Friday, February 16, 2007

Reconsidering some of the positive externalities to curbing emissions

When people get in a jam arguing for a Kyoto-plus response to climate change they usually resort to the classic "but there are other advantages" gambit. Common advantages cited are an end to funding terrorism and preparing for when recovering fossil fuels is no longer economic. However, neither of these justifications for curbing fossil fuel use really stand up to scrutiny.

Firstly, on the conservative's favourite of ending financing to nasty states like Iran or Saudi Arabia. This is dependent upon the logic that states are dangerous because they are rich. Iran's nuclear programme may be paid for by its fossil fuel revenues but if North Korea can afford to obtain nukes it seems highly improbable than any state is too poor to develop nuclear weapons. All that is required is the will and the political authority to make the nuclear programme an absolute priority but this is already required when developing nuclear weapons involves the threat of Western military action.

On Saudi Arabia, or other similar states like Venezuela, we have to ask the question of whether it is really efficient to pay the massive costs of an early shift to non-fossil fuel power in return for the marginal effect we can have on their earnings and ability to hurt our interests. Even if we do make them poorer will this make them more compliant or will they make a priority of spending that we dislike in angry desperation? There are other methods by which the West can influence these states, classic carrot and stick diplomacy, which do not have the same economic cost to ourselves. Saudi Arabia, for example, gets very worried every time the United States gets upset and starts muttering about withdrawing its security guarantee.

Also, there are other forms of trade which have strategic implications. Trade with China is certainly feeding an economic strength there that could create a huge strategic threat. However, I think in that case it is realised that attempting to avoid a strategic threat through impoverishing an entire nation is the Arthur Harris strategy of modern international relations, hurt your enemy's populations until they give way, and somewhat immoral. There would seem to be a similar case with respect to the oil states, already poor Venezuelans in particular would suffer significantly if we caused demand for oil to fall. While their money may sometimes be put to unprincipled uses surely the best response is to stop that illegitimate use of the funds through other means rather than stopping the funds altogether. It is an unnecessary admission of failure to argue that we can only influence states like Saudi Arabia and Venezuela through wrecking their economies.

Secondly, the argument that sooner or later we will run out of fossil fuels and it makes sense to lose the addiction to oil now rather than later. Essentially the problem is that the sort of solutions we would look for are quite different. The key if our objective is to maintain our standard of living post-fossil fuels is to find a replacement source of stock energy (that which does not come from agricultural land) which can generate energy at as economical a rate as possible. As there is plenty of time on the clock there is no reason we need to rely upon the flawed renewable technologies on offer now (solar, wind or nuclear fission). Equally, as the problem is reflected in the oil price, market incentives can be relied upon to do most of the legwork in adapting the economy to a future without fossil fuels. There is a case for government action to fund basic research but the form would be very different to that required to combat global warming. Boosting funding to fusion research and throwing a pile of money at universities and telling them to think about other ways of getting large quantities of energy probably won't achieve much in the next fifty years, the time frame required to be a big help in fighting global warming, but is relatively cheap and for that reason probably well worth a shot in terms of securing the long term energy supply.

We certainly wouldn't want to use any solution which was a flow stock of energy as this would put a dramatic limit on the total quantity which could be produced in terms of agricultural land and increase the price of food, also requiring an input of land. Of course, ethanol (what people usually mean when they say "biofuel") is a liability even in global warming terms, although that doesn't stop greens proposing it. If Stern is right and global warming will cause agricultural yields to fall then a replacement fuel which requires the use of agricultural land which could be growing food will be worse than useless. It is also hideously inefficient as this study for the AEI has found it takes 29% more energy to grow a field of corn than is contained in the ethanol itself. Switching to ethanol will require more fossil fuel to be used rather than less.

Both stopping our enemies defying us and preparing for a post fossil fuel world are good ends but curbing greenhouse gas emissions is not a good means to either.

No comments: