Tags: Climate Policy, Energy Policy, Renewable Energy, Solar Energy
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The environmental news site Grist, has just published a piece I wrote that is a response to Bill Gates’ recent entry into the climate and energy discussion.
Check it out at:
Enjoy and comment if you like!
Tags: cap and trade, carbon tax, Energy Efficiency, Energy Policy, Energy Pricing, Sustainability
In the first part of this post I identified 10 features of cap and trade, the favored climate policy of many policy elites at this point in time, that make the policy ineffectual. I outlined how cap and trade was sold to America and the world based on faulty assumptions as well as its superficial political appeal to the then Clinton Administration. Contrary to the story told in climate activist and sympathetic policy circles, cap and trade has been comparatively ineffective as a means to reduce emissions of either SOx or GHGs. I argue that this is a structural problem with cap and trade, not a mistake in implementation.
The Gulf Between Gutlessness and “All the Guts in the World”
Cap and trade is a hybrid policy, the mixture of a price mechanism and permit regulation. In theory, the three “motors” of cap and trade are the economic pain caused by having to buy permits (or the anticipation thereof), the profit gained by market participants in exploiting the permit and pollution troubles of others, or the prospect of running out of permits and being subject to some penalty inclusive of actual “police action” on the part of regulators. As with any permitting system, permits are meaningless without the threat of, potentially, monetary and criminal penalties. For instance, fish and game wardens need to be able to stop hunters and fishermen from taking animals for which they do not have permits.
However, cap and trade systems hide and, it appears infinitely, postpone the moment where regulators would have to essentially shut down the operations of various industrial or power generation facilities because they no longer possess permits to pollute (which they would have to do to operate using their current technology). For instance if a financially troubled power utility or plant operator ran out of permits on November 5, to meet the cap regulators would have to shut down one or more power plants until January 1. This might mean blackouts and brownouts to homes, businesses and, of course, hospitals. It would therefore take “all the guts in the world” for a regulator or government to enforce the cap, standing down the cries of people who will have to live with no or extremely unreliable electricity. Yes the notions of “banking and borrowing” permits are meant to reassure system users that this day of reckoning will never come. Yet this process undermines the power of the permits and the firmness of the cap.
Furthermore, at the point when this theoretical moment of enforcement might occur, the net effect would actually show the regulators/government in a very negative light because punishment might come as a consequence of a lack of “clever” permit-market behavior on the part of the power plant operators. Their power plants may be no more carbon intensive than the next but they may simply have been outfoxed by other permit buyers or various manipulators of the permit market. In this case, the punishment will seem arbitrary.
So we can now understand the design and behavior of the designers of real existing cap and trade systems a little better by recognizing this disjuncture between the lax disbursement of permits (Kyoto/EU-ETS and current Congressional bills), the various softening and smoothing mechanisms (banking and borrowing) and the need for some kind of real enforcement of the cap. It would subvert the politics of the policy to actually meet the cap through the harsh regulation that would almost certainly never happen or would be largely meaningless within the cap and trade framework.
While regulatory and political guts will be required to meet the climate change challenge, the imposition of harsh measures should be seen far in advance to allow adequate time for polluters to take action to cut emissions. Cap and trade’s framework does not allow for this type of lead-time before administrative measures are taken.
True Belief in Markets vs. a Baroque Policy Mess
As you might glean from how I write about these matters, I am no market absolutist nor believer in the efficient market hypothesis (EMH) which assumes exclusively rational information processing by market participants in aggregate. I think it is more reasonable to assume that people can be both economically rational and economically irrational or can alternate between the two at different times or in different contexts. Economists are also coming around to realizing how central irrationality is in our economic behavior: there has now been about a decade of behavioral economic research as well as the coming to grips with the fact that our recent crash was in part caused by a belief in the almost total predominance of rational, utility-maximizing economic behavior.
Whatever the balance of rationality and irrationality in human economic behavior, cap and trade (or carbon taxation/fees) with good justification attempts to mobilize the economic rationality of individual market actors in the service of climate protection by introducing a carbon price that will influence procurement and operations decisions. Rational economic man (or woman), according to the theory, only needs the information of price to make rational, optimal decisions. In cap and trade, the carbon price and market is supposed to be the link between merely pro-forma climate action in the form of permit giveaways/postponement of action by regulators and the theoretical, never-to-be-activated harsh punishments for exceeding the cap. Polluters are supposed to know that they are in trouble when they start paying more and more for polluting, sending to them a signal, the price signal that they need to change their operations. Rather than the impingement of some set of rules upon the company’s operations, the price is going to tell that economic actor “how much” it will be worth it for them to do something, so they can make an rational choice among a range of options.
The most productive use of a price signal will be if firms anticipate the economic pain caused by the signal before it gets expensive for them; once they are in trouble and overpaying for permits they will have less of an ability to make expensive long-term investments, especially if they are an emission-intensive business like power generation or cement making. With cap and trade, there may be sudden surprises in the carbon markets which will put firms into trouble even with adequate planning.
I’ve already outlined how flawed cap and trade is in generating the price signal due to the variability of the carbon price that results both via auctioning and via permit trading. In both cases there will be a lot of market “noise” related to how much people think something is worth rather than what it is worth fundamentally in terms of the climate. The “how much” will be almost impossible to calculate accurately under cap and trade as conceived and as urged by climate action groups that believe in cap and trade with all permits auctioned off as the gold standard of climate regulation. This will make investment decision making tools like net present value difficult to use as you cannot calculate the negative cash flows into the future that are attributable to the carbon price. This is not because net present value (NPV) is more environmentally insensitive than any other investment tool: it’s just sloppy policy-making to defeat the purpose for which you are instituting a policy! Cap and trade would have to invent its own more baroque micro-economics and corporate finance tools that will always be more inefficient and fault-prone than using a simple price signal and NPV.
So if true belief in markets and economic rationality of individual market actors is fundamental, then a carbon tax or fee that is correlated directly with the amount of carbon or global warming potential (dealing with more powerful greenhouse gases than carbon dioxide) emitted is the clearest, most predictable price signal. Cap and trade’s baroque double decker market structure is like a climate policy that has been thought up by an overeager 5-year-old who gleefully stacks markets on top of markets because it seems more “market-like”. Having one “meta-market” emit the carbon price to the real market for carbon emissions reduction solutions is a bad idea. An excess of markets in this case does not encourage rational economic behavior on the part of individual market actors.
“It’s All that We Have”: Making Do is not Good Enough
A number of commentators, bloggers, and politicians critical of the state of climate policy nevertheless hang on to cap and trade. Some agree with some of my criticisms while others might find my foregoing criticisms gratuitous or simply giving aid and comfort to climate deniers. Or, even if they are frightened of the monumental hand-off of responsibility that is contained within the cap and trade system, they might feel that so much political capital has been spent on cap and trade that it must be defended as the embodiment of climate policy itself.
Below, I will suggest that in fact we have a wealth of choice in the area of climate policy, almost all of which will be more effective and efficient than cap and trade. For one, governments around the world including the Obama Administration are taking action in other areas that do not deal with carbon pricing or trading of permits or credits/offsets. You could say that governments that openly advocate a cap and trade system might be seen as also hedging their bets. Secondly, it will be fairly easy to replace cap and trade with an ensemble of different measures or a carbon tax with any number of features. If history is any guide, other countries have implemented a carbon tax within months rather than the years long efforts to install cap and trade systems.
It pains me that so many people many of them good-hearted and well-intentioned have expended political capital and reputations on such a faulty instrument. In their own defense, depending on their social scientific or business backgrounds, they could not necessarily have known differently. However, that is no reason to stay with an instrument that has a high probability of gumming up the wheels on climate action rather than speeding it up.
Before describing alternatives to cap and trade, I want to first outline what I think the tasks are that the policy needs to address. Without a common vocabulary for these tasks, stripped of bias towards a particular policy instrument, you, the reader, won’t be able to evaluate whether these are substantially better than what we have already. In most cases I am not reinventing the wheel, but simply observing and compiling what I see is out there already.
The Fundamental Challenge of Climate Policy
The fundamental challenge facing governments, climate activists, green-oriented businesses, and concerned citizens is a neat intersection between a massive policy challenge and a massive political challenge of the early 21st Century. Policy and politics are not always so closely intermingled but in this case they run for historical reasons very closely together.
Instituting cap and trade rather than more effective policies is a bad idea spawned of an era in which government was supposed to become more “market-like” in all matters. We have discovered in so many areas of life that this philosophy of government is flawed, despite continuing political disagreements around this issue in governments around the world. Our current generation of politicians got elected by taking one stance or another (but mostly one stance) on the either/or proposition of whether government or markets were “better”. Markets unregulated, as it turns out, encourage short term thinking and satisfaction of immediate appetites. Fortunately or unfortunately, to face the future threat of climate change, a revision of government’s distinctive place vis-à-vis regulation of markets and our own appetites is required.
Climate policy has the unenviable task of
- saying “stop” to our impulses to overuse fossil fuels and overexploit the world’s forests and soils,
- directing, under constant political attack, substantial streams of public and private investment to building a new energy and energy-use system and
- changing our patterns of land use to fix more carbon in plants and soil.
This places government, and government is the only instrument up to the task, at loggerheads with citizens’ and businesses’ impulses to use more and more energy (and non-renewable natural resources), as cheaply as possible with a disregard for the negative consequences. While ideally such policies would enact a form of “aikido” on our wishes, using the momentum of our wants for more and better stuff to instead be used to transform society for good, there still needs to be a firm boundary and governmental “center of gravity” that is clear to all (otherwise it cannot perform aikido on anything). In the end, what is required is the return of government’s legitimate role and moral authority to set this type of reasonable limit and redirect energies that would otherwise go elsewhere.
The analogy of speeding on the highway can bring this closer to our personal experience. Without traffic cops, many of us, including myself, would drive too fast, increasing the possibility of fatal accidents; furthermore automakers have tended to put whatever mechanical efficiency gains that come from among other devices, turbochargers, into making cars more powerful and “fun to drive” than into gains in mileage. Yes, there are those of us with a conscience or without the interest in driving fast but we cannot count on these forces alone to curb fast driving, especially given the powerful automobiles to which we now have access. The police who catch speeders are not very popular but, if they avoid corruption and are not subject to absurd ideological attack, they maintain moral authority and can do their job.
Fossil fuel use (or wanton deforestation) is similar to the propensity to speed in that it offers us and our economy an easy way to satisfy our wants without regard for the long-term consequences. Fossil fuels are notably energy dense and we in most developed or in oil-rich countries do not pay nearly enough for them given their social and environmental costs. In an uncharacteristic moment of clarity within his Presidency, George W. Bush put his finger on it when he said that “America is addicted to oil”. As in addiction, only firm limits and sometimes harsh measures are able to stop the addict from re-using the drug he or she desires. The authority of government to intervene (double entendre!) in the domestic economy has been over the past 30 year undermined by an ongoing political barrage that suggests that government has less legitimacy and moral authority than the market. Cap and trade is an effort to wrap government in the faux moral authority of the market, as promoted by the market fundamentalist creed of the last 3 decades. The market unregulated, as it turns out, is amoral, not caring that much about long term consequences. Markets are not “bad” or essentially immoral, they just are tools that lately have been called on to do tasks to which they are ill-suited. As even Alan Greenspan now attests, they have been fundamentally misunderstood most notably by him and by many others.
