A “green” solution to climate change, the burning of wood, is being adopted by many countries because it permits them to meet their contractual carbon commitments, but it turns out to be worse than burning coal for climate change.
This is not rocket science, but it is denial, at best.
Pulp Fiction: The European Accounting Error That’s Warming the Planet
I’ve had an uneasy feeling for a long time that a carbon fee and dividend policy proposed by many bright minds such as James Hansen will not work. My feeling was based on the fact that wealth is proportional to energy consumption and most of our energy is fossil carbon so unless you are reducing wealth you are not reducing CO2.
Proponents of carbon fee and dividend policies believe that it will drive consumption towards renewable energy but do not understand that renewable energy cannot generate the same level of wealth as fossil carbon. So the policy will cause an economic decline and risks a public backlash when it becomes clear that the policy was falsely advertised.
The following comments from the Google discussion group America 2.0 by energy/economy analyst Nate Hagens were made in response to Robert Marston Fanney’s post titled Climate Change Changes Everything — Massive Capital Flight From Fossil Fuels Now Under Way.
Nate makes a strong case against a carbon fee and dividend and makes some important points that I missed.
https://www.reddit.com/r/collapse/comments/3f1oaq/nate_hagens_on_why_growing_the_economy_while/
I suspect you’ll agree this post is horribly naive. Scribbler gets the [climate] science right, but the systems analysis/economics wrong. The reason Arch coal and other energy firms have enterprise values heading south isn’t because of divestment but because of global deflationary depression – started by a continual money machine that creates principal out of thin air but not interest – and the interest (and eventually principal) has to be serviced and paid back with growth based on energy and non-renewable resources flows, which (still) cheap fossil co-workers account for 90%+ of the planetary labor force.
“investors by the droves are now engaged in removing their assets from fossil fuel based companies.”
Unless they also change their lifestyles ‘by the droves’ it won’ matter one bit.
I gave a talk locally last week to the Citizen Climate Lobby, following James Hansen. Hansen is championing a ‘fee and dividend’, where carbon is taxed and the revenue is then given to the poor (or other areas of society – not the government). I paste below what I wrote to some friends after my talk:
Though debating Fee and Dividend was a small % of the total event, I thought I’d lay out the logic I presented to see what I missed, or if you all disagree or agree or other.
Here is their logic/detail on Fee and Dividend… https://citizensclimatelobby.org/remi-report/#Overview
My main points:
1) I’m in favor of energy being more expensive as a transition to a different type of economic system, but taxing carbon by saying it will grow our economies is naive, ignorant and poses systemic risk.
2) Fee and dividend conflate the dollar value of carbon and the work value of carbon. When we tax say gasoline $1 and give that $1 to say, the poor, this is claimed by CCL to be ‘revenue neutral’ and the behaviors shift somehow so that the economies grow. This econometric-based analysis ignores the biophysical aspect of energy inputs. E.g. if we take 1 dollar of energy out of the economy and transfer it, we also are taking 90-100$ worth of ‘work’ done by that gasoline. So the dollars are the same, but the work is (much) less. Economies usually contract using this math, not grow.
3) The economy is a heat engine, requiring 7.1 milliwatts per $ (constant over time) http://www.inscc.utah.edu/~tgarrett/Economics/Physics_of_the_economy.html, but we now live in a world where financial claims far outweigh the natural resource and energy ability to service them. Any company or nation that reduces energy use (that can’t print their own currency) will be at severe disadvantage. 90% of global work force is carbon co-workers. We want to grow the economy but fire these workers. It doesn’t make any sense.
4) If we use $1 less of carbon, and give that $1 to someone who didn’t drive or use air conditioning etc., they will go spend that $ at a coffeeshop, at WalMart, at an amusement park, etc. There are extremely few activities in our world that are ‘carbon free’. Carbon free in our modern world is almost an oxymoron.
5) To distribute carbon fees as dividends to the poor as a combinatory climate mitigation and wealth inequality tool, risks a large backfire. The lowest 2 quintiles of our society spend 100% of their income. The top 5% spend 7% of their income. In a world with depleting oil fields (not 1 year view but 10 year view), a carbon fee with the money going to the poor quickly rebounds as a large call on more oil/gas/consumption as we are taking abstract wealth (digits in bank) and having them become an immediate call on natural resources.
