Friday, January 26, 2018

Delusions of Grandeur in Building a Low-Carbon Future



Some excerpts from Carey King's excellent paper titled "Delusion of Grandeur in building a low-carbon future" (2016). By all means worth reading: it identifies the delusionary approach of some policy proposals. Image Credit: K. Cantner, AGI.


.... the outcomes of economic models used to inform policymakers and policies like the Paris Agreement are fundamentally flawed to the point of being completely delusional. It isn’t the specific economic assumptions related to the “low-carbon” transition that are the problem, but structural flaws in the economic models themselves.

There is a very real trade-off between the rate at which we address climate change and the amount of economic growth we can expect during the transition to a low-carbon economy, but most economic models insufficiently address this trade-off, and thus are incapable of assessing the transition. If we ignore this trade-off, or worse, we rely on models that are built on faulty premises, then we risk politicians and citizens revolting against the energy transition midway into it when the substantial growth and prosperity they’ve been told to expect will accompany the low-carbon transition don’t materialize. It is important to note that citizens are also told that doubling-down on fossil energy also only provides growth and prosperity. But this is a major point of this article: mainstream economic models can’t tell the difference. There are foreseeable feedbacks of a fast transition to a low-carbon economy that increase the risk of major recessions.


The AR5 indicates that if the world invests enough to reduce greenhouse gas emissions over time — such that total annual greenhouse gas emissions are practically zero by 2100 — to stay within the 450 ppm and 2-degree-Celsius target, then the modeled decline in the size of the economy relative to business-as-usual scenarios is typically less than 10 percent. In other words, instead of the economy in 2100 being 300 to 800 percent larger than in 2010 without any mitigation, it is only 270 to 720 percent larger with full mitigation. Meanwhile, there is no reported possibility of a smaller future economy. Apparently, we’ll be much richer in the future no matter if we mitigate greenhouse gas emissions or not.

This result is delusional and doesn’t pass the smell test.

Another flawed piece of the framework in the IAMs is that they assume that factors in the economy during and after a low-carbon transition will remain at or return to the statistically positive trends of the last several decades — the trend of growth, the trend of high employment levels, the trend of technological innovation. Those positive trends change over time, however, so it is faulty to assume they’ll continue at historic levels independent of the need for rapid changes in the energy system. They also assume that energy costs will not significantly increase over the long term. Further, they extrapolate trends in growth, employment and technology from the past and current carbon-based economy to apply to a future decarbonized economy in ways that represent guesswork at best, and ideology at worst.



Perhaps most importantly, IAMs do not consider the substantial negative feedback between high energy costs and overall economic growth. Negative feedback means that when one factor increases (energy prices, for example), another factor consequently decreases. Many of us know from practical experience that if gasoline costs too much — like when it was near $4 per gallon in 2008 — it may eat into our budget to such an extent that we can’t pay all our bills or can’t pursue hobbies. On a personal level, then, we see that increased gas prices cause decreased discretionary spending — a negative feedback. This idea can be extended to the entire economy’s budget and income.

..... the models currently answer a question that is barely useful: “If the economy grows this much, what types of energy investments can we make, and at what rate?” The models should address the question we really need to answer: “If we make these energy investments at this rate, what happens to the economy?”


There is a fundamental conflict between achieving low- or zero-carbon energy systems and growing an economy. Both the scale and rate of change during a low-carbon transition matter. So, let’s create macroeconomic models that can plausibly replicate historical trends of the most important energy and economic variables in times of high energy investment, recession and growth, so that we have confidence that we can ask relevant and informative questions about how low-carbon investments impact economic growth. Let’s stop deluding ourselves by using models that assume answers we want to see.



Read the complete paper (open access) at this link




8 comments:

  1. as with all species, humankind sustains itself by exchanging one form of energy for another.

    investing calorific output by stalking and killing a deer, is only a good deal if we catch it and consume it

    waste too many calories on pointless deer hunts and you starve to death---and so do those waiting for you to bring home meat.

    But that's a description of primitive stone age living---our hunter gatherer times?

    But is it?

    Well I have just described ''employment'' in which energy is exchanged, taken from one to support another.

    Which is what our employment is--and does.

    It is not possible to have employment without expending heat---and for the past 3 centuries we have exploded our heat making activities to the point of destroying the planet. And still our demand for emplyment will go on, because that is the only way we know.

    We have to eat (absorb energy) by some means. We cannot go back to hunting our food, therefore we will go on until we run out of food resources in the sense that we currenntly consume them

    after that, the earth will begin its cooling down, after it has got rid of us---its plague species

    We have no collective emotional means by which we can elect to shut ourselves down to prevent a future, which as yet, is only a threat.

