Is it safe to extract the coal and oil already discovered?

                                             

                                              Comments due by September 30, 2016 (# 3)

The world’s working coal mines and oil and gas fields contain enough carbon to push the world beyond the threshold for catastrophic climate change, according to a report released on Thursday.

If all the existing fuel were to be burned, projects currently operating or under construction could be expected to release 942Gt CO2, said the report by US-based thinktank Oil Change International (OCI).

This exceeds the carbon limits that would most likely warm the world 1.5C and even over 2C above the pre-industrial average. These were limits agreed at last year’s climate conference in Paris.

It has been established for some time that the enormous unworked reserves claimed by fossil fuel companies contain vastly too much carbon to ever be burned safely. But OCI said that this was the first time an analysis had been done of how much greenhouse gas is stored in projects already working or under construction.

Founder of 350.org and climate campaign Bill McKibben said the report “change[d] our understanding of where we stand. Profoundly”.

It means that even if not a single new coal mine, oil or gas field were opened up, the carbon budget would be at risk, said OCI’s executive director Stephen Kretzmann.

Projected investment in new extraction sites and infrastructure over the next 20 years adds up to a staggering US$14tn, the report found.

“Continued expansion of the fossil fuel industry is now quite clearly and quantifiably climate denial,” said Kretzmann.

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 Photograph: Rystad Energy, International Energy Agency (IEA), World Energy Council, Intergovernmental Panel on Climate Change (IPCC)

The OCI report said existing oil and gas fields alone would exceed the carbon budget for 1.5C – which is a limit some small island states say would finish them and scientists believe would wipe out most coral reefs.

James Leaton, research director at the Carbon Tracker thinktank which did much to popularise the concept of “unburnable carbon”, said research by Carbon Tracker in 2015 showed coal demand was declining so quickly that current reserves would be enough. But the picture was less clear for oil and gas.

“There is clearly no need for new coal mines to be developed if we are to stay within a 2C carbon budget,” said Leaton. “Because oil and gas production declines over time in any particular well, this may fall faster than the level of oil and gas demand in [a 2C scenario], in which case some new production would be needed. Depending on how much carbon budget you allocate to each fossil fuel, and the speed of the energy transition assumed, the window for new oil and gas will also start to close.”

In the UK, the government has committed to opening its shale gas resources to fracking. Ken Cronin, chief executive of the industry body UK Onshore Oil and Gas, said: “This report needs to look more deeply into the use of gas in a modern energy mix, looking at areas such as reformation of methane into hydrogen and carbon capture and storage, particularly for heating systems and potentially transport. The simple fact is that the best way to combat climate change is to remove coal ASAP and to do that you need to replace much of the coal capacity with gas.”

The OCI report did not take into account carbon capture and storage (CCS), which it argued is still at an “uncertain” stage of development. The International Energy Agency reported last week that CCS, which is fitted to emissions sources to trap carbon, was being rolled out at a rate of just one project every year.

Study author Greg Muttitt said it was imperative for governments to focus on shutting down new mines and fields before a sod was turned.

“Once an extraction operation is underway, it creates an incentive to continue so as to recoup investment and create profit, ensuring the product – the fossil fuels – are extracted and burned. These incentives are powerful, and the industry will do whatever it takes to protect their investments and keep drilling,” he said.

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Bill McKibben 

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There is new carbon math coming tomorrow that will change our understanding of where we stand. Profoundly.

10:32 PM - 21 Sep 2016

 
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Ben Caldecott, director of the Sustainable Finance Programme at the University of Oxford Smith School said: “One direct implication of meeting climate targets are stranded upstream fossil fuel assets. These stranded assets need to be managed, particularly in terms of the communities that could be negatively impacted. Policymakers need to proactively manage these impacts to ensure a ‘just transition’.”

The report expands on a call made by former Kiribati president Anote Tong last year to stop opening new coal mines. China, the US and Indonesia, the world’s largest, third- and fifth-largest coal producers, have banned any new coal mines. In the US, the moratorium is only on public land.

