Suppose you believed the world was getting warmer due to humanity’s greenhouse gas emissions and you worried about it but you can’t get yourself to believe that the 200-odd countries in the world are ever going to agree to drastically reduce their emissions via some joint scheme, partially because it is too hard to measure many emissions, partially because it might take a world dictatorship to actually enforce such a deal, and partially because some countries are most likely going to be much better off if the world warms up and hence are going to sabotage any joint plan. You would find yourself backed up in this opinion by a lot of auxiliary data on the difficulties of letting go of the growth fetish, ranging from the known miniscule effect that the ETS schemes currently on the table would have even if they were agreed upon, to the factoid that China is building two coal powered stations a week, to the factoid that in nearly every election politicians promise their electorate more economic growth (read: bigger cars, more holidays to far-away places, more gadgets running on energy, etc.), to the factoid that even the European countries who have been calling for reductions in emissions for over 2 decades have themselves been happily ‘burning the midnight oil’.
For people like this, which includes me, geo-engineering seems the only realistic way forward, i.e. some kind of technological fix that can be implemented by a single worried country or a sub-set of countries desperate enough to try unproven technology to cool the planet down. No world dictatorship or elusive coalition needed, hence much less of a free-rider problem. How serious are good scientists thinking about such technological fixes, what are the front runners, and are the front runners indeed things a sub-set of countries could implement?
It turns out that the possibility of geo-engineering is taken much more seriously in the academic community than you’d ever think from reading the newspapers. English scientists in particular seem to have adopted the idea that they should look for technical fixes, just in case the world coalition on CO2 emission reduction doesn’t quite live up to the dreams of its adherents. The Royal Society for instance advocated research in geo-engineering quite openly (see here) making it clear sensible people are thinking about this option seriously. Find over the fold a basic breakdown in basic options and their characteristics.
The geo-engineering options fall in two categories: trying to get the CO2 out of the air or reflecting more sunlight before it is absorbed (SRM: Solar Radiation Management).
On the first, the UK Institute for Mechanical Engineering put out a paper (here) where they look at several options. One of their favoured ‘absorption’ plans is artificial trees, where the trapped CO2 has to be buried underground. The tough thing about this option is partially the cost of these artificial trees (reportedly 20,000 pounds per unit of which you’d need 100,000 to only cover the UK transportation sector, meaning you’d be talking about hundreds to thousands of billions of dollars for the world as a whole) but also the problem of how to actually store the huge volume of CO2 (abandoned oil fields are touted, but this is not as easy as it sounds). Nevertheless, it can be done by a subgroup of countries if it has to be done, though we might end up digging an awful lot of big bunkers deep into the ground to get rid of all this CO2.
Another favoured solution by these mechanics is to capture CO2 in algae, either directly in coal-fired plants or as algae strips on the sides of buildings. The obvious problem is again that one would have to bury an awful lot of algae somewhere, but in principle it is a solution that can be implemented unilaterally at great cost. The suggestion to use the algae as fodder for animals is probably more cost-effective but has the obvious disadvantage that this doesn’t get the CO2 out of the whole system.
The last of the favoured absorption solutions is to try to get the oceans to absorb more CO2 via all manners of ‘Ocean fertilisation’, with the saturated algae drifting to the bottom of the ocean with all their CO2 trapped in them for a long time. So far this option has proven harder than hoped, with the well-known failed attempt to get sustained massive algae blooms via pouring some iron into the water. Apparently, some Australian scientists are involved in seeing whether nitrogen and phosphates would be a better idea to put into the water than iron, but the technology looks quite dicey at present. In particular, unlike the other ones so far talked about, there is much more risk of doing unintentional harm by adding massive amounts of chemical substances into the ocean as opposed to burying some CO2 captured in one way or another.
If we then look at the SRM solutions, a couple of interesting ones have popped up in the UK reports. One of the mentioned solutions by the Mechanics is to paint all the buildings white so that they reflect more sunlight. This is clearly the kind of thing that might well capture the public imagination (‘save the planet: paint your roof white’), but it is much harder and expensive than it sounds. For one, I understand we’d have to reflect something like the whole area of Australia back into space to reduce the temperature, which is far more than merely the surface of all the buildings in the world. Also, white roofs tend to get dirty over time and the paint may not itself be all that environmentally friendly either. Hence, we’re talking a high cost, high maintenance solution that might well be more useful as a symbolic DIY policy rather than as a serious option. Yet, the potential downsides of this method seem smallish in the sense that no-one sensible is going to insist on the impossible pre-requisite of knowing with certainty that we wont be doing unintentional harm by reflecting some more sunlight via white buildings.
