What's the Plan?
Every president since Richard Nixon has sought the holy grail of energy independence. The last eight presidents have all promised to get us there, as Jon Stewart pointed out in 2010. We all laughed along.
Well, guess what? It now looks like it might actually happen. But here’s the first bit of shocking news on this front, as reported in the NYT:
The United States will overtake Saudi Arabia as the world’s leading oil producer by about 2017 and will become a net oil exporter by 2030, the International Energy Agency said Monday.
Holy Peak Oil! How did that happen?
Or this:
That increased oil production, combined with new American policies to improve energy efficiency, means that the United States will become “all but self-sufficient” in meeting its energy needs in about two decades “” a “dramatic reversal of the trend” in most developed countries, a new report released by the agency says.
I guess the new golden age of oil is real. I don’t see any point in denying it. Or this:
The report also predicted that global energy demand would grow between 35 and 46 percent from 2010 to 2035, depending on whether policies that have been proposed are put in place. Most of that growth will come from China, India and the Middle East, where the consuming class is growing rapidly. The consequences are “potentially far-reaching” for global energy markets and trade, the report said.
Yes, I can see the thought bubble forming over your head: The consequences for the world’s climate are also far reaching.
I agree. The Guardian has the depressing quotes from IEA economist Fatih Birol, including this:
I don’t see much reason to be hopeful that we will see reductions in carbon dioxide.
So now what? You gonna try and get China, India et al to put the brakes on their economic growth? Good luck with that. So what’s the plan that addresses climate change while allowing the aforementioned countries to continue to develop?
“ou gonna try and get China, India et al to put the brakes on their economic growth? Good luck with that. So what’s the plan that addresses climate change while allowing the aforementioned countries to continue to develop?”
I’m confused. In what way do you think any of the things you discussed have changed the problem of decarbonization? The plan is going to be the same as it was when cap and trade passed in the House, which is the same (although they often deny it) as that pushed by The Breakthrough Boyz: an initially tolerable but rising price on carbon with heavy investment in clean energy, supplemented by adaptation measures. Some trading mechanisms would be ideal but if they aren’t feasible, then so be it.
The basics of the issue haven’t changed. (If anything, they are only now actually catching up to assumptions made in the SRES scenarios that were previously considered by some to be too optimistic about fossil fuel reserves.)
Plus ca change. I don’t see any change here, unless you’re implying that American greens are so thick they don’t know where China and India are. Of course China and India will continue to grow GDP and emissions. That’s why EU policies are worse than doing nothing. Dieter Helm very good on this. http://www.nytimes.com/2012/11/12/opinion/on-climate-change-the-us-is-doing-better-than-europe.html
Keith – Here’s my plan: Climate Change: The Resilience Option. I’ve been arguing this since about 1997: the right response to climate change is to induce people to move out of harm’s way, and to build social resilience by properly-pricing risk and infrastructure to account for climate change, whether anthropogenic or not. That is my story, and I AM sticking to it.
The percentage game is interesting.
From the IEA
So we have an additional 12 million barrels of oil demand by 2035.
As far as overtaking Saudi Arabia as the largest producer the US has been a 3rd in production for quite a while.
The ‘exporter’ comes from the 2025 54 MPG CAFE standards.
365 * 12 Million = 4.3 billion barrels4.3 billion / 7 barrels/metric tonne = 614 million tonnes of oil x CO2 factor of 1.6 = 982 million additional tonnes of CO2 from oil.
You would need to replace about 125 GW of baseload coal fired plant with zero emissions generation to offset it.