But in Australia’s Galilee basin, there are nine proposed coal mines with a total lifetime emissions of 24Gt CO2. This includes the massive Adani Carmichael mine, which the Australian government has approved. The Australian Department of Environment would not comment on whether it had assessed the impact of the Carmichael mine on the global carbon budget.

Economic Growth and Sustainability

                                            Comments due by Sept. 23, 2016

– Until recently, the usual thinking among macroeconomists has been that short-term weather fluctuations don’t matter much for economic activity. Construction hiring may be stronger than usual in a March when the weather is unseasonably mild, but there will be payback in April and May. If heavy rains discourage people from shopping in August, they will just spend more in September.

But recent economic research, bolstered by an exceptionally strong El Niño – a complex global climactic event marked by exceptionally warm Pacific Ocean water off the coast of Ecuador and Peru – has prompted a rethink of this view.

German Europe or European Germany?

Hugo Drochon poses the question that Europe and the world can no longer avoid, and examines how Joschka Fischer, Otmar Issing, Anne-Marie Slaughter, and others address it.

Extreme weather certainly throws a ringer into key short-term macroeconomic statistics. It can add or subtract 100,000 jobs to monthly US employment, the single most-watched economic statistic in the world, and generally thought to be one of the most accurate. The impact of El Niño-related weather events like the one this year (known more precisely as “El Niño Southern Oscillation” events) can be especially large because of their global reach.

Recent research from the International Monetary Fund suggests that countries such as Australia, India, Indonesia, Japan, and South Africa suffer adversely in El Niño years (often due to droughts), whereas some regions, including the United States, Canada, and Europe, can benefit. California, for example, which has been experiencing years of severe drought, is finally getting rain. Generally, but not always, El Niño events tend to be inflationary, in part because low crop yields lead to higher prices.

After two crazy winters in Boston, where I live, it would be hard to convince people that weather doesn’t matter. Last year, the city experienced the largest snow accumulationon record. Eventually, there was no longer any place to put it: four-lane highways narrowed to two lanes, and two-lane roads to one. Roofs collapsed and “ice dams” building up from gutters caused severe flooding. Public transport closed, and many people couldn’t get to their jobs. It was a slow-motion natural catastrophe that lasted for months.

The US as a whole did not have a winter as extreme as New England’s in the first part of 2015, and the effects of the weather on the country’s overall economy were subdued. True, New York City had some significant snowfalls; but no one would have paid much attention had the mayor been more competent in getting the streets plowed. Eastern Canada suffered much more, with severe winter weather playing a role (along with lower commodity prices) in the country’s mini-recession in the first half of the year.

This year’s winter is the polar opposite of last year’s. It was 68º Fahrenheit (20º Celsius) at Boston’s Logan Airport the day before Christmas, and the first speck of snow didn’t come until just before New Year’s Day. Trees and plants, sensing spring, started to blossom; birds were just as confused.

Last winter Boston was something of an anomaly. This year, thanks in part to El Niño, weird weather is the new normal. From Russia to Switzerland, temperatures have been elevated by 4-5º Celsius, and the weather patterns look set to remain highly unusual in 2016.

The effect on developing countries is of particular concern, because many are already reeling from the negative impact of China’s slowdown on commodity prices, and because drought conditions could lead to severe crop shortfalls. The last severe El Niño, in 1997-1998, which some called the “El Niño of the Century,” represented a huge setback for many developing countries.

The economic effects of El Niño events are almost as complex as the underlying weather phenomenon itself and therefore are difficult to predict. When we look back on 2016, however, it is quite possible that El Niño will be regarded as one of the major drivers of economic performance in many key countries, with Zimbabwe and South Africa facing drought and food crises, and Indonesia struggling with forest fires. In the American Midwest, there has lately been massive flooding.

