You’ve heard the term “ocean acidification,” and I know what you’ve been thinking: “It can’t be as bad as they say. I remember the ’90s. I made it to a few Phish shows. I’ve seen what goes on in the parking lots, and there’s nothing wrong with a little ‘acidification.’ So the Ocean drops out of Brown for a semester and stares at its belly button. The Ocean’s belly button has the Great Barrier Reef in it. The Ocean will enjoy that.”

But there is a lot more at stake than the Ocean dropping out of school to make burritos and follow a jam band. Ocean acidification is known as “climate change’s evil twin,” and considering what a swell fella climate change is, this should give you an idea of just how dangerous ocean acidification may be.

Wesley AllsbrookClick to embiggen.

And the twin metaphor is an apt one: Climate change and acidification work together and both have the same anthropogenic mamma: carbon dioxide.

Here’s how it works: Since the beginning of the industrial revolution, we’ve been cranking out carbon dioxide, or CO2, at an ungodly rate, and as the atmosphere floods with the stuff, the oceans naturally strive to soak some of it up. The process, called air-sea gas exchange, is affected by temperature, wind, waves, weather, and plants and animals in the ocean, but basically when you have a buildup of CO2, or any other gas, in the atmosphere, it will seep into the water below until the water reaches chemical equilibrium with the air.

The oceans absorb over a quarter of the CO2 we produce — about 22 million tons of CO2 a day [PDF]. Estimates put the damage so far at 530 billion tons of human-produced CO2 sucked into the seas since the dawn of the industrial revolution. Of course, I already know what you’re going to say. “Awesome!” says you. “That’s a quarter of my CO2 I don’t even have to worry about! I’ll take the long way home from Stucky’s.”

Well not so fast, Charlie! Just ’cause it’s out of sight, doesn’t mean it should be out of mind. Over the last 200 years, human pollution has caused the oceans’ pH to drop 100 times faster than it did in the previous 650,000 years. To give you an idea what the oceans are going through, try to imagine taking in the entire six seasons of The Wire in 32.4 seconds. You’d have 11 strokes. And that’s just the tip of the iceberg (a cliché that will baffle your grandkids). If CO2 emissions continue on their current trajectory, we could see a further drop in pH four times worse than what we’ve seen so far by the end of the century. If projections hold, we’re headed toward an ocean unlike any seen for 25 million years!

What does it all mean? When CO2 mixes with seawater, it creates carbonic acid, and, spoiler alert, increasing acid in the oceans makes the oceans more acidic. The fossil record shows that even a slight change in the ocean’s acidity can cause massive die-offs. When CO2 builds up in an organism it causes a condition know as acidosis. Acidosis hurts the immune systems of fish and other marine organisms, causing stunted growth, reproductive failure, respiratory problems, and even death [PDF]. Throw these massive problems on top of ecosystems already stretched to the breaking point by overfishing, and the effects on not only biodiversity, but the world’s food supplies, could be calamitous: The oceans are the primary food source for 3.5 billion people.

And that’s not all. Corals and shellfish use an ion in the water called carbonate to build their shells and skeletons. As a result of ocean acidification, half of the oceans’ useable carbonate could be gone by the end of the century. Sure, we could make billions of tiny barrels and sink them into the briny deep along with tiny suspenders so the lobsters won’t have to go nude, but that’s a stopgap at best. And what about the oysters, snails, mussels, and shrimp — animals that would look ridiculous in tiny barrels? Their shells are thinner and more brittle, they’re not growing as big, or they’re not growing at all. Some corals are incapable of building their skeletons, and reefs are crumbling. By 2050, we may reach a tipping point where reefs can’t keep up with the rate of loss.

While some climate change models predict some fisheries will be winners in our warmer future, ocean acidification could turn that notion upside down. When you add ocean acidification to climate change models, a projected 30 percent growth in North Atlantic fisheries productivity turns into a 15 percent decline. Predictions for other areas, like the tropics, go from bleak to horrifying.

And this is where it all comes back to you. As climate change turns fertile land into arid wastes and rising tides cost us even more, ocean ecosystems will be an increasingly important part of our global food bank. The good news is, actions that would reduce greenhouse gas emissions will pay dividends with ocean acidification as well. The problem is, we haven’t exactly been making great strides there, and damage that has already been done will continue to affect the rising acidity in the oceans: The sea’s absorption of CO2 is a long, slow process, and the oceans will continue to soak up what we’ve already dumped into the air until an estimated 80 percent of all human-produced CO2 is locked up in the great blue.

