Development & sustainability:
CC CC
Robert H Wade
March 2013
GDP or GNP – flawed measure
• Since WW2, GDP growth has been among top econ priorities of ALL govts.
• Deeply flawed. Measures amount, not quality.
Undercounts environmental costs. GDP does Undercounts environmental costs. GDP does not fall when pollution increases; rises when pollution clean-up increases.
• We MUST develop environmentally-responsible measures of econ performance (See Joseph Stiglitz et al., commission on measurement of GDP, sponsored by French government, about 2010)
Neoclassical econ & envt
• Neoclassical economics hostile to idea of ‘limits’.
‘Everything has its price’, ‘as price of scarce inputs (minerals, oil) rises, substitutes will be found’, ‘resources move smoothly, like
toothpaste’
• WDR 1992: Environment & Development
• WDR 1992: Environment & Development
• Big issue: Diagram of circle labelled ‘Economy’, with environmental ‘inputs’ arrow going in & env
‘outputs’ going out. Shd circle be set inside a box labelled ‘Ecology’ (or ‘Env’)? Box = limits.
• In the published version, no box
Science of CC
• The science is fairly settled: robust link b/w anthropogenic GHG emissions,
atmospheric temperature, & disruptions in CC big enough to threaten human
CC big enough to threaten human civilization.
• Conclusion: the disaster in front of us is
close at hand (within next few decades)
Science
• Science settled, as long as we recognize that relationship b/w CO2 &
atmospheric temperature is stochastic – affected by sun cycles, by El Nino,
clouds, etc.
clouds, etc.
• “Critics” miss this elementary point: fail to see powerful upward trend in global
temperature, around which there are
variations due to things other than CO2
density.
Science
• Shape of distribution of CO2–temperature relationship fairly certain. Knowing the
distribution tells us a lot. Just as: we
cannot know for sure which way a tossed coin will land; but we know the distribution.
coin will land; but we know the distribution.
• If one of the outcomes of known
distribution is disastrous, we have basis
for action…
Present manifestations of CC
• Temperature: 15 hottest years on record have occurred since 1990
• Arctic ice: average extent in 2012 by far lowest recorded since satellite records began in 1979 recorded since satellite records began in 1979
• Weakening of E Asia monsoon
• Prevalence of drought/ fires in US & Australia
• Ocean acidification – coral bleaching
• Warming influence of fossil-fuel emissions icw natural variation in sunlight: 30 times grter
Target ceiling for temp & CO2
• Maths is ugly. For there to be 50:50 chance of keeping rise in temperature, from pre-industrial levels, to 2C, energy use must be carbon-free by 2030.
• Consensus target among CC scientists is to
prevent temp rise going > 2C. This corresponds
• Consensus target among CC scientists is to
prevent temp rise going > 2C. This corresponds to CO2 density = 450 ppm.
• At time of Indust Revoln (1750) = 300 ppm
• 2012, Alaska, 400 ppm recorded, first time ever.
• Global av now 395ppm. So 450 ppm in sight.
•
How long to hit ceiling?
• Given that it takes hundreds of years for CO2 to exit atmosphere we can forecast when 450 ppm will be reached on current trends with global emissions rising at 2.5- 3%/year : 2030.
3%/year : 2030.
• Many scientists doubt temp rise can be limited to 2C.
• Critical window is next 10 yrs = 2 election
cycles
What happens if > 2C?
• Av temp rise of 3.5C fr pre-industrial temp wld make Earth hotter than in past 3 mn years (when sea level 20 m higher than today)
today)
Econ growth & emissions
• If global temperature rise to be limited to 2-3C above Indust Rev level (or to 1.2 to 2.2C above present), absolute amt of emissions added each year must fall.
• If global econ growth continues, must be ABSOLUTE decoupling of growth & carbon emissions
• Killer fact: on world scale, no evidence of
absolute decoupling (only relative decoupling)
Loss of ‘pol will’
• But in West & most of South pol will to push for solutions is DECLINING.
• Stephen Emmott, econ advisor to UK
Treasury, says best way to adapt to
Treasury, says best way to adapt to
coming CC: learn to use a gun!
Loss of pol will for inter-state coopn
• CC negotiations in ‘lull’.
• Eg late 2012, Doha, annual mting of UNFCCC, wh extended Kyoto. Few senior pols; media
silence. Qatar is biggest emitter per head in world!
world!
• Kyoto now irrelevant.
• US is blocking discussion of CBDR (Common but Differentiated Responsibilities); Loss &
Damage (compensation from rich c’ies to poor c’ies damaged by CC)
Why the loss of public policy momentum?
• Politicians focus on short-term issues
• Recession in US & Europe drives out concern abt CC.
• Sense of powerlessness. Many CC
• Sense of powerlessness. Many CC
activists now focus on other issues of
capitalism etc.
Why public scepticism?
• Many members of public sceptical of what CC scientists say. Reject messages of
climate science.
