Over the fold, an excerpt from my book-in-progress, The Economic Consequences of the Pandemic, adapted from an article coming out soon in Australian magazine Inside Story
Comments, criticism and (of course) praise welcome
The latest reports from the Intergovernmental Panel on Climate Change are predictably grim, but in a sense, irrelevant. The scientific debate over climate change has been over for some time, and the reality of climate change is now evident for anyone who chooses to look.
Until about five years ago, debates on climate policy lined up extensive evidence of rising global temperatures and model predictions about worse things to come against statistical quibbles and “sceptical” arguments which came down to “scientists are always predicting disaster and it never happens”
But in 2021, we no longer need to look at models to see the disastrous impacts of climate change, arriving faster and causing more destruction than most of the modellers thought possible. For Californians, and many others around the world, climate change has emerged I the form of almost unstoppable wildfires. For those who have yet to feel climate change directly, the Covid pandemic provides life experience of long-predicted disaster that has turned out worse than most people thought possible.
Even this direct experience has turned out not to matter much to those committed to ignoring the problem. A recent study showed that people had experienced an approaching wildfire were subsequently more likely to vote for costly climate reforms. But only Democrats (more precisely, voters in mostly Democratic census blocks) learned from experience. Republicans remained as strongly opposed to climate action as ever. The same is true in Australia, where voters on the political right are heavily influenced by the US, via the Murdoch press.
The same is true, in spades, of Covid. Conservatives who have seen friends and relatives die around them continue to insist that the whole thing is a hoax. There’s now a whole genre of stories (reminiscent of deathbed conversion narratives) where people dying of the disease finally urge their friends to get vaccinated, or, occasionally go their graves still denying everything.
But, despite all this resistance, we have collectively made enormous efforts to control Covid. We have, for the most part, accepted handwashing, social distancing, masks, travel restrictions and periodic lockdowns even while being unsure which measures will work and which will turn out to be unnecessary. Now that vaccines have become available, the majority of the population has rushed to protect themselves and everyone else. And there is increasingly little patience for the selfish or misguided minority who refuse, even when given every opportunity to get vaccinated. The only way to protect ourselves and our children from this group is by keeping them isolated from the rest of us, effectively continuing the same restrictions we have all gone through until now.
The contrast with climate change is striking. We know, from looking at successful examples, that we can greatly reduce greenhouse gas emissions at costs too small to be detectable in the aggregate econoy. It’s easy enough to show that we could eliminate nearly all
By 2025, most European countries will have eliminated coal-fired electricity; several have already done so. The main policy instrument used to achieve this goal has been an emissions trading scheme which requires firms burning coal, iron or gas to buy a tradeable permit. The permit price was below 10euros/tonne for some years, but has now risen to 50euros/tonne. Since generating a megawatt-hour of electricity using coal emits roughly a tonne of carbon dioxide, the scheme effectively adds around 50 euros/MWh (0.05 euros/kWh) to the cost of coal-fired electricity, with a smaller effect on gas-fired electricity.
Since the emissions allowed under the scheme are currently around 1.5 billion tonnes, the annual value of permits used is around 75 billion euros, or around 0.5 per cent of total GDP in the EU. This value is not an economic loss, but a transfer from polluters to society as a whole. The actual economic cost is even smaller.
The same point can be illustrated by Australian experience. The short-lived carbon tax/price had a significant impact on emissions. But despite Tony Abbott’s claims about a ‘wrecking ball’ through the economy, neither the imposition of the tax nor its removal had any measurable effect on GDP or other measures of aggregate performance.
Ending coal is only a first step. But an extension of the same policies, for example, a doubling of the EU carbon price, would see a rapid replacement of gas-fired electricity with a combination of solar, wind, battery storage and other zero-carbon options. And even if the economic impact were quadrupled it would still be so small as to be undetectable against the background of ordinary economic fluctuations, let alone crises like the pandemic.
If the electricity supply were decarbonized, electrifying the vehicle fleet would eliminate emissions from road transport. Again, we have examples to show how easy this would be. Norway has committed to ending sales of internal combustion engines. Already, electric vehicles account for more than half of new car sales and around 20 per cent of the total car fleet. This outcome was achieved with a mix of fairly modest measures, such as exemptions from purchase taxes and parking fees. As the cost of electric vehicles has declined, some of the more generous measures have been scaled back.
