can I say that?)
“… At a conference on the Indonesian island of Bali last week, Interpol environmental crime official Peter Younger told Reuters he expected fraudulent trading of carbon credits, as organised crime infiltrates the system of companies and countries in the developed world buying rights to the stored carbon….”
http://www.reuters.com/article/latestCrisis/idUSL171901
I think the comments on this string are a bit stale. Can we get a new topic going so we can discuss real climate issues?
bobberger Says (5 juin 2009 at 3:08 PM):
“If you run, say, an IT center and use electricity for that, then higher prices will only decrease your profitability – nothing else.”
Not strictly true. If the cost of power for your data center becomes a significant factor in your bottom line, you have an incentive to buy machines that use less power. That (among other things, like battery life for portables) gets the chip makers &c competing on “performance per watt” rather than clock speed, and pretty soon you’re spending less on power, even though each watt is more expensive.
Same logic applies to cars. If gas prices jump from $2/gal to $4, and that motivates you to swap your 15 mpg guzzler for a 60 mpg hybrid, then even though the gas is twice as expensive, you’re only spending half as much on your driving.
SecularAnimist Says (5 juin 2009 at 2:25 PM):
“Why not assume…”
Because I can look on the web, find some batteries, place an order and have them delivered next week? Try that with assumptions :-)
“Why don’t you look at the actual real-world utility-scale wind and solar power systems that are being deployed right now, today, in large and rapidly increasing amounts…”
Because they aren’t being deployed in LARGE (in comparison to the grid total) amounts? Currently all renewables other than hydro are only about 3.6% of total generation in the US: http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.html
Danny, this isn’t a chat board. Try the links in the right hand column.
re 1256, nothing about what HAPPENED was “free market”, I’ll give you that RodB.
But the reasoning for setting it up was to let the “invisible hand” do its thing.
“It’s thing” in this case was to project the middle finger…
re #1225 and 1226.
Earlier in the thread, I stated it as my view that reliance on renewables alone as replacements for fossil fuels would lead to a drop in living standards that democratic voters would not be prepared to sanction until too late to avoid a severe global climate crisis.
Barton Paul Levenson perfectly reasonably asked why my judgement should be trusted. Of course, there is absolutely no reason why my assessment is likely to be any more informed than his own. In his next post, he acknowledges that energy from renewables is more expensive than that from coal, but only because the damaging costs of coal have not been internalised. Fair enough. He might, therefore, go on to argue that energy efficiencies might more than offset greater unit costs, thus obviating the necessity of falling living standards. It remains my view that this will not be the case, given continuing population growth and rising aspirations of those in developing nations, particularly in the context of a severe global recession. I would very much like to be wrong.
Suppose, however, that there existed a technology that could provide CO2 free energy in a sustainable manner at a price cheaper than that of coal. Surely, this would be highly desirable. Proponents of fast breeder reactors claim this very thing. I believe that Barton Paul Levenson (and many other commentators here) do not trust their judgement. For example, J.S. McIntyre (#1204) cites Dr Cochran’s paper (Natural Resources Defence Council) in which breeder reactors are rubbished. Having read, not necessarily exhaustively and, no doubt, without the necessary levels of expertise, about the pros and cons of fast breeders, I find myself favouring the pro side. Obviously, I could be totally wrong. However, given the hugely beneficial claims of the proponents, I think the technology should be given the chance to prove itself commercially.
> “If the cost of power for your data center becomes a significant factor in your bottom line, you have an incentive to buy machines that use less power. That (among other things, like battery life for portables) gets the chip makers &c competing on “performance per watt” rather than clock speed, and pretty soon you’re spending less on power, even though each watt is more expensive.”
That logic is totally bizarre. It means that, by making energy more expensive, people actually save money in the end. According to that idea, we should make energy expensive in order to help the economy, even if we wouldn’t have a CO2 problem at all. We’d all get rich if we’d only be taxed higher. Maybe hunger in the world would end if we’d produce less and more expensive food. We should close half our schools down to improve education.
> “Why not assume utility-scale molten salt thermal storage for concentrating solar thermal power plants?
Why not assume utility-scale compressed air storage in underground caverns for wind turbine farms? Or residential-scale compressed air storage for that matter?
