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Roy Spencer's Bad Economics

Posted on 15 March 2012 by dana1981

While they can't seem to agree about what is causing global warming (except that it must somehow mainly be something other than human CO2 emissions), the few climate scientist "skeptics" do all seem to agree on one issue - that somehow reducing greenhouse gas emissions will harm the economy.  Why these climate scientists consider themselves economics experts is a mystery, but as we have frequently detailed, climate economic studies consistently show that CO2 limits will actually save money.  Yale economist William Nordhaus, who is quite conservative in his estimates regarding future climate change costs (also see this explanation of Nordhaus' optimism by Joe Romm), recently made this point emphatically:

"...the cost of waiting fifty years to begin reducing CO2 emissions is $2.3 trillion in 2005 prices. If we bring that number to today’s economy and prices, the loss from waiting is $4.1 trillion....The claim that cap-and-trade legislation or carbon taxes would be ruinous or disastrous to our societies does not stand up to serious economic analysis."

Even economists who are conservative and relatlively optimistic about the potential impacts of climate change agree that limiting CO2 emissions will save trillions of dollars.  Yet certain individuals (who lack economics expertise) are convinced that taking these measures will somehow cripple the economy.

No climate scientist "skeptic" embodies this trait of bad economic arguments more than Roy Spencer, who has gone as far as to publish a book about free market economics.  Ironically, the proposed solutions to climate change which Spencer opposes are free market concepts, originated by the Republican Party.  As we will see in this post, Spencer has a very incorrect view on a number of climate-related economic issues.

Particulate Pollution

In a recent post on his blog, Spencer criticized the US Environmental Protection Agency (EPA) regulations of fine particulate matter.  This is a poor choice of regulations to criticize from an economic standpoint.  The Office of Management and Budget (OMB) estimates the costs and benefits of US federal regulations every year.  In 2011, the OMB report concluded as follows (emphasis added).

"the rules with the highest benefits and the highest costs, by far, come from the Environmental Protection Agency and in particular its Office of Air. More specifically, EPA rules account for 62 to 84 percent of the monetized benefits and 46 to 53 percent of the monetized costs.18 The rules that aim to improve air quality account for 95 to 97 percent of the benefits of EPA rules.

It is important to emphasize that the large estimated benefits of EPA rules are mostly attributable to the reduction in public exposure to a single air pollutant: fine particulate matter. Of its 20 air rules, the rule with the highest estimated benefits is the Clean Air Fine Particle Implementation Rule, with benefits ranging from $19 billion to $167 billion per year."

In the blog post, Spencer also shows Figure 1 below, claiming

"You will note that the most “polluted” air occurs where almost no one is around to pollute: in the deserts. This is because wind blowing over bare soil causes dust particles."

particulates

Figure 1: fine particulate measurements

The people in China and India would undoubtedly object to Spencer's claim that the most polluted air only occurs in deserts.  The Chinese government is taking steps to better monitor and reduce fine particulates because of their detrimental health effects. 

Additionally, one of the biggest pollution threats in developing regions like Africa is indoor combustion from biomass fires without proper ventilation, which may be responsible for 800,000 to 2.4 million premature deaths each year.

Spencer's reason for discounting pollution in India and China and biomass burning in Africa is to support this argument:

"...the most “polluted” air occurs where almost no one is around to pollute: in the deserts...If you really are worried about fine particulate air pollution, do not go outside on a windy day."

However, most dust and sand particulates are larger than the small particulates addressed by EPA regulations.  Moreover, the USA is not covered in deserts, and thus Spencer is comparing apples (supposed particulates from desert sand) and oranges (supposed particulates from airborne dust). 

Particulates from combustion are typically much smaller than sand or dust, remaining suspended in the atmosphere and penetrating deep into the lungs. They can also be coated with carcinogenic compounds, which explains their much greater adverse health effects and why the EPA regulates their emissions in order to protect public health and welfare.  To equate larger dust particulates with smaller combustion particulates reveals a lack of understanding of the health threats Spencer is dismissing.

Spencer's Tragedy

Spencer finishes the particulates blog post by trying to connect the dots to climate mitigation efforts.

"And I haven’t even mentioned carbon dioxide regulations. Even if we could substantially reduce U.S. CO2 emissions in the next 20 years, which barring some new technology is virtually impossible, the resulting (theoretically-computed) impact on U.S or global temperatures would be unmeasurable….hundredths of a degree C at best.

The cost in terms of human suffering, however, will be immense."

The main error in this argument is the Tragedy of the Commons - a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource even when it is clear that it is not in anyone's long-term interest for this to happen.

There is a nugget of truth to Spencer's argument, but if every nation were to make his argument (and if the USA can make it as one of the world's largest emitters, then every nation can make it), then nobody would reduce their CO2 emissions.  However, the most optimal result involves every nation reducing emissions, which is why there are international climate conferences like Kyoto and Copenhagen, to try and achieve international agreements for all nations to reduce emissions.  If everyone thought like Roy Spencer, this most optimal result would become impossible to achieve.

