Desert Year: Doing a 180 on Energy

Running with the lizards and doing a 180 on energy!

The heat of the season is beginning to arrive earlier in the morning. And on this particular day it seemed especially sensible to get out ahead of the sun – well before it began to beat down with any real strength.  So I headed out early for a leisurely morning amble.  The route took me up a road that has very high curbs to channel the water from the fall monsoons. On this specific stretch of curb there was a single lizard, hugging the side of the concrete wall.  It scurried maybe 10 feet ahead of me as I approached, and then it stopped.  As I again advanced within three feet, it jumped ahead maybe another 8-10 feet, still hugging the curbside. And then again. . . .

I don’t have a clue why the lizard insisted on moving forward with me, hugging tightly to the pavement sidewall. The smarter thing, it seemed to me, would have been to scurry at a very quick right angle away from me to safety.  Yet, as I again approached it for perhaps the fifth time, it suddenly turned 180 degrees and bolted past me in the opposite direction – leaving me alone with my thoughts.  Although the suddenness of its movement startled me, I reflected a little and thought . . . that was very cool. And I immediately wondered why it is that we are so often dogged in maintaining our existing course of action?

A Changing of the Minds?

The good news is that people can and they sometimes do change their minds. Not to distract from his current predicament, in 2006 Rupert Murdoch, for example, “had a change of heart on climate change and now believes global action is needed.” Also changing his mind on climate change? Bjorn Lomborg who claimed for many years that climate was not an especially important issue to address. Yet in 2010 he released a new book with new equations stating the exact opposite. The indication is that while did change his mind, he hugely underestimates what might be an appropriate scale of mitigation effort. His current thinking recommends that we should spend $100 billion a year to mitigate and avoid the impacts of greenhouse gas emissions. The evidence, however, suggests it should be many times larger.  Continue reading…

Media Coverage of Climate Change Economics

E3 Network created RealClimateEconomics in 2009 to demonstrate the weight of peer-reviewed economic research that supports immediate and extensive emissions reduction as a precaution to avoid uncertain, but potentially catastrophic, climate change impacts. Part of what motivated us was the popular perception that climate change was “just” an environmental problem that we could not afford to solve. And while there are certainly economic analyses that strike such a cautionary tone, as economists publishing and teaching in this field, we knew that the weight of evidence to the contrary was compelling. Why, then, weren’t more people aware of it?

We understood that part of the blame fell on economists and academic publishing more broadly, for producing high quality research that is basically undecipherable to non-academic audiences. But we also suspected a bias in media reporting. A new journal article by political scientist, Jules Boykoff, in the latest issue of the journal PS: Political Science and Politics (the journal of record for the American Political Science Association) confirms such a bias.   Continue reading…

Costs of Inaction: Energy and Water Demands Collide

A new report by the Union of Concerned Scientists details how our electricity demands are colliding with our fresh water needs. Though often overlooked, the electricity sector’s dependence on fresh water runs deep, and not only in regions that rely heavily on hydropower. Fossil-fuel and nuclear power plants rely on fresh water for cooling purposes. Power plants demand the largest share of U.S. freshwater withdrawals: 41%. Just as hydropower plants operate at reduced capacity or shut-down during periods of prolonged drought, steam-generating power plants cut back production or shut down during dry and hot periods.

The bottom line: the energy system is not only the primary driver of global climate change but is highly vulnerable to its impacts. As climate change reduces the availability of fresh water supplies and contributes to greater irregularities in the timing of peak stream flows, the capacity of our energy system to reliably produce power declines. The solution: we need to embrace lower-water technologies such as air cooling for power plants and no-water options such as wind farms and energy efficiency.

 You can read the full report here.

 Releated posts: The Costs of Inaction: Southwest Water Crisis; Costs of Inaction: Energy, Water, Infrastructure


Building the Economic Case for Climate Action

Economics for Equity and the Environment Network convened a recent meeting of economists at the Pocantico Center of the Rockefeller Brothers Fund to discuss the role of economics in building support for climate action in the U.S.

