23/12/2018

Market-Oriented Economic Belief System Incompatible With Climate Change Mitigation

International Business Times - * | *


Climate scientists are loudly sounding the alarm bells. Even if global greenhouse gas (GHG) emissions are drastically reduced, a series of self-reinforcing bio-geophysical feedback loops could still lock the planet into a cycle of continued warming and a pathway to final destination: “Hothouse Earth.”
To avoid these risks and keep warming below 1.5° Celsius, humanity will have to reduce GHG emissions to net zero by 2050. Scientists show that limiting the global mean temperature increase to 1.5° Celsius is neither a geophysical impossibility, nor a technical fantasy. The engineering solutions to bring about deep de-carbonization—including quick fixes and negative-emissions technologies—are available and are beginning to work.
Rather remarkably, the distinctly alarmist tone of the climate scientists stands in contrast to more upbeat economic reports that there has been a delinking between economic growth and carbon emissions in recent times, at least in the world’s richest countries. The view that decoupling is already happening in real time is a popular position in global and national policy discourses. In a widely read 2017 article in “Science”, former President Barack Obama argued that the U.S. economy could continue growing without increasing GHG emissions, thanks to the rollout of renewable energy technologies.
Is the “Yes, We Can” optimism warranted? The economists’ equivalent of Obama’s optimism is the “Carbon Kuznets Hypothesis”, the idea that industrialization raises GHG emissions initially, but as the economy becomes technologically more sophisticated and energy efficient, and as people become richer and demand stricter environmental regulations, GHG emissions fall. In other words, growing the economy and saving the planet go hand in hand.
In our recent working paper published by the Institute for New Economic Thinking, we systematically evaluate the “Yes, We Can” optimism by carefully looking at the historical data on GHG emissions and growth for a sample of 61 countries.
What we observe is that the data do not support this harmonious view of economic growth. The generally used production-based GHG emissions data ignore the highly fragmented nature of global production chains and are unable to reveal the ultimate driver of increasing CO2 emissions: consumption growth.
It is true that some rich countries have managed to reduce GHG emissions while increasing their consumption levels, but these are exceptions, there is no general trend. In today’s global economy, higher consumption leads to higher GHG emissions. So far, there is no systematic decoupling of material standards of living and GHH emissions.
This picture shows a small globe surrounded by smoke to illustrate global warming, taken in Paris, Nov. 10, 2015. Photo: LIONEL BONAVENTURE/AFP/Getty Images
To prevent potentially catastrophic warming, the link between consumption and GHG needs to be severed, but halfhearted tinkering will not do the job. Deep de-carbonization cannot be brought about by slightly modifying business-as-usual policies, which rely on price signals, technological fixes on the supply side and voluntary or “nudged” behavior change on the demand side.
Current policies are bound to extend current unsustainable production, consumption and emission patterns into the future and put us all on the one-way path to Hothouse Earth. Climate stabilization requires a fundamental disruption of hydrocarbon energy, production and transportation infrastructures, a massive upsetting of vested interests in fossil-fuel energy and industry, and large-scale public investment — and all this should be done sooner than later. What is required is a massive mobilization in the face of an existential threat.
The problem for most economists is that it suggests directional thrust by state actors, smacks of planning, coordination, and public interventionism, and goes against the market-oriented belief system. “Economists like to set corrective prices and then be done with it,” writes Jeffrey Sachs, adding that “this hands-off approach will not work in the case of a major overhaul of energy technology.”
The real problem therefore is not a technical one. The real problem is that available solutions go against the economic logic and the corresponding belief system that have dominated the world economy for last few decades — a logic aimed at scaling back (environmental) regulations, pampering the oligopolies of big fossil-fuel corporations, kowtowing to the automotive industry, giving free rein to financial markets and prioritizing short-run shareholder returns.
The biggest barrier to averting going down the path to “Hothouse Earth” is the present market-oriented belief system. We will only be able to phase out greenhouse gas emissions before mid-century if we shift our societies and economies to a “wartime footing.”

*Dr. Enno Schröder and *Dr. Servaas Storm are economists at Delft University of Technology, the Netherlands.