Why not assume utility-scale flywheel storage like Beacon Power is already building, or residential-scale distributed flywheel storage?”
Simply because I didn’t find reliable figures for efficiency over long timescales for these forms of energy storage. I’d be happy to recalculate if you can provide data or point me to a resource. Since Anne van der Bom brought the “large” scale solar installation up as an example for reduced cost per W(peak), I was merely curious to see, what it would cost on a national scale with the technology we have today and (as I said) as an example. So if you’ve got data, please do provide it. Otherwise the belief in cheap solar remains just that – a belief.
> “Why don’t you look at the actual real-world utility-scale wind and solar power systems that are being deployed right now, today, in large and rapidly increasing amounts, rather than basing your arguments on shaky assumptions?”
That is exactly what I did (#1240). The numbers are solid, as far as I can see. Feel free to correct any of them or put up your own calculation – but don’t just claim it’s all wrong because of some vague feeling of your’s.
http://www.google.com/hostednews/afp/article/ALeqM5ij9mBRC5LIj4BXd_-avg8kVF469g
Green energy investments top carbon fuels
WASHINGTON (AFP) — Global investments in renewable energy overtook those in carbon-based fuels for the first time in 2008, attracting a record 155 billion dollars, a UN report said Wednesday.
…
The 2008 investment was more than four times higher than that in 2004 according to the report Global Trends in Sustainable Energy Investment 2009, prepared for the UN Environment Programme’s (UNEP) Sustainable Energy Finance Initiative.
bobberger #1249, #1244, #1267 — For me, at least, your point about wind storage is well-taken. Battery storage, as we know it, is prohibitively expensive. The more unconventional storage options cited by SecularAnimist # 1251 for utility-scale wind storage are ideas which may or may not work. It would be interesting to investigate them, however, and given the importance of wind a serious effort should be made in that direction, which perhaps SecularAnimist will lead, as you suggest.
Questions that pop out at a first look: for salt thermal storage, how do you convert wind kinetic energy into salt internal energy, and at what efficiency? How about the energy wasted in pumping that viscous molten salt? Compressed air would be inefficient because of the heat lost on compression, and sealing that much compressed air looks like an impossible job. Flywheel storage seems like a better alternative, because you get wind kinetic energy into flywheel kinetic energy on-site.
Hank Roberts #1259 — Touche. You’ve penetrated to the heart of the carbon offsets problem: fraud. We know from experience with the Kyoto Clean Development Mechanism (CDM) that offsets do not actually reduce emissions, so what can be the point of cap-and-trade? What else but (1) to strip the EPA of its Supreme Court approved jurisdiction to regulate CO2 under the Clean Air Act, thus allowing polluters to continue to stall as they appeal the new law; and (2) to start a junk market in green offsets, which are imaginary commodities subject to fraud in origination and in risk packaging.
Enron’s empire of fantasy trading collapsed, but the traders who gamed the deregulation of California energy went on the the subprime real estate derivatives market, which also collapsed, and now they are using their ill-gotten gains to bribe consensus for a new and even bigger scam in green offsets.
The great part of the scam is that utilities and other big emitters will be compelled to participate in the junk market, paying swindlers the money that should be going to developing and deploying clean energy alternatives. We in the US started down the road for that junk market with Waxman-Markey. Copenhagen will usher in Enron writ large.
The Roman Catholic church made a fortune in the sale of indulgences, which were payments to the Church in exchange for forgiveness of sins. That is exactly what is going on with carbon offsets.
Solar is getting better all the time, with many of the advances now pushing over into manufacturing:
http://www.solardaily.com/reports/Lasers_Are_Making_Solar_Cells_Competitive_999.html
The use of laser-drilled back contacts was developed in a research lab perhaps a decade ago, so you can see that the pace of technological development is fairly slow, if it takes ten years for a breakthrough technology to reach the manufacturing stage – compare that to, say, the billions invested by the Atomic Energy Commission in the 1940s and 1950s (and onwards) on developing all aspects of a uranium, plutonium, and tritium supply chain for the civilian and military nuclear programs.