A number of national governments have now committed to ending sales of internal combustion engines, and car manufacturers have announced plans to switch to production of electric vehicles. But current policies will leave lots of petrol and diesel vehicles on the road well past 2040. Incentives on the scale of those being offered in Norway, combined with a hard deadline on the removal of internal combustion vehicles from the roads, announced now, could put an end to transport-related emissions by 2035.
The main economic cost would be the scrapping of vehicles before the end of their usable life. But owners could be compensated with a version of the ‘cash for clunkers’ scheme used in the US a few years ago. This isn’t an elegant policy solution, but when we are faced with the prospect of destroying the global climate, we can’t afford to worry about such things.
Other policy responses, including drastic limits on air travel, might seem more draconian. But we have all put up with near-total bans on international travel, and lots of constraints on domestic travel, imposed with little or no notice in response to pandemic outbreaks. Replacing business travel with Zoom has turned out to be easy. As for recreational travel, a very simple response would be to replace frequent short ‘getaways’ with the longer holidays, taken once a year or less, that were normal in the 20th century. This would allow substitution of trains for planes in many cases.
We have more time to act on climate than we did on Covid. But that time is running out, and we are not using it well.
{ 19 comments }
Brett 08.26.21 at 6:59 am
You’d find it easier to switch to carbon-neutral synthetic or biofuel for aviation than to rapidly build out electric train lines in a lot of countries (especially the US).
Tim Worstall 08.26.21 at 8:54 am
“You’d find it easier to switch to carbon-neutral synthetic or biofuel for aviation”
Quite so. If green hydrogen ever does properly work – something I don’t know but given the ever falling cost of solar and fuel cells I’d argue it’s possible – then synthetic would be easy enough chemistry, carbon neutral and would allow the use of the current infrastructure. Plus we all get to keep travelling etc.
“But in 2021, we no longer need to look at models to see the disastrous impacts of climate change,”
That seems like a pretty big statement. You mention fire zones and I live in one (the Algarve) and it’s not wholly obvious that it is temperature driving any changes. This envionment is built to burn occasionally and not allowing it to do so occasionally causes problems. Quite how much this is the California problem well, arguments are still ongoing about that.
But not needing models? Leaving aside those claiming nothing is happening and moving on to those insisting something must be done. On the one side Nordhaus, Stern, you at times, me, vast numbers of economists etc who say that something like A1T is possible (or RCP 4.5, 0r even 1.9 etc) by those sorts of tweaks from a carbon tax etc. Essentially, globalised free market capitalism continues we just power it with renewables. Then certain others who insist that unless we abolish capitalism, all eat only plants, never travel, impose degrowth and so on we’re stuck with RCP 8.5 or A1FI.
Models seem to be fairly important in trying to decide between those two insistences.
notGoodenough 08.26.21 at 9:33 am
Brett @ 1
That is an interesting suggestion, but could you expand a little? I’m not currently aware of any commercially produced carbon neutral synthetic/bio fuels – did you have something in mind?
Lee A. Arnold 08.26.21 at 10:33 am
I asked my doctor for a presciption for medical marijuana so I don’t start shooting climate denialists.
Omega Centauri 08.26.21 at 5:39 pm
Passenger trains, and especially high speed trains are a false choice in my book. There is a lot of embedded cost and carbon footprint in the track, and the amount of mass moved per human is very high. For continental travel electric planes would arguably be a better alternative. We would have to give up nonstop intercontinental flights, but a several stop electric plane flight from say New York to LA would still be much faster than a railroad trip.
One of my concerns is that greens may block or seriously delay the transition, as NIMBY style arguments over wind turbines, power lines, and the new mines for the necessary materials for the new technology could seriously constrain the speed of the technological replacement.
oldster 08.26.21 at 10:05 pm
When one side of a debate turns a deaf ear to reason and evidence, it’s only natural for the other side to shout, and shout louder as the situation gets worse.
This leads to a curious class of collateral damage: those with sensitive ears, for whom the shouting is deafening.
I have in mind here a phenomenon that I witness among many young people, who are so thoroughly convinced of global warming and the looming catastrophe that they are in a state of perpetual despair. I know a number of people in their 20s who have concluded that the world is simply going to be uninhabitable towards the end of their lives, with massive extinctions of animals and plants, including humans.
Are their forebodings too grim? It’s hard to know — on some models, we are indeed facing the extinction of life on earth.
