Rethinking the Implications of Climate Change and Peak Oil
by Richard Heinberg
MuseLetter #187 / November 2007
Environmental and development NGOs are now fixated on climate change to
the exclusion of nearly every other topic. Discussions in and among
these organizations center on capping carbon emissions and trading
emissions rights, and doing this internationally in a way that will be
deemed equitable by the global South and acceptable to the industrial
Northern countries.
Most of these policy organizations are seeking ways of implementing
recommendations made in 2001 by the Intergovernmental Panel on Climate
Change (IPCC), which suggested that to keep the global average
temperature rise to two degrees Celsius above pre-industrial levels (by
consensus, the maximum increase the world's climate system can absorb
without triggering catastrophic climate change), the amount of
greenhouse gases in the atmosphere must be capped at 450 parts per
million of carbon dioxide equivalents. This will require a sixty to
eighty percent reduction in carbon emissions below current levels by 2050.
In order to win any reduction agreement from less-industrialized
nations, the richer, more industrialized nations will have to promise to
reduce their emissions more and faster. A growing number of
organizations (including the Global Commons Institute, EcoEquity, the
Climate Equity Project, Feasta, Just Transition Alliance, The Sky Trust,
and Third World Network) contend that the fairest solution would be to
allocate annually capped emissions rights globally on an equal
per-capita basis; then, if wealthy nations wished to continue using
proportionally more fossil fuels, they would have to purchase emissions
rights from more parsimonious consumers in poor nations. This would
result over time in both a diminishing amount of total emissions (based
on the declining trajectory of the annual caps) and an enormous transfer
of wealth from the more-industrialized to the less-industrialized
nations. Some organizations advocate immediate allotment of equal
per-capita emissions rights; others envision a staged implementation of
the program, that would give wealthier nations time to plan and adjust
(the two most widely promoted versions of this strategy are known as
"Contraction and Convergence" and "Cap and Share").
>From the perspective of less-industrialized countries, a global climate
policy that does not include an equity provision is a non-starter. The
existing humanly produced atmospheric carbon, which will continue
driving climate change for the next forty years or so even if all
emissions are halted now, was generated overwhelmingly by rich countries
in the process of getting rich. Thus it is these countries' obligation
to shoulder most of the burden of necessary cutbacks. A second equity
argument has to do with expected population growth: since the population
of the global South is expected to double during the next fifty years
while total population in rich countries is projected to remain at
current levels (the US is an exception), even if the South reduces
carbon emissions at half the rate of the industrial North that will
translate to an equivalent per-capita cut.
If people in the industrializing countries (particularly China and
India) continue to burn more coal and drive more cars, they will
metaphorically cook the planet. These nations have the highest growth
rates for fossil fuel emissions, and China is set to soon become the
world's foremost carbon emitter if it has not already done so. These
nations are in effect saying to North America, Europe, and Japan, "Agree
to reduce your emissions faster than we do, or we won't reduce ours at
all and the entire planet will burn".
This Grand Bargain could amount to an unprecedented shift of the world's
economic center of gravity. During decades of "development" policy and
aid, the disparity between rich and poor only grew; now, however, the
poor world has a weapon - even if its use implies a suicide pact.
The environment/development advocacy community is pushing its agenda
with particular urgency for two reasons: first, scientific data show
dramatic climate impacts already appearing that could devastate global
ecosystems within decades or even years (more on that in a moment); and
second, the agenda itself promises to solve at one stroke three enormous
problems - the world's unsustainable reliance on fossil fuels, a pending
environmental catastrophe, and the global equity dilemma.
However, the Grand Bargain is going to hit three serious snags before it
can gain acceptance: politics, scarcity of fuels, and a growing
perception that it is already too late to avert catastrophic climate
change. These barriers may require new tactics if NGOs are to achieve
their goals.
Has the Climate Revolver Already Fired?
In a paper titled "Climate Change and Trace Gases" published in the
Philosophical Transactions of the Royal Society earlier this year, six
of America's leading climate scientists, led by James Hansen, director
of NASA's Goddard Institute for Space Studies, warned that the Earth is
rapidly approaching a "tipping point" beyond which climate change will
become unstoppable {1}. The authors discussed feedback mechanisms not
included in the assessments of the IPCC and argued that unless effective
measures are put in place to control carbon dioxide emissions over the
next ten years, the rise in the Earth's temperature could set loose
self-reinforcing processes that would be beyond human control.
