So to sum up: The way to save our planet is clear. Step 1 is to embrace natural gas as a "bridge" fuel, limiting the risks from fracking and helping China and other developing countries to switch from coal to gas. Step 2 is to fund research to ensure that the jaw-dropping three-decade plunge in solar power costs continues for two decades more. Natural gas is the temporary ally. Cheap solar is the cavalry that will ride in to finally save the day.
Preventing catastrophic global warming might still be a long shot. But if we do the right things now, we just might make it.You can read the whole thing here. The source for the figures about decreasing solar costs is this Scientific American piece by Ramez Naam.
Update: Here is a 2012 analysis by ThinkProgress claiming to show that fracking has been a much smaller cause of emissions reductions than I claim in my Atlantic piece, accounting for only 11% of the decline in U.S. emissions over the last 5 years. But here is a paper by three Harvard engineering professors claiming that over half of the emissions drop is due to gas fracking. I'm not sure who is right, but it is important to note that everything does depend on the facts; if fracking is small potatoes when it comes to emissions reductions, as ThinkProgress claims, then we should soon see emissions reductions plateau, unless there is another recession.
Very much liked the piece; two questions about carbon taxes though:
ReplyDelete1. Why not lower income taxes, and raise taxes on carbon producing fuels? Yes, there will be a substitution away from products that are produced with a large number of fossil fuels, but this will be partly offset by that people can spend more.
2. If this would mean that companies move their production to countries with lower standard, why not place a tariff on the imports based on the CO2 required to produce the product?
Both measures should also encourage more spending on research in alternative technologies without solely focusing on solar. Solar might be a solution, but it might not be the only possible solution.
Also I am rather hesitant of having the government fund investments; why not let the private sector fund investment and hold an auction for the IP right, where the IP goes to the buyer with probability q, and to the government with (1-q), at the price p determined by the auction?
That way the government is not in the business of picking winners or losers and competition can help us keep costs down and keep the progress on trend, and we can still do the technology transfers.
read the article
DeleteI did, I liked it, however, when I read passages such as this:
Delete"This idea works great on paper, and would probably work great in real life ... if countries were willing to try it. But the fatal weakness of the carbon tax is that in order for it to work, it has to be global -- implemented by most or all industrial countries -- or else carbon-emitting activity will just migrate to whichever country has the weakest standards (in the process, hollowing out the economies of the countries with high carbon taxes)."
It made me ask Q2. I don't really see a big problem with carbon taxes, provided you tax all products based on the approximate amount of CO2 it was required to produce these.
You can accomplish this through either a tax at the source and tariffs, or you can accomplish by a carbon-based sales tax.
Similarly, I do like the idea of technology transfer to poor countries and help those countries develop 'clean' fuels to our benefit, but I don't like the idea of the government picking winners.
I would therefore prefer to use the IP-law system and have the IP go to the government at a market price with a probability of (1-p).
2. If this would mean that companies move their production to countries with lower standard, why not place a tariff on the imports based on the CO2 required to produce the product?
DeleteJust think, man.
What's up with the hostility? Just asking a question here.
DeleteYour argument as I read it, is that if you impose carbon taxes, companies will avoid those taxes by moving production abroad. The obvious solution to this seems that you treat products the same regardless where these have been produced and impose a carbon tariff or a carbon based sales tax. There is no reason to move now.
Company A produces Z widgets a year in the USA of which X are consumed in the 'USA' and Y are consumed in 'China'; a tax is imposed on the widgets consumed in the 'USA', by the 'USA' because of the carbon content, and income taxes are reduced.
Why would company A move to China?
"I'm from the economics profession, and I'm here to help."
DeleteHow : "just think, man".
Thank you.
No hostility! I just don't have the time to spell out these simple problems for you...you are perfectly capable of answering your own question. ;)
DeleteAnd yes, there is a good answer.
OK, fine, Martin. You got me. I can't resist. But in the future you should really start working these examples out for yourself instead of asking me...
DeleteThere are two reasons why a carbon tax with import taxes will not do a lot to prevent global warming.
Reason 1: Price. A reduction in U.S. demand for fossil fuels will lower the price of those fuels in other countries, causing greater usage in those countries. This will mean that the reduction in emissions in the U.S. is more than the global reduction in emissions. And global emissions are all that matters.
Reason 2: Nonlinearity of the externality. If the U.S. and all its fossil fuels vanished from the Earth tomorrow, the Earth would still be in big trouble from emissions.
Now if the U.S. were really small, only the second reason would apply. If the U.S. were really big, then a carbon tax would probably be more politically feasible.
How's that?
Okay, I understand what you meant then; I read you as that the big problem was that companies would migrate, rather than that companies in other countries would increase their usage due to a lower price.
