Environment

I’m nearly through reading Barbara Kingsolver’s *The Poisonwood Bible* at the moment, and very good it is too. For those who don’t know, the main part of Kingsolver’s novel is set in the Congo during the period comprising independence in 1960 and the murder of its first Prime Minister, Patrice Lumumba, on 17 January 1961 at the hands of Katangan “rebels” backed by Belgium and the US. And DR Congo (sometime Zaire) has been pretty continuously violent and unstable ever since. With its origins in King Leopold’s extractive private state (rubber), Congo has been coveted and plundered for the sake of its natural resources ever since. At the time of the Katanga crisis copper was the thing. But now what was previously a little-wanted by-product of copper extraction, cobalt, is in heavy demand because of its use in batteries.

My attention was caught yesterday by [a press release from the UK’s Natural History Museum](https://www.nhm.ac.uk/press-office/press-releases/leading-scientists-set-out-resource-challenge-of-meeting-net-zer.html), authored by a group of British geoscientists:

> The letter explains that to meet UK electric car targets for 2050 we would need to produce just under two times the current total annual world cobalt production, nearly the entire world production of neodymium, three quarters the world’s lithium production and at least half of the world’s copper production.

A friend alerted me to a piece by Asad Rehman of War on Want, provocatively entitled [*The ‘green new deal’ supported by Ocasio-Cortez and Corbyn is just a new form of colonialism*](https://www.independent.co.uk/voices/green-new-deal-alexandria-ocasio-cortez-corbyn-colonialism-climate-change-a8899876.html) which makes the point:

> The demand for renewable energy and storage technologies will far exceed the reserves for cobalt, lithium and nickel. In the case of cobalt, of which 58 per cent is currently mined in the DR of Congo, it has helped fuel a conflict that has blighted the lives of millions, led to the contamination of air, water and soil, and left the mining area as one of the top 10 most polluted places in the world.

People who are optimistic about the possibilities of decarbonizing without major disruption to Western ways of life and standards of living are often enthusiastic about new technologies, battery developments etc. I’ll include CT’s John Quiggin in that (see John’s piece from CT [Can we get to 350ppm? Yes we can from 2017](https://crookedtimber.org/2017/07/22/42710/)). John tells me he’s sceptical about claims that we are about to run out of some scare resource. Maybe he’s right about that and more exploration will reveal big reserves of copper and cobalt in other places. But even if he is, we still have to get that stuff out of the ground, and that’s predictably bad for local environments and their people, and in the short to medium term it may yet be further bad news for the people of DR Congo who have already endured seventy plus plus years as a “free” country (and 135 years since Leopold set up in business) in conditions of violence and exploitation, whilst already wealthy northerners get all the benefits.

The New York Times has a piece pushing the idea that nuclear power is the solution to our environmental problems. It’s familiar stuff, citing the French success in the 1970s, the promise of Gen IV and small modular reactors, and so on. Indeed, two of the authors had an almost identical piece in the Wall Street Journal in January. What’s most interesting is that the set of authors[1] this time includes Steven Pinker, who seems to be spreading his claims to expertise yet more broadly[2].

None of the authors has any training or expertise in economics, AFAICT. So, they make extreme claims such as that South Korea and China can build nuclear plants at one sixth the cost of the US. With the abandonment of the nearly-complete VC Summer project, the only nuclear plant now under construction in the US is the 2GW Vogtle project in Georgia. That looks like coming in at about $20 billion or $10 billion/GW. Optimistic estimates of Chinese costs are around $3.5 billion/GW or one third of the US price, not competitive with new renewables under most conditions.

Moreover, it might have been worth mentioning that South Korea has stopped new nuclear power and China hasn’t started a new project in three years. In both cases, renewables have undercut even the lowest estimates of the costs of nuclear.