If you listen to the projections of people that build power plants for a living rather then people who sell climate policy prescriptions or coal for a living
http://www.powerengineeringint.com/articles/2012/11/china-and-india-will-lead-boom-in-gas-nuclear-and-renewables-says-report.html
One has to wonder if a carbon tax is exactly the wrong approach to implement at this time. Raising the cost would make the incremental cost to bring these harder to recover fuel sources a smaller percentage of the total at use point. That could encourage their development, especially for trade to China India, etc. Not only will capNtrade and tax encourage a less effecient use if China, India do not sign on due to their eineffecient use in these countries, the regulations become a subsidy for those who do not sign. Since a large fraction is on private lands in the US, a possible scenario if either are passed, or the EPA brings it in the backdoor, is that we become more like the middle east with oil barons and the desperate poor rather than a modern economic power. The other point is that in terms of incremental costs and trade imbalance, it could encourage more pollution, and more recovery of these difficult reserves, rather than less pollution and less recovery.
I think you should be asking ‘What’s Plan B’?
Is this a serious question Keith?
#2 Roddy Campbell
From the annual power gen asia conference in bangkok
http://www.powerengineeringint.com/articles/2012/11/china-and-india-will-lead-boom-in-gas-nuclear-and-renewables-says-report.htmlIMHO The slope of IPCC Scenario A1T will be reality post 2020 regardless of any ‘policy’ initiatives.
Marlowe (#7)
Semi-serious. I was aiming for a cheeky tone, but perhaps that didn’t come through.
Of course I know what the conventional climate policy plans have been. I’ve been writing about the topic here for the past four years.
Maybe I should have been more specific and mentioned what hasn’t worked thus far (as Dieter Helm–referenced by Roddy upthread in #2–laid out in his op-ed) and then asked, Tom Fuller says, “what’s plan b.”
The occupational hazards of blogging on the run…
I mainly wanted to juxtapose the IEA news (which reinforces a trend) with the quicksand-like climate policy efforts.
We’re going to see a real roller-coaster in petroleum prices over the next 20 years. Too many new fields providing supply at wildly uneven costs for cultivation.
Plan B seems to be adaption. IEA and others have projected growth of emissions until 2030 for a few years now so it cannot come as a surprise. The shortcomings of Kyoto (free rider problem, leakage, exclusion of developing nations) are also well-known.
On the other hand, abundant oil ( and energy in general) is important for economic growth. Whatever is done about climate, it requires money and without growth there is no money.
Keith,Interesting post. Thanks. The supply of reduced carbon is large enough and humans cleaver enough at developing technology that there is no real limit on fossil fuels for at least a century, and probably much more. Reducing CO2 emissions any time in the next few decades, absent lower cost alternatives, will pretty much require certainty that future negative economic consequences (considering both potential pluses and minuses), at net present value, of not reducing emissions will be greater than the benefits of emitting. One encouraging fact seems to me too often ignored: All the “unconventional” fossil fuels are and will likely remain more expensive, even considering technological improvements. That means over the long run there will be strong motivation for developing lower cost alternatives. For example: if the net cost of batteries, calculated as cost per kilowatt-hour stored over their lifetime, fell by a factor of three, then distributed solar energy (roof-top power) would be competitive with grid power in sunny regions.
Here’s an interesting article from Mueller in the WSJ yesterday:
The Fracker’s Guide to a Greener World
This puts US environmentalists in a bind. The “blame America first” crowd looks increasingly incoherent when the carbon math simply doesn’t add up for new tight US regulations. And when people perceive you don’t care if the math adds up, well, they question your motives. The shrill argument that others will follow if only we lead doesn’t have much weight in light of the ongoing facts and history.
It’s a hard problem, but the only realistic answer out there is low cost, abundant, low carbon energy for the world. Pushing for anything else is beating your head against the wall. Fracking may not be perfect, but making perfection the enemy of the good is bad environmental policy. Predictable opposition to solutions like this is why the greens have become nearly irrelevant to energy policy.
Tom Scharf,
The “blame America first” crowd looks increasingly incoherent when the carbon math simply doesn’t add up for new tight US regulations. And when people perceive you don’t care if the math adds up, well, they question your motives. The shrill argument that others will follow if only we lead doesn’t have much weight in light of the ongoing facts and history.