6) British Columbia’s carbon tax is an excellent case study on why policy framed around climate action won’t ever work (in my opinion of course). Annual emissions declined from 2005-2013 but are now projected to significantly increase through 2020. This is happening because govt didn’t stick to the cost of accelerating carbon above $35 a ton, plus the carbon neutral projects were a colossal failure because developers just got $$ to develop property they would already destroy but just at a slower rate thanks to the carbon tax. And all this happened without accounting for the increase in carbon exported through BC through coal and shale oil.
7) As long as we optimize dollars (as in a market system), the dissipative structure that is the global economy will just get larger. So fee and dividend is just a feel good mechanism to shift where the heavy lifting is done. Arranging deck chairs without reducing emissions. And definitely without reducing emissions at the levels needed. http://www.economist.com/news/briefing/21569039-europes-energy-policy-delivers-worst-all-possible-worlds-unwelcome-renaissance
8) As long as there are one or more countries that don’t tax carbon, (and as long as goods that are made with coal are not subject to a special tax), then adding the carbon tax will tend to move manufacturing toward countries without such a tax. This will increase the advantage that these countries already have because of the use of low-priced coal in manufacturing and home heating. (Wages can be less with coal, too!)
9) The dividend likely increases demand for products from these countries, because of the mix of products poor people buy.
My talk was well received but this aspect of it was very unpopular as I hit a lot of emotional buttons on people who are already fully committed to fee and dividend outreach and activism. I suspect leisure is a great supporter of virtue and when the ‘economy is going south or souther’, there will be some switching of teams. I hope to be wrong about that as I do think the sapient thing is for energy [prices] to be gradually become much more expensive, in an accelerating manner.
Nate
Jay Hanson’s response: Nice summation Nate. Fossil fuels are a dirty word on Scribbler’s site. Try commenting about their importance to the economy and the modern world on his site and you will be censored and banned from further commenting. He believes renewables can replace all fossil fuels without drastically changing our way of life. Many prominent climate scientists believe that we can innovate our way out of this mess as well. This is the major disconnect preventing any substantive discussion on root causes for human overshoot and the inevitable collapse to follow.
The layers and layers of denial, even among the good guys, is amazing!
Take Kevin Anderson for example. He’s one of the good guys. Kevin is a world leading climate scientist that has been persistent and aggressive at calling out the hypocrisy, dishonesty, and denial among his colleagues for pretending that 2 degrees is still an achievable target, for focusing on optimist and ignoring realistic emission scenarios, for not walking the talk, for telling politicians what they want to hear, etc., etc. Good on him!
On the other hand, Kevin Anderson is in denial on the implications of reducing CO2 emissions. He understands that we need to contract the economy but thinks we can do so without crashing it. He knows we need to reduce our consumption in the short term but thinks we can resume the good life after we build out renewable energy. Neither of course is possible.
Denial is everywhere, and deep.
Here is a talk by Kevin Anderson titled “Delivering on 2°C: Evolution or Revolution”.
Here is my understanding of the current situation. I think this is the most accurate and concise summary you will find anywhere.
1) 2 degrees rise is already certain and we are on a path for 4-6 degrees in the lifetimes of our grandchildren.
2) 2 degrees will be a disaster for human civilization and many other species, 4-6 degrees will be worse.
3) Wealth is proportional to energy consumption.
4) Wealth (at the current high level we enjoy) is enabled with debt which requires economic growth or else the system will crash.
5) Over 90% of our energy is fossil carbon which emits CO2.
6) Renewable energy does not have the density or qualities necessary to replace fossil carbon energy and maintain our current lifestyle.
7) We and other species cannot afford carbon capture technology and it will not scale.
8) Low cost fossil carbon energy is depleting rapidly and current economic problems are largely due to this fact; economic contraction is imminent even if we reject voluntary conservation.
9) Geoengineering at best will buy us a little time.
10) Self-reinforcing feedback loops may have already taken over from human emitted CO2 as the primary drivers for climate change.
Therefore, we cannot mitigate climate change without reducing total wealth, and we cannot reduce wealth without crashing the system.
If we choose not to voluntarily reduce wealth we will be forced to do so. By volunteering we might be able to control the contraction, rather than being controlled by the contraction.
Unfortunately, even when wealth does contract it may be too late to avoid unacceptable climate change.