Especially in the US but also abroad, governments, in order to do their work, must re-establish moral legitimacy in many areas of domestic policy which have been thrown into question by our decades-long experiment in market fundamentalism. The substance of the politics surrounding cap and trade is largely about the moral authority of government to restructure our energy system and secondarily about the legitimacy of natural science. The content of this moral legitimacy is that government can when functioning well, represent the general or common interest in making and enforcing rules, collecting taxes, and spending that revenue for the purpose of maintaining and improving the future viability of the nation. Even more so in the area of climate change, which will mean over a period of a decade or two, dramatic changes in at least three sectors of our economy, governments’ moral legitimacy needs to be well established to effect whatever policy is chosen.
Cap and trade’s “prospectus” (a.k.a. political sales pitch) suggests that government can after declaring a “cap” essentially recede into the background, while the “hand” of the permit trading market does its work. Its superficial political attraction is that it reinforces the pre-existing “rap” that government is “bad’ or ineffective and the market is “good” and effective. However, to work in any shape or form, climate regulation and policy, including cap and trade systems such as they are, is going to need government action in spades. So, cap and trade sets up its advocates for a long-term political defeat: even if a weakened form of it passes, people will ultimately start to wonder why there is so much government involved in cap and trade (and so ineffectually at that). Maybe its advocates believe that “people know” that cap and trade is really just another government regulatory program and won’t feel betrayed; given the state of civic understanding of government’s role, I believe they are sorely misinformed.
Ultimately the leaders of government(s) are going to need to take responsibility for protecting their people and the environment from substantial degradation via curbing our own emissions of greenhouse gases. The language and parallel institutions of cap and trade interfere directly with the process of by which government leaders would take responsibility, suggesting that automatic processes will “take care of themselves” via the invisible hand of the carbon permit market. I have demonstrated that such an invisible hand will play tricks with the policy itself compromising its effectiveness. Both the policy in its pure form and even more so efforts to curb its tendencies will create a baroque structure that does not work directly and efficiently on the basic tasks that are required to reduce carbon emissions rapidly within a decade.
The Basic Elements of Climate and Energy Policy
To open up the field of alternatives to cap and trade, as well as understand cap and trade better in context, we need to understand what the generic tasks of any climate and energy policy would be. A comprehensive climate and energy policy has most of these elements independent of policy instrument choice:
- Disincentives for (or rules against) the use of fossil fuels, leading either immediately to switching to virtually carbon neutral fuels/energy sources or vastly more efficient use of fossil fuels prior to switching to carbon neutral energy.
- Incentives for private investors to build carbon neutral electric generation and carbon-neutral energy storage as replacements for fossil electric generation.
- Incentives for vastly more efficient energy use of all types in transportation, buildings and industrial processes (or conversely disincentives to “waste energy”).
- Provision of or facilitating the financing of site- and regionally-specific public goods that lead to carbon neutral energy use (electric transmission, electrification of railways, build out of railways, electric vehicle recharging networks).
- Revenue sources for financing public goods and incentive programs that enable a society to cut emissions.
- Incentives for maintaining and increasing carbon sequestration in land use in agriculture, silviculture and in forest preserves.
- Disincentives for (or rules against) the release of sequestered carbon in land, vegetation, and sea.
- Reduce black carbon emissions via introducing emissions controls or alternatives to biomass combustion or other black carbon sources.
- Develop, identify and institute standards for lower- and zero-emissions technologies and processes.
- Generate regional and national plans based on better and best practices to curb emissions
- Fund basic climate and energy research
There is no single policy that does all of these tasks well nor will some policy package address all of them. We see that cap and trade is an attempt to address a number of them with a single instrument, most particularly numbers 1, 3, 5, and 6. As we have indicated cap and trade’s inherent laxness and unclear carbon price signal interfere with 1 and 3 (energy efficiency, fuel switching, and restriction of fossil fuel use). It does offer to join these efforts with 6, which has spurred interest in the developing world. Again there have been difficulties in establishing whether funded carbon sinks/offsets needed the funding and also run into problems with 7, the release of carbon once sequestered. Would development projects need to pay the money back if the forest they are leaving to grow is cut down by them or someone else?
The temptation of policy makers, in their first take on a climate policy to lump a number of concerns together is understandable, especially if climate policy, in relative terms, has been a low priority. However cap and trade has been extremely cumbersome to set up and ineffective or marginally effective in each of these areas with a high probability of continued problems given its long list of inherent flaws. Moving to or at least seriously considering any one of a number of alternatives is advisable given cap and trade’s ability to block other policies and clog governmental channels. Furthermore translating our thinking about climate into its terms limits our ability to imagine other scenarios that will work much better. In every one of these categories there is a more effective instrument than cap and trade, meaning that we of necessity must move to a multiple instrument platform because of cap and trade’s lack of effectiveness as well its (and any instrument’s) lack of comprehensiveness.
I will offer here (in the next part) two main directions, one mainstream and the other “heterodox”, that both will achieve more quickly and easily emissions reductions than cap and trade.
Tags: Climate ethics, Tradeoffs
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In Part 1 of this post I summarized US and worldwide efforts to create legal standards to limit GHG emissions and described the political opposition to these efforts as based on a narrow conception of liberty, negative liberty, popular among conservatives over the last three decades. I introduced two types of ethical system, deontology and utilitarianism as helpful in understanding the debates over climate legislation
The Supposed Wealth vs. Green Tradeoff
One of the more recent and cleverer arguments that counsel inaction on the climate is the notion that fossil fuel use is equivalent to social wealth and this wealth prevents more harm and maximizes more pleasure than the attempt to “go green” and slow global warming. Popularized by Bjorn Lomborg and now repeated by many, this argument is based on the narrower form of utilitarian ethics mentioned in Part 1 that suggests a limited scope of knowledge about future events is wise; present pleasures and pain avoidance loom larger than dangers to future pleasures or the threat of future pain.
A version of the wealth vs. green tradeoff argument most recently available in a column of the New York Times by climate “skeptic” John Tierney, suggests that wealth both precedes and is a cause of the greening of an economy, with wealth premised on fossil fuel use. The general structure of this argument is not new, as opponents of environmentalism have often portrayed environmental protection as a concern of the idle rich or at least inessential to economic growth. Tierney attempts to divert attention from government regulation’s effect on the greening of economies by suggesting that wealthy people start to care about their environment and that somehow from there we see, through a presumed market effect, more efficient and cleaner use of natural resources. Many commenters to Tierney’s blog post (perhaps one positive is that Tierney’s opinionated views function as bait for commenters who actually know what they are talking about…but you have to dig to find them) are quick to point out that the relationship between wealth and environmental improvement is not linear and is initiated almost invariably by government regulations.
Whatever the factual inaccuracies that both Tierney and Lomborg use to reinforce their positions there are some important issues related to fossil fuel use and development that need to be attended to in this discussion. While Tierney and Lomborg counsel slow action or inaction on climate, many countries of the developing world accuse the West of a double standard in seeking to curb fossil fuel use and therefore some representatives of developing countries feel entitled to ramp up the use of fossil fuels to spur their own development. Fossil fuels are energy “caviar”, very concentrated portable energy, stored in molecular form, that are still plentiful and fairly cheap in many areas of the world, though on a world historical scale will eventually become scarce. It is also true that all of the current industrial and now post-industrial powers have had access to and now still use fossil fuel to fuel their development. Furthermore energy use of any kind at some level of energy-intensity is a hallmark of developed or rich countries; development and a society’s wealth can be defined as shifting from using human musclepower alone to using powered equipment to make useful products and deliver useful services. Some commentators call this a shift from exclusively endosomatic (inside the body) to exosomatic (outside the body) energy.
Lomborg styles himself to be a defender of the developing world in suggesting that getting rich by repeating the West’s development path is the highest priority for most of the world, while Tierney sees himself simply as a realist in suggesting that the sequence of events from fossil fuel use to greening the economy is a natural history. However both are prey to a key fallacy that leads to their peculiar views, what might be called the “fallacy of continuity”. Both Lomborg and Tierney assume that change and development happen as a continuous process: that the future is simply an incremental change from the past. In this they are not alone as the U.N.’s International Energy Agency and US Energy Information Agency forecasts for energy use both show a similar tendency to stress continuity (continued growth in fossil fuel and renewable use in parallel) with regard for the climate protection goals enunciated by their sister agencies. Both authors must show themselves to be utterly convinced that climate change will be moderate or insignificant in its effects. And crucially both think that economic development will continue and must continue in the same way it has occurred in the past. This leads Tierney, for instance, who almost always selects those snippets of data that suit his political framework, to overlook the “break points” in the history of environmental quality, when a regulation actually kicked in and reduced emissions or increased energy efficiency.
Put another way, Lomborg and Tierney are, like the majority of financial analysts in 2006 and 2007, ignoring the twin “black swans” of climate change and the political and human reaction to climate change. The term “black swan” has become popularized by writer and financial analyst Nassim Nicholas Taleb, who has pointed out how assumptions about randomness and normality led economists and business analysts to ignore unlikely events, a.k.a. “black swans”. Assuming continuity, while seemingly the “conservative” option, is not always wise when a discontinuity is likely. However, the attractions of keeping intact, in their own minds, their mental models and contrarian ethics keeps them discounting or ignoring these black swans. And to make matters worse for Lomborg and Tierney, climate change and the reaction to climate change are not really “black” at all but at most “off-white” swans, as the data keeps pouring in about the seeming inevitability of both.
The fact is, that Lomborg and Tierney don’t know for sure, nor can they convince using reason rather than fear and innuendo, that
1. Wealth will always and ever be associated with intensive fossil fuel use
2. Less developed countries are condemned or fated to repeat the West’s development path
Due to the threat of climate change, the likelihood is high that through intensive international cooperation a different development path or paths can be organized both for the already developed societies of the world and the developing societies, though not without monumental effort. Lomborg and Tierney both want to make these likely and preferable solutions seem less likely and less preferable for personal or political reasons that are unclear. Certainly a contrarian stance enables one to attract media attention and sell books.
But let’s not kid ourselves that we simply need to continue on a linear “pollution then greening” path that we have already started in the West and will spread to the developing world. As MIT Chemistry professor, Keith Nelson, reminds us in a comment on Tierney’s blog, the stemming of carbon dioxide emissions represents a challenge of a different magnitude than scrubbing out or removing traditional pollutants. Nelson reminds us that the intended chemical reaction that releases energy from fossil fuels by necessity releases carbon dioxide, unlike the release of contaminants like sulfur dioxide or mercury. With 80-85% of worldwide energy use being attributable to fossil fuels, this means entering into another industrial revolution, either the third or the fourth depending on how you count these things.
Tierney’s and Lomborg’s stance is then to ignore or foreclose this oncoming technological revolution or the possibility of it before it really gets started. Besides its denial of reality, the ethical fragility of this stance is evident when we see how the emerging outlines of this revolution are denied or distorted by these two commentators. While they grasp at the utilitarian justification that continuing contemporary pleasures and pain avoidance associated with fossil fuel use justify ignoring the needed future transformation, this stance requires distortions of fact about the seriousness of climate change and how human will as expressed through government regulation and technical innovation have already gotten us a small portion of the way.
Risks of Change vs. Risks of Business as Usual
If ethical arguments are not Tierney’s and Lomborg’s strengths, they are also relying on our natural risk averseness to send a message to their readers/listeners: “don’t risk change, it’s not worth it.” The subtle and not so subtle appeal to fear of change can paralyze those on the fence who otherwise might be spurred to action. Faced with an extremely high probability of continuing disruption to the climate, people and governments, despite our natural conservativism, are girding for a long process by which societies change their emissions and energy systems. While reassurances can be made that all our current satisfactions will remain in the same or similar form (i.e., from fossil-fueled mobility to an equal level of mobility largely fueled via renewable generated electricity) we cannot guarantee that the transition will be smooth and that no changes will occur. Those who share Tierney and Lomborg’s position or similar, attempt to emphasize the potential loss of even the smallest convenience as paramount and more important than the gain of climate security and new forms of wealth.
