Bad policy, including continuing the effective no-policy policy which is the easiest bad policy, is probably the likeliest outcome. But we very much need a good policy despite the odds.
Doing policy right is a huge challenge to global collective decision-making, which (GATT, WTO, IATA etc.) has some successes that people somehow like to forget.
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One idea going under the rubric of “lukewarmism” is that getting to zero is not important, so that the no-policy policy is fine. On this view, we just need to slow down a little. This simply fails to understand the physical constraints on the problem.
Another view, until recently called the "breakthrough" view and now being rebranded as "ecomodernism", also supports the no-policy policy while at least bowing in the direction of a carbon neutral future.
That new “ecomodernist” push implicitly restates the Breakthrough Institute (BTI) position that getting to zero follows from technological innovation alone. Again there is no need for a policy instrument on that view. That is exactly the stated position of the main players in the fossil fuel industry. But the immense economic interests of that industry are in slowing that transition down. If they extract the full book value of their reserves, which “fiduciary responsibility” says they are supposed to do, the outcome will likely be somewhere between grim and cataclysmic. Avoiding that is the reason we need a globally binding policy.
Bjorn Lomborg adopts both of these positions - he advocates that the problem, while real, is smallish AND that technology will solve it left to its own devices with perhaps some research subsidies but no regulatory effort.
“Lukewarmism” and “ecomodernism” are wishful thinking in my opinion.
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In the real world, there is a fossil fuel industry, and the imperatives of capitalism put them under enormous pressure to do us harm. Some sort of global regulatory instrument is needed. Doing this responsibly and effectively will be very difficult. The fact that lots of people would just as soon that such a process fail for their own ideological reasons just makes matters even harder.
On the whole, I agree with the ecomodernism perspective, that we ought recognize the immense capabilities of modern science and technology. Though I have some problems with his recent essay, on the whole I agree with Stewart Brand (who indeed has always been an inspiration to me) that we should work toward a world not just of defending a shrinking natural endowment but of enhancing it. See the Planet3.0 manifesto (which I wrote, drawing extensively on Bruce Sterling and David Schaller) for more. Is it ecomodernist? Maybe so.
But to the extent that the ecomodernist manifesto does not take account of the real-world obstacles to that goal, it ducks the very question it pretends to be addressing. There is no workaround to a global, binding treaty.
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UPDATE: Hmm, there's a problem with this stance. The Planet3.0 manifesto is pretty handwavy on how to jump those hurdles too (though it does at least allude to them).
More to follow.
If I understand you properly, you make an interesting point. In the absence of regulation, the fossil fuel industry probably has a legal obligation to maxmise the return on their investments (or on their fossil fuel reserves). That's what their investors have a legal right to expect. It's possible, also, that they have a legal duty to not lobby for any form of regulation that would reduce this return. That's why we have regulators. They're meant to make the difficult decisions that businesses may not like, but that are of overall benefit to society.
ReplyDeleteSo, the only way we can proceed is to introduce some form of legislation that makes it more difficult (impossible?) for the fossil fuel industry to realise all their possible financial returns.
This is kind of why, at the end of the day, I blame our policy makers and only them (well, and maybe us for electing them). There clearly is an awful lot of misinformation being spread around, but our policy makers can't work out who is credible and who is not, they're either ignoring what is obvious or are not very bright. Again, possibly our fault for allowing our system to develop in the way that it has.
I am not averse to compensating the fossil fuel interests for some fraction of their losses. Indeed although it rankles I think it is necessary. But any further reserve discoveries after some date certain should not be compensated.
ReplyDeleteA point of negotiation would be what that date should be.
Actually, I wasn't really thinking in terms of compensation, simply that we have a system where it seems that the fossil fuel industry is almost legally obliged to obtain the best return for their investors.
ReplyDeleteYou may be right, though, that some kind of compensation may be necessary. I guess it's possible that there are many involved in the fossil fuel industry (investors and management) who may like to see some acceptable way out. They presumably would rather not be regarded as responsible for climate change, but can't simply decide that some moral obligation trumps their legal right to try and achieve some return for the investors - however much we might prefer it to be the other way around.
Even if you're not a total free market zealot or a Freakonomics sycophant (I'm neither though I'm far from a socialist), pricing does provide strong incentives. A reasonable way of pricing externalities would motivate leaving fossil fuels in the ground.
ReplyDeleteOf course, it would need to be implemented in phases else many very bad consequences would ensue - after all, it's a rare person who has no dependence on affordable fossil fuels.
But so much good can come from such a plan and it gives those with the capital assets an out to their fiduciary duty to act in the best financial interests of their shareholders. I say "financial" because it's in everyone's best interest to have an inhabitable planet so, without that modifier, it's easy to contend that leaving fossil fuel assets in the ground is already in their shareholders' best interest as, in fact, it is. But that's not how Delaware law works.
I'm no expert on securities law i the US, let alone elsewhere, but I do understand incentives. That has to be the wedge, I don't know where the crack is though.
Personally, I was glad Porter's piece in the NYT got so little buzz - I was disturbed by it as I read it, and not just because it was so reliant on Breakthrough ideas.
ReplyDeleteThat is, what is disturbing is: what if it is true? What if we can't change unless 4B people substantially raise their standard of living. There is simply not enough earth for that.
/ecologist's hat
Best,
D
ATTP my understanding is that the legal obligation to maximise returns thing is a myth: http://www.washingtonpost.com/opinions/Harold-eyerson-the-myth-of-maximizing-shareholder-value/2014/02/11/00cdfb14-9336-11e3-84e1-27626c5ef5fb_story.html
ReplyDeleteJamie,
ReplyDeleteInteresting, thanks. It's no great surprise that I was in error when it came to the basics of corporate law :-)
Although, I guess this - from the article - does suggest some kind of grey area
At any other time, corporate law simply dictates that directors are supposed to help the company prosper and do nothing to benefit themselves at the company’s expense.