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Stalling On Clean Energy Leaves Australia In The Dust

Fairfax - Crispin Hull

As Hyundai demonstrated its latest pollution-reversing hydrogen car in London this week, it is worth looking at how the policy impasse on climate change – caused by the actions of the troglodyte right of the Coalition – threatens Australia’s economic wellbeing.
It is difficult to change the selfish view that Australia can do little on its own to reverse climate change.
Credit: Julian Smith
We first have to understand the troglodytes’ beliefs by following the money trail.
It is wrong to assume they believe the climate is not changing or that humans are not causing it and therefore coal is okay to use. Rather it is the other way around. Their financial backers in the coal industry want to be able to continue to profit from coal, therefore the troglodytes must either deny climate change is happening or that coal has anything to do with it.
Of course, proselytising and propaganda have caused a lot of people to believe that there is no human-made climate change, in the same way that people have been convinced of a religious belief that, say, God made the earth in a week a few thousand years ago. But it is not science.
It is difficult to shift belief. It is also difficult to change the selfish view that Australia can do little on its own. We should therefore look at economics and how much these beliefs will cost Australia in the near future.
The Coalition troglodytes should contemplate over this yet-again record-breaking hot summer how their dogged determination to stick with coal and other fossil fuels is denying Australia a leading role in new industries and billions in savings by using new technology.
Climate change aside, we should be embracing renewable energy from solar and wind with battery and hydro storage because they will make our lives materially better.
Hyundai’s hydrogen car is a good example. It splits hydrogen into two positively charged protons and two negatively charged electrons. The electrons are drawn off to run the car’s electric motor. Then they and the protons are combined with oxygen from the air to form harmless water.
The oxygen has to be free of pollutants, so the incoming air is filtered. The net result is that the hydrogen car removes as much pollutant from the air per kilometre as petrol and diesel cars emit.
Hydrogen-powered cars are driven by electric engines, just like ordinary electric cars, but their energy source is stored in hydrogen fuel cells. Other electric cars use batteries, usually lithium. Both need electric power, usually from the grid, to charge them.
These cars are already here, but in the next few years, sales will boom. We do not make any cars in Australia so we will be forced to follow international trends as petrol and diesel cars are phased out. They will go the way of the film camera with the onslaught of vastly cheaper and instantly satisfying digital cameras. It took about eight years for almost the whole of the world’s camera inventory to be replaced.
Electric cars have very few moving parts, not even a gearbox. They do not emit poisonous gases into the atmosphere. And even with Australia’s inexplicably high electricity prices are far cheaper to run than petrol or diesel cars.
A battery car uses about 18kWh of electricity for 100km, say $4. A hydrogen car uses about double that, and, incidentally, unless that improves it may mean that hydrogen cars do not take off, though hydrogen trucks and buses will still make sense. A petrol or diesel car, on the other hand, costs about $10 per 100km and requires much more servicing and lubricants than electric cars do.
But if the federal government is so scared of the coal lobby that it will not develop an innovative energy and transport policy, Australians will not get these benefits, or get them later and at a greater cost.
Our national government should not be contemplating subsiding or owning new coal power plants but be leading the charge. It should not be passively waiting for industry, the states and individuals to take up the technology in a haphazard way. Our government should be promoting nationwide charging stations for electric cars.
At present Australia imports about 90 per cent of its liquid fuel for transport, at a cost of about $50 billion a year.
If the Coalition is really interested in jobs and growth and running the economy, it would be helping Australian industry innovate with more renewables and better battery and other storage technologies.
We should be replacing the $50 billion worth of polluting fuel with electricity from our abundant sun and wind.
This brings us to transport policy. Roads are funded directly or indirectly through registration fees and the fuel tax.
This has got to change. We should be intelligently planning for that change. In the inevitable transition to electric vehicles, the $11 billion-a-year fuel tax will dry up.
As it does so, there will be obvious unfairness. A 10-year-old petrol car costs almost 5 cents a kilometre in tax. An electric car costs nothing. Also, registration is a flat fee irrespective of how far you travel or where or when you travel or how much you contribute to costly congestion and pollution in cities.
Trucks are already using telematics to work out how far they travelled and where and when they travelled so a road-use charge can be levied.
We should phase in the same technology for cars and do away with registration fees and fuel tax. In doing so, the road-use charge would be higher for higher-polluting or heavier cars.
We should also recognise that for every person who walks or cycles, it is one less car on the road, saving governments lots of taxpayers’ money. Investment in cycleways and footpaths should not be seen as pandering to cyclists and pedestrians but as helping motorists have freer roads.
However, the Coalition troglodytes do not think about these things because they are so hung up about coal that all principles about state ownership, user-pays, innovation, good economic management and smart industry policy go out the window and too bad about the wellbeing of a majority of Australians.
And that is irrespective of anything to do with climate change. Bad climate change policy is just collateral damage in what will become a major self-inflicted economic injury on Australia just so that the troglodytes’ mates and funders in the coal industry can be looked after.