The Royal Society also reviewed a whole set of possible SRMs (see here). One of their most recommended options is to put ‘sulphate aerosols in the stratosphere above natural levels, causing an increase in planetary albedo and thereby reducing the incoming solar radiation’. The obvious problem with putting massive amounts of a chemical (SO4 and the like) into a particular region of our air is that there is the potential danger of unintended consequences. Yet, it is the kind of thing with which an individual country can experiment and something of which the consequences can be learned about by trial and error before implementing it on a massive scale.
A more outlandish option is to put reflectors in space so that less sunlight hits the earth. An ‘L1 point shield’ would be best placed at a particular point between the earth and the sun so that it is kept there by the combined gravitational pull of both bodies. An interesting sideline of this whole area (which has really generated the enthusiasm of a whole horde of engineers who have each come up with their own variant) is that they have figured out you only need to deflect sunlight by a tiny amount such that it misses the earth. My problem with this option is that it would seem fantastically expensive to put enough mirrors into space to reflect the equivalent of the total radiation hitting Australia without anything going wrong. These mirrors have to be in exactly the right spot, themselves deflected easily by the smallest of gravitational pulls from comets or what-have-you (and if you’re deflecting the equivalent of the total amount of sun-energy hitting Australia, you can imagine the destructive force hitting those mirrors if they are not in exactly the right angle). It basically does not sound plausible at this point that we will be able to do this now or in the coming century or so.
Another interesting idea is to get the clouds to be whiter in order to reflect more sunlight. The way to get whiter clouds appears to be to generate better ‘mini water droplets’ and a whole host of options exist to attempt to do this, including ocean sprays and particular forms of coal dust that form the nucleus of these droplets. The potential disadvantages of trying it appear smallish of this option (whatever we put into the air will be quickly going back in the form of rain so it is hard to imagine permanent damage from putting something into the air of which there is already quite substantial amounts in the air), but whether it might work or not appears completely unknown.
Summarising, there are respectable scientists spending their time on geo-engineering solutions, with the above merely being the ‘front-runners’ of dozens of proposed schemes. None of the proposed solutions talked about above appear to be thought of as ‘proven and implementable at acceptable costs with minimal risks’ at this point, but as someone who basically views the whole global ETS carnaval with bemused incredulity I am heartened to see serious thought is put into what we might actually end up doing as a subset of desperate countries and that there appears to be some hopeful candidates on the table.
Of course, having said all this, my front-runner for what will actually happen is that the world as a whole will simply adapt to whatever climate change our energy-guzzling way of life condemns us to. Should geo-engineering really be implemented by a subset of desperate countries then the problem will be that the optimal climate for one country may not be the optimal one for another, i.e. those countries currently secretly happy with climate change may well move in the opposite direction with their own geo-engineering if the promised warming of the planet is thwarted by someone else. We may thus end up with ‘climate wars’ where, say, Russia does its best to pump as much CO2 into the air as it can and Canada paints all its buildings black whilst, say, Australia puts SO4 into the stratosphere and Japan fills the oceans around it with phosphate. Perhaps such climate wars in turn will lead to a ‘geo-engineering dis-armament UN body’. You can just imagine the UN inspectors checking that the buildings in Vancouver are not all black! All such humour aside, the possible political dynamics of geo-engineering are scary.
Core Economics 
We seem to have already started – accidentally. Our high-altitude civilian air traffic is altering cloud coverage and leaving small particulate matter (pollution) in the atmosphere to reflect sunlight. I’m sure some people are aware of the air temperature rise of 1 degree over North America following the 9/11 air ban. (Don’t have the link to hand, but the references are easy to find.)
There is speculation that this explains why temperatures have not risen by as much as predicted in some climate models.
Of course that same air traffic is contributing carbon emissions that ultimately play out with respect to increased ocean acidification.
One final aside – Obama’s energy ‘czar’ (a leading physicist whose name I forget) suggested colouring the tops of buildings and roads white or neutral colours. Reckons it may buy ten years worth of time to reduce carbon output.
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Personally I’m a big fan of ocean fertilization. The ocean has water, sunlight, and CO2, and with the right nutrients it can support as much life as the best farmland. A lot of this biomass will sink to the bottom of the ocean – and turn into oil over thousands of years – but the rest will be eaten by fish, greatly increasing the world’s supply of protein.
In general reflecting sunlight is a bad idea because it reduces the rate at which plants photosynthesize CO2, but there’s a lot to be said for increasing the albedo of our roads.
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DP:
yes, acidification is another worry of CO2 use, but one I dont really understand yet. I thought acidity was a zero-sum game in that if the oceans are getting more acid, either the air or the land has to get less acid which bounds on how far they can differ. I am hence not really sure whether ocean acidity is something that will sort itself out or that can really become very bad. I guess you need to be a biologist/chemists to have an answer to that one.
Matt, what I understand from the science of ocean fertilisation is that one would be talking about a truly staggering amount of chemicals one would have to pour into the ocean, even more so if we allow for some to remain in the system via being fish-food.
As a driver I am not sure I want our roads to be more relective. Perhaps if we can be sure it all goes streight up in stead of sideways.