The risks of business as usual are even greater in terms of their consequences for the planet and our future pleasure and pain as well as in terms of the scope of choices that will be open to us and to our descendants. Our attachment to our current pleasures seems so puny in comparison to the wholesale destruction of many of our future pleasures and pains and freedom to enjoy them. In a way it seems unfair to compare these two risks, perhaps something that has aided Lomborg and Tierney, because opponents may hesitate to go at their main arguments. No one wants to be a scold but sometimes…
A final assumption that Lomborg and to a less extent Tierney communicate is that our current economic system and our satisfactions which support it are fragile and will not survive green initiatives. For them it is better to allow this, in their accounts, fragile “beast” to continue on its way rather than to move aggressively to change our transport and energy systems. However this position, again, normalizes inaction and ignores a history of vigorous efforts to change economies, some of which have had negative outcomes and some which have had positive economic outcomes, like the building of the railways in the US, the Marshall Plan, the WWII mobilization in the US, the US Interstate system, and the Chinese government’s management of the PRC’s economy after Deng Xiaoping. To assume that continuity is the norm is to underestimate our adaptability and our ability to realize our best or at least better intentions when required.
If what, according to the Stern Review we would be facing a 20% drop in world GDP if we continue on our “business as usual” course, a few years of working out a transition to a greener, more sustainable economy would seem to be worth it. However, the risk averse among us will remain unconvinced by anything that does not promise them the same satisfactions or even continuing enlargement of those satisfactions in a linear or geometric progression from today onward.
Are We Free to Pollute the Atmosphere?
To answer the question then of whether we are free to pollute requires, in the great tradition of philosophers and some politicians, to define what we mean by “free”.
The Existential Sense of “Free”
While existential sounds like a fancy word, it just means starting with the reality of human existence rather than from abstract principle. This means “are we now able to” pollute in terms of taking the action now.
The answer is simply and disturbingly, “yes, we, as individuals with sufficient financial means can pollute the atmosphere”; we are now existentially free to pollute given that we have built an economic, transportation, agricultural and industrial system that is dependent on polluting the atmosphere as a free externality, i.e. dumping ground. As we in developed and rapidly developing countries live in this worldwide system of interdependent economies, we are with somewhere close to 99% probability contributing more rather than less to the atmosphere’s concentration of greenhouse gases.
This means I am free to go out and drive my car around, as little or as much as I like, within my financial means and time available, able to buy products that are dependent on emissions within the same financial and time constraints, and able to do work that is dependent on these emissions.
We are also existentially “free” to emit the more potent warming gases, synthetic CFCs, that still exist around us, though in this case we would be breaking laws in most states that regulate these chemicals, not for their warming potential but for their ozone depleting ability.
The Legal Sense of “Free”
Currently there are no federal laws on the books in the US that say that it is in any sense illegal to emit more or less carbon dioxide, methane or nitrous oxide into the atmosphere, though synthetic greenhouse gases like CFCs are now heavily regulated here and in most countries. For power companies in New England, the RGGI cap and trade system has started its first compliance period on the first of this year, which means that these companies will attempt to reduce their carbon dioxide emissions by 10% by 2018. An economy-wide law prohibiting a certain type of greenhouse gas emissions or a cap and trade or other greenhouse gas legislation with an emissions limit would at least in theory draw a line beyond which people and organizations would NOT be free to emit naturally-occurring global warming gases into the atmosphere. The legal “unfreedom” associated with this transgression would depend on the penalties involved in overstepping the legal limit on emissions or breaking the prohibition on a given type of emissions.
At this moment in time, prior to the implementation of either a legal rule or a law with a cap or allotment we are still legally free to emit as much or as little carbon dioxide, nitrous oxide, and methane as we like.
The Ethically Justified Sense of “Free”
An important element in designing effective laws or taking actions to reduce emissions is to clarify the ethical bases of these laws and actions. Ethics is not just the province of legal or ethical specialists; everybody uses and refers to our personal versions of ethical systems we carry around with us to make decisions about a myriad of daily activities. Without a widely accepted public recognition that new laws are good and right according to widely-accepted norms or standards, they may not pass through legislatures or other institutions of government or if they pass they may not be able to be enforced or realized via shortages in funding, as politicians must in some way make reference to ethical arguments in building coalitions in the legislature or figuring out how to appeal to the public.
While the existential view avoids the introduction of universal principles of right and wrong before or after the fact, the ethical systems we have reviewed require either a priori principles or post-hoc analyses to determine right from wrong or better from worse. Previously, we have already established that the only ethical justification for a continuation of business as usual in the use of fossil fuels comes from an extremely reduced version of utilitarian ethics that values the current pleasures and pains of a fraction of the world’s population and its continuance in the very near term over everyone else’s pleasures and pains. Or, a more sophisticated version of this narrow utilitarian vision suggests that the world’s economic system and therefore it’s livelihood is premised on the undisturbed continuation of this particular balance of pleasures and pains and will not be able to withstand the regulation and mitigation efforts related to reducing greenhouse gases.
If we depart from this exceedingly narrow ethical universe, we will conclude that we are in ethical terms, definitely not free to continue to pollute the atmosphere in excess of its capacity to absorb our emissions of carbon dioxide, methane, and nitrous oxide. A reasonable deontological ethics would mandate that because of our duty to ourselves, to future generations and to those who now emit little in excess of these gases particularly in developing countries, we would need to cease in the shortest order possible. If we expand the utilitarian perspective to take account of climate science and the expectable future pleasures and pains of our own and future generations, inaction on climate would also not lead to the happiest outcomes for the most people. Therefore, from both a more complete utilitarian ethics or a deontological perspective that account for what is becoming common sense in the area of climate science, our existential freedom to use fossil fuels now is unethical. Our current contemporary freedom to use these fuels interferes with the freedom of others to expand their wellbeing currently and most gravely the freedom of future generations to enjoy a decent livelihood.
Limits of a “Climate Virtue-Ethics”
Given the above conclusions, it would seem to be the most righteous path for individuals to cease as quickly as possible emitting fossil fuels so as not to impinge on our own future freedoms and those of others. However an immediate cessation is often not practical and may not be desirable; despite this many of us may experience the need to purify ourselves in the pursuit of greater personal virtue.
In addition to the deontological and utilitarian designs for ethical systems, there is additionally another parallel design for an ethical system that is called a “virtue ethics”. A virtue ethics emphasizes that the good is that which encourages virtue and discourages non-virtuous character traits in people. Virtues are prized traits of individuals; virtues can originate in or correspond to deontological systems of ethics most readily (e.g. honesty = following the rule of telling the truth). Carbon pricing as the leading edge of climate and energy policy can be viewed, perhaps caricatured, as an attempt at a modern climate virtue ethics; the carbon price will encourage climate virtue in individual people and corporations and this will then spread to the social and economic systems in which we live.
The problem with a virtue ethics as a predominant operative ethical framework is that system- and group effects of good and bad behaviors and differences in influence are discounted: the promotion of and development of virtue individual by individual remains key. This leads to an individualized ethical universe which may end up distorting the tasks ahead of us, many of which may need to be undertaken in coordination with other people and with many organizations working in concert. A virtue ethics overlooks the indirect or follow-on effects of people in groups or living in society.
Transitional Use of Fossil Fuels
If we believe that immediate cessation of use of fossil fuels, while virtuous on an individual level, is not optimal from the point of view of building a zero net-carbon society and economy, do we then necessarily arrive at Lomborg’s solution which councils slow or no action? Lomborg suggests that we must remain or become “rich” which he equates with fossil fuel use and disregard for mounting GHG levels.
Those who believe as I do that a zero net carbon society will require a good deal of new electric infrastructure both for electricity generation and electric transportation, using fossil fuels, especially compressed natural gas to power the off-road machinery that helps build the zero-carbon infrastructure may be one important use for some of our remaining fossil fuels. In this I differ with T. Boone Pickens who believes that we need an entire new natural gas fueling infrastructure to power freight transport in the next decades. I believe it is possible to transition more quickly to electricity in the transport of most freight through electric rail and other means. More important in my view, is the powering of the off-road machines like cranes, backhoes, bulldozers, and graders using a portable high concentration fuel until such time as these can be powered via electricity. Therefore I would suggest that the ethically and technically optimal use of natural gas in the next couple decades would be to power off-road and off-grid machines building the zero-carbon infrastructure we will need.
Even on a personal and individual level, if we would strand or reduce our personal “power” by not using fossil fuels in the next few years, it would appear that there would be slim ethical justification for doing so. Even in a deontological ethics, one can and does have a duty to oneself to take care of oneself, even in the most group-oriented versions of such an ethical system, one does so in order to take care of others.
However, we would hope that governments and forward thinking private companies throughout the world will enable these transitional uses to “sunset” into more sustainable forms of energy use rapidly, let’s say within 5 or 10 years. Otherwise the transitional use of fossil fuels will start to look ever more “Lomborgian” and weak in its commitment to facing the challenge.
Changing the Energy System
If we contrast the amount of resistance and the many objections to climate legislation and action on renewable energy that are batted about the media and in political circles with the stark ethical case for decisive action, one is left with the impression that our culture is incredibly tolerant of if not friendly towards an attitude of entitlement and short-sightedness. In fact, that I have taken some pains here to build strong ethical arguments against such flimsy positions is a sign that we normalize and accept thought and political leaders who lead us to an attitude of spoiled indulgence rather than realistic assessment of our options.
Are we “spoiled” and lazy? Are we unable to buck up and face the tasks ahead knowing that perhaps, and just perhaps, there will be some sacrifice involved, along with building a new energy economy, the basis of a more sustainable new economy? The gains are surely greater than the losses but we will over the next period of months and years hear again and again about the how terrible and dangerous the sacrifices that we will make will be.
It is too bad that the policy vehicle, cap and trade, which climate and energy action groups as well as legislators have picked is so flawed. If there has been an unfortunate choice of emphasis, the general mission of those who support it is ethically justified, which is the focus here.
To overcome or outgrow our dependence on fossil energy will require not just a summoning of inner virtues on the part of dispersed individuals nor just lambasting the strongest advocates of our dependence, but developing a clear view of the political and economic path ahead. In my opinion, a full-scale mobilization of economic and political resources will be required, like that which occurred during the Second World War, which goes beyond the visions of carbon pricing advocates. To halt our emissions at the level of 450 parts per million of carbon dioxide or to return to 350 parts per million of carbon dioxide as is now recommended, will require a coordinated effort that will be spurred both by price signals but also by combined efforts by governments and diverse industrial sectors.
Carbon Pricing is Just One Piece of the Puzzle: Towards a Comprehensive Climate and Energy Policy – Part 3 February 11, 2009Posted by Michael Hoexter in Uncategorized.
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In part 1 of this very long blog post, I described how the current economic crisis has reversed the prestige and standing of two competing schools of economic thought that are also attached to distinct worldviews, monetarism/supply side vs. Keynesianism. In part 2, I suggested that the main policy instrument discussed by climate activists, carbon pricing in both its cap and trade and carbon tax forms, uses the toolkit of the now somewhat discredited monetarist/supply-side school. I attempted to document the benefits but also questionable assumptions involved in reliance on carbon pricing as the mainstay of climate and energy policy. Part 3 discusses how there are multiple ongoing market failures that have a decisive impact on climate policy rather than the singular failure of discounting the impact of carbon emissions.