Such vast expenditures were justified to the public on the basis of the need to out-compete the Soviets on nuclear weapons. You can see similar national security-based arguments fueling arguments for tar sand and coal-to-gasoline projects. Tar sands, shale oil, and coal gasoline require large up-front expenditures of energy, and result in large volumes of contaminated fresh water. They also double or triple the ratio of greenhouse gases produced to energy generated. National (in)security?
For solar photovoltaics, that ratio goes to zero over time as fossil fuels are removed from the entire manufacturing cycle, from silicon ore onwards. Silicon shortages, happily, are not going to be a problem. Look at diatoms, for example.
This is more than just a feel-good exercise for many regions of the world. See the recent report on the eastern Mediterranean region by the International Institute for Sustainable Development, IISD:
The only viable technology for producing sustainable (if slim) water supplies is going to be solar-based desalination, in all likelihood. That is a link to projects for Yemen and Gaza – here is some research on the issue from Israel:
That has to be part of a larger-scale effort that provides a stable ecological & economic base for renewable energy development – meaning that ‘environmentalists’ and ‘industrialists’ need to learn to work together.
The two distinctions should properly be surroundings and system, not environment and industry. The environment surrounds the human agricultural-industrial systems and constantly exchanges matter & energy with it. Thermodynamics constrains ecological systems as well as industrial systems – and that doesn’t just apply to internal engine combustion performance, or to solar desal performance, but also to marine photosynthesis and food chain productivity, which is what the fishing industry relies on.
The main argument for ecological economics is that it allows you to incorporate the above effects, as well as things like biodiversity loss and increasing drought, into long-term models. The economic side of the argument is that those costs should be incorporated into the current energy markets in the form of regulations and taxes on fossil fuels, combined with feed-in tariffs and coordinated R&D funding for a wide variety of renewable energy projects.
It’s not too hard to see how such a policy, including feed-in tariffs, could be incorporated into any cap-and-trade legislation. Look at the recent Florida solar feed-in tariff program for a workable example.
bobberger Says (6 juin 2009 at 5:03 AM):
“That logic is totally bizarre. It means that, by making energy more expensive, people actually save money in the end.”
It may be bizzare, but it works :-) Just do a search on “performance per watt” or similar term. Or consider that I’m writing this on a notebook PC that has several times the computing power of my last full-time desktop machine (which I kept in a separate room because of the noise from cooling fans), yet is only drawing about 15 watts.
“According to that idea, we should make energy expensive in order to help the economy, even if we wouldn’t have a CO2 problem at all.”
Yes, you’ve got it. There’s a lot of waste and inefficiency out there that nobody’s motivated to address because with cheap energy the shoe’s not pinching. Take my automobile example: if doubling the price of gasoline motivates people to drive cars that use 1/4 as much per mile, aren’t they now spending half as much on gas?
There are many similar instances, where all that is needed for savings is a motivation for change. Electric clothes dryers vs clotheslines. Outdoor lighting left on all night (and sometimes all day) vs turning them off when no one’s around. LED traffic lights: installed to save energy, but more than pay for themselves in reduced maintenance cost. LED brake lights ditto, and also reduce accidents because of the extra fraction of a second response time. WalMart’s experience in “daylighting” stores: not only saves energy, but sales go up. And on and on…
News from the Arctic commons (not unexpected)
The melt rate of the ice extent is speeding up again.
http://www.nsidc.org/arcticseaicenews/
Someting to look into
http://www.citizensclimatelobby.org/
re1270. Well, if these people can so well predict the future that they can start Carbon Credits a decade before they started the Enron Scam, maybe they deserve the money! If only we can get them to predict something helpful to us, we’d be happy for the exchange!
Wilmot, logically speaking we don’t know that “offsets don’t actually reduce emissions.” We know that in some circumstances they may not–particularly if schemes are badly designed, or inadequately implemented or enforced.
Anyway, the offsets are (or should be) a sideshow at most. The core of the cap and trade approach is the cap, which incentivizes actual emissions reductions, and which has been demonstrated to be workable by the Acid Rain program–generally regarded as a big success.