DeleteI read you as being worried about the migration of companies because of this sentence here:
"or else carbon-emitting activity will just migrate to whichever country has the weakest standards (in the process, hollowing out the economies of the countries with high carbon taxes)"
and in particular due to the part between the brackets.
Also, as I read you here above, are you not comparing the short-run effects of a carbon tax to the medium to long-run effects of what you proposed to do in The Atlantic?
For a carbon tax in the USA also sets incentives to innovate for those producing for the US-market and adopt new technology with less carbon-emissions such as solar and natural gas.
Finally and for the record, I would like to make clear that I did not post the comment under "anonymous". If that's what you meant with "OK, fine, Martin. You got me. I can't resist".
Also, as I read you here above, are you not comparing the short-run effects of a carbon tax to the medium to long-run effects of what you proposed to do in The Atlantic?
DeleteFor a carbon tax in the USA also sets incentives to innovate for those producing for the US-market and adopt new technology with less carbon-emissions such as solar and natural gas.
Actually, no! I think a carbon tax, even imposed unilaterally, would be a good thing to do. In particular, it would increase research incentives for private companies. My main point about carbon taxes is (and has always has been) that they are politically infeasible; the fact that the benefits are global while the cost is local has, it seems to me, so far proven an insurmountable barrier to getting carbon taxes passed in major emission-producing nations, and that doesn't seem likely to change soon.
Finally and for the record, I would like to make clear that I did not post the comment under "anonymous". If that's what you meant with "OK, fine, Martin. You got me. I can't resist".
Haha. Yes, I realize you are not a troll.
Haha okay! Just to make things clear. It's not always easy to read how & what people mean on the internet.
DeleteTruer words were never spoken!
DeleteIs wind power also coming along at a comparable annual decrease in price?
ReplyDeleteDo you think there are fundamental limits to solar power costs?
It used to be that the energy costs of producing solar cells were higher than the energy produced over the cell lifetime. Is it safe to presume that is a thing of the past? (My opinion is that they will eventually be comparable to agricultural costs, more or less.)
I should first say that I agree completely with Noah's policy proposal. But the analysis is superficial.
Delete> Do you think there are fundamental limits to solar power costs?
Exactly. At current costs, the balance of the system costs more than the panels: design, permitting, land, construction, power transmission and interconnection, end of life costs. In total, these costs can only go up, as the cheap sites near population centres are used first.
In contrast, now that people have got around to looking, they're suddenly finding coal all over Africa. In one case, geologists flying in found it at the end of the airport runway.
Growth in solar will turn logistic well before it contributes a Terawatt to global energy, out of the current 15 TW used 24x7x365.
There was a piece about a great milestone: solar PV in California produced 1GW (0.001 TW) for an hour or so last week! In the small print it mentioned that this was 1% of California's demand at the time. 1%. That is a great achievement. But ...
Not mentioned at all was the fact that solar PV has a load factor of about 0.2: a system that can produce 1 GW peak will produce 0.2 GW on average, because of night, and low sun, clouds, and winter, and stuff.
At present solar's costs are being measured in terms of peak production - the grid will take all it produces. Once solar PV becomes a significant player and we have to account for the load factor, costs quintuple. Remember from above, the important costs are land and construction. (You may see talk of solar paint and roof tiles powering your house. It's ... naive. This comment is too long already so I'll leave that there.)
> the energy costs of producing solar cells were higher than the energy produced over the cell lifetime. Is it safe to presume that is a thing of the past?
That's not a problem. Recent analyses have given solar cells an "energy return on investment" of well over 100 times, and the return on investment for full installations is at least 40: more, if panels last longer than their rated life. The energy cost of cells will continue to fall as manufacturing scales up.
At current costs, the balance of the system costs more than the panels: design, permitting, land, construction, power transmission and interconnection, end of life costs. In total, these costs can only go up, as the cheap sites near population centres are used first.
DeleteActually I believe most of those costs are now coming down...
Did the Atlantic ASK you to write this????
ReplyDeleteOr did you go out of your way to get it published somewhere?????
I have a regular column at the Atlantic now. Did you see the first two, about high-skilled immigration, and paternalism vs. fat?
DeleteFrom the article: "Gas has succeeded in sending U.S. emissions tumbling; what else has managed that feat?"
ReplyDeleteUh... long-ago-passed *regulations* on mercury emissions, which caused the closure of old, inefficent, and dirty summer-time coal peaking plants. And demographics. And a decline in real incomes, caused in part by high energy prices.
The NG supply boomlet had next to no impact on utilities' plans, because it happened too recently. Utilities' planning cycles are measured in decades.
What is dramatic, IMO, in your piece, is the whole gap which separates USA with Europe.
