Beyond the Suicide Economy
The climate and energy emergency starts now....
Contents
Part 1 - Introduction
The approaching Tsunami
Part 2 – Britain in 2006
Turning to coal to avert a gas depletion crisis, pushing up the carbon price
Part 3 – Three Problems
Energy Security, Scarcer fuels and a scarcer atmosphere
Part 4 – Energy and Prosperity
How much our prosperity is based on fossil energy – UK Measurements
Part 5 – Absolute limits
Bankrupting the carbon budget; oil and gas depletion; carbon sequestration and coal depletion; uranium depletion and nuclear power; the energy cost of developing renewables
Part 6 – Being Driven to death
Biofuels – feeding cars and planes versus food and light for poor people
Part 7 – Living Equitably within energy limits
Sustainability is a justice concept; Policy Nemesis; the problem with 'grandfathering'.
Part 8 – Policy Mechanisms
Taxes versus quotas; the Oil Depletion Protocol
Part 9 – Types of Carbon Quota Schemes – Que Bono?
Tradable Energy Quotas; The European Emissions Trading Scheme; the Corporate enclosure of the atmospheric commons – who owns the sky? Carbon Trading in Developing Countries; Upstream and downstream schemes; social and environmental weaknesses of current carbon schemes
Part 10 - Energy and Social Policy – Protecting the Poorest
Part 11 - An equitable policy framework, fit for purpose
Final Words – Beyond the suicide economy
Responding on a war footing to the global emergency
Part I – Introduction
A good place to begin is where a recent report on climate policy ends. In September 2006 the respected Tyndall Centre released a report that had been commissioned by the Friends of the Earth. Its concluding paragraph reads as follows:
“Finally, if there is one important message we want to re-iterate from the research, it is the absolute urgency with which we must act to curb dramatically our carbon emissions. It is an act either of negligence or irresponsibility for policymakers to continually refer to a 2050 target as the key driver in addressing climate change. The real challenge we face is in directing society towards a low-carbon pathway by 2010-12, and thereafter driving down carbon intensity at an unprecedented 9% per annum (around 6% per annum in terms of absolute carbon emissions), for the following two decades.”
http://www.tyndall.ac.uk/publications/briefing_notes/Livingwithacarbonbudget.pdf
Suddenly - “sustainability” ,which was supposed to be about protecting unknown 'future generations', is now about protecting the people living here and now from a catastrophe that is likely to occur in their own lifetime. Current economic and energy policies are hastening today's children to early graves.
We are entering a new era in world economic history. After 200 years of 'energy ascent' we are entering a period of energy descent. Recent warnings from climate change scientists are that we have to immediately and dramatically ditch business as usual in the energy industry world wide so that global greenhouse gas emissions peak in the next 5 years and then fall at least 50% in the next half century.....and even that may be too little and too late. Science writer Fred Pearce calls his latest book on climate science 'The Last Generation' because todays adults are the last generation to live in a relatively stable climate. And as Pearce explains, Nature does not do slow linear transitions, it slides over thresholds into abrupt and violent shifts. It is not unknown for climate zones to shift from Arctic to Tropical temperatures in 3 to 4 years – avalanche effects triggered by smaller changes than are currently in prospect...
And that's not all....as if possible climate change of this terrifying magnitude were not enough there are considerable additional problems to do with energy supply which can be expected to intensify over each of the next 7 to 8 decades. If nothing else intervenes, it is not unrealistic to predict that, by the time the children who are born today go to school, world oil production will have peaked and, by the time they are leaving school, world gas production will be in precipitate decline. By the time some of them are becoming junior managers and politicians the peak of world uranium production would certainly have long passed by and by the time they take the reigns of power world coal production will have peaked. Meanwhile, as we have said, the world's climate is likely to have changed dramatically - and they will have a lot of nuclear waste and carbon dioxide to look after. We can expect that they will have a lot of crisis management to do, although with rapidly dwindling energy resources to help them do so. To these politicians, looking back, the current talk of 'sustainability' will appear for what it is – a self deceptive fraud, spin, PR words used by politicians and economic interests blind to a rapidly approaching storm.
The purpose of this essay is to put some ball park figures on the magnitude of this crisis, describe the time scales and discuss the complexity of the policy challenges. It is necessary to do this because much writing and thinking in this field is characterised by a total ignorance of the scale, as well as the interrelatedness and the complexity of the tasks facing us, individually and collectively. Thus solutions to the problems are often put forward which sound superficially appealing but are really fantasies because they are based on an ignorance of the costs of fixing things compared to the resources that are likely to be available to do so.
Part II – Britain in 2006
Turning to coal to avert a gas depletion crisis and pushing up the carbon price
One example of the current fantasy thinking arises due to the frequent failure, when discussing climate change policy, simultaneously to take into account oil, gas and uranium depletion together with the related questions that are called, diplomatically, 'energy security'. On first impressions, of course, oil and gas depletion might be thought to be a blessing in disguise. If there is less oil and gas available to burn then surely emissions will come down too? Unfortunately, it is already clear that if oil and gas become more expensive and scarcer then more coal will be used as a substitute. One cannot, of course, run cars on lumps of coal – but one can run cars on electricity – or one can divert natural gas into the adapted fuel tanks of cars, powering electricity grids with coal. But, since coal is the dirtier fuel that will mean, all other things being equal, that greenhouse gas emissions will rise.
Every three months, the UK DTI (Dept of Trade and Industry) publishes an update of UK energy statistics in a report called Energy Trends. Amongst other things, it details what percentage of electricity is produced from each primary source – coal, natural gas, net imports, nuclear and ‘oil, renewables and other’. It is no secret that to get through last winter without a gas-supply ‘incident’, the UK had every available coal-fired power station working full-throttle whilst cutting back on the gas-fired power stations as much as possible (see Energy Trends, June 2006 (PDF, 816 Kb), Chart 5.1 - Fuel used for electricity generation. This is available at http://www.dti.gov.uk/energy/statistics/publications/trends/index.html
The available data shows an approximate swing of 10% from natural gas to coal, for Q1 which is winter and it looks like this swing has remained for the rest of the year (2006). As of end of June 2006, UK gas production was down about 15% compared to the first six months of last year. At the time of writing it looks like it will show the swing from gas to coal is an all-year-round feature.
Averting a gas crisis therefore made UK emissions higher than they would have been. This has come about because gas depletion in the North Sea has been more rapid than expected – with a corresponding failure to build up an alternative infrastructure for gas imports in sufficient time. It led, last year, to emergency planning arrangements in which domestic consumers would have been protected by cutting off supplies to large users like chemical, steel, glass and paper manufacturers – reassuring to consumers perhaps, but not to the workers employed in those industries, nor to workers in the companies that need chemical, steel, glass and paper to produce their products, who would have been laid off until gas supplies came me back on stream. But then again, perhaps gas consumers should not feel completely reassured. If the gas guzzling industrial users had been cut off they made clear that they would expect compensation – a compensation that would be paid for by putting up domestic gas bills.......again.
Meantime spare a thought for people when it comes to paying their electricity bills. The gas crisis has pushed up power prices too and in June reports were showing a renewed statistical surge in officially defined fuel poverty.
It is the poor that are being hit hardest by dearer oil and gas prices – and research has confirmed this. On 7th September an article in the Guardian reported a study by John Hawksworth, chief economist at PriceWaterhouseCoopers. Hawkworth's report shows that the rise in general inflation caused by oil prices has primarily affected the poorest third of the population. This is because they spend a greater proportion of their income on energy and food than the better off (where the price of energy is an important component in the price of fuel).
http://en.euemissions.com/index.php/site/comments/making_a_killing_through_the_carbon_price/
Because gas generation of electric power has been curtailed the power companies have resorted more to coal as their fuel source. This has driven up the carbon price in emissions trading. Under new arrangements in the Europe Union if the power generation companies switch from gas to coal generation they need to buy more carbon emission permits under the EU trading scheme to cover their higher emissions. For many months the increased demand for permits pushed up the price of those carbon permits. The price of electricity was pushed up too, because the 'price of carbon quotas' is now part of the financial costs of producing electricity. Who has been hit? The answer is poor people. Official studies admit that one of the reasons for a new upturn in fuel poverty has been the rising carbon price in the european emissions trading scheme.
Part III – Three Problems
Energy Security
They might not have done much about it, but when the G8 met in Gleneagles in 2005, they were at least talking about climate change and the development of poor countries. By 2006, when they met in St Petersburg, the G8 had changed their focus. In 2006 they talked about 'energy security' – about whether the main industrial countries could guarantee that they would get their regular carbon energy fix. Oil and gas depletion in North America, as well as in the North Sea and Europe, have brought about this change – and the fear over the power that it gives to countries like Russia and Iran. Because of depletion of North Sea gas reserves it is envisaged that by 2020 Britain will be dependent for 80% of its gas upon imports. Because Russia is the world's largest gas supplier we will be highly dependent on decisions taken by Russian gas companies that are under the control of the Kremlin. More and more the G8 are dependent for their energy sources on countries that are considered ' politically unstable'.
This matters – when the German government this year were thinking about the next phase of the European Emissions Trading System - they decided to give a large slice of the emissions certificates to the companies wanting to build brown coal (lignite) power stations. Lignite is a very dirty energy source that chucks out a lot of greenhouse gases. Natural gas generated power would be a lot cleaner. However, Germany has a lot of brown coal – whereas it will have to rely on Russia for any natural gas. The political shock, when Russia turned off the gas to the Ukraine at the beginning of 2006 has sunk in....
Leaving aside climate change, the 'energy security' implications of oil and gas depletion are likely to be the major preoccupation of 21st century politics. Conflicts and emergencies, like that between the Ukraine and Russia, are likely to occur again. In recognition of this, in March of 2005, the International Energy Agency urged member states to have emergency rationing measures in place when it published a report titled “ Saving Oil in a Hurry: Measures for Rapid Demand Restraint in Transport” http://www.stcwa.org.au/journal/210405/files/background_IEA.pdf
A complicated network of interrelated effects all centre upon energy use. Energy use is becoming very problematic. This paper is about understanding that network of issues as they effect the British economy and British society, and what range of policy options are available to the UK and European governments as they struggle to get to grips with a new historical epoch – one characterised by “energy descent” .
Two connected Problems – Scarcer Fuels and a Scarcer Atmosphere to burn them in
For two hundred years industrial economies have developed by through the application of more energy to the production process, energy that is overwhelmingly derived from fossil fuels – coal, oil and natural gas. However, the combustion of these fuels involves a process that depletes two resources – the fuel itself and the earth's atmosphere. Not only is the fuel consumed but the combustion process takes up oxygen and replaces it with carbon dioxide (as well as sulphur dioxide and other waste gases). If this happens, as it is doing, faster than the earth's biosphere can absorb through natural cycles, then runaway climate change is threatened. So fossil fuels are becoming scarcer and, so too, is the capacity of the earth's atmosphere to be used in burning them. This twin and linked problem is the world's number one economic challenge for which solutions have to be found. In the rest of this century the world economy and the British economy will have to stay within greenhouse gas limits at the same time as it struggles to find ways to cope with perpetually dwindling fuel supplies. As oil and then gas are dwindling much more rapidly than coal there will be a pressure, at least initially, to rely more on this dirtier fuel.
New Policies – New Vested Interests
Policies for a whole range of energy issues like this are currently being developed – there are already schemes in place and others are being considered in academic, government and energy industry circles, in the UK and throughout the European Union. However, the general public, as well as many environmental organisations have been largely passed by, and stayed outside of this policy debate, unaware of its profound implications for them. Thus the time is rapidly disappearing before these arrangements are 'set in stone'. Politicians are already saying in Europe that their carbon trading system is not up for change or amendment. A new set of institutions and vested interests is building up around the new arrangements which will be a powerful lobby for a defective status quo.
Two policy deficits – inadequate policies and unfair policies
This will be disastrous because current arrangements are both inadequate to the gravity of the problems facing us and profoundly unfair and inequitable. In large part we are in danger in the EU of being saddled with energy policies which put too much of the burden of adjustments on citizens least able to cope. As we argue, such policies will be an injustice that will be greatly resented and this will undermine the social cohesion our societies when they need to unite in the face of serious energy challenges in the decades ahead.
In this paper this case is argued in the following sequence: firstly much little known information about the magnitude, the complexity and nature of the energy problem is given. Secondly, there is a look at what the current policies are, what is wrong with them and what should be put in their place.
At the core of these alternative proposals is a one central idea – no person and no corporation had any hand in creating the earth's atmosphere whose use and transformation is the pre-condition for energy production involving fossil fuels. They have no claim, based on prior effort, prior inventiveness or prior investment to own it. However, the Earth's atmosphere is a natural resource which has become scarce because its 'over use' is leading to global climate change. Further economic development therefore requires a limitation of its use and that involves pre-distributing it as a limited resource. The pre-distribution of natural resources can either be done on the basis of those who are most powerful now in the economy grabbing the biggest share – or it can be done on the basis of fairness and equity. The assumption that the biggest and most powerful economic interests have the biggest right to what they had no hand in creating will inevitably generate conflict as it is so clearly a natural injustice. Unfortunately this is exactly the starting point of all current policy – including British government policy and EU policy. Facing up to the massive challenges of the next few decades require that humanity works together as never before to achieve massive transformations - it cannot begin to achieve these changes on the foundations of a collosal global injustice that favours the rich and powerful.