There is a long history of weather having a profound impact on civil strife as well. Economist Emily Oster has argued that the biggest spikes in witch burnings in the Middle Ages, in which hundreds of thousands (mostly women) were killed, came during periods of economic deprivation and apparently weather-related food shortages. Some have traced the roots of the civil war in Syria to droughts that led to severe crop failure and forced a mass inflow of farmers to the cities.

On a more mundane level (but highly consequential economically), the warm weather in the US may very well cloud the job numbers the Federal Reserve uses in deciding when to raise interest rates. It is true that employment data are already seasonally adjusted to allow for normal weather differences in temperate zones; construction is always higher during spring than winter. But standard seasonal adjustments do not account for major weather deviations.

Overall, the evidence from past El Niños suggests that the current massive one is likely to leave a significant footprint on global growth, helping support economic recovery in the US and Europe, while putting even more pressure on already weak emerging markets. It is not yet global warming, but it is already a very significant event economically – and perhaps just a taste of what is to come.

(Rogoff/Project Syndicate)

Green Economy

                                                             Comments due by 9/16/2016

Sustainable development has been the overarching goal of the international community since the UN Conference on Environment and Development (UNCED) in 1992. Amongst numerous commitments, the Conference called upon governments to develop national strategies for sustainable development, incorporating policy measures outlined in the Rio Declaration and Agenda 21. Despite the efforts of many governments around the world to implement such strategies as well as international cooperation to support national governments, there are continuing concerns over global economic and environmental developments in many countries. These have been intensified by recent prolonged global energy, food and financial crises, and underscored by continued warnings from global scientists that society is in danger of transgressing a number of planetary boundaries or ecological limits.

With governments today seeking effective ways to lead their nations out of these related crises whilst also taking into account these planetary boundaries, green economy (in its various forms) has been proposed as a means for catalysing renewed national policy development and international cooperation and support for sustainable development. The concept has received significant international attention over the past few years as a tool to address the 2008 financial crisis as well as one of two themes for the 2012 UN Conference on Sustainable Development (Rio+20). This has resulted in a rapidly expanding literature including new publications on green economy from a variety of influential international organisations, national governments, think tanks, experts, non-government organisations and others.

Despite the growing international interest in green economy, negotiations between Member States on the concept in the lead up to Rio+20 were challenging. This was partly due to the lack of an internationally agreed definition or universal principles for green economy, the emergence of interrelated but different terminology and concepts over recent years (such as green growth, low carbon development, sustainable economy, steady-state economy etc.), a lack of clarity around what green economy policy measures encompass and how they integrate with national priorities and objectives relating to economic growth and poverty eradication, as well as a perceived lack of experience in designing, implementing and reviewing the costs and benefits of green economy policies.

Recent publications on green economy or green growth by the United Nations Environment Program (UNEP), the UN Department of Economic and Social Affairs (UNDESA), the United Nations Conference on Trade and Development (UNCTAD), the International Labour Organisation (ILO), the World Bank, the Organisation for Economic Cooperation and Development (OECD), the Global Green Growth Institute (GGGI), the Green Economy Coalition, Stakeholder Forum, the Green Growth Leaders and many others have begun to address these knowledge gaps and demystify these concepts. Importantly, there is also emerging practice in the design and implementation of national green economy strategies by both developed and developing countries across most regions, including Africa, Latin America, the Asia-Pacific and Europe. This emerging practice can help to provide some important insights and much-needed clarity regarding the types of green economy policy measures, their scope with regard to various sectors and national priorities, and their institutional barriers, risks and implementation costs. This international experience may serve to alleviate concerns regarding the effective integration of green economy policies with national economic and social priorities and objectives, including the achievement of internationally agreed development goals.(ECOSAC)

Cap and Trade :Ontarior

                      Comments due by April 25, 2015

Canada's provinces are taking command of the nation's battle against climate change, seizing the initiative from a reluctant federal government as the clock ticks down to a crucial international climate agreement later this year.
Ontario Premier Kathleen Wynne on Monday signed a historic deal to join Quebec's cap-and-trade system for carbon emissions, while British Columbia Premier Christy Clark was invited to promote her province's carbon tax at the World Bank – an honour not usually accorded to a provincial leader.

