Sunday, July 6, 2014

Climate Misconception #9: Investing in clean technologies will solve the climate problem

Here we continue with Misconception #3, with a few more wrinkles to consider.

It has become popular in some circles to say that a fixation on reducing the use of fossil fuels—the thou-shalt-not approach to carbon policy—is a political non-starter.  No one will support a movement that’s so negative.  Instead, they say, we should emphasize the positive.  Let’s ramp up investment in clean technologies, provide lots of green jobs, and fossil fuels will take care of themselves.

I’ve already tried to explain why generating more renewable energy is not the same thing as reducing fossil fuel use by an equivalent amount, so I won’t repeat myself.  Here I’d like to broaden the focus and consider energy-saving technology in general.

The first point to make is that it isn’t always clear what the energy-saving technology is or how much it saves, once we take account of all the upstream inputs that go into it.  On a mundane level, this has come up in the debate over local laws that mandate the use of paper rather than plastic shopping bags at retail stores.  It’s a complicated problem of industrial ecology, and the answer is not likely to be the same in each city.  But this difficulty arises in nearly every technology choice, such as which materials to use for auto parts, what criteria should determine LEED (green building) certification, and so on.  This is our old friend the economic calculation problem: modern interconnected production systems are just very complex.  If we ever put a significant price on carbon, the price mechanism will tell us where net carbon savings actually lie.

The second point is that innovation is difficult to forecast.  Often the methods and products that prove to be the most successful were not the ones you would have bet on during the early stages of R&D.  This is not an argument against promoting research in green tech, but it suggests we need a large portfolio of research projects, anticipating that most will lead to a dead end.  Public R&D needs to be as entrepreneurial as private—perhaps more so, since the stakes are higher.  But the portfolio approach leaves us in doubt regarding the pace and direction of technological development.  We simply can’t know going in what and how much we’re going to get out of it.

And that leads to the main consideration, which is time.  As discussed earlier, what matters for climate change is the accumulation of greenhouse gases in the atmosphere.  Every day we extract and burn more fossil fuels, this accumulation goes up.  A brilliant breakthrough that lowers the economic cost of transitioning away from fossil fuels doesn’t help very much if it occurs decades into the future, after we have already surpassed our carbon budget.

To put it bluntly: the physics of climate change imposes a timetable on us, summarized in the form of a carbon budget.  The longer we delay, the faster we have to reduce future fossil fuel consumption.  If we delay too long, no plausible transition path will keep us under budget.  But the development of new technology has its own timetable, which we can’t know for sure going in.  If nature’s schedule moves at a faster pace than technology’s, which it almost certainly will, we have to make a choice: more climate change or more economic disruption.  The point of our whirlwind tour of climate science at the beginning was to convince you that nature really calls the shots.

Consider an example.  One large contributor to fossil fuel use is air travel.  If you fly a few times a year this is probably your biggest individual carbon consumption item.  Living within the IPCC’s carbon budget means that, within a few decades, we have to get to near-zero use—and the path has to head downward sooner rather than later.  What will this mean for air travel?  With current technology the picture is bleak.  Biofuels can be used to power jets, but only at much greater cost, and if we try to substitute biofuels for hydrocarbons in all uses their cost would go through the roof.  There’s no getting around it: with today’s technology there needs to be a lot less flying.  Maybe future technologies can get around this; I really hope they can.  But if we take climate change seriously we can’t afford to wait for new technology before cutting back on air travel.  I realize this is not the positive message that, according to marketers, has the biggest political appeal, but the climate problem is inconvenient on many levels.

The upshot is that it would be great to increase investments in green tech.  In the current macroeconomic environment, with unused productive capacity and rock-bottom interest rates, it’s crazy not to.  But this is primarily about helping people adapt to the demands of fossil fuel reduction; it’s not a substitute for it.

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