Part IV – Energy and Prosperity
Why is energy policy so important?
To get our situation in perspective, let us look in historical terms at our energy use. In a pre-industrial economy people work with their muscles, and with the muscles of working animals, supplemented by wind and water power. In our industrial economy they work with fuel power. To get a sense of the enormous difference that this has made it is helpful to explore some ball park comparisons. Don't be put off by the figures in the next paragraph, the maths are very simple!
Working with their muscles an averagely fit person has a power rate of 70 watts – so, that if they sat on a pedal generator, they could light a 70 watt bubble though their efforts. This means that, for every hour that they spend in continuous physical labour, an average person can achieve 3,600 X 70 Joules of work measured in energy units. (A watt is a joule per second - so a 'watt hour' is calculated from the number of seconds in the hour, which is 3,600. ) 3,600seconds x 70 Joules is 252,000 J per hour which is what the average worker could achieve every hour. However, at the end of 2005, the British labour force was working 923.4 million hours every week. Thus, were all these people working, without tea breaks, not at their desks, but in physical labour - lifting, wheelbarrowing, digging, fetching and carrying - then, every week, they could potentially be achieving work that could be measured at 252,000 x 923.4 million Joules of energy. This comes to 232,696,800 million Joules and it represents the power that the British economy might fancifully expect from British workers as physical effort every week. Let's be generous and allow people 4 weeks holiday every year, as they would need it. This allows us to calculate that, over a 48 week working year the British labour force might then achieve 11,169,446,400million Joules every year. (i.e. 232,696,800 million Joules per week x 48 weeks). This is roughly 0.1EJ. (1ExaJoule or 1EJ = 1,000,000,000,000,000,000Joules).
To get this 01.EJ in perspective it is useful to compare it to a 'ball park figure' for the total primary energy supply of the UK which is (just over) 10ExaJoules a year and the final energy supply of about 7EJ. (3EJ primary energy is dissipated as waste heat turning fossil fuels into electrical power and in energy guzzling industries like iron and steel). The order of difference between the potential of a human muscle power based economy and a fuel powered one is thus about 70 to 100fold.
Of course, real physical labour figures virtually no where any more in a modern industrial economy – except in hobby gardening perhaps. Nor does our society any longer amplify its production abilities by appropriating the use of animal muscle power, or capturing available wind and water power, which were the other energy sources of pre-industrial societies. Whatever the impression, renewables like wind, wave and solar power only supply 0.03EJ energy to the UK economy. The government has a target of 10% of electricity supply from renewables by 2010 but, since electricity makes up only 20% of UK final energy supply, this would convert to a miniscule 2% of final energy. Virtually all of the 10 EJ primary energy supply (7 EJ final energy supply ) comes from burning carbon fuels and the rest (roughly 0.9EJ) comes from electricity from nuclear power.
This is where we are now and it allows us to pay ourselves generously – not because of physical effort but because of the thought we put into things. What we call labour, for which we are paid wages, salaries, management emoluments and consultancy fees, consists of steering, directing, calculating, deciding, arranging, co-ordinating, guiding, regulating, checking, teaching, training, designing...in other words a host of mainly mental operations by an educated labour force associated with very small amounts of physical work (like the energy used by my hands and fingers in typing this paper). It is the multitude of types of energy guzzling machines and processes that do the physical work transforming and processing raw materials taken from the planet's natural resources, that keeps the supermarket shelves and department stores overflowing. And it is mainly fossil fuels that power those machines – like the gas that Russia was supplying to the Ukraine and that is running down in the North Sea.
Part V – Absolute Limits
The limits of energy expansion – Carbon Bankruptcy : a small budget, already overspent...
As already explained, policy makers must ensure that we stay within limits defined by the amount of fossil fuels available, as well as the amount of atmosphere which it is 'safe' to use in its combustion. Of these two it is the amount of available atmosphere which entails the tightest limits. That said, no one knows for sure what a 'safe' level of temperature increase is – nor what a safe level of emissions to match this temperature increase would actually be. It is quite possible that, given the level of greenhouse gases already in the pipeline, the climate is even now on a slippery slope towards an 'abrupt tipping point' beyond which there would be a much more massive and rapid change – bringing with it collosal economic destruction, a devastation of agricultural systems, mass starvation and catastrophe.
In the climate discussion so far a 2 degrees C increase has almost arbitrarily been judged as 'probably' safe. But climate scientists can only make judgements based on 'probabilities', not certainties. Indeed, a recent report by the Tyndall Centre for Friends of the Earth says “It is important to recognise that, according to current scientific understanding, to have a very high probability of not exceeding 2°C would require a complete cessation of carbon emissions from today.” (The reference for this quote is Meinshausen, M. (2006). What does a 2C target mean for greenhouse gas concentrations? A brief analysis based on multi-gas emission pathways and
several climate sensitivity uncertainty estimates Avoiding Dangerous Climate
Change Chapter 28.)
http://www.tyndall.ac.uk/publications/briefing_notes/Livingwithacarbonbudget.pdf
The science of climate change is still very much "work in progress" as Fred Pearce, a writer with the New Scientist, makes clear in his latest book “The Last Generation”. For 300 pages Pearce describes climatic feedback systems involving the effects of melting ice in Greenland, the Arctic and Antarctic; methane releases from the Siberian peat bogs; the acidification and warming of of the oceans and the effect on take up of CO2 by plankton; giant Tsunamis caused by 'megafarts' of methane from the sea bed as the sea warms; droughts and the potential burning of the tropical rain forests; the relationship between Saharan dust storms and the Amazon rainforest; the earth's wobbling spin in relation to the sun; the ocean conveyor of cold and warm currents carrying warmth around the oceans; el Nino and el Nina ocean currents distributing rising heat in the Pacific and their world wide effects; soot and aerosol particles in the atmosphere effecting the earth's albedo; the relationship of the ozone problem to the greenhouse problem and feedback effects between the stratosphere and troposphere, the warming of the oceans and the greater intensity of hurricanes. Most of these are descriptions of 'positive feedback effects' – in other words 'avalanche effects' which are likely to re-inforce climate change, rather than negative feedback – which would stabilise and put brakes on it. Towards the end of his book Pearce then writes " I am sorry if you have got this far hoping for a definitive prognosis for the planet. Right now there is no such prognosis except uncertainty. The Earth system is chaotic, with the potential to head off in many different direction. If there is order, we don't yet know where it lies. No scenario has the ring of certainty." (p 294). Four pages later he writes: “...most would argue that the critical aim in the quest for the prevention of dangerous climate change is avoid crossing dangerous thresholds in the climate system where irreversible global changes occur – especially changes that themselves trigger further warming. There is no certainty about where such 'tipping points' are.”
This is pretty much the general view among climate scientists. Thus a survey of Climate Change Science published by the UK Natural Environment Research Council (NERC) summarises what the state of the knowledge is. In 5 pages of text (not counting the reference) a whole page is devoted to 'Uncertainties'. The NERC takes some comfort from the fact that computer models are getting better at predicting events but we really clearly cannot be certain about whether we are near an abrupt turning point.
In this regard the widely held consensus that the world should try to prevent global temperature increases which are more than 2 degrees above pre-industrial levels and more than 1.4 degrees above current levels is simply an arbitrary threshold. There is, moreover, no certainty about what level of emissions that this implies. It is once again fairly arbitrary to assume that this implies no more than a doubling of CO2 emissions from pre-industrial levels at about 550ppmv - which would entail a 60% cut in CO2 levels at 2050 compared to 1990 levels. Given recent developments, like the melting of Arctic and Antarctic ice, scientists are now tending to think that the 'safe' levels of CO2 in the atmosphere may be much lower. For example the Hadley Centre has suggested that a 'safe' level may be more like 450ppmv which would require an 80 to 90% cut compared to 1990 levels in 2050. More recently the Tyndall Centre argues that:
“....the latest scientific understanding of correlations between concentration and temperature suggest that even at 400ppmv CO2, there is, approximately, a 50% chance of exceeding the 2°C target. The implications of this emerging scientific consensus for the UK’s stated position on climate change are difficult to exaggerate. Unless the UK and the EU are to abandon their commitment to 2°C, they must continue to either fudge the implications, or acknowledge that “aiming for a global average temperature increase of no more than 2°C” demands that they establish targets in line with stabilising atmospheric concentrations of CO2 at levels as close to 400ppmv as possible.”
http://www.tyndall.ac.uk/publications/briefing_notes/Livingwithacarbonbudget.pdf
The implications of these limits has barely begun to sink in among policy makers and the general public. It is common on climate science to speak in terms of parts per million volume of carbon dioxide in the atmosphere. However, to get a clearer picture it probably helps to talk in terms of an allowable carbon budget that can still be emitted measured in tonnes of carbon. Taking the (no longer so) 'safe limit' of 450ppmv actually means as follows:
“Forgive me if I now....talk in terms of tonnes of carbon rather than parts per million. The simple figures are these. At the depths of the last ice age, there were about 400 billion tonnes of carbon dioxide in the atmosphere. As the ice age closed, some 200 billion tonnes switched from the oceans to the atmosphere, raising the level there to about 600 billion tonnes. That's where things rested at the start of the Industrial Revolution, when humans began the large-scale burning of fossil fuels. Today, after a couple of centuries of rising emissions, we have added another 200 billion tonnes to the atmospheric burden, making it about 800 billion tonnes. If we want to keep below the safety-first concentration, we have to keep below 850 billion tonnes. So we have only about another 50 billion tonnes to go.
Currently, we pour about 7.5 billion tonnes of carbon into the atmosphere annually. Of this, a bit over 40 per cent is quickly taken up by the oceans and vegetation on land. The rest stays in the air... So, for practical purposes, we are adding about 4 billion tonnes of carbon dioxide a year to the atmosphere. Even at the current rate of emissions, that means we will be above our 850 billion safety-first target before 2020 and, assuming emissions continue to rise as they currently are, we will be there in less than a decade.....
Reaching the 'safety-first target'... would require an immediate and dramatic ditching of business as usual in the energy industry worldwide. Global emissions would need to peak within five years or so, falling by at least 50 per cent in the next half-century and carrying on down after that......”
Fred Pearce, The Last Generation (Eden Project Books, 2006), pp 298-300. Incidentally, Pearce suggests that, "if we are feeling lucky", a 1000 billion tonne target might be adopted for the world (ie 150 billion more tonne rather than 50) "with a nod to round numbers and political reality".
Other authors have arrived at the similar conclusions – and draw out far reaching implications for the relations between rich and poor countries in what is, above all, a global problem. For example, a study by Sivan Kartha, Tom Athanasiou, Paul Baer and Deborah Cornland called "Cutting the Knot - Climate Protection, Political Realism and Equity as requirements of a Post-Kyoto regime" argues that that the available "Carbon Budget for the 21st Century" is now so small (to stay within a 2 degree C rise) that countries of the south are in great danger of being left with insufficient rights to emit that would allow them to develop out of poverty.
“This is because to have a high probability of keeping the temperature increase below 2ºC, the total global 21st century carbon budget must be limited to about 400 Gigatonnes, with the precise figure depending on how much one allows for non-CO2 gases. But all things considered, 400 GtC is a reasonable estimate, perhaps even a bit generous, as it assumes the oceans and terrestrial biosphere will endure as an undiminished carbon sink."
"A budget of 400 GtC is very small. To stay within this budget, global emissions would almost certainly have to peak before 2020 and decline fairly rapidly thereafter. If emissions were to continue to grow past 2020, so much of the 400 GtC budget would be rapidly used up that holding the 2ºC line would ultimately require extraordinary rates of emission reduction, rates corresponding to such large and historically unprecedented rates of accelerated capital-stock turnover that, frankly, it's difficult to imagine them occurring by virtue of any normal, orderly economic process."
The implications of this, which Kartha, Athanasiou, Baer and Cornland draw out, relate to the development prospects for the global south. They conclude that there is very little room left for the growth of emissions in developing countries in the South. Thus, for example, under a Contraction and Convergence regime (which would aim for a convergence on equal per capita rights to emit CO2 across the world) by the time that convergence is likely to occur what will be left of the 400 GtC would be an e'qual per capita right to emit' that would be too small to allow the South to develop while it was still trapped in poverty. This has tremendously difficult implications for arriving at agreement between countries on how the carbon budget be divided up. Effectively the North has already virtually overspent the World's carbon budget and we are heading to a kind of carbon bankruptcy.
http://www.ecoequity.org/docs/CuttingTheKnot.pdf
The time to act is now – as already quoted at the beginning of this essay:
“It is an act either of negligence or irresponsibility for policymakers to continually refer to a 2050 target as the key driver in addressing climate change. The real challenge we face is in directing society towards a low-carbon pathway by 2010-12, and thereafter driving down carbon intensity at an unprecedented 9% per annum (around 6% per annum in terms of absolute carbon emissions), for the following two decades.”