Some critics said Hansen was overstating his case. Richard Peltier, a
University of Toronto physicist and the director of the Centre for
Global Change Science, criticized the tone of the paper and the use of
words such as "cataclysm", saying that Hansen had moved "dangerously
away from scientific discourse to advocacy" {2}.
But this was before the summer Arctic ice melt of 2007.
This year, Arctic ice reached a minimum extent of 4.13 million square
kilometers, compared to the previous record low of 5.32 million square
kilometers in 2005. This represented a decline of 22 per cent in just
two years; the difference amounted to an expanse of ice roughly the size
of Texas and California combined. Between 1979 and 2005, the rate of
Arctic ice retreat had averaged seven percent per decade; in the two
years from September 2005 to September 2007 that rate increased to more
than twenty percent. Moreover, the average thickness of the ice has
declined by about half since 2001. Altogether, taking into account both
geographic extent and thickness, summer Arctic sea ice has lost more
than eighty per cent of its volume in four decades. While sea levels
will not be directly affected by the total melting of the northern
icecap since it floats on and thus displaces ocean water, that event
will severely destabilize Greenland's ice pack - whose disappearance
would cause sea levels to rise by several meters, inundating coastal
cities home to hundreds of millions.
The organization Carbon Equity issued a report last month, "The Big
Melt: Lessons from the Arctic Summer of 2007" {3}, which draws
conclusions from this disturbing new information:
"The data surveyed suggests strongly that in many key areas the IPCC
process has been so deficient as to be an unreliable and indeed a
misleading basis for policy-making ... Take just one example: the most
fundamental and widely supported tenet - that two degrees Celsius
represents a reasonable maximum target if we are to avoid dangerous
climate change - can no longer be defended. Today at less than a one
degree Celsius rise the Arctic sea ice is headed for very rapid
disintegration, in all likelihood triggering the irreversible loss of
the Greenland ice sheet and catastrophic sea level increases. Many
species are on the precipice, climate change- induced drought or
changing monsoon patterns are sweeping every continent, the carbon sinks
are losing capacity and the seas are acidifying ... The Arctic began to
lose volume at least twenty years ago when the global temperature was
about 0.5 degrees Celsius over the pre-industrial level. So we can now
see that to protect the Arctic the average global temperature rise
should be under 0.5 degrees Celsius.
According to the report, if this suggested 0.5 degrees Celsius
precautionary warming cap were adopted, the target for allowable
concentrations of atmospheric greenhouse gases would have to be about
320 ppm carbon dioxide equivalents, a level that was passed more than
fifty years ago.
Another report published this month, this one in the Proceedings of the
National Academy of Sciences {4}, documents that carbon is accumulating
in the atmosphere much faster than previously thought, and only adds
weight to the Carbon Equity recommendations. While global carbon dioxide
emissions from fossil fuel burning rose annually by 0.7 percent in the
1990s, the new study shows they have increased by an average 2.9 percent
each year since 2000.
What would targets of 0.5 degrees warming over pre-industrial levels,
and 320 ppm carbon dioxide equivalent, mean in terms of policy? While
the Carbon Equity report doesn't say so, if all nations were to bear the
brunt of equal emissions cuts the latter would have to be huge - well
over ninety percent in just three or four decades. But if international
equity is also targeted, this means that for the wealthy nations more
than 100 percent reduction would be needed. In other words, leaving
aside the notion of carbon capture and storage (discussed below), not
only would wealthy nations have to transform their economies to run
entirely without fossil fuels (which currently supply 85 percent of
world energy), but they would need to spend considerable capital on
efforts to capture and sequester existing atmospheric carbon - for
example, through massive reforestation projects. One has to wonder: With
all the energy and investment that would be needed to de-carbonize
industrial economies (by developing renewable energy sources, building
public transportation infrastructure, and so on) and store carbon, what
money and energy would be left to run existing economies, much less to
fuel growth in goods and services to the population?
Politics: An Alternate Reality
Climate science exists in a different world from the one peopled by
politicians. Inhabitants of both worlds think of themselves as realists:
while scientists study the real physical world, politicians are arbiters
of what can and will get done in the real human socio-economic world.
