Weatherdem's Weblog

Bridging climate science, citizens, and policy

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Newest Climate Change Consensus Document Won’t Matter…

It won’t matter unless and until physical scientists leverage expertise outside of their silos and stop executing failed strategies.  In addition to summary after summary of government sanctioned peer-reviewed scientific conclusions, scientists now think they need to report on the perceived consensus on individual bases of those conclusions in order to spur the public to action.  Regardless of their personal political leanings, scientists are very conservative job actors.  They have long-held traditions that are upheld at every turn, which reduces the urgency of their statements.  As an analogy, think of a bunch of people sitting down who think for long time periods before any action is ever taken.  First, they calmly say there is a situation that requires near-immediate action.  Then they say it a little louder.  Then a handful start yelling because you’re not responding to their carefully crafted words and they think that you just didn’t hear them or you just aren’t smart enough to understand those carefully crafted words.  Then they start screaming because they’re convinced you’re an idiot and screaming will definitely work where yelling and saying those words didn’t work before.

Well, the screaming isn’t helping, is it?  You’re not an idiot.  The volume of words isn’t the issue.  The issue is you are motivated by things outside of the climate realm – things like having a job; a job that pays a living wage so you can pay for your mortgage and car payment and keep your children educated and happy.  An existence in an affluent world that allows you the time and energy to think of complex problems beyond your perceived immediate needs.  If those needs aren’t met – if you have insecure affluence – you place climate change and the environment far down on a list of priorities – just like a majority of other Americans.

But the newly released “American Association for the Advancement of Science, the world’s largest general scientific society with a membership of 121,200 scientists and “science supporters” globally” report won’t change this dynamic.  While it is important that the AAAS engages scientists and the society it serves, this report is unfortunately just the latest effort by a group of physical scientists that ignores science results outside of their discipline to try to convince Americans that immediate and drastic action is necessary.  Like previous efforts, this one will not spur people to action, mostly because the actions listed are about limits, stopping, restricting, reversing, preventing, and regulating.  The conceptual model from which these words arise works in direct contrast to the fundamentals of American culture.  We are a people who are imaginative, who innovate, who invest.

As I have written before, there is no way we will achieve greenhouse gas emissions reductions without substantial investment into innovation of new technologies that we research, develop, and deploy at scale.  There is nothing limiting or restrictive about this framework.  It it the opposite of those things.  This framework recognizes and sets out to achieve opportunities; it allows for personal and cultural growth; it is in sync with the underlying cultural fabric of this country.  It directly addresses people’s perception of the security of their affluence in the same way that developing countries’ economic growth allows people to move beyond basic material needs to higher order needs.

The reality of insecure affluence among many Americans today might be an indirect outcome of the 1%’s efforts to increase wealth disparity, but it is real.  We have to address that disparity first in order to address the real, valid perceptions of insecure affluence.  Only after Americans feel their personal wealth is secure will they have the resources to devote to higher order needs such as global climate change.  That can happen with concerted focus on investing and innovating a post-carbon economy.  But you won’t see that at the top of any policy prescription from the majority of climate scientists.

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Carbon Price Already Part of Doing Business

A report issued yesterday by the Carbon Disclosure Project generated a number of news articles today, including in the New York Times.  The report identified 29 major US corporations’ inclusion of future carbon prices in their financial planning.  This is a significant and logical development.  It is financially responsible for companies with billions of annual revenue dollars to consider upcoming costs in their planning.  These companies aren’t partisan, they’re interested only in making money.  If they think there is a way to make more money with carbon pricing than without, they’ll plan and act accordingly.

The NYT article notes that many Republicans might not like this development.  That’s due to the hyper-partisan characteristic of today’s leading Republicans.  Their worldview demands that they yell loudly at developments like carbon prices.  And despite their to-date very successful campaign to prevent policymakers from establishing a national carbon tax (which economists agree is the most economically efficient method) or a cap-and-trade system, they can’t and don’t control global policymakers.  A larger economic body than the US established a carbon price: the European Union.  China has begun limited implementation of carbon pricing.  Regional cap-and-trade systems encompassing US states and Canadian provinces with large economies exist and will only expand in the future.  What this means is US corporations doing business in the EU and China (and soon high population US states) have to take their carbon pricing into account.