The Limits of expansion - the depletion of the fuels
This need to act arises in a context – the rising costs of extracting oil and gas – soon to be followed by a decline in their absolute availability. At first sight the depletion of oil and gas is good news for the earth's climate – on deeper inspection it actually makes things more difficult.
Although there has been less attention to the depletion of fossil energy reserves and uranium fuel sources than there has been to climate change, this is changing. In the last few years the consciousness that world production of oil and gas will peak very soon has increased. The idea has crept into policy papers and it is, for example, accepted by the French government, which dates peak oil at 2013. Perhaps more impressive still is that the peak oil idea is being accepted by the Pentagon. (See: “The Pentagon and Peak Oil. A Military Literature Review” by Sohbet Karbuz at http://www.energybulletin.net/18056.html A particularly striking example of this literature is an report by the US Army Corp of Engineers titled Energy Trends and Their Implications for
U.S. Army Installations by Donald F. Fournier and Eileen T. Westervelt September 2005 -
http://stinet.dtic.mil/cgi-bin/GetTRDoc?AD=A440265&Location=U2&doc=GetTRDoc.pdf )
There is now voluminous information about the imminent peaks of oil and gas production. Suffice it here to say that there are more and more countries whose oil production is now in decline. The USA produces less than half of what it produced in 1970, despite advances in extraction techniques, and countries such as Egypt, Indonesia, Norway, Venezuela and the United Kingdom are all in decline, joined soon by Denmark, China, Mexico and others. In 2006, according Chris Skrebowski of the Petroleum Review, 40% of conventional oil production will come from countries in decline and 10% in imminent danger of decline. Perhaps most significant of all are reports that Saudi Arabia may have just peaked. For these reasons many experts think that oil production will peak somewhere between 2005 and 2010. Meanwhile gas production has already peaked in Europe taken as a whole - and it is anticipated by many experts that gas production will peak in the world taken as a whole in about 2019. On current official estimates by 2020 Britain will be nearly 80% dependent on imports for its gas.
Energy lost to coal generation through carbon capture and sequestration
This will tempt countries to develop and redevelop their coal power generation capacities. With a lack of oil and gas supplies of its own, it is an oft quoted fact that China is opening a coal power station every week. This matters big time for the environment. We have already seen that, because coal is the dirtier fuel, its combustion releases more CO2 than natural gas which will have the consequence of increased CO2 emissions unless ways are found of dealing with this increased CO2.
Largely for these reasons, there is much interest in the idea that CO2 can be prevented from getting into the atmosphere by for example, pumping it deep into the sea or into geological formations, for example into empty oil and gas fields. It is a seductive idea that implies that we might be able to use coal without the greenhouse consequences. The technology is called 'carbon capture and sequestration'. So let's take a hard and sober look at the technical issues and costs.
A recent report published (in English) on the web site of the German Environment Ministry reviews some of the issues. (“Assessment of Technologies for CO2 capture and storage. Summary” at http://www.umweltdaten.de/publikationen/fpdf-k/3076.pdf ). According to this report there are important issues at each of the three basic sub processes – separation and 'capture' of CO2; compression of the gas and its transport to secure locations; and storage through injection into geological formations.
These issues include in regard to separation: capture rates are not 100%. Depending on method they are 85 to 95% - which therefore means 'low emission' not 'no emission'. On top of this 'the high additional energy demand of CO2 separation results in an efficiency loss of 8-18 % points in the power station and thus in a clear increase in the consumption of resources' – which means higher electricity prices.
In regard to transport there are high (energy and financial) costs in compressing the CO2 for transport by pipeline or ship – and no infrastructure for transport exists in Europe (or elsewhere). It would be expensive to build this infrastructure and there is a high financial risk in doing so. Inconveniently the best geological storage sites are not conveniently located near to power stations.
Finally, in respect of storage there are sufficient geological storage capacities in Europe in saline acquifers for perhaps 50 to 100 years . However there are uncertainties about the amount of possible leaks from repositories and leakage rate which can be tolerated - the main risks for leaks are the boreholes and their seals. This means that there are questions of who should monitor the intactness of the storage facility and with which methods and for how long the monitoring – all of which have to be sorted out. Thus there are great uncertainties about authorization issues with regard to concrete implementation.
The authors of the report conclude:
“...capturing CO2 in power stations would cost us the efficiency gains achieved over the last 50 years and would increase resource consumption by about a third. Power stations with CO2 capture can thus not be designated "sustainable energy production." From a purely economic viewpoint, this technology currently compares favourably with other low-emission electricity generation technologies such as, e.g. photovoltaic, wind or biomass, in spite of the considerable
additional costs when compared with conventional power stations. However, even with all its apparent present advantages, CO2 capture and storage should not be seen as the solution to the climate problem. Rather, it represents only one conceivable bridging technology until renewable energy sources are sufficiently developed (with regard to amount and price) since the
available storage capacity in Germany would probably only be sufficient for about 50 to 100 years.”
In my view the conclusion is questionable. Like many such studies there is a failure to consider the implications of fuel depletion – of coal itself, and of oil and gas whose depletion rates are likely to have a knock on effect on the rate with which coal might be used. Coal is a depletable resource, just like oil and gas. There are currently 200 years supply of coal left at current rates of usage, but the oft used formula 'current rates' of usage is not very helpful. For one thing, if resource consumption increases by a third because of carbon capture and sequestration, 200 years of coal decreases by 66 years. Also, if coal is replacing oil and gas as they deplete, then 'current rates of usage' will increase considerably again. Energy analyst Paul Mobbs calculates that if coal rises from the current 26% to provide 60% of the energy supply as oil and gas depletes, then the 200 years shrinks to about 100 years. Nor is that the only reason to think again about the significance of the 'current rates of use' formula. The assumption of mainstream economics is growth – which has always meant growth in energy usage. An economy growing a 3% per annum doubles it size in 24 years – in 48 years it is thus be 4 times as big – what will that mean with the formula 'current rates of usage'? Of course, that's playing with maths, but the International Energy Agency and the OECD recently produced a report which, while making no assumptions about supply constraints for other fuels, assumed a 55% increase in world coal demand between 2002 and 2030 . (IEA, “World Energy Outlook” 2004 quoted in 'Energy in the Century Ahead' in Le Monde Diplomatique, January 2005). Even were there no climate crisis there would be a coal depletion crisis within the lifetime of today's children.
These are global figures. In Britain the situation is even tighter. At current rates of consumption, the UK's coal reserves will last 26 years – or less than 10 years if all our electricity were sourced from coal. At the moment one half of UK coal is imported and if we are to go down the coal route we are going to have to get our coal from abroad – the biggest producers currently being Russia, the USA and China. A sudden gearing up UK coal mining would not be easy either. To make up for declining oil and gas the growth would have to be without precedent, after two decades in which the skills and equipment for the coal industry have been run down. As David Fleming argues “ the maintenance and upgrading programme in the British mines in the late 1970s and early 1980s involved the construction of around 500 miles of tunnels per annum; an emergency expansion of the industry might require this to be increased to at least 2,500 miles a year – and this from an industry that has run down its skills to the barest of essentials” (David Fleming “The Lean Economy” Unpublished manuscript p25 of Dec 2005 edition).
There are other problems for conventional coal power too. Coal power creates the problem of global warming but global warming creates a problem for coal power. In the hot summer of 2006 coal power stations in Germany had serious problems getting enough cooling water from the rivers that flowed nearby. The water was already too low and too warm. The problems were so severe that the price for power from coal fired stations in Germany increasing by 600% within a few days. While solar installations were working at full capacity, water cooled big power plants had to cut back their power production because of the heat – hence the massive increase in prices.
http://www.co2-handel.de/article158_2767.html
Nuclear Power to the Rescue?
So can nuclear power come to the rescue? As it happened it was not just coal powered stations that got into trouble when river cooling became a problem – so too did atomic stations. Of course, you can site atomic power stations near to the sea – but sea levels are set to rise – producing a danger of flooding......
And that's just one of the problems for nuclear. There are currently 14 British nuclear power stations producing 21% of the electricity supply and some are due to close. If we were to imagine that, as oil and gas decline, the entire British transport fleet is to be powered with hydrogen it would require no less than 100 nuclear power stations to generate the amount of electricity required to make this possible according to calculations by Professor of Economics, Andrew Oswald and Jim Oswald, an energy consultant. (“The Arithmetic of Renewable Energy” web version)
These figures alone would be pretty daunting but whatever we say about nuclear power in the UK has to be put in a global context. Paul Mobbs calculates “At current rates of use, where nuclear provides just over 6% of the world's energy supply, there is enough uranium to keep the reactors running for 80 to 100 years. But if the nuclear sector expanded, producing perhaps 30% of the world's energy, then the supply of uranium-235 would last just 20 years. To use the other 99.3% of the uranium resource we would have to develop fast breeder reactors. The problem is that not only would this require a large expansion of nuclear reprocessing (for the UK it would meaning building another one or two Sellafield-like plants), but as yet no one has produced a working fast breeder reactor design. All the experimental fast breeder plants around the world have been shut down because of 'operational” problems” Another calculation by Peter Bunyard published on the Institute of Science in Society web site suggests that if all the worlds electricity, currently 60Exajoules, were produced by nuclear power the uranium would last 3 years. (Peter Bunyard, “Deconstructing the Nuclear Power Myths” http://www.i-sis.org.uk/DTNPM.php )
A further point is that, as uranium-235 resources deplete, so the CO2 emissions associated with nuclear power will rise. This is because more fossil fuels will be needed to extract and process uranium from ores of declining quality. In the case of leaner ores, of less than 0.01 per cent (for soft rocks such as sandstone) and 0.02% (for harder rocks such as granite), the energy required for extraction and milling rise so much that it is more efficient to use carbon fossil energy directly - both from the point of view of net energy, yield and from the point of view of carbon emissions. For the lower grade ores these exceed those from gas powered generation.
And that's even before adding in the massive costs of managing nuclear waste and decommissioning power stations....
(For a very clear critique of nuclear power see David Fleming's Feasta Briefing “Why Nuclear Power cannot be a Major Energy Source” available at http://www.feasta.org/documents/energy/nuclear_power.htm )
The Policy Implications of Energy Descent - The Importance (and cost) of Renewables
If 'sustainability' is to have any meaning at all it entails leaving future generations with adequate energy resources to sustain their own life styles. Yet, once they are used, fossil fuels cannot be used again – they are non renewable.
On first impression any use of fossil fuels in the here and now denies future generations access to these non-renewable energy resources because they are converted into ashes and gaseous pollutants during combustion. Thus the use of fossil fuels can only truly be considered sustainable if an adequate proportion of them is 'ring fenced' and then used for the manufacture of equipment with which to generate an equivalent replacement quantity of renewable energy for the quantity being burned. Nothing of the sort currently takes place and no politicians ever advocate this.
Some academics have, however, worked out figures to give a sense of what it would mean. Thus Oswald and Oswald calculate that, to power Britain's transport by hydrogen generated by wind energy would require “ approximately 100,000 new wind turbines. If sited off-shore, this would mean an approximately 10-kilometre-deep strip of wind turbines encircling the entire coastline of the British Isles. If sited on-shore then an area larger than the whole of Wales would have to be given over to wind turbines.” (The Arithmetic of Renewable Energy”)
So replacing fossil fuels with renewables would be technically possible but it would be immensely costly. A massive diversion of capital (measured in energy resources as well as cash) to investment in renewables would be required and this, in turn, would have knock-on effects for the rest of the economy- including on resources available for consumption and on the level of unemployment.
In order to calculate the magnitudes involved Professor Malcolm Slesser conducted research for the European Commission. His findings were that a transition to a renewable based economy would neither be cheap nor easy. For the research his team used a model of the economy whose calculations were based upon the energy implications of various capital creation options (economic and energy development strategies). The different strategy options are compared to projections which assume a 'business as usual' (BAU) continuation of current policies. One option was a 'fast track investment programme in renewables' made up of a mix of wind and solarvoltaics. The rationale for this would be, for example, to forestall the rapidly growing dependence of the EU on energy imports which will be the consequence of 'business as usual'. Their findings for the 15 years up to 2015 were: growth rate 45% less than BAU; manufacturing output – 25% more than 2000 but 11% less than BAU; material standard of living – 24% down on BAU; primary energy demand – 20% less than BAU; self sufficiency in energy, better than BAU with 33% of electricity from renewables; unemployment – even higher than BAU (i.e. higher than 30%!)