Absolute and Local Carbon Minima, a.k.a. Peaks and Valleys
Another potential limitation of carbon pricing involves the target carbon dioxide level that will enable us to maintain a livable climate. With climate scientists and climate activists urging us to take on very ambitious goals that mean a net subtraction, not just a reduction in the rate of emission, in the current amount of carbon in the atmosphere within a period of decades, it would seem we are targeting what might be called an “absolute minimum” of carbon emissions. The renewable electron economy that I have promoted or the nationally-advertised Repower America proposal by the Alliance for Climate Protection are targeting something close to the absolute minimum in carbon emissions in an advanced energy-intensive economy. In general any proposal that seeks to replace fossil fueled transport and other end-use machines with electric end-use devices can target zero emissions, as we have a number of ways to achieve very low or no carbon emissions in the electricity generation sector.
A carbon pricing system, especially in its first years, will encourage investment in what might be called “local minima” or the currently less expensive carbon reduction technology or practice. In some cases, these local minima may be zero-carbon or potentially part of a net zero carbon emitting economy, but in most cases these choices will entail the more efficient use of fossil resources or switching to “second-best” alternative fuel systems like substituting natural gas for petroleum. Many of the easier-to-achieve fuel efficiency measures for fossil fuels are necessary investments (switching to a more efficient internal combustion engines, for instance), especially if we assume that they will have a useful lifetime of perhaps ten years. However commitments to second-best, long-lived infrastructure with a useful lifetime of 40 or 50 years that commits us to a lot of carbon emissions during that period appear to be ultimately a waste of resources. If we take, for instance, the proposal in the Pickens Plan to convert our transport system to natural gas (which cuts emissions by only 35% relative to petroleum), this would involve massive investment in a new compressed natural gas infrastructure, though the size of this investment would be smaller than the conversion to an all electric transport infrastructure (assuming just an evolutionary increase in the energy content and manufacturing efficiency of batteries).
Imagine, as a model of this phenomenon, a 3-dimensional undulating surface like a contour map of a mountainous landscape with height equaling the rate we are adding carbon dioxide (or you like carbon dioxide equivalents) to the atmosphere. We are currently at the top of the highest mountain as a society though perhaps individual firms and organizations are already doing better than they were and could be pictured on a “downslope”. If we look down from the (rising) mountain top we are on we see a number of different routes downward. Some of the paths lead eventually to valleys, the floor of which are still at a high “altitude” (some net carbon emissions) and which are surrounded by “ridges” (local peaks in carbon emissions). Other paths lead to valleys that are at “sea level” or zero emissions and some might even lead to valleys below sea level (carbon negativity). Not all paths are “arrayed equally” before us as some require the traverse of intermediate peaks and ridges (infrastructure investments or evolution of technology).
A carbon price will drive us down this mountain toward some of the valleys but I believe because of its structure and foreseeable price evolution, will drive us without a strong assist from other policy instruments towards “local minima” that are not necessarily the “absolute minima”, the deep Rift Valleys and Death Valleys that we are targeting. A policy scheme that hinges largely on carbon pricing assumes that local minima will lead to the absolute minima, yet only in the (still extremely important) areas of energy efficiency, in particular electrical energy efficiency and land use, is this true. Therefore carbon pricing can be seen as, potentially, an effective incentive for energy efficiency but not necessarily arriving at the zero or negative carbon society. Focused as it is on the market, it does not aid us to see much beyond the horizon of concerns of individual market actors, and therefore we may be missing the “big picture”.
New Low/Zero-Carbon Infrastructure: Enabling Effective Market Choice
It is a common lament heard around US metropolitan areas with fairly good public transportation or walkable downtowns and neighborhoods that people with awareness of global warming or other ecological impacts complain that they “have to use” their cars to do certain errands or to get to work. I live in a part of Northern California with much better than average public transportation but where use of automobiles is the difference between living an average as opposed to a restricted lifestyle. The areas of the US where automobile use is optional to lead a comfortable or middle class lifestyle are extremely limited. Peak Oil analysts warn of (or celebrate) the “end of suburbia” with a rise in petroleum prices as supplies decrease. In the US (and Canada), almost ever aspect of life depends on relatively cheap fossil fuels.
Carbon pricing will push us gently at first towards more efficient use of our existing infrastructure but will not by itself build or point us towards the zero-carbon enabling infrastructure. In order for economic actors to be able to respond to carbon pricing, they will need to have the concrete choice of modes of transport and modes of living, that are undergirded by a changed infrastructure. Our current infrastructure in the US commits us to emit carbon copiously. In Europe and Japan, particularly in the area of transport, the amount of infrastructure change required to go to a zero-carbon society is less though these countries also happen to have less options in the area of clean electricity generation than the US. For transport in these more densely populated countries, carbon pricing may be enough to push for expanded use of existing low and potentially zero carbon infrastructure, as this involves intensified use and expansion of existing rails and public transport. The relative population density of these societies and historically higher energy prices are a boon to more efficient end use devices.
Building new infrastructure, even if it will support a lower or zero carbon emissions, will, in an era of fossil fueled construction machines and industrial processes, represent more emissions for the period of building that infrastructure. This is unavoidable if we need rapidly to achieve essentially a zero net carbon emissions society, which will inevitably require new infrastructure. If we assume a longer timeframe, it is conceivable that the contribution of emissions from large infrastructure projects would be less, though the delay in building that infrastructure would have many negative consequences.
Infrastructure, the Persistent Market Failure
In the recent era of idealization of the market, market externalities were considered to be exceptional circumstances or “unmentionables” in an era of ideological polemic. We are re-discovering now that in fact those externalities may in fact be more common and may represent an unavoidable and even necessary part of all economies. Nicholas Stern’s observation that carbon emissions are the greatest market failure of modern industrial economies may be true but contains within it the implication (not necessarily Stern’s personal view) that market failures, even in this massive and long lasting form, are events bounded in time rather than persistent and “business as usual”.
If instead we assume that the market coexists with and even requires both natural and social positive externalities and creates or falls victim to negative externalities for which it fails to fully account, the organization and replenishment of positive externalities and the management of negative externalities becomes as vital an economic activity as the activities of market actors within the market. These natural and social externalities of the positive type are sometimes treated as “public goods” by economists but are more easily recognized by economists of the Keynesian persuasion. Despite the efforts of these economists, the examination of public goods is a minority concern within contemporary economics, especially in models that assume or imply a self-sufficient or all-encompassing market.
The building and maintenance of infrastructure seems to be one area where market participants are not likely to be moved voluntarily, i.e. by their wants, to address. It is here that governments have stepped in to fill in where private market participants have either lost interest (passenger rail), abandoned assets, or not built (roads and bridges) the necessary infrastructure to keep the economy going. In the era of idealization of markets, it was assumed that markets could provide or did not really require the public goods which had in the earlier part of the 20th century had been assumed to be the province of government. These efforts have not yielded much in the way of actual progress in creating infrastructure owned and operated by private industry. We are now facing, in the US, an aging infrastructure that, furthermore, is not designed to support a functional zero-carbon society.
The “confession” that markets cannot provide these services would until recently be considered something like apostasy within those areas of economics and the economical “common sense” promoted in the media and in policy circles. On the other hand, if one takes the perspective of an economic historian or a Keynesian of most varieties, the notion that government would provide or help finance these services would seem to be the norm. While it may seem an unusual move to some, all I am assuming is that markets are not perfectable or self-sufficient.
The efforts then made to represent carbon pricing as the main means to achieve a zero-carbon society by steering market actors via the price signal ignores the persistent market failure in the area of infrastructure and reveal the degree to which the assumptions of the market paradigm have been internalized in the climate policy community. If we are to re-adopt at least some of the lessons learned by Keynes and those who worked in his tradition in the post-WWII period, climate policy might look quite different.
A Choice of Infrastructures…and Fiscal Stimulus
As discussed elsewhere and implied above, the choice of energy infrastructures has a lot to do with which target carbon dioxide concentration we are attempting to achieve and how fast we want to achieve it. As I highlighted in the preceding post about the post-carbon decision space, we are facing in the area of infrastructure a number of areas of choice that can be outlined as follows:
1) Energy sourcing and generation (renewable, nuclear, fossil)
2) Energy distribution system (wires, pipelines, rail, road)
3) Form of transport energy (electricity, gas, biofuel, hydrogen)
4) Form of building energy (electricity, liquid, or gas)
5) Balance between individual vs. aggregated group conveyance
6) Balance between grid-tied vs. autonomous vehicles
7) Balance between guideway-constrained vs. road-going vehicles
For instance the renewable electron economy that I written about can, in a number of configurations, get us to or very close to a zero net emissions society. The ambitious Repower America plan currently advertised on TV throughout the US foresees generating most electricity renewably. To achieve society-wide net or near-zero emissions, I would add to its scope, powering land transportation using electricity either directly through wires or stored in batteries, which is the intention of many advocates of electric transport.
To make the zero net emissions renewable electron economy a reality, a number of large pieces of infrastructure are required to allow electricity to come from clean sources, to be used efficiently in buildings, and to be used in a majority of transport tasks. Firstly the Unified National Smart Grid, which is contained in the Repower America plan, would involve the building of a number of high voltage transmission lines from high renewable energy resource areas (windy Great Plains, sunny Southwest, offshore high wind areas) to existing transmission lines with sufficient capacity or directly to regional and national demand centers. Furthermore, local grid reinforcement and energy storage facilities would need to be built to balance renewable resource fluctuations and allow quick re-charging of large numbers of electric vehicles during times of peak demand. Electrification and build-out of the rail system needs to occur to allow for increased freight and passenger traffic with zero emissions. High traffic roads may need to be electrified with overhead wires or other means to allow large vehicles to traverse them without the need to store all energy on-board. The degree to which batteries or portable energy storage devices progess in durability and energy content will reduce the need for electrifying roads, though rail electrification, the internationally recognized top choice in rail locomotion, is a no-brainer in any scenario.
Other clean or cleaner energy proposals require more or less new infrastructure though they have other drawbacks or do not target zero or negative net carbon emissions. A clean hydrogen economy would require 2-3 times the generating capacity as the renewable electron economy as well as improvements in hydrogen storage and distribution. Hydrogen fueled transport would also require the build-out of Unified National Smart Grid with approximately 3 times the transmission capacity. An energy economy dependent on, still experimental or speculative, 4th generation nuclear plants, would not require as much long-distance transmission and energy storage but would require a similar build out of electric transport infrastructure. A shift of transport to natural gas and electricity to renewables, as recently advanced by T. Boone Pickens, would require less build-out of an electric transport infrastructure or at least a delay thereof but the expansion of a the natural gas distribution network, in all probability financed and owned by the private sector as is our petroleum infrastructure. Pickens’ proposal, however, does not target zero net emissions.
Investment for the new clean energy infrastructure for the United States economy as a whole will, over a period of a decade or two, number in the trillions of dollars, though these trillions will largely be spent in the United States on productive assets. Furthermore, it is not clear that a carbon price will provide the appropriate incentive/disincentive to motivate an economic actor (who?… mostly governments or public-private partnerships) to build pieces of this infrastructure, though it might provide revenue for these projects. In this regard, well-informed leaders of governments and their advisors will need to take many of the key steps, informed one hopes by a process not unlike the decision space tool.
While advocates of carbon pricing and in particular the carbon tax have attempted to emphasize that most carbon pricing proposals are revenue neutral or of low cost, if one is concerned about forging ahead rapidly towards a carbon neutral society, as well as funding employment-generating infrastructure projects, it would make sense to use some of the revenue from carbon pricing schemes to help fund these efforts. If one advances from a view of economics that takes public goods for granted to one that sees the building and maintenance of public goods as necessary and a part of the scope of government involvement in the economy, the financing of this type of project eventually through a combination of tax and use fee revenue becomes a key task (in the depths of a deep recession, Keynesians would turn to deficit spending followed by paying off the resulting debt during better times through taxes and use fees).
