Business World

Thursday 8 December 2016

8 ways in which economics can save the world

Christopher Flavelle

Published 06/12/2015 | 02:30

Bard Harstad is a professor of economics at the University of Oslo
Bard Harstad is a professor of economics at the University of Oslo
Bob Inglis, a former Republican congressman from South Carolina, is executive director of republicEn
Oren Cass is a senior fellow at the Manhattan Institute
Joyce Penner is a professor of atmospheric science at the University of Michigan and a member of the UN Intergovernmental Panel on Climate Change
Mark Jacobson runs Stanford University’s Atmosphere and Energy Program, and is a co-founder and director at the Solutions Project
Howard Herzog is a senior research engineer for the Massachusetts Institute of Technology’s Energy Initiative
Christina Back directs fission and inertial fusion programmes for General Atomics

As the talks continue in Paris, eight experts tell Christopher Flavelle their solutions to climate change

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Bob Inglis: Win over the US conservatives — with a carbon tax

The best way to curb emissions is to use market-based mechanisms, mixing the lightest touch by government and the maximum amount of liberty. It’s free enterprise innovation that’s going to make clean energy work.

World leaders should consider a carbon tax, paired with cuts to existing income taxes, so that there’s no growth of government.

They should also apply that tax to imports from countries that don’t price carbon, to avoid sacrificing economic competitiveness and to give their trading partners an incentive to introduce similar taxes.

If the fight against climate change incorporated accountable price signals, American conservatives could enter the conversation.

Until now, they’ve felt excluded, as the preferred solutions have involved a growth of government and a loss of liberty. It doesn’t have to be that way.

In fact, while conservative support for a carbon tax may look impossible at the moment, the impossible may become inevitable.

Rather than fickle tax incentives, clumsy government mandates or expensive regulations through cap-and-trade and the Clean Power Plan, energy optimists and climate realists believe a free and entrepreneurial society can deliver on Pope Francis’s leadership and implicit blessing of the “spirit of enterprise”.

Bob Inglis, a former Republican congressman from South Carolina, is executive director of republicEn.

Bard Harstad: People like to put things off - take advantage of that

Our leaders should do three things to prevent uncontrolled climate change. First, agree on a ratcheting mechanism of national commitments that is automatic, binding, and legally sanctioned. Future periodic negotiations should deal with modifying these commitments, rather than arguing over how to set them in the first place.

How can that be achieved? By taking advantage of leaders’ desire to push costs into the future. Just as politicians tend to prefer the delayed expense of climate change to cutting emissions today, they may also prefer agreeing to reductions later (even if they ratchet up over time) to cuts today. The challenge is to entrench those commitments in a credible, legally binding way.

Second, agree to ban drilling for oil in the Arctic. Those reserves are the most costly to extract, so they are the first humanity should conserve indefinitely, and the first that become unprofitable if we succeed with emission cuts. A drilling ban will thus have no impact if we succeed with future emission cuts, but it will be our insurance policy if we fail.

Third, pay developing countries to protect, instead of cutting down, their tropical forests, because they can keep huge amounts of carbon out of the atmosphere. This may be the most cost-effective climate policy available. But the option is gradually vanishing as those forests decline, making it an urgent issue to find effective ways of paying for their conservation.

Bard Harstad is a professor of economics at the University of Oslo

Christina Back: The future is still nuclear for our energy needs

The largest source of clean, sustainable and reliable energy available is still nuclear power. But to play a bigger role in reducing carbon emissions and air pollution, future advanced reactors must address four core challenges: They must be safer; they have to produce less radioactive waste; they need to pose lower risk of weapons proliferation; and they need to be less expensive.

General Atomics has a new reactor designed to meet each of these concerns, called the Energy Multiplier Module. To enhance safety, it uses ceramic materials that are irradiation-resistant and able to survive temperatures more than twice what current metallic fuel rod materials can withstand. More importantly, these new materials are cooled with inert gas, which means an explosion like the one at Fukushima, caused by the build-up of hydrogen gas, can’t happen.

This reactor also uses fuel more efficiently, producing 80pc less waste. And it only has to be opened and refuelled every 30 years, compared with every 18 months for current plants.

Finally, to address economic competitiveness, this new type of reactor produces 60pc more electricity from the same amount of fission.

In addition, its modular design uses factory-made reactors that can be transported by truck, cutting construction time in half. And it can run on uranium, thorium or even used nuclear fuel. That means lower construction costs and cheaper power.

Christina Back directs fission and inertial fusion programmes for General Atomics.

Howard Herzog: We can trap carbon, but we need to make it cheaper

The most direct way to curb emissions of carbon dioxide, if not necessarily the simplest or least expensive, is to catch it before it enters the atmosphere. That process, called carbon capture and storage (CCS), consists of trapping the carbon produced by the combustion of fossil fuels and then storing it, often in deep geologic formations. The primary targets for CCS are large, stationary sources, chiefly coal and natural gas-fired power plants, as well as industrial facilities including refineries, cement plants and petrochemical facilities.

CCS has three inherent advantages over other approaches. It works with our fossil fuel infrastructure and can avoid stranding hundreds of trillions of dollars of fossil fuel assets. It makes it possible to keep using fossil fuels, which produce constantly dispatchable power, as opposed to intermittent power from solar and wind. Finally, when the source of power is trees or crops, which pull carbon from the air, burning it at a facility that uses CCS can create negative net emissions.