Nevertheless, I think we should try to make the future less bad for our children with conservation and population reduction policies. More people and more consumption will make the future worse. Less people and less consumption will make the future better.
I doubt however that we have the ability to override our genes’ desire to maximize resource capture, nor our inherited denial of reality filter.
Overshoot is a bitch.
Canadians think we elected the liberals because we are decent and tolerant when in fact we voted for the party that promised the most stuff with the least inconvenience to our privileged lifestyles.
If this were not true, why did we reject the same party when they made climate change their top priority 7 years ago?
Thermodynamics trumps Keynesian economics. There is no free lunch.
The increased debt we just voted for will not fix anything and will only delay the day of reckoning and made that day much more painful when it comes.
Given that a dollar of debt now produces less than a dollar of income, it’s time to have an adult conversation and shift our strategy to conservation and population reduction.
Many people are saying they are happy the Liberals won because they will do more to address climate change than the Conservatives. I’m sure the Liberals have better intentions however the fact that they plan to increase debt and public expenditures means they will emit more CO2 than the Conservatives.
But let’s not let facts spoil our good feelings.
Is it possible to reduce our debt, and as a consequence shrink the economy, in a controlled fashion such that standards of living contract smoothly in step with declining net energy?
Or is a violent crash inevitable because existing debt cannot be sustained without growth, which is not possible without increased energy consumption, which is not possible without additional debt, which is not possible without increasing incomes, which is not possible with declining net energy, which is inevitable due to depletion of a non-renewable resource?
I suspect the design of our monetary system necessitates a crash, but it would be nice to be proven wrong as this would give us something worthwhile to lobby our leaders for.
Those of us fortunate to live in the developed world consume much more than we require to survive. Our standard of living must contract soon due to fossil energy depletion. If we can figure out a way to contract in a planned and controlled fashion, then we might be able to maintain social order and avoid war and unnecessary hardship.
Note also that a smaller economy emits less CO2 which might make climate change less bad provided that self-reinforcing positive feedback loops have not already taken over.
Planned contraction is one of the most important questions we should be exploring. I have not yet read enough to know if it is possible.
This article provides a flavor of the debt problem.
Climate scientists damage their own credibility by being in denial about the reality of our situation.
1) The planet cannot feed more than a billion people without fossil energy.
2) Those of us fortunate to have comfortable lives owe it to fossil energy.
3) Over 90% of all wealth derives from fossil energy.
4) Renewable energy does not have the qualities, scale, or return to replace fossil energy.
5) There is no easy fix to climate change.
6) There may be no fix to climate change because it is possible that self-reinforcing positive feedback loops have taken over.
7) Assuming we can still influence the outcome, austerity, conservation, and population reduction policies are the only things that might help.
8) Most climate scientists don’t set a good example in their personal lives.
Perhaps if climate scientists started setting a good example and speaking the truth they might have more credibility and impact.
Or maybe it wouldn’t make any difference.
It would be nice to have an honest fight.
Radio Ecoshock is a long running B.C. produced podcast hosted by Alex Smith that interviews the best minds in the world on climate change and related topics. The archive is very rich and well worth your time exploring. It’s been my favorite podcast for years. Here is this week’s episode.
“Oil company BP says recoverable oil runs out in 50 years. American scientist James H. Brown publishes study saying this means a crash of economy and population is “very, very likely”. Then Canadian climate scientist Andrew Weaver on our prospects, and why he ran for the Green Party.
Warning: If you are already feeling depressed, this may not be the program for you. Maybe you should take a walk outside instead. Really. That would be OK.”
http://www.ecoshock.org/2015/09/science-of-coming-catastrophe.html
“The simple truth is that when you find yourself in deep resource depletion and high population no amount of financial hocus pocus or political posturing or brute force can fix anything.”
Our leaders are stupid but not that stupid.
At some point they will finally understand that economic growth is no longer possible and permanent economic contraction is guaranteed due to falling net energy.
At that point they might implement aggressive measures to reduce CO2 emissions. This will allow them to blame climate change for a shrinking economy and thus avoid the panic, hoarding, and wars associated with wide-spread understanding of overshoot and limits to growth.
On the other hand…
History strongly suggests there is no limit to human stupidity and we will blunder into full on collapse and wars over the remaining scarce resources.
un-Denial 