Electricity and Markets: An Uneasy Mix
The market mechanism assumes that there are multiple actors that can supply or demand a good or service from each other and market participants can legally “dispose of” relationships that are no longer profitable for either party. The electricity system, at least one that is professionally managed on an interconnected grid, is a natural monopoly because of the physics of electrical circuits and difficulties of energizing and managing those circuits all the time. Furthermore, electricity in most settings needs to be produced and consumed immediately, so cannot be easily stored or inventoried like most other goods. In other words, it is economically inefficient for there to be two or more electric grids built in one area, as the electricity transmission and distribution system is such a huge expense that consumers would end up needing to pay for the resulting doubled expense.
There have up to the 1990’s been two main forms of ownership of the electricity system both within the US and abroad: public or state ownership and investor-owned regional monopolies overseen by government regulators.
Within the same timeframe that the first climate policies were formulated in the late 1980’s and 1990’s, politicians in the US were attempting to experiment with deregulation of the power industry with mixed and sometimes disastrous results. In deregulation, regional power generation markets were to be created within which competition was to be maximized and therefore, it was hoped, the economic efficiencies of the market would be brought to the utility industry. In deregulation efforts worldwide, public power companies were sometimes sold off to investors and private monopolies were required to open their distribution systems to privately owned generators.
To create a wholesale electricity market, non-profit independent system operating companies were formed that functioned as an exchange that brokered wholesale generation bids from generators to electricity retailers and managed day to day grid functioning. Consumers were also allowed to buy electricity from power companies (not specific generators) that did not actually serve them power through the distribution network but nevertheless operated generators or at least paid for power generation somewhere else. The regulated investor owned power companies that had acted as regional monopolies and still owned most of the power distribution system in a given area, spun off unregulated subsidiaries to develop and own new generators anywhere on the national power grid.
While deregulation has had some benefits in opening up a very conservative industry especially to renewable generators owned by third-parties, the declared goal of lower electricity rates has not been achieved, so the claimed efficiency benefits of deregulation and markets have not taken place with the electric grid. Deregulation has also caused the utilities to look long and hard at investing in their transmission and distribution infrastructure, which is not only for their own use but has also become an asset to their competitors in the area of retail power delivery.
In almost every account of the future post-carbon energy system, electricity will play an even more central role. The mechanisms introduced into the electricity industry via deregulation do not get us much closer to building the vital additional electric infrastructure that will be required for a transition to non-carbon sources: a renewable supergrid and self-generated renewable energy on private premises. In fact, the primary competition in electricity will be at some point in the future not between generators of similar types but between different technologies and systems of delivering electricity, self- or local generation and centralized generation and distribution. While partisans of either the local vs. the continental and trans-continental options can be found in abundance, we currently do not need to foster direct competition between the distributed vs. centralized modes of distribution except in theoretical discussions as there is so much carbon-dependent energy to replace by any means with little time to do so. Some in the climate community support conventional 3rd generation and new forms of nuclear power as climate solutions, these too are not easily developed and delivered by conventional market mechanisms without large government assists; they will continue to require an intimate relationship with government for research and development, insurance and waste disposal.
To realize the most likely near-term technological solution to reducing carbon emissions from electricity, the Repower America program, one would need large-scale cooperation and public financing options to create a Unified National Smart Grid that tapped into the resources of the best renewable energy regions of the US. Given the size of this investment it behooves us to find the most efficient means to finance this project, which also could function as an economic stimulus over the short and medium terms. As always with the electrical system, there will need to be efforts including industry representatives, regulators and legislators, independent of ideological commitments, to find the best solution appropriate to this technology and the challenges ahead. Some parts of this grid may be investor-owned while others may become part of the already existing federally owned electricity transmission system. Despite the deregulatory efforts of the past two decades, the electrical industry, more than, for instance, consumer electronics, is by its physical structure, more Keynesian than free market/monetarist, requiring a combination of public and private initiative to grow and thrive.
Scientific Research: Another Persistent Market Failure
Unless they are extreme market ideologues willing to throw everything upon the altar of unregulated markets, most political actors realize that government has and will continue to have a key role in funding basic scientific research of all types including research in the area of energy and climate. In a plenary session focused on carbon pricing at the 2009 American Economic Association meeting, the panel discussion, while informative, was airtight in its focus on the singular market failure of carbon emissions and the carbon pricing solutions. After I commented from the floor that clean energy infrastructure would not necessarily get built via carbon pricing, Lawrence Goulder of Stanford, brought up that research was another ongoing market failure that was not addressed by carbon pricing. As it turned out this was the only voice from the podium that brought up boundary conditions which fall outside or to one side of the idealized model of market actors responding to pricing
Most people who are concerned about climate change support an increase in government funding for clean technology research. It is encouraging that President-elect Obama has appointed some world renowned scientists to his team, including his Secretary of Energy, Steven Chu and has talked of $15 billion per year in funding for clean energy research. Some call for still more funding in this area.
Despite the unanimity among all science advocates and their political allies, it is rare to find economists who factor this into the foundations of their economic models. The ongoing role of government in this area may be too obvious but calling it a “market failure” may help spur more realistic economic modeling of how technology change occurs.
Waiting for a Technological “Deus Ex Machina”
In the area or scientific research and innovation as well there are advocates, largely not economists, who are hoping for a “deus ex machina” in the area of one or many technological breakthroughs which would make the transition to a post-carbon economy cheap and easy. These advocates feel that one must pay attention only or largely to finding an as yet undiscovered technological fix for our clean energy and climate dilemmas. Some in this camp take the view that this must be a massive government funded research program, using the metaphor of the Apollo project, while others feel that daring and innovative entrepreneurs will lead us into a post-carbon world. As the latter view meshes perfectly with the monetarist/supply-side view of economics, the Bush Administration despite its indifference and/or hostility to aggressive climate action, occasionally spoke of the ability of entrepreneurs to innovate in the area of clean energy.
Some of Google’s clean energy initiatives, the Breakthrough Institute, and a number of venture capitalists have notably come forward with the notion that we will innovate our way out of this problem with minimal extra expense to the general population. While each of these actors is convinced that they have a fresh, even revolutionary message, this discourse touches a well-worn groove in the American psyche, and carries with it the various fantasies we all have for devices that will make our lives easier and more painless. Additionally this view underplays other failures of the market, including its dependence upon but tendency to neglect public goods like infrastructure.
To emit zero or negative net carbon into the atmosphere, we are going to need at least an evolution of current technology, if not a revolution in some technologies, to live well according to our current standards. These changes will eventually bring down the costs of most of these technologies. However, making carbon strategy contingent on a breakthrough or revolution in technologies is choosing perhaps a politically more comfortable but nevertheless a higher risk strategy than we really need to adopt. More perniciously, this type of technological over-optimism functions in actual fact as a block to taking action now in improving and deploying the already good technologies in search of the perfect, cheap clean technologies. The political comfort comes from postponing or ignoring expenditure of funds now on existing adequate technologies and infrastructure, in a sense reassuring the public that no costs will be incurred now.
Google’s RE<C (Renewable Energy cheaper than Coal) is one such initiative that has many laudable intentions yet ultimately encourages passivity in deploying real existing technologies that are not yet cheaper than coal. Google’s announcements imply, echoing the concerns of some climate activists on the global scene, that worthwhile post-carbon technologies MUST be affordable for rapidly industrializing countries (China and India) overlooking or downgrading the existing technologies that are slightly more expensive but affordable now in some of the developed countries. I have pointed out elsewhere that this phenomenon is “making the perfect (cheap and clean) the enemy of the good (mid-priced and clean)”.
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In the leisurely way I have been writing and posting on my blog, I have not yet completed my series on how energy supply and energy demand will look in the future, what I am calling the Renewable Electron Economy. Yet, as events are unfolding more rapidly in the world around us, we may see some form of an Electron Economy, perhaps fueled by renewable energy, sooner rather than later. So this post is inspired by recent news more than
The Oil Price Spike
The theory of Peak Oil, once the province of a few oil industry renegades and a sundry bunch of people who like depressing stories, is going mainstream. With crude oil prices spiking on Friday by $10/barrel to record highs ($139/barrel) and petroleum prices at the pump now at their inflation-adjusted highs (finally beating their peak in the early 1980’s), the idea that inevitable declines in oil production could wreak havoc in the global economy seems almost like common sense.
One area of the economy that almost all people are feeling the oil price spike is in the price of food. Food prices are also climbing as we start to see how much the global food system is dependent upon fossil energy to produce food and get it to market.
Oil prices, however, affect most sectors in modern economies, as logistics and international trade is heavily dependent on oil. Ordinary citizens in the US, Canada and Australia are in many areas almost entirely dependent on petroleum to do most activities of daily living including getting to work and shopping for, among other things, food.
Whether we see the “End of Suburbia” and severe economic contraction will depend on a number of factors including the willingness of governments to act quickly to both help people adapt to expensive oil and to prepare for a “post-oil” world. As with climate change, there are two levels of response: short-term adaptations and long term energy strategy. Both levels will be necessary to avoid the worst effects.
There are those, critical of the certainties of Peak Oil theory, who say that we are experiencing a speculative bubble in oil prices, which will recede later this year. But Peak Oilers, at least, will say that this amounts to “whistling past the graveyard”, as limits to oil supplies and rising demand will inevitably raise the price of oil dramatically whether this year or next.
My understanding of basic economics would indicate that the Peak Oilers are right about the overall trajectory of oil prices even if the production peak has either already happened or will happen in 5 years time. The way in which energy economics has been treated as exceptional, let’s call it “oil exceptionalism”, is itself a cause for wonder. In addition to the immediate economic crises associated with much more expensive oil, there may as well be a huge crisis in confidence in the profession of economics and political leaders who have not prepared us for what in retrospect may appear to have been an inevitability, predicted over 50 years ago by M. King Hubbert.
The Electric Vehicle Solution
In discussions of the presumed-to-be-distant post-oil future that one has seen in the media, one is presented with a colorful assortment of possibilities that makes for diverting journalistic fare but hides the fundamental physics of energy and energy conversion technologies. The picture is not nearly as complicated which may be unfortunate for those looking for a good story as well as commercial interests betting on biofuels or hydrogen fuel cells. For most transport uses, with a few modifications in technology and some large infrastructure projects, electric motors will drive most on-land transport and machine tools, with biofuels and hydrogen generated from clean electricity used for some specialty applications.
Unbeknownst to most people who use them, electric motors, especially those of medium and larger size, convert 90% of the electric energy they receive into torque, the whole point and purpose of using motors and engines. They are also relative to their power output much more compact as demonstrated by the photo on the left of the Tesla Roadster motor which has a peak output of 248 hp. By contrast, the modern internal combustion engines used in vehicles convert around 20-25% of the energy of the fossil or biofuels into torque, dissipating most of the rest of the energy as heat. That 75-80% loss of energy means that more energy is required to do the work that we ask of these machines.
In an era of plentiful and cheap fossil fuels, the massive energy losses associated with internal combustion engines have been deemed acceptable or at least largely invisible to the unconcerned public. But in an era in which energy will need to be actually “produced” from capital-intensive renewable energy conversion technologies or from very capital-intensive nuclear power plants, a more efficient solution is going to deliver more end-use utility from scarcer usable energy. Furthermore most of the renewable energy conversion devices that we have already invented convert renewable energy into electricity; these devices are many times more efficient in producing usable energy than photosynthesis in fuel crops.