Moreover, the USA is one of the world's largest per capita CO2 emitters, and the largest historical CO2 emitter.  We should be leading the way in reducing CO2 emissions, not making excuses that our emissions are too small to matter.  Spencer's argument is simply irresponsible.

And of course, Spencer's argument that CO2 limits will result in 'immense human suffering' is entirely without basis.  CO2 limits will both help the economy and the poor.  In fact, one of the worst climate ironies is that the poorest nations, which contribute the least to the problem, will tend to be the most impacted by human-caused climate change (Figure 2).

vulnerable

Figure 2: Per capita emissions vs. vulnerability to climate change, from Samson et al. (2011)

Thus Spencer has it exactly backwards - if we follow his advice and fail to reduce CO2 emissions, that is the scenario in which human suffering will be maximized.

Spencer's Ill-Conceived Motivation

Spencer of course sees things differently, and does not intend to harm the poor.  In a recent interview, Spencer discussed his motivations for speaking out on climate and economics issues (emphasis his):

"[the journalist] provided several paragraphs alluding to why scientists on the other side of the issue speak out, but nowhere could I find reasons why WE speak out.

I had told her that ill-conceived energy policies that hurt economic growth kill poor people."

This is consistent with Spencer's previous statement that

"...my job has helped save our economy from the economic ravages of out-of-control environmental extremism.

I view my job a little like a legislator, supported by the taxpayer, to protect the interests of the taxpayer and to minimize the role of government."

In short, Spencer thinks government (especially environmental) regulation harms the economy, which he believes in turn kills poor people.  Of course, we have already seen that Spencer's views could not be further from the truth, as EPA particulate regulations are saving tens to hundreds of billions of dollars per year in the USA, and climate economics experts agree that reducing CO2 emissions will similarly save money.  Moreover, exactly what "ill-conceived energy policies" does Spencer refer to?  Most climate mitigation policies center around putting a price on carbon emissions, which does not hurt economic growth.  For example, aggressive installation of solar panels has lowered electric prices in Germany, and renewable energy standards have no statistically significant impact on electricity rates.

Spencer's misunderstanding of climate economics is based on his anti-government views, as he further illustrates in his pollution-defending blog post:

"government jobs programs...only create special interest jobs at the expense of more useful (to the consumer) private sector jobs."

This concept that the government cannot create jobs because any government jobs will "crowd out" private sector jobs is fairly common among political conservatives, but simply has no basis in our current reality.  Note that fellow climate "skeptic" Bob Carter made a similar argument.

In reality, there are only a few circumstances in which this "crowding out" argument holds true; generally when the economy's resources are being fully utilized, which is rarely the case.  It's certainly not true in today's stagnant economic conditions, when private investment and growth is low.  Under these conditions, public investment provide jobs to the unemployed without "crowding out" private investment.

In fact, reality is disproving Spencer's "crowding out" argument at this very moment.  If Spencer were correct, then cutting government spending (a.k.a. "austerity") would lead to private sector job growth and decreased unemployment.  On the contrary, in countries currently practicing austerity (such as Ireland, Spain, Portugal, Greece, and the UK), unemployment is rising.

Demonizing James Hansen

Spencer has also claimed that

"James Hansen...actively campaign[s] for Malthusian energy policy changes"

Malthusianism generally refers to the concern that human population growth and resource depletion are unsustainable and will eventually lead to an ecological collapse or other catastrophe.  While this may be an accurate description of Hansen's concerns (that human fossil fuel combustion will lead to catastrophic climate change if it continues unabated) Hansen's suggested energy policy is in no way Malthusian.

A Malthusian energy policy would involve limiting the human population, or rationing consumption for the sake of sustaining energy supplies.  On the contrary, Hansen thinks we have more fossil fuel resources than we can afford to burn (i.e. Kharecha and Hansen 2008).  The energy policy changes Hansen advocates for are quite straightforward - transition away from our reliance on fossil fuels by taxing carbon emissions, and return 100% of the taxed funds to the public through a dividend.  This is a free market solution, and thus a proposal that Spencer, as a free market proponent, should support, rather than attaching negative labels to it.  Hansen's straightforward explanation of this simple market-based approach is well worth viewing towards the end of the video in the link above.

Simple Economics Misunderstood

The economics of carbon pricing are actually quite simple.  Even climate scientist "skeptics" like Spencer agree that human CO2 emissions are causing some climate change.  There is a price tag associated with that climate change, just like there is a price tag associated with the detrimental health effects of particulate pollution.