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In large parts of the ocean the limiting nutrient is iron (because it tends to sink), and a kg of iron gets you around 10,000 kg of biomass, so there’s a pretty good payback. If you can secure fishing rights it’s probably even profitable. But you’re right that to increase yields further requires enormous amounts of nitrogen and phosphates.
As for the albedo of roads, a few roads are light grey concrete, others are black asphalt. Let’s make them all light grey. Or you could coat them with microscopic glass balls which will reflect light straight back to its source (like we use on street signs so they light up when our headlights hit them).
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Most modern roads (or at least highways) are concrete and almost white in appearance.
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One of the most left-of-centre proposals is to use lasers to ionise CO2 molecules such that they exit the atmosphere at the poles using the Earth’s magnetic fields.
The insight is based on a paper by Hans Nilsson of Swedish Institute of Space Physics documenting how oxygen already leaks out at the poles via magnetic field.
A fuller explanation of that and other methods was published in The Economist (‘A Changing Climate of Opinion, Sep 4th 2008)
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Purleeze!! The cost of getting it wrong is seriously problematic; that, and the complexity of the issue does not really avail itself of simple (minded) solutions. A simple piece of civil engineering should suffice to illustrate. Let’s take the Aswan Dam, not geo-engineering on a large scale, but pretty big. The problem: secure supplies of water and electricity to downtown Cairo and other bits of Egypt. Hey, let’s build a dam. Nobody foresaw: Dams, especially of that architecture, are much shorter lived than expected because of siltation, and reducing environmental flows in the Nile has reduced the deposition of sediment on the Nile delta, reducing arable land and degrading existing tracts.
I’m not instinctively a Luddite, but I’d hate for my future to be left in the hands of engineers, who instinctive shy toward the simple from the complex solution. I’d hate at some future time for some engineer to say “Who’d have thought … ?”
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Retrogrouch,
I have seen this argument in many guises in this debate. One incarnation of it is the ‘Pre-cautionary Principle’ and another goes by the label the ‘conservative Approach’ (where I use the word concervative with a small c). In this case I think it is simply not a useful way of looking at the problem for two distinct reasons:
1. We are already on an unknown trajectory in terms of what we are doing to this planet. Significant percentages of the original pre-human habitat are changed beyond recognition; chemicals are created and distributed in vast quantities; new species are created whilst the relative frequency of existing species is heavily influenced; humans have become the dominant life-form and look set to keep experimenting with the earth in terms of our roads, buildings, air travel, electricity usage, etc. To pretend that one can meaningfully speak of a ‘safe and conservative’ approach to climate change or any other global environmental problem is simply wishful thinking. We are on a roller-coaster ride with the fate of this world whether we like it or not and it is surely better to try and figure out how to build a good roller-coaster for us to keep moving on rather than pretend we can stop in mid-air and be safe.
2. The alternative on the table (ETS) is also a human intervention with unknown consequences (it should more aptly be described as ‘slow geo-engineering’), but then one for which we can reasonably expect it to be completely useless because of the gaping free-rider problem at the heart of it.
Hence the argument ‘we should go global ETS because the rest is untested’ is a fundamentally untenable position because whatever we do will be somewhat untested, including a global ETS. Worse, the global ETS is a kind of rain-dance: we know it doesn’t do much good by itself but its adherents dream that in some magical unexplained way it will lead us towards a ‘safe’ solution in the future. I will take the advise of a good engineer anyday above such mumbo-jumbo. At the very least I want to see what the engineers have available to us just in case the rain dance fails to produce the goods.
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retrogrouch:
I agree with you for the most part, but in truth – as I explained – we have already begun experiments in geoengineering and not realized it, re: high-altitude alterations. And it appears (?) to be buying us some time until we reduce future emissions and – more hopefully – the current CO2 burden down.
As for engineers proposing simple solutions over complex solutions, again you’re right to a degree (speaking as an engineer). However do absolutely nothing whatsoever, no time, no place is also very simple to propose. It assumes that civilization does not possess a resource footprint.
Some proposals are complementary, not supplementary, to the important task at hand.
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Paul
Technology is a great idea. The smelly visual pollution from the manure in the streets of our cities in the nineteenth century did not go away because someone taxed or constrained the supply of oats!
Technology gazumped the horse!
And, gave us a bigger pollution problem a century later.
However, should we pursue a long, winding and uncertain road to invent complex solutions?
For domestic energy consumption, we have proven technologies that can help to reduce pollution, Solar. A significant part of the energy produced by our smelly coal-fired power stations is lost from the IR losses in the transmission system (~7%). Why not eliminate the IR losses and produce power closer to the point of domestic consumption? On the roof of our home. Admittedly, the costs for a solar system is high compared to grid-supplied electricity. But, the cost of early combustion engine technologies was much higher than a horse-drawn carriage at the turn of the twentieth century. The current policy of our State government is to expand the electricity transmission system, funded by a ten-percent increase in the cost of electricity to the domestic consumer. This is a bit like a nineteenth century government investing in horse stables at the turn of the twentieth century! Government policy and the taxpayer dollar should seek out the Henry Ford of solar systems. I don’t mind if my solar system only comes in black, as long as it is cheap!
