The full-court press

by John Quiggin on December 6, 2020

Another excerpt from the climate chapter of my book-in-progress, Economic Consequences of the Pandemic. Comments, constructive criticism and compliments all appreciated.

Economists have long been enamoured of simple and universal solutions to the problem of greenhouse gases emissions. The key to these solutions is imposing a price on emissions, through a carbon tax or an emissions trading scheme. With a carbon tax, firms are required to pay a fixed price for each ton of carbon they emit. In an emissions trading scheme, firms are required to use a permit for each ton of carbon they emit. The permits are initially auctioned, and can then be bought and sold, so that the price is determined by the cost of reducing emissions.

The appeal of a carbon price is that it does not require governments to ‘pick winners’ by determining the most cost-effective way of reducing emissions. Energy using industries will pick the cheapest source of energy, and the carbon price will ensure that low-emissions technologies are preferred. Similarly consumers don’t need to perform complicated calculations about their carbon footprint or the food-miles embodied in their groceries – products that embody lots of carbon emissions will be more expensive than alternatives that don’t.

If carbon pricing had been adopted when it was first proposed in the 1990s, it would have worked by now to greatly reduce emissions. Even the somewhat half-baked and mismanaged system introduced by the EU has put the continent well on the way to eliminating coal-fired electricity. For most of the world, however, including the US the reality is that the time for relying on a single global solution is past. Pricing carbon emissions is still important, but it will not work fast enough on its own.

Similarly, while political action is essential, the crisis is too urgent to be left to the slow processes of government, particularly in a deadlocked system like that of the United States.

What is needed now is, in basketball terminology, a full court press. The normal practice in basketball is for the defensive team to guard a zone around their goal, allowing the offensive team to bring the ball up from their half of the court. By contrast, in a full court press, the defenders seek to block opposing players for the full length of the court. The full court press enables a team with small, but energetic, players to compete against taller teams with better shooting skills.

At the beginning of the campaign to reduce CO2 emissions, the protagonists were very unequally matched. The most formidable opponent was ExxonMobil, the most valuable company in the S&P 500 until as recently as 2013. Beyond the power that naturally goes with such wealth, ExxonMobil had recruited teams of lawyers, propagandists and mercenary scientists, many of whom had previously worked for the tobacco industry.

Exxon’s oil money was a powerful force, but the initial phase of the struggle to decarbonize the economy has focused on coal. Until coal-fired electricity generation is ended, there is little chance of reducing global emissions. The next big step in decarbonization, electrification of transport, will only work if electricity generation is decarbonized first.

As recently as 2010, the task of getting the global economy off coal appeared unachievable, even though the cost of solar PV and wind was steadily declining. Coal was still the primary fuel for electricity generation in nearly all countries, and coal-fired power stations were being built at a rapid pace in China and India. A huge and complex network was (and still is) deeply involved in coal, including:

coal mining companies;

electricity generating utilities;

heavy engineering companies building power stations and supplying coal mining equipment;

railways and ports on which coal is shipped;

global banks and insurance companies that provide financial services;

institutional investors that provide equity capital;

international development banks which provide loans on favorable terms to

national export credit agencies which support exports of coal technology

national development strategies premised on exploiting resource endowments,

As the New York Times observed in 2018

coal is a powerful incumbent. It’s there by the millions of tons under the ground. Powerful companies, backed by powerful governments, often in the form of subsidies, are in a rush to grow their markets before it is too late. Banks still profit from it. Big national electricity grids were designed for it. Coal plants can be a surefire way for politicians to deliver cheap electricity — and retain their own power. In some countries, it has been a glistening source of graft.

The essence of the full court press has been an attack on every node in this network, turning its apparent strength and resilience into multiple points of vulnerability. The environmental movement has challenged every corporation, investment fund and government agency involved in promoting coal, with considerable success.

The most striking success has been the push for financial institutions of all kinds to divest from coal. A hundred of more global banks, insurers and reinsruers, pension funds and other institutional investors have announced divestment policies and gradually tightened them . Although the push to divest began in Europe and North America, it has now extended to include Japan, South Korea and Singapore. Coal mining and coal-fired power are increasingly dependent on Chinese institutions for funding.

New coal mines have been resisted both because of their damaging local environmental effects and because of their contribution to greenhouse gas emissions. Any proposal for a new coal mine even in developing countries, can count on vigorous resistance, and many proposals have been abandoned.

The millions of deaths caused by coal-fired power generation, poorly understood until recently, have become a focus of political resistance. Power stations near major cities like Beijing and Delhi have been closed, and others are likely to follow.

