"System change is now inevitable. Either because we do something about it, or because we will be hit by climate change. '...

"We need to develop economic models that are fit for purpose. The current economic frameworks, the ones that dominate our governments, these frameworks... the current economic frameworks, the neoclassical, the market frameworks, can deal with small changes. It can tell you the difference, if a sock company puts up the price of socks, what the demand for socks will be. It cannot tell you about the sorts of system level changes we are talking about here. We would not use an understanding of laminar flow in fluid dynamics to understand turbulent flow. So why is it we are using marginal economics, small incremental change economics, to understand system level changes?"

Monday, November 16, 2015

In It for the Gold

Where's my cut? "Global warming" is alleged to be a $400 Billion (that's Billion with a B) "industrial complex".

You'd think I could round up a few hundred a week for my efforts...

Of course, at best that's a maximizing view of the non-fossil energy sector, not the "global warming industry".

It's reasonable that this should be a big number. Is it accurate?

Regardless, it's not accurate for the throughput of the various expert communities that touch on climate. Though by now that amount is itself a Big Number, it's not That Big.

It may be creeping up to a couple billion, again if estimated inclusively (with WG II and WG III related research folded in. There's another billion or so for NASA earth observations.

The first Clinton administration decided to count earth observation satellites in the U S Global Change Research Program's budget, thereby painting a bit target symbol on NASA's back to go with our own one.

This all said, though I hate to see NASA cut, with the US in relative decline to other countries, and possibly in absolute decline, it seems unreasonable to expect America to foot the bill for everything of global value, and under present disconcerting circumstances foolish to rely on it doing so.

Just by coincidence this came across my feed just moments after I wrote the above:


Rob Ryan said...

You've already given the 2016 Presidential election to Hillary?

Tom said...

Actually non fossil fuels (including generation, manufacture, investing and advocacy) are estimated at about 10% of the energy sector. Pity that 10% so far produces less than 1% of the world's energy supply, but there's hope for the future. Anyhow, 400 billion is probably on the low end. Might be 50% more than that.

Tom said...

Actually that's wrong. It's not non-fossil fuels that comprise 10% of expenditures. It's pure renewables. Doesn't include hydro or nuclear.

Michael Tobis said...

Have you got a more or less authoritative source for this? I'm not saying it's wrong, but a lot depends on how you count.

I've seen such calculations that conflate capital and operating expenses pretty horribly. These make rapidly growing sectors look much worse than sectors that are stable or in decline.

Michael Tobis said...

I'm not hugely enthusiastic about Mrs Clinton, but any other scenario I can imagine is too horrible to spend much time thinking about.

By the way I find the habit on all sides of referring to Mrs Clinton as Hillary pretty much undignified but I guess it's been focus tested.

Tom said...

Looking at investment only, the IEA says global investing in energy was $1.6 trillion in 2013. https://www.iea.org/publications/freepublications/publication/WEIO_2014_ES_English.pdf

Bloomberg had investment in clean energy at $268 billion for 2013, far more than 10%.https://www.iea.org/publications/freepublications/publication/WEIO_2014_ES_English.pdf.

Total global spending on energy was $6 trillion in 2011 and has been climbing at about 5% annually since. https://en.wikipedia.org/wiki/World_energy_consumption. In 1990, global spending was $2.7 trillion.

Michael Tobis said...

Yes, that'san example of the fallacy exactly. Investment is not a measure of cost, unless the growth rates of the sectors are the same. To fix it, you have to amortize the costs over the expected benefits.

Let me try to make this clear with a concrete example. If I am spending $2000 a month driving an old Hummer, and trade it in for a new Prius, reducing my driving costs to $500 a month, but I am $20,000 out of pocket on the trade-in, my annual costs will go from $24,000 to $26,000, but my costs per mile have been quartered. The first way of thinking about it is not right, because my $20,000 that I spend this year will benefit me for years to come.

Tom said...

It actually gets worse. Focusing on investment skews the argument in favor of fossil fuel power production, as of course solar and wind operating costs are much lower.

But all of this is fairly nebulous, in that interconnection, switching and monitoring costs are not accurately apportioned by generating power source.

Levelized cost of energy skews in the other direction just as badly, and is of course derided by those favoring fossil fuels. Nobody has come up with a middle course.