In general, any policy that means voluntary economic contraction of any
noticeable magnitude doesn't stand much of a chance in the real world of
politics. At least in the current political climate, absent a massive
public education effort, voters will not support it and no politician
will stake her career on it.
This in itself constitutes an enormous roadblock to the achievement even
of the IPCC recommendations, much less the far more stringent targets
(but more "realistic" ones in the scientific sense) that Carbon Equity
is proposing. Faced with this roadblock, climate activists typically
respond by minimizing the estimated cost of de-carbonizing economies,
and by assuring one and all that economic growth can continue into the
indefinite future while industrial nations radically reduce their
consumption of the very fuels that made the industrial revolution
possible. But if this sanguine, politically acceptable notion is at
least arguable in the case of the IPCC reduction targets, it is hardly
credible when it comes to the emissions reduction trajectory suggested
by Carbon Equity.
Take the US as an atypical but essential example. One can realistically
calculate a possible fifty percent reduction in fossil fuel consumption
for the country through conservation (though that will be an enormous
job, requiring extensive new electrified public transport
infrastructure, new housing codes, subsidized energy retrofit programs,
and so on). Another 25 percent of current fossil fuel consumption could
be offset with renewable energy sources. All of this would take a few
decades, and during that time we have to assume no population growth and
no economic growth. That gets us to 75 percent reduction from current
levels. Beyond that, it is difficult to see how more could be achieved -
unless America continues burning fossil fuels but captures and stores
the carbon. Suddenly with that possibility a relief valve is opened:
coal-based electricity could flow in to fill the void.
This is why carbon capture and storage is the technical centerpiece of
most politically acceptable prescriptions for climate salvation.
However, technologies for carbon capture will add to the cost of energy,
will reduce the amount of useful energy derivable from fossil fuels, and
won't be ready for widespread commercial application for about three
decades. We do not even know if the captured carbon will stay where we
put it. These are not trivial problems, and the first two will bite hard
in the emerging context of scarce energy supplies and high prices (more
on that below).
Still, politicians are feeling increasing pressure from constituents,
NGOs, and the scientific community to agree at least to the IPCC target
of sixty to eighty percent emissions reductions by 2050. The European
nations have signed on to a carbon reduction scheme, as has the state of
California. The method being adopted is "cap and trade" - the creation
of a carbon emissions rights market that, according to its critics, is
actually an elaborate shell game that enables wealthy nations and energy
corporations to continue burning fuels at high rates by paying others to
do the hard work of figuring out how to get by on less fuel (a point
hilariously illustrated on the website www.cheatneutral.com). While "cap
and trade" employs many of the same basic mechanisms as the emissions
rights distribution programs advocated by the environmental/equity NGOs,
there are also substantial differences: governments and corporations
envision high caps and free or auctioned distribution of emissions
rights to industry; the NGOs advocate much lower caps and free
distribution of rights to the people. Resolving these two visions of the
process will be no small matter.
But let's assume the best - that "cap and trade" will in fact move
nations toward their targeted reductions; in that case, would promises
continue to be met if compliance began to compromise economic growth?
Significantly, California's climate law, AB32, contains an escape clause:
1. In the event of extraordinary circumstances, catastrophic events, or
threat of significant economic harm, the Governor may adjust the
applicable deadlines for individual regulations, or for the state in the
aggregate, to the earliest feasible date after that deadline.
2. The adjustment period may not exceed one year unless the Governor
makes an additional adjustment pursuant to subdivision (a).
In other words, the Governor can essentially cancel the state's
greenhouse gas reduction efforts for a year, then do the same the next
year, and so on.
Meanwhile, international bargaining on the equity issue will be a
nightmare. The "North/South" terminology used by development NGOs
utterly fails to capture the complexity of the negotiations. The reality
is that "North" consists primarily of the US, Europe, Japan, Australia,
Canada, and South Korea, which have quite different energy trajectories
and political positions. "South" consists of rapidly industrializing
countries (China, India), really poor countries whose economies are
stagnant or declining (Zimbabwe, for example), as well as major fossil
fuel exporters (OPEC) whose revenues are increasing but whose industrial
base is small. Again, these categories of countries have very different
energy mixes and bargaining positions that are poorly captured by a
single term.
