climate change
22 Feb 2008
Only a Recession Can Save Us
The melting Greenland icesheet
We should be looking at the slowing of the global economy with relief, argues Brett Robertson
Before the Bali Conference last year, the world's early warning system on climate change, the Intergovernmental Panel on Climate Change (IPCC), released their latest report. It was their most alarming yet. They then proceeded to criticise themselves for being too optimistic. Constrained by the requirements of scientific rigour and broad consensus, their data was up to five years old, and their conclusions already made redundant by a frightening reality.One important reason is that they did not predict the explosive growth in China and India. The unprecedented expansion of these economies, which has thankful economists on their knees and praying for more, is deeply disturbing for climate scientists. Other reasons include a surprising inefficiency in the use of fossil fuels and the failure of the climate scientists' models to follow the rapidly changing dynamics of the global climate system.
The problems are building too fast and we need to buy some time. A key measure of our efforts to mitigate climate change is called carbon intensity - the amount of carbon released per unit of GDP. It needs to go down, but at the moment, it's stalling.
Only a recession can save us now.
Before you dismiss this suggestion, let me explain. Australia would not suffer greatly from a recession. We are nearly fully employed, and working longer hours than ever before. The resources industry is stretching to the limits of its capacity, straining infrastructure and desperately soaking up skilled and unskilled labour. The pressure has been building for years, and demand growth is not letting up. Inflation is an inevitable by-product.
In this context, we should be looking at the easing of global demand with relief, not with dread. As well as buying us some time to deal with climate change, a global slow-down would ease the pressure on inflation, ease the housing affordability crisis, and give us time to ease the skills deficit. In the long run, we would not be missing out on any opportunities in the resources sector. One of the advantages of relying on non-renewable resources is that anything we leave in the ground today, we are bequeathing to the next generation.
But that is not the way conventional wisdom sees it. The view is that Growth is unambiguously Good. The 'growth religion' pervades every aspect of today's society, from the neoclassical economist's pulpit to the faithful masses. Politicians argue over whose policies will lead to the most growth, like different denominations bickering over whose doctrine is the most holy. Economists who challenge this dogma - such as ecological economists - are cast aside as heretics.
The main problem with growthism is that it denies the physical dimensions of the economy. This abstract, ephemeral thing we call an economy actually, at some level, represents real stuff - real minerals that we dig out of the ground to make real buildings, real corn that we package into real aluminium cans, real oil that we pump, refine and burn in real cars.
Real things originally come from nature, and nature has limits on the things it can provide for us, and the rate at which it can adsorb our waste. We have known about these physical limits for many years, but have largely hoped that if we ignore them, they will go away. The science of economics studies the circular flow of money but ignores the flow of real stuff from and into our environment. As the economist Herman Daly points out, this is equivalent to a biologist studying an animal's circulatory system but ignoring the digestive tract.
Economists hope to ignore these limits through the magic of price signals and resource substitution. Adam Smith's ageing but ever-present "invisible hand" is still providing for us, through that most wondrous of institutions: the market. Whatever we are running out of, it will provide a substitute. Running out of tuna? Use salmon. Running out of pine? Use redwood. Running out of the atmosphere's ability to adsorb carbon dioxide without leading to catastrophic climate change? Just use ... oh wait, there's no substitute for that.
In fact there are many things for which markets alone cannot provide an adequate substitute: sources of fresh water, fish stocks, rainforests, soil nutrients, and perhaps even the lifeblood of modern civilisation: oil (to name just a few). Markets are good at economic efficiency but poor at resource efficiency.
Part of the problem with growth is actually one of semantics. What do we mean when we say growth? The technical definition is usually an increase in GDP, but by itself, this may not be a good thing. As ecological economists would point out, growth in GDP could mean growth in welfare, or it could mean growth in resource and energy consumption. While it seems reasonable to hope for continuous improvements in our welfare, we cannot have continual growth in consumption and waste without reaching limits.
If we want to improve our human condition without reaching environmental limits, such as catastrophic climate change, we have to find a way to decouple these two concepts. In fact, we already know how to do this, by radically improving our resource efficiency and increasing our use of renewable resources. But we can't simply replace the physical components of our economy overnight - it will take innovation, political will, and time.
Senator Penny Wong's assurance yesterday that the Government would not rely soley on the Garnaut report to shape climate change policy, but would also "be looking at other inputs such as modelling from the Australian Treasury", shows that growthism as a political doctrine is not about to end any time soon.
Delicious
Digg
StumbleUpon
Reddit
Newsvine
Facebook
Kwoff
Discuss this article
To participate in the discussion Sign in or Register
It says much about the human specie that we can applaud a potential economic slowdown because it will help us to control the emission of greenhouse gases.