• EG UK: In general, > 2/3 of public trust
• EG UK: In general, > 2/3 of public trust scientists to tell truth. Only 1/3 trust
climate scientists to tell truth.
• US?
• Why does significant % of electorate
disagree with scientific near-consensus?
Why public sceptical abt CC? (1)
• (1) CC scientists overwhelmed with
scientific info; do not give high priority to
engaging in public discourse
Why public sceptical abt CC? (2)
• (2) The rise of CC-dismissive neoliberal or libertarian think tanks (Oreskes &
Conway, Merchants of Doubt , 2011) Conway, Merchants of Doubt , 2011)
• Deliver simple messages crafted to appeal to specific world views:
• ‘CC is hoax’; ‘no need for emissions
regulations’; ‘climate always changing,
humans have always adapted’.
Example of CC dismisser
• Matt Ridley, ‘Cooling down t fears of climate change: evidence points to a further rise of just 1C by 2010. The net
effect on t planet may be beneficial’, WSJ 18 Dec 2012
18 Dec 2012
• MR journalist at WSJ, whose family runs a coal mine in UK
• He quotes as his authority a semi-retired
financier in Bath, UK.
Merchants of doubt (ctd)
• Neoliberal/libertarian think-tanks comment persistently, & nurture media
• Media practice of ‘balanced reporting’ has reinforced public perceptions of scientific reinforced public perceptions of scientific DOUBT or disagreement
• (CC scsts say: Earth has never experienced
today’s increase in GHG & rise in temperatures.
Humans twisting Earth’s thermostat hard to right, very fast.)
Why public sceptical? (3)
• (3) Misinformation campaign plays into deep anxieties about whole shape of society,
relationship b/w individuals & state:
• Close correlation b/w people of strong
individualistic ideology/libertarian politics, and individualistic ideology/libertarian politics, and scepticism abt CC
• Why? B/c they see CC as challenging premises abt the good society, human freedom, economic growth, etc. (‘My children must be excused
from any schoolroom discussion of CC’)
(4) Clashes b/w ultimate values:
CC = abortion
• CC is like ‘abortion’ politics, not like ‘weather’.
(Scientists talk to public as though CC is an
issue like ‘the weather’, on which they are able to forecast better than public, thanks to science.)
• J. K. Galbraith: ‘faced with the choice of
changing one’s mind and with proving there is no need to do so, almost everyone gets busy with the proof’.
Why we disagree abt CC: (5) DCs
• DCs: ‘you put it up there; you solve it – or you pay us to help you solve it’
• Brazil?
• It is true that stock of GHG very large
• It is true that stock of GHG very large
relative to inflows; that getting DCs to cut inflows will not ‘solve’ the problem
•
Good news
• Carbon emissions in many ACs are declining.
• EU-15: GHG emissions fell 15% since 1990
• US CO2 emissions fell 15% since 2007, thanks to shale gas, standards for cars, air quality regs to shale gas, standards for cars, air quality regs (wh make new coal power stns imposs).
• Falls also due substantially to ACs exporting pollution to DCs; + recession.
Good news
• Insurance companies, pension funds, actuaries, now give CC central place in their forecasts on water, food & energy (the ‘pyramid of peril’).
(the ‘pyramid of peril’).
• Eg Hurricane Sandy in 2012
Good & bad news: China
• Ch making world’s most ambitious steps to redirect economic growth along green lines:
thousands of polluting factories closed, cities in intended blackout, huge investment in
renewables (wind & solar) renewables (wind & solar)
• Ch is world’s worst pollution center: GHG
emissions up 150% since 2002; air pollution in big cities far above ‘safe’ level; Ch + India
adding almost 3 new coal-powered stations per week (without CCS).
Bad news
• By 2020 world average emissions must fall at annual rate at wh UK reduced its
emissions in 2011 (b/c of recession)
What must be done: public policy
• Cut coal. Dieter Helm (The Carbon Crunch, 2012): there are 3 main causes of the climate problem: 1. coal; 2. coal; 3. coal
• Coal power stations are mainstay of most
• Coal power stations are mainstay of most economies. Cheaper than low carbon
alternatives s.a. nuclear; more reliable than renewables.
• Coal remains biggest, & fastest growing srce of global energy.
Clean coal?
• Carbon capture & storage (CCS)?
• Only 8 large CCS prjts in world
• Adding CCS raises cost of coal- or gas- station by 50-100%, when govts cutting station by 50-100%, when govts cutting public spending.
• Once stored underground CO2 can leak
• World showcase prjt for CCS (Algeria, In Salah) closed in 2011
• UK govt stopped the major CCS pilot
Nuclear fission?
• So, utilities cannot rely on renewables, b/c variable; clean coal & gas too expensive.
• Nuclear fission? Yes. Dangers of CO2 >
dangers of nuclear waste
• Fukushima a double disaster. Wrong lessons
• Fukushima a double disaster. Wrong lessons learnt. F was an obsolete reactor. Close to
Fukushima a more recent design reactor not destroyed by earthquake. Yet Jpn shutting
down many nuclear stations, replacing with coal
& gas
• Germany, worried by possibility of tsunami in
Bavaria, shutting its nuclear, replacing with coal
Nuclear fission?