China represents itself as speaking for the entire less-industrialized
world in insisting on an equity provision, and in some ways this makes
sense: its voice is much louder than that of Zimbabwe, so the latter
gets a free megaphone. But China can easily afford to bid up energy
prices and can continue to grow its economy even with oil at $100 per
barrel, while Zimbabwe can't afford much fuel at all at current prices
even if it is permitted to burn all it likes under climate accords. Thus
the practical climate mitigation question that must be addressed with
regard to the South is not whether the desperately poor in
fuel-importing nations should have the right to industrialize using coal
or oil - that is not an option, given global supply constraints (which,
again, we will address in a moment); the question, rather, is whether
China and India will continue to industrialize by burning coal.
Russia is in a category of its own, but due to its wealth of remaining
fuels it will be a key player in the energy and climate discussions.
And so, while in some ways the situation is more complex than it is
represented to be, in another it is simpler. As James Hansen has
recently noted {5}, the resolution of the climate dilemma really centers
on coal (it is the world's fastest growing energy source because of its
current cheapness and abundance, while it is also the most
carbon-intensive of fuels), and thus it revolves mostly around four
nations - China, the US, India, and Russia (the US and Russia have the
largest reserves; China is the foremost consumer; and India has both
large reserves and fastgrowing consumption levels). Getting these
countries to agree on major reductions in coal consumption, in which the
US reduces much faster than India and China for the sake of global
equity while Russia keeps its treasure chest of fuels buried, is going
to be ... well, difficult. Moreover, since China consumes twice as much
coal as the US, arguing for the US to reduce faster than China is also,
in effect, arguing for slower total declines in emissions from coal.
And we must remember: the global South may have a leverage point here,
but the North still has the guns. In history, nations have gone to war
to enforce or avoid transfers of wealth much smaller than those implied
in some climate equity proposals.
But What About Supply?
Conventional "cap and trade" carbon markets work by creating a scarce
commodity (rights to emit) and then allocating that commodity by price.
If the commodity turns out not to be scarce, its price will collapse and
so will the market. If fossil fuel depletion means that carbon emissions
will be declining anyway, rights to emit carbon will cease to be scarce.
People will buy such rights only if they can afford the fuel. When fuel
is expensive and the supply is shrinking at a rate comparable to
reduction rates mandated by caps, the carbon market becomes utterly
irrelevant.
That is essentially the situation we face.
Global oil production has probably already peaked, as was affirmed just
this month by an authoritative report from the Energy Watch Group of
Germany {6}. The peak for global natural gas production is likely to
follow in a few years, perhaps a decade or two at most. And, according
to another Energy Watch Group study, "Coal: Resources and Future
Production", published earlier this year, global coal production is
likely to peak between 2025 and 2030 {7}. With oil past its peak, and
with gas and coal able to do little to compensate, total energy derived
from fossil fuels will peak around 2010, while total carbon dioxide
emissions will peak somewhat later due to the fact that coal will
commence its decline after oil and gas.
Aside from the fact that it undermines the efficacy of carbon trading,
this news has one good, one not-so-good, and one rather terrible
implication.
On the good side, the early peaking of fossil fuels means that most
estimates of future global carbon emissions will never be realized. The
Special Report on Emissions Scenarios (SRES) of the IPCC presents forty
scenarios for future carbon dioxide emissions. Most scenarios show
growth in emissions to 2100; the average of all forty shows fossil fuel
consumption in 2100 at about twice current levels. The Report offers no
discussion of supply constraints for oil, gas, or coal.
Engineering professor David Rutledge of the California Institute of
Technology has authored an online article titled "The Coal Question and
Climate Change" {8}, in which he applies techniques typically used to
forecast oil production peaks to coal, arriving at conclusions similar
to those of the Energy Watch Group. In his analysis, supply constraints
will yield lower emissions from coal than envisioned in any of the forty
IPCC scenarios. On the basis of supply constraints alone - not assuming
any voluntary emissions-based consumption cuts - atmospheric carbon
dioxide will peak at 460 ppm by 2070. Rutledge writes:
"The maximum temperature rise for our Producer-Limited Profile is
degrees Celsius in 2150. The ... part of the temperature rise that is
associated with future fossil fuel use ... is calculated by running the
simulation with and without future fossil fuels, and subtracting. It
turns out that the maximum temperature rise associated with future
fossil fuel use is only 0.8 degrees Celsius, less than half of the
total. This means that the contributions to the temperature rise from
fossil fuels that have already been consumed, and from deforestation,
and from other greenhouse gases amount to more than the contribution
from future fossil fuel use.