When that cost is not reflected in the market price of the products which result in those emissions - as is currently the case with fossil fuels and CO2 - this is called a negative economic "externality," which economists consider a market failure.  The problem is that when these externalities are not reflected in market prices, consumers are unable to factor them into their decision making.  For example, putting a price on particulate emissions reflects their true cost on public health, encourages consumers to consume less of the products which result in these emissions, and demand lower-emissions products, which drives technological innovations and thus leads to lower overall emissions. 

The same principle would hold true for greenhouse gases.  Prior to putting a price on particulate emissions, industries claimed the costs would be immense and damage the economy, as "skeptics" now claim about CO2 limits.  In fact, industries and researchers have consistently overestimated the costs of environmental regulations.  As we saw above, the costs of reducing particulate emissions have been much smaller than claimed, and have been far exceeded by the economic benefits.  In fact, two of the largest externalities associated with coal combustion come from air pollution and climate change (Figure 3).

coal externalities

Figure 3: Average US coal electricity price vs. MMN11 and Epstein 2011 best estimate coal external costs.

That is not to say the costs will be small - the OMB found that environmental regulations have been among the most costly government regulations, but they have also resulted in the largest savings, and the largest net benefit to the economy of any government regulations.  There is no reason to expect CO2 limits to cripple the economy, especially since economic studies conclude they will save money.

Spencer appears to think otherwise because he believes that all government and environmental regulations will harm the economy.  However, Spencer's belief is factually wrong, and he should leave economics to the economists (Figure 4).

should US reduce emissions

 

Figure 4: New York University survey results of economists with climate expertise when asked under what circumstances the USA should reduce its emissions

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Comments

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Comments 51 to 89 out of 89:

  1. jzk:

    Are developing countries inherently unable to adopt geothermal, solar, wind, nuclear, hydroelectric and other non-fossil forms of primary energy production?

    Are developing countries inherently unable to ensure their buildings and vehicles are energy-efficient, run off non-fossil power sources, and suitable for their local climates?

    Are developing countries inherently unable to deploy carbon capture & sequestration technologies, should these become viable on a large scale?

    Are developing countries inherently unable to use carbon-neutral fuels where fuel combustion cannot be replaced?

    Given reports shared here at SkS suggesting global reductions of CO2 emissions to near nothing are possible by 2050, are developing countries inherently unable to do all the above over the next 38 years (if they take 2050 to be their objective to achieve net zero emissions - or negative emissions with carbon capture & sequestration), even granting that in many cases they will initially be required to grow their CO2 emissions?

    (-snipYour continued attempt to posit that there is somehow an insoluble problem with developing countries' CO2 emissions, in light of the above, fails to impress.Hidden obnoxious comment here-)
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    Response:

    [DB] Inflammatory tone snipped.

  2. Sphaeric@49,

    Highlighting a word in bold doesn't add to its truthfulness. China is part of the developing world, and you would describe its contribution as minimal? China is outputting CO2 as fast as it can. It is building coal power plants as fast as it can. Its CO2 output growth is accelerating. Have you looked at the data?

    How is China doing the best it can? It doesn't even focus on "emissions," but rather it uses the word "intensity." We already know that China doesn't care much about traditional environmental problems, they care even less about CO2. What you are hearing is pr. I am surprised you give it any credence.

    My position is that you aren't going to accomplish anything unless you get buy-in from the entire world.
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  3. Composer99@50,

    "Are developing countries inherently unable to adopt geothermal, solar, wind, nuclear, hydroelectric and other non-fossil forms of primary energy production?"

    Perhaps. But the question is more of whether they are willing to. So far, they aren't.

    I was just curious as to whether anyone had a solution to that problem. If the answer is no, then just say that.
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  4. jzk @48:
    "How do you solve the problem of the CO2 emissions of the developing world?"
    You assist them in addressing their growing energy needs with renewable energy, for starters. Develop the technology to make it cheap, as is already happening with solar PV, which is expected to reach grid parity in the USA within the next few years. China is already installing tons of wind and solar energy.
    "Gore, Hansen, Mann. How are they doing?"
    I have no idea how Mann and Hansen live, but Hansen is doing a lot of good, being willing to get arrested in protests against Keystone and coal power plants, for example. Gore could certainly do more to walk the walk, but he has done a lot to make his home 'greener' (i.e. all his energy comes from renewable sources).
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  5. jzk

    Perhaps. But the question is more of whether they are willing to. So far, they aren't.

    That interests me. Any references?
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  6. dana1981@54,

    One that comes to mind is Daryl Hannah. While I personally don't agree with her ideology, I give her much credit for walking the walk. Much.

    I actually find Hansen's proposed solution very interesting, keeping the revenues out of the hands of the government. However, without worldwide buy-in, I am afraid the results will, again, be hard to measure. Again, this is a practical problem that isn't tied to ideology. I was just curious as to whether anyone here had a solution.