The NYT and Huffington Post articles’ authors seem more surprised that companies like ExxonMobil are among those who are planning for carbon pricing than anything.  As I stated above, this is really the only logical development left for Exxon and other companies.  They can either perform their fiduciary duties and protect their shareholders’ interests or they can lose market share or fail.

This is one of the reasons I’ve supported regional carbon pricing following the continued failure to price carbon at the national and international levels.  If the price exists in a large enough portion of the larger economy, companies have to respond.  They can more easily lobby national politicians than local people who are very supportive of carbon pricing and who can run for local offices.  This is an example of my larger point that we need to implement climate mitigation and adaptation policies at the local level first.  Efforts to do this at the international level have failed time and time again.  But if thousands of communities implement their own strategies nationally and internationally, then higher levels of government have examples with which to work and grow.  More importantly, thousands of communities’ influence establishes political and social inertia that lobbying can only blunt.  This is the fastest way toward widespread policy implementation.

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Government Crisis Viewed Through D.C. Media Bubble

In the postmortem of Republican’s surrender from their extremist hostage taking and ransom demands, people everywhere are analyzing what they think happened.  One article contained glaring ideological framing.  I agree with the foundational analysis of “Short-term debt deal won’t mask big barriers ahead” by Charles Babington of the Associated Press: yesterday’s deal didn’t address the underlying problems in D.C.  But I do disagree with important parts that Charles uses as supporting evidence for his argument.


Republicans still adamantly oppose tax increases. Powerful interest groups and many Democrats still fiercely oppose cuts in Social Security and Medicare benefits.

The first sentence is mostly true.  Republicans oppose tax increases on the rich (witness the 2011 deal to lock in lower tax rates for people making $400,000 or more per year), but are more than happy to shift taxation onto the lower and middle class.  But the second sentence is even more painful to read for its vapidity.  What the heck are “powerful interest groups”?  Does Charles know who opposes Social Security and Medicare benefit cuts the most?  People that receive them!  Want to “fix” Social Security?  Lift the taxable income cap and Social Security is solvent for centuries.  But that means “raising taxes” to pay for a social good.  Does Charles seriously believe there are no “powerful interest groups” that oppose tax increases?  No, but he and the AP sure expects readers to.  And Republican supporters demonstrate that effort works.  It’s hip to trash Social Security and Medicare in the D.C. cocktail circuit, but remains wickedly unpopular in the rest of the country.

In fact, most of the “powerful interest groups” on the right – the same ones that pushed for the partial government shutdown and threatened the US’s role as the safest investment on earth -

Also, as usual, there is no mention of the national deficit’s growth under Republican President George W. Bush, George H. W. Bush, or Ronald Reagan.  But this fact is an obvious part of the Teabagger’s outrage at establishment Republicans.  It also serves another purpose: if Republicans can generate enough outrage over national debt (that they themselves accumulated), they can demand Social Security and Medicare cuts while the obscenely wealthy get their taxes cut, even though Social Security doesn’t contribute one penny to the national debt they’re supposedly so concerned about.


The Simpson-Bowles plan remains widely praised nationwide, and largely ignored in Congress.

What?!  Most of the nation doesn’t even know what the S-B plan is or what it would do.  S-B remains widely praised in the same D.C. circles where it’s cool to want to take insurance programs away from the disadvantaged, and that’s it.  Does Charles write that it’s Congress’ job to plan for and pass a budget every year?  Because they haven’t done that on time since 1996 – a time when Republicans dominated the legislature.  Instead, folks in D.C. turned to gangs as the answer – gangs of legislators trying to do the work the rest of their colleagues can’t be bothered to do.

Left out of this article, as usual, are the long list of concessions Democrats yielded all to willingly to Republicans in previous “negotiations” without acquiring Republican concessions.  This latest “reset” is no different: sequestration cuts to the budget (which nobody likes but too many voted and signed for) remain in place.  Those cuts reduce our national economic activity: reduced GDP of about 1%.  At a time of historically low interest rates, the government could rebuild our decaying infrastructure for nearly at-cost, while putting millions of people back to work who want to work.  We are squandering an immense opportunity that will not repeat itself.  That infrastructure will be rebuilt, but today’s politicians want to make sure we pay more than we have to.

Charles and the AP mention none of this.  Instead, it is “powerful interest groups” and crackpot plans.  The framing by the D.C. crowd belittles the American people.  It’s no wonder the media and Congress aren’t liked or trusted by a majority of Americans.