Driving down the cost of the solar systems addresses one side of the problem, but not the consumer’s acceptance of the technology. Where does the average Joe in the street buy a decent solar system? From their existing electricity distributor who is hardly motivated to supply technologies that reduce their revenue? And, if I convert to a solar system and it fails, how do I get it fixed, immediately! For decades we have feasted on cheap, reliable coal-power energy. Are we really willing to risk having the meat go off in our fridge because the solar system on our roof has failed and the electrician’s response time is three days? Even if solar costs were the same as the electricity from our polluting coal-power energy sources, does the average Joe in the street understand the technology sufficiently to risk converting to it? Society was initially sceptical of the motor-carriage. Perhaps the academic community needs to spend more time educating the community about the long-term benefits from converting to existing technologies instead of looking for blue-sky solutions!
While solar provides an existing technology for low consumption domestic consumers, how do we address the high energy consumption of industry? The environmental policy of the western nations seems to be that of ‘tax the polluters’. Then, we selectively extend tax-free holidays to lobby-powerful industries so they can continue to pollute. Government policy would be better focussed on developing post-petroleum industries, the jobs of tomorrow. It is difficult to understand how the largest coal-exporting country like Australia can morally turn a blind eye to the CO2 that it’s coal is producing while on the other hand take the high moral ground by having an anti-nuclear policy; particularly when we are naturally-endowed with substantial reserves of yellow-cake. Tax the polluters! Immediately apply every dollar to: fund the domestic conversion to solar; build nuclear power stations, and; develop a competitive solar industry. At the same time, boost the demand for low-polluting energy sources like solar by funding the academics to educate and overcome the scepticism of the community. Such a policy would move us in a positive direction and help overcome the perception that academics are harbingers of environmental doom, when what we really provide is the yellow- brick- road to the technologies of the future.
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Tony,
can I summarise your arguments by saying you want domestic consumption to be solar-based whilst the electrivity-grid should be fed by nuclear?
As i understand it, both technologies are far more expensive than coal and hence would immediately be subject to international free-riding as a global solution. The tragedy of the commons make both ‘solutions’ seem non-starters to me, quite apart from my suspicion that even if all homes are on solar and all electricity is from Nuclear, we’d still be burning ‘too much’ CO2 in other ways, like air travel. That, and of course the problem that building that amount of solar panels is not without its own environmental problems.
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The takeaway point here, Paul, is that government should be funding research on geoengineering right now.
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Carnaval?
GeoEng smells like a pipe (or hose) dream full of rotten egg gas. Best to have some contingency though when it starts getting Mad Maxian.
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RE: Ocean Fertilisation
Killer algae a key player in mass extinctions
Boulder, CO, USA – Supervolcanoes and cosmic impacts get all the terrible glory for causing mass extinctions, but a new theory suggests lowly algae may be the killer behind the world’s great species annihilations.
Today, just about anywhere there is water, there can be toxic algae. The microscopic plants usually exist in small concentrations, but a sudden warming in the water or an injection of dust or sediment from land can trigger a bloom that kills thousands of fish, poisons shellfish, or even humans.
Killing humans mean you reduce fossil fuel use, so I guess this could be seen as a bonus.
If the proposed pulp mill in Tasmania were to make biochar instead of paper pulp then that would be a real solution. Taking CO2 out of atmosphere using trees in a fast tree growing area makes a lot of sense, and instead of ‘pumping under the carpet, the resultant carbon will actually improve soils and productivity elsewhere, with the right plant it can also produce energy (particularly with new research ideas in “reverse cracking” fuel gases into liquids).
Meanwhile Forestry Tasmania proposes wood fired power stations utilising wood waste. Oh so 1800s.
Mind you there are good people in Forestry Tasmania, but Tasmania’s elite are a pack of mind-numbing stupid and intellectual lazy people. But they wouldn’t have got to the top any other way, power here is congenital.
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Paul,
what do you mean by: “the global ETS is a kind of rain-dance: we know it doesn’t do much good by itself but its adherents dream that in some magical unexplained way it will lead us towards a ’safe’ solution in the future.”
Surely, a global ETS (if/when implemented) would provide a clear, safe and easily explained solution. I agree that implementation is a problem but I can’t see how the ETS itself is “magical” or “unexplained”.