    The idea that the US is going drastically reduce CO2 emissions while the developing world doubles, triples and quadruples theirs just seems very unlikely.
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  7. 52, jzk,
    Highlighting a word in bold doesn't add to its truthfulness.
    No, it highlights your mistake and misleading comment to other readers.

    China is faced with both developing quickly and not making the problem worse. China is building dirty, but also aggressively aiming clean in more than just one way and more than even just two or even three. In some ways they are better positioned because they don't have to give up on as much rotting fossil-fuel infrastructure as we do.

    But they're being aggressive about it, and your slams on the dirty, backwards nature of China's development are, quite frankly, uneducated and wrong (yes, that's in bold).

    That we're not doing more in a similar way is an absolute sin.

    My position is that you aren't going to accomplish anything unless you get buy-in from the entire world.
    Your position is that you are happy to sit back and watch civilization crumble, because you can't think of anything else to do so you'd rather stick your head in the ground and pretend that because you can't think of (or accept) any solutions, there are no problems.

    The solution is to lead, one person, one industry, one country, one continent, one hemisphere.. whatever can be done.

    Your position is that no one should listen to you, because all you have to offer is droll sophistry.
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  8. Sphaeric@57,

    China imported 175 million tonnes of coal in 2011, and estimates are that it will grow to 1 billion by 2030.

    http://articles.economictimes.indiatimes.com/2012-03-14/news/31169216_1_coal-imports-coaltrans-thermal-coal

    India's 80 million tons imported is expected to double by 2015.

    Just do the math here on the CO2 emissions that will result. This is not information that I "support" or am "against" just information.

    This is a real problem that you face, and getting all upset with me isn't going to solve it.
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  9. jzk says

    The idea that the US is going drastically reduce CO2 emissions while the developing world doubles, triples and quadruples theirs just seems very unlikely.

    You seem to overlook the fact that US CO2 yearly emissions per capita is 17.9 ton, while China is 5.3 and India 1.5.

    A fair convergence fo these figures would necessarily imply in significant US reductions (as well as other big emitters), while allowing for poorer countries growth. Of course, somewhere down the road (some decades) everyone has to cut it down. The idea is not new, mind you.

    Do you have any alternative to offer?
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  10. jzk wrote: "My position is that you aren't going to accomplish anything unless you get buy-in from the entire world."

    Yep, if Lesotho refuses to buy in to greenhouse gas reductions then whatever the rest of the world tries to do is meaningless.

    Heck... you say "the entire world". So, clearly if 'Bob Smith' from Woebegone, Arkansas declines then it doesn't matter if every single other person on the planet switches to solar power... 'nothing will be accomplished'.


    Or perhaps that's completely ridiculous. Who can say.
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  11. CBDunkerson at 04:14 AM on 16 March, 2012

    re jzk's comment, I would also add that a safe way to impasse is a big emitter to stick to the position of refusing to reduce its own share. Or conditioning this to an "entire world" agreement.

    I remember some time ago the EU setting its own reduction target, and on top of that offering an even better one IF a number of countries made certain reductions*. As a move in the game of geopolitics, that's as good as it gets, IMO.

    *my googling abilities could not locate a reference for this. Can someone help?
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  12. Alexandre@59,

    China's CO2 output in 2010 was 6.8 tons per capita. The problem is the accelerating growth, not necessarily today's emissions. That is why this is such a big problem.

    It is not like we can just stop emissions and that China can take our place. China is going to double and triple our worst emissions very soon. And, India is not far behind.

    Go look at the numbers and the forecasts, then tell me what you really think.
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  13. jzk,

    Did you miss this statement in my post?
    China is building dirty, but...
    You focus exclusively on China's growing carbon emissions without looking at everything.

    Once again you present a false dichotomy, one side of the issue to the exclusion of all else. This seems to be your MO. This is the third time within 24 hours that you've done it.

    Yes, China is growing fast, and yes, to do so they are using conventional, dirty means. But they're also planning for the future.

    Yes, if everyone would get on board it would happen faster and be more fair. But that's not the only solution available.

    Your ability to narrow your focus onto a single facet of the problem, and then to use that to dismiss all action (or appreciation of the situation in the Arctic, or whatever the subject is) should be a warning bell to anyone who reads your opinions.
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  14. jzk... I get the sense you're only reading half the news on China. You say they are building coal plants "as fast as they can." They're actually also closing down older, dirtier coal plants as fast as they can. They're quite aggressive about it too. They give generators a time frame within which they can clean up. If they don't achieve the target government officials go in, tell everyone to leave, lock down the plant and then later raze it. Job done.

    IF you look at China's energy mix projections they are changing it almost on an annual basis. A decade ago they projected mostly coal with a mix of renewables and nuclear. Those projections have dramatically changed since then. They keep bumping up wind and solar and cutting back on coal and nuclear.

    The challenge here is, power generation projects are large, long term investments. You literally can not just shut down projects without losing huge amounts of capital and having significant economic impacts. The ship of energy generation won't turn on a dime.