Australia Giving Up On Relatively Successful Carbon Market

Australia voted last week to scrap their carbon tax and replace it with a much less economically efficient cap-and-trade scheme.  The pro-business Reuters article acknowledges the only “positive” that results from this decision: businesses will save money.  Well, hallelujah.  I’m sure today’s children will be immensely grateful when they’re adults with all the resultant climate change effects that Australian businesses were able to avoid paying for their actions and saved a few billion dollars in the 2010s.  That’s one way to look at this news.  Let’s flesh the landscape out before throwing Australia under the bus too quickly.

To be fair, Australia simply moved up the date when they joined … the European carbon “market”.  You remember, that’s the market that severely over-supplied carbon credits at its outset and refused earlier this year to remove some of those excess credits for a mere two years.  In essence, the European carbon market doesn’t work.  How can you tell?  Carbon costs €4.2/tCO2 today.  When the European market started, the cost was €31/tCO2.  At one-tenth the original price, the market signal is clear: there are far too many allowances in the European market.  Have greenhouse gas emissions (note: CO2 isn’t the only GHG!) fallen in the EU since the market’s inception?  Yes, but this is a result of the continued economic malaise the Europeans inflict on themselves, as described by the European Environment Agency’s most recent report.

The temporary benefit to the earlier Australian move to the EU’s ETS is this: the flow of carbon credits is one way: from Europe to Australia.  Australia can’t export credits until July 2018.  So in the short-term, Australia could help relieve the over-supply of EU carbon credits.  This might help in raising the carbon price back to more realistic levels, but this won’t happen until 2016 at the earliest because of lower emissions and demand for permits in Australia.

There are two big negative effects of moving from a fixed tax to a floating market.  The first is that carbon will become much cheaper in Australia: from A$25.40 per tonne to A$6 per tonne.  Is carbon really only worth A$6?  In an over-supplied market, perhaps it is.  The fact that not all industries are involved in the carbon market means that we manipulate the true carbon price.  Of course, as much as folks like to talk about “free markets”, most markets are heavily manipulated by vested interests.  The second negative effect remains local: the move removes A$3.8 billion from the Australian federal budget over four years.  Australia’s Prime Minister Kevin Rudd proposed to make up this budget shortfall by “removing a tax concession on the personal use of salary-sacrificed or employer-provided cars.”  Good luck with that, Mr. Rudd.  Everybody is loath to give up a financial benefit once they receive it.  Look – more market manipulation!

Australian coal companies were more than happy to propagate misinformation to Australian energy consumers: electricity price increases were due exclusively to the carbon tax!  This highlights a common problem with any carbon-pricing scheme: special interests can more easily spread misinformation and disinformation (and are often happy to do so!) than market proponents can spread true information.  The reason is often quite simple: the truth is complex and consumers don’t want to invest the time to understand why they pay the prices they pay.  How many consumers demanded energy utilities stop raising prices before carbon market inception?  Then who was responsible for price increases?  “Market forces” is the lame excuse dished out to the masses.  How about the relentless, unquenchable hunger for ever-rising profits?  Somehow, that’s alright, but accurately pricing a commodity is heresy.

An additional piece of context: Australia suffered from record heat waves, droughts, and floods in the past ten years.  The Australian public’s acceptance of climate change related to these disasters is widespread, as is their desire to “take action”.  Well, the government took action and that same public cried uncle with slightly higher utility bills.  This proves the common refrain: people support climate policies … so long as they are absolutely free.  That smacks into reality awfully quick.  It also demonstrates that there is no such thing as a “Climate Pearl Harbor” that leads to unequivocal support for a given climate policy.  The slow-acting nature of climate works strongly against widespread, effective climate policy.


Recent Carbon Market News

A couple of carbon market-related news items caught my eye recently.  While not an exhaustive list, these items are important to discuss:
EU Cancels Carbon Auction, Prices Drop
RGGI Nets $106 Million For Clean Energy, May Hit $2 Billion By 2020

The EU auction failed because bids didn’t reach a secret reserve price.  “In the past five years, carbon prices on the ETS have plummeted nearly 90 percent.”  The core problem with the ETS is oversupply of credits.  The article points out possible solutions: backloading or long-term structural change.  I’m not an expert on carbon markets, but my understanding leads me to support the long-term structural change course.  The ETS tried to please too many vested interests simultaneously (too complex) and resulted in pleasing too few while not achieving its core objective of emissions reductions resulting from a market signal.