So much for the good implication of fuel supply constraints. The
not-so-good implication is that, while shortages of extractable oil,
gas, and coal will nearly ensure the achievement of the low-range IPCC
targets of sixty percent reduction in carbon emissions by 2050, they
will not guarantee the more than ninety percent reductions by 2040 that
will be required if we are to come close to achieving 320 ppm carbon
dioxide equivalent before the end of the century. Thus deep carbon cuts
will still be needed if there is yet hope of averting catastrophic
climate change.
The terrible implication is that a relentlessly declining fuel supply
will almost certainly have devastating economic, social, and political
impacts. Trade, manufacturing, and farming will be hard hit. No nation
is prepared to deal with the high prices and shortages for energy that
will soon begin to work their way through the entire global economic system.
Political Reality Confronts Physical Reality
Taking all of this information together - the physical realities of
climate data and fuel supply projections, and the political realities
previously mentioned - what conclusions can be drawn? Perhaps the best
way to find out would be to bring together several of the most
knowledgeable and open-minded experts in relevant fields and let them
talk these issues through for a few days away from the public eye.
However, until that happens here are a few thoughts of my own.
Some kind of climate agreement will probably emerge within the next two
years due to pressure from NGOs and the real concerns of governments.
But the economic self-interest of those governments (and major
corporations) will most likely ensure that only a watered-down version
will be agreed to. Some form of carbon market will be deemed the
acceptable means of implementing it. And its terms will include a mild
equity provision that won't make anyone happy.
At the same time, supply constraints will be starting to hit hard -
globally for oil, regionally for gas, and in China for coal. Ultimately,
these supply shortfalls may drive policy far more than fear of climate
change. The response of governments to fuel shortages will be one of
desperation: climate mitigation efforts will fall by the wayside as
nations flail about attempting to keep their food and transport systems
functioning. International conflict is likely.
This clearly is not the optimal scenario. What alternative policies
would yield different results, and how might we go about assessing
policy options in the light of factors discussed above?
One way to begin the assessment process would be to list and rank
candidate policies in a two-by-three matrix. Start with two vertical
columns; in the first, list those that could actually achieve emissions
reductions; in the second, list those that could actually help societies
adapt to scarce and expensive energy. In these first two columns, order
policies in terms of the degree of positive impact anticipated. Then in
three rows, rank those policies in terms of (1) how they will affect
equity; (2) how politically viable they are now; and (3) how politically
viable they are likely to be in the context of energy scarcity.
If a policy is likely to be highly efficacious but is politically
unacceptable now or later, we might leave it on the table for further
consideration while taking note of the problem. (The fact is, policies
that rank well under the heading of what is politically viable now may
not correspond with much of anything in the high range of the two columns.)
It would be interesting to see if different organizations would arrive
at similar or widely varying conclusions from this exercise. The
following are some observations from my own initial run-through.
At the top of the two columns should be some overall umbrella policy to
manage the transition away from fossil fuels. We have already seen the
potential problems with "cap and trade" resulting from fuel shortages.
Those problems could be addressed by lowering the caps with the goal of
making emissions rights scarce again, but in a contracting economy this
might not work, and most people would see the effort as arbitrary and
onerous anyway. Distribution of emissions rights directly to the people
on an equal per-capita basis might help avert a carbon market collapse
(as long as there was a demand for fuel, there would also be demand for
the emissions rights). But why not just cap the extraction, and ration
the distribution, of fuels themselves instead of regulating the
emissions they produce? The rationing of scarce fuels is historically
proven; this approach would be both more effective, and more intuitively
reasonable and understandable to all concerned. Two existing proposals
could be helpful here - the Oil Depletion Protocol {9}, which if
generalized would provide a direct mechanism for capping fossil fuel
extraction and consumption; and Tradable Energy Quotas {10},
guaranteeing equitable access to the available domestic supply of scarce
fuels - a basic electronic rationing scheme that will be essential when
oil outages begin, and that needs to be installed in advance.