• Nuclear waste? Serious problem. But
technology is operational for ‘integral fast
reactor’, which can keep using ‘waste’ till only small residue remains, with half life in tens rather than thousands of years. ‘Waste’ ‘asset’.
• But no commercialization
• But no commercialization
• As nuclear shut down, & as wind turbines
provoke more opposition than thermal, West switches to coal and gas higher emissions.
• We are displaying collective MADNESS
• Nuclear fusion wld be game changer
Growth-ecology dilemma
• (1) Low or no econ growth (in dev’ed c’ies) collapse
• (2) Growth endangers ecological systems vital to our survival as civilization
our survival as civilization
• Popular solution: “Green Growth”. Growth can be made compatible with ecolog goals, b/c Growth drives technological efficiency, & rises in effy can outrun environmental impacts of
increasing econ output.
Solutions to growth-ecology dilemma?
• The growth tech innovation ‘solution’ is
questionable – especially because killer fact: no evidence of ABSOLUTE decoupling of
emissions from econ growth. To stop CO2
density going > 450 ppm, emissions must ‘soon’
density going > 450 ppm, emissions must ‘soon’
fall to near zero.
• Other solutions: (1) nuclear fusion. (2)
‘Prosperity without growth’? Need lots of
social science research. (Tim Jackson, 2009, Prosperity Without Growth, London: Earthscan)
• (3) Learn to use a gun
Imagine realistic Goodland (not Bestland)
• All the features of Goodland exist today, but spread out!
• President lives on average wage, to share struggles of ordinary people (Uruguay)
• New constitution written through ‘crowd-sourcing’
(Iceland) (Iceland)
• Constitution makes protecting ecosystem the top legal priority (Bolivia), puts natural resources in ownership of
‘the nation’ (Iceland)
• National plan for good living (Ecuador), measured not by GDP but Gross National Happiness (Bhutan)
Goodland (ctd)
• Free education & health, subsidized child & elderly care (Scandinavia)
• Citizens actively involved in deciding on public spending in their city (Porto Allegre)
• Fossil fuels being phased out by 2017 (Nicaragua)
• Fossil fuels being phased out by 2017 (Nicaragua)
• Mutually-owned local banking system (Germany)
• Large & productive business cooperative sector (Mondragon)
• If financial crisis, private banks made to fail; guilty bankers go to jail (Iceland).
• All societies have viable alternatives from current path!
(Andrew Simms, 2013, ‘Let’s play fantasy economics’, The Observer, 17 Feb)
Conclusions from 5 lectures
• 1. Neoclassical economics postulates that competv mkt is better mechanism of
collective choice than ‘politics-state’
• State shd not try to form collective ‘vision’
• State shd not try to form collective ‘vision’
of future path of economy-society
• Helmut Schmidt: ‘People who have visions
shd see a doctor’
Conclusions from 5 lectures (ctd)
• 2. Neoliberal global policy experiment of past 30 years has been justified by hypothesis that with lower taxes, freer labor mkts , less ‘welfare state’, more
privatization of state assets, ‘everyone’ will be more prosperous. USA has used this argt to justify mandate of WB, IMF, OECD etc: it is America’s job to remake the of WB, IMF, OECD etc: it is America’s job to remake the world, & in its own image (C. Rice, Foreign Affairs, Aug 2008).
• Neoliberal hypothesis has largely failed.
• Neoliberal policies (+ technology, globn) good for rich.
• ‘Establishment’ elite ‘plutrocratic’ elite in Anglo ct’ies
Conclusions from 5 lectures (ctd)
• (3) Income inequality:
• Distinguish ‘inequality’ (average across whole Y
distribution) & ‘concentration at top’ (eg share of top 1%)
• Mechanisms of rising concentration different from rising IN. Eg Rising IN driven by skill-biased tech change, wh hits middle-class jobs. Concentration generated by ability IN. Eg Rising IN driven by skill-biased tech change, wh hits middle-class jobs. Concentration generated by ability of finance to privatize profits & socialize losses -- &
caused by finance ‘buying’ politics.
• ‘Democratic Kism’ ‘plutocratic immunity Kism’
• Higher IN slower econ growth, higher social problems.
Conclusions from 5 lectures
• 4. Comparative political economy shows that polities do have choices abt how they navigate through the big forces of technology & globalization. See ‘Goodland’
• 5. Industrial policy: Many govts have increased IP
measures since Crisis of 08. Maintaining ‘open borders’, not using trade protection. Discriminating in favor of (a) not using trade protection. Discriminating in favor of (a) some sectors, (b) firms producing within territory, (c ) nationally-owned firms. Eg public procurement,
subsidies. (But Brazil doing this less than other major ecies.)
• 6. Brazil has unusual depth in ‘heterodox’ economics;
shd build upon it, & foster ‘complementary pluralism’!