I am not quite sure what you mean here. If you are referring to China passing us in CO2 emissions, due to the immense effective residency of GHGs like CO2, the US will remain responsible for a larger share of the emissions pie for a long time because we had been out-emitting China by so much for so long until so recently.
If you are referring to the recent drop in US domestic emissions meaning that we no longer need a price on carbon, you can look at our coal exports over the same period and the projections of emissions in the near term and see how laughable that really is. The carbon needs to stay in the ground. The US burning a little more gas and oil domestically and shipping its coal to burn elsewhere is obviously not a real net reduction in emissions.
Thingsbreak, the carbon will not stay in the ground. What’s your Plan B?
build a big boat. what’s yours Tom. Oh right. you won’t be around.
a few other thoughts…
the assumption in this post, and echoed by others, seems to be that climate policy in the u.s. is an either/or proposition. Either the federal government implements a national carbon pricing scheme via tax or C&T and it gets serious about arm twisting BRIC countries on the international stage or….bust.
This framing of the problem is simplistic and unhelpful IMO. There are many, many climate oriented policies being enacted by sub-nationals in N. America and by other countries around the world. Is this sufficient given magnitude of the challenge? No. But, to insinuate that the the lack of action at the federal level in the U.S. stems from a strategic miscalulation is grossly disingenuous. Is anyone really surprised that no climate legislation has made it through Congress and received 60+ votes in the Senate? Of course not. No other legislation of similar magnitude has succeeded either.
Now I realize that the TBI folks and RPJr fanboys want to promote pixie dust + adaptation (Hi Ken Greene!). they’re perfectly entitled to make a detailed argument outlining why their preferred approach is more politically realistic than a revenue neutral carbon tax (Hello Mr. Norquist!). I’m still waiting — although unwilling to pad roger’s wallet by reading his book(s).
Here in Canada we don’t have the ‘laboratory’ model that folks in the U.S. have when it comes to enviro policy (Hello California!). While it’s still too early to tell, the Washington and Colorado votes on ‘potting up’ and AB32 suggest to me that the federal government in the U.S. will be a follower rather than a leader in days to come on both these issues.
“No other legislation of similar magnitude has succeeded either.”
style=”font-family: Verdana; font-size: 11px; line-height: 18px; background-color: rgb(255, 255, 255);”>I kind of like Obamacare, myself. Was it just a mirage?
” So what’s the plan that addresses climate change while allowing the aforementioned countries to continue to develop?” More magical thinking. Unless you want to develop a new virus that kills a few billion people.
#13 – TB – Obviously already burned carbon is water under the bridge, this is not relevant. Would you feel better if we said we are sorry? The point I (and many others on both sides) was making is trying to limit future emissions with a US centric focus doesn’t make sense if you want to be effective in your stated goal. And if you can’t win in the the wealthy US, the chances of limiting emissions in China and India are 0.0000000000000001%. If you want to fight a losing battle to try to prevent the economic good news of the US becoming a potential net exporter of energy with gas and/or coal while we have a fragile economy and huge debt burdens, well then go ahead. But I will tell you the the big red spot on the wall in front of your head is caused by you beating it there. The definition of insanity…
Tom you’re channeling your inner(?) stupid again i see. obamacare was passed when the dems had the house and 59+1 in the senate.
nice try.
Drunk or merely stupid, Marlowe, you’re the one that can’t get it straight. As usual.
I still think nuclear is going to play a big role. China has been working on AP1000 desgn and its derivative CAP1400. They are talking about mass production and 2000-3000$/kW price range. Much more than coal & gas but much less than renewables.
http://www.chinadaily.com.cn/business/2012-03/15/content_14839968.htm
http://www.foxnews.com/world/2012/07/18/uae-nuclear-plant-gets-construction-green-light/
http://www.globaltimes.cn/content/734628.shtml
http://www.economist.com/node/21549094
Marlowe refers to the years 2009 and 2010, a period when it was “stupid” to think anyone cared about Climate Change, apparently.