    Given the incredible leaps in efficiency of solar and the falling costs of both wind and solar, China clearly sees the handwriting on the wall. They can't shut down all the coal projects that are moving forward but they can change the direction of their energy mix. And that's exactly what they're doing.

    Compared to the US... We're still stuck in the dark ages of "it all a big hoax."
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  15. @jzk - Assume for the moment that we have a goal of reducing CO2 emissions. That will necessarily require that China and India reduce theirs. Several things seem obvious to me:

    1) Reducing the rate of CO2 emissions growth is better than not. To the extent that the effects of high CO2 lag the emissions, this means that we'll be in for less future unpleasantness when we finally do see the "oh shit" event that causes "everyone" to agree that we really do have a problem, no kidding.

    2) I do not see a scenario where our decision to reduce CO2 emissions makes it less likely that China and India will reduce theirs, or where our choice to not reduce makes it more likely that they will. This is especially true as long as the bulk of their emissions comes from cheap coal instead of expensive oil (if we reduce our oil consumption, arguably that makes oil cheaper, and they burn more -- but being so dependent on oil in a supply-constrained world is also an economic risk).

    3) There is much greater consensus among climate scientists that we have a global warming problem than there is among economists that cutting CO2 emissions will necessarily trash the economy. There is a history of industry and conservatives in this country declaring that doing X (raising taxes, trading SO2 credits, whatever) will result in the destruction of the economy, and they have a near-perfect record of crying "Wolf!".

    Among your various straw men about the inevitable horribleness of a low-carbon lifestyle, I note you mentioned giving up automobiles. I know several people who have kids, do not own cars, and do not want to own cars. They view them as expensive, wasteful of space, and unnecessary. I've lived without AC (in Florida), without a dishwasher, without a clothes-dryer. Of all the items on the list, the one I agree that is most problematic is refrigeration; that is a heavy energy user, and also requires more lifestyle changes if it is foregone than most of the other items on the list.
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  16. jzk@38 "I have a feeling that people living with out refrigerators, automobiles, wash machines and gas stoves aren't living that way as a matter of choice."

    Well I haven't owned a car for over 10 years and didn't learn to drive until 24. It's out of choice.
    I have lived without a washing machine. I used to hand wash clothes in my early adult/student years. I don't think my grandmother had a refrigerator until the 1960s but most homes had a 'larder' which was designed to be naturally cooler than the rest of the house. Given that Einstein was around in the 1930s/1940s I don't think people were uncivilised without these things.

    "But China is building coal power plants as fast as they can because their people want out of that lifestyle."

    Absolutely incorrect. OK yes if you dangle the idea of luxury living in front of some young 20 somethings, they'll go running after it. Is that a decision??
    No it isn't, most of the change has been dictated and many villages have been forced off their land and the land transformed into giant cities by government commands. There have been tens of thousands of riots in China by villagers happy with a very basic life but forced into an unknown urban future.
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  17. jzk - repeating earlier comments - you assist the developing world be moving to non-carbon energy sources as fast as possible so they can grow emissions. And you put a high price on their goods produced with dirty tech.

    'the reality that we do not have control over what the entire world does' And you have zero chance of cooperation while the western world makes excuses and delays. This has to be weakest excuse for inaction around. I also notice that the developing countries (the ones also most affected by climate change) are the ones clamouring for action on climate change.
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  18. "And if the answer is that it won't have any effect without everyone doing it, then there you have it."

    Limiting damage means limiting the rate of climate change. Almost anything helps. And you are ignoring that the emissions in China are heavily driven by manufacturing goods for the West. The west has simply exported its emissions to China. We can change that.
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  19. scaddenp,
    The west has simply exported its emissions to China.
    Very good point!
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  20. ""Leading the way" makes for a nice, costly symbolic gesture, but if you can't get India and China on board, the results will be difficult to measure."

    A few points about this:

    1. The belief that we know all about what China and India will or won't do, what energy policies they support, etc., is ill-advised and, I think, sometimes a little prejudiced. We think we know what they "must" want or "must" do based on a very simplified idea of them as poor countries pursuing rapid development. We don't know what our own society is going to do, so why speak for them?

    2. The US and Europe produce about half the carbon emissions in the world. We can make a measurable difference regardless, although we need China and India on board.

    3. Leading the way is step one. Step two is stiff economic penalties on any trading partner who doesn't want to pull their weight in reducing global emissions. Check out this short interview with Arthur B. Laffer (he of the famous curve): http://theidiottracker.blogspot.com/2012/02/santorum-2012.html.
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  21. Well done, Dana - You are beginning to sound like me:
    Sceptical economists are intellectually bankrupt (10 August 2011)
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  22. Many of you are wasting far too much time trying to win an unwinable war with jzk (-Snip-). Over a four week period he posted over 100 comments on my blog; some in excess of 800 words in length. He is a complete waste of your time.
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    Response: [DB] Inflammatory snipped.
  23. The Tracker@70.