Of course, this doesn’t mean that the same mechanism will necessarily work for GHG control, too. There are many more players, and more types of pollutants, and generally much more complication to deal with. But I do think your cap-and-trade pessimism goes beyond what the data so far support.
Kevin McKinney #1275 — You raise a frequently-cited point in favor of CO2 cap-and-trade, the acid rain experience. The comparison is inapposite for a number of reasons. One is scale. Another is the availability of SOx scrubbing technology, which is not there for CO2. One result of SO2 caps is that manufacturing moved out of the US to China. See http://www.thebreakthrough.org/blog/2009/05/cap_and_trade_worked_for_acid.shtml
Offsets are not a sideshow. They are the heart of the cap-and-trade scheme, since there is no feasible CCS and no incentive to develop it. Polluters buy tree offsets and continue to pump CO2 into the atmosphere as usual. Who knows if these green offsets are real. And imagine what the quants on Wall Street can do to package the risk of trees dying, etc. so that no one can understand what they are buying. The cap is illusory because of the huge amount of free allowances given to polluters.
The experience with Kyoto’s caps, particularly in Europe, has been that there are no actual emissions cuts. “After a decade of closely monitoring the [Kyoto CDM] mechanism,” says Patrick McCully in the San Francisco Chronicle, May 26, 2009, p. A13, “I have found it to be at best expensive and ineffective in combatting climate change, and at worst, to have aided increased carbon emissions.”
Getting back to Gavin’s parable of the fishery, let’s extend it a little further:
The top five fishers, in concert with the manufacturers and others who would be adversely affected by restrictions on the allowable catch, and by the bite of recently affirmed government regulations on the fishery, come up with a new plan:
Under a new law, which overrides the effect of the old regulation restricting the catch, the existing fishers can continue to catch 90% of what they used to. Anything in excess of this cap can be made up by restocking certificates, which credit the holder with the fish being restocked. So nobody has to reduce their catch, but they do have to buy these offsets (restocking certificates), which are offered by the Fish Futures Exchange, based in Nigeria.
A robust speculative trade develops. As is well-known in other commodities, only 3% of futures contracts actually go to delivery, so real fish restocking is beside the point. After a few years, it is discovered that the certificates do not represent any restocking activity, and the fishery collapses. But the top five fishers have made a bundle selling derivatives based on the restocking certificates and they retire to Monte Carlo.
James, that’s the central myth of fossil fuels – that they represent cheap energy. The real costs, both ecological and economical, are immense – often hidden by government subsidies of various sorts. “Making energy expensive” is not the solution, but rather assigning true costs to different energy sources. How to do that? Regulation and taxation plus direct government subsidies – look at how your favorite industry was built up in the U.S. during the Truman and Eisenhower years. Waste? Inefficiency? They were willing to spend almost anything to achieve their goals (building up a stockpile of nuclear weapons and a network of privately owned, state-subsidized nuclear power plants).
In reality, nuclear and fossil fuels are extremely expensive, it’s just that the fact is hidden by government subsidies for fossil fuels and the unwillingness of banks to move billions into renewable energy.
For another example of ‘the tragedy of the commons’, look at the promised rewards of the World bank program in Peru:
As with similar promises in Chad and Sudan, the opposite appears to be true:
Peru roiled by tension after deadly Amazon clashes, Reuters, Jun 2009
Again, since it is the World Bank, that is also a U.S. taxpayer-subsidized fossil fuel program – like I said, there are dozens of such projects. It doesn’t take a whole lot of consideration to conclude that fossil fuel projects are massively subsidized by the U.S. government both at home and abroad, while the opposite is true for renewable initiatives – like this one:
How Africa’s desert sun can bring Europe power
“A £5bn solar power plan, backed by a Jordanian prince, could provide the EU with a sixth of its electricity needs – and cut carbon emissions, July 2007”
So why is nobody investing in it?
1266 Bob: That logic is totally bizarre. It means that, by making energy more expensive, people actually save money in the end. According to that idea, we should make energy expensive in order to help the economy, even if we wouldn’t have a CO2 problem at all.
