I’m interested in your information on N. Europe, and will read up on it, would love it if you could forward me some links. They certainly are dong something interesting up there when they can be simultaneously lauded by greens and neocons. Though I would find it a bit ironic if Norway was leading the way only because of it’s incredibly heady oil revenues.

Though the spirit behind Kyoto is laudable, the protocol itself does seem to be deeply flawed. It seemed to lack consideration for the effects on human life and global poverty through it’s potentially negative effects on the US economy. The sad reality of the global economy over the last 4 years is that US consumption is the only geoeconomic center of demand. Germany is at record unemployment, and Japan is set to re-enter inflation. It’s pretty pathetic that the other two significant geoeconomic centers in the world lack the political will to reform their labour markets and banking system, respectively. With only “one engine flying” the world’s economy we are all in a pretty precarious situation. If the US was to implement Kyoto today it would very likely signal a global recession.

If we had more balance in the world economy we might be able to wind things down simulaneously and not slow economic growth (which is so vital in battling global poverty). I’ve been expecting monetary pumping and fiscal stimulus in both Germany and Japan for the last year and half, but the ECB is just too rigid, and the Japanese business-class just too strong and short-sighted. Maybe the recent changes to the Stability and Growth Pact at the EU will signal this, but we shall see.

The human cost of a global depression is so high that even the risk of one should give us pause to consider the benefits of Kyoto. Even under the UNs published numbers, the gains would be marginal at best, buying only a few years by the mid-century. Certainly, outside of the cost to smaller economies and thier citizens if the US were to implement kyoto along with, one would expect, protectionist measures to try to ‘bring demand home’, there is major direct costs that forstall investment in other areas. I consider it vital, to examine the lost opportunity costs associated with the protocol (cf. Bjorn Lomberg).

Of course, I’d love to see the development of better protocols, but it really is a tough problem to crack given the geo-political-economic state of the world.

The issue will be a policy one in the US because of security, a current one because of economics, and a solved one because of technology.

Kalin

I also disagree with the premise behind your main argument against Kyoto. In particular, I don’t buy the argument that Kyoto will hurt the economy in the US. I’ve yet to see any convincing figures linking Kyoto directly to economic downturns in other signatory countries, including Canada. I suspect that spurring innovation and investment in alternative energy sources more than makes up for the negative effect you’re talking about. And even if your argument were true, that would be like opposing a cure for cancer because of the negative effect it would have on the US economy. Climate change is going to have disasterous effects, particularly in the poorest regions of the world that are marginal already. While Kyoto is by no means a solution to climate change, it is a key first step in stimulating alternative energy production which will likely lead to more substantial reductions in CO2 emmissions in the future.

One last thing: Lomborg’s argument is extremely problematic, on a number of levels, and most in the scientific community do not find him credible. Here’s a link to some debunkings of the Skeptical Environmentalist by scientists that I think are worth looking at: http://www.ucsusa.org/global_environment/archive/page.cfm?pageID=533

Anyway, enough procrastinating. Real work beckons…

ian

It’s fortunate for Denmark that they’re history now finds themselves at the forefront of a growing global industry. But this surely does not contradict the point of the original piece, or my contention that policy and ideology are not the major drivers of innovation, but ought only to lend a hand to the markets, and most importantly, not coddle old industries (which is why Bush’s first term energy bill was so brain-dead).

The Danish taxes on oil are one way of motivating innovation with a broad brush. Of course a 10% tax on hydrocarbons should have the equivalent effect on conservation and stimulating innovation of alternatives as a 10% rise in prices through natural mechanisms. Considering that a barrel of oil cost less than $10 in 1999, and is now over $50, just how marginal much would the effect of additional taxation be? A carbon tax, might still make a sizable difference, but it’s really tough for me to understand how the motivation towards renewable energy could be made much larger on a global scale (by global I mean both across the world and across industries) than it already is.

Now the thing that makes me skittish about raising total global energy costs, even in the short term, is that raising energy prices can contribute to the cost of pretty much everything, can result in price shocks, and will result in price inflation on basic goods (which you could call regressive taxation). Unless gradual we can risk stagflation as occurred in the seventies, but of course I’d imagine any general carbon tax scheme would take this into account and be phased in over time.

The thing that I found most interesting in the executive summary for “Winning The Oil Endgame” is that it focusses on individual transportation as the major area where changes will transform our energy-productivity. It’s a worthwhile argument, because were energy usage in other areas of the economy are plainly productive, single occupancy vehicles are terribly inefficient in some cases. Of course one doesn’t want to downplay the efficiency gained by comfortable ad hoc personal transportation which is massive but difficult to quantify, or discount the sunk costs in infrastructure.

So my initial reaction to the proposals in the book, building lighter vehicles with new materials, as well as advancing hybrid technology is positive. Even with the fuel economy advances that hybrid vehicles deliver today they are already brisk sellers. There is a problem in that most people don’t factor in the fuel savings over the life of a vehicle against the larger purchase price for this new technology. WTOE proposes ‘feebates’ to help even out the costs of inefficient and efficient technology and “pull forward” some of the long term savings to consumers (I’m not sure how this mechanism would work, I only read the summary).

More significant is not the question of whether consumers like saving money, but whether business will invest in the technology. Ford, Toyota, and Honda sell their hybrids at a loss today, because they reason that the payback gained from mass-production and marketing experience with the technology is worth it. WTOE proposes loan guarantees to companies reducing fuel used in transportation.