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  2. It is difficult to come to grips with King's assumptions (and others of course) and convey the sense of 'delusion within delusion' I feel. Let's start with the 450ppm CO2 and the period of time after 'achieving' a maximum of 450ppm. Simply, unless *rapidly* brought back under 400ppm, all major ice sheets eventually disintegrate, SLR say 60m, long term equilibrium temperatures almost certainly attain 16 degrees and arguably unavoidable earth system feedbacks take us to 20 degrees. Civilization as we know it, is certainly finished, extinction of HS is very likely. (measured GDP approaches zero in any case)
    I conclude from this that any economic modelling which can't account for the energy required to rapidly remove and successfully sequester 600+ gigatons of CO2, having dumped it into the atmosphere over the next 20 years, is perpetuating a long sequence of interrelated delusions.
    There is no currently conceivable capacity to rapidly remove the required CO2 pollution.

    An economic statement logically compatible with the above is 'the real global economy is shrinking at an alarming rate of something like 13% per annum when taking into account the physical constraints which have no currently known means of being tunnelled through. These *physical* constraints relate to pollution and the earth system.'
    Much more to say I think and that will do for now.

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    Replies
    1. Current global temperature is 14.7 degrees. Currently understood sea level rise commitment is around 10 metres. (Rignot) Recent findings of deep pre-historical deep sea temperatures suggest a lot cooler than thought. The train of thought around this suggests heat transport to the poles is far faster than previously modelled, accounting for dramatically enhanced ice sheet and sea ice losses over those modelled for the previous decade and implies continuation at an accelerated rate of heat transport to the poles. The ice cliff instability mechanisms recently described by Pollard and others points to the dynamic loss of ice sheet and sea ice mass continuing at an accelerated rate, an independent amplifying factor over those previously modelled. Hence, I see dramatic and widely unexpected sea level rise in amongst the other toxic mix of negatives for homo sapien survival. Personally, I see another .3 degree rise as dramatically impacting 'the economy', without reference to resource depletion (apart from GHG pollution if regarded in that light). So at 15 degrees global temperature the economy tanks already from physical causes, which are not capable of being ameliorated in the short term even if equilibrium temperature was attained. (my opinion)
      Global brightening as a necessary adjunct to ceasing coal burning adds another short term temperature spike so stability, equilibrium and adaptation and recovery (especially economic) cannot happen in the next 20 to 50 years.(if my thesis is correct)

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  3. "We have no collective emotional means by which we can elect to shut ourselves down..."

    We are entering an age in which it does not have to be done collectively. If the future gets bad enough, and it probably will, then very few men with very little resources will be required to loose diseases upon the world that will do the job.

    I'm an old man. I am not advocating it, but I am predicting it.

    Google the word "virus" along with the names Jackson and Ramshaw, if you are not familiar with the results already. Contemplate that what they did was before the days of CRISPR.

    another fred

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  4. I have to question the entire exercise of attempting to 'fix' economic models when even with a 'better' model it is likely impossible to find one that truly reflects the complex systems we are discussing. There are not only emergent phenomena that can't be modelled as they are unknown (the unknown unknowns) but there will be feedback loops that we are aware of but that act different than our assumptions. I have found economic models in general, no matter how refined, to be constructed with assumptions upon assumptions upon assumptions. One small deviation from the assumed numbers or equation and everything goes sideways in usually completely unexpected ways. And then there is the issue of EROEI (to say little regarding the 'magical thinking' that go into techno-cornucopian views).

    While ideally we would confront the dilemmas we face because of our attempts to pursue infinite growth on a finite planet in a rational and successful way, I have doubts that this will happen. I'm increasingly coming to the conclusion that we will, as is often the way, have to deal with the various crises after they have occurred and as best we can. We may have the knowledge to forestall the worst case scenarios but we do not have the political or social wherewithal.

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  5. I have been trying to look at population models try to figure out what is happening. Nearly all the troubles we are looking at will be solved only by the combination of three different trends:

    1.) An increase in the death rate.
    2.) A decrease in the birth rate.
    3.) A decrease in the energy used per capita.

    Since you got me thinking with this post (I will need wine tonight thank you) and it is a rainy day and I have access to a spreadsheet, I think that I will do one of the hated and unsophisticated "Excel Models" to get a not-too-clear glimpse of just what kind of numbers we are talking about.

    I'll get back to you on this page when it is done.

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  6. Hey Ugo:

    This damn spreadsheet has kinda taken on a life of it's own.

    Any chance that you know if there is such a thing as a target energy use per capita that is considered "good" by non-idiots?

    Right now I calculate that the US uses around 87K KwH per capita All sources) in a year.

    By the way, I love this chart

    https://flowcharts.llnl.gov/content/assets/images/energy/us/Energy_US_2016.png

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  7. The problem of all these models is that they are based only on first derivatives: they just take the past data points and extrapolate linearly in the future. And, if the linear extrapolation points downward, they just extend the historic dataset until it points upwards, in order to match the implicit expectation that the economy will always grow.

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Who

Ugo Bardi is a member of the Club of Rome and the author of "Extracted: how the quest for mineral resources is plundering the Planet" (Chelsea Green 2014). His most recent book is "The Seneca Effect" to be published by Springer in mid 2017