Slesser concluded that renewable based economy is certainly possible as far as the supply side is concerned but that the investment requirements would be formidable, requiring time and a lot of energy. “To make this transition we shall need all the fossil fuels we can get. And the sooner we start the easier it will be. We certainly will have to start before it becomes 'economic' using that word in its traditional sense” (Malcolm Slesser, “Using the net energy concept to model the future” in “Before the Wells Run Dry” ed Douthwaite, Green Books, 2003 pp 81-87 also available on www.feasta.org/
Unfortunately, politicians are unable to speak to the public with such unpalatable truths and the media also almost entirely lacks the courage, dependent as it is on advertising which feeds the consumption orgy. It is possible to protect the interests of todays children – but only by making very considerable cuts in the consumption of todays parents and grandparents. Put in other words, the continuation of todays consumption orgy, with its profligate use of energy, is hastening the children born today to early early graves, probably mass ones.
Part VI
When energy becomes very scarce – being driven to death
Probably nothing better expresses this dilemma than the likely consequence of new ways to provide fuel power for the worlds growing fleet of motor cars. One solution currently being promoted is that these fuels might be refined from agricultural crops, as biofuels. In many cases the amount of fossil energy used to produce the inputs for biofuels (fertilisers, fuel for tractors and harvesters, fuel to power crop irrigation, energy used in processing, fermentation and distillation etc) makes it doubtful that there is actually a net energy gain when fuel crops are grown. But the consequences are spelled out in an article for the Washington Post by Lester Brown of the WorldWatch Institute on September 10th 2006
"Plans for new ethanol distilleries and biodiesel refineries are announced almost daily, setting the stage for an epic competition. In a narrow sense, it is one between the world's supermarkets and its service stations. More broadly, it is a battle between the world's 800 million automobile owners,
who want to maintain their mobility, and the world's 2 billion poorest people, who simply want to survive." (Starving the People To Feed the Cars)
http://www.washingtonpost.com/wp-dyn/content/article/2006/09/08/AR2006090801596.html
This is because of the large land area that they take up. On reasonable assumptions it would require a land area equal to that of the entire UK under rapeseed to run just 25 million cars an average 9,000 miles a year on biodiesel. Although the technology for biofuels is developing all the time and later generations of biofuels will probably get far more kilometres per hectare of agricultural land or forestry there seems little doubt that that biofuels will involve some competition with food and fibre crops for land. It is not an exaggeration, therefore, to see the possibility that, to keep the motor car industries in the rich countries running, the population of the poor countries will be 'driven to death' by starvation when they cannot afford the rocketing prices as their agricultural systems are turned into fuel plantations for the global motor industry. In a recent article on bio fuels in the news magazine Der Spiegel the limited availability of agricultural land in Germany for biofuels was addressed like this: "a land like the Ukraine could provide Germany with all its energy needs from plant based fuels"....(Vegetables in a Tank, Der Spiegel 26 September 2004. See also George Monbiot's article “Feeding Cars, Not People.” The Guardian 23 November 2004 http://www.monbiot.com/archives/2004/11/23/feeding-cars-not-people/ )
Similar things can be said about aviation. Aviation is currently growing at about 8% per annum and, according to the December 2003 government White Paper, “The Future of Air Transport” the number of passengers at UK airports will grow from 189 million in 2002 to 400 million in 2020 and freight from 2.2 million tonnes in 2002 to 5 million in 2010. http://www.dft.gov.uk/stellent/groups/dft_aviation/documents/divisionhomepage/029650.hcsp
As the Tyndall Centre points out this threatens to wipe out whatever other gains are made in carbon reductions in other sectors and “reveals the enormous disparity between both the UK and EU positions on carbon reductions and their singular inability to seriously recognise and adequately respond to the rapidly escalating emissions from aviation.”
Nor is this all – a continued level of expansion of aviation at this level would represent a massive injustice to the world's poor. This is because the purchase of oil for air travel, 80% of which is for leisure purposes, leaves less of a depleting oil resource for the essential needs of the poor who are driven out the market. In this respect the projections and plans for future air transport growth need to consider the continued availability of aviation's fuel source. A reasonable assumption in regard to the fuel efficiency of air transport is 1.2% improvement per annum according to the Tyndall Centre. Thus any increase above that level will require extra fuel. After the peak of world oil production, say in 2010, extra aviation fuel to carry extra transport growth will only be available to the extent that fuel consumption could be reduced in non aviation uses. In theory extra natural gas, coal or nuclear energy could, in the future, be called upon to cover some non aviation uses for oil, again releasing more of it for aviation fuels. However, as we have already seen, the scope for this is incredibly limited. Thus we cannot avoid the conclusion that the scope for substitution in relation to other fuels is very limited. So aviation fuel will be hugely more expensive and if aviation continues to grow it will only be because poor people are driven out of the energy market.
Seeing the way that things are going, some aviation experts see a long term future based on biofuels - but that would require absolutely vast land areas put under energy crops and it would, in addition, take land away from food production. Would the poor then starve so that we can continue to fly? In the last year there have been many riots because of high fuel prices in poor countries all over the world and part of that is because the aviation sector has been bidding away the fuel from irrigation pumps, from school buses for poor children and from the kerosene lamps which allow them to study at night. At least a part of that desperate fuel poverty is because people from rich countries are prepared to pay more to indulge their passion for flying and are thus bidding up fuel prices, making them unaffordable for the poor. The aviation industry is part of a massive engine of global injustice.
Part VII – Living Equitably within Limits
Energy Justice – Sustainability is a Justice Concept
However we look at it, energy consumption has to come down indeed, in the not too distant future, global energy production will start to come down. A central question is then - who will then bear the burdens – or, at the extreme, who will be driven to death? Policies are needed to address these questions and whatever new policy measures are adopted will inevitably have some distributional effects. As we already explained in the introduction, the need to ration the use of the atmosphere to burn carbon fuels into pre-supposes that use rights to the atmosphere will be pre-distributed. Those who possess these rights have been given a share of a natural resource which is a pre-condition for the creation of any wealth. If the question of distribution – which is here a matter of pre-distribution - is not explicitly decided and explored in policy discussions then the 'default position 'will be that those without the money and 'connections' to protect themselves, those least able to influence policy makers, will end up as the chief losers. As things stand at the moment this is exactly what is happening in the emerging British and European energy policy framework and why it needs to be subject to major revisions. What is being set up now is terribly unjust.
Sustainability is above all a justice concept – the idea that the rights of future generations should be protected implies a sort of intergenerational and temporal equality of opportunity in relation to access to natural and energy resources as well as to atmospheric and other sinks. It cannot be a market based concept if only for the obvious reason that those future generations are not yet around exercising market choices. So this is a political idea. It is a concept that arises for people in their role of citizens, not in their role as consumers maximising their personal satisfaction, nor as economic actors, entrepreneurs, disposing of their private resources for maximum private monetary gain. In recent years there has been a systematic conflation of citizen decisions with consumer or business decisions as if calculations of personal interest on the market is all that is entailed in public policy discussions. This is demonstrably false because judgements about the public interest are about collective matters, and about collective resources, not about personal interest narrowly conceived.
With this in mind it would be evidence of bad faith and inconsistency to be claiming to be protecting the interests of children being born today - who should expect to live at least 7 or 8 decades or up to 2075 or 2085 - if their families are to be driven into extreme poverty having to bear a disproportionate share of the burden of adjusting to climate change and the emerging energy depletion constraints. If a justice principle applies in the future then it applies also in the present. If it applies in our country, it also applies internationally.
Whatever policies are put in place now must recognise that we are in living in a totally new era which requires radical economic, social and cultural shifts and, above all, re-thinking how to protect vulnerable people. Without this we will descend into barbarism. A culture that tolerates, indeed promotes, greed as a positive social value for a dynamic competitive economy, is not fatal in a period of economic ascent. But it is suicidal in an era where general austerity measures become necessary and a central issue is how we can rise to massive challenges, and yet still continue co-operating with each other as a society. So that social cohesion is not stretched beyond the tearing point it will become essential to create a shared culture, a public spirit ethic, and means to apportion adjustment fairly, protecting vulnerable people and sharing the burdens out in a just fashion. It is not overstating things to claim that this is now the only rational course of action.
Text Box – Rationing and Rationality – Forestalling Nemesis
It will be noted that the words rate, ratio, ration, and rational are all appear similar. They are derived from a common root in Latin - and from a world view, originated by the ancient Greeks, that regarded the ability to recognise proportion and proportionality as the cornerstone of reason. In a similar way the word 'medicine' is derived from the Greek word 'medere' – to measure – because medicine, whether it be for the human body, or for an economy or society, must be a measure that has a correct dosage – that is proportionate, 'in the right measure'.
What happens then, to people and societies that are immeasured in their actions? The Greeks had a goddess especially for the harsh punishment of people who acted disproportionately, overstepping limits and arrogantly overestimating their powers ('hubris'). That Goddess, the daughter of Oceanus, was called Nemesis – strictly speaking she was the goddess of appropriate measure, not of crime and punishment. Peak Oil and Gas, limited supplies of coal and uranium, the challenge of the Greenhouse effect, all represent limits to the economy. They are hubris for those who regard 'growth' as an unquestionable absolute principle which blinds them to the greater need to maintain a proportionate and therefore balanced relationship between the economy and its sustaining and containing ecological context. This relationship requires new types of measures – new types of economic medicine in order to (re-)establish a non destructive proportionality between economic activity and the bio-physical environment in which it is takes place.
To forestall Nemesis, measures are needed to establish proportionality in two dimensions – firstly in the relationship between humanity in aggregate with nature taken as a whole and secondly in the relationships between human beings as they decide who carries what proportion of the burden and who receives what proportion of the benefits of re-adjustment. (It should not be automatically assumed that re-adjustment is purely a matter of burdens for reducing energy uses has more benefits than it has burdens - if in the right measure to the context that people find themselves in).
Social and Political Sustainability – The Problems with 'Grandfathering'
If the burdens and benefits of re-adjustment are not seen as socially proportionate – i.e. are not seen as just – then whatever measures are imposed will not be socially or politically sustainable. They will generate intense conflict and people will seek ways to evade and undermine them. That would frustrate and render futile the attempts to impose any kind of limits at all between humans and nature. However, the social dimension of proportionality has so far (n 2006) has barely figured at all in political and social discourse either in the UK, in Europe or in much of the rest of the world. On the contrary, up until now the assumed principle for 'sharing the burdens and benefits' has often been what is called, “grandfathering”. There is an ironic appropriateness to this term in view of the fact that sustainability policy is supposed to be about protecting the children of the world, and their children after them, whereas grandfathering is basically all about protecting the existing relationships based on privilege.
More precisely, 'grandfathering' means taking the already existing proportions in the allocation of a resource which has to be rationed as the starting point for its future policy determined pre-distribution. Under the grandfathering principle, for example, if the USA emits 25% of the world's greenhouse gases then in a future international system to ration carbon emissions, the USA would be entitled to 25% of the permits as of right. As is obvious, what grandfathering does is to give the greatest protection to the very same interest groups who are the chief beneficiaries of the state of affairs that needs adjustment. It is as if Nemesis, instead of exacting her toll against the chief culprits is redirected to punish others....
There are those, however, who argue in defence of 'grandfathering' as a principle in international economic relations. Their claim is that, to award poor countries rights to use a greater share of international fossil energy than they are already using is not to do them any favours in the long run. This is because whatever infrastructure they build up using extra fossil fuels will only build up a fossil fuel dependency that they will have to deal with later. (The point is made in a forthcoming book by Richard Heinberg and is also to be found in David Flemings unpublished book “The Lean Economy” ).
There is a kernel of truth in this viewpoint and it is also true, of course, that the industrial countries have most re-adjustment to make in reducing their fossil fuel dependencies. However it doesn't follow from this that they have most adjustment to make in general terms. For example vulnerability to global warming is a climatic and geographically specific matter not an energy matter and it will require energy resources for adaptation measures - e.g. For building new coastal and flood defences. It isn't necessarily creating more fossil fuel dependency to be able to get fuel for earth moving vehicles to build one off flood defences - although their later maintenance might have to assume human and/or animal physical labour.
Nor does it follow, ipso facto, that all increased use of fossil fuels is unsustainable. As we have seen it depends on what the fossil fuels are used for - if poor countries use fossil fuels to manufacture renewable energy capacity, for example, then there may be a net gain in regard to their wealth, also in a sustainable sense - as long as a sufficient part of the build up of the renewable energy capacity when in use is reserved for maintenance and replacement of the resource so that the initial reliance on fossil fuels is not perpetuated.
Part VIII – Policy Mechanisms for Living within Energy Limits
Taxes versus quotas
Since, as we have seen, the energy throughput in the economy has to be limited how is this to be achieved? Two approaches are possible – raising prices through taxation to reduce demand, or limiting quantity directly through quotas (rationing) and letting prices adjust to whatever absolute carbon or energy limits are set. Which approach is to be preferred? Imposing taxes on the sales of particular products has taken place since virtually the origins of trade and it is tempting for governments to resort to methods with which they are familiar. Much of the early thinking about environmental economics has been about how external environmental costs are brought into the private cost structures of enterprises in the 'polluter pays' principle. Energy taxes fit with this way of thinking – and are often coupled with the idea that they should gradually replace taxes on labour.