But in another sense, any foreboding that is so grim as to leave the actor paralyzed and incapable of action is for that very reason far too grim. We need people motivated to act. Nothing is gained by scaring young people into depression and nihilism.
So, here we are: caught between the old people who continue denying that there’s a problem, and the young people who have been terrorized into despair and lethargy. It’s hard to know how to calibrate the message so as to inspire the second group with a bit of hope and optimism, without risking the first group’s lapsing into complacency.
(Just imagine, for instance, if we got good news in the shape of a cool year or two right now, that significantly changed the projections 20 years out; I would-be delighted that we have a bit more time to prepare and change our ways, and I would be resigned to seeing the climate deniers react by saying that the anomalous cooling proved it’s all a hoax).
I don’t have any good advice here. It’s not possible to micro-target our messages so that only the recalcitrant will hear them, and the converted will not feel preached at.
But I will say that the very doom-and-gloom that rolls off the backs of those in power is at the same time producing a generation of decent kids who are scared out of their wits. It’s not that the best lack all conviction; it’s that they lack all hope.
Kenny Easwaran 08.26.21 at 11:46 pm
Replacing some fraction of business travel with Zoom is easy – and it’s “easy” to replace all, but I think there are still debates about how effective it is.
As for longer holidays, taken once a year or less – I believe the median American already flew less than once a year in 2019, so maybe this is just a statement directed at the upper middle class, which has gotten used to far more frequent flights. But I would bet that if the total number of flights is cut, so their prices got higher, there may well be a greater percentage reduction in flights by the below median fliers than by the above median fliers.
Fake Dave 08.27.21 at 3:41 am
It certainly is a California problem. We’ve been in a “drought” for most of my life at this point and many landscapes are absolutely devastated even in places that haven’t burned. Some of the degradation traces back to various crimes against the environment — permanent deforestation of most of Southern California, draining the once vast wetlands of the Central Valley, diverting whole rivers from the Sierra Nevada and Northern California (largely for cash crops and industrial use), and over grazing almost everywhere.
The denuding of much of California’s ground cover (especially slow growing oaks whose saplings are then trampled by cattle) and draining of our wetlands has eliminated much of the region’s capacity to regulate temperature extremes and retain water in the dry season, which in turn has made the south ever more dependent on water siphoned from the north, where water levels in many regions are now unsustainably low and getting worse.
All of these issues predate notable global heating, but have been exacerbated by longer, hotter summers and dry winters that offer little respite. Central California is becoming a dust bowl and there is no longer enough rain or snow pack in the rest of the state to compensate. Some of the most productive farmland in the world is turning into tumbleweed strewn desert and all the local right wing leadership can think to do is blame Democrats and the endangered species act for not letting them divert more water from rivers that are already so dammed and depleted that many fish species haven’t spawned successfully in years if not decades. Fires have always been just the dramatic tip of the iceberg.
The real crisis is still coming and doesn’t have anything to do with backcountry timber management. Rather it has been unfolding in plain sight in regions where millions of people live, but was rendered invisible by the old settler mentality that land rightfully belongs to those who “improve” or “develop” it rather than those who simply live there. Unfortunately, the same people who caused this crisis — land barons, water thieves, big ag, and developers — have largely been allowed to build the state’s culture and institutions to suit their own needs and reshape our reality. Many Californians gripe about the absurdity of building cities and growing almonds in a desert, but two few realize that much of that “desert” was originally healthy forest, wetlands, and sagebrush chaparral. People made it a desert and people are the reason that desert is still spreading.
Tim Worstall 08.27.21 at 7:21 am
Commercially produced?
” I’m not currently aware of any commercially produced carbon neutral synthetic/bio fuels”
Not as yet. But it is being worked upon:
https://press.siemens-energy.com/global/en/pressrelease/siemens-energy-drive-development-green-hydrogen-economy-middle-east
Sure, it’s a press relesae and all that. But solar in Abu Dhabi, make green hydrogen, formulate up to synthetic avgas. Each stage is well enough known, it’s the economics of the process as a whole under stress. If the electricity going in is cheap enough (I’ve heard stories of under 2 cents a W for solar there) then it should be possible to produce something commercially viable. But how cheap is “enough” ?
Neel Krishnaswami 08.27.21 at 1:04 pm
notGoodEnough @3
It’s not really commercially viable yet, but is likely to be very soon.