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Climate Change And The Risk To Civilisation: The Doctors' Prescription

Fairfax - Colin Butler*

The 2018 State of the Climate report, released yesterday, again highlights the risk to human wellbeing from our love affair with fossil fuels. Coal, oil and gas have underpinned the incredible advances in affluence, population size, and health since development of the steam engine. But fossil fuel use has an optimum dose, which is now well past.
We are metaphorically drowning in carbon dioxide, the invisible, odourless waste product of burning fossil fuel. As the report notes, this is increasing heatwaves, acidifying the oceans and raising the sea level. It is also lowering the micronutrient concentrations of food.

An evacuation during the November bushfires, near Mount Larcom, Queensland. Credit: AAP
The report cites growing effects on human and animal health, including from increased fires and flooding, and says extreme heat days are rising alarmingly. This month, dozens of Australians were rescued from the Hume Highway, stranded by intense rainfall. Record heat and fire ravaged north Queensland. A third of the spectacled flying fox population died from heat, possibly exposing animal rescuers to viral diseases.
In November, San Francisco air was worse than Delhi, due to fires that ruined the Californian city of Paradise, recently home for 30,000 people.
Earlier this month, at the Katowice conference, held in the heartland of Polish coal seams, David Attenborough called climate change the greatest threat to humanity in thousands of years. He warned that, without action, “the collapse of our civilisations, and the extinction of much of the natural world, is on the horizon”.
Attenborough’s warnings have a distinguished pedigree. In 2010, Frank Fenner, the great Australian scientist who helped eradicate smallpox, warned that humans risked total extinction due to overpopulation, resource over-consumption, environmental destruction and climate change. Martin Rees, a past president of the world’s oldest scientific organisation, the Royal Society, has warned this century might be our last.
It might be comforting to dismiss these warnings as the fantasies of old men, and some wise old women, such as Jane Goodall. Optimists might argue that a rise of even 2 degrees in average global temperature is trivial, or point out that you could walk to Tasmania during the Ice Age. The sea-level rise of 10 thousand years ago was easily adapted to, and today our technological and social capacity is immeasurably greater. A fever of 2 extra degrees is uncomfortable, but we have paracetamol.
Such responses are deceptive and dangerous. The unprecedented complexity, connectivity and power of modern civilisation is also its weakness. Sea-level rise on the US east coast is already depressing the market value of homes and could help trigger a future financial crash. The UN’s Food and Agricultural Organisation is increasingly concerned about climate change, conflict and future food security. The 2010 heatwave and drought in Russia, which led to the temporary banning of Russian wheat exports, helped spark the Arab Spring and the Syrian civil war. The Australian winter harvest of 2018 was poor, especially from the eastern states, due not only to drought, but heat, reduced soil moisture and a lengthening frost season.
But the collapse of civilisation is not inevitable. Collapse might be avoided by a strong dose of preventive medicine, such as replacing coal with wind and solar, an electric bus revolution and reduced meat consumption (also good for health).

The threat of sea-level rise ... erosion at Old Bar, NSW. Credit: Shane Chalker
As with a real vaccine, which requires a tiny dose of something potentially harmful (technically known as an antigen) we seem to need a dose of poison (in this case fear) before we act; but too much fear is paralysing. We also need hope, such as provided by the NSW government’s recognition of our overdose on fossil fuels.
The physical climate is changing, so fast that more and more people, including many children, can now recognise it. If we can harness the internet, new technology, and the common sense of ordinary people then we will we at least have a reasonable chance. Recognising the validity of these warnings is a vital step if we are to survive.

*Colin Butler is an epidemiologist and member of the scientific advisory committee of Doctors for the Environment, Australia. He is an honorary professor in public health at the Australian National University.

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