And on Tuesday, Quebec Premier Philippe Couillard will play host to a meeting of provincial and territorial leaders to start crafting a national strategy to co-ordinate further climate action across the country.
"Climate change is one of the greatest challenges humankind has ever faced. This is about preserving a world for our children and our grandchildren," Ms. Wynne told reporters after meeting Mr. Couillard in his office near the National Assembly. "We cannot wait for a particular moment when the federal government decides it is going to engage."
Many of the details in Ontario's cap-and-trade system still have to be worked out over the next six months, but it is likely to look similar to the joint system run by Quebec and California. In that model, the government sets a cap on emissions and hands out some permits to industry for free while auctioning others off. The proceeds are then plowed back into other green programs, such as public transit.
Once Ontario's system is operating, 62 per cent of Canada's population and more than half its economy will be under the same carbon market. Including B.C., which uses a carbon tax instead, some three quarters of Canadians will be covered by provincial-level carbon pricing.
Ms. Clark on Monday said her message to leaders at the World Bank, which she will address Friday in Washington, will be to match B.C.'s success in slashing emissions through the tax: "The climate action challenge we're making to other governments is clear and simple: meet it or beat it."
While the federal government is moving forward with some climate-change measures – such as new regulations to make trucks more fuel efficient, and a plan to phase out coal-fired power generation – Ottawa has adamantly refused to support carbon pricing.
"We are very clear we don't want ... what is effectively a tax on carbon which would increase the cost for consumers and on taxpayers – the cost of electricity, of gasoline, of groceries," Finance Minister Joe Oliver told reporters Monday in response to Ontario and Quebec's deal. "We think this would be negative for the economy; it would be negative for consumers and for taxpayers. And that's why we oppose it."
The federal government is also leaving it up to the provinces to set their own emissions targets and report them to Ottawa, rather than attempting to forge a national strategy.
Mr. Couillard lamented this Monday, arguing that the federal government should negotiate with the provinces to set a clear plan that spells out exactly how much each province will cut in terms of emissions, and what each will do to achieve these targets.
The government must table its emission-reduction targets ahead of the UN climate summit in Paris in December, which will pull together an international accord for cutting greenhouse gas emissions.
"[The federal government should help with] getting to Paris with a common, well-documented position, which would include the global target for Canada and the allocation for different regions," Mr. Couillard said.
In the absence of the federal government, the provinces will be attempting to co-ordinate this themselves Tuesday.
But a spokesman for Environment Minister Leona Aglukkaq said Ottawa is attempting to work with the provinces and has received little feedback.
Ms. Aglukkaq has sent two letters to her provincial counterparts – one in November and another on Sunday – asking them to lay out their targets and plans beyond 2020. She told her colleagues the federal government will use that information, plus its own plans to regulate, to build a national submission for Paris.
However, Ottawa has rejected calls to lead a national negotiation on climate and energy policies and regional burden-sharing.
There are still major hurdles. Oil-rich Alberta, whose emissions are growing by leaps and bounds, must take tougher action to cut carbon if Canada is to achieve a net reduction over all. But Premier Jim Prentice, in the middle of a provincial election campaign, is skipping the Quebec meeting, leaving his province's plans up in the air.
Ms. Wynne, meanwhile, took a drubbing from the provincial opposition over her plan. Progressive Conservative environment critic Lisa Thompson argued that all cap-and-trade will do is make life more expensive for consumers in order to direct money into the treasury; she declared the plan a "new revenue tool to cover their wasteful spending."
Ms. Wynne appeared to anticipate this argument, and hit back at it as she unveiled the cap-and-trade plan at ecobee, a green-tech company in downtown Toronto, before flying to Quebec for her meeting with Mr. Couillard.
"When my granddaughter, Olivia, looks at me and says 'Grandma, what did you do [on climate change], I am not going to say to her 'I put my head in the sand because I was worried that maybe there would be a cost somewhere that I couldn't explain,'" she said. "I'm not going to do that."
(The Globe and Mail April 12, 2015)

Economic Growth vs. The Environment

                                                    Comments due by April17, 2015

When it comes to economic growth these days, people often point out that it must be sustainable or "green growth." To what extent is a combination of economic growth and sustainability really possible?