Nevertheless, there are several reasons why it is probably a better idea to use a direct limit to the quantity as the policy instrument of choice. The chief of these is the difficulty, using taxes, of being able to calculate in advance the right level to exactly hit the quantitative target for carbon emissions. A change in the price of energy, via taxes, has uncertain results. Economic forecasting is a highly inexact activity because so many variables on the demand and supply side are constantly changing, frequently in an unforseen and unforseeable fashion. The price of energy before a tax is imposed on it is likely to be effected by changes in the weather and natural disasters, by faster or slower than anticipated depletion rates, by wars and acts of terrorism, by changes in level of national income, by trade. Academic economists can draw demand curves on the whiteboard in their seminar rooms to show how a predictable amount of oil would be taken off the market at any given price other things remaining equal – however nothing ever does 'remain equal'. Thus a tax hike to curb carbon based energy consumption is almost certainly going to be either too high or too low and in need of constant re-adjustment. If it is too low and the cut backs are inadequate then the global climate will suffer and there will be pressure to change it. If it is higher than needed it will act as an unnecessarily depressing influence on the economy and again there will be pressure to change it. Under this regime, therefore, finding the right tax rate would become a constant political football and one more source of economic unpredictability. Far better to set the quantity through quotas and then let the market find its own level for energy/carbon prices.
In practice, current economic regimes assume ever growing per capita incomes and ever growing population (official estimates project a 6.1million increase in UK population between 2003 and 2031 ref. http://www.gad.gov.uk/Population/2003/methodology/mignote.htm ). The starting point for policy must therefore be an assumed continued upward pressure for new energy resources and for greater use of the atmosphere. If policy is imposed by quotas all of this pressure, as upward demand for energy, will automatically be reflected in increased prices, which in turn will act as a pressure to increase the efficient use of energy. However, if policy is imposed by taxes then there will have to be constant increases in tax levels if the rising demand is to be choked off, and each time there will be political pressure against this or for delays – so that there is a great likelihood that the policies that are imposed will be too little and too late. (See Herman E. Daly and Joshua Farley, “Ecological Economics. Principles and Applications”Island Press, 2004, pp366-368).
These are not mere theoretical ideas, there is actually evidence that this would be the case from a European research project on attitudes to environmental tax reform (ETR). The research involved focus groups in 5 countries and found that people “didn't see the point of ETR , didn't believe in revenue neutrality or understand the idea of a tax shift, thought it was all a plot by politicians to raise revenue and, particularly troubling and unexpected, most of them were unable to understand the environmental purpose of a green tax because they couldn't see how taxing something would discourage its use.” This was even true in countries like Germany and Denmark which had introduced some environmental taxes – in Germany, despite all the public debate only one person in 40 was aware that a complementary reduction in labour taxes had taken place. Comments Simon Dresner, the research co-ordinator “These findings make me wonder whether we could ever get the public to accept the constant ratcheting up of carbon taxes that ETR demands, since most of them don t have the first understanding of the rationale and the vast majority are allergic to taxes in general because they think they're always going up.”
To conclude, quotas need to be seen as the preferred way of setting appropriate scale in the relationship between the economy and Nature in the use of natural resources (fossil energy and the atmosphere as source of oxygen and 'dump' for resulting oxides).
International harmonisation of rates to reduce oil dependency – The Oil Depletion Protocol
Proposals to deal with global warming by establishing enforcable limits to emissions are proposals to dam off growing fossil fuel use. But in the near future, after the anticipated world production peak, oil as a fuel source at least will away fall anyway. One challenge then is to prevent the demand for fuel spilling over into a demand for coal but there are specific problems arising from oil depletion in its own right. In particular there is a huge danger, already clearly evident in the Iraq crisis, that countries will be drawn into bitter conflicts over oil, conflicts which would have destructive human and economic ramifications. The Oil Depletion Protocol has thus been proposed as a basis for international co-operation in reducing petroleum dependency. Of course, the work and adjustments that must be made to achieve this will have to be done inside countries but the Protocol is intended to give countries guidelines as to how fast and how much they will have to act – something that they will need to co-ordinate internationally if all countries are to reduce their oil dependency, harmoniously and in step with each other.
The formula for doing this proposed by Dr Colin Campbell of the Association for the Study of Peak Oil and Gas (ASPO) is that oil importers should reduce their imports by the world oil depletion rate and oil producers should reduce their production by the national depletion rate.
The depletion rate is worked out by dividing the current rate of production by the amount of oil that there is still to produce. If Kazachstan is producing 0.36 Gigabarrels a year and has 38 Gb still to produce then its depletion rate is 0.36Gb/38Gb = 0.9% (The yet to produce figure is, in turn, calculated by adding the remaining reserves that have already been found with an estimate of what there is still to be found - based on extrapolating past discovery trends. In the example of Kazachstan this is probably just over 30Gb in known remaining reserves and an assumed 8Gb still to find according to ASPO estimates, hence the 38Gb).
To understand the Depletion Protocol imagine that a powerful importing country tried to hold its imports of oil up, or even increase them, as oil production in the world was declining. This would only be possible by other countries being able to import even less. If countries do not reduce their imports in line with world depletion rate then others would be hit inordinately. The idea that producing countries reduce their production by their depletion rate also requires comment. This would mean that, in our example, Kazachstan would reduce its production next year by 0.9% of 0.36Gb of oil. For the world as a whole Campbell calculates that the depletion rate is about 2.6% and using this formula world production next year would decline by 2.6% of this years amount.
Proponents of the Protocol like Richard Heinberg (in a forthcoming book) argue with justice that this would conserve the resource, would reduce carbon emissions from oil production (by 25% in 10 years) and would produce a gradual and forseeable withdrawal from oil dependency co-operatively between countries, helping economic interests plan ahead.
However, as Heinberg himself admits, on its own this will not be enough. In the absence of other measures the demand for energy that is damned up by the Protocol will overflow into a search for substitute energy sources. Because the potential for substitution by gas will be limited some of it will spill over into the use of coal. In the absence of other measures this will push up emissions.
The other problem with the scheme is that it is based on a grandfathering relationship between nations, which involves equity issues that we have already addressed.
Part IX– Many different architectures for Carbon Quota Schemes
Carbon Quotas
The word 'rationing' is sometimes used to describe the controls that need to be put upon the emission of greenhouse gases. The word is not a good one and can be misleading. During World War Two there was rationing in Britain – however this war time rationing was in order to better cope with a shortage of essential foodstuffs, fuels and materials where that shortage was unwanted and externally imposed, by German U boats and the war. In the case of carbon quotas the problem sis that there is no externally imposed limitation on the use of the atmosphere to emit greenhouse gases and thus an 'articifial' scarcity has to be created by external means.
Strictly speaking emission quotas are better understood as the parcelling out of a global commons. We can regard the use of the atmosphere as a greenhouse gas dump as a a resource that has been free for any one to use up till now, but whose use must now be limited to a safe level. The atmosphere, or the sky, has to become a scarce resource. To make sure it is used as scarce resource it must be capped and the capped amount must be parcelled out in some way.
World War Two rationing pegged the total level of demand for certain goods – but did so in a way that protected the interests of everyone in society and was therefore seen to be just. It was very definitely not a form of grandfathering. At that time there was extreme scarcity of essentials like bread and other foodstuffs. Without the arrangement, involving the use of coupons issued to adults in little books, these scarce goods would have been 'rationed by high prices'. Wealthy people with purchasing power would have been able to afford them at the higher prices while those without money would have gone without. Rationing ensured that rich and poor alike had access to essentials as products could only be sold to people who could surrender ration coupons for them, as well as money for their purchase price. By limiting the number of coupons issued, demand was pegged administratively at a level to match the shortages in supply and prices were thereby kept stable. The poor could still afford to buy things, like everyone else, within their ration.
Cap and Trade rationing schemes are not like this – nor are they necessarily as fair. Under a cap and trade carbon emissions scheme the amount of fossil fuels with a given carbon content allowed on the market over a period of time is limited at some level – this is the 'cap'. This amount is then divided up as quotas that are allocated or 'pre-distributed' in some way. Let's say that quotas are divided into units equivalent to 1 kg of carbon dioxide in which case under one kind of scheme you would have to give up the following numbers of units in order to get the following from different fuels: 0.2 units per kWh of natural gas; 2.3 units per litre of petrol; 2.4 units per litre of diesel; 2.9 units per kg of coal; 0.6 units per kWh grid electricity in the UK (at night time) and 0.7 per kWh for day time. A trade of fuel and electricity is then only allowed when quotas are surrendered to cover the requisite amount - but if you don't have these permits then you can buy them from if someone else is prepared to sell them – this is the 'trade' part. The “ration coupons” can be bought and sold.
While all 'cap and trade' schemes have features like this there are a variety of different models with quite different 'architectural features':
1. Coverage. The European Carbon Trading scheme, while applying to large industrial users and power companies only covers 45% of the EU's CO2 emissions. It does not cover greenhouse gases from aviation, nor from road transport and nor from most individual and domestic uses of fossil fuels. Many people propose schemes which would cover all carbon emissions.
Quota distribution arrangements. There are also crucial differences in how quotas are distributed once the total amount or cap has been agreed. In principle there are three possibilities – to give quotas to the large users on a grandfathering or some other methodology; to auction quotas to the highest bidder or to allocate them to the public by giving them away on a principle like a per capita basis. Some schemes that have been proposed which combine these methodologies. For example, Tradable Energy Quotas (formerly called DTQs) have been proposed to operate with a mixed or hybrid arrangement. 40% of the quotas would be issued to cover the domestic use of fuel and electricity and would be allocated on a per capita basis. The remaining 60% would be auctioned by governments to companies and other institutional users.
3. Imposition arrangements. A third issue relates to whom the quotas imposed. There are two options – upstream or downstream. In one variant governments can require the surrender of permits for the greenhouse gas content of combusted fuels from energy suppliers before they are allowed to sell fuels with the specified combustible greenhouse gas content. These are called 'upstream arrangements' . Alternatively the authorities can require permits from fuel users to cover the emissions of the purchased fuel when burned. These are called 'downstream' arrangements. As we shall see, this distinction makes quite a lot of difference to the amount of administration required because there are a lot more users than there are suppliers and there needs to be a lot more record keeping to cover emissions when fuel is finally used.
4. A final point of clarification is needed at this point. There is no necessity, in the design of schemes of this sort, for the quotas to be initially distributed to the people or institutions from whom they are eventually eventually required. In fact, I shall argue later in this text for a scheme that pre-distributes quotas to the general public – while imposing their requirement them from primary energy companies before they can sell their fuels. In an arrangement like this the public would sell the quotas distributed to them by the government. They would do this via brokers like banks or post offices to the energy companies who need them as permits for the sale of fuel. The revenue flowing back to the public would then serve to compensate for the rise in energy prices forced on the energy companies as they recouped the cost of buying the quotas.
With these four points of quota architecture in mind let's look at how different schemes can work - or how they already do work:
Tradeable Energy Quotas (TEQs) – formerly called Domestic Tradable Quotas.
As has already been made clear this is a hybrid downstream scheme which would allocate 40 to 45% of carbon quotas to individual and household use and auction the rest, 55 - 60% of the quotas for industry and government would go to the highest bidder at a weekly tender. At the start of the scheme a full years supply of TEQs is put on the market. Then, every week, the number of units is topped up with a weeks supply.
As with all quota schemes the units would be tradable. Surpluses can be sold, or if more are needed, they can be purchased. When fossil derived energy is purchased (e.g. Petrol for a car or fossil derived electricity for the household ) that amount of energy is deducted from the personal or corporate TEQ account and the accounts would be administered electronically. It would require a national computer data base where people would maintain their TEQ balances. They would use a personal account card in much the same way that they can now use cash cards. Most transactions would be automatic using a direct debit technology. Individuals or companies that found that they wanted to buy fuel or electricity when their company or personal carbon account was exhausted would still be able to buy quotas through electronic means, at the going market rate, at the time that they complete their transaction.
The big selling point of a scheme like this is said to be that, through the operation of individual and organisation accounts, carbon energy use would become highly visible – everybody would become very aware of how much energy they were using.