More controversially perhaps WTOE proposes that the pentagon’s current re-org and modernization should focus it’s R&D money on technology that will save it fuel on the battlefield, and in the transportation of equipment. The book also proposes that biofuel industries be fostered. It’s interesting that Brazil and America have advanced ethanol industries, taking advantage of their natural ability to grow cane sugar and corn, while Denmark focussed on it’s natural windiness.

Now one could argue that WTOE is more of a description of what will happen than a program for making it happen, and I’d tend to agree with that assessment. The policy prescriptions are light because the authors identify incremental trends in technological advancement that can and should be encouraged but which will very likely happen anyway if oil costs continue to trend upwards over the long-term.

Hmm, I’ve typed away again. Thanks for the posts as dialogue really does help me get my thoughts together. This subject ought to be more dear to me, and I’ve gotten behind in reading John Atkinson’s WoC updates on alternative fuels.

As for your claims about Lomborg’s argument being ‘extremely problematic’, I’d say that that stance depends on your perspective. I read the Scientific American ‘debunking’ and totally regretted ever recommending the usually fine journal to people. It was one of the worst pieces of writing I’ve ever read in a scientific publication, meaning that there was almost no science involved (and I subscribed to Omni when I was in grade 6, so I know all about bad scientific journalism!), and they were roundly criticized for it. Considering that Lomborg singles out the institutionalization of science along ideological lines, I’m not terribly surprised that the Union of Concerned Scientists can round up 3 figures who are willing to write against him.

The charges leveled against TSE by the Danish Committee on Scientific Dishonesty have also been roundly dismissed in a review by the Danish ministry of Science. I don’t know which scientific community you are referring to in which “most do not find him credible”, but I suppose you could craft one. Here’s a link to Lomborg’s critique’s page

It’s of course a good thing that there is a debate on environmental issues, but I’d rather it was kept on a sane level. Lomborg doesn’t deny that global warming is happening, or that species are disappearing, he merely argues for detached realism of what the effects are, constantly reviewing the newest data, and a realization that we have finite resources and have to focus on where we can get the biggest bang for the buck (or in the case of trade liberalization, the biggest bang for the reward).

As for your desire that implementing Kyoto be beneficial to the world’s economy most analyses I’ve read agree with you that it will, but understand that it will take generations for these benefits to begin to materialize. As for the cost over the near term, I’ll leave that as an exercise to the reader (try the last link). The other question I have is what progress will we make without a rigid and unevenly applied protocol? What’s the difference? The key to Lomborg’s work is the concept of lost opportunity costs.

I would oppose investing in a cure for cancer if we could determine with some rigor that the same money spent elsewhere would stop the spread of HIV, end starvation and malnutrition across the globe, provide clean drinking water with sustainable technology, and cut the poverty rate in half all within a generation. That’s the sort of debate that’s needed. Doing one of these things faster does imply doing many of the others more slowly. Imagine that the ‘cure for cancer’ wouldn’t actually work without another 300 years of research, and that its near-term benefits would be to extend the lifespan of terminal cases by a month or two. That’s the sort of reality we’re facing when choosing to follow the Kyoto protocol.

As for Canada’s lack of economic devastation from the passing of Kyoto it shouldn’t be surprising. It’s nothing more than a signature at this point; the government hasn’t taken significant action towards it. I’m betting it won’t. Sure there will be some programs and light tax credits, hastening technological change that is already happening, but these can and would have occurred without signing on to a broken treaty whose targets will not be met. You also referenced Germany, but barring any further evidence I don’t think it’s a particularly good example of what tight regulation does for the common citizen’s economic well-being and the long term viability of a nation to address other serious problems.

You haven’t seen convincing figures linking Kyoto to economic downturns in signatory countries because the Kyoto treaty took effect just over a month ago. You can choose to ignore the vast body of theory and historical knowledge concerning the effects of taxation or rising costs of energy on an economy at your peril.

I think we can agree to disagree on the immediate economic effects of Kyoto, but I want to point out that the argument against environmental regulation because of its effect on the economy is one of those arguments that will always apply, meaning that environmental regulations like Kyoto can keep being put off to some future date ad infinitum. However, I would argue that the economy has the ability to recover from the costs of regulation far better than damaged ecosystems can from continued lack of regulation. We will need to deal with global warming sometime, but the sooner the better.

And regarding Lomborg: I havent yet had a chance to read the replies to his critics that you’ve linked to, so I’ll have to refrain from commenting on his critics in the sciences. (Although I should point out that Scientific American is not so much an academic scientific publication but, rather, a popular science magazine. I can email you a far more balanced, but still damning critique of his methods from Science if you want it.) However, I will argue that the idea that the money spent on Kyoto could better be spent on other areas is fallicious because governments spend far more money in far more problematic ways than Kyoto (see American military budget, corporate welfare, war on drugs, etc). Targeting a treaty like Kyoto is unfair because it assumes that we have only one choice for solving the world’s problems and that Kyoto precludes other areas of humanitarian policy. I would argue that the logic of focusing resources on where we can get the best bang for our buck is perhaps more applicable when looking at the middle east: as much as Saddam Hussein was a ruthless tyrant who deserved to be brought to justice, the billions of dollars money spent so far on the Iraq conflict could have been better spent on dealing with AIDS, malaria, tuberculosis, or world poverty. Kyoto is a blip in comparison with the current and projected future costs of that war, as are the current levels of spending on the above mentioned problems.

IAN

Cool.

I would love to hear more about this …

Law of Attraction

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