ReplyDeleteSomeone (Huntington, was it?) once grabbed from the big trash-can of history of ideas (out of which diamonds as sh... gets out) that idea of a "clash of civilization".
Some politicians, in the whole world, took hold of this concept.
Actually, IMO, there is no "clash" ; but there is a big, very big misunderstanding, between European countries & the US about the way to confront climate change (assuming "European countries" and "the US" want to solve this ; of course, like you say, the "bad guys", East Coast or West Coast, don't care...).
This is apparent in your thorough defense of "fracking" natural gas. According to you: environmentalists, instead of freacking out (sic), should try to get the risks down.
I thought that firms were doing (claiming to do) that. But...
What about having the companies giving public their magic formulaes to take out their gas?
Which data are you supporting yourself on to say that extracting, or "fracking", natural gas, produces less emissions leading to climate change?
Democracy needs free, & public, information. That starts with data. If you don't have data, we're all making wild guess. Perhaps that's a motive to be optimist. I rather not bet on that, for (God's)(my children)(my honour)'s sake !
And for data purposes, saying that " That is what is now happening with gas displacing coal. " is true only, and only for, the USA. Which is very important, but is quite far away from being universal.
Nuclear power is still very important (alas, and despite Tchernobyl, Three Miles Island, Fukushima, & lots of other "incidents" and casual deaths).
Cheers, to your optimism!
"Solar is now so advanced that Germany, although it is cutting subsidies, is installing capacity at a breakneck pace"
ReplyDeleteThis is misleading, too. Germany has _announced_ that it will cut "subsidies" in 2014. The subsidy is a guaranteed price of IIRC about 70 cents per kWh produced, for the life of the installation.
_Of course_ there's a rush to get on the gravy train before it leaves the station.
Let's not even talk about solar power in Europe, because...
Deletehere's some (official) data: in 2009, solar power in EU-27 countries accounted for 1,7% of the total renewable power production in EU-27 countries - renewable energies themselves accounting for 18,3% share of total energy production.
I let you make the count of the importance of solar power in total energy production of the 27 countries of the EU.
How about having each dollar used to drill "frackable" natural gas/nuclear energy leading to a dollar spent in research on renewable energies?
Source : Eurostat :
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Primary_production_of_renewable_energy,_1999_and_2009.png&filetimestamp=20111124103234
Economists seem to be downright horrible at doing a thorough analysis when talking about the environment, and I'm sorry to say, this piece strikes me as more of the same. The entire article rests on the assumption that NG is a "bridge" to some low carbon future, but a different analysis suggests otherwise:
ReplyDelete"Natural gas cannot be credited with the reductions in the US CO2 emissions observed in the last half-decade. Most reductions, nearly 90%, were caused by the decline in petroleum use, displacement of coal by mostly non-price factors, and its replacement by wind, hydro and other renewables. Where low price of natural gas saved some CO2 by displacing coal, it was quickly offset by its increased use in other sectors—highlighting the pitfall of justifying the current market for natural gas as a “bridge” or an interim phase of transition towards clean energy." (http://thinkprogress.org/climate/2012/08/07/651821/shale-gas-and-the-fairy-tale-of-its-co2-reductions/).
Then there's the analysis of the solar industry and your assumption that something that provides a tiny fraction of today's energy is going to seriously compete with cheap NG and coal on a time frame that doesn't involve frying the planet.
Optimism = wishful thinking. Stick to writing about macro please.
That's interesting...I'll have to take a closer look at both this study and the Lu et al. study. Thanks.
DeleteI wouldn't so quickly dismiss solar, though.
And if all else fails use a high altitude ballon to erect a mylar tube into the upper atmosphere injecting sulpher dioxide particles similar to what the eruption of Kraktoa did in the 1880s. (tongue in cheek...sort of)
ReplyDeleteNewton's First Law of Motion states: An object at rest will remain at rest, or, if in motion, will continue in motion unless acted upon by an outside force.
ReplyDeleteThis law implies that absent friction (the outside force), an object in motion will continue in motion forever.
A corollary of the First Law is that, absent friction, ZERO ENERGY is required to move.
Friction can be reduced to a negligible amount by the use of roller bearings. The coefficient of rolling friction is ~.0018. http://www.roymech.co.uk/Useful_Tables/Tribology/Bearing%20Friction.html
A moving object has energy equal to ½ mv^2 This kinetic energy must be removed for the object to stop. The kinetic energy of a moving object may be captured and stored as potential energy of gravity for later use with ~100% efficiency by rolling uphill. Note that (almost) no energy is lost to heat, light, noise, etc.
I assert: There is no more efficient or robust method of moving from point A to point B than rolling down a ramp from A down to B. I assume that A is at a higher gravitational potential than B, and the difference in gravitational potential energy is greater than the energy losses due to rolling friction and air resistance traveling from A to B.