Of course, the following year was 2011- the point at which it became “stupid” to doubt that Dems really, really care about Climate Change due to the fact that they could blame Republicans for inaction again. There was another electoral event in 2011 that had an impact on carbon tax proposals. It happened in Canada. Marlowe, care to refresh our memories?
Based on the number of comments it appears the “concerned” here are far more interested in deregulating immigration than coming up with a plan for reducing carbon emissions.
The lack of interest in a plan guarantees the lack of a plan. But it’s good politics, so perhaps that is the plan.
Revenue neutral carbon tax. Start at $12/ton. Re-evaluate price every ten years against benchmarks for CO2 concentrations, US emissions, sea surface temperature changes.
#14 TB
Yep…if you look at where US coal exports are currently going they are going to Kyoto countries that have a ‘price on carbon’.2012 1st half US coal export statistics…Europe 34 million tons…China 7 million tons.http://www.eia.gov/coal/production/quarterly/pdf/t7p01p1.pdf
Tom fuller, I think you’d have trouble getting anyone to trust a govt running a trillion dollar deficit to actually make a new tax revenue neutral. Plus, it’s hard to describe what benefit it would have to climate.
Best to be upfront, a carbon tax proposal that goes half to the deficit and half to sea wall projects and viable clean energy (gas and nuke mostly, wind solar in very select areas).
Personally, I see a benefit to having everyone pay for Obama’s spending, but I rather doubt the left will go along. Putting it toward the deficit and adaptation gets around the fact that “revenue neutral”=big fat redistribution to cities.
#12 Tom Scharf
Latest statshttp://www.platts.com/RSSFeedDetailedNews/RSSFeed/ElectricPower/7249636
Coal fired utilization rates are down about the same amount as capacity increases in China.
In my math the utilization rates are down to 56%.
In the US we wouldn’t build a coal fired plant for peaking…an open cycle gas turbine costs about 1/4 of the price of a coal plant. In China they don’t have much in the way of gas.
The combination of China’ hydro,wind,solar and nuclear programs is becoming substantial.
To make their announced 2015 targets for non-fossil they will need to bring on line 15 GW of wind per year, 6 GW of solar per year , 9 GW of nuclear per year and 30 GW of hydro per year.
Full 2015 policy paper updated in October 2012 here –
http://www.globaltimes.cn/content/740169.shtml
The only real question left for China is will their electricity consumption grow faster then their very substantial non-fossil build rate. The answer for 2012 appears to be no. 2012 was admittedly a good water year for China. It’s hard to look at 60 GW/year of non-fossil scheduled to come on line per year and conclude that Chinese coal consumption growth is going to continue much longer.
Kenneth Green.
Nice. I won’t quibble with the details, but focusing on resilience as opposed to intervention
may just just gotten a boost from all the extreme weather we are experiencing. We can do nothing about the extreme weather that is “baked’ into the pipeline. 20 years of fiddle farting around trying to get a global treaty on intervention has gone from being a waste of political capital to an outright crime against the present generation which faces real present danger from extreme weather.
The coal wont stay buried. the oil will flow. the gas will be fracked. we will cross the 2C threshold. better be prepared.
I think a big part of the solution will be research (private and public) directed towards carbon-free energy production which is cheaper than hydrocarbon energy.
Cheaper safer nuclear – yesSpace based solar – yes.Fusion – yes
If we invent power sources which can be made cheaper than hydrocarbon sources, market forces will case automatic migration to the cheaper source, with no laws required.
I hate this editor!