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Meika, I think any solution that carries an obvious threat of major human population decreases would be politically suicide. If there are indirect deaths that cant really be easily attributed to a policy, then that is far less of a game-stopper (policy has such side-effects quite often, such as when deforestation upstream causes damaging floods downstream). I dont see how using biochar to improve the soil is going to get significant amounts of CO2 out of the system. Isnt that just pumping it back in again? Dave (and Peter), just think about what is on the table in Kopenhagen: we’re talking about small reductions of the current levels of emissions. In order to reduce global warming via emissions, we wouldnt just have to reduce emissions drastically now, we would also need to take a lot of the current stock of CO2 out of the air (i.e. we’d need to reduce both flow and the accumulated stock of the last century). What is on the table now will have minimal effects in terms of further global warming because even if the emission cuts agreed upon happen (another big if), we’d still be emitting enough to keep increasing the stock of CO2 in the air, accelerating the climate problem. Read the ‘Skeptical environmentalist’ by Bjorn. Its a book often derised but he quite convincingly shows the reader the ineffectiveness of the plans on the table now. If you dont like him, just look at the CO2 projections of the IPCC itself under various scenarios: nothing on the table now will make much difference for the next century. In this regard, I find myself in full agreement with hard-core Greens who make similar points all the time.
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There would have to be a lot of biochar. Far better to stop burning coal.
But it has the potential to put away carbon, to actually remove it from the carbon cycle for thousands of years. It becomes inaccessible to soil fauna (do you ever feel like eating well-burnt toast? yum!) while providing them with nutrient grabbing and holding carbon. (Won’t last as long in very acidic soils but still a while.)
Ordinary humus does this of course, but poor soils hold little carbon, you can boost it with compost/mulch but it all eventually rots (CO2 back to atmosphere) and the soil returns to it’s natural carbon holding capacity (rich soils can hold more carbon— and hold onto nutrients & water better anyway) (you can also over-cultivate and remove carbon to below it’s natural holding capacity of the soil)
It’s economics would partly depend on some sort of trading scheme or carbon tax. But you can also sell the end products for soil improvement and fuel/power. This is much better than pumping pure CO2 underground hoping it doesn’t bubble up again later suffocating. It’s actually useful in the soil.
Algal farming/seeding sounds attractive because its all out at sea, but human have very little experience with sea based ‘agriculture’. It’s a blue sky/sea dream.
Biochar (terra preta) has been tested in the Amazon for hundreds of years. You can dig it up and test it. Seeding the ocean for algal blooms contains many more unknown unknowns and so would not look as good on a risk managment matrix.
Use algae for biodiesel farms and by coal-fired power stations by all means.
I’ve been added charcoal to our vegie patch for a couple of years now, and I’m a convert, (it comes from our inefficient outside ‘camp’ BBQ fires) and it does wonders for friability of the water-repellent chalky useless Permian mudstone based soils here in Hobart. (and things grow well, and it just doesn’t disappear like the compost does after a season or so)
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meika,
sounds good. Any idea what the costs would be if done on a massive scale?
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no.
what ever massive scale project costs, simpler than pulp though I imagine, one big pyrolysis chamber (until you whack in nifty catalysed wood gas to liquid fuel infrastructure)
the attraction of algal blooms is the idea that fertilisation of the sea would pay back massively it’s costs, but the tests so far are not good, also, the real test is how much carbon gets locked away at the bottom of the sea, not how much more gets cycled through an increasingly acidic ocean
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OK, an effective global ETS will never happen because emissions reduction is too expensive and countries will never sign up to it, and yet these futuristic carbon sequestration technologies are going to be so cheap that some countries will decide to undertake them unilaterally for the good of the planet.
Something does not compute here.
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Dave,
you can be a bit more generous to my argument. Its not the cost that makes ETS a dead horse. What makes it a dead horse is that you need almost all major countries and up-and-coming countries to be committed to its implementation for it to work. You only need a few to be reluctant to implement this (or simply unable because of lack of bureaucratic potential) and you’d quickly find those few can emit enough on their own (attrating the ernergy intensive industries) to undo the efforts of the others. That’s the gaping Tragedy of the Commons problem the ETS faces for which I see no realistic solution.
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Paul,
The risk of a Tragedy of the Commons outcome is present under an ETS, but surely global GATT and WTO agreements, regarding trade, are an indicator of what is possible given the right incentives.
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DP,
that’s a very good analogy: GATT and WTO are seen as being in the ultimate individual interest of nearly all the countries part of it. The ETS is not in a country’s individual interest (the individual interest is to free-ride), and even the adoption by others of the ETSS is probably against the individual interest of quite a few countries who can expect to win if the world warms up. Then look at the tremendous degree of problems with WTO and GATT and reflect on what this tells you about how hard the watered-down ineffective current ETS would already be to agree upon and implement. To then realistically expect a ‘real ETS’ to be agreed and implemented is, in my books, fanciful.
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Who are the countries who may “win” from global warming and who may have the ability to sabotage an ETS deal?