I won’t rehearse the whole argument here why electric vehicles that store their energy in batteries, flywheels or ultracapacitors are our first line of defense against climate disaster and peak oil. Ulf Bossel, Joe Romm, Patrick Mazza and Roel Hammerschlag have run the efficiency analyses to show that electric drive vehicles as opposed to hydrogen fuel cell vehicles are going to enable us to use most renewable energy sources to do work in a way that is truly conservative of the energy we will have available, at least in the coming several decades.
There are challenges ahead in extending and reinforcing the electric grid, in improving the energy density of batteries, and in building electric overhead or third-rail energizing infrastructure for trains, trolleybuses, trolley trucks, etc. But electric vehicle (EV) technology is rapidly maturing.
The Turning Point
Much has been written recently about high profile EVs like the Tesla Roadster and the Chevy Volt (a PHEV or EREV but still driven by an electric motor). Developing an attractive substitute for the family or personal car involves creating an EV that mimics the aesthetic and broad range of uses of current personal vehicles that run on oil. If oil becomes prohibitively expensive and scarcer, the pressure to create an electric vehicle that just offers basic transportation becomes much greater. However it is apparent to me and other observers of the electric vehicle scene that low mileage fleet vehicles and local delivery vehicles are already the “low hanging fruit” for EV development.
Local fleets of utility vehicles and trucks can use somewhat larger and heavier conventional battery packs to go the 40 or 50 miles that they need to traverse every day. Fleet vehicles can also pioneer fast-charging infrastructure and/or battery pack exchanges. Vehicle fleets can leverage the existing electric forklift technology that one finds in warehouses and factories making for a faster development and production timeline.
The announcement last week that the Japanese post office is planning a transition to an all-electric fleet indicates to me that it is only a matter or time before most managers of local fleets will start ordering electric vehicles, driven by the rising price of diesel or gasoline. This would mean potentially the purchase of 21,000 electric vehicles. The French post office is starting a similar project. The post office of tiny Monaco is already making a similar move. There are other electric vehicle and plug-in hybrid fleet test projects at other large state agencies. These orders and projects already add to moves by private companies in Europe who have put in orders for or are already using electric delivery trucks by Smith, Modec and other manufacturers (in part a response to the London congestion charge).
Though these vehicles may be moving below the radar of personal car buyers and car fans, they will provide a means to build electric vehicle manufacturing infrastructure. Furthermore, a vehicle that does the work that is asked of it using electricity will become in the future more “sexy” than a vehicle that requires expensive inputs like petroleum fuel to move. More important for achieving economies of scale are fleet buyers who with their buying decisions, can help EV companies survive and thrive. Rather than having to convince or market to often-finicky individual consumers, corporations and governments can lay out their functional requirements to which companies can build vehicles. From this basis, more adventurous EV designs for the public can be attempted.
Shai Agassi’s Project Better Place, which promotes an all-inclusive vehicle plus charge infrastructure package for localities, has a more ambitious plan of converting personal transport to electricity by using a subscription model. PBP has gotten interest from localities that are actual or virtual “islands” where EVs with contemporary batteries would have little problem fulfilling most transport tasks.
Plug In Hybrids
For more sparsely populated regions or users that require trips of variable length, the plug in hybrid or extended range electric vehicle has become the option that has gained a great deal of visibility. The Chevy Volt is now the highest profile PHEV/EREV project. Toyota may respond with a plug in version of the Prius, which has been the object of most aftermarket PHEV conversions. While still 2 to 3 years away as a production vehicle, PHEVs or EREVs will probably gain wide market share, especially with high gas prices continuing. As they have received more coverage, have a number of websites and organizations (calcars.org) devoted to them and are a growing topic unto themselves, I will discuss PHEVs/EREVs in another post. Once available, PHEVs or EREVs will also attract fleet buyers.
The Renewable Electron Economy Part VIII.1: The Electric Farm November 12, 2007Posted by Michael Hoexter in Green Transport, Renewable Energy, Sustainable Thinking, Uncategorized.
Tags: agriculture, battery, battery exchange, biofuels, Elec-Trak, electric tractors, electricity, lead acid batteries, lithium ion batteries, Rudolf Diesel, tractors
Urbanites and suburbanites tend to forget that our civilization is based on agriculture, an agriculture that is heavily mechanized and dependent on fossil fuel. The US has the most highly mechanized farm economy; one estimate has put the number of people supported by one farmer’s food output currently at 100 for the US. If we try to account for farm family members, farm laborers and illegal immigrant farm laborers (added together 6 million) as well as adjust for the fact that the US is a net exporter of food products, the number of people outside agriculture supported by a single worker in agriculture is something like 40-50 in the US, and in all probability fewer in Europe and still fewer in developing countries. The degree to which human social groups can develop into civilizations and economies with highly specialized roles is entirely dependent upon this ratio.
Tad Patzek, in his stinging critique of biofuels from an energetic perspective, mentions in passing how the enhancement of human labor by fossil fuels turns ordinary workers into “supermen”. But energy balance is not just an issue in raising fuel crops. In fact it is more important for determining what kind of food agriculture (i.e. the original kind), and therefore society, is ultimately sustainable. A ratio of 20, 30 or 40 non-agricultural workers for every ag worker is unthinkable without energy subsidy from a source other than human muscle, what students of agricultural energetics call exosomatic (outside the body) energy as opposed to the endosomatic (inside the body) energy of food. Exosomatic energy flow is what we usually think of when we discuss “energy”, the energy of fossil fuels, renewables and nuclear.
The word “sustainable agriculture” brings up many definitions and potential variables, some so complex that it takes committees of farming specialists, ecologists, and economists to sketch the dimensions of the problem. A list of sustainability issues in agriculture includes water balance, soil preservation and restoration, carbon balance, energy balance, farm economics, use of toxins, balance of ecological relationships between key species, and food economics. Organic or biologic agriculture standards have tackled one portion of what sustainability might mean in food production but have excluded energy subsidy in the form of fossil fuel energy as a consideration (other than limiting fertilizer inputs which happen to be made from fossil sources). A combined view of the energetics and material balance of agriculture has yet to take on a common form recognized by the institutional forces that shape contemporary agriculture: we better get going on creating a science-based roadmap to sustainability in agriculture, given our dependence on unsustainable fossil fuels to help feed us.
One place to start making modern farming more sustainable is to ensure that all exosomatic energy in agriculture will come from renewable sources in a way that would be affordable for agriculturalists themselves or the complex of business and government entities that work together to bring food to market. In the short term, petroleum products are the most affordable options given the farm equipment available. Long-term affordability will mean sourcing exosomatic energy in ways that have sustainable effects on the local and regional ecosystems on which the farms and, by extension, our society depend. In addition, agricultural scientists, inventors and farmers might work together to further reduce energy demand on farms by utilizing natural energy flows directly or more targeted use of exosomatic energy.
In the US, energy use on farms, including “indirect” fossil energy used to produce fertilizers, peaked in the 1978 at 2.4 quadrillion BTU (~2.4 exajoules) or 2.96% of total U.S. energy use for that year but through a series of measures has decreased 26% for direct use (powering devices on farms) and 31% for fertilizer production. Much of the reduction has come from the use of more efficient diesel equipment, use of low-tillage and no-tillage plowing techniques, and more efficient targeted energy use in irrigation and crop drying. In 2002, agricultural energy use, including both direct and indirect energy was 1.7 quadrillion BTU (-1.7 exajoules) or 1.7% of total energy use. All in all, this is not a huge contribution to US energy use but within agriculture, an absolutely critical sector of the economy, fossil energy is an absolutely critical input.
Managing greenhouse gases from farming is more complicated than simply limiting fossil fuel use, as methane emissions by rice paddies, cattle and manure are an additional area of concern. In the US, agriculture accounts for about 8-9% of CO2 equivalent emissions because of methane’s strength as a greenhouse gas.
While agriculture may not in itself contribute as much to global warming as building or transport energy use, it is very vulnerable to rises in fuel prices and availability. Financially farming is a very slim margin business and energy costs can be as much as 30% of total production costs for farms depending on the crop; insulating farmers from the vagaries of petroleum has environmental, economic, and food security benefits.
Rudolf Diesel’s Dream Deferred
Rudolf Diesel, the inventor of the diesel engine, had designed his revolutionary compression ignition engine to be capable of using vegetable oil as a fuel. While most diesels are now tuned to use petro-diesel, the recent biofuel movement has revived interest in the idea of farmers being able to grow their own fuel. We have discovered that there are many problems with biofuels and, in temperate climates, nitrogen fertilizers for the leading contender for biodiesel production, rapeseed/canola, create unacceptable levels of nitrous oxide emissions. The energy balance for rapeseed is mildly positive, i.e. more energy is produced than invested in the process of growing it, but the nitrous oxide is a 200-300x more powerful greenhouse gas than carbon dioxide so the use of rapeseed would appear to defeat its primary purpose in terms of climate protection.
More productive and potentially carbon neutral biofuels may be on the way but these are still in the indeterminate future. A return to spark ignition engines (once dominant on farms replaced by diesel in the last decades of the 20th Century) would allow farmers to use ethanol in farm equipment, though ethanol from corn is not particularly productive. The fuel needs of farmers vary but it appears that a farmer would need from 3 to 10% of their cultivated land to grow biofuel crops for their own needs and then process the crops into biofuel or pay to have their fuel crops processed. Current biofuel conversion processes capture around 0.15% of solar energy that is then only converted into around 0.05% of work capacity by your typical diesel engine. The idling that tractors engage in during the work day waste further energy. A combined solar array (15% efficient), storing electricity in a battery (85%) with an electric motor (90% efficient) could use around 11.5% of the sun’s energy to do work, a 228 x more efficient use of the sun’s energy.
If biofuels can be climate neutral and potentially energy positive, they still emit when burned local smog forming gases (SOx and NOx) and particulates, though in different and sometimes smaller amounts than petrodiesel or gasoline. Mark Jacobson of Stanford has pointed out that substituting biofuels for petroleum products in areas with air quality problems will have not improve local air pollution substantially. Though tractor operators in most rural areas are those that are most effected by diesel emissions, California’s Central Valley with air flow blocked by the surrounding mountains is one of the smoggiest areas of the country because of smog forming emissions from coastal California cities and the emissions of farm equipment and vehicles in the Valley itself.
Why not Electricity?
What if farmers used largely electric-powered equipment to cultivate and process crops? What advantages would accrue to farmers and agriculture in general?
- Farm equipment would have zero emissions at the point of use
- Farmers could use the concentrated renewable energy of wind or solar to power their equipment locally, either on the farm or from the local grid creating a zero emissions agriculture
- The food supply would become more secure along the dimension of using exosomatic energy
- If farmers had wind turbines or solar arrays on their properties, these would take up from 0.0 to 0.02% of their productive land, if sized to serve their farms needs under expectable energy demand.
- Farmers could utilize electric devices’ high efficiency, potential for precise control, and high torque at low RPM.
- Farm energy costs would have the potential to be: a) fixed (if renewable assets are owned or governed by a power purchase agreement), b) regulated by public agencies, and/or c) at least relatively independent of oil prices.
What are the hurdles or disadvantages of an all-electric energy system on farms?
- Current farm practice and infrastructure would need to be modified in part or in full, leading to some new capital infrastructure investment
- Battery and mobile electrical systems would need to be weatherized or insulated from the exposure to moisture and cold.
- High heat applications such as barn heating or crop drying that may have used fossil fuel combustion processes would need to be redesigned to use heat pumps, solar and other environmental technologies.