It suggests that there is little real drive to correct our destructive economic profligacy, a ‘she’ll be right, mate’ attitude. Well, it won’t!
How come humans are so dumb?
www.dangerouscreation.com
The Rudd Government is new in name only. The Growth is Good doctrine of Economic irRationalists, like Greed is Good, has still a long time to run in this poor misguided and dying world. Fancy going, as Penny Wong is doing, to the Howard Government Treasury, unchanged, for advice on the future. Give me air!
I agree, a recession in Australia, unlikely as it seems, would be a good thing. It would certainly take the heat out of the inflation bubble, and may give back some balance to the incomes inequities. This has to be done somehow, or we are on the path to bloody insurrection in Australia.
I, as a Pensioner, find that I am being required to pay Millionaire Rates for just about everything, including food, on an ‘income’ that has hardly risen for 12 years. Unless something is done against Always Growth and Increasing Consumerism, there will be a lot more than 100 thousand people sleeping rough in the streets at night in Australia, and robbing the waste bins of the rich and gluttonous for food.
12 years of Howard taking us down the US road is now showing just how horrendous it is over there. No wonder their society is breaking down on a daily basis. Ours will soon follow, or may be there already. Dazza.
Hey, Dazza, loved your words, "misguided and dying world."
Capitalism (Consumerism) is a cruel master. It rewards the cunning and the unscrupulous, the bullies and carpetbaggers. It disadvantages most people and encourages the worst in us!
The Grey-haired Brigade must again regain their place as the tribal elders, must stop the nonsense and glitz that the young have put in place. Or we are lost!
www.dangerouscreation.com
Brett there are far better options than just destroying the world more slowly, and keeping the poor in poverty in the process. See my article "Quick reduction …" under my bio for a slightly older (and wordy) version, but you’ll get the idea. It comes down to doing more with less, in other words being much more efficient. The links in my recent article give plenty of substantiation.
And now you’ve triggered Akshay Shanker to run the mainstream line that we need more and more of more. It’s a sterile debate on a false dichotomy.
btw I saw your comment on my article, and yes I’ll be putting a submission in.
Geoff Davies
A good article. Clive Hamilton’s 2003 book "Growth Fetish" also covered this issue comprehensively. Some words from his introduction are telling: ‘Growth not only fails to make people contented; it destroys many of the things that do’. VM
As I have pointed out elsewhere there are good grounds for inferring that the IPCC (2007) estimate of ‘climate sensitivity to CO2 i.e. the projected rise in temperature from a doubling of atmospheric CO2 concentration (= T(2x)) is 2.0 - 4.5 degrees is an over-estimate, for example:
‘We have shown that the ice core data from the warm period (around 42 KYBP) to the Last Glacial Maximum (LGM) and from the LGM to Holocene transition can be used to constrain the dust aerosol radiative forcing during these transitions. We find the dust radiative forcing to be 3.3 ± 0.8 W/m2. Assuming that the climate sensitivity is the same for both transitions, we obtain [the climate sensitivity] = 0.49 ± 0.07 K/Wm_2. This suggests 95% likelihood of warming between 1.3 and 2.3 K due to doubling of atmospheric concentration of CO2 (assuming that the CO2 doubling produces the radiative forcing of 3.7 W/m2 according to the IPCC 2007 report). The ECHAM5 model simulation suggests that during the LGM the global average aerosol optical depth might have been almost twice the current value.
Such results are compatible with a climate sensitivity around or below 2 K for doubling of CO2 were also recently deduced using cloud resolving models incorporated within GCMs [Miura et al., 2005; Wyant et al., 2006], from observational data [Chylek et al., 2007; Schwartz, 2007], and from a set of GCM simulations constrained by the ERBE (Earth Radiation Budget Experiment) observations [Forster and Gregory, 2006].
All these results together with our work presented in this paper support the lower end of the climate sensitivity range of 2 to 4.5 K suggested by the IPCC 2007 report [Solomon et al., 2007].’
Chylek, P., and U. Lohmann, 2008. Aerosol radiative forcing and climate sensitivity deduced from the Last Glacial Maximum to Holocene transition. Geophysical Research Letters, 35, L04804, doi:10.1029/2007GL032759.
It is interesting to note that in all the hysteria about AGW, there has been so little real discussion of the ‘ecoengineering’ implications of the generally acknowledged finding from GCMs etc that, over long periods negative forcing (cooling) due to the radiative effects of tropospheric aerosols has been so close to, and only slightly less than, the 3.7 W/m2 radiative forcing due to CO2 according to IPCC, 2007.
To me this means that the solution to the AGW problem, to the extent it might become more urgent (and we still have plenty of time to determine this so let us all calm down a bit ;-) simply involves the injection of environmentally benign aerosols into the atmosphere until such time as civilization can move beyond its present reliance on fossil fuels.