You forget the output. Each dollar taxed is a dollar saved. By making energy falsely more expensive, decisions are made which save energy. In the current state of affairs, this savings is larger than the cost itself! Reduced demand exerts a downward pressure on cost large enough to offset any reasonable cost of demand reduction! And 100% of the dollars collected are available for rebate to the people on a per capita basis. Screw cap and trade. Tax and rebate to the people.
Wilmot McCutchen wrote in 1270:
A large part of the fraud includes claiming carbon offsets on forests you weren’t planning on developing, mines you weren’t planning on mining, etc., or buying offsets from companies and countries with similar non-plans for development. It would be like getting a carbon offset for the promise not to burn down your own house or buying that offset from someone else who promises not to burndown their own house — so that you can continue to pollute.
However, sometimes you just can’t count on such “carbon offsets”:
*
Odd captcha fortune cookie, but may be relevant:
superego Park
Ike Solem Says (6 juin 2009 at 8:45 PM):
“James, that’s the central myth of fossil fuels – that they represent cheap energy. The real costs, both ecological and economical, are immense – often hidden by government subsidies of various sorts.”
What is real? I don’t, of course, disagree with the broad thrust of your argument about what you see as the real costs, but to Joe Sixpack deciding whether to buy the Expedition or the Prius, the real price is what he pays at the pump, while to the data center manager, it’s the size of the monthly power bill. That price is going to be a strong motivator, because there’s a direct connection. The price goes up, you pay more. You become more efficient, you pay less. Those other costs, precisely because they ARE hidden, are going to have small effects if any.
“So why is nobody investing in it?”
I suppose you’ll dismiss ecological arguments out of hand? And I’ve really never understood how they expect to build transmission lines to carry that much power across the Mediterranean.
But all that aside, the real obstacle is simple and obvious geopolitics. Do I have to go into that here?
For readers:
http://dlc.dlib.indiana.edu/
searchable library of full-text resources on commons research
Hat tip to:
http://www.sciencemag.org/sciext/sotp/commons.dtl
links to [Hardin’s] original essay, and some of the scientific dialogue that Hardin’s controversial ideas have spurred, as played out in the pages of Science.
Douglas Wise writes:
Current price of electricity from wind power in California: 9 cents per kWh.
From coal: 10 cents.
Wilmot McCutchen writes:
So why did cap-and-trade work so well with sulfate emissions in the US?
re 1279, the Port Talbot steelworks changed their process because coal was getting expensive and that resulted in less energy being used up and the product cheaper.
Until prices went up enough, there wasn’t the need to engineer the change since the money spent on the reworking of the entire plant would not have saved more money than they could have gained with investing that money somewhere else instead.
IN GENERAL your point is correct.
But when accountants run businesses, with their Net Present Value and the “know the cost of everything and the value of nothing”, they will not change unless there’s a commercial incentive.
Short term profit is all that a listed company cares about. Sustainability can go hang.
For a more recent example, see the power consumption of CPUs when netbooks became the “new hotness”. Until then, price per watt or mips per watt were not important and we had the Pentium 4 which used 150W and more.
> “It may be bizzare, but it works. Just do a search on “performance per watt” or similar term. Or consider that I’m writing this on a notebook PC that has several times the computing power of my last full-time desktop machine (which I kept in a separate room because of the noise from cooling fans), yet is only drawing about 15 watts.”
Not really. This happens to be the field I work in and believe me – energy cost has got absolutely nothing to do with it. What you may think of as green IT is simply the nature of building high speed, cost competitive processing and memory units. With mobiles, the main concern driving us to develop low power peripherals is how long you can survive on a battery load (again – not price of the electricity itself). What everybody is talking about in green IT and where energy cost really matters, are measures like optimizing the air flow through rows of racks in an IT center, reducing the number of disks by de-duplication and space management and things like that. That doesn’t keep our marketing folks from hyping every new processor generation as built especially climate friendly while forgetting to mention, that there wouldn’t have been any other way to build it that fast and cheap with more energy consumption, unless we’d be prepared to build a huge, expensive water-cooler unit around it like we did in the old days.
> “There’s a lot of waste and inefficiency out there that nobody’s motivated to address because with cheap energy the shoe’s not pinching.”