The thing to google for is “power to gas”. Basically you use solar or wind to power electrolysis, and then use the resulting hydrogen to produce methane or even longer-chain hydrocarbons.
The efficiency isn’t great (~39% for methane, ~25% efficiency for octane (i.e., gasoline), compared to ~90% for batteries), but since prices for renewables are in free fall, it’s still likely to become cheaper than gas from fossil fuel sources in the near term (say, 1-5 years). This is attractive because it permits reusing the existing natural gas infrastructure for energy storage: use solar power to make methane during the day, and then burn it to get power at night. (Since we need to overbuild solar/wind for daytime use anyway, this turns excess capacity into storage.)
Battery prices are also collapsing, so this is probably not be a long-term solution (and in fact, I hope it isn’t), but it can certainly be helpful during the transition.
The main takeaway is that renewable costs are getting so low that even dumb ideas for storage are starting to become economically viable. We’ll still need big government spending to kickstart the transition, but as interest rates are zero-to-negative it’s dumb not to borrow heavily to finance infrastructure.
notGoodenough 08.27.21 at 7:53 pm
Tim Worstall @ 9, Neel Krishnaswami @ 10
Thank you both for your comments. As someone who has been a researcher in energy storage (though admittedly currently specialising in technology transfer for batteries) for a few decades now, I flatter myself I have something of a vague understanding of the topic! I do appreciate seeing the positive comments relating to these topics, though, as normally people find my interests somewhat…idiosyncratic.
I do agree that if one expects aviation to continue in a zero-carbon world, hydrogen will be a key technology (though whether as a fuel, fuel-precursor, or fuel-cell type system I won’t pretend to be able to comment). The gravimetric and volumetric energy densities are certainly attractive – though IIRC, PEM still remains a challange (if one is thinking of green hydrogen).
I was merely curious if I’d missed important progress regarding TRL (it is always possible, as sometimes one becomes a bit focussed on one’s own area rather than the other fields!). It seems I haven’t, which is always reassuring :-)
Tim Worstall 08.29.21 at 12:24 pm
“As someone who has been a researcher in energy storage ”
I’m not, but I have been a step or two along the chain. Most specifically, with Sc for fuel cells. Not PEM, but SOFC and a scandia stabilised zirconia seems to be optimal for certain tasks – it’s what’s used in the Bloom Energy boxes.
I’ve long assumed that solar through fuel cell to hydrogen (as a battery, back through a fuel cell, or through chemistry to synth avgas etc) is going to be a part of the solution. How large a part depends upon how cheap solar gets. The more those price estimates on perovskites go down then the more I think that it becomes economic despite the obvious inefficiencies in so many transformations.
At this point of course the correct answer is “dunno”.
Glen Tomkins 08.29.21 at 6:49 pm
“We have more time to act on climate than we did on Covid. But that time is running out, and we are not using it well.”
Don’t expect any positive action from national govt in the US., not anytime soon.
The Rs do not, as a matter of what passes for principle among them, believe that govt action can ever be anything but destructive.
The Ds have convinced themselves, after losing repeatedly to the obvious bathroom idiots the Rs tend to put up as presidential candidates, that they absolutely cannot afford to be identified by any voter as being in favor of doing much at all, no matter how great and immediate the need. We attribute every loss to being not being bathroom idiot enough.
COVID is contrasted here as prompting more action than climate change, because the threat is more immediate. Fair enough, but consider that the US has yet to nationalize COVID response, even in the face of breathtakingly foolish responses in many states that put the entire nation at risk, and that inaction even with D control of the federal trifecta.
And if you are discussing clear and present dangers, insurrection and sedition would seem to be matters that Ds need to prioritize even higher than COVID. The Rs control enough state govts that the plan they are implementing in those states of never again letting Ds win elections is clearly succeeding. Their measures to limit the franchise as a means to this end seem almost quaint at this point. They have moved on to direct legislative control of the certification of elections, with the backup plan of the legislature simply discarding election results it doesn’t like and declaring the R candidate to be the winner. I guess that’s one way to get campaign contributions out of politics.
Ds who can’t or won’t do what needs to be done to keep Trump from a second term, can’t or won’t do anything much about climate change.