    "so why speak for them?"

    (-snipGiven the concern for CO2 emissions expressed on this site, I would think one would at least pay attention to what the largest emitter is doing. Just plot China's CO2 emissions over the last 10 years. Connect the dots. Which way is the trend?

    Do the same for China's coal imports. And, consider that China has a huge supply of its own coal. So why are China's coal imports growing at such a huge pace? Hint: It is not manufacturing for the west.

    Then look at how quickly China is ramping up its own coal production. It added something like 95 million tons of coal production in 2011 and is planning on 200 additional tons of production in 2012. This is not total capacity, it is the incremental growth of production capacity.

    Ask yourself what all the coal is for. 1 billion tons in 2030? Will they be burning it, or just looking at it? What kind of CO2 emissions will that produce?

    Then figure out how much CO2 emissions you can cut in the developed world by what date. Then take one of your models and plot out the temperature difference that will occur with and without the cut, but also taking into account the massive CO2 emissions that are on the way from India and China. The temperature difference will be hard to measure because of the logarithmic relationship between CO2 and temperature.

    Note that this analysis has nothing to do with challenging anyone's ideology. In doing this analysis, I am assuming your ideology to be correct. It is a practical analysis based on the current trends in China and India. If you don't do it publicly, you ought to at least do it privately, so that you can suggest measures that actually impact the problem that you are purporting to solve.Hidden obnoxious comment here
    -)
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    Response:

    [DB] The topic of this thread is Roy Spencer's Bad Economics.  Please stay on-topic, cease with the ideological statements and the inflammatory digs.

    Please note that posting comments here at SkS is a privilege, not a right.  This privilege can be rescinded if the posting individual treats adherence to the Comments Policy as optional, rather than the mandatory condition of participating in this online forum.

    Please take the time to review the policy and ensure future comments are in full compliance with it.  Thanks for your understanding and compliance in this matter.

    Comments Policy violations snipped.

  24. jzk at 04:32 AM on 16 March, 2012

    I understand. The US cannot afford to let China take the lead as the largest per capita emitter, because it would mean lowering their life standards to, say, swedish ones.

    Or in more direct terms: The raise of Chinese emissions is a lame excuse to do nothing. The US could emit as little as many European countries which have pretty much the same life standards for their citizens. The phasing out of fossil fuels is a sensible path EVEN if we do not take AGW into account. A leader that sets the example could even have the moral and political power to demand that others do likewise, be it in commercial or political negotiations.

    Apparently, you prefer the look-I-said-he-is-bad-so-there's-room-for-my-worsening attitude.
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  25. And Martin Lack is right. Enough hijacking.
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  26. 73, jzk,

    So you really think that the best way to get China, a potentially emerging superpower, to cut back is to just do nothing ourselves, because they're not cutting back, and even if they are, no one else is, and even if we do, they're going to emit more than us eventually anyway?

    WTF?
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    Response:

    [DB] Note that a response to you was moderated out due to ideology and inflammatory tone.

  27. Further to my #71.
    Another one of my posts that highlights the fact that the last bastion of denial will always be one of economic rationalism was Being economical with your scepticism (3 October 2011), in which I concluded:
    "...This would appear to lend weight to the argument of those that have suggested that it is Capitalist economics and/or consumerism that is/are the problem; what [Herman E.] Daly calls 'growthmania' and Hamilton 'growth fetishism'. Whatever you want to call it, some economists... appear to have decided that they cannot afford the IPCC to be right; and are therefore willing to grasp hold of any evidence they can find (or that other conservative think tanks feed to them) that may confirm this view. In other words, this is cognitive dissonance leading to confirmation bias; being dressed-up as economic rationalism."
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  28. Unfortunately, you can't have a rational debate with people who have already made their minds up because of their political/free-market viewpoint.
    This, recently, from Senator Inhofe shows what sort of people we are dealing with here :

    "I was actually on your side of this issue when I was chairing that committee and I first heard about this. I thought it must be true until I found out what it cost."

    That's right : he went along with AGW until he found out he didn't like what he believed it was going to cost !

    Listening to the rest of that interview, Inhofe is living in a world of his own creation, constantly battling against those whom he calls "liberals", i.e. anyone to the left of Genghis Khan, it would seem.

    You can see what sort of rubbish he believes in when you look into the sources he brings out at the beginning - the "liberal" British Telegraph (actually columnist Christopher Booker in the famously right-wing Telegraph); the Financial Times (actually blogger Clive Crook in the Financial Times); and the UN and IPCC, or some blustering combination of the two, somehow (actually Hal Lewis's resignation letter from the APS, and Dr Philip Lloyd Pr Eng, MD - Industrial and Petrochemical Consultants).