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Dave,
if we just think of countries who would probably gain from a warmer climate, I would for instance think of Russia and Canada, with Russia alone quite capable of sabotaging a deal. If I then think of all the countries who would be very reluctant to include their agriculture or their mining into any global deal seriously limiting the direct and indirect emissions of those sectors, then I would have to include almost every rich and poor country in this world.
Let me pose the opposite question to you: which countries do you think would be really willing to reduce their carbon emissions by 90% in, say, the coming 20 years (which is within the ‘turning point stories of many commentators), including the emissions from sectors so far kept out of any deal? I cant name a single one, can you? If there’s not even one country which would be willing to do what is reportedly necessary to avert global warming via emission reductions, what chance is there for the world coalition?
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Well, I agree with you about 90% reduction by 2030, but I think that is a strawman. I don’t think anybody has seriously suggested attempting to negotiate such an outcome. Correct me if I am wrong.
Could Russia or Canada sabotage a deal. Suppose everyone recognised that those 2 countries gain from global warming. Then nobody is going to try to include them in the global ETS – it would be crazy to even try. Since Russia and Canada are major mineral and energy exporters, an equivalent to including them in the ETS would be to levy a tariff on their exports. Wouldn’t it?
Nobody wants to offer to carbon-limit their mining or agriculture unilaterally, but surely many would if their competitors were also in the ETS (or else tariffed). Particularly if the alternative were (penal?) tariffs.
Good point on the GATT though. It does show that it is not just about cost.
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I agree with some others that you are overestimating the difficulties of securing coordinated global action. There are only a small number of countries that would benefit from global warming in a relative sense. And even these could be harmed when taking into account the endogeneity of their own economic performance to that of their trading partners.
Second, Canada simply couldn’t sabotage an agreement that the US was a party to – for geopolitical reasons its would be a non-starter. Russia is more problematic in that it doesn’t care as much about being outside the international system, but do you really see the bulk of the world’s fossil fuel intensive industries relocating their given their governance problems? And if a small number of countries stayed out of an international agreement, their non-compliance could be dealt with by border adjustments. In short, whether we get a global deal on an ETS, or something else, it will come down to whether the largest economies (US, China, Japan, Europe, India) can come to a reasonable agreement.
Whilst not underestimating the challenge involved here, I’m not overwhelmed by the arguments for geo-engineering as a preferred solution. Although I’m happy to see ongoing research in this area as a kind as an insurance policy against failed international coordination, as an economist I have a lot of faith that if coordination can be achieved, that large, permanent changes in relative prices will have a powerful effect on innovation incentives for low-carbon technologies.
I don’t see how it is a magic pudding. You are simply setting up a system that ensures that externalities are internalised. The whole point of the ETS is to allow for the unpredictability of future technological change and innovation. If you want to think of it as a magic pudding, you can think of the institutions that underpin the market economy as a magic pudding as well. We don’t collectively direct technological change and productivity growth in that we determine in advance what the future should look like. Instead, we get the framework conditions right (incentives to innovate), and let firm and household decisions do the rest.
Within the debate that we are having, people place too much emphasis on the inadequacy of the short-term targets and the fact that the change in relative prices is likely to be too low to induce much change.
The way I think of it is as a learning exercise. The first goal is to get a system up and running and demonstrate clearly that an increase in the relative price of fossil fuels will not have disastrous economic effects (think of the scare campaign against the GST). After that, it will be easier to build a coalition favouring deeper emission cuts and steeper increases in relative prices.
Of course, without a decent international agreement, or at least concerted unilateral action by our major trading partners, building this coalition will be more difficult.
The coalition’s stance on this issue is crazy. Committing to the same targets but attempting to drive it all with regulation and subsidies. That strategy might hide the cost of reducing emissions, but will almost certainly make abatement more expensive.
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Outsider,
I wont comment on the recent political developments, but will say something about the assertion that you dont really need a global coalition: these emission schemes will have to remain in place for a century and will during that time need to be continuously adhered to by most countries, from generation to generation, from changes in the realtive economic size of countries, frrom changes in the population numbers, and from political elite to political elite. To imagine that such a feat ‘only’ needs the largest economy of the day simply seems false to me. You truly need all players on board who might be big today and in 50 years time and you need to be able to police them when their leadership changes. This is why the post speaks of a ‘world dictatorship’ as a probable necessary element of such an agreement. that comes close to my definition of magic.
Geo-engineering solutions that require only the cooperation of a couple of countries simply seems a far more plausible way to actually deal with the issue than the global coalition. Also, the argument that somehow agreeing to a water-downed version will eventually lead to a strong version smacks of wishful thinking to me. If you truly believe the world is standing on the edge of the abyss and should act now, you wouldnt acquiesce to a learning period of 10 years during which we get acquianted with things like the price mechanism (which we’ve been used to for centuries already). Emission schemes on other substances have been implemented before, so the learning argument sounds hollow to me. Its the free-riding and Tradegy of the Commons problem that makes a ‘true ETS’ an impossibility now and in the future.