The economists who convened view climate change as a civilizational challenge that demands immediate action to protect the quality of human life today and in the future. They recognize that conventional economic thinking has failed to envision a way through the climate crisis, but believe firmly that economics can and must provide critical skills and insights. These economists take as their starting points: Continue reading…

Costs of Inaction: Popular Climate Econ Model Needs Major Overhaul

Another in the series on the costs of inaction – what we’ll pay if climate change continues unabated.

True or false: Risks of a climate catastrophe can be ignored, even as temperatures rise? The economic impact of climate change is no greater than the increased cost of air conditioning in a warmer future? The ideal temperature for agriculture could be 17oC above historical levels?

All true, according to the increasingly popular FUND model of climate economics. It is one of three models used by the federal government’s Interagency Working Group to estimate the “social cost of carbon” – that is, the monetary value of the long-term damages done by greenhouse gas emissions. According to FUND, as used by the Working Group, the social cost of carbon is a mere $6 per ton of CO2. That translates into $0.06 per gallon of gasoline. Do you believe that a tax of $0.06 per gallon at the gas pump (and equivalent taxes on other fossil fuels) would solve the climate problem and pay for all future climate damages?

I didn’t believe it, either. But the FUND model is growing in acceptance as a standard for evaluation of climate economics. To explain the model’s apparent dismissal of potential harm, I undertook a study of the inner workings of FUND (with the help of an expert in the relevant software language) for E3 Network. Having looked under the hood, I’d say the model needs to be towed back to the shop for a major overhaul. Continue reading…

Costs of Inaction: The True Cost of Coal

Another in the series the Costs of Inaction – what we will pay if climate change continues unabated.

There is so much emphasis on greenhouse gas pollution from coal plants that we can sometimes lose sight of the other social and environmental impacts of burning coal. A recent report calls attention to the real cost of coal and what we should be paying to derive electricity from coal-fired power plants.

Researchers at the Center for Health and the Global Environment at Harvard Medical School estimated the external costs of coal across its life cycle – extraction, transport, processing, and combustion. Their results, published in the Annals of the New York Academy of Sciences, finds that the annual costs of coal borne by the general public range from $345-$523 billion. If those external costs were accounted for, the price of coal generated electricity would increase by as much as 17.8-26.9 cents per kilowatt.

The study estimated the health impacts from coal-fired power plants at $187 billion annually; mercury emissions at $29 billion; and climate change damages at $206 billion. To arrive at their estimate of climate damages, the researchers assumed a very conservative social cost of carbon of $30 per ton. The social cost of carbon measures the dollar impact from every ton of carbon dioxide that goes into the atmosphere; many economists have argued that research supports much higher social costs of carbon estimates.  

You can read the full report here.

Costs of Inaction: Not Only a Problem For the Poor

This is another in a series of entries focused on the costs of inaction – what we will pay if climate change continues unchecked

In a recent article in Newsweek, Nobel laureate economist Thomas Schelling argues that one of the greatest obstacles to addressing climate change is persuading the non-poor in the developed world to take the problem seriously. As he states:

Estimates of lost world product due to climate change are moderate because the poor have so little to lose. More than a billion people, maybe 2 billion, are estimated to live on less than the equivalent of $2 per day. If a billion of those poorest people lost half their income, it would be an overwhelming tragedy, a true catastrophe, worse than all the earthquakes, floods, tsunamis, landslides, and fires of the past decade happening every year. But those billion people together would lose only $365 billion per year. That is less than 1 percent of world income! They have so little to begin with that what they can lose doesn’t amount to much of a statistic. But they can lose tragically. (Schelling, Newsweek)