The problem is cost. The technology works, and is getting better. But until there is a financial incentive to adopt CCS, why on Earth would you capture carbon when you can put it into the atmosphere for free?

Wide-scale deployment of CCS requires strong climate policy. That includes technology support policies, such as tax credits.

Howard Herzog is a senior research engineer for the Massachusetts Institute of Technology’s Energy Initiative.

Mark Jacobson: Forget technology. The solution is information

The greatest barrier to dealing with climate change isn’t technology, but information. As policy-makers and the public realise they can get clean, low-cost renewable energy — along with the side benefits of new jobs, stable energy prices, less international conflict and a reduced risk of terrorist attacks on large centralised power plants — they’ll become more likely to change course.

At the Solutions Project, we’ve offered detailed plans for how 50 US states and 139 countries can power their electricity, transportation, manufacturing, agricultural and residential sectors entirely from wind, water and sunlight by 2050 — and get 80pc of the way there by 2030.

The US can get 47pc of its 2050 power from various types of solar power, 31pc from onshore wind turbines and another 18pc from turbines offshore — and cut average per-person electricity costs by $443. India, which is choking on coal yet has resisted committing to lower carbon emissions, can get half of its 2050 electricity needs from utility-scale photovoltaic solar power alone, as well as 17pc from onshore wind and 12pc from concentrated solar plants. Doing so would prevent an estimated 767,000 premature deaths annually by 2050, while creating 1.1 million new long-term jobs in construction and operation. Once people realise how much they can gain from fighting climate change, they’ll demand political action.

Mark Jacobson runs Stanford University’s Atmosphere and Energy Program, and is a co-founder and director at the Solutions Project.

Joyce Penner: Geoengineering can work. Just not by itself

As the world struggles to address global warming, some are proposing geoengineering — intentionally altering the planet’s atmosphere — as a way to lower temperatures.

The most studied technique would work by adding sulphate particles to the stratosphere, which is similar to what happens as a result of large volcanic eruptions. Those particles reflect solar radiation, preventing some of the sun’s rays from warming the Earth.

While this type of solution sounds promising, it must never be considered in isolation. Without agreements in place to significantly decrease carbon dioxide emissions, we would have to continue pumping more and more sulphur dioxide into the stratosphere, perhaps for millennia. We don’t know the consequences of such large and prolonged tampering.

Here’s another problem: Curtailing the injection of sulphur would quickly return the Earth to the high temperatures caused by the continued accumulation of carbon in the atmosphere. Only through a concerted effort to decrease those carbon emissions could we return to the normal skies of a sulphate-free atmosphere.

Geoengineering might be able to keep temperatures from rising two degrees, but only in combination with a reduction in carbon. By itself it’s no solution.

Joyce Penner is a professor of atmospheric science at the University of Michigan and a member of the UN Intergovernmental Panel on Climate Change.

Richard Branson: Business can’t wait for governments to act

IF A powerful and legally binding global agreement were to be achieved during the current talks in Paris, it would provide an urgently needed lynchpin for all efforts to reduce global warming.

However, business leaders can and should play a crucial role in this process as well — by making bold commitments to transform their respective industries.

There are number of initiatives across the Virgin Group of companies that aspire to achieve net-zero carbon emissions by 2050, either through far-reaching emission reductions or through offsets.

And 2014 was the first year in which Virgin Atlantic successfully decoupled its business growth from carbon growth; it achieved an overall 12pc reduction in carbon dioxide or equivalent emissions from aircraft operations between 2007 and 2014.

Elsewhere, Virgin Active is focused on ways to reduce energy consumption in its fitness clubs, with a reduction of 25pc since 2011 and plans to reach 30pc in 2015.

Over the past decade Virgin has also invested more than $150m in renewable energy ventures. Not all have of these worked, but we remain committed to investing our capital in developing the power sources of the future.

I truly believe that businesses can help drive the transition to a thriving zero-emissions economy by 2050.

Richard Branson is the founder of the Virgin Group.

Oren Cass: Staying below two degrees is hopeless (without war)

However compelling the arguments for holding global warming below two degrees, here’s the problem: Doing so is plainly incompatible with the economic aspirations of the developing world. Even if rich nations halted emissions tomorrow, other countries would need to slash emissions by half immediately and hold them there indefinitely.

That course would preclude rapid economic growth, which is why developing nations are refusing to contemplate it. Despite impressive progress, low-carbon technologies remain nowhere near capable of providing affordable power.

Instead, the world is experiencing a “renaissance of coal”. To keep developing nations on board, international negotiations have long since abandoned carbon pricing or even the basic requirement of reducing emissions. The emissions “commitments” of many large developing nations amount to only a continuation of existing trajectories. If the West believed combatting climate change merits hobbling poorer countries against their will, it could coerce emissions cuts with threats of embargo or military force.

Obviously, that should not and will not happen. But without it, dramatic cuts depend on as-yet-unidentified technological breakthroughs that a developing economy might prefer to fossil fuels.

Success is by no means guaranteed, but the best chance will come if focus shifts from today’s wind farms and solar panels to spurring whatever innovations might come next.

Oren Cass is a senior fellow at the Manhattan Institute

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