Posts Tagged ‘carbon’

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IEA: Recession => lower carbon emissions

September 21, 2009

Lynne Kiesling

The International Energy Agency has put a quantitative estimate on an effect that we all suspected — this year’s economic recession is contributing to a reduction in global carbon emissions. They estimate that 2009 carbon emissions will be 2 percent lower than 2008, with 75% of the reduction attributable to the economic slowdown and 25% attributable to carbon-reduction policies:

The close relationship between GDP and carbon emissions is well documented, so many commentators were expecting that the recession might cause emissions to drop.

But the size of the fall has come as something of a surprise.

The IEA estimates that the recession is responsible for about three-quarters of the fall.

As well as curtailing the business sector’s energy use by applying a general economic brake, the straitened circumstances have reportedly led to deferments on investment in new fossil fuel plants.

The remaining quarter of the reduction comes from policies designed to curb CO2 production, according to the IEA.

The BBC article also points out that compared with the recession of the early 1980s, which was a biggie, this one is likely to lead to larger carbon emission reductions. This is interesting, because it highlights the fact that the relationship between GDP and carbon emissions is 1. nonlinear and 2. not constant. Technology changes, policy changes, and they change the relationship between CDP and CO2.

It’s also interesting that the magnitude of the effects of economic drivers is so much larger than the effects of policy drivers.

Posted in Economics, Environmental policy | Tagged , , , | 3 Comments »

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Sorting out some claims about Danish wind power

May 15, 2009

Michael Giberson

A shortened version of Michael Trebilcock’s commentary on wind power, mentioned here the other day, was published in the Financial Post under the not so subtle title of, “Wind power is a complete disaster.”

The Financial Post subsequently published a reply by Sigurd Lauge Pedersen, a Senior Adviser to the Danish Energy Agency: “Wind power works.”

Trebilcock is back in the Financial Post with “The myth of the Danish green energy ‘miracle’.”

Pedersen begins, “It is perfectly legitimate to hate wind power. But it is more convincing if you do your homework first.” Trebilcock, in his reply, begins by casting aspersions on the Danish government’s sensitivity to criticism of their wind power experience. Both authors have some helpful points to make, but I object to the unnecessarily strident and snide tone of the exchange. (Hey, that’s what blogs are for! -ed.)

If Pedersen had done his homework, say by reviewing the Arthur Campbell paper cited in Trebilcock’s submission to the Ontario Legislative Committee on the Green Energy Act (mentioned in the original op-ed), Pedersen would have realized that claiming wind power raises CO2 emissions is not absurd. Instead it is merely unlikely.

If Trebilcock were more careful, or maybe if he understood wind power better, he’d have avoided the modest non sequitur of, “Most wind turbines run at about 25% of rated capacity, requiring back-up generation for the balance of the time.” No one, so far as I am aware, expects to get a constant 100 percent of nameplate capacity delivered from their wind power (or any other) generation, so what “balance of the time” is he referring to?

It is well known that “facts” circulating in public discourse sometimes stray from their original meaning, so it is sometimes useful to track down sources.  In the continuation I try to sort out two disputed claims made by Trebilcock in his first Financial Post op-ed.

Read the rest of this entry ?

Posted in Electricity, Energy markets, Politics | Tagged , , , | 5 Comments »

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A problem with market-based approaches to emission reductions

April 29, 2009

Michael Giberson

Market-based approaches to regulating emissions are the new conventional wisdom, according to Robert Stavins, and it would be hard to disagree. Among proponents of regulating greenhouse gasses in the United States, the big debate is over which of two market-based approaches to regulating emissions should be pursued: emission tax or cap-and-trade. Is anyone proposing “best available control technology”? Market-based approaches have become favored in part because of some high profile successes, notably the cap-and-trade program for SO2, seen as achieving its goal at a considerable cost savings compared to alternative approaches to regulation.

The primary strength of market-based approaches comes from the decentralizing of compliance decision-making, which enables each entity responsible for compliance to pursue the lowest-cost means of meeting the requirement. This strength, though, may also be the biggest problem with market-based approaches, at least when proponents of regulation hope to achieve goals beyond efficiently addressing externalities associated with emissions.