Also striking is a sudden shift in the argument about halfway through. The article begins reasonably enough, pointing out that the success of the French model in the 1970s depended critically on the large-scale deployment of a small number of standardised designs. (That wasn’t the only crucial feature, as I’ve pointed out before.) That contrasts sharply with the current situation where nearly every new plant is First Of A Kind, or close to. They point to US efforts to promote new nuclear power, including the Nuclear Energy Innovation and Modernization Act, recently passed through Congress by big margins (361 to 10 in the House, and a voice vote in the Senate).

Then suddenly, the article shifts gears, claiming that the crucial problem is irrational public fear of radiation, nuclear accidents and so forth. The obvious question to raise is: how does this supposed climate of fear manifest itself? Obviously not in a Congress, generally notable for bitter partisan division, where pro-nuclear legislation sails through with negligible opposition. Nor is there any evidence of significant resistance at the regulatory level, where numerous plants have had their licenses extended.

With the abandonment of the nearly-complete VC Summer project, the only nuclear plant now under construction in the US is the two-reactor Vogtle project in Georgia. Googling for Vogtle protests, I found numerous links to protests from shareholders, customers and others concerned about the massive cost overruns of the project. But the only anti-nuclear protest I could find was back in 2011, and appeared to have no effect at all on the project.

Perhaps they mean that we should drop all the expensive safety precautions added since 1979, and go back to Generation II technology like that used in France. If so they should say so

The myth that nuclear power would roar ahead if only public fear could be overcome is comforting to nuclear fans. But the truth is that the technology is doomed by economics.

fn1. The only author with any relevant expertise is Staffan Qvist who works on Gen IV reactors and has previously written policy pieces with our own Barry Brook.

fn2. I also write on lots of different things. On the blog, I’m happy to state my views on all kinds of topics, as I would in ordinary conversation. But when I write for the general public, citing my professional affiliation, I try to stick to areas where I have some claim to expertise.

That’s the title of a collection of papers published by the Green Institute, including one I posted here a little while ago. Lots of people were involved but Tim Hollo was the prime mover on this one.

Over the fold, a statement of my view that property rights, notably the rights of corporationsl are socially constructed. That view isn’t universally shared, to put it mildly, so feel free to respond.

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There’s an interesting article by Anna Grear in Aeon, criticising the idea that Nature should have human-style rights, and linking to the website of the Centre for Humans and Nature, which has lots more interesting discussion.

I’ve recently written a contribution to a forthcoming book by Tim Hollo, in which I take the opposite view. My central point is that corporations are routinely treated as persons for legal purposes, and that the effect is frequently harmful to Nature. There is in my view, no reason in principle, not to give legal standing to representatives of Nature, similar to that given to the representatives of social constructions like corporations. A lengthy extract over the fold.

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The latest issue of Coalwire, a weekly newsletter covering the transition away from coal list three separate corruption cases involving coal: in Indonesia, South Africa and Bangladesh. These aren’t isolated instances: in just about every jurisdiction that isn’t moving away from coal at a rapid rate, the industry is associated with cronyism at best, and outright corruption at worst.

In Australia, for example, the push to develop the Galilee Basin is being driven by a set of politically connected billionaires (or pseudo-billionaires on the Trump model). In China, the move away from coal is being obstructed by provincial governments eager to keep the construction gravy train rolling. In India, there’s Coalgate. Crony capitalist governments like those of Trump in the US, Erdogan in Turkey and Law and Justice in Poland are among the leaders in resisting decarbonization.

The explanation is simple. Coal can’t survive in an open market environment, particularly one with a carbon price, nor under a coherently planned system. It’s only under the toxic mixture of markets and intervention represented by ‘business friendly’ government that money can still be made from destroying the global environment.

The market price of Bitcoin and other cryptocurrencies is plummeting, having dropped by 10 per cent over the last couple of days, and 50 per cent over the past month. The bubble that reached maximum expansion a year ago is gradually deflating.