- Tasks requiring high energy- (and power-)density mobile energy storage such as all day or all-night use of harvesters, tractors and other mobile machinery would need to be addressed through innovation in electric mobile storage.
The Electric Farm Concept
While the advantages of electricity on some farms and agricultural sectors, will with some quick innovations in technology, be realizable very soon, on other farms with different work requirements a longer technological development curve will be followed. The advantages of electricity may be such that farms will eventually modify some of their requirements to allow them to use electricity for tasks which had been built around the capabilities of a fossil fuel based infrastructure. Only time and hard work with given crops and cultivation practices will tell.
The central piece of mobile equipment on most electric farms will be the electric tractor or a similar multi-purpose, high-power, slow-moving mobile power and traction source. Conventional fossil fuel tractors range from a 20hp riding mower size up to 525hp behemoths with massive dual wheels appropriate for only the largest farms in certain crop sectors. While some of the power of tractors goes into traction or pulling of implements, most modern tractors have a “power take off”(PTO), a shaft that can drive a number of powered attachments such as roto-tillers and back hoes. Operators often add as much as several tons of ballast weights around the tractor to improve traction and pulling power.
Electric tractors will probably look quite different from fossil fuel tractors for a couple very important reasons: electric motors are much more physically compact per unit power than internal combustion engines and for the foreseeable future, batteries are much larger and heavier per unit energy than liquid hydrocarbon fuels. Therefore the large, prominent noses of tractors that contain their diesel or gasoline engines will be an unnecessary feature; the electric motor could easily be fit underneath the operator cab or individual smaller motors could run each wheel or caterpillar track. Furthermore, batteries can be distributed in a number of different configurations around the vehicle, as distributed wiring is easier to manage than building multiple fuel lines with flammable liquids. Unlike the disadvantages of battery weight for transport uses, the weight of battery packs can function as ballast for tractors as well as, of course, energy storage.
For many tasks, electric motors for tractors may be sized substantially below the horsepower ratings of their internal combustion brethren: a 20 hp electric motor can do most of the work of a 40-80hp petroleum power tractors using a lot less energy. Electric motors are anywhere from 2.5 to 5 times more efficient than an internal combustion engine, depending on the load level being compared. At higher power outputs, diesel engines are closer to their peak efficiency but electric maintain a high level of efficiency throughout their power band. The right-sizing then of the power unit for the electric tractor can then save energy and the need for additional onboard storage, dependent upon the task.
None of the major farm equipment manufacturers (John Deere, Case International, McCormick, Kubota, AGCO, New Holland) now markets an electric tractor. In the 1960’s and 70’s General Electric sold a garden tractor/mower called the Elec-Trak, in a range of models from 8-16 hp equivalent with snow blower, roto-tiller and front loader attachments. The Elec-Trak did not sell well as it was substantially more expensive than the gasoline equivalents. There are hundreds of Elec-Traks still in service. A newer Canadian company The Electric Tractor Corporation markets the Electric Ox that can function as a tow and push vehicle as well as a riding mower. Steve Heckeroth of Homestead Enterprises, who created a larger solar electric tractor prototype in the 1990’s is now working on two models of electric farm vehicle that will function as replacements for 40 and 80 hp tractors, particularly suitable for work in vineyards and on small to medium size farms.
Batteries, Battery Exchange and Battery Tenders
Batteries for the foreseeable future will have energy densities (energy per unit weight or volume) somewhere in the area of 20 to 300 Watt-hours/kg (Wh/kg). For a larger tractor this means that a metric tonne (2200 lbs) of batteries will be able to hold from 20 kWh to 300 kWh depending on the battery type used and the future development of batteries into the higher end of this range. At the current upper end, the Tesla Roadster’s lithium ion Energy Storage System including all of its battery management systems has a energy density of approximately 124 Wh/kg so a metric-tonne sized version of it would contain 124 kWh of energy. The Tesla’s battery system is quite expensive, probably costing something on the order of $25000, so a pack twice its size would cost upwards of $50K. On the more economical end, a metric tonne of lead acid batteries might have 25 kWh and cost $3K or $15K (5 tonnes) for the equivalent charge of the lithium ion pack above.
Tractors on larger farms can be called upon to work as many as 3000 hours a year, and perhaps in increments as long as 12 to 14 hours during the peak season. Harvesters need to work around the clock at points during the year when it is critical that the crops be brought in on time. The large but not largest equipment usually runs on 250-300 hp diesel engines so we would use a 250kW electric motor with similar maximum output characteristics. Though the two configurations may not be exactly equivalent, I am inventing this configuration to arrive at an hourly energy usage, in this case 250 kWh at maximum power. Motors modeled on locomotive traction systems (either all-electric or diesel-electric hybrids) might be appropriate as these supply high continuous power output. In any case, this energy usage rate would require 2 metric tonnes of the lithium ion and 10 tonnes of the lead acid batteries at full charge for an hour of work
If the more energy intensive farm tasks were to be entirely electrified, a modular battery exchange system would need to be developed that allows tractors and harvesters to stop at the end of a row for a mobile quick charge or a battery exchange. Mobile quick charge displaces the same problem of energy density and then adds the problem of extreme high voltages and amperes (quick exchange of charge) to a recharge truck so it would appear that battery exchange might be one solution that would work at some point in the not too distant future.
To do battery exchange at the field’s edge, there would need to be a central charge station and a battery tender vehicle that would be able to transport and install multiple 500kg (1100 lbs) or 1000kg (2200 lbs) battery packs on farm equipment anywhere within a 5 to 10 mile (8 to 16 km) radius of the charge station. Battery tender vehicles might vary in size depending upon the size of the farm but would probably have some features of a flatbed truck with a hoist and a series of drawers or sliding tables to handle half-tonne and tonne sized battery packs.
The farm’s inventory of battery packs would need to exceed the farm’s total daily energy usage for mobile equipment on the highest demand day of the year, its peak energy usage. If we extend the example above and invent an example farm’s energy demand we will assume the larger tractor’s 250kw demand for 10 hours and 4 vehicles averaging 25kw for 10 hours. The larger tractor would consume around 2.5 MWh of battery charge in an intense workday while the 4 vehicles at lower power levels would each consume 250 kWh for a total of 1 MWh. At this usage rate, the 250kw tractor would require 20 metric tonnes of lithium ion batteries or 100 metric tonnes of the lead acid batteries while the tractors operating at 25 kW power would each require 2 tonnes of the lithium and 10 tonnes of the lead acid per day.
To fill out this scenario, we need to arrive at a battery carrying capacity for each of the tractors, the 250 kW and the 50kW models (operated in the scenario at 25 kW). Conventional tractors at the 250hp level weigh with ballast somewhere around 15 metric tonnes (33500 lbs) while conventional 80 hp tractors weigh around 5 metric tonnes (11100 lbs.). If we figure that around 50% of the weight of electric tractors can be devoted to batteries, the larger tractor could theoretically carry 8 metric tonnes of batteries while the 50kW models could carry 2.5 metric tonnes of batteries. The larger tractor then could with lithium ion battery packs carry 1 MWh of charge and 200 kWh of charge with lead acid. The 50 kW tractor could carry 312 kWh of lithium ion batteries and 62.5 kWh of lead acid batteries. As tractors can operate in a wide range of power levels depending on the task at hand which an electric tractor can tap into more efficiently, some days these tractors may not require battery exchange while other days they might require hourly exchange of batteries.
Using our sample workday above, there are two different scenarios for how many battery exchanges will be required per day depending on the energy density of the batteries used. I will assume a 100% discharge of batteries though in reality it may be necessary to exchange batteries that still contain charge in them to preserve battery life. Starting with the lithium example, the 250kW tractor carrying 1MWh of charge would require 2 exchanges of batteries per day and the 50kW tractors operating at 25kW power carrying 312kWh of charge would not need a battery exchange. With lead acid, the frequency of battery exchange goes up substantially: the 250kW tractor would require 13 exchanges to work 10 continuous hours and the 50kW tractor working at 25kW would require 3 to 4 exchanges.
To facilitate in-field battery exchange, battery packs might be carried on the vehicle in such a way as to promote easy access for the battery tender vehicle and also to provide ballast to the tractor. They might be situated underneath the cab or in slots in a space between the wheels. A battery powered tractor might have a more elongated design than conventional tractors to allow battery exchange in a space between the wheels and underneath the cab. If a motorized system of battery pack exchange and automatic connection and disconnection has been worked out, these exchanges probably would require from 10 to 20 minutes.
As this post is already long enough, I will continue working out the Electric Farm concept in my next post and evaluate it from the perspective of its current and near-future feasibility. Also, the main rationale for the Electric Farm concept will be discussed, i.e. using on-farm or near-farm renewable electricity generation to fuel contemporary agriculture.
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A recent article in the New York Times by Matthew Wald, highlights one of the main challenges for renewable power, in particular wind energy, its intermittent nature. In some places wind is more reliable and stronger than others but still it is of course not entirely predictable or constant. As with wind, sun is also not constant, though again it is stronger and more consistent in some areas than others. Geothermal power is consistent but, in current harvest strategies, is limited in its geographic dispersal. With massive infrastructure and regular yearly precipitation, hydroelectric is consistent but geographically limited and in many cases disruptive of other natural resources or farmland and human habitation. Wave and tidal power are limited to coastal areas and have not been fully developed.
With almost universal recognition now that carbon-neutral or carbon negative energy solutions are the future of energy generation, what holds back even greater investment in clean renewable energy is the lack of an “on-demand” alternative to the use of fossil fuels or fissionable nuclear fuels. Another way to put this is that the power industry does not yet have a workable, renewable source of “baseline” power rather than an intermittent or supplemental power source to reduce peak or local demand.
Likely Technological Solutions
As Wald’s article points out, the wind industry advocates an integration of the electric grid across the nation if not the continent to allow wind-rich areas to supply wind-poor areas with power. South Dakota, for instance, is reckoned to have the potential to supply 35% of US electric demand with wind power though it does not yet have the transmission capacity to supply its neighbors with electricity. The pooling of renewable energy resources, be they wind, solar, tidal or wave energy, through connecting different regions via the electric grid makes a good deal of sense. A connected grid allows for regional and national markets for clean power and smoothes discrepancies between supply and demand.
Another technical solution to the intermittency of many renewable resources is the development of new generation technologies that tap into more constant energy sources that are still renewable. Notable among these efforts is the Kitegen project profiled in Wired and other news sources. Kitegen, the brainchild of Italian physicist Massimo Ippolito, is a theoretically well-grounded, proposed wind power generation system that uses highflying kites mounted on a horizontal carousel. These kites tap into the almost constant winds of the upper troposphere in certain regions of the world including Europe and North America. The building of large tidal or wave energy generation plants, as well as more complete exploitation of geothermal energy are two areas to increase the amount of predictable renewable power. The more complete exploitation of solar power, the most widely dispersed and consistent renewable resource, will also reduce the amount of baseline power generation resources required by reducing peak power draw during daylight hours.
Finally, clean energy storage solutions have yet to be fully developed to smooth over spikes and troughs in clean renewable power generation and demand. Hydrogen generation from electrolysis has been the highest profile proposal, though considerable questions have arisen about the overall efficiency of the cycle through which hydrogren is isolated, stored and then used to generate electricity in a PEM fuel cell (25% efficiency). The development of battery technology and the creation of a broader “electron economy” offers greater efficiencies, though the ultimate form of how electric energy would be stored (chemical batteries, compressed air, pumped hydroelectric storage, flywheels etc.) is still open to discussion and much technical development.