Indeed although prospering is much weaker than maximising. It's a convenient myth for corporations to put about but it's quite surprising how deeply entrenched it has become considering it never existed. I certainly assumed that it was a legal obligation until I did some digging.
ReplyDeletePerhaps the definition of the responsibility to shareholders to maintain share value is not written into law, though I recall reading elsewhere that in the US this is explicitly the case. It is nevertheless the case that the pressure to do so is immense and corporations do behave as if that were their sole purpose.
ReplyDeleteFurther, I have always believed that it SHOULD be their sole purpose, at least insofar as publicly traded corporations go, BECAUSE it makes their role well defined and their motivations easy to legislate.
The problem is when these soul-less artifacts are allowed a voice in policy, because they will automatically and without much hindrance subvert the process. Which we plainly see nowadays.
Lukewarmers do not think getting to zero is unimportant. We just think it is not possible.
ReplyDeleteThe developing world is not going to quit developing.
Energy consumption in 2075 may be six times that of 2010.
The developed world is successfully lowering their own emissions, but not by enough to compensate for the explosion of energy consumption in the developing world.
There are options:
1. Force the developing world to slow down their development by mandating non-fossil fuel sources.
2. Provide technology transfer to clean up the pollution of the coal plants the developing world would tend to employ.
3. Pursue fracking enthusiastically, convert from coal/oil to natural gas across the world.
4. Subsidize nuclear power plants, build them in modular form and spread them across the world.
The world's GDP grew by 3.3% in 2014. Emissions of CO2 dropped.
You probably don't remember why you all were so busy trashing The Breakthrough Institute, Bjorn Lomborg etc. so lustily. If you could reexamine what they wrote in the light of what has happened over the past 15 years you would have trouble escaping the conclusion that they were broadly correct.
Ex. 1. Bjorn Lomborg and The Breakthrough Institute have called loudly and frequently for investment in innovative energy technology. The U.S. government listened. They funded some duds like Solyndra. But funding Elon Musk is starting to look pretty smart.
Similar innovations such as a new windmill with no moving parts, improvements in fracking, the continued progress of solar all point to the importance of technological innovation.
Of course, neither Lomborg nor TBI say that technological innovation alone is the answer. You just made that up.
Far from Lomborg advocating that technology be left to solve it alone, he supports a carbon tax and many other worthwhile measures. So do TBI.
In the real world, fossil fuel companies donate heavily to green NGOs, invest in renewables and generally are against the wholescale killing off of their customers. They also do many bad things.
Doing policy right might start by recognizing that demonizing those with the correct view of the world is not a good start.
Jonathan Gilligan writes:
ReplyDeleteTwo brief comments:
1. The ECON 101 definition of economics is that it is the study of allocating and using scarce resources. BTI and now Ecomodernism respond by invoking the ghost of Julian Simon to declare economics obsolete because there is no such thing as scarcity: "To the degree to which there are fixed physical boundaries to human consumption, they are so theoretical as to be functionally irrelevant."
2. On the real world obstacles you refer to, David Victor's book, Global Warming Gridlock had some very nice, pithy, and insightful discussion of the policymaking pitfalls that arise from what Victor called "The Engineer's Fallacy" that if you merely built a better and cheaper nuclear reactor/photovoltaic/wind turbine/whatever the world would beat a path to your door and "The Economist's Fallacy" that if you simply put the right price on carbon emissions, the world would automatically adjust to an optimal mix of fuels.
Meanwhile, on the technology front, John Quiggin notes this morning that "we now have just about everything we need for a technological fix for climate change, based on a combination of renewable energy and energy efficiency, at a cost that’s a small fraction of global income (and hence a small fraction of national income for any country) ." If Quiggin's analysis is sound, then the technology is pretty much there. The challenge will be to devise the kinds of policies (both formal governmental regulations and informal private-sector and community norms and expectations) to deploy that technology quickly and effectively throughout the world.
Quiggin might be two years early. But then so was I. I predicted 2015 for parity for solar.
ReplyDeleteSad part is part of the new paradigm comes from higher utility prices, not cheaper solar.
If Musk can make the battery thing work and regulators can persuade utilities not to overcharge solar home owners for grid connections, it will be quite soon.
So glad to see some activity here. I'm a little distressed at the world's ignorance of the downside of fracking, though.
ReplyDeleteAside from the short term cycle boom and bust and side effects (water, earthquakes, overused underfunded infrastructure in local communities, exploding trains, leaking pipelines) it is a form of extreme fossil, which means the whole process is more complex and exploitative than the stuff that's all used up that was easier to get at. Other forms of extreme fossil are deepwater drilling and tar sands. The externalities are being glossed over by wishful thinking or active dishonesty. They are fraught with privatization of profit and socialization of risk, though at this point socialization is too polite: it's more like devil take the hindmost.
People like Rusbridger are finally getting the idea. While I sympathize with the necessity to be a realist (Obama, HRC), it is past time to point out that this is not working. The organization of the confusionists is too good, and the time too short, for a moderate approach to do what is needed to avoid real trouble. (Maybe the developing El Nino will knock the pause stuff out of the park, but rather dreading it.)
I note this, which says it one possible way: "sleepwalking into the future"
http://www.theguardian.com/environment/2015/may/06/climate-change-must-be-tackled-by-the-markets-say-city-grandees
Given our politican mayhem, perhaps the market is our only hope. But compromising with the awful is not the way.
Well, that's opinionated of me, there you have it.