Beyond green scarcity: a simple taxonomy

New post on Substack on ecological economics, inequality, and why environmental degradation is not just a market failure. Degrowth raises real questions, but for the periphery the issue is development, structural transformation, and the external constraint. This is based on the paper I presented at the BIPP conference.

Taylor and Foley recipients of Leontief Prize live

2015 Leontief Prize went to Duncan Foley and Lance Taylor for their work on "Macroeconomics in the Age of Climate Change." Watch their talk live starting at 5:30 Eastern Time today here.

PS: If you missed it, they will post later video footage. Meanwhile here are the interviews with last years winners Angus Deaton and James K. Galbraith.

Political Economy of the Environment: A Conference of the Union for Radical Political Economics Co-sponsored by New Politics

A Conference of the Union for Radical Political Economics

Co-sponsored by New Politics

St. Francis College, Brooklyn, NY • Saturday, October 5, 2013

Call for Workshop Presentations

If you would like to make a workshop presentation related to the theme of this conference, please send an email to the URPE National Office at urpe@labornet.org.

We are living in a period of increasing environmental crisis and growing inequalities within and between the countries of the world. The obstacles to sustainable development and the equitable distribution of the products of our labor lie in the ways in which our political economic system operates. The necessary technology is already available, and the resources required to end the use of fossil fuels, for example, exist. But multinational corporations, and the governments they control, base their decisions on the maximization of profits, not on the well-being of the world’s people. Understanding and challenging capitalism is therefore essential for the building of local, national and international environmental movements.

The goal of this conference is both to clarify areas of agreement among progressive environmental activists and to promote friendly discussion of disagreements. Thus we would like the plenaries and workshops of the conference to address questions such as the following:

• What would a sustainable and just future look like? 
• What short-run reforms, if any, can enable us to survive the climate crisis until fundamental change can be achieved? 
• Would sustainable development necessitate a reduction in living standards? 
• What have been the main successes of environmental movements and how were they achieved? 
• How do we promote environmental justice, making sure that environmental movements in the US address the specific concerns of African American and Latino/a communities? 
• Is there a conflict between the environmental movement and the labor movement? 
• How are people in the US and other countries responding to the challenge of fracking? 
• How do we assess the Kyoto Protocol? Why did the Copenhagen summit fail? 
• How should we address hazardous waste disposal -- locally, nationally, and internationally? 
• What are the relative merits of carbon taxes and tradable carbon-emission permits as ways of reducing worldwide emissions of greenhouse gases? 
• What are “green taxes” and how could the imposition of taxes on pollutants be made “revenue neutral” or used to make a tax system more progressive? 
• Does environmental regulation result in the loss of jobs, the creation of jobs, or is this the wrong question to ask? 
• How does the changing balance of international power, such as the rise of the BRICS, affect the prospects for reducing environmental damage? 

For updates on the conference program, please visit the program page. For a flyer announcing this call for workshops, click here.

Energy transitions and the end (or not) of civilization

Steve recently posted (not I) on the possibility of a big breakthrough in cold fusion technology (hey, he is at the University of Utah after all; on Fleischmann and Pons see here). But even if that occurs in the near future energy transitions tend to be a very slow process as explained by Vaclav Smil (reference below), which should make you a bit more pessimistic.

He suggests that it was in the 20th century that we finally did the transition to oil from coal, and that the 21st should be a slow transition to natural gas, with increasing role, but not yet dominant by alternative technologies. By the way, Smil is way more skeptical than Steve on the possibilities of what he refers to as 'soft energy illusions.'

The process is really slow. He shows that, in the US, only in the 1880s coal surpassed wood as the main energy source, something that occurred in China somewhere in the 1960s, and is still happening in some places in Africa. The 19th century was still part of the millennia dominated by wood burning, and the 20th century was dominated by coal, with oil becoming relevant towards the end. By the way, coal still generates almost 30% of the world's electricity. The figure below shows the time frame of energy transitions.

Given the slow transitions and the effects of biofuel consumption on climate change it would seem that we are doomed. However, Smil is considerably more optimistic (on this he resembles Steve) on the possibilities for the survival of civilization.

The biggest change in last two centuries with respect to energy use is the rapid increase in efficiency. As he notes, in open fires only 5% of wood's energy ends up as useful heat, while today's most efficient furnaces convert around 95% of natural gas to heat. So with better batteries, non-oil based fuels, less wasteful transmission of electricity, and more efficient technologies in general one can expect per capita stocks of useful fossil fuels will be only marginally smaller by the end of the century, and perhaps with a significant reduction on their environmental impact.

In fact, he suggests that with about half today's energy demand it is possible to maintain the quality of life associated with the world's developed countries, and, hence, the eventual decline in oil's share in the global energy supply will not mark the end of civilization (which I'm glad, since I'm kind of personally attached to civilization).

Also, I should point out, increased efficiency may come out of regulation, as noted by Smil. For example, the Corporate Average Fuel Economy (CAFE) regulations, which allowed for a doubling of the average efficiency from 13.5 to 27.5 mpg (and you thought regulations do not work!), were incredibly efficient. The other way to improve efficiency is economic growth (as I argued before; that was I, not Steve).

So it seems that if you want to preserve civilization, growth and regulation is the way to go. Of course that is no guarantee that that we'll get either regulation or the kind of technical change that comes with growth (in particular, austerity seems to suggest a prolonged period of stagnation, but that should not make you happy even from an environmental point of view).

Reference:
Smil, Vaclav (2010). Energy Myths and Realities: Bringing Science to the Energy Policy Debate. AEI Press. Kindle Edition. 

Energy demand and costs: Swanson's Law

Graph below shows the distribution of energy demand in the US, from wood burning at the time of independence to gas and oil now.