Ki Wa 08.29.21 at 10:40 pm
“…where voters on the political right are heavily influenced by the US, via the Murdoch press…”
Just a detail. the Murdoch pressstarted in Australia and Murdoch was/is an Austrlian.
God knows the US has many sins to answer for but Murdoch belongs to Australia and the Commonwealth.
Zamfir 08.30.21 at 11:31 am
Neel Krishnaswami writes:
“[…] (Since we need to overbuild solar/wind for daytime use anyway, this turns excess capacity into storage.)
Battery prices are also collapsing, so this is probably not be a long-term solution (and in fact, I hope it isn’t), but it can certainly be helpful during the transition.”
Based on that remark, I was wondering how people see the role of batteries in a mostly-renewable energy system?
If I do back-of-the envelope calculations, it seems at least plausible to use batteries to manage the day-night fluctuations in energy demand and supply- as order of magnitude, that would be similar to a full transition to electric cars (and might even be the same batteries). But for longer period fluctuations, the numbers don’t look right to me. For week-long weather cycles, and especially for seasonal cycles at high latitudes, I end up with battery amounts that do not seem plausible at all.
Do other people here agree on that?
If so, all alternatives appear to be some form of “tank-based” storage. Hydrogen, or some hydrogen-related synthetic fuel, or perhaps flow batteries, or the continued use of natural gas (with or without carbon capture). Produced locally, or piped, or shipped.
Neel Krishnaswami 08.30.21 at 3:34 pm
Glen @13: Very luckily, you’re wrong!
The reconciliation bill is shaping up to have a very substantial set of provisions to decarbonise US energy production, called the Clean Energy Payment Program.
It sets targets for zero-emissions electricity production, and fine producers who miss the target and pay bonuses to producers who exceed the threshold. This is not as straightforward and efficient as a regulatory mandate, because of the limitations of the reconciliation process, but is still pretty good.
(Given the lawless, authoritarian turn of the Republican party, this might even be better than regulations! Corporations wouldn’t mind if regulations are not enforced, but they will be very mad if they don’t get paid for decarbonisation, and stiffing corporations is not a fight that Republicans will want to fight. It sucks that we have to think this way, but such is life.)
John Quiggin 08.30.21 at 11:25 pm
Ki Wa @14 Guilty as charged. But Murdoch was on the centre-left in Australia in the 1960s, and only shifted right around the time he moved to the US in 1974. As things work now, the rightwing lunacy is produced in the US and imported here.
notGoodenough 08.31.21 at 9:21 am
Zamfir @ 15
I’m not an expert on the grid side, but I think how much storage you think you’ll need depends a fair bit on what the system is (e.g. how much geo-, hydro-, nuclear, wind-solar mix, etc.), how well connected you think it will be, how much overcapacity you’ve included, how big the fluctuations you are accounting for are, etc. I’d also make a slight nitpick that LIBs are probably far better for EVs, while stationary is probably better served by LCA (or, possibly and with many caveats, a PB-HC battery). But these are tangents to your comment, so probably best to set aside for now.
As a very rough response, I’d say (from my current understanding) the batteries which are most likely to be deployed at the moment would work best for order magnitude days mitigation. There are press-release type comments about longer storage (e.g. Form Energy have made claims about their iron-air systems), but I’d be sceptical (as in not reject their claims, but not accept them either) until they show large-scale deployment and field data.
So, I’d say (without checking your numbers), based on where we are now with the technologies you’re probably right that long-term (e.g. months and seasonal) storage is most likely better served by other systems – such as those you mention (possibly also including TES and PHS where applicable).
Omega Centauri 08.31.21 at 8:37 pm
To follow up on notGoodenough’s excellent comment. Its likely that overcapacity will take the lion’s share of seasonal balancing, which implies a lot of curtailed renewable energy during the favorable season. There is also Energy Vault, which uses gravitational storage. Also compressed air storage, which is cheap but has poor round trip efficiency. As he alludes to, a larger catchment area, made possible by long distance transmission also reduces the need for storage. Today’s economics favors 4 to maybe 8 hours of Lithium Ion battery storage, there is not as yet sufficient demand beyond that time frame to make much of a market for the promising longer term alternatives.
IMO using methane for storage and/or replacement of natural gas is problematic for the climate. The current gas distribution system is too leaky, and Methane is far more potent a greenhouse gas than CO2. I also find CO2 capture and incorporation into products to be only a very small part of the solution, despite the level of hype it gets.
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