TRYING TO UNDERSTAND CLIMATE CHANGE – PART II

Accepting the existence of climate change shouldn’t be all that hard.  The difficult part is ascertaining whether it is really a crisis and practically what can be done about it either way.

So let’s start with the so-called Paris Agreement.  It was negotiated by representatives of 195 countries at the U.N. Council on Climate Change and adopted on December 12, 2015.  It deals with goals for greenhouse gas emissions, adaptation and finance starting in 2020.

In September 2015, President Obama and President Xi of China announced “ratification” of the Paris Agreement.  Now, almost 90 countries have signed the “treaty” and some 95 have ratified it, which accounts for about 66% of the world’s global emissions.

Ratification means acceptance, not contractual implementation.

Largest greenhouse gas contributors:

  • China: 20.1%
  • US: 17.9%
  • EU: 12.1%
  • Russia: 7.5%
  • India: 4.1%
  • Japan: 3.8%
  • Brazil: 2.5%

The goal of the Paris Agreement is to reduce fossil fuel generation of electric energy to 50% by the year 2050 and then eliminate it entirely.  No one knows if that is practical or can be accomplished.

China, the world’s largest polluter, alternately expresses the desire to accept modest goals for dropping fossil fuel generation while at the same time it continues to be the globe’s biggest coal user.

The only way to make any inroads towards meeting these goals would be to accelerate the use of alternative energy sources, particularly wind and solar as fossil fuel plants age, are decommissioned and have to be replaced.

Top energy policy makers and corporate leaders caution that it will be challenging to meet even the accord’s modest goals to reduce emissions of greenhouse gases.

Many companies have not even figured out yet how much greenhouse gas they emit, much less made plans to curb these emissions.  Rapid technological advances in areas like electric cars are not enough to stop the world’s long climb in oil consumption, let alone reverse it.

The financial framework, namely a carbon price or tax that would force industries to pay for the pollution they spew, has barely started to emerge.  And while tens of billions of dollars of green bonds have been issued to finance environmental projects, these are a pittance compared to the sums required to make a difference.

“It’s not a question of billions, it’s a question of trillions,” said Angel Gurria, the secretary general of the Organization for Economic Cooperation and Development, speaking at the N.Y. Times Energy for Tomorrow conference.

The Paris Agreement, according to Gurria, was never imagined as the silver bullet for global warming.  Rather, the goal of the agreement was to stave off the most devastating effects of climate change by limiting the increase in global temperatures to two degrees Celsius, and to just 1.5 degrees Celsius if possible.

But even that may prove problematic.  If every country fully accomplishes its initial pledges, the increase would be closer to 2.7 degrees, according to Fatih Birol, executive director of the International Energy Agency.  That misses exceeding the goal by over 30%.  In the next several years, countries are supposed to set additional goals for deeper reductions.

Fledgling exchanges for trading carbon emissions rights have attracted limited interest.  And the prices on those markets are well below the $100 a ton or more that experts say would force companies to limit their emissions of greenhouse gases.

The world needs “a big, fat price on carbon,” Mr. Gurria said at the conference.

“The market for carbon emissions has actually weakened in the months since the deal was approved.  It has gone from $9 after the agreement to $6—it shows us the market impact of the Paris Agreement has not been as strong as we all thought,” Fatih Birol, writing in the U.S. edition of the Guardian, said.

Carbon pricing, the mantra of all climate change proponents, causes more economic damage, according to Robert Murphy of the Institute for Energy Research, along with Pat Michaels and Paul Krafren-Berger of CATO.

In their book, “The Case Against US Carbon Tax,” they cite the experience of Australia which threw out a carbon tax after electricity price hikes and a struggling economy.  In British Columbia (Canada), it did not produce any significant reduction in gasoline usage.

Reliable estimates predict a carbon tax will show up on each US household to the tune of $2,500 to $3,000 per year for increased prices for electricity and in the marketplace for everything you buy.

“The era of fossil fuels is far from being over, even if the Paris pledges are fully implemented,” said Birol.  “Today,” he said, “the share of fossil fuels in the global energy mix is about 81%; if Paris goals are met, the share will drop to only 74%.  This is in part because even though renewable energy sources are finding their way into electricity generation, oil is still an important source of power for transportation and petrochemical production.”

If the Trump administration is successful in ratching up our economy to an annual 4% growth, we might be able to afford a carbon tax.  If the more realistic economists are correct in predicting a continuing 2% growth rate, we would have a lot of trouble implementing a carbon tax.

Technically, the Paris Accord may be a treaty, but it is non-binding to encourage more country participation.  Two-thirds of our Senate would have had to approve the accord as a binding treaty.  Not likely, so it’s all a lot of window-dressing.

My Conclusions

  1. We unquestionably have climate change, but I’m not sure it’s a crisis. A significant number of credible naysayers question the accuracy and validity of the computer models used by the proponents.  If the science was so exact, 90% or more of the scientific community would subscribe to the crisis state.
  2. If you check out my blog in the archives of 7/2/14, you’ll be reminded that we have been warned before about impending doom many times from various causes. There was the ice age, before fossil fuels, the population explosion that would leave everyone starving, the banning of DDT was necessary to save the world, but millions in the tropics died of malaria and in the 20’s when the world was getting colder and we were told we all would freeze to death.
  3. I’m not sure we can count on a couple hundred countries that have ratified the Paris Accord to accomplish their commitments. Will we be alone?  There is no penalty for missing the targets.
  4. There is a ton of data which clearly demonstrate the ability to reach even the Paris goals are impossible.
  5. When our economy can sustain something near 4% annual growth, only then can we consider agreeing to these lofty goals.  Until then, we have higher priorities:  more jobs and more investment in infrastructure.

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1 Comment

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One response to “TRYING TO UNDERSTAND CLIMATE CHANGE – PART II

  1. Gary W.

    Hi Art,
    Can’t argue with any of what your shared. You nailed it. I hope President Trump cancels the Paris Agreement today. As stated, it was never approved by the Senate thus never a valid treaty.

    Then you have to ask yourself, if it’s so critical and so worthwhile, why did President Obama approved it unilaterally. My guess, it would never have made it through the Senate. The majority of the folks in America don’t want it.

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