Heavy engineering companies have faced pressure to withdraw from destructive coal projects. This has been most effective in the case of diversified firms like GE, Siemens and Toshiba, where the reputational damage associated with coal harms their position in other markets. All three have announced their withdrawal from building coal-fired power stations.

Proposals for rail and port developments to facilitate coal exports have been resisted with some success. The Lummi Nation fought successfully to block a coal terminal proposed for Seattle in 2016 https://www.seattletimes.com/seattle-news/environment/tribes-prevail-kill-proposed-coal-terminal-at-cherry-point/ Oakland

In Australia, some major coal port proposals have been stopped. There is a continuing struggle over the Adani Group’s (fn Bravus) Carmichael project, involving a new coal mine and railway line along with an expansion of Adani’s existing coal port at Abbot Point.

As the end of coal has come into sight, attention has turned to oil and gas. The initial focus has been on the most destructive processes for producing these fuels, such as fracking and tar sand extraction, as well as on the protection of particularly precious areas such as the Arctic National Wildlife Refuge.

The time has come, however, to demand an end to any activity that is inconsistent with the goal of zero net carbon emissions by 2050. That includes an end to new gas-fired power plants, electrification of all kinds of transport and the replacement of industrial processes that rely on burning carbon in any form. Governments need to commit to this goal and set phase-out dates for all such activities, as many have already done for coal and some for internal combustion engined vehicles. The pledges already made by financial institutions to stop funding coal should be extended to ensure that only projects compatible with decarbonization can attract capital investment, operating finance, and insurance.

It is too late to prevent severe damage, but there is still time to avoid climate catastrophe. If we tackle the problem with the same urgency with which at least some of us addressed the Covid pandemic, we have all the resources of skill and technology needed to limit warming to 2 degrees or less.

{ 21 comments }

1

bad Jim 12.06.20 at 4:38 am

Utilities in the U.S. are rapidly switching out of coal not from the goodness of their hearts, or even for the most part due to government mandates, but simply because it’s more expensive than the alternatives. Plentiful natural gas and the efficiency of combined cycle power plants are a big part of this, but lately the cheapest power comes from solar and wind generation. (Utility Dive is worth a weekly visit to keep up on the latest developments.)

2

Peter T 12.06.20 at 7:47 am

The key difference between the harms that can be addressed by taxes or pricing and CO2 is that with the latter it’s the absolute level – including all past use – that counts. Slowing the rate of increase is useful, but only a first step – at lower rates we are still cooking ourselves, only more slowly. An analogy with tobacco use might be useful – prices (and a host of other incentives) have steadily reduced the rate of use – from around 70% in the 50s to around 15 per cent today. But there is no realistic prospect of reducing tobacco use to zero. The same is true of other similar harms (various pollutants) – yet with CO2 zero or negative is where we have to go.

3

bad Jim 12.06.20 at 8:08 am

(apologies; begging your indulgence; don’t want to be a nag)

So why is the use of coal expanding around the world? In this respect China is the parson’s egg: parts of it are excellent. They’re still bringing more coal online, and building coal infrastructure around the world, but they’ve committed to decarbonization and investing heavily in solar and wind power. Perhaps it’s a demonstration of the incoherence of a modern totalitarian superpower.

Germany is a sad case, substituting coal for nuclear power (please tell me I’m wrong!) It seems to be a matter of entrenched interests, the way things have always been done, the abundance of local resources, und so weiter.

India is even more puzzling, and much more important. The subcontinent is so drenched in sunlight that a massive investment in solar power would seem to be the obvious move, but they’re building coal plants as fast as they can. Why, if it’s too expensive for the U.S. is it economical in India?

Maybe, just maybe, it’s because cheap natural gas from fracking is only available here and there due to geological quirks. See this from the New York Review. It depends on the sort of rocks you have. Lacking an abundant supply of a slightly less damaging hydrocarbon, a growing economy turns to whatever keeps the lights on 24 hours a day.

4

notGoodenough 12.06.20 at 11:30 am

John Quiggin @ OP

This is, I think, a good overview and summary of the situation. Coal is (particularly in China) one of the leading causes of GHGs, and reducing that as quickly as possible is imperative (and certainly adding to it need to be stopped…well, decades ago, frankly).

As I’ve said repeatedly, renewables (apologies for mentioning the dreaded r-word) are one (key, in my opinion) part of this approach, but they alone are not going to save us. We are also going to have to make significant, and likely rather uncomfortable, decisions about how are societies function going forward. On a long-distant previous thread, I made the point that I see this juncture as being the end of civilisations as they currently are – in the future, either they will look radically different or cease to exist at all [1]. To that end, I would like to offer a thought on the final paragraph.