At TNR’s THE VINE, Bradford Plumer asks, “If Carbon Caps Are Coming, Why Mandate Renewables?“, and reports some of the responses he received.  Rich Sweeny asked the same question at Common Tragedies a while back.  In both cases it appears to be the case that proponents of greenhouse gas regulation are worried we might achieve the targeted reductions too easily, i.e. while still burning a lot of coal, not cutting back on consumption, and not garnering enough market share for renewable power. That is to say, some proponents of regulating greenhouse gasses hope to not only to reduce externalities, they have additional preferences about other people’s future energy choices that they want to control through the public policy process.

From Plumer:

Hummel explained that in wholesale electricity markets, the price of carbon would need to get very high—around $60/ton—before pushing dirty coal out onto the margins. So a renewable standard is a good way to manage a steady transition away from coal long before reaching that point.

In the comments responding to Sweeny’s discussion:

Cap and trade purists don’t seem to understand that there is something out here in the real world called an electricity market, and that under any politically viable national cap, coal use is barely touched.

Once we get beyond “internalizing the externality” in economists’ language, or more plainly, once the third party effects of actions are taken care of, the further ambitions of these regulation proponents sound like a bad mix of industrial policy and meddlesome preferences. The problem with market-based approaches, from the point of view of some folks, is that they don’t help enforce these further ambitions for social reform.

Actually, in my view, this “problem” is another great strength of the market-based approach.

Posted in Energy markets, Environmental policy | Tagged , , , , , , , , | 3 Comments »

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Couple of “food miles” items

December 29, 2008

Lynne Kiesling

One topic that has gotten some attention in 2008 is “food miles”, or the estimate of the environmental impact of the total resource use and transportation required to get food from grower to consumer. One argument for eating more locally-produced food is that it reduces the transportation impact; however, in making that argument we also have to take into account differentials in total factor productivity. In other words, if your local farmers are less productive than distant farmers, producing and consuming a given amount of food produced locally could increase resource use because the local farmers have less of a comparative advantage and achieve lower yields. That increased resource use mitigates the transportation benefits of local production, and if large enough can outweigh them entirely.

At Aguanomics David Zetland had a post recently with some links to work on the “carbon footprint of food”; interestingly, one report finds that transportation constitutes a small share of food’s environmental impact, and that most of food’s climate impact is a result of non-carbon dioxide greenhouse gases (such as methane). Very interesting.

Back in November Ron Bailey wrote about food miles at Reason, and I’ve been wanting to post about it since then. He mentions the studies that David noted in his recent post, and Ron also commented on a Mercatus Center study of the food miles argument (pdf).

In their recent policy primer for the Mercatus Center at George University, however, economic geographer Pierre Desrochers and economic consultant Hiroko Shimizu challenge the notion that food miles are a good sustainability indicator. As Desrochers and Shimizu point out, the food trade has been historically driven by urbanization. As agriculture became more efficient, people were liberated from farms and able to develop other skills that helped raise general living standards. People freed from having to scrabble for food, for instance, could work in factories, write software, or become physicians. Modernization is a process in which people get further and further away from the farm. …

Food miles advocates fail to grasp the simple idea that food should be grown where it is most economically advantageous to do so. Relevant advantages consist of various combinations of soil, climate, labor, capital, and other factors. It is possible to grow bananas in Iceland, but Costa Rica really has the better climate for that activity. Transporting food is just one relatively small cost of providing modern consumers with their daily bread, meat, cheese, and veggies. Desrochers and Shimizu argue that concentrating agricultural production in the most favorable regions is the best way to minimize human impacts on the environment.

In other words, the productivity effects on resource use swamp the resources used and emissions generated in the transportation portion of the supply chain. Incorporating this aspect of productivity into the food miles argument illustrates the point I raised above — much of what determines resource use and emissions in the food supply chain is factor productivity and comparative advantage.

Posted in Economics, Environmental policy, Food and wine | Tagged , , | 1 Comment »

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