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I wasn’t suggesting that such a scheme would be credible if a large number of countries stayed outside the scheme. What I was saying was that if the most important countries today were to agree to coordinated action, then it would be difficult for any of the other countries to stay out for either geo-political reasons, or the likely threat of retaliatory action (border adjustments).
As for binding future generations, that is one of the arguments for an ETS (it is harder to back out of). By treating a permit to pollute as a property right, you give holders of those permits a stake in the system and build a coalition in favour of retaining that system. Warwick Mckibbin has written a lot about this.
I also don’t buy the argument that unless drastic action is taken in the next five to ten years the planet is doomed. It is still the case that the largest absolute cuts to emissions will need to take place after 2020. There is a cost associated with delayed action sure, and the longer we wait, the greater the burden on adaptation, but there are a lot of different trajectories for emissions over the next 50 to 100 years that are consistent with reducing the risk of irreversable damaging climate change.
As for being comfortable with gradual reform, there are a lot of examples where that has been the case. Liberalisation of international trade has been one area where reforms have built on previous reforms. The EU’s own ETS has been strengthened in each of its three phases.
In sum, I think you underestimate the probability of coordinated action and also underestimate the difficulties associated with geo-engineering. In particular, your analogy between geo-engineering and a global ETS (they are both experiments with uncertain outcomes) is a bad one. Whilst the problems with coordination are genuine, the goal of that policy is to stabilise atmospheric concentrations of GHG at levels that we can be somewhat confident are safe, because those concentrations will be close to what they are today. Geo-engineering on the other hand involves trying to correct one distortion (excess pollution) with another (the geo-engineering solution) for which it will be almost impossible to know in advance what its effects will be. The tail risks associated with such a strategy are enormous. And if you think securing poltical agreement about carbon taxes/ETS is difficult, wait till the political establishment tries to wrestle with the various geo-engineering alternatives. The debate amongst scientists as to which is the most appropriate solution and debates about the dangers of individual solutions will be vicious.
So, as a last resort, fine, but for now I’d like to see governments persist with finding a multilateral solution.
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I’m with you Outsider. A training period is vital for the ETS. There is so much scaremongering at present, nobody will commit to deep cuts now. Once the ETS is up and running, we will wonder what all the fuss was about.
But I also agree on the need to develop sequestration technologies (I’m not so sure about the SRM. It all sounds pretty fanciful and rather dangerous. But if it is feasible, it could be a paradigm changer as Paul suggests). But this will happen much quicker under an ETS as private finance is brought to bear to complement the efforts of a few under-funded government scientists.
If this sequestration turns out to be relatively cheap, the carbon price will remain moderate even under strict reduction targets and the long-term ETS stresses that Paul talks about will not eventuate. If, on the other hand, sequestration turns out to be expensive, then it is unlikely that countries will pay for it unilaterally as Paul suggests and an ETS will still be needed.
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I’m playing catch-up after an absence from this discussion. For the benefit of those who missed some comments of mine earlier in the thread – I think we should move on all fronts if possible: a workable ETS, extra carbon taxes at the discretion of individual nations and geoengineering in some form.
The references to the EU’s ETS is interesting from the fact that it is almost a total failure regardless of the tinkering they have done. The ETS carbon price is ridiculously low, the major polluters got a easy profit boost from credits given away (instead of being auctioned), and the only EU countries that reduced their carbon emissions did so with national carbon taxes to set the local price over-and-above the ETS price.
The EU ETS is a model of what not to do in terms of effectiveness of outcome.
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Labor outsider, DP,
others can view geo-engineering as an insurance policy which, as Robert Merkel says, basically means it would be handy to invest more in the research now.
The argument that once a few big countries are in, others will feel forced to join and that there will be a sliding scale towards much more stringent targets still smacks to me of wishful thinking, particularly since it just isnt true that all countries can expect to lose from global warming and that all countries will hence be in favour of stringent targets if only they ‘see the light and experience the ease of ETS in practise’.
I agree with DP about his general characteristion of the ETS but would add another observations: those environmental lobbyist telling the Europeans that they were being immoral if they werent in favour of the ETS have only had the net effect of subsidising particular industries.
As to McKibbins opinions, I am not sure he is any more in favour of the global ETS than I am. He has a plan of his own that is meant to allevaite some of the political constraints.
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Hmm. The EU carbon price is “ridiculously low” but, at the same time “major polluters got a easy profit boost from credits given away”. If the carbon price is so low, then the credits must be almost worthless. So where did the profit boost come from?
I don’t know much about the EU ETS, but I would think that a more coherent critique might be helpful.
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The ETS carbon price is published regularly – I don’t know if it is a daily price or a weekly price. On the 4th December, it was 14.28 Euro/tonne. Look at your own gas or electricity company invoice next time – they specify how many tonnes of carbon were produced to satisfy consumption – and check to see how much that adds to the bill – not much of a price signal there. (As a personal exercise in calculating what carbon price would be needed to substitute a solar cell system in lieu of mains power, I calculated approx. $150-$200/tonne would be the necessary trade-off price.)