With its Energiewende, the energy transition policy from nuclear to renewable energies, Germany aims to gradually increase renewable energies like solar, wind and hydroelectric power. Some say it's an important step towards a more sustainable lifestyle. But not Karl-Heinz Paque.

"If we do these things in Germany, it's not really going to have much of a global impact. We're too small for that," Paque, a professor of economics at the University of Magdeburg, told DW. "It's going to be decisive what happens in those countries that are now trying to catch up on economic growth - and they make up two-thirds of the global population."

Should developing countries and emerging economies follow the path Europe took? For centuries, Europeans fostered their own economic growth and wealth, before discovering their heart for environmental protection.

"Environmental protection as a priority stems from affluence," Paque said. "For us, it only started in the 1970s, no earlier. In China, it's only just beginning, and it will take a little longer in India."

Comeback for coal

There is much to make affluent and environmentally active Europeans nervous. Across the world, coal - the energy source that in most European countries has a reputation as being particularly dirty - is booming.

"Coal is about to enjoy the biggest renaissance in the history of economics," said Ottmar Edenhofer, deputy director and head economist at the Potsdam Institute for Climate Impact Research.

In the 1990s, many countries substituted coal with gas. But this trend is now being reversed, since coal has become "incredibly competitive," Edenhofer said.

Attempts to limit greenhouse gas emissions internationally have been unsuccesfull

"Above all, China's economic growth is strongly powered by cheap coal. The same holds true for India, South Africa, as well as some Eastern European countries," he added.

When coal or other fossil fuels are burned, CO2 is emitted, polluting the atmosphere - and contributing to making climate change more likely. Projections by the International Energy Agency (IEA) say that annual medium temperatures could rise 5.3 degrees by the end of the century, if countries across the world don't take action.

But negotiations towards a new international agreement on climate protection have been a failure. Whether it's about limiting greenhouse gas emissions or agreeing on emission rights trading, the interests of the various countries are simply too different.

Devaluing resources

"A global climate agreement would probably lead to a reduction of coal and oil consumption," said Carl Christian von Weizsäcker of the Bonn-based Max Planck Institute for Research on Collective Goods.

That, in turn constitutes a problem for countries with large fossil fuel resources. "A climate agreement would lead to decreasing prices for the resources in these countries," Weizsäcker said. "That makes it even harder to reach an agreement."

To complicate things further, some countries are changing their negotiation positions. Since new oil and gas fields were discovered in Kenya, and Canada found ways to make tar sands exploitation more lucrative, these countries have practically lost interest in a achieving climate agreement; Any limitation to pollution would reduce the value of their resources. 

After the failure of the UN climate talks in Copenhagen in 2009, the chances of reaching a quick agreement are slim, many experts fear. And it's even more unlikely to expect countries to agree to less, or no, economic growth. Even so, many environmental activists in western industrial nations dream of a world in which economic growth is unnecessary.

Improvements without growth?

From a global perspective, zero-percent economic growth is not a serious option.

"The huge disparities, for instance between Africa and Europe, or between Africa and the Americas would be not acceptable," Ottmar Edenhofer said, referring to calculations he undertook for the Potsdam Institute on Climate Impact Research.

Few, if any, countries in the world are likely to agree to limit their own economic growth

"For Africa to reach living standards similar to those in Latin America, the United States would have to reduce its per capita incomes by 80 percent," he said. "Resulting social conflicts would be severe."