On the other hand, The Regional Greenhouse Gas Initiative had its successful 19th auction of CO2 allowances earlier this month.  I wouldn’t characterize it as bad news, but the clearing price of $2.80 per ton, above the reserve price of $1.98 per ton, is too low to directly impact CO2 emissions; it is also lower than the price in Europe and California.  Utilities in the region are switching to cheaper fuel sources because they’re cheaper, not because they emit fewer CO2 emissions.  According to the article, a significant portion (63%) of the $105.9 million in this quarter’s revenue and the $617 million in historical revenue are earmarked for clean energy technologies like energy efficiency, renewables, and climate change adaptation across RGGI’s nine Northeast US member states.  I would certainly like to read a more in-depth analysis of this claim.  Where specifically have the investments gone and what are the results to date?

The RGGI realizes their reserve and clearing price are too low:

Just over a month ago, the RGGI states decided to reduce the 2014 CO2 budget (the “cap” in cap-and-trade) from 165 million to 91 million tons and retire unsold 2012 and 2013 allowances.  This 45% cut is expected to boost allowance prices to $4 per ton in 2013 and up to $10 per ton in 2020, creating billions of new revenue every year. By comparison, RGGI allowance auction clearing prices have never risen higher than $3.51.

That 2020 price is still too low to have much of a direct impact on carbon emissions.  The obvious benefit is the additional revenue however.  The more revenue we have available to invest in innovation and deploy efficient infrastructure and technologies, the more we will decrease CO2 emissions.  The investment portion of the RGGI policy is a positive feature (I have read less about what the EU does with ETS revenue; I don’t claim with certainty that the RGGI system is “better” than the ETS system).  Any national-level tax-and-dividend system will be complex.  But even$20 per ton today would not, absent subsidies, provide enough incentive for utilities to switch from fossil fuels to zero-carbon sources.

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US Carbon Intensity

I saw this article today – “US Getting More Economic Bang for Its Energy Buck” and wanted to make some observations about it.  The article contains the following assertion:

Energy intensity, or the amount of energy we use to create one dollar of GDP, has plummeted 58 percent between 1949 and 2011. Even more impressive is the 66 percent decrease in carbon intensity, or the amount of carbon emitted per real dollar of GDP.

The data are what the data are.  This comment follows the data:

These improvements are what greens miss when they call for Americans to make painful, costly cutbacks on energy usage.

Let’s take another look at that data, now that we know the bias of the author.  There are 62 years in the data cited.  That means there was a 0.94% annual decrease in energy intensity. The good news is there was a decrease. We generated the same GDP dollar for less energy, as we expect in an advanced society with research and innovation.  Similarly, there was a 1.06% reduction in carbon intensity. This value is important for energy and climate policy. The amount of carbon required for every GDP dollar fell over the past 62 years. Again, this is a good thing generally speaking. Technological efficiency permeated the economy over that time, which reduced the amount of carbon we emitted.

Now an important question: What caused this decrease? Was it emission reductions? No, US emissions have increased since 1950, with only a couple of periods when emission values didn’t increase every year. The US emitted just over 600 million metric tons (MMT) of carbon in 1950 and over 1500MMT in 2011. If carbon intensity is a measure of carbon per unit GDP, then the denominator increased faster than the numerator (GDP rather than carbon), in order for the ratio to decline over time. In 1950, the US real GDP was $2 trillion; in 2011, it was $13 trillion. Indeed, GDP increased faster than carbon emissions over the past 60 years.

What magnitude carbon intensity decrease is necessary to achieve carbon concentration reductions? First of all, carbon emissions have to decrease. Granted this has to occur globally, but let’s keep our focus on the US since we can actually control those emissions. Something between 3% and 4% annual decrease would do the trick. That is 3 to 4 times the historical rate! Let’s go back to the ratio: what has to change to achieve this decrease? It’s one of two things: carbon emissions or GDP. If GDP increases at the same rate it has historically, carbon emissions would have to decrease in value. If carbon emissions increased at the same rate they have historically, GDP would have to triple or quadruple in value.  The former case is more likely because while we want GDP to grow as much as possible, tripling or quadrupling the rate of GDP growth won’t happen.

