What just about everyone is getting wrong about climate change

The Telegraph has an interesting report today on the costs of decarbonising Britain’s electricity generation system over the next 15 years. It’s vast and it’s not a sensible thing to do. But in their discussion there’s this, which shows just how badly everyone is approaching this question:

All political parties (apart from Ukip) support the 2008 Climate Change Act which commits Britain to reduce emissions by at least 80pc from 1990 levels by 2050. Analysis by the Department of Energy and Climate Change has shown that, to hit those targets, there must be significant decarbonisation of the power sector by 2030. The Committee on Climate Change has set a target of reducing carbon intensity from 450g of carbon dioxide per kilowatt hour to 50g by 2030.

This is entirely the wrong way around.

Let’s not get into the science of this, that’s always a boring and unproductive shouting match. Instead, let’s just say the IPCC is correct and then look at the economics of it. And there we find that this approach is *still* wrong. Because it is not correct to announce a target for emissions: it is correct to announce a cost that we’re willing to pay to reduce them.

This is the Stern Review argument. There’s some future damage to come from emissions. How much should we be willing to spend now to reduce such damages? We reach our answer (which translates into that $80 per tonne carbon tax) and that’s it. We should not spend more than that to reduce emissions. We should not have a target for emissions: we should be targeting only those emissions that we can reduce below that cost.

And yet every political party except Ukip is targeting the emissions number. This is simply wrong, it’s an entire misreading of what the settled science on this issue is. The settled economic science as laid out in that Stern Review and backed up by every other economist who looks at it (Nordhaus, Tol and so on). We set the price of the actions we’re prepared to undertake and go and do those things that cost less than that to do.

The reason for this is that the actual logic that says we should be doing anything rests upon that estimation of the cost of future damages. Spending more than that cost makes the future poorer than it could or should be. It is quite literally impoverishing our grandchildren.

It’s not the first time this has happened of course. When the political classes have entirely misunderstood the entirely reasonable (please note, economists might differ on what the price of emissions should be but not on the logical approach itself) result of economic research and so garbled the implementation as to end up doing the opposite of what they should be doing. But it’s impressive to see them doing so all the same.

Introducing the climate deniers at the Renewable Energy Foundation

John Constable of the Renewable Energy Foundation finds that he gets attacked for being something he is not:

Work like this has caused a flurry of unease in certain circles. REF has been falsely accused of hiding its donors, while our new Energy Institute – established with the University of Buckingham – has been branded a “front” for climate sceptics. The Independent quoted one academic who called me a “doubt-monger”.

We feel the pain, we’ve been accused of similar things ourselves. So, what is it that Constable suggests?

But it also means that there has to be a clear economic signal, which I think is best provided by putting a consistent, economy-wide price on carbon, probably through a carbon tax with corresponding offsets in other taxation. This would be flexible, so economic harm could be kept under control, and it would be technology-neutral, allowing the economy to gravitate towards the cheapest ways of reducing emissions that human ingenuity can discover.

That is also what we have been suggesting this past decade. And it’s extremely surprising to be told that we’re climate deniers for doing so. For this was, of course, the major recommendation of the Stern Review itself. That source document that everyone is using to tell us that something must be done. Stick on a carbon tax at the social cost of carbon emissions, reduce other taxes to compensate and she’ll be right. Perhaps sprinkle a bit of R&D fairy dust tax money around the place as well.

This is not an odd view, is not some denial, it’s the straight up mainstream view. We could get everyone from Bjorn Lomborg through Nick Stern, Bill Nordhaus, Richard Tol all the way out to James Hansen to sign on to this. Yes, there’s technical arguments about what the social cost is but the basic structure of what needs to be done is evident to everyone who has spent more than 30 seconds thinking about the economics of this.

But then, of course, it’s when the economics profession is most united in their view of a matter that no one else takes a blind bit of notice, isn’t it?

An interesting example of how politics works today

True, this example comes from the US, where one of us does some media work and is thus bombarded with press releases. But this really does quite take the cookie, as they might say over there:

NEW YORK – An open letter signed by over 130 faculty members was delivered this morning to NYU President John Sexton calling for fossil fuel divestment. The letter, which began to garner signatures in early February, calls on the university to divest its $3.4 billion endowment from the top 200 publicly traded oil, gas, and coal companies. The university currently has an estimated $139 million in fossil fuel investments.

The letter was delivered in hard copy this morning by the Environmental Studies department chair, Dr. Peder Anker, who stated, “NYU needs to divest, because it’s the right thing to do.”

Delivering it on paper? Isn’t that going to kill trees? However, what interested us was, well, we know pretty much nothing about New York University. This is not a comment about the divestment campaign please note (a silly idea but it’s not about that). It’s a question about, well, is 130 members of faculty an interesting number or not?