Since fuel depletion alone will not result in emissions cuts sufficient
to achieve an atmospheric greenhouse gas concentration of 320 ppm carbon
dioxide equivalent, and since carbon capture and storage is problematic,
if nations are serious about climate protection the discussion must
center on leaving coal and other low-grade fossil fuels (such as tar
sands) in the ground. The fact that this is a politically distasteful
notion now, and is likely to become even more so, puts a big burden on
the persuasive abilities of all of us who care about the climate. But
this is the one policy that will assuredly work to achieve our goal.
As for equity: Since we live on a finite planet, equity for the global
poor can only really be achieved by a reduction in material living
standards for the billion or so inhabitants of wealthy nations. As we
have seen, this notion is extremely difficult to sell to the governments
of industrialized democracies now, and it will be no less so when their
economies are in tatters.
However, steep declines in standards of living will be hitting these
wealthy countries anyway, due simply to depletion of important energy
resources, starting with oil. The only way to avert massive social chaos
and famine as extraction levels decline will be to devote public capital
domestically toward the building of low energy infrastructure (for
example, electrified rail networks, trolley lines, wind farms) while
moving many people to rural areas and teaching them to farm sustainably.
Production and consumption will have to be largely re-localized,
essential goods rationed by quota. Basically the same thing will have to
happen in the poor nations.
One end result will be a world characterized by much greater
international equity - but this will have been achieved without enormous
direct international wealth transfers. Another result might be the
reduction of control by the present power-holders within all nations,
since their power is currently maintained and exerted in the context of
giant centralized systems of production and distribution.
One more helpful equity strategy would consist of the transfer of
renewable energy technologies from rich to poor countries for domestic
implementation free of intellectual property rights.
The single factor that would undermine the energy transition and bring
everyone to ruin is resource wars.
Some of the policies mentioned (such as the development of renewables
and reforms to industrial agriculture) are ones climate activists are
hoping to promote indirectly through emissions caps. My analysis
suggests that it may be better to champion these policies more directly,
and to buttress the argument with depletion data.
Ultimately, power holders must be convinced that such policies, if
obnoxious to them now, will be far less destructive to their interests
than a complete breakdown of society and biosphere - which is the very
real alternative. For a historic example of a similar conversion of
elites think of the 1930s New Deal: then the titans of industry had to
sacrifice some of their financial power in order to keep from losing it
all. Many wealthy individuals never forgave Franklin Roosevelt, whom
they regarded as a "traitor to his class", but most of them reluctantly
agreed that redistribution represented the lesser of evils.
Today the central question facing us is not whether the world will move
away from fossil fuels, but how. The primary dispute will be between
those who look for short-term solutions to energy supply shocks (burn
the last of the coal, attempt to expand the use of other low-grade
fossil fuels, go to war to control remaining highgrade fuel deposits),
and policy advocates with a long-range plan for dealing effectively and
peacefully with climate change, adaptation to scarcity, and global
inequity. If NGOs are stuck fighting for policies that simply won't
work, then the short-term options, however disastrous, will win by default.
At best, this article can only describe the situation in general terms,
point to a few of the possible policy options, and begin assessing them,
without delving into messy but essential details. Much more analysis is
clearly required. It is surely time for the climate and equity policy
discussion to broaden to include the challenge of impending energy
resource scarcity, as well as a more nuanced reconnoitering of the
current and future political terrain. Perhaps this essay can serve as a
conversation opener.
Links
{1} www.planetwork.net/climate/Hansen2007.pdf
{2} http://postcarboncities.net/node/1018
{3} www.carbonequity.info/PDFs/Arctic.pdf
{4} www.guardian.co.uk/environment/2007/oct/23/climatechange.carbonemissions
{5} http://pubs.giss.nasa.gov/docs/notyet/submitted_Kharecha_Hansen.pdf
{6} www.energywatchgroup.de/Erdoel-Report.32+M5d637b1e38d.0.html
{7} www.energywatchgroup.org/files/Coalreport.pdf
{8} www.theoildrum.com/node/2697
{9} www.oildepletionprotocol.org
{10} www.teqs.net
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