The United States expended 27 quadrillion BTUs of energy on transportation in 2011. http://cta.ornl.gov/data/tedb31/Edition31_Chapter02.pdf
Question: If zero energy is required to move, why then are we expending such a great amount of energy on transportation?
The perfect transportation system is a roller coaster. Stations are elevated. Trains roll down ramps leading from the stations; They coast toward the next station, perhaps along a slightly declined route. They need no motors. The roll up the ramps leading to the next station; they need no brakes. They WILL NEVER GET AS HIGH AS THEY STARTED, they will have to be dragged up the final portion into the next station; this is not perpetual motion. Energy must continually be added to the system to replace frictional loses. Note that the design is for efficiency, not thrills. The slopes can be quite gentle.
Why do we not have such a system? Answer: History is not commutative. In baseball, a single preceding a home run:-> score = 2; a home run preceding a single-> score =1. Arrival at a train station before train leaves -> no problem. Train leaves before arrival at station -> problem.
If the tapered roller bearing had been perfected before the steam engine, this is what we would be doing.
Note that if Pharaoh Ramses had the roller bearing, he could have caused to be constructed at transportation system that would make Amtrak look sick.
Why drill for oil, if we can roll down hill?
Regards,
Hugh Loebner, Ph.D.
http://loebner.net http://loebnerprize.org http://en.wikipedia.org/wiki/Hugh_Loebner
Is a carbon tax so politically impossible? You know the US better than me, but EU fuel taxes are vastly higher than the US, about double. And Germany has gas prices about double the US, but runs a trade surplus,so it's not obvious that carbon taxes cause industry to migrate. Sorry, can't link to source.
ReplyDeleteNoah, I your writing on climate change is interesting, but you don't seem to have addressed that the environmental problem is Greenhouse Gases, not CO2 in particular. Because fracking releases methane (which has a @20 times stronger greenhouse effect), using natural gas may have little effect on climate change and may be worse for us if the climate system reaches a tipping point. I'd love to hear what you think.
ReplyDeleteI agree, but how do we measure this? Is this in the "carbon emissions" figures, or is it left out?
DeleteIt's left out because it's very hard to measure the amount of methane leakage generated by fracking. I believe there was a Cornell study which attempted to estimate it. The error bars on it are huge.
DeleteIt is, however, always a mistake to ignore something simply because you can't estimate it accurately.
--Nathanael
"electricity from solar panels now costs less than twice as much as electricity from coal, and only about three times as much as electricity from gas."
ReplyDeleteBut in large parts of the country, solar costs much less than this. I've heard of cases in my home state, Arizona, where solar panels pay for themselves in less than five years with the tax spiffs. Even in the same place, southern facing panels produce a lot more electricity.
I have two posts on solar panels that I think make important points not heard, especially with regard to the risk-return pecuniary aspect of an investment (solar panels are a very low risk, dependable investment for one's personal finance). They're at:
http://richardhserlin.blogspot.com/2012/03/unique-personal-financeinvestment.html
http://richardhserlin.blogspot.com/2012/03/solar-panels-new-safety-net.html
Also, what about nuclear as a big bridge? From my knowledge, it seems like we should have much more (smart, well done) nuclear (and more research on how to do it safer and cheaper).
Nuclear: Great. However, it'll take a lot of time and money...
DeleteAlso, to put it in a nice concise way, solar panels are like TIPS. They're an inflation indexed fixed income-like long term bond -- except that with the tax spiffs, in some areas they pay a vastly higher return than TIPS. And they're a non-positional good. They can be a great investment. Again, more at the posts I cited above..
DeleteUnrelated.
ReplyDeleteJust saw your twitter about the top five evil regimes.
I noted that you included the CSA because of slavery.
I think you should reconsider that:
http://en.wikipedia.org/wiki/Atlantic_slave_trade#New_World_destinations
http://en.wikipedia.org/wiki/Slavery_in_Brazil#The_end_of_slavery
http://en.wikipedia.org/wiki/File:Senhora_escravos_1860.jpg
The LCAs for thermoplastics (recyclable with a simple melt for non-processed parts), a fraction of a barrel that could be the whole barrel if we want, they don't encompass marginal GWP (global warming potential). And some thing are chunky. You only renovate your insulation every few years at very most. So if thermoplastics keep improving or if you want to kill your glass or metal part early, in both instances this acts to shorten the lifetime of your thermoplastic product. I would like to see a carbon price (even if not directly charged it could still be used for subsidizing new shock wave reactors and such) that rises in booms and lowers in recessions (vice versa for a cap), to be politically viable.
ReplyDeleteSo as the rate of improvement of thermoplastics lessens, then is when it is most economical to buy the part.