“It is too late to prevent severe damage, but there is still time to avoid climate catastrophe. If we tackle the problem with the same urgency with which at least some of us addressed the Covid pandemic, we have all the resources of skill and technology needed to limit warming to 2 degrees or less.”

This is, in my mind, an important point. People drastically underestimate how little resources actually go into R&D, and how many roadblocks are always in the way (partly from the way competition between researchers is encouraged, partly from the way in which linking lab-scale to industrial-level is routinely ignored, partly from the way in which there is an active opposition to any work here at all). What is needed is a global approach in which cooperation is rewarded, expertise from all different areas is linked together, and the current “publish or perish, fight for scraps, winner takes all” approaches are abandoned for “let’s try to avoid going extinct, and worry about dividing the credit later”. Sadly, given how little interest there is in reforming the way R&D is currently carried out, I think this is one weight which will forever remain dragging humanity down.

However, putting on my political hat for a moment (which means I am talking purely personal opinion, and not promulgating my usual data-driven knowledge, so take the following with a pinch of salt), I think I would be tempted to suggest a minor change along the lines of:

[…]”we have all the resources of skill and technology which, when combined with effective social action, will be able to limit warming to 2 degrees or less.”[…]

(or something like that – I am hardly as an effective writer as JQ!)

The technological advances we have seen are dramatic and effective, but (again, this is just opinion) they need to be accompanied by equally dramatic and effective changes in society. For while r-words are a key piece of the puzzle, there seems to be good reasons to think that alone they would struggle to maintain our current lifestyles [2] and that the rapid implementation will be incredibly challenging [3]. Advances in technology are going to be critical, but they are only one half of the puzzle – the nail to the hammer, as it were.

The current damaging nature of most (if not all) societies needs to stop, now. We need collective, equitable action capable of enacting big shifts in how things are done. Capitalism has had plenty of time to address the issue (far too much, frankly), and the result has hardly been a success. To my mind, it seems that if we want to stop the disposable, built-for-obsolesce, wasteful, burn-a-forrest-for-a-quick-profit, approach which has led humanity up and over the precipice of disaster, we need an alternative. Left wing politics seem, at least to me, to be the best area from which to seek effective collective and equitable action, from which sustainability may be in-built to all our actions – I sincerely hope it will.

[1] As noting renewables help cut emissions where implemented is “happy clappy”, and showing that the work in the EU (though nowhere near enough) represents promising blueprints for what can work is “hopey changey”, I won’t bother banging that drum again. It seems clear to me that those convinced we should implement renewables as part of the drive to sustainability already are, and those who are not will never be. I will repeat what I said before – the current state is catastrophic (in a very literal sense) and we are headed for disaster. I am open to hearing any plan at all (whether or not it includes renewables), but it does have to actually be some sort of plan and include some proposals on how to reach the goal. Otherwise, to borrow the delightful metaphor, you are just standing watching the burning building while repeating “someone should do something” – perhaps true, but not really much use. This is not intended to be a dig (there are many things I would likely agree with), but it is the repetition of my sincere request for more ideas on how to achieve what needs to be done. As KT2 has provided a link to a plan, I will try to read through and see what I think – if anyone else wishes to present theirs I would be more than happy to consider what they have to say.

[2] 10.3390/en13123036

[3] 10.1016/j.esr.2019.100399

5

anonymous 12.06.20 at 11:35 am

“Similarly, while political action is essential, the crisis is too urgent to be left to the slow processes of government, particularly in a deadlocked system like that of the United States…

…Governments need to commit to this goal and set phase-out dates for all such activities, as many have already done for coal and some for internal combustion engined vehicles. ”

Hmm…..

6

Zamfir 12.06.20 at 12:50 pm

Bad Jim, I have some incomplete answers for you regarding India. First off, coal is no longer growing as fast as they can. Coal consumption already went down in 2019, and corona-2020 will be another drop. The last few years, you can find many examples of coal plant projects that are struggling to be completed due to financial problems. Partially from overbuilding in earlier years, partially from renewables that are getting cheaper and have preferential grid access, partially from stricter emissions regulations, which determine a lot of the cost of a coal plant.

The latter is part of the explanation of the difference with the US – until recently, Indian emission norms were much lower than in the US, and enforcement was notoriously bad. The norms for new plants have been tightened, and I think enforcement as well.

Another part is indeed that India does not have enough natural gas at home to fuel current demand, let alone expansion. And imports are mostly LNG, which is much more expensive than pipelines. There used to be a dual pricing structure, where domestic gas was sold at low prices to specific users (especially fertilizer production). It think that’s changing. As it was, it didn’t encourage much gas plant construction, since the extra plants would have to run purely on the expensive pricing schedule.