Thus, it seems unlikely there will be a conscious limit to economic growth, just as it's unlikely universal targets for climate protection will be agreed anytime soon.

Regional efforts, such as the trading of emissions rights within Europe, only work partially or not at all. That's why many experts see humanity steering towards an apocalypse.

Economist Karl-Heinz Paque, however, is cautious when it comes to such scenarios, pointing out that reliable predictions about the future are simply impossible to make.

"Imagine you had made a prediction in 1913, exactly 100 years ago, about the future of the world - but starting from the state of technological development back then," he said. "What has happened since, within less than three generations, would have been completely beyond your imagination. That's why we have to be very careful about our predictions."

Don't panic, humanity will come up with solutions - that seems to be the bottom line to this argument. Paque, who has been active in politics with the liberal FDP party, believes such technological progress can be reached with as little state regulation as possible.

Yet Gerd Wagner, who heads the German Institute for Economic Research (DIW) in Berlin, argues that regulations set by nation states will indeed be necessary. "If you want to reduce environmental exploitation you need regulations."

California Should Increase The Price of Water.

Comments due by April 10, 2015

 

There has been a lot of discussion of the drought in California and the new regulations that the state is putting in place.  But there has been little mention of the obvious (to an economist) solution: Raise the price of water.

This would do more than any set of regulations ever could.  For example, the governor is not going to force people to replace their old toilets with newer, more water-efficient ones.  But a higher price of water would encourage people to do that.  A higher price would also give farmers the right incentive to grow the most water-efficient crops. It would induce entrepreneurs to come up with new water-saving technologies. And so on.

Some may worry about the distributional effects of a higher price of a necessity.  But the revenue from a higher price could be rebated to consumers on a lump-sum basis, making the whole system progressive.  We would end up with more efficiency and more equality. ( Greg Mankiw)

US Government greenhouse emissions to be cut by 40% !!!

                                                   Comments due by April 5, 2015
 U.S. President Barack Obama will sign an executive order on Thursday March 19, 2015 that sets a goal for the U.S. government to cut its greenhouse gas emissions by 40 percent by 2025, the White House said.

Although the federal government accounts for only 0.7 percent of net U.S. emissions, it is the single largest energy consumer in the United States, according to the White House.

Meeting the goal would cut 21 million metric tons of greenhouse gas emissions from 2008 levels, it said.

Several large private-sector partners, including IBM, General Electric and Honeywell, also committed to cutting a combined 5 million metric tons.

Obama has made fighting climate change a top priority in his final two years in office. The White House sees it as critical to his legacy.

In November, Obama reached an agreement with Chinese President Xi Jinping that set a goal of reducing overall U.S. greenhouse gas emissions by 26 percent to 28 percent below 2005 levels by 2025. China agreed to begin lowering its carbon dioxide emissions by 2030, with the intention of trying to do so earlier.

White House senior adviser Brian Deese said the federal government's share of greenhouse gas emissions in the overall U.S. economy is "modest," but said the announcement is significant.

"The potential from this announcement, however, is significant both because we can drive substantial reductions across the entire federal footprint and because our efforts to do that leverage both innovation and investment in the private sector," Deese said on a call with reporters.

The Environmental Protection Agency last year offered a Clean Power Plan that set deadlines for states to submit proposals to meet power plant carbon emission reduction goals.

A dozen states, including Kentucky, West Virginia, Indiana and Wyoming, sued the EPA last August, soon after the plan was unveiled, saying its use of a certain section of the Clean Air Act was illegal. The federal D.C. Circuit Court of Appeals will hear the case on April 16.

Obama's budget proposal for fiscal 2015, released last month, called for a 7 percent boost in funding for clean energy and a $4 billion fund to encourage U.S. states to make faster and deeper cuts to emissions from power plants. It also called for the permanent extension of tax credits used by the wind and solar power industries. (Reuters)