Schelling’s quote is a telling example of why GDP is a flawed metric for communicating the risks of climate change. In a world characterized by gross income disparities, treating a dollar’s worth of impact in a poor country the same as a dollar’s worth of impact in a rich country is a surefire way to mask the real impacts of climate change. Yet, this is what almost all economic models of climate change do, and many economists think it is necessary to avoid value-laden comparisons. Attaching greater weight to impacts in poor countries would cause global estimates of the economic damages of climate change to rise substantially.  Continue reading…

Costs of Inaction: The Price of Ice

This is another in a series of entries focused on the costs of inaction – what we will pay if climate change continues unchecked

Source: NASA

Arctic sea ice extent averaged over Januray 2011 its lowest recorded levels since satellite records began in 1979. It was 19,300 square miles below the record low of 5.25 million square miles, set in 2006, and 490,000 square miles below the 1979 to 2000 average.

Climate change, the crisis many hoped we could ignore for decades, is here. Ice and snow that covered the vast frozen northland for 800,000 years is disappearing rapidly. As countless square miles of the Arctic turn from reflective white to heat-absorbing dark, the result is an acceleration of global warming. And this is not just a problem for polar bears. The Arctic acts as the air conditioner for the entire planet.  And it is starting to break down.

A co-author and I estimated the economic impacts of this breakdown. What is the price of a melting Arctic? Trillions of dollars in global economic damages. Continue reading…

Costs of Inaction: Energy, Water, Infrastructure

This is another in a series of entries focused on the costs of inaction – what we will pay if climate change continues unchecked.

In a previous installment, we introduced integrated assessment modeling as one approach economists take to answer the question: how much will we pay if climate change continues unabated? Today we’ll explore an alternative, bottom-up approach.

A bottom-up approach provides a detailed accounting of climate damages in specific sectors, building upwards from historical data. These bottom-up studies have the advantage of being less dependent on modeling assumptions. The disadvantage is that sectoral estimates cannot be added up to represent the cumulative impact of climate change on the economy of a country or a region.

This approach is used in case studies of the impacts of climate damages on specific sectors of the economy or on states or regions. While it cannot provide a complete picture of the costs of inaction, it can produce compelling snapshots of the magnitude of potential damages from climate change. Preventative measures to limit warming may be justified on the basis of these snapshots alone.

Bottom-up analyses usually assume that the baseline for comparison is a “business-as-usual” approach to climate change in which emissions continue to grow and no efforts are taken to mitigate emissions or to adapt to the impacts of warming. Assumptions about changes in sea-levels, precipitation patterns, temperature increases, agricultural productivity, and the like are typically based on reputable and widely cited emissions and climate scenarios presented by the UN IPCC and/or the US Global Change Research Program (US GCRP).

Below we present a sampling of just some of the best available estimates of the costs of climate change for US sectors. We rely mostly on a widely cited 2008 study by Frank Ackerman and Elizabeth Stanton on the impacts of climate change for US energy supplies, water systems, real estate and infrastructure. Continue reading…

Costs of Inaction: The Economics of High End Warming

Another in the series, The Costs of Inaction – What We Will Pay if Climate Change Continues.

Perhaps nowhere is the contrast between the science and economics of climate change as great as in the dueling metaphors governing the impact of high end warming: “Collapse” (following Jared Diamond) versus “Reductions in the Rate of Growth” (following all standard integrated assessment models in economics, including those of Nicholas Stern and the IPCC).

By way of reference, mid-range estimates of business-as-usual warming are currently around 4 degrees C. During the last Ice Age, global temperatures were only 4.5 degree C colder then they are today. Many climate scientists, I would argue, believe that high end warming (> 4 degrees C) will likely impoverish much of humanity.

By contrast, economic models calmly integrate this warming of greater than Ice Age magnitude, only in the opposite direction, into scenarios assuming continued growth, albeit at reduced levels.  Stern, for example, provided an integrated estimate of the costs of climate change, forecasting likely reductions in global output as high as 20% below the baseline. This is a big number, justifying immediate and large cuts in emissions on a benefit-cost basis. Continue reading…