We could imagine that NYU has 140 faculty members. In which case this is highly interesting, even if not important. So, we asked. And it should be noted that this list of 130 includes those at other campuses, associated study groups, remote locations and so on. The answer for the total faculty was:

The latest number I found from 2013 is for “Academic Staff” is 6,564.

We’ll assume that Academic Staff is a rough proxy for Faculty shall we? And our rough, back of that fag packet with the cancer warnings on it, calculation is that 2% of the faculty have signed this petition.

From memory, so don’t quote us on these numbers, some 11% of Americans are convinced the Moon landings were fake, 18% think that Obama was born in Kenya and, judging from legislative acts, more than 50% are sufficiently deluded to think that raising the minimum wage increases the number of people in employment.

But, this is how politics is done. Some papers will print this release without questioning the numbers and it will become a standard tale that “the faculty of NYU call for divestment”. And thus is politics done in this modern age.

Aren’t we all such lucky people?

There’s gold in them thar sewage plants!

Quite the little story as it seems that the good old British sewage system could be a source of all sorts of lovely metals:

Although the prospect of digging through human excrement hunting for the gleam of gold may seem unpalatable, the figures show it could be a surprisingly lucrative enterprise.

An eight year study by the US Geological Survey found that levels of precious metals in faeces was comparable with those found in some commercial mines.

In fact, mining all of Britain’s excretions could produce waste metals which are worth around £510 million a year.

All most interesting and proof that where there’s muck there’s brass. However, as usual in these sorts of things, that’s not quite the whole story.

In the minerals and mining world the crucial distinction is between dirt and ore. Dirt is, well, you know, dirt. It’s made up, like all dirt is, of different elements. Sometimes, and here’s the crucial definitional difference, that mixture of elements is sufficiently lopsided in favour of one of more elements that it is commercially viable to process it. That makes it ore: dirt is not commercially viable to process, ore is.

So, as an example, the North Sea contains some trillions of pounds worth of gold. And, last time anyone ran the numbers, it would cost some tens of trillions to process the North Sea. The North Sea is therefore dirt, not ore. And so it is with our human sewage. Yes, there would be a revenue stream from processing the metals out. And the cost of doing this would be higher than the revenue.

Meaning that sewage is in fact dirt. Which is roughly where we came in, isn’t it?

What joy in The Guardian letters page

Mark Lynas exaggerates a little but is generally correct here:

Climate change is real, caused almost entirely by humans, and presents a potentially existential threat to human civilisation. Solving climate change does not mean rolling back capitalism, suspending the free market or stopping economic growth.

That “potentially existential” is the exaggeration. It’s something between not a problem and a large problem. Meaning that yes, we probably would like to do something about it even if only on the grounds of insuring ourselves. Very much the Matt Ridley point in fact (not surprisingly, as the Good Viscount has informed us on the matter and we have been able to inform him on certain points).

Then we come to the Guardian letters page in response to Lynas. Much spluttering that of course capitalism must be defeated etc. And we’re also set a challenge:

Immense changes to the economic system must be made over the next few years, and the blame game gets us nowhere. If Klein’s belief that “corporate capitalism must be dismantled’” is wrong, it is up to the right to show how the new measures required can work under the present system.

OK, how’s this for a plan?

We carry on rather as we did in the 20th century. Roughly the same rate of economic growth, roughly the same demographics (we need the growth rate to reduce fertility and thus get the demographics), roughly the same rate of globalisation and increase in international trade, roughly the same rate of increases in energy efficiency, reduction in costs of solar and so on and on. There’s also that insurance bit and as we’ve got to get tax revenue from somewhere let’s have a carbon tax and reduce the taxes on a good thing. Say, increase the allowance before paying payroll taxes (national insurance for the UK, FICA for the US etc). This will in fact solve the problem. (Maybe we might try to miss out the communism and the two world wars bit though.)

No, really, it will. For what we’ve described there is A1T, one of the scenarios that the IPCC itself uses to forecast climate change. And A1T really is just a straight line projection of the trends of the last century across the next. The carbon tax is simply adding the major recommendation of the Stern Review to our mix as that insurance policy. Under A1T climate change is not an existential problem, it’s not even a major problem. In fact, by the end of the century it’s not even a problem at all.

Now, we’re generally believed to be on the right so perhaps that answers the letter writer’s question? Or perhaps, because this isn’t actually an answer from the right but is one from the climate establishment it doesn’t qualify?

Or, of course, there’s the possibility that all of those shouting about climate change and the necessity of deconstructing capitalism and markets either have not read or have failed to understand the basic documents that lay out the concerns in the first place. That would be something of a pity, of course it would, but it wouldn’t be the first time various lefties have decided to ignore reality.