So our goal should be to decrease carbon emissions. If we can simultaneously increase GDP along the way, so much the better. We obviously should not look at “solutions” that decrease GDP. Walter Russell is unfortunately partially correct when he says that some greens miss part of reality. They place too much focus on decreasing emissions regardless of the consequences. In the real world, people still have to eat and pay for the mortgage. Walter does miss his own share of reality however. These graphs do not indicate a wildly efficient economy. We should not break out into celebration because of the graphs. We should instead examine them soberly and then determine what our goals should be. Do we want to decrease emissions and concentrations and if so to what level? Those goals will help us establish the requisite policies to achieve them. I for one do not think we are decarbonizing nearly fast enough and I think we can decarbonize faster via some common sense policies.

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Not Breaking: Obama Misjudges Republican Willingness To Negotiate

In the sordid mess leading up to this week’s sequester, the NY Times editorial board diagnoses part of the problem:

The White House strategy on the sequester was built around a familiar miscalculation about Republicans. It assumed that, in the end, they would be reasonable and negotiate a realistic alternative to indiscriminate cuts. Because the reductions hurt defense programs long held sacrosanct by Republicans, the White House thought it had leverage that would reduce the damage to the domestic programs favored by Democrats.

Obama chose excellent election staffs throughout his political career.

He did not choose competent political strategists.  He himself is not a competent political strategist.  His team spent 18 months on health insurance legislation, during which he gave away concession after concession without getting anything of value in return.  Why?  Because he wanted a Grand Bargain as part of his political legacy.  One result of this shortsightedness was the Republican wave election of 2010, when state legislatures and governorships flipped from Democratic to Republican control.  The Democratic base didn’t think Obama had done much for them for 2 years, so they didn’t show up to vote.  The biggest problem with this: your average Republican wasn’t elected; the far right-wing fringe of the Republican Party was: enter the Teabaggers to the US Congress, governorships, and state legislatures.

Obama’s team made multiple deals on financial items: the debt ceiling (Republicans don’t want to pay for the bills they charged up), the Bush tax cuts (expired after 1 extension), and the 2011 deal to initiate blind spending cuts because the Republican-led House of Representatives can’t execute their Constitutional duty to pass an annual budget on time.  Hence the leading NYT paragraph.

Time after time after time, the Teabagging Republicans have refused to negotiate or work with President Obama or Democrats.  How many times will it take before Democrats take the Teabaggers at their word: despite the trillions of debt run up by their party in the 2000s, they won’t allow Obama to run up any more debt, regardless of the cost to the US economy or its citizens.  Well, it will take at least one more time, apparently.

No more Grand Bargains, Mr. President.

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President Obama Still Can’t Negotiate

The President this morning had important statements on what the group to be led by Vice President Biden will do in the wake of the Newtown terrorist attack.  After his announcement, the press asked many questions regarding the fiscal curb negotiations.  Here is a gem of a response from President Obama (emphasis mine):

I have gone at least halfway in meeting some of the Republican concerns.

Did Americans vote for President Obama to go more than halfway in meeting Republican concerns?  They did, even if they didn’t consciously think about it beforehand.

This is a frightening admission.  The start of fiscal curb impacts won’t start for another two weeks and Obama has already given up more than half the field to his opposition.  How many football games would you win if you let the other team start at your 45-yard line?  In the last four years, Obama’s defense hasn’t kept Republicans out of the end zone when he should have been scoring his own points.  How far will Obama yield just to satisfy his own intense desire to make a deal with anybody, no matter how ridiculous they are?  The American people are on the record rejecting Republican fiscal proposals, yet Obama continues to add them to his own proposal.  If the stakes weren’t so high, it might be entertaining to watch how this unfolds.

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How Much Of The Big 3 Will Obama Give Away Just To Make A Deal?

We heard plenty of rhetoric from Obama super-supporters leading up to the November election: how we had to vote for Obama because crazy ol’ Mitt Romney would destroy the country.  It turns out Democrats are just as eager to scare-monger as Republicans are when it comes to protecting those in power from accountability.  Largely left unsaid was what Obama would do if re-elected.  I argued with many friends about this topic.  I saw what the first-term was all about: taking progressive policies off the table prior to negotiation, negotiating for too long, yielding concession after concession while not getting anything of equal value in return from Republicans who only wanted to see him lose the 2012 election.