The number of units available would be set out in a TEQ budget , which would look 20 years ahead and the size of this Budget would go down step by step, like a staircase. The Budget would be set by an Independent Energy Policy Committee. The government would also be bound by the scheme and its role would be to work out how to live within it, as well as to help the rest of us to do so. (David Fleming “The Lean Economy” Dec 05 edition p154)
The scheme, developed by David Fleming, has excited much topical interest. Perhaps this is because the current EU carbon trading scheme does not cover individual and household use of fuels and Fleming's scheme is seen as one way of rectifying this deficiency. During the year 2000, UK households produced 23.4 million tonnes of carbon (mtc) emissions from their direct use of fossil fuels and another 18.0 mtc if emissions from their use of electricity are taken into account, giving a total of 41.4 mtc (DEFRA, 2002). Between 1990 and 2000 their direct fossil fuel use grew by 13.3% (an average annual rate of 1.25% p.a.) and their carbon emissions from this source by 8.8% (a lower rate of growth because of the shift from coal to less carbon intensive gas). Household electricity use grew by 16.5% over 1990-2000. Because of the switch in UK power generation to natural gas this was achieved with 24.2% less emissions but, as we have seen, the favourable trend is unlikely to continue as natural gas becomes more expensive and coal regains a competitive edge. If the government is to achieve its Kyoto goals of a 20% reduction in emissions by 2010 over 1990 it will need to tackle the use of energy by households.
The current European scheme only indirectly covers individual and households in so far as they purchased electricity from power generation companies who must operate within the European Carbon Trading scheme. Governments are now realising that carbon restraint will have to be extended and are looking for ways to do it.
In this context David Fleming's ideas have been taken up and are being widely publicised as a fair way of rationing carbon emissions. For example, a recent major report by the Tyndall Centre for Climate Change Research, devotes several pages to the idea and the per capita basis for individual allocation is justified by the Tyndall Centre on the grounds of 'distributive justice'.("Decarbonising the UK. Energy for a Climate Conscious Future" pp 55-58). In another press statement on the web, Dr Kevin Anderson of the Tyndall Centre, based at UMIST, repeats the claim that DTQs are fair. "It is an equitable system. It is not based solely on people's ability and willingness to pay, but an explicit allocation of an equal per capita basis."
The Tyndall Centre's opinion that dtqs are fair has, in turn, been widely repeated in the press - for example by the Daily Telegraph on 3rd July 2005, which reported that government ministers were considering the possibility of DTQs. The Telegraph article tells us that even the Queen would be covered by the scheme and would have the same allocation as everyone else!
But how fair is the scheme in reality? Household energy use can be thought of as both direct and indirect. Energy is used directly when fuels and electricity are purchased by a household e.g. Petrol for the car, gas for the central heating and and electricity for the lights and computer. Energy is used indirectly through the purchase and consumption of non fuel goods whose manufacture and delivery was only made possible by the earlier use of fossil energy. There is a lot of fossil fuel used to produce and deliver food, for example. Or again, it is not just the buying of petrol to power a car that involves purchasing energy – a lot of energy goes into manufacturing cars in the first place – probably as much as a fifth as it uses in its life time. This energy is 'indirectly purchased' when payment is made of the final retail price. It is important to remember this because otherwise we get only a partial view of the equity and distributional implications of energy descent.
It is, of course, very positive that the ability of poor people to pay has been considered. But the matter of pre-distributive justice is here solely discussed in regard to individual and household use of fuel and electricity. But what about the price rises on their other purchases? What is missing in the discussion are the equity implications of the other 55 or 60% of domestic tradable quotas that would not be allocated on a per capita basis but which would allocated by auction for the use of companies, organisations and institutions. These are the quotas which would be required from companies to cover their energy when they produce the non fuel consumption goods that households purchase like food. The prices of these goods will rise too – by how much depending on the amount of energy that had gone into producing them.
As already explained, energy costs also enter into the cost of living indirectly. It is just and appropriate that the Queen should have no more than an equal ration in access to fuel – centrally heating palaces must take up a lot of energy so we can assume that Her Majesty would have to enter the carbon market to buy up quotas from her more frugal subjects. But what about the energy costs of having all those banquets? As food prices rise in consequence of higher energy prices the Queen would continue to eat well but we cannot make this assumption about her poorer subjects.
There is another sense too, in which, reserving 55 to 60% of dtqs for non individual use is likely to turn out to be highly inequitable. The distinction between individual use and use by companies, organisations and institutions is not so clear cut as at first seems the case. It seems a fair bet, for example, that the quotas required to cover fuel used in the ovens cooking those state banquets would be provided by the government, and not be taken from the Queen's personal dtq allowance.
The Administration and Transaction Costs of DTQs
Sadly matters of justice are of little concern to the government – while matters of cost and administration are. And DTQs would be very administratively intensive. As already mentioned, they would require that records be kept for the energy transactions of millions of users and hundreds of thousands of companies and organisations. As Simon Dresner comments “a downstream personal quota system has large administrative costs. You're looking at having to give every resident a secure card. I think that the set-up costs of a stand-alone system, running to billions it seems from Richard Starkey 's estimates, would be unacceptable to a government. It can only be implemented as a feature of the national ID card, if it is introduced. Even so, it would be quite expensive and add complexity to the scheme. The government isn't currently planning to get you to produce your ID card whenever you buy petrol, a railway ticket, a bus ticket or a tube ticket but you would be expected to with personal quotas. Imagine what the civil liberties lobby and the press will say about that - I expect they'd compare it to the Soviet system of internal passports and surveillance. I know you won't have to produce the ID card under personal quotas, you can just pay extra, but it would add to complexity and queues, and could be resented.” (Ibid).
Civil Liberties and Carbon Trading
(Academic expert on carbon trading, Richard Starkey, has suggested to me in e mail correspondence that the Daily Telegraph article of Charles Clover linking ID cards to DTQs
may involve “a not an insubstantial amount of journalistic licence”. He further comments that:
“From correspondence I’ve had with (or have seen from) the Home Office I’m entirely confident Clover’s remark about the ID card didn’t come from a government source. In the early days of our research we speculated on whether the ID card could physically be used as a carbon card. However, in a letter (July 2004) from the then Head of Legislation at the Identity Cards Programme to Colin Challen MP it states
You asked about the possibility of identity cards “doubling up” as personal carbon units trading cards. I should say first of all that the proposal is for an identity cards scheme that enables individuals to identify themselves securely not to create a multi-function card scheme incorporating a multitude of private or public sector functions.
And in a letter to me (March 2005) from Stephen Harrison, the then Deputy Director of the Identity Cards Programme, it states that DTQs
Falls outside the legal scope of the scheme in that the Bill…does not provide for the storage of information about a person’s ‘quota’…The same issue would apply in storing information to link a person’s ‘carbon card’ details to their Registry entry.
If you look at Clause 1 in what’s now the Identity Cards Act 2006 (it received Royal Assent in March), the situation outlined by Stephen Harrison remains the same. See
http://www.opsi.gov.uk/acts/acts2006/ukpga_20060015_en.pdf
So in conclusion, there is little reason to be concerned that DTQs will somehow be subsumed as a subset of the ID card scheme. However, as I’ve pointed out in my paper, like it or loathe it, if the ID card scheme is successfully implemented (a big “if” in my view), then it could be used to verify identity as part of enrolling people into the DTQs scheme.
Starkey also doubts that the information about people's carbon use in their dtq accounts would tell the state anything much about people that could be used to 'repress them'...)
The European Carbon Trading Scheme
TEQs (or DTQs) are an idea under consideration. The EU Carbon Trading Scheme is already up and running – although, as explained, its coverage of European carbon emissions is only partial. The 'large energy users' covered by the ETS are electricity generators; oil refineries; iron and steel producers; cement, clinker and lime producers; glass manufacturers; brick and tile works; pulp and paper mills and “installations in any sectors that have combustion plants of a thermal input of over 20MW, including aggregated plants on a single site, are also covered (Hospitals, Universities and large retailers may find themselves included under this provision).” http://www.dti.gov.uk/energy/sepn/euets.shtml#neca
The total amount of carbon dioxide that can be emitted by these installations is set in order to help meet the EU's Kyoto obligations. Almost all of quotas allocated by the UK government are pre-distributed on grandfathering principles – although some quotas are held in reserve for companies that might start an operation where their (new) energy use would require them to be covered when they set up. If companies close down an operation they lose their quotas in subsequent years which go back to the government. For these reasons at least a few quotas are held by the government and, if they are unused these are then auctioned. All this is detailed on the UK governments web site for the scheme where the grandfathering methodology is explained like this:
“Standard allocation methodology. The starting point for calculating an allocation for an installation is to calculate its "relevant emissions" during the baseline period. In most cases, an installation's "relevant emissions" will be the average annual emissions for the years in the baseline period when the installation was in operation after excluding the lowest year's emissions. The sector total is then divided between installations in the sector according to each installation's share of the sectors relevant emissions.” http://www.defra.gov.uk/environment/climatechange/trading/eu/nap/allocation.htm
Installations covered by the scheme are then only permitted to burn carbon fuels, and thus emit carbon dioxide into the atmosphere, if they have quotas for the amount of their emissions. As with all cap and trade schemes the quotas can be traded and the market for permits is European. If companies in the UK wish to buy more permits they can buy them from other EU countries provided they are prepared to pay the going market rate on the different European Energy Exchanges.
What the going rate for permits is, partly depends on how generous, or restrictive, is the total amount of permits issued (the supply) against the demand for the permits by the large energy users. As time has gone on it has become clear that the permits have been issued too generously in the first round of the scheme. That the control is so weak, partly reflects the very inadequate nature of the Kyoto agreement and the reluctance of countries to impose real restrictions on their power generation sectors. Around Easter 2006 the price of carbon fell with a big crash. When the actual emissions of the EU were added up for 2005 it was found that in country after country the emissions were lower than the ETS targets had allowed for – this was not that the EU had suddenly reduced its emissions, it was because so many emissions certificates had been issued so that there was no effective reduction being expected in many countries.
Nevertheless there have been times when the carbon market has risen more than was originally expected. The market opened in December 2004 at less than 10 Euros a tonne of CO2 but peaked as high as 30 Euros a tonne on some days in July – to fall back slightly to 22 Euros a tonne in November. In 2006 it again rose before collapsing around Easter. As already explained, one reason for the higher than expected 'price of carbon' is thought to be high gas prices which pushes generating companies towards more coal power generation. As coal power generation of electricity puts out more CO2 – the power companies are required to buy up the carbon emission permits and this bids up the 'carbon price'.
The carbon price therefore keeps coal and gas prices in equilibrium. As gas prices rise, in relation to coal prices, the demand for coal rises and the price of CO2 rises with it.
As far as it goes this is all to the good. Bringing environmental costs into the market – in this case making it more expensive to use the dirtier fuel - is just how the scheme should be working, albeit probably even more tightly. However, the rising cost of gas, driving up the cost of permits as generators switch to coal, drives up electricity and other prices – and hits consumers. Whereas world war two rationing choked off the potential for rising prices so that poor consumers could still get essentials when their purchasing power was low, this kind of rationing imposes the final burden on consumers. If they are cannot afford the higher electricity prices, then tough for them, there is nothing in this particular scheme to protect their interests.
The higher carbon prices also push up the costs of making steel, glass, paper, cement, not to mention the costs of all the other manufacturers judged to be large users and required to buy quotas for their fuel use. When the price of the goods from these industries rise and eventually hit the shops as increasing consumer prices there is, again, nothing in this scheme to protect low income consumers. At the moment this is a rather small matter but as we have seen we are only in the opening stages of energy descent.
When this system was being designed other ideas were considered. Some proposals would have had governments auctioning all the permits to the large energy users - whereas in the existing scheme the permits are mainly given to them. If an auctioning arrangement had been adopted it would have given governments a revenue which they could then have used, if they had so chosen, to compensate vulnerable people and to help them cope with the scheme-induced higher energy prices. Indeed, as we have already suggested, EU governments could have given the permits to households who would then have had an income from selling the permits.
As far as the environmental effects of carbon trading are concerned, as long as the scheme is enforceable, it does not matter to whom the permits are given initially, as long as the total permitted magnitude of emissions are sufficiently restrictive to forestall environmental damage. However, because permits are tradable their sale earns someone money – and from the point of view of social justice it matters a great deal who that 'someone' is. The grandfathering arrangement directs the cost away from the largest energy users onto consumers – some of whom may not be able to afford to pay.
Enclosing the Global Commons – the Big Corporations claim ownership rights to the atmosphere
One way of seeing carbon emission quotas is that they are a new kind of property which entitle their owners to use of a portion of the Earth's atmosphere. The scale of burning carbon fuels is so great that it is reaching its safe limit. Thus the use of the atmosphere has been recognised as a scarce resource that must now be rationed by price. Portions of the limited resource must be purchased before fuels are burned. But who owns these new rights? Property rights are owned by the people in general, until they are assigned by states, and states can assign them to whoever they decide it is in the public's interest to assign them to. What has happened in Europe has been an assumption that the use rights to the earth's atmosphere are to be pre-distributed to today's biggest users. The Earth's atmosphere is like common land in the past. Previously available to all at a certain point in economic history it was enclosed in favour of big landowners. Now the Earth's atmosphere is being enclosed in favour of the big multinational corporations. Perhaps it is for this reason that many big companies in the USA, seeing the say that things are going, have adopted a voluntary carbon emissions trading system , based in Chicago. Three dozen major companies, including Du Pont, Motorola and Ford, have committed themselves to it. The companies are more foresighted than their government – while it may seem that they are voluntarily putting themselves under restraint, and taking on extra costs, another way of looking at this is that they have seen the future - and are staking out their claim to part ownership of the Earth's atmosphere.