As a side note, the US is simply large. Every square kilometer is another lottery ticket for natural resources, and the US has 3 times more tickets than India. Much more, if you count Canada as de facto US reserves.

7

mike huben 12.06.20 at 1:06 pm

How is this a consequence of the pandemic, as opposed to merely contemporaneous?

8

steven t johnson 12.06.20 at 4:37 pm

It is something of a shock to realize that coal is subsidized so that I can have cheap electricity. The way my power bill has climbed and climbed, doubling far faster than my disposable income, kept me from realizing what a parasite I am.

9

steven t johnson 12.06.20 at 4:39 pm

Sorry to be out of place, but the previous thread is closed to comments now. But a comment by Hidari that I just saw minutes ago was so extreme I felt compelled to weigh in again. (And not just in a There’s-Something-Wrong-on-the-Internet! way, something I am altogether too agitated by.)

This would have been my response:

[Hidari@35 writes ” we need to cut emissions of CO2 ( gross not net). Then, we hope that renewables ‘take up the slack’.” The thing is, of course, is that the innocuous phrase “take up the slack,” means a radical decrease in energy production which will condemn to absolute immiseration untold millions, if not billions of people. Given that poverty kills, that being poor and defenseless means being prey for richer nations whose owners are afraid of losing status, this innocuous phrase means, sacrificing the lower forms of human life. Is that why it’s in scare quotes in the original?

It’s like people who can afford a widely varied vegetarian diet that more or less meets nutritional needs feel virtuous for prescribing obligatory vegetarianism for the masses. (See reruns of The Good Place tv series on Netflix for examples.) Some may imply they mean the cure for the disease of humanity is the bankruptcy of the fossil fuel companies, but any such presumption is unwarranted. If the argument above were a serious one, the first task is not reducing energy production on a lethal scale, but overthrowing the government and instituting an international plan.

Even the metaphor above is messed up. The first task facing people when firemen are throwing gasoline on a fire is…stop the firemen, violently and lethally if you have to! The issue of course is that pretty much everyone else here on principle rejects revolution, preferring social pacifism. This is hidden away by all sorts of ridiculous ideological constructs, like repudiation of “totalitarianism” or whatever. But: There is no anti-revolutionism, there is only a commitment, shame-faced but real, to counter-revolution.

This plan does have the great advantage of relying on the well-tested technologies of war and ethnic cleansing and proven skills for ignoring other people’s famines, instead of day dreaming about future technologies.]

10

J-D 12.06.20 at 11:17 pm

… In this respect China is the parson’s egg: parts of it are excellent. …

Not ‘parson’s egg’, ‘curate’s egg’. ‘Parson’ and ‘curate’ are not synonyms, and the humble status of the curate is key to joke.

(Congratulations, though, on such an apposite use of the expression; people often use ‘curate’s egg’ as if meant the same as ‘mixed bag’, which misses the original point.)

11

bad Jim 12.07.20 at 6:32 am

Thanks, Zamfir, for some not bad news about India. I wonder about the availability of wind power. From what little I know about climate patterns there, I would not be surprised to learn that it is seasonally variable. In California it’s positively fitful, ranging from 5 gigawatts to 300 megawatts. For reasons beyond my ken, it tends to be low when the Santa Ana winds are howling.

I should have been more explicit about fracking. The NYR article I linked notes that the U.S. is one of the few places it can work. Your lottery analogy is dead on.

12

Tim Worstall 12.07.20 at 9:16 am

“For reasons beyond my ken, it tends to be low when the Santa Ana winds are howling.”

You have to turn them off (“feather” them) when the wind gets nice and strong otherwise they blow up. Akin to reefing sails in a high wind.

13

Dragon-King Wangchuck 12.07.20 at 12:23 pm

One thing that’s missed in this is the effect of O&G vs coal. In the power sector, there’s a fairly widespread recognition that the thing which really did coal plants in was cheap fracked natural gas. It’s been a very long period of cheap natural gas prices and while that has slowed down renewables uptake, it has also greatly accelerated the phase out of coal.

Natural gas is probably going to be a much harder to displace incumbent than coal. The health effects are substantially reduced and the plants aren’t anywhere close to as bad as the blight a coal fired plant represents. There are a lot of people who use natural gas to heat their homes and will have a much less negative attitude towards it. That application has also resulted in an absolutely massive amount of infrastructure to distribute that gas, including ludicrous amounts of storage to accommodate the seasonal nature of demand. If we though getting rid of coal took too long, imagine what tackling natural gas is going to be like. Moreover, one of the major negative impacts of natural gas on climate change is pretty hidden in the fugitive emissions of methane from the entire network. Regulating that is going to be a fairly complex task.