Now that Obama has been reelected, a political “crisis” that Obama and Congress purposefully created for themselves needs our attention.  The fiscal curb is approaching.  For a couple of weeks, Obama made a good show of touring the country and showing voters how smart they were to vote for him, because he wasn’t going to capitulate and concede on tax cuts for the obscenely rich or the Big 3: Medicare, Medicaid, and Social Security.  Social Security doesn’t add to the deficit because it has a guaranteed revenue stream.  Medicare and Medicaid could be made solvent for decades with minor adjustments that have nothing to do with things Republicans think they do.

I had no doubt we would see the following.  Obama made the following proposal yesterday: in exchange for extending middle-class tax cuts, raising the debt limit, extending unemployment benefits, and new spending on infrastructure, he would continue Bush’s high-income tax cuts for income up to $400,000 and would cut Social Security benefits.  That’s $1.3 trillion in revenue for $850 billion in spending cuts.  Obama has already given up on raising taxes for incomes over $250,000.  And he threw Social Security under the bus.  For nothing in return.

Mark my words: the Big 3 will take massive hits.  And unlike in 2005 when the country resisted a Republican President doing it, a Democratic President will do it in 2012.  Republicans will successfully get even more spending cuts in programs that need only slight tweaks while raising the income limit that gets subjected to a return to tax rates under Clinton than is present in this offer.  How do I know?  Speaker Boehner quickly rejected the President’s offer.  Why?  Because it ensures that Obama will continue to foolishly engage with the Speaker in closed-door meetings instead of speaking in front of the American people.  If he did the latter, as was his initial strategy, Boehner would have to agree to the President’s proposal.  Because Republican plans consist of everything Americans don’t want to see: slashing unemployment insurance, tax hikes on the middle class while the rich walk away untouched, cuts to the Big 3, etc.

And here is why that will happen: Barack Obama wants his legacy to be defined by his ability to make deals with Republicans.  The specific details don’t matter that much to him.  He wants to be perceived as someone who gets things done, regardless of who came up with the idea in the first place.  Health care?  Let’s try the Republican plan Mitt Romney got through in Massachusetts.  Climate Change?  Let’s try the Republican plan from the 1990s.  Budget balancing?  Let’s try what Republicans have wanted for decades: no social programs and lots of defense spending.

The best part?  We’ll all do it together!  Yay!  Be happy, Democrats!  You prevented the world-ending Mitt Romney from being elected and now your party’s President will dismantle the most successful programs that kept millions of Americans out of poverty in the 20th century.  Because we all had to vote for the lesser of two evils.  Phew, disaster was narrowly avoided, wasn’t it?


Why Design of Carbon Markets Is So Important

Various interested parties have written about the efficacy (or lack thereof) with regard to carbon-related market schemes of all sizes and types.  Probably one of the more visible programs is the global emissions offset scheme enacted in the wake of the Kyoto Protocol.  This is the case for good reason: Kyoto represented the largest effort to date to deal with carbon emissions and related activities at the international level.  The short story can be summarized by two competing viewpoints.  On the one hand are people who think the Kyoto-scheme was real progress because it did something for the first time.  On the other hand, critics claim that the scheme is a failure for any number of reasons, most not actually dealing with real-world facts.

Who’s right?  Well, as usual, there are valid points made on both sides.  It is true that a global market was created where none before it existed.  In and of itself, that is probably a good thing.  It allows us to monitor how such a program works and make modifications with time if something needs to be tweaked or overhauled.  To that point, the critics make a good argument.  The scheme very likely isn’t working.  But critics will leave it at that without examining it in further detail.

I’m going to look at one part of the scheme in a little more detail and explain why the scheme isn’t working as efficiently as it should.

Quickly: there are too many credits in the market.  In economic terms, there is a drastic oversupply of offset credits.  By definition, the market will operate inefficiently.  How inefficient is the market?  After all, if we are talking about just a little oversupply, we are also talking about small inefficiency.  How does 1,000X oversupply grab you?  Yes, that number is correct and it is wildly inefficient.  This scheme is laughable (or would be if part of a comedy routine).  Unfortunately, it is what passes for real-world policy today.

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