Category: Climate business

Do you want to fly or do you want to eat?

The title to this post may seem like an odd question, but I think it is an inescapable one, as I hope to demonstrate. The US Department of Agriculture has a mandate for a huge biofuel planting programme, the largest in the world in 2005. Currently around 13.5 billion gallons are produced per annum. The aim is to grow this to 36 billion gallons by 2022.

Then along came the US drought of 2012. US farmers are asking the USDA to forgo the biofuel mandate. It turns out that that they need all of that corn to keep food prices down.

The fact that biofuels compete with land for food crops and can produce food shortages has been noted by others. The US drought has simply demonstrated that the issue will affect rich and poor nations.

But the dream of using biofuels on a large scale for transportation has always been fanciful. US production targets for biofuels have been based on assumptions about technological developments and the availability and productivity of farmland. A recent report, using satellite data about climate, plant cover and usable land, showed that meeting current US biofuel production targets with existing technology would require “devoting almost 80 percent of current farmland in the US to raising corn for ethanol production or converting 60 percent of existing rangeland to biofuels.”

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Nick Smith: another fossil fuel fail

MP Nick Smith in a NZ Herald opinion piece this week uses the fracking debate to advance the cause of fossil fuel mining. He claims that fracking is important in the development of geothermal energy and then moves seamlessly to the notion that we are desperately in need of unconventional natural gas in order to save us from falling back on coal, which we will otherwise “inevitably burn”. In defending fracking he manages to nicely couple the fossil fuel natural gas with a renewable energy source, geothermal.

It’s not my purpose to argue here about fracking as a technology. What is dismaying about Smith’s article is the complacency with which he advances the cause of natural gas. Writing enthusiastically of the huge unconventional shale gas resources in the US, he claims gas emits one-third the greenhouse gas emissions of coal. I know its emissions are lower, but it was news to me that they were as low as that. I could find no source to substantiate that figure. A little over half is the best figure I have been able to locate, and there are big questions about methane leakage in the fracking process. However let that pass. The real issue is the unrestrained pursuit of unconventional fossil fuels, which as James Hansen has reminded us often enough will mean game over for the climate.

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NZ ETS, you are the weakest (international) link

Simon Johnson (Mr February) argues that the New Zealand Emissions Trading Scheme (NZETS) is “the weakest link” due to its high exposure to the international carbon market. The strong “international linkage” is the other side of the coin of the uncapped design of the NZETS. Both features reinforce just how ineffective the NZETS is in providing an incentive to reduce greenhouse gas emissions.

Who remembers the The Weakest Link? The quiz show with Anne Robinson the disciplinarian female host with the popular catchphrase “You are the weakest link. Goodbye!” Yes that’s today’s bonkers metaphor for another post on the NZETS. In addition to the observation that I would love to say “Goodbye!” to the ETS, there really is a relevant connection to the economics literature.

“Linking” of emissions trading schemes means that units from one ETS can be imported and surrendered by emitters regulated by a different ETS. There are papers and blog posts about international linkage. The key economic benefit claimed for linking two or more ETS, assuming that they are otherwise sensibly designed, is that the lowest-cost ways of reducing emissions within the linked schemes become available (via emissions trading) to the emitters of the linked schemes.

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Cold Cash, Cool Climate

I’m no entrepreneur, but I enjoyed reading energy scientist Jonathan Koomey’s book Cold Cash, Cool Climate: Science-Based Advice for Ecological Entrepreneurs. It’s comforting to be reminded that not everything in the mitigation of climate change depends on governments, that there is a lively creativity abroad in the entrepreneurial world which can take up the challenge without waiting on the interminable processes of governmental negotiation or the rigidities of big business.

Koomey makes much of this. He records that in his experience it is those who carry the entrepreneurial spirit who are most comfortable with rapid change and least tolerant of fossilised thinking.  “Their whole purpose in life is to intensify and encourage what the economist Joseph Schumpeter called ‘creative destruction’, and they are famously scornful of the phrase ‘it can’t be done’.” 

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McKibben: naming the enemy

“It has become a rogue industry, reckless like no other force on Earth. It is Public Enemy Number One to the survival of our planetary civilization.”  These are the words Bill McKibben uses to describe the fossil-fuel industry in a recent striking article in Rolling Stone which has received wide attention. It’s well worth reading, not least for the elegant lucidity of its prose. This post is not intended as some kind of summary, but rather as a reflection on McKibben’s notion that we need to recognise that we are up against a formidable enemy.  He moves to this declaration by considering three numbers.

The first is 2o Celsius, the level of warming which is widely accepted politically as not to be exceeded. Scientifically it can’t be regarded as a safe level of warming, and it’s certainly not so regarded by McKibben, but ”political realism bested scientific data, and the world settled on the two-degree target”.

The second number is 565 gigatons, which is the amount of carbon dioxide scientists estimate can still be added to the atmosphere by mid-century and give us a reasonable (80%) hope of staying below two degrees.

The third number is 2,795 gigatons, which is the amount of carbon already contained in the proven coal and oil and gas reserves of the fossil-fuel companies, and the countries that act like fossil-fuel companies. “In short, it’s the fossil fuel we’re currently planning to burn.” And it’s five times more than we can burn and have any hope of staying within two degrees of warming.

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