Big energy users have seen the way things have been going and used a powerful lobbying voice to get an arrangement that suits them best. It is an arrangement which dumps most of the cost of climate adjustment on Europe's consumers, some of whom are in a poor position to meet those extra costs. Nor are are the big energy users alone in getting a good deal. The City of London is very enthusiastic about the new arrangements which gives it plenty of work.
A whole new business sector is growing quickly, evolving into a network of vested interest in a specific way of arranging things - consulting firms for smaller businesses that can't afford to set up a separate emissions trading department; banks and brokers creating departments and appointing staff to manage emissions rights trading - and developing new 'investment products' like futures for the emissions market; companies that calculate and certificate the amount of CO2 that other companies are producing and engineer bureaus that advise on saving energy measures; energy development agencies which organise energy saving projects in developing countries to offset emissions in industrial countries.
Many of these are going to be vital to the future but the particular way in which the EU scheme has been set up has quite literally been designed to give the City of London a stake by creating more work that is actually needed.
Upstream and Downstream controls
The upstream and downstream options in carbon controls have already been mentioned but its necessary to say a bit more about this – to explain what has happened in Europe. To understand the current arrangement one can use the analogy of building a damn to control the flow of a river. All other things being equal it makes sense in terms of building costs, to build damns at the narrowest place in the river. However, if you are a building company with friends in high places the more lucrative contracts are going to involve building damn at the widest – and this is rather like what has happened with the EU scheme.
Energy enters the economy through a small number of primary energy importers and suppliers – oil, gas and coal importers, domestic producers of coal etc. This is, so to speak, the 'narrowest part of the river' and the administratively simplest and cheapest scheme would involve requiring the small number of primary suppliers to purchase permits for the carbon content of the energy that they sell on. However, this is not the arrangement that was adopted probably because it was not the scheme that would have generated the best returns for the City of London. Instead of requiring that the small number of energy suppliers 'upstream' had permits which give them the right to sell a certain quantity of fuels with a specific carbon content, it was required of the much larger number of energy users 'downstream' that they have permits before they can buy a certain quantity
of fuels with a specific carbon content.
“..... the benefits for the financial sector and the City of London will simply reflect a significant transactions cost burden that will ultimately be paid by the consumers of Europe as a result of the costs in actually operating the market. The verification of the scheme will also involve a firm by firm audit to ensure compliance, further adding to costs. Compared to an across the board carbon tax, or an emission scheme imposed on producers or importers of primary energy ( upstream ), the costs of compliance of the current scheme applied at the level of individual firms will be significant. This is because of the need to verify each plant's behaviour. For this reason the Consultation Group on Greenhouse Gas Emissions Trading, set up by the Irish Department of the Environment, recommended in 1999 against operating a trading scheme at the level of such downstream firms, preferring an upstream scheme involving very few firms that currently pay excise tax on most of their imports and which would have made use of the existing excise tax administration.” (John FitzGerald “An Expensive Way to Combat Global Warming:Reform Needed in the EU Emissions Trading Regime” at www.esri.ie/pdf/QEC040_FitzGerald.pdf )
The Clean Development Mechanism – Carbon Trading in Developing Countries
What is true for UK banking is also true globally. Carbon Trading is being brought into disrepute by the way that the biggest global financial interests are turning it into a money spinner – and that includes the World Bank. In the last few decades the World Bank has been one of the largest public sources of funds for the fossil fuel industry. In fact, research conducted by Sustainable Energy and Economy Network (SEEN) shows that in an average year of financing, the World Bank supported fossil fuel projects that have lifetime emissions of 1,457 megatons of carbon. This figure is "4-29 times the amount of emissions reductions anticipated under the CDM per year."
The CDM is the so-called 'Clean Development Mechanism'. This is a device under the Kyoto Protocol involving developing countries. It allows developed nations to achieve part of their reduction obligations through projects in developing countries that reduce greenhouse gas emissions or 'fix' or sequester CO2 from the atmosphere. It is an aspect of carbon trading that needs to be understood because there are good reasons to believe that it is undermining the credibility and effectiveness of carbon trading altogether.
A friend comments:
“South Africa in particular was instrumental in the development of the "Gold Standard" CDM, which sets out quite stringent rules for CDM that includes social as well as environmental and economic benefits. It is a very high standard, but the benefit to a project developer for such projects is that they can try and demand a higher carbon prices for the "saved carbon tones" than ordinary CDM projects.
CDM has been hotly debated, as many feel that the projects approved are not good, nor do they impact. A clause, called the "additionality clause" is in the Kyoto Protocol, which disallows projects that were going to happen anyway, as part of a countries plan, from trying to sell the carbon tones. This issue is raised again and again by China and other big emitters as they want it removed. An example is South Africa's parastatal SASOL who have built a gas pipeline form Mocambique to South Africa to bring natural gas here. They will use this as their main power supply rather than coal in their synthetic processes. But they were going to do it anyway, long before CDM. But they applied for CDM approval. I think/hope they were turned down.
Each non annex 1 country that signed on to the Kyoto Protocol and wants Clean Development Mechanism projects has to set up a DNA (designated national authority). The DNA is supposed to check each project and assess its acceptability.
The current price of carbon on the world market offsets about 15% of the costs of the a project in South Africa. However, it is lengthy and costly to do and so precludes small community driven projects in general.” (From - personal communication from Annie Sugre of Feasta in South Africa)
If mechanisms like the CDM are not watertight it is possible to argue that, far from creating mechanisms to deal with climate change, carbon trading becomes a mechanism to escape doing anything about it while appearing to do so. Virtually all the EU countries participating in the ETS intend to rely on the CDM to meet their Kyoto targets - the Clean Development Mechanism credits gives them a valuable carbon trading 'escape clause'. Austria, Belgium, Denmark, Finland, Ireland, Luxembourg, Portugal, Spain and Sweden all plan to use significant CDM credits. In some cases the National Allocation plans of these countries show significant shortfalls between what the ETS should be achieving in ETS covered sectors - shorfalls that are to be made up though the JI/CDM. (See Ecofys (2004): Analysis of the National Allocation Plans for the EU Emissions Trading Scheme. August 2004 http://www.ecofys.co.uk/uk/publications/documents/Interim_Report_NAP_Evaluation_180804.pdf
Let's spell this out again to make it clearer: let's say that your country doesn't intend to make any cuts at all on carbon emissions to spare industry the pain of de-carbonising adjustment. At the same time your country wants to participate in the ETS and appear to be doing something about climate change. This can be done like this - you give your industries enough carbon credits to enable them to emit at a business as usual level (BAU) - or only slightly below it. Of course, the EU has allocated your country only a certain number of credits - but it has given your country (and everyone else) the right to acquire more via the JI/CDM mechanisms. So you make up the difference (between the smaller number of credits distributed from the EU and your country's larger distribution to enable BAU to occur) by the cheaper option of buying from developing countries.....so then you have a cheap way out!
From the point of view of saving the climate this would not matter if the cuts in developing countries are genuine. But are they? When the additionality clause is not applied rigidly, this is doubtful.
And there are other consequences for developing countries. A lot of the hostility to the CDM arose as NGOs who were working with forest peoples who were threatened by the international plantation interests saw that these interests were going to use the CDM as a source of finance for their operations. This is very destructive to many groups. This quote is from the recent Tyndall Centre report and describes CDM in Latin America:
"Women are often marginalised from key aspects of projects. This implies that relatively well-off farmers who have private or individual property rights to forest are more likely to be beneficiaries. Even these farmers, however, are likely to be poorly informed and receive only small increases in incomes. Only some forest property rights are legible and fit into formal frameworks imposed by international global regimes and government. Some sectors of society, such as poor households and women-headed households, depend on less formal rights to access forest resources. The creation of carbon markets may involve overturning long-established traditional management and property
rights regimes, with implications for both local livelihoods and sustainable development.
Even the same project has different impacts on different stakeholders in different locations because of the micro-politics and diverse ecology of the region. Clearly no one-size fits all and blueprint style approaches are not applicable. Whilst investment in carbon sequestration and market-based
approaches are attractive for developed country investors and developing country governments, the outcomes are typically far less certain and the prospects less attractive for local people. Marginalised voices of women, the landless, and poorly educated are seldom given prominence in the projects, and any venture which involves risk, uncertainty and future, rather than present, benefits is likely to further disadvantage them. This has important implications for local equity and sustainable development."
A recent issue of the New Internationalist (July 2006) shows that carbon offset CDM schemes are highly dubious in many ways. For example, a scheme where local populations has been cleared off the land to make room for tree planting raises more than just human rights issues. “The only way of knowing the true impact of the project on carbon stored is by following the thousands of people who have been evicted from the national park and comparing their carbon emissions before and after the evictions....Some of them may clear other areas of forest to continue farming. Others may overgraze the land around the park, causing soil erosion. Others may try to continue farming in the National Park. Other may move to the city and take up a higher carbon life style”.
The science underlying plantations and tree farming has been subjected to a lot of scrutiny. An article in the New Scientist argues that tree planting projects release substantial CO2 into the atmosphere – most tree planting involves vegetation such as grasses which absorb CO2 and exposes the soil where carbon is stored, releasing CO2. In the end there is more CO2 released than is absorbed.
These worries have not stopped some developing countries becoming overrun with entrepreneurs on the hunt for suitable CDM projects, helpfully led by the World Bank.....the very same organisation that is simultaneously selling new fossil fuel projects to the same countries....
The World Bank
Having helped to create the problem of global warming the World Bank now sees the possibility for making money from solving it – a recent leaked document exposed World Bank plans to profit handsomely by charging a 5% commission on carbon transactions as a broker between Northern and Southern governments and industries. The commission--which the bank claims is merely to cover costs--will be closer to 8-10%. With a potential market in CO2 that could reach $2 billion by 2005, the World Bank noted in the leaked memo, it could quickly earn $100 million in one year--and that was just for starters. (Daphne Wysham. “A Carbon Rush at the World Bank” http://www.fpif.org/papers/0502wbank.html)
The story so far is therefore that the two economic interests which have most to lose from global warming because they carry the biggest responsibility for causing it, have taken over the arrangements for dealing with it, and are turning it to their advantage. This is true in the UK, in Europe and globally. Since the adjustments in response to global warming inevtably involve costs there is every indication that unless policies are changed these costs will be thrown more and more onto others. The injustice is striking. Daphne Wysham explains why there has been so much support for carbon trading by big corporate interests:
“Why is there so much support for carbon trading? Well, there is plenty of money to be made. The average citizen won't make any; instead, the very same corporations who fuel the problem--the large oil, gas, and coal companies--are among those who will profit from this trade in invisible
gases. For instance, just last month, Danish power utility Energi E2 sold hundreds of thousands of dollars of the rights it had been granted free by its government to Shell Oil Company after mild temperatures kept the utility's carbon emissions below expected levels. No such free rights have
been granted to ordinary Danish citizens, however.”
Polluters make windfall profits
As we have seen we are just at the beginning of a long process of energy descent. If these are the principles and mechanisms that will drive it then there is no hope for the world's poor or for vulnerable people in this country – nor is there hope either for civil liberties and democracy because these kind of arrangements will eventually generate deep resentment, resistance and social conflict. Without equitable burden sharing the social consensus and cohesion vital to tackling a huge challenge will be lost, replaced instead with burning resentment at the interests who have created the problem and who are now cashing in on solving it. The implications of current arrangements were clear in May when the following appeared on the BC web site:
“Power firms could make a £1bn windfall profit from the EU Carbon Emissions Trading Scheme, it is claimed. The windfall is likely because many firms have benefited from increases in electricity prices brought about by the scheme without needing to make any extra investment in return.
Peter Bedson, from IPA Consulting, confirmed to BBC News that the profit could reach £1bn.