That’s what I mean by “bizarre”. The funny idea that you have to “pinch” people in order to make them pick up money they’d otherwise simply refuse to claim. You can construct as many examples as you like – in the end higher prices do NOT mean wealthier people but poorer people. The example of somebody driving a SUV and (being pinched enough) suddenly discovers, that a smart works as well and therefore leads him to saving money in the end implies, that this particular person could have lived with a smart all along but drove a SUV anyway because he was simply too stupid to realize that. And, of course, it totally ignores somebody, who is already driving a smart because he can’t afford to run a SUV today. Pinching him won’t do much good, right?
> “Tax and rebate to the people.”
I won’t get into this since it is purely political. I lived in such a system until 1989 and don’t want another one.
Actually, Ike’s article on Desertec–the “solar Sahara” project–says this about the investment question:
Admittedly, solar thermal-produced power is still not competitive. However, conventionally generated energy is getting more and more expensive — and solar thermal power gets cheaper with the construction of every new power plant. By 2020 at the latest, Müller-Steinhagen predicts, solar-thermal electricity will be the same price as fossil fuel-generated energy. On top of that, solar thermal has greater price stability as the sun yields unlimited and free energy, which does not require elaborate and costly raw material extraction.
Elsewhere in the article, though, it notes that “renewable is in” WRT investment, and discusses the political problems consequent to having many nations involved, so perhaps the main issue is the intimidating effects of massive scale and fragmented jurisdiction.
Wilmot, the heart of the cap-and-trade question is emissions. If a cap is “hard”–if excess emissions are really penalized financially, then the scheme will probably work. If, as in the European Kyoto experience, the cap is too high, then it won’t–or at least, not very quickly.
Offsets should be a sideshow, as I called them, because tradeable credits should follow primarily from actual reductions. (In your parable, the “restocking credits” would either be tightly tied to documented restocking, or better, from actual reductions in catch–although the whole analogy doesn’t work well here, as GHG emissions are not the primary aim, unlike catching fish.) And these reductions can indeed occur with GHGs–regardless of the absence of “scrubbers.” You can think of ways in which emissions can be, and are, reduced all the time, just as well as I.
The devil is always in the details. I think it is a great mistake to write off the potentially powerful tool of cap-and-trade too readily.
“…implies, that this particular person could have lived with a smart all along but drove a SUV anyway because he was simply too stupid to realize that.”
Nope, just that they had an SUV and don’t use it enough to justify it.
Ever bought a DVD that you hadn’t watched and found out you didn’t like it?
What did you do with the DVD? Chuck it in the bin?
So you buy an SUV thinking that you’ll take it up the mountains in the summer for camping, that you remember it being so hard to get the kids in the old car and that MUST be a frequent occurrence, right? And with the tax breaks it isn’t much more expensive than a sedan.
But when you get it, you don’t go camping in the mountains.
You discover that you now have just as much trouble since now you take more with you (the load you want to carry always exceeds the capacity available).
But if you sell the car now (it’s only five years old!) you’ll lose $20,000.
Sell it in another five, maybe.
James says:
“But all that aside, the real obstacle is simple and obvious geopolitics. Do I have to go into that here?”
“Geopolitics” usually refers to “national security”, and we’ve already seen that fossil fuel dependency does not equal (inter)national security. So, that’s just an attempt to rephrase a PR line in new terms.
For the real king of U.S. fossil fuel subsidy programs, the obvious place to look is Iraq:
Without the estimated $1 trillion in expenditures related to the invasion and occupation, it is highly unlikely that Chevron or Exxon or BP would be able to gain such lucrative contracts in Iraq. In addition, the Nabucco gas pipeline to Europe is set to be filled with Iraqi natural gas. “Geopolitically”, this might have to do with Russia and Iran also wanting to sell gas to Europe.
So, you seem to be claiming that the reason the U.S. doesn’t support giant solar projects in the North African desert is because that would interfere with “geopolitical strategy”? For example, if Europe decided to go with solar electricity, that would reduce gas demand, making all the gas suppliers unhappy – including whatever companies are trying to gain control of Iraqi gas supplies.
This is your explanation of why the State Department is busy lobbying for billions more for the Nabucco pipeline, but not for the North Africa solar projects, as I understand it – any corrections?