We already move thousands of commercial plane flights through altitudes sufficient to accomplish this each and every day. Our civilization also produce billions of tonnes of environmentally benign, highly IR reflective aerosols such as iron oxide and titanium dioxide pigments each and every day. We could also easily afford to paint every roof and highway in the world with titanium dioxide paint and not one bird would be blasted out of the sky either! Note here that titanium metal and the titanium dioxide have been proven to be the most non-toxic solids our civilization has ever encountered. This is why every internal prosthesis is generally now titanium (oxidising in situ).
Food for thought?
Geoff,
You’re right, of course, that "let’s hope for a recession" is not an effective policy response. You’re right that there are better options, one of which is encouraging higher efficiency, that we need to aggressively pursue. My central point is really that the innovations are coming too slowly and the problems are coming too quickly. I’m trying to generate a sense of urgency, same as you.
At the same time, I’m calling into question the underlying assumption that pervades mainstream economics, that growth is some kind of cure-all for all our problems. Clive Hamilton and Herman Daly are both far better advocates of this position than me. The best I can do is raise some awareness.
I have to admit that I was hoping to tease out exactly the kind of response that Akshay Shanker gave. To me, this is a key part of the debate. We have to get away from the idea that affluence will save us. The first step is to get these assumptions out in the open, so we can begin to examine them.
Before even getting into pursuing higher energy efficiency we need to actually define very carefully just what ‘efficiency’ will be when we are talking about coal and oil in a world in which the price of carbon is rising rapidly.
For Australia we need to (fairly quickly) resolve how to deal with the core linked (but separate) variables of economic benefit from the export price of coal while major cost factors are (largely imported) liquid transportation fuels and the ‘at boiler’ cost of thermal coal.
This issue is critical when we start talking about efficiency if only because we are assuredly not going to change our modes of electricity base load generation or transportation overnight. Furthermore, until we can resolve (in an economic managerial sense) how we in Australia will cope with the all-powerful link between oil and coal we won’t be able to invest effectively in carbon capture and storage technology be it geo- or bio-sequestration technology.
While the price of carbon is rising, which is what governments wanted in the fight against global warming, now it is here no one has a coherent plan to manage it.
Energy prices worldwide have risen sharply recently, driving up domestic gas and electricity prices, an effect governments had said would help promote increased energy efficiency and therefore reduce emissions of climate warming carbon gases.
But demand has barely twitched, fuel poverty has mushroomed and instead of carbon emissions falling, they are all set to boom as coal becomes everyone’s favorite fuel once more.
The paradox is that what looks like an increase in energy prices is in fact feeding through to an increase in carbon emissions rather than a reduction.
The oil price is of course not a genuine carbon tax. Far from cutting demand for carbon, the high energy prices have prompted a rush for coal — the dirtiest fuel.
While known reserves of oil are expected to last only to around mid-century, and gas is in relatively plentiful but still finite supply, coal reserves are estimated to last for several centuries more.
There are big increases in the coal burn in China, India and the United States where even tar sands have started to look attractive to investors again.
Even in Europe, which has set itself the target of getting 20 percent of its energy from renewable like wind, waves, solar and biomass by 2020, utility operators are starting to talk about building new coal power stations.
Fact is, around the world the rising price of oil is driving economies towards coal.
Britain last month gave the go-ahead to a new coal-fired power station, the first to be built in the country in quarter of a century.
After strong lobbying by the operator, the plant will be built without carbon capture and storage technology — one of the main but expensive and largely untried techniques of preventing carbon from power plants entering the atmosphere.
The contradiction is that governments are trying to drive down the price of electricity to maintain competitiveness at the same time they are trying to solve climate change by driving up the price of carbon.
There are a lot of unintended consequences. What happened when the price of oil went up from $40 to $100 a barrel was not a drive to cut consumption, but a massive drive to make megabucks from coal to liquids, biofuels and tar sands.
Refer:
http://uk.reuters.com/article/oilRpt/idUKL2648352120080226
This milieu is the main reason why I believe Australia should be going all out for low technology algae-based biosequestion of thermal power station emissions (a subject I have previously written about for new matilda) because diversion of algae for biofuel allows an economically price linkage mechanism (between ‘oil’ and ‘coal’) which would facilitate the drive towards energy efficiency.
IMHO Garnaut didn’t address this key issue properly at all.
Is the p-word banned from articles and comments by New Matilda contributers and subscribers. Surely it is easier to persuade women (and men) to have only 2-3 children (and thereby be healthier and richer) than to persuade everyone to lower their standard of living, especially those in developing nations who just want to have a better life.
Reducing population is a solution to the physical problem of economic growth and allows time for technology to take effect.