Currently, EU ETS allowances are given away. (They will not be auctioned until 2012.) The correct way to value the right to ‘pollute’ is for the governments to auction the allowances and get polluters to bid for them. In this manner, they set the underlying price.
When the EU gave the permits away, the polluters carried the current price value on their Balance Sheets – presumably as tradeable securites of some sort. (This is what Paul Frijters referred to as “subsidizing some industries”.)
Now that the price has dropped so has the value, but nonetheless the EU managed to create something out of nothing – an actual “free lunch” at taxpayer expense. They have real value – in accounting terms – for polluters, but not enough value to reduce carbon emissions – the worst of both worlds.
Hope that spells out the details. This information is easily obtainable from various sources if one chooses to looks.
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DP
All the market is saying at the moment is that the near-term targets in Europe can be met relatively cheaply. That is not particularly surprising given: a) the collapse in demand for permits associated with the recession; b) the fact that a significant proportion of the permits can be imported via the CDM mechanism; c) Europe has a host of other policies that significantly subsidise non-fossil fuel sector. Take a look at the recent review of Europe’s energy and climate related policies in the OECD Economic Survey of the EU.
The EU ETS is not perfect, but it has been strengthened over time. There will be full auctioning for stationary energy after 2012. The non-auctioning did generate transfers to polluters, but the over-allocation was only serious in the first phase. Polluters still face an opportunity cost from holding allowances, and the trajectory of EU energy policy will significantly reduce the value of businesses producing energy with fossil fuels over time.
That comparison with the carbon price needed to make PV cost competitive is not relevent. PV is pretty much the most expensive replacement technology for fossil fuels. The point of the ETS is not to make all renewables cost competitive, but to allow the market to determine the price compatitible with a given emissions target.
You also have to remember in the EU context that fossil fuels are not as cheap to use as they are in Australia, so the carbon price necessary to induce switching to some renewables isn’t as high as in Australia.
And Paul, I’m sorry, but I just don’t buy this “not all countries lose from climate change line”. Not only is the number of countries that will benefit tiny in an absolute sense. But as I explained, it will be very difficult for those countries to credibly stay out of an international agreement (in the longer term) that was made between the world’s largest economies. As far as I can see, Russia is the only large economy that could stay out, but that would make it relatively easy to penalise it in other ways.
Remember also, from a carbon leakage perspective, when a firm thinks about relocating, not only does it have to take into account all the economic factors (carbon pricing is just one) that influence the relative costs and benefits of a new location, but to the extent that the carbon price is important, it has to consider whether that country will price carbon in the future, thereby undermining the benefits of relocation or altering investment patterns.
Finally, McKibbin does not advocate a global ETS. But he does advocate individual countries having their own ETS, within a broader international framework. His scheme simply allows the carbon price to be fixed in the short-term and then allows the long-term price to vary in line with demand and supply in the long-term permit market. While his scheme is not cap and trade, he is definitely in the camp of believing that a carbon price is necessary to efficiently manage the transition to a lower emission economy.
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DP,
roof-top solar PV is not a serious form of generation; it is a PR stunt. If you are anchored by the $200/tonne required to support roof-top PV, I can see why you would regard a price of EUR14/tonne as “ridiculously low”.
In Australia, even with its cheap coal, such a carbon price ($25/tonne, say) would prevent any new coal-fired power stations ever being built. Hardly “ridiculous”.
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The example of solar PV was just that – an example. It is probably the most unviable of alternate electricity resources in terms of cost.
Even so, at 14euro or 25AUD per tonne, the price signal to the consumer is weak. Any power alternative at that price is hard to compete with brown coal in Victoria. This is not only about preventing the building of new brown coal plants, it is about transferring over to alternative power sources at competitve prices. The current plant investment is a sunk cost. At $25/tonne, without a means of raising the price sufficientlyquickly, that is business as usual.
The Swedes managed to reduce their carbons emissions by approx. 20% (give or take) by setting a carbon tax at approx. 100 euro – paid by the consumer, not the producer. That is the level at which people sit up and take notice. AU politicians will lose their seats at that price. (In this particular example, Swedes are generally “greener” than most constituencies and are used to paying higher taxes. They can take the pain, so to speak.)
My crtiticism is not with the principle of an ETS (the mechanism was pioneered by the USA to reduce SOx emissions in 1989 and beyond); it is with the politicians who game the price because they realize carbon emissions reduction is costly relative to current electricty generation costs. (I haven’t included petrol pricing as other taxes are already in place in Australia.)
Taxes have the single benefit of being transparent; ETS prices can be fudged depending whom squeals the loudest. (Which is what happened in the EU.)
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