Steven Mosher #28,”The coal wont stay buried. the oil will flow. the gas will be fracked.” Almost certainly correct, although the period over which this happens matters; worse if over 60 years than over 160 years. Public policy choices will make some difference in how much temperatures will increase at their peak. Maybe you are right about passing 2C, but it depends on what the true climate sensitivity turns out to be, as well as public policy over the next 25 years.Extreme weather is going to continue to happen, global warming or no. Being prepared for extreme weather makes sense, independent of the impacts of global warming. Being prepared for sea level rise also makes sense; prepare for 50 cm rise in the next 100 years and you are unlikely to waste a lot of money.
@21
remind me again when obamacare passed and what the configuration was in the house and the senate? You’re still very, very wrong as usual. google is your friend (or not).
@23
presumably you’re referring to the federal election in which a far right party got 39% of the vote (of the ~65% of eligible voters who could be bothered to vote). Climate change policy didn’t come up as an issue at all, much to my and many others dismay. shitty economic outlook + standard right-wing demagoguery + severely divided center/left vote = easy electoral win. but, as i’ve said before, it would be a severe mistake to assume that the ascendancy of the cons in canada = apathy towards climate mitigation policy (hello BC!). Canada is in a very bad place right now in terms of its democratic health. For the benefit of my american friends consider the following: you have a first-past-the-post system (thanks for that UK) with 5 parties and only one on the right. It doesn’t take a Phd in poli sci to figure out what happens next…
@26
Jeff you raise a very important point that Obama alluded to in his comments today. Carbon pricing will have a disproportionate impact geographically and across income levels. Its no secret that poor people spend more ‘disposable’ (love that framing!) income on energy than the Mitt Romney’s of the world. He’d have to drive a hell of a lot of Ferraris and really, really big yachts and private jets to even come close. Similarly, it’s no secret that people who live in suburban and rural areas spend far more on energy than people who live in urban areas. Longer driving distances, larger homes, etc. Now here’s the $64k question. If we assume that a carbon tax is revenue neutral (e.g. via an equivalent payroll tax cut) then how do you correct for these ‘historical’ differences? Is living in rural areas a ‘right’ that should be compensated? Given that most ‘red’ states already receive far more in federal tax revenue than they contribute, is it possible that carbon pricing can provide an opportunity to redress the cognitive dissonance that exists? Consider that the vast majority of ‘red’ states are ‘rural’ and receive more money from the feds than they put in –in canada we call them the ‘have-not provinces–and yet steadfastly complain about the taxes they have to pay to the federal government.
@27
thanks for the link. very interesting.
“mitigate we might; adapt we must” -Nordhaus
@32
Marlowe I was referring to the 2011 elections, the one that every honest analyst agrees was a stunning defeat for carbon taxes. In Canada.
“Is living in rural areas a ‘right’ that should be compensated?”
I don’t know which is worse, the insinuation that our Eco-betters know that we have no “right” to live where we want. Or that you think the failure of the state to over-tax us should be described as “compensation.” Either way, good luck with the middle class tax hike and relocation plan! It has just as much chance as Things Break’s plan.
“the 2011 elections, the one that every honest analyst agrees was a stunning defeat for carbon taxes. In Canada.”You are wrong. Carbon taxes were not a large issue in the 2011 Canadian election. The Conservative party won a majority thanks mainly to the collapse of the Liberals (the major center left party).Carbon taxes were an issue in the 2008 election and it is true that the party promoting carbon taxes (Liberals) lost the election. However it is tough to say how much of the loss was due to the carbon tax vs. other factors (weak leader, poor debate performance, etc.)
Mobk, that’s right, it was in 2008 that the liberals lost over the carbon tax. At least that was Ignatieff’s take on the 2008 election when he ran at the head of the liberals in 2011.
the 2011 election was the one where nobody believed the liberals when they claimed they learned their lesson on the carbon tax in ’08 – Ignatieff’s words- and wouldn’t push for a carbon tax if elected.
If only Australians had been more skeptical of liberals who claim they won’t push for a carbon tax.
However, by all means, I agree the US Democrats should follow in the footsteps of their northern soul mates.