There are lots of positive signs – battery plants that provide grid support services at lower prices than natural gas plants for example. Also the shift in public opinion away from all “fossil fuels” is going to help. But I think it’s going to be a very heavy lift.

14

notGoodenough 12.07.20 at 12:49 pm

John Quiggin @ OP

As, on reflection, my comment could be read as a bit negative, I just wanted to take this opportunity to thank you for posting your excerpts here for us all to read. I am finding it a thought-provoking expereince, and am grateful for the perspective you bring and are able to explain in a way which even I can understand.

I am looking forward to more posts from you, and to reading the book when it comes out.

Thank you again.

15

Zamfir 12.07.20 at 7:24 pm

Yeah, the variability situation in India is the inverse of what I am used to in Europe – solar is constant over the year, while wind is strongly seasonal. From what I understand, the purpose of wind power in India mostly to reduce the intra-day variability.

16

Zamfir 12.07.20 at 8:10 pm

@Jim, the situation in Germany is also not as bad as you portray. Col power didn’t really expand, but it did stay stubbornly high for years into the Energiewende. Effectively, Germany produced a massive amount of wind and solar power and then exported it because they didn’t want to close coal plants. That did end up reducing GHG emissions, but mostly in neighbouring countries.

They cut some political compromise a few years ago, and now the coal plants are closing, though gradually.

You can play around with the numbers here: https://energy-charts.info/charts/energy/chart.htm?l=en&c=DE&stacking=stacked_absolute&interval=year&year=-1

17

Carl 12.07.20 at 11:02 pm

The terrible truth is that solving the climate problem will not take us very far, as we still need to solve the resource challenge, and address toxic chemicals. These are all related. the climate tech revolution will require resources, which are often mined in dreadful conditions. this means that we must be wise with our resources. unfortunately, we can often not recycle materials as they contain toxics. this is the reason why the European Commission has put their circular economy and new chemical strategies under the Green New Deal (climate). even if we address the cliamte challenge, millions of species (animals and plants) will probably go extinct. it is probably too late. For these reasons, I think the more radical economic agenda of ecological economis is required in order to move forward. it would be interesting to see what you make e g of these proposals: https://www.jasonhickel.org/ I think we cannot ignore poverty alleviation and economic redistribution, in our climat efforts, for several reasons

18

bad Jim 12.08.20 at 4:59 am

Thanks, Zamfir. Maybe I’ll poke around in your link on Saturday when I would otherwise run out of science & technology news.

Tim Worstall, I do understand that part, and you may well be right, but it might have something to do with the direction of the wind (prevailing winds flowing west to east, katabatic winds the reverse) and the siting of the windmills, likely optimized for onshore flow. Moreover, to the best of my knowledge, even our devil winds are wimpy compared to the high plains norm.

19

Tim Worstall 12.08.20 at 1:37 pm

” the direction of the wind (prevailing winds flowing west to east, katabatic winds the reverse) and the siting of the windmills, likely optimized for onshore flow. Moreover, to the best of my knowledge, even our devil winds are wimpy compared to the high plains norm.”

Quite possibly true in part. Near all will be feathered at 25 m/s and above though, on top of those siting and usual direction issues.

20

bad Jim 12.09.20 at 8:10 am

The Great Barrier Reef Is Now Officially in ‘Critical’ Condition

Nonetheless, the Australian government continues to commit to environmentally destructive energy policies and projects, Prime Minister Scott Morrison refuses to commit to a target of net zero carbon emissions by 2050, and the construction of the Adani Carmichael coal mine—which requires the dredging of over a million cubic metres of the Great Barrier Reef’s seafloor to give passage to coal ships—is underway.

21

bad Jim 12.09.20 at 8:55 am

Not exactly the same thing, but not much different.

Is it Too Late to Save ‘America’s Amazon’?

Alabama is inviting industry — and industry is coming because you can get a permit here in 30 to 60 days from the state environmental agency. That same permit in California would probably take 10 to 20 years to secure.

One example is the way Alabama does water permits: There’s no limit on how much water industries can take, no matter what environmental havoc may occur.

A couple of years ago we had droughts so bad we actually saw some of the state’s major rivers run dry. The Cahaba River is 150 miles long and it has 120 fish species — more than in the entire state of California.

And during this drought, the industries and golf courses were allowed to suck so much water out of the river it went dry. It only started flowing again downstream from a sewage plant. The entire flow of one of the most diverse rivers in America was the outfall from a sewage plant. It’s the kind of thing you can’t imagine happening in the United States, but it happened here and there were no laws to stop it.

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