Nuclear power, using uranium or thorium as fuel, may or may not be the less carbon intensive solution to the generation of baseline power. If the rise in spot-market prices for uranium is any indication, many think that a round of investment in nuclear plants is upcoming. It is premature to conclude that there will not be a more desirable renewable energy solution for generating baseline power.
Let’s retreat just a little from the position of a technological optimist for a moment and ask whether the molding of renewable energy sources to substitute for the fossil and nuclear fueled electric power is desirable from the point of view of sustainability as a philosophy of economics and of life.
Baseline electric power is a utility, a commodity, something that we take for granted. It is available to us “on-demand” and furthermore is expected to be of uniform quality and usefulness to us. Increasingly in our society with increased globalization of production and the reliance upon air and ocean transport, more and more goods are available to us “on-demand” and have other characteristics of commodities.
With current technology multiplied numbers of times, if we were to turn to renewable energy to supply our energy needs, we would not yet have the seamless “on-demand” infrastructure that we currently enjoy. That this “on-demand” infrastructure endangers our future well-being has not been the paramount concern of most actors in the energy sector.
If we suddenly weight the need to cut greenhouse gases much higher in the scheme of values we place upon energy, the notion of or the actual return to an “on-supply” energy economy is a possibility though not necessarily a desirable outcome.
“On-supply”: The wages of poverty or the re-valuation of resources?
The highest valued individual goods in our economy are clearly “on-supply”. Rare art, one- or few-of-a-kind houses or automobiles are often bid up beyond their asking prices because the demand is greater than the supply and supply will foreseeably never catch up with demand. These goods are not available to everyone because everyone does not have the means to buy or the access to them. On the other hand, there are most often “on-demand” alternatives to these rarities that fulfill the same use functions though not their status functions. Could we view renewable, clean power similarly? Currently the rareness of renewable energy gives it a prestige that helps increase the valuation of its environmental benefits. Yet this prestige comes in part in contrast to the easy availability of power generated by polluting means.
But in economies and eras where “on-supply” is the rule rather than the exception, we are often talking about circumstances that are considered to be undesirable by most people. Immigration patterns show that people throughout the world desire to live in economies where there is an abundance of goods even if they cannot afford many of those goods. The citizens of the old Soviet bloc know what it was like to live in a time and place where goods were available “on-supply”. This led to a predictably higher subjective valuation of individual goods, like tropical fruits from Cuba, yet an overall sharply lower subjective valuation of the entire circumstance of being dependent upon an intermittent supply. Most of us prefer to have our desires at least theoretically fulfilled immediately or to have control over the circumstances under which they might be fulfilled.
If we look back to an era where globalization was not nearly as complete as it is today, societies, when they did not have a comparison with other contemporary societies with abundant and regular supply of desirable consumer goods, accepted seasonality and intermittency of supply. One accepted that one could not enjoy everything at any time, even if one had substantial means and were relatively wealthy. For example, when refrigeration was a luxury, ice cream was only enjoyed on special occasions rather than something that one could eat at any time with only modest expenditure. Marketers continue to create value by artfully limiting supply to increase the subjective value that the market will place upon their goods.
“On-supply” as a sustainable value
Not only is “on-supply” a condition of lack or a marketing technique, increasingly in the leadership of the culture of sustainability, what I am calling “on-supply” has become something of a value in itself. The praise of local, seasonal food, Treehugger’s 100 mile Thanksgiving challenge, etc. are a reversal of historical trends toward designing an economy that can fulfill wishes “on-demand”. The Slow Food movement, part of this trend, even blurs the distinction between consumer and producer, calling itself a “co-producer” of food by supporting certain types of production and distribution over others.
If one limits oneself to ONLY seasonal or locally available ingredients, one foregoes what is available from distant lands and off-season. This ETHICAL CHOICE becomes a driving economic force however if the food system were to be restructured to favor local and seasonal ingredients over distantly produced ingredients. In the future, there might very well be a policy of agricultural and fuel subsidy that will produce lower prices for these foods as opposed to imported or out of season foods.
The use of recycled or reused materials in the production of clothing or other finished goods also introduces an “on-supply” element into consumer goods that previously was considered to be undesirable for the consumer and the producer. For instance, the eco-fashionable Swiss bag maker Freitag, uses used truck tarps to construct its bags, with the designs influenced by the tarp’s original design. The currently available designs are limited by which tarps have become available to Freitag, though one can design one’s own bag online at Freitag’s website by using an interactive web tool that orders your choice of cuts on available tarp material in their inventory.
Balancing “on-demand” with “on-supply”
A turn ENTIRELY to “on-supply” as an ethical choice or as a condition of future survival of a favorable climate system would seem to be premature. “On-demand” utilities and services are such enormous human achievements and of such great use to us that we would and do soon miss them when they are unavailable to us.
A designation of renewable energy sources as a group as by their nature “on-supply” may also be premature. With a number of plausible technological advances, renewable energy might very well be able provide the consistent flow of energy upon which we have come to depend upon. But the design of that system may be more complex than our current system with multiple energy sources and storage devices.
A sustainable economic ethic, however, would also be more conscious of the human and natural resources that go into the production and delivery of a good or service, more so than the “on-demand” consumer world. A growth in “on-supply” goods and services brings home to people the value of natural and/or human resources that go into the production of products and services. If nothing else, sustainable economics and ethics point to sense of gratitude for natural resources and human offerings, a gratitude that would not only be felt but also be reflect in monetary valuations and acted upon in people’s work and exchange activities.
Is it too late? Perspectives on taking action about climate change December 26, 2006Posted by Michael Hoexter in Green Activism, Sustainable Thinking, Uncategorized.
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I had a conversation with one of my cousins a few weeks ago that triggered a series of thoughts about differences in how we see climate change. I had assumed that most people were in one of three groups: ignorant of the climate change, in the camp of “climate change deniers” or were convinced that we must do something about slowing or stopping global warming. As the struggle between deniers and global warming believers has been at the forefront of debates, more nuanced and realistic views of climate change and what we can do have not gotten the play that they deserve. As we come to accept that climate change is a reality, we will begin to see the full range of choices available to us as individuals and as societies.
In our recent conversation, my cousin, who is environmentally conscious and scientifically literate, expressed the idea that, though he would do what he could, he felt as though it was “too late” to do anything major about climate change, that we are only now feeling the effects of carbon emissions from 20, 30 even 100 years ago. Scientists who estimate that greenhouse gas emissions have an exceedingly long “half-life” once in the atmosphere substantiate this view.
It occurred to me that all of us have different ideas about what climate change will mean to us and that the actions that we are willing to take will stem in part from our ideas about climate change. While, in the future, scientists may develop an extremely explicit and highly predictive model of how our climate will change, currently there are large areas of uncertainty about what will definitely happen and how much we can do now to avert which consequences. for the time being, our imaginations play some role in shaping how we think about what to do and what we can do. The dimensions of the problem seem to be related to how each of us answers the following questions:
1. Is it too late FOR WHAT?
2. How does the future look to me?
3. What role do I WANT to play in the future?
4. What role am I ABLE to play in shaping the future?
1. Too Late for WHAT?
Is it not too late to preserve the earth’s climate as it is now or has been over the last millennium? From my understanding of trends in the climate and in GHG emissions, I think so but some people may feel as though action is only worth taking if we can “keep it all”. Therefore action-taking is reserved only for what now looks like a utopian outcome: keeping all of what we have now.
Is it not too late to preserve the outlines of our currently climate system and climate zones only a few degrees warmer as well as the approximate levels of our seas and coastal outlines? I don’t know. Some scientists will say that it is still possible others will say that this is highly unlikely. I personally act “as if” this were the case, even though I am not certain that this will be the outcome of even radical changes on the part of how humans emit carbon and other GHGs.
Is it not too late to preserve a livable but much warmer earth of any description? Probably human populations in perhaps reduced numbers will survive in some form on a radically warmer earth. If you are strongly convinced that this is the outcome, you will probably prepare more for personal and familial survival than for action on reducing global warming. Still, there may still be an earth that is too warm even for climate survivalists.
2. How does the future look to me?
This is, in part, the old “glass half-empty” “glass half-full” situation: how optimistic are you? Usually people who are optimistic are more likely to take action to try to improve a situation but there is a difference with climate change. If you are very optimistic, you might be less inclined to even register the importance of the problem…you may be looking at only those aspects of the world which support your optimism rather than a fairly grim problem like climate change. Some climate change deniers seem to me to be either natural inveterate optimists or those who believe in a gospel of optimism…i.e. that it is a moral imperative to be optimistic. On the other hand if you are very pessimistic you may become depressed or at least inactivate yourself as there will be no point in taking action. In all probability some moderate optimism with a dose of pessimism is required to sustain interest in and focus on issues of climate change.
There is also a difference in types of optimism: Some people are optimistic about what can come to them in opposition to what they see around them. Those who feel optimistic about their own chances as opposed to those of the population as a whole are more likely to take a survivalist approach to climate change, while those whose focus is on society and the world in general will take more of a activist approach to trying to stop climate change.
3. 3. What role do I WANT to play in the future?
Some people want to be activists and doing things for the greater good while others want to take a more private role. Those who are more into activism and doing things for the world in general are going to be more likely to take action for the greater good. Those who wish to play a private role may be willing to be led and may make some positive consumer and electoral choices. Still others will be purely “apathetic” about climate change and will only do something when there are no other choices.
4. 4. What role CAN I play in the future?
Opportunity and circumstances will both expand and narrow choices that are actually available at a given time to any one person. There is a multiplicity of potential roles and activities in both public and private life that will effect how we individually and collectively deal with climate change.
Some individual and societal choices will be very difficult and it will be necessary for governments and private groups and corporations to provide support for positive decisions and reduce the number of potentially harmful choices available to people. For instance, the California Solar Initiative is just one step on the way to helping support action in concrete ways. What to do about mobility and automobility are areas where, at least in the United States, there are huge differences among different activist and industry research groups and concrete future-looking choices have not yet been put yet before either the consumer or the voter. The extent of government’s role is still controversial and will be hotly debated by both advocates of a regulated and advocates of a largely market-driven economy.
More on these issues in future posts.
The Concept of Sustainability Part II: Addendum October 12, 2006Posted by Michael Hoexter in Uncategorized.
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In my post earlier this week on the Concept of Sustainability, I left out an important bullet point. As I had thought about my post over a period of days sometimes without the help of a computer or pen and paper, I suppose it was not such a surprise that something would get left out…
In my last post I created a list of the tendencies or crystalization points within the broader sustainability concept. These crystalization points singly or in combination, tend to characterize specific activities and ideas within sustainability. I left out the following item:
5. Greener Innovation and Invention - Transforming our societies and economies in a sustainable direction will in almost every case involve technical innovation and innovations in social arrangements and institutions. There are variations in emphasis in this category though as there are also those who feel that a return to older technology or older ways is more sustainable. Others feel that sustainability is itself a largely technological challenge. Innovations in social rules and relationships should not be forgotten as part of this theme.
I’ve numbered this item “5″ because it is approximately the 5th most characteristic aspect of sustainability as a whole. So the list will now look like this:
- Balanced exchange between humanity and nature
- (Holistic) Systems thinking
- Long Time-horizon/Responsibility for the future
- Greener Innovation and Invention
- Biomimicry and Biophilia
- Linking and Valuing the Local and the Global
Many discussions about solutions to the crisis in sustainability have to do with the choice of technologies and new social arrangements that would yield a more sustainable society. As suggested above there are those who are not favorably disposed toward innovation while others are totally focused on technical innovation, sometimes to the exclusion of other issues.
I will discuss how these different points of emphasis shape how we think about sustainability and the course of discussions about what to do next.