The good news is that a lower Bitcoin price makes the energy-wasting process of Bitcoin mining unprofitable for many, so lots of miners are turning off their servers. Most estimates of the marginal cost of mining are around $4500 per coin, but the market price has just fallen to $3500.

That situation won’t last long. Every couple of weeks (more precisely, every 2016 blocks) Bitcoin adjusts the difficulty of the pointless algorithm used to mine coins, so as to ensure a steady flow of around one every 10 minutes. As mining effort has declined, the difficulty is reduced, which means less electricity wasted per Bitcoin.

The rapidity with which Bitcoin prices are falling give some hope that the entire disastrous episode will soon be over. If the current rate of decline (50 per cent per month) is maintained, Bitcoins will be worth less than dollar coins in a year’s time, and their impact on electricity demand will be negligible. That’s equivalent to taking a small country like New Zealand off-grid.

In this context, it doesn’t matter whether Bitcoin miners are using renewable energy or coal. The opportunity cost of the electricity they use is the coal-fired electricity that would otherwise be displaced by renewables.

I’ve just been advised that my latest article “The importance of ‘extremely unlikely’ events: Tail risk and the costs of climate change” has come out online in The Australian Journal of Agricultural and Resource Economics. For those who can use it, the DOI is 10.1111/1467-8489.12238. For everyone else, here’s a link to a pre-publication version. The main points are

* The IPCC convention is to use the phrase “extremely unlikely” to refer to outcomes (in particular, values of climate sensitivity) in the range of 0–5 per cent.
* Most of the risks against which we act to protect and insure ourselves (for example, car crashes, premature death in any given year) are “extremely unlikely” by this definition
* Around half, or even more, of the expected welfare loss from climate change arises from the worst-case 5 per cent of high values for climate sensitivity.

Nothing really startling here, but it’s the other side of the coin to the contrarian suggestion that since there’s a 5 per cent probability that global warming will turn out not to be a problem, we should do nothing.

I gave a talk yesterday at a Colloquium organized by a group called Sort, on The Wasteful Economics in Resource Recovery, and I was asked to talk a bit about blockchain technology. That reminded me that I needed to take another look at the issue, and what has changed since 2015 when I wrote that

at most of the market value of a Bitcoin reflects the electricity wasted in the calculations needed to “mine” it, with the obvious disastrous implications for the global climate.

and concluded that the sooner this collective delusion comes to an end, the better.

As far as I can determine, the only thing that has changed is that the Bitcoin bubble has got massively bigger and that the associated waste of energy is now much more widely recognised than when I first wrote about it.

Despite the huge increase in the market value of bitcoins, they seem further than ever from becoming an actual currency. Unsurprisingly, there’s no sign that governments are willing to accept bitcoins as legal tender. Nor is there any sign that they are displacing standard forms of money. On the contrary, bitcoins now seem to be seen as a financial asset, with no real suggestion that they will ever be a general medium of exchange.

As a check on this, here’s a list of firms that accept bitcoin as payment, which fits easily on to a single page. Sydney readers who would like to buy a beer with bitcoin are in luck, or were back in 2014 when the Old Fitzroy got a bit of coverage for saying it would accept bitcoins. There’s another pub listed in London, and that’s about it as far as drinks are concerned. After nearly a decade, Bitcoin acceptance remains the stuff of publicity stunts, not a serious commercial option.

At least by repute, bitcoins are used more extensively in covert transactions such as those involving drug trading, tax evasion and money laundering. But that’s scarcely a good reason to bet on them being around for a long while. If the scale of the problem gets large enough to cause real problems, governments will act to shut the whole system down or regulate it to the point where the compliance costs make the whole idea unattractive.

At any rate, the durability and magnitude of the Bitcoin phenomenon, running for nearly 10 years and with a putative value of nearly $US 100 billion, provides us with a very sharp test of the Efficient (financial) Markets Hypothesis. If Bitcoin eventually becomes a currency, the EMH and its supporters will be vindicated, and I (along with quite a few other economists) will have a lot of egg on my face. If the bubble bursts, the roles will be reversed.