Foreign U.S. energy policy revolves around fossil fuel and nuclear subsidies (mostly for oil and gas), and so does domestic U.S. energy policy (with much more for coal and nuclear). If you want to have any hope of stabilizing atmospheric greenhouse gas levels, you have to address that problem. That means looking at government expenditures first, and political speeches second. If the two seem wildly at odds with one another, you might want to start asking questions:
http://www.allgov.com/Agency/Department_of_Energy
There are no good arguments for expanding global nuclear power production, other than to replace existing coal plants – but with real nuclear costs so high (construction, fuel costs, fuel rod storage and disposal, reactor decomm costs, etc. etc.), that doesn’t make economic sense – replacing coal plants with wind and solar, on the other hand, eliminates fuel costs and everything associated with that.
That’s why the most sensible domestic policy would be to maintain U.S. nuclear capacity at 20% of the supply while using sunlight- and wind-based systems to replace coal-fired electricity. For foreign policy, it is equally obvious that most developing nations can bypass fossil fuel and nuclear development entirely and go straight to carbon-neutral renewable energy systems – but for that to happen, the world’s most powerful nations (all fossil fueled) would have to start supporting it.
And yes, you can store intermittent energy from sources like sunlight and wind for future use.
Barton Paul Levenson #1284 — Your question about acid rain cap-and-trade success being grounds for optimism re CO2 is an important one. I made an attempt to answer it at #1276. To recap: scale and technology. Comparing SO2 capture with CO2 capture (and storage) is comparing an ant and an elephant. And the chemical capture that worked with SO2 scrubbers has not been developed for post-combustion CO2 capture at powdered coal power plants. In addition, the SOx cap resulted in a switch to low-sulfur low grade coal from the Powder River Basin, which hurt the heartland coal industry just as manufacturing was being pushed offshore. Anything in particular you would like to explore?
RE: 1255 and 1261
Hey bobberger and James,
Interesting that you both appear to have missed the recent changes in IT. Most corporate installations have gone much further to reduce the energy and system costs then either of you have suggested so far.
After years of watching a normal mid-sized Data Center grow from a cluster of 10 Unix servers and 20 Novell servers, we advanced to 5 Unix servers, three Novell servers and 20 MS servers. In the time frame between 2001 and 2004 the 20 MS servers grew to over 120 servers as each application ended up requiring it’s own hardware platform.
With the advent of Clustering (For Reliabilities Sake) the potential growth looked to rise to the brink of 400 MS servers with the energy requirement of nearly 180kWhr. This would force the average corporation significant concern. However, there was a movement that had been introduced 10 years prior called virtualization.
Via software it was possible to both host the activity of multiple end users on a server; but to actually host multiple application services on a single hardware platform with a less then a 20% increase in energy at a cost for the Clustered hardware, increasing only 20%. Hence, the average Cluster could host between 4 and 10 services changing the potential demand from 400 hosts to around 60. Dropping the power requirements to around 32kWh.
So sorry about the diversion from the current thread of discussion I just wanted to point out that IT demands are miles ahead in planning and development to meet green intents then most other industries. (Mainly because there is little brick and mortar in a virtual or data world.) Here is the hard part, can you think of a means to transfer multiuser/server virtualization technology to the transportation or power demand industries?
(Yes I know that Buses, Trains and Planes work for transportation; but, how do you provide the same thing for energy demand? Neighborhood laundries won’t work because no one wants to wash their clothes with anyone else’s. How about hot water, do you install a Neighborhood Hot Water/Steam Supply system like in Iceland, for hot water and heating? What of refrigeration and cooling? Do you have a community refrigerator/ice box with everyone having their own section? Maybe you would need to design a community liquid nitrogen system for refrigeration and cooling?)
Cheers!
Dave Cooke
#1288 Kevin McKinney
From what I have heard latest, the cap & trade bill has been whittled down to 17% reductions by 2050. Are you sure you don’t want to dismiss it?
Direct progressive carbon tax is the way to go. It works.