    As for the Newsweek 'condemnation' and the study in the "liberal" Nature : Inhofe is seeing exactly what he wants to see, rather than what is actually there in real life. What a surprise...
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  29. JMurphy - I'll be doing a blog post on that Inhofe interview in the near future.
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  30. If Genghis had to be put on the political spectrum of his day it'd surely be on the left. He instituted social reforms and practiced religious tolerance. Not a great neighbour however.
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  31. The real problem with the analysis is it assumes costs to reduce emissions. Over the medium to long term, there are HUGE savings to renewables. And when you factor in the trillions saved in avoided wars - the ledger tilts dramatically towards renewables.

    We are in no brainer territory.
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  32. I am convinced that we are experiencing global warming and that it is caused by greenhouse gases. But I have two concerns. The first is the estimated of the cost of the reducing the use of fossil fuels. I am not an economist, but I am a chemical engineer with over 30 years in the approval, design and construction of chemical plants. I have developed a program to compare the costs between using the current mix of energy sources and limiting the use of fossil fuels between now and 2100. This program and sources for the data can be found at https://docs.google.com/spreadsheet/ccc?key=0Alb0IxaBZzT8dEE4a2tOQW1OdEZYQW02blk5RlhRQUE
    I am sure that some of my data and assumptions may be obsolete or incorrect. You can play around with it by changing the inputs on Sheet 2 and I would appreciate any feedback on more correct information
    For the case shown I assumed a population in 2050 and 2100 of 10 billion and a world per capita energy usage of ½ US current in 2100 and half way there in 2050; a fossil fuel reduction from current levels of 25% by 2050 and 50% by 2100; no increase in Nuclear or Hydro; a 50/50 split between wind and solar energy to make up for the reduction in fossil fuels and I adjusted the fossil fuel cost from $0.02 sited in the source to $0.05 and the cost per KWH generated by fossil fuels from $0.087 to $0.117.
    In the above case the program calculates the cost of limiting fossil fuels to be $308 Trillion between now and 2050 and $1,394 Trillion between now and 2100. That equates to an average annual per capita cost of $788 between now and 2050 and $1,565 between now and 2100. All these cost are in today’s dollars. Actual numbers will be much higher.
    The second concern has to with land usage The IPPC says that there is currently 0.6 acres of cropland per person, but if you subtract out non-food or minimum calorie acreage (cotton, wool, tobacco, coffee and tea etc.) it is closer to 0.5 and if you add 3 billion more people it drops to under 0.4.
    In the US it takes 0.37 acres of wheat to supply one person with 2000 calories a day for a year. With the world average wheat yield it takes 0.75 acres. As can be seen by the previous sentences there is room for improvement in yield but there are also reports that climate change is reducing yields. A 2000 calorie/day diet based on the US food pyramid takes in the neighborhood of 1.25 acres. As developing countries become more affluent their citizens will want to improve their diet. I do not know what the total amount energy required to produce the world’s food supply is but one site said that 2% of our total energy usage is required to make the fertilizer currently consumed. I apologize for not providing references for this portion. I hope to rectify that situation in the near future. I just think it would be a real shame if the carbon dioxide we eliminate by limiting fossil fuels is replaced with carbon dioxide from changes in land used to feed the world.
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  33. Makes no nukes look bad doesnt it? Does the spreadsheet take off the subsidies?
    IEA
    estimates fossil fuel subsidies at 409 billion per year. Furthermore, the cost of petroleum and to lesser extent coal will rise no matter what because of production constraint so you cant park all of that cost at door of fossil fuel reduction.

    You also look at the full analysis done by economists instead of a spreadsheet (eg Nordhaus or Stern).
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  34. scaddenp @83
    To answer your question the source http://en.wikipedia.org/wiki/Cost_of_electricity_by_source I used for the cost data states

    "The availability of various incentives including state or federal tax credits can also impact the calculation of levelized cost. The values shown in the tables below do not incorporate any such incentives."[11]
    Incentives, tax credits, production mandates, etc. are discussed in the overall comprehensive EIA report: "Annual Energy Outlook 2011".[12][13][14]



    I spent several hours this morning trying to find the specific data like I used for Nordhaus and Stern. If you could provided a site that has this kind of information I would greatly appreciate it.