Renewable sources are still a small share. But there are good news in that front, with solar energy prices falling at a fast pace. According to The Economist, "Swanson’s law, named after Richard Swanson, the founder of SunPower, a big American solar-cell manufacturer, suggests that the cost of the photovoltaic cells needed to generate solar power falls by 20% with each doubling of global manufacturing capacity." Hope springs eternal.

The costs of man made catastrophes

Graph below shows some evidence on the increasing costs of man made catastrophes. Note that some of the weather ones are also associated to global warming and, thus, are man made too (h/t The Economist).

Although the data is for a relatively short period, the increase is clear and significant. This is another reason why State spending to prevent these kind of disasters is called for.

Energy sources in Latin America and Asia

The graphs below (World Bank data) show the sources of energy in a few selected countries in Latin America and Asia. The first thing to notice is that Asia burns way more coal than Latin America, which tends to depend more on hydroelectric and natural gas sources (the US is a natural gas and coal country, by the way).

One reason for the difference is that Latin America does not have a significant share of the global coal reserves. China and India have a reasonable share (the US has the largest reserves of coal, followed by Russia).

In terms of the environment hydro sources are considerably better for emissions (zero) than coal, but do have other impacts, associated with flooding, reduced streams and negative impact on fish migration patterns among the worse. Natural gas is also better than coal. So Latin America is slightly more environmentally friendly. Coal tends to be cheaper (although fracking may be changing that in the US), which gives a competitive edge to Asian countries.

Note that energy is essential for the functioning of the economy. Lenin said that: "Communism is Soviet power plus the electrification of the whole country." Paraphrasing, capitalism is power to the corporations and electrification of the whole world. Note that this implies that sometimes, at least, the constraint to the expansion of demand could come from a supply restriction. Interestingly enough, more often than not, it still manifests itself through an external constraint, since many developing countries are net importers of energy.

Perverse dependence on Asia

By Luiz Carlos Bresser-Pereira

Published originally in portuguese in the Folha de S. Paulo, January 16, 2012

In his last column, Martin Wolf mentioned the fact that, since 2007, the fast-growing Asian countries have grown by 60%, whereas rich countries have grown by 3%, and he pinned the world's economic hopes in Asia. Brazil, in the same period, grew by modest 16%. Brazilians also depend on the increase in Asian demand to achieve their growth. Brazilian economy is not stagnant as the economy of developed countries, but, in terms of growth, it is closer to them than to countries such as China and India.

Read the rest here.

Cold Fusion and Population - Environmental Musings

The center of gravity on climate change/global warming/... on the left is pretty fairly represented by Dean Baker's recent blog saying it's lights out figuratively and literally if we don't change our profligate energy ways. And this is by far more important inter-generationally than the current aggregate-demand-deficit-led fiscal deficits. Dean's post is here.

And, given mainstream science, he's absolutely right. This leads to the growth-neutral advocates with whom I have a moral problem in that it condemns the poorer nations to less wealth than we living in advanced countries enjoy. If that is to be the outcome, we should be crystal clear sure of our environmental arguments. I do not challenge results like those from the IPCC.

However, there are a couple of mitigating things going on, one in the realm of economics, and one in the realm of heterodox science.

First, for a recent department seminar on environment, I put together some data using the Kaya model and UN population projections to project CO2 emissions. What this clearly shows is that among greening of energy sources, energy efficiency, and population growth, it's population growth, through GDP growth, that has the greatest impact on CO2, by a factor of at least three times.

And, the closer we are to the UN 2010 population low estimate of growth, the better off we are, in fact, my analysis shows we bend down the CO2 curve starting in about 2050. Fertility reduction is what we should focus on. Fortunately, it is clear in the literature that GDP per capita growth and female education both significantly correlate with reduced fertility rates, and those trends are in train around much of the world.

So the best solution for CO2 mediation in the current context is headed in the right direction; we should give it a major shove. Helicopter drops of books and family planning items. You can see my slides here. Make sure to check out the embedded motion chart to visualize the effects of GDP and education growth on fertility by country. There may be hope in the following sense.

Growth of per capita income is not necessarily that bad for the environment, and those defending De-growth (reduction of GDP) might understate the economic, social and environmental effects of their policy suggestions.

Second, I will talk a bit of non-mainstream science, and thereby prove myself crazy for doing it publicly.

Remember cold fusion? In 1989 Professors Pons and Fleischmann, right here at the University of Utah, reported experimental results for an over-unity chemical reaction in a press conference. They were immediately, viciously, humiliated and attacked by the scientific mainstream, especially those whose gored ox was pulling the generously funded hot fusion projects. The cover story was that this violates thermodynamic laws. Case closed.

Except physics has evolved theories in which such results are supported without violating thermodynamics.

And one of the many serious experimenters working in cold fusion since 1989, Andrea Rossi, has announced and shipped an over-unity megawatt heat generator that uses its modern incarnation LENR, which stands for Low Energy Nuclear Reaction. The mainstream science is still out on this, but if its commercially successful, who cares?

Well, Dennis Bushnell, the chief scientist at NASA Langley, cares, and has spoken. He thinks LENR is a revolutionary epoch-changing technology whose time has come, a true game-changer.

I have gone on further than most care to read in one blog, so will stop and not embed more word or links in this post. Depending on the interest and tolerance for these surprising ideas, I will offer to follow up on this and post more sources.

Let me finish by saying, if true, this will put us on the road to virtually unlimited, very cheap, zero pollution distributed and compact energy sources. That would change much that is wrong with our current economies on the physical (but not distributional) side. And Dean Baker would be freed of his inter-generational global warming dilemma, so can get back to creating jobs here and now.