Finally, I should give a plug to Gridcoin. This is a project that aims to avoid the massive waste involved in Bitcoin by making calculations that are actually useful to science. This is a worthwhile idea. But with a current market capitalization of $21 million, it’s obviously got a long way to go.

There are also alternatives to the “proof of work” method of validating changes to the blockchain, such as “proof of importance”, which is analogous to Google’s page ranking systems. I’m still trying to find out more about these.

The International Energy Agency recently released data showing that world coal production fell sharply in 2016, mainly because of big cuts in China. Looking at the graph, it appears that the peak in production was around 2013. The price of coal has experienced a “dead cat bounce” over the last year or so, essentially because China has been closing coal mines faster than it’s been closing or cancelling coal-fired power stations, but the picture tells the story for the future.

Global coal production (source IEA)

Until relatively recently, the decline of coal was the result of competition with gas, while new renewables weren’t even enough to cover the growth in demand. But a quick calculation shows that renewables will soon be taking out a bigger bite. Global electricity generation is currently about 20000 terawatt-hours (TWh) a year, growing at around 1.5 per cent, or 300TWh a year. Installations of solar PV and wind (I haven’t checked on hydro and other renewables) for 2017 look set to come in around 150 gigawatts (GW). Assuming 2000 hours of operation per year, that’s just enough to offset demand growth. So, any future growth in renewables must come directly at the expense of existing fossil fuel generation which in practice will almost always mean coal.

Turning to transport, James Wimberley has an analysis of the prospects for peak gasoline (petrol) used in internal combustion engines. Summarising drastically, his best estimate for peak gasoline is 2032. Decarbonization requires an end to petrol-driven vehicle sales by around 2035. On this front, the good news is that quite a few countries, including the UK, France and India are pushing for an end to new sales with target dates ranging form 2030 to 2040.

Of course, all of this assumes that the attempts of Trump and his Australian counterpart Turnbull (along with likeminded culture warriors in Turkey, Poland and elsewhere) to bail out the dying coal industry come to nothing and also that Trump doesn’t manage to destroy the planet through nuclear war.

I tend to post about relatively frivolous stuff. But today is shaping up pretty serious. Global warming report. North Korea and Trump rattling sabers. I’m a pessimist at heart, which makes these headlines so alarming I have trouble thinking clearly. What do I think the really important, consequential issues are for humanity for the next hundred years?  Climate change and environmental destruction generally; the threat of some catastrophic, global war and/or the use, somewhere, of weapons of mass destruction. I guess number three would be: inequality and the threat it poses for the stability of societies and political orders, long-term. Everything else bad looks a lot smaller – more super-structural – than these three. I don’t have a lot of bright thoughts about any of the three. My poor brain likes to think about smaller, nicer things.

So what do you think? Am I right those are the big three? Are we screwed, long-term, because of them? Are you a pessimist or an optimist about the survival of humanity, the continuation of civilization in something like the form we know, past the next 100 years?

Unless you were paying very close attention, you probably haven’t seen the news that construction of two Westinghouse AP-1000 nuclear reactors at the Virgil C. Summer plant in South Carolina has been abandoned, following the bankruptcy of Westinghouse earlier this year. There are two more AP-1000 reactors under construction at the Vogtle site in Georgia, which are also likely to be scrapped. Either way, this seems the right moment to mark the end of the nuclear renaissance which offered high hopes in the early 2000s. The biggest remaining carbon capture and storage project, the Kemper plant in the US, was also abandoned a month ago.

So, at this point, there is no alternative to the combination of renewables, storage and energy efficiency. This would be a good moment for those environmentalists who accepted and promoted the nuclear story to recognise that any further efforts in this direction can only harm the prospects for a low-carbon future.