From Jim Hansen to the Secretary of the Australia Department of Climate Change:
Source: http://www.columbia.edu/~jeh1/mailings/2009/20090505_TempleOfDoom.pdf
9 According to a retrospective analysis by the Arthur D. Little consulting firm for the Alliance for Responsible Atmospheric Policy, the tax on CFC’s began in 1990 at $3.00/ODP-kg (ODP denotes ozone-depletion units) and automatically increased each year by $1.00/ODP-kg, finally reaching $18.80/ODP-kg in 2002. See http://www.arap.org/adlittle/2.html.
10 The British Columbia carbon tax began at $10 per metric ton of carbon dioxide on 1 July 2008 and is scheduled to increase annually by $5/tonne, reaching $30/tonne on 1 July 2012.
http://citizensclimatelobby.org/
http://www.carbontax.org/
Kevin McKinney #1288 — I suppose we agree that if there are actual reductions these should be credited as some sort of reward to encourage deployment of emissions reduction technology. For example, if a plant installs technology that reduces its CO2 emissions by 10,000 tons, and the price of each ton is established at $100 (based on the actual cost of CCS), that plant should get a credit in the amount of $1,000,000.
Maybe that could be a tax credit, against future indebtedness to the government. Maybe that tax credit could be sold.
What I object to is credits that do not represent actual emissions reductions at point sources. That’s the major source of GHG.
The money spent buying indulgences should be spent on technology that can make a real difference.
bobberger Says (7 juin 2009 at 6:54 AM):
“Not really. This happens to be the field I work in and believe me – energy cost has got absolutely nothing to do with it.”
That’s not what I’ve seen. Low energy consumption is used as a design & selling point. See for instance here: http://www-03.ibm.com/systems/deepcomputing/bluegene/ – something I’m more familiar with than the data center, though the same logic applies. If you poke around in the supplementary material, you’ll probably find an explanation of the engineering tradoffs: with a given chip technology, power consumption increases non-linearly with clock speed. That’s expressed as heat, which increases cooling requirements, thus total power consumption increases further, so you get more throughput at lower cost with lots of slow processors…
“That’s what I mean by “bizarre”. The funny idea that you have to “pinch” people in order to make them pick up money they’d otherwise simply refuse to claim.”
Call it what you like, it’s the way the average person works. I’ve given a few examples, others have added to them, a little searching will find plenty more.
“…this particular person could have lived with a smart all along but drove a SUV anyway because he was simply too stupid to realize that.”
You’ve got it :-) Though to the simple variety of “stupid: can’t do simple arithmetic”, you have to add “stupid/gullible: believes those ads that imply SUV will increase status/virility etc”. Look at the last 30 years or so of the US automobile industry for supporting evidence.
Ike Solem Says (7 juin 2009 at 8:47 AM):
“So, you seem to be claiming that the reason the U.S. doesn’t support giant solar projects in the North African desert is because that would interfere with “geopolitical strategy”?”
US support, or lack of it, is irrelevant, because the US really has nothing to do with such projects – unless perhaps you’re postulating high-voltage transmission lines under the Atlantic?
If I must state the obvious (and I apologize to the moderators for having to do so), the areas of the Sahara where those plants would be built are under Islam. So Europe is supposed to pay to build these plants, on which they’ll be dependent, and not expect them to be turned into a weapon against them?
You might want to think about the problems with Russian natural gas this past winter, and how much more serious a shutoff of North African electricity would be. Frankly, this scheme makes the insane US policy WRT Mideastern oil (briefly expressed as “give your avowed enemies money to buy the guns to shoot you with”), seem sensible by comparison.
Ike (1278), the cost estimates from your two references differed by almost two magnitudes. Was one a typo(s) or just different early guesses?
RichardC (1279), surely you’re making a joke… If not please return to Accounting 101 and review the terms income, cost, expense, saving, tax. Then refresh yourself on “smoke and mirrors.”
btw, Obama’s “cap and trade” idea is in fact a tax and rebate (and subsidize) plan.
Barton (1283), the 9 cent and 10 cent figures have been mentioned many times; but I can’t find them anywhere. Can you reference them? Are they retail charges for wind and coal? Can a retail user order wind or coal and get those prices? How do they fit with the almost 13 cents per kWHr average overall for California?
Mark, what tax breaks does a SUV get over a sedan??