    The one reference I did find http://en.wikipedia.org/wiki/Climate_change_mitigation said that for a reduction in fossil fuels to 75% in 2050 Stern estimates a cost of 2% of GDP. Because my calculation are in today's dollars in assumes all costs rise at the same rate. I get a cost of 12% of %GDP. If I assume that GDP rises at the same rate as energy usage (or 2% above inflation) that % is reduced to 8% of GDP. In the case on the spread sheet I raised the cost of fossil fuels by 150% from $.02 to $0.05 /KWH to account for price increases above inflation.
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  35. dunc461 - I am not an economist either. What I am challenging is the validity of the spreadsheet as compared to more sophisticated economic model, especially say DICE2007.
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  36. Nordaus (eg. try here for some detail

    Furthermore, the costs are on basis "US is the world". Economic analysis has to compare global costs of mitigation versus cost of adaptation. I'm going with the published analyses over a spreadsheet, because like you, I am not an economist.
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  37. Scaddenp - Thank you very much for the site reference. It led me to a spreadsheet version of the Dice program C – 1 on http://www.econ.yale.edu/~nordhaus/homepage/DICE2007.htm . After review of this spreadsheet I feel there is good agreement between the portion of his model dealing with abatement/preventative costs and mine. Of course his model is much more comprehensive but because his “abatement cost equation is a reduced-form type model in which the costs of emissions reductions are a function of the emissions-reduction rate.” It tells us nothing about how those reductions are to be achieved.
    Based on total carbon emissions for his base case he expects energy usage in 2055 to be 166% over current and 233% in 2105. Based on total carbon emission for his “optimum” case he expects energy from fossil fuels to be 126% of today’s values in 2055 and 140% in 2105 He projects total abatement costs for his optimum case to $1.6 trillion by 2055 and $12.3 trillion by 2105.
    If you plug his constraints into my spreadsheet you will find that although fossil fuel usage increases by 40% the energy supplied as a percent of the total drops from 86% to 51%. Holding nuclear and Hydro at current levels, Solar and Wind must contribute 44% by 2100 with 35% from wind and 9% from Solar unless the price of solar drops significantly.
    On the other hand, if you assume the price of solar does not drop and only 50% of the energy required to make up for limitation of fossil fuels can come from the wind with the other 50% coming from solar, the preventive costs jump to $65 trillion in 2050 and $373 trillion in 2100. That is why it is important to look at HOW we get from here to there.
    I am only trying to verify the assumptions Nordhaus and others are making with respect to abatement/preventative costs over the next 38 and 88 years. That is why I requested the latest information available on the inputs to my spreadsheet as I only have information that is available for free on the web. What is the latest thinking on future energy usage and fossil fuel limits? Is nuclear usage to be expanded? Can we expect significant reductions in solar PV costs in the next 38 years? Etc.
    With respect to your final comment, while my costs are report in US $, as are Nordhaus’s, we live in a global economy, the price of coal and oil is the same around the world. Most of the components for a power plant will be built by the countries that can supply them for the lowest costs. There might be some differences in construction labor costs and operating labor costs. But capital and fuel costs are the largest factors.
    Finally I must say that my faith in economists has been shaken. Despite the fact that it is well known the excessive private debt in the form of leveraging caused the depression the economists failed to warn us when the private debt as % of the GDP exceeded the levels reached in the late 1920’s in 1987.and went on to be almost twice as high in the early 2000’s. Nor did they attach any significance to the fact that it had taken 34 years US home ownership to grow by 3% but in 10 years starting in 1994 it grew by 7.8%.
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  38. dunc461 - it seems you are in the mode of "knowing the price of everything and the value of nothing" - in the real world, it is cheaper to use renewable energy than it is to use fossil fuel, when all variables are included. That will not change based on the number of people on the planet. That will not change based on the energy density of the economy.

    Buildings take ~40% of our annual energy usage, yet we know how to make zero energy buildings. Over the life of the building, the savings of not paying utilities greatly exceeds the initial cost of conservation and renewable energy. Therefore the cost of mitigation is negative for buildings (ie you save money, so there is no cost. There is a savings). This comes from the real world, from experience, from the evidence of reality.

    If your spreadsheet does not report this result, please adjust accordingly.

    And you state many times no nuclear. This is an assumption that the Chinese, for one, are invalidating right now. Again, your spreadsheet needs adjustment.

    The task of avoiding the worst of global warming is mainly the task of ending coal now, and switching off of oil over the next 20-30 years. If you think Americans won't figure out how to do that and make/save money, you are not a student of history. I suspect clever people in other countries will also contribute.

    The idea that getting off of fossil fuels is a cost is an assumption. An assumption that is not born out by reality. It is a savings.
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  39. Dunc461 - coal does not cost the same everywhere. Labour, technical extraction and transport costs vary enormously. Renewables cost is also very location dependent. Where I live, we have no subsidies on any form of generation. Wind is competitive with coal because of high availability. Ditto for Concentrated Solar Power in other locations. (You can expect reduction in PV, but SCP is technology of choice for large scale solar). Can I strongly recommend you look at Sustainable Energy without the hot air

    I also wouldnt rush to blame economists for perceived ills. Plenty of cassandra's out there because it is hard to convince politicians to hear unwelcome news (just like AGW "skeptics").

    I also have considerable faith in markets to deliver. Kill the subsidies (all of them), ban new coal-fired generation, then leave it to the market to sort out best replacement generation.
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