Environmental pressure groups have called the news a scandal. Part of the problem, Mr Bedson said, was that firms had been given, free-of-charge, the carbon emissions permits on which the scheme is based. This, he explained, was like the government giving energy firms free money. The WWF pressure group has demanded a windfall tax to re-direct the profits into energy conservation.”
http://news.bbc.co.uk/2/hi/science/nature/4961320.stm
Perhaps we can be charitable and assume that, when governments gave permits away to the corporate interests in the EU, they thought that this would keep energy prices from rising. If so, the policy makers who made the decision to give the permits free, didn't understand economics. With permits selling at around 20 to 30 Euros a tonne of CO2, the companies that have been given them will factor in the price they could have obtained if they had sold them as their cost of using them themselves in their own production processes. Thus even though the permits come free, the cost of electricity, cement, iron and steel, glass, paper etc. will still go up by just as much as if the permits have been auctioned – large users have been given a hefty subsidy which will be paid for by others. This was known very well when the scheme was introduced. See “CO2 Price Dynamics: The Implications of EU Emissions Trading for the price of electricity” http://www.ecn.nl/docs/library/report/2005/c05081.pdf
It isn't only consumers who have been stung. While the ETS is handing out free money to the polluters the promoters of renewables are not part of the bonanza. As already explained the UK Government's National Allocation Plan reserves a portion of the permits to be given to new installations setting up in their respective markets – and this means effectively that a subsidy is being given to them that will not be available to people setting up a wind farm, for example. Supposedly in order to be consistent, permits are also to be taken away from installations that close down their operations. This is a 'use it or lose it clause'. Although at sight reasonable, the implication of the 'use it or lose it clause' is that the closure of dirty installations means loss of the windfall income that these installations get from the permits that have been given to them. Effectively they are being subsidised to stay operating by an amount equal to the market value of the permits given to them. In Germany too, the recent plans for phase II of the ETS were highly controversial in the way that they seemed to be favouring the brown coal power sector.
Justified suspicion and anger at the unjust nature of carbon trading and the way that it has been taken over by the carbon sector has led some commentators to reject the whole idea of trading carbon permits. Yet this either throws us back on the tax system where, as where have seen, there is great resistance to change, or giving up on enforcement altogether, effectively relying on exorting people to change their ways. But the problem of such voluntary austerity measures is that in the current market system it would merely creates a slack that others would take great pleasure in taking up, rendering the generosity of the gesture futile. If half of the population work hard to reduce their energy consumption then, other things being equal and without any policy changes, this would reduce demand for energy and thus energy prices will be lower than they would otherwise be – this will make it cheaper for those showy people to run SUVs in fact. In a competitive economy there is generosity trap – the more you give, the more someone else can take and live a little bit more comfortably on your spirit of self sacrifice.
Part X – Energy and Social Policy
However equitable pre-distributive approaches are made to allocating 'the right to emit CO2' there will still be many problems for socially vulnerable groups and other policy mechanisms will be needed to sort them out.
The matter of energy justice be solely reduced to questions of income, cost of living and relative prices. Economic policy operates through measures that effect relative prices and incomes to which economic agents are then expected to respond. The greater wealth of those who are better off gives them the purchasing power to make life style adjustments. But this is not the only way in which they have a greater freedom of action and greater scope for adjustment. Well off people tend to be better educated, in better health, and to be better connected - they are likely to have a great deal of social capital that they can call upon to help each other out of difficulties. By contrast, poor people are more likely to be on their own and socially isolated - they will lack the well connectedness that helps to get things done. Poor people too are more likely to be in inferior health, to have less skills and to generally be less in touch. Many poor people will find it difficult to respond to economic signals without help. For example, of the 21.7 million households in the UK, 30% are single person households - 3.1 million of these are one pensioner and 3.4 million are under pension age. There are also 2.3 single mother households and a good number of other two person households where one person is totally pre-occupied with the care of a long term sick or disabled relative. Households like these will need help to make adjustments and adaptations - because they will otherwise be too old, too ill, too tired, too pre-occupied, too disorganised and chaotic, or too out of touch to be able to find the variety of resources needed to respond to a radical change in 'price signals'. Social services and health policy will need to be tightly connected to energy policy otherwise, as the energy crisis evolves, there will be a public health and social disaster in poorer areas.
This means that many people will need a great deal of help indeed - particularly in sorting out their home heating costs if they live in the oldest part of the housing stock, which without cavity walls, are less easy to insulate. On first impressions giving everyone an equal fuel and electricity ration seems equitable - at least for the 40% of household expenditure devoted to fuels and power. An initial assumption, indeed, might be that high income households would end up having to buy extra quotas from low income households to cover higher fuel and electricity use - thus redistributing income from rich to poor. As it turns out this is true but only to a rather limited extent. Domestic energy use rises very little from the poorest to the richest and not only that - the ranges of energy use among households in the same income bands are very large. Research exploring the distributional and practical implications of carbon taxes and quotas by Paul Ekins and Simon Dresner of the Policy Studies Institute found that "Those at the 80th percentile in the ten percent of households with the lowest equivalent income (the first decile in the jargon) consume nearly six times as much energy as the 20th percentile of that decile, and more than three and a half times as much energy as those at the 20th percentile in the tenth decile, the richest. The main reason for this big variation is the large variation in the efficiency of the housing stock." ('Distributional, practical and political implications of carbon taxes and trading UKERC Taxing and Trading Workshop', 3rd and 4th November 2005 Simon Dresner, Policy Studies Institute.)
This has considerable consequences - when Ekins and Dresner used their figures to calculate the distributional impact of DTQs they that found that "about 30% of the poorest fifth of households would lose out under DTQs because they had above-average emissions. The inclusion of aviation in PCAs reduces the percentage of losers among the poorest households to about 25%.......the
proponents of rationing are now thinking of how to compensate that 25 or 30%"
A major problem here is a strategy to make the older houses more energy efficient and to heat them, where at all possible through renewable energy sources. Where houses are owned by elderly people who are too frail to organise the upgrading of their property then other solutions must be found. Problems exist in multiple dimensions each of which requires its own policy response.
Part XI - An equitable scheme fit for purpose
A total carbon budget for the EU and member countries like the UK would be set based on the best advise on what is necessary to reduce carbon emissions to prevent global warming, assuming a fair international division of those emissions – i.e. A national and international pre-distribution on a per capita basis.
Emission certificates would be issued to cover the whole amount of these emissions, not just a part. They would therefore include all domestic and transport use, including aviation (50% of emissions for airplanes flying into an out of EU airspace and all emissions for flights inside EU airspace).
Oil and gas supplies are currently expensive due to supply constraints which will continue and in the long run get much worse. Any additional means to limit the use of oil specifically, like the proposed Rimini Oil Depletion Protocol, would be likely to have the effect of further boosting the demand for coal in the absence of other policy controls. Overall carbon emissions certificates are thus a vital tool to prevent substitution effects between energy sources, depleting at different rates pushing up global emissions. In particular it is important to prevent the demand for energy, that can no longer been met by oil and gas, spilling over into a extra demand for coal, thus accelerating global warming. While the price of carbon will go up, the price of coal as such will not.
The emission certificates would be issued to all EU citizens on an equal per capita basis – though a portion would be held back for states to use to sell exclusively for funds used to build up a renewable energy infrastructure – otherwise the right of future generations to adequate energy is unlikely to be adequately protected in the scheme.
On receiving their permits, the recipients sell them to banks and post offices, just as if they were a foreign currency. The permits cannot be hoarded as their validity lapses after, perhaps, a year. This would give people an income and help to equalise the burden of adjustment, thereby attaining social acceptance.
Companies distributing oil, coal and gas (including to electricity producers) buy enough permits from the banks to cover the emissions from the amount of fuel they want to distribute. The permits are thus not on the demand/use of energy 'downstream' but on the supply/sale of energy as far 'upstream' as it is possible to go – there being only a few places at which energy enters the economy, managed by a few companies. All the cost of monitoring energy use downstream would be avoided.
A corps of inspectors is maintained to ensure that the oil, gas and coal producers do not exceed output for which they have the required number of permits. The inspectors check the permits just as if they were banknotes and, having reconciled the number with the output figure, send them away for destruction.
Nuclear power should not be expanded because the enormous and tremendous hazards associated with its wastes would not be worth it, particularly when one considers the very short time period that world uranium would last if other countries go down this route. It would be better to go for an international agreement declaring a moratorium on all future nuclear development – including in this country. (Within the framework of such an agreement Iran might be cajoled to join in).
Other complementary policy instruments are needed to ensure that those with social and health problems are given the extra help that they will need to convert and upgrade those particularly old ad energy efficient parts of the housing stock, as well as to respond to other major emerging challenges, like rises in food prices. Energy policy needs to be integrated into into health and social policy.
Summing up
In this paper we have explained why fuel based energy has become so central to our economic life. We explained how our existing way of generating and using energy has reached its limits and will not be able to grow further – why it must contract and will contract in the decades ahead. We have shown why sustainability requires us to take the long view – which means at the very least the life span of children being born today. We should expect that policies designed now will evolve but that they will shape the politics and economics of the next 7 or 8 decades.
We have argued today's children will face not only the well known difficulties posed by global warming, though this is perhaps the greatest of all the challenges, there will also have to cope with major depletion in non-renewable fuel based energy sources. This means that the depletion issue and the global warming issues need to be taken together – we are already seeing how, when gas and oil become scarce, there is a pressure to use the dirtier more carbon intensive fuel. Next we have showed that, although the problems of oil and gas depletion are currently more topical, it will not be long before depletion problems emerge with uranium and even coal supplies. A crucial aspect of policy to protect the position of todays children must therefore be, not only to avert more global warming, but to leave them an adequate resource in the form of an infrastructure of renewable energy to replace the non renewable fuel sources when are 'running on low'
Having established, we hope, the huge magnitude of the public policy responsibilities and tasks facing us because facing today's children we looked at the policy options for controlling the overall magnitude of energy use, particularly fossil fuel use. Central to this will be the maintenance of social cohesion – which means confronting the danger that society will tear itself apart over who bears the burden and costs of some profound readjustments. This means that equity and fairness must be absolutely central to the broad public acceptance of any lasting arrangements – a principle that will also have to extend to international dealings about energy.
From this standpoint we looked at the different policy mechanisms that are available and considered them against issues of equity, administrative cost and their civil liberties implications – this included schemes which would use the tax and benefits system, schemes to regulate the oil trade and a variety of schemes which effectively cap the amount of carbon that can be used and then portion them out with. We noted in all of this that economic policy instruments alone will not resolve all the issues and that, for example, vulnerable people must also be helped to respond to the problems in a creative combination of social and health policy with energy policy.
We then explained why we think that the current arrangements are highly inequitable and will, as the energy crisis deepens, put an unjust burden of the increasing costs of readjustment on those people least able to meet them. We argued that the current direction of policy is to effectively hand over ownership rights to use the earth's atmosphere to those very interests who have done the most to create the climate crisis. Further we showed that the administration costs of these arrangements are very high and this benefits the financial sector and banks at the expense of others, As if that were not enough, how the arrangements also end up unfairly discriminating against the development of renewable energy too.
Finally, we set out a policy that would be equitable, have an adequate coverage and lower administration costs. It is this policy that we urge the public and policy makers to urgently consider as an alternative to what we have now.
Last Words- Beyond the Suicide Economy – Reacting to the Emergency
Transforming Government, Transforming Society, Transforming the Economy
The more I look at the crises facing us and the enormity of the tasks and problems that we face the more I think of this metaphor – it is as if one is looking up the wall of am approaching wave of problems that is getting larger and larger – like a economic and social Tsunami whose immense destructive power is about to burst over us, with most people and politicians almost totally uaware. Thus I am very ware that this paper, which is already 34 pages long, has not even touched a mass of consequences that will simultaneously have to be addressed at the same time as imposing controls and regulations over the use of energy. For example, I am aware that I have not even addressed the issue of how one reduces the energy availability without the economy collapsing into a depression with the credit and financial system falling to bits. Economic growth is not merely a conceptual fixation of misguided economists and chancellors it is necessary to feed our credit based money system – without growth the economy does not just glide downward smoothily it stalls and collapses. Emergency monetary arrangements will be necessary to deal with these consequences.
Another consequence, hinted at, but not developed in this text, are the multiple international relations dimensions of this crisis. We desperately need an international consensus for a climate change policy – but the room for manoeuvre for achieving this is deperately narrow. As we have said an equal per capita approach on an international level will lead many developing countries with an equal per capita right to a carbon pittance – although it is arguable that they will fare much better than the global North in the massive adjustment shocks that are coming. Meanwhile, the disastrous stupidity of the so called “War on Terror” has wound up tensions around the world and done much to undermine diplomatic and foreign relations situation that would allow a negotiated approach to dealing with the energy and climate crisis.
Because cheap energy underpins our whole way of life there is, as Richard Heinberg puts it a veritable 'banquet of consequences' all requiring policy goals and specific policies . As these consequences involve the very survival of the human species policy makers and populations ought to be regarding this with the same gravity as a war – a war in which we are seeking to avert mass death by flooding, drought, starvation, hurricanes...all of which are thousands of times more threatening and dangerous in their consequences than the so called “War on Terror” .
The horror and scandal is that everywhere we look the politicians are failing us – to be sure they are wringing their hands in displacement activities – and they are telling us that the public are not aware enough of climate change yet for them to act. Without more public awareness, they tell us, the politicians would face massive resistance to change.
Perhaps – but the job of politicians is to tell the truth to citizens about the situation that we face and then to put forward the policies that will help us collectively cope with the problems. If the truth is too much for the population to accept then it is the job of politicians to fight for a collective wake up to the reality. If they fail they should go off into the political wilderness and do what they can outside of the political mainstream.
They will find that that there are a lot of people already there...
© BRIAN DAVEY