More soon on this, I hope

There’s been a fair bit of buzz about an article in New York Magazine with an apocalyptic picture of climate change over the next century. I’ll for a more complete response later. But as it happens, I was already preparing a much more optimistic view, arguing that, at least in the absence of political disasters such as a long-running Trump presidency, the world is likely to achieve stabilization of greenhouse gas concentrations around 450 parts per million by 2050, and reduce that to 350 ppm by 2100.

On current models, stabilization at 450ppm gives us a 67 per cent chance of holding the long term increase in global temperatures below 2 degrees. Warming of 2 degrees would not be cataclysmic for humanity as a whole but it would be a disaster for many people and also for vulnerable ecosystems such as coral reefs. That’s why 350.org wants to reduce concentrations to 350 ppm from current levels above 400 ppm. Is that even possible? In my view, the answer is Yes.

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The NYT today has an article about how the Dutch, with their long experience of holding back the sea, plan to advise other nations about utilizing children’s pudgy fingers to avert devastating floods. At least, I assume that’s what it’s about; I didn’t RTWT yet. More interesting and pertinent to me was this article from some weeks ago about how Singapore is constructing new land, both to increase the city state’s area on general principles and to deal with rising sea levels. Singapore is in a difficult position as a low-lying polis with no higher ground or inetrior countryside to relocate to. In addition, it is forested with high-rise apartment blocks that can hardly be moved. Bukit Timah hill, which I can see from my window, is only about 400 ft above sea level and is the highest point on the island. Singapore imports tons of sand from neighboring countries and uses it to create new islands offshore or infill and extend the current island.

The area where the Marina Bay Sands hotel and casino is located is on infill. It’s the one that looks like a cruise ship plonked on top of three curving towers. Next to it are these fabulous tree-like structures filled with plants and a stylized lotus building, and the huge ferris wheel, currently the biggest in the world, is nearby. With this and the durian-shaped Esplanade theatre Singapore has methodically achieved its goal of having a recognizable skyline. It is just like the government to plan the whole thing out like in this way after, one assumes, envious comparisons to the spontaneous towers of Hong Kong, and build it up in a slow plodding way–but then have it actually work!

From what I have seen in staying here so long, after the sand is put in, the ground is usually firmed up by being planted with trees for a while, though apparently they also build concrete honeycombs to support it from beneath. Both Indonesia and Malaysia have become irritated by the expansion and have begun to withhold exports of sand, so that Singapore has to look further afield. Myanmar has no compunction about selling something that’s worthless to them. Singapore has created something I didn’t know about, namely a strategic sand reserve in Bedok. This is also the most Singapore thing ever. Looking ahead! 10-year plans for new public housing and new MRT lines to service them! It is a curious place. I recommend you do read the whole article though it is long. The stories of a man who has viewed all the changes from the water are very interesting for a different perspective than the one I see. It is a fascinating look at what a truly endangered nation will do when it takes the Anthropocene seriously.

Last night I watched Citizen Jane, a recent biopic about Jane Jacobs and her long fight against Robert Moses’s plans for New York. Of course, Jacobs was largely correct: Moses’s grand utopian schemes wrecked the ecologies of street and community and eventually produced neighbourhoods worse than the ones they replaced, whilst failing to solve even the problems, like traffic congestion, they seemed best suited to. But being already familiar with the substance of the dispute, and with Jacobs’s great work, *The Death and Life of Great American Cities*, what struck me most forcefully was the rhetoric. On the one hand, there were the self-proclaimed “experts”, on the other, ordinary people with their lived experience, sceptical about whether the “experts” had their best interests at heart (or if they did, whether they shared the same conception of their interests). A great irony of the Jacobs case is that though she was right about Moses and his plans, the net result of her activism has not been, in the end, to preserve those neighbourhoods for the kinds of people who lived there then, but rather to give them an afterlife to be enjoyed by the people who can now afford to live in them.

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