We dump so much into the ocean — stupid love letters stuffed in bottles, Corona-thinned pee, and most cruelly of all, secondhand Jimmy Buffet — and the ocean takes it. (I think the ocean is a bit of a hippie. That’s why it doesn’t have a real job, spends so much time at the beach, and keeps taking my frisbees.) But the billions of tons of CO2 we choke it with may finally be too much. If you can’t see that, you’re tripping on the brown acid.

Filed under: Climate & Energy

via Grist http://grist.org/basics/bad-acid-trip-a-beach-bums-guide-to-ocean-acidification/

Wouldn’t it be great if generating solar energy at home was:

• A Do-it-Yourself project you could build using the tools in your garage
• Built with inexpensive, commonly available materials
• Modular like a LEGO block that you can snap in to lots of different places where you need it

It can be.

Here’s an example.  It’s called the Solar Flower.  It’s an open source hardware project that was built by Daniel Connell while in Spain.

What is the Solar Flower?  It’s a system that makes it easy to turn sunlight into heat.

Here’s what it looks like.

As you can see in the picture above, sunlight is captured by a U-shaped reflective surface (technically, a parabolic trough).    This reflected sunlight is then focused onto a black copper tube that runs along the length of the system.

Naturally, this makes the copper tube very hot, which in turn heats whatever liquid you want to run through it.

Of course, the Solar Flower only really works if it is facing the sun.

To do that, Daniel built an ingenious (which is often best measured by how simple the solution offered is) passive solar tracking system.  This system doesn’t use electric motors or sensors to track the sun.

To accomplish this, Daniel built a small solar oven that he filled with ethanol (it expands when heated).   Experiments showed that the sun would heat the ethanol enough to turn some gears that would rotate the main reflective surface.  So, Daniel placed the solar oven in a place where it would only “see” the sun just as it was just passing by the optimal angle for the main surface (angled slightly to the “west” of the angle the Flower was pointing).

That plus some simple modifications makes the Solar Flower a solar energy system that you can install and forget.   To make one of your own, Daniel has put together some excellent tutorials.

What do you Do with a Solar Flower?

Anything that involves heating fluids up.  That includes:

• Heating hot water for your home.
• Heating small spaces like a greenhouse.
• Generating electricity from steam.
• Purifying water.
• Smokeless cooking.
• Making biochar.

Basically, lots of great DiY and easy to assemble project modules that you can plug into it.

I’ll connect you with those modules as we press forward into resilience, abundance, and a better future.  Stay tuned.

 

Resiliently Yours,

 

JOHN ROBB

 

PS:  Tomorrow, I’m off to Maine, to attend a little conference called Poptech.   The focus of this year’s conference is resilience, which is (of course) why I was asked to attend it.   It should be fun and I’ll definitely learn quite a bit.  While there, I’ll be on the lookout for the people who are important to our future — I’ll introduce you to them and write-up what they are working on in the second Resilient Strategies letter (the first one should be out soon).

PPS:  Here’s something to remember.  Resilience isn’t achieved by disconnecting yourself from the world.  It’s accomplished by reducing your dependencies, increasing your production, and connecting to the world on your own terms.

 

via Resilient Communities http://www.resilientcommunities.com/diy-solar-energy-without-expensive-panels/

Shutterstock

Climate change is a serious security risk to the United States — the Department of Defense, the Joint Chiefs of Staff, and the White House have affirmed as much in various reports and proclamations. It’s become a popular talking pointamong climate hawks. Nonetheless, there hasn’t been enough thinking, at least outside nerd circles, about what it would it mean to approach climate change as a security problem. What exactly would that look like?

Typically, economists and policymakers have viewed climate change through the lens of cost-benefit analysis, where the goal is efficiency, the right balance between pollution reduction and economic growth. The idea is to determine the cost that a ton of carbon imposes on society and price that cost into markets. Voilà: the optimal solution.

Unfortunately, climate change is subject to a degree of uncertainty that renders any such attempt at optimization arbitrary and brittle. Decisionmaking under deep uncertainty calls for an emphasis on robustness and resilience — plans that can hold up reasonably well under a wide variety of possible outcomes.

It’s important to realize, however, that climate change is not unique in this regard. We make decisions in the face of deep uncertainty all the time: in finance, in resource management, in infrastructure planning. In particular, national security decisions are often made on the basis of incomplete, unreliable, or shifting information. If you think planning for climate change is bad, try making decisions today based on China’s military posture in 2050. Now that’s uncertain! Nuclear proliferation, terrorism, disease epidemics … they all require taking action in a fog.

Obviously, many national security decisions have turned out to be awful. Nonetheless, over time, there has been a great deal of learning about how to operate under uncertainty. The approach used in national security circles falls under the rubric of risk management. How would it look applied to climate change? That, as it happens, is the subject of a fantastic report from green think tank E3G: “Degrees of Risk: Defining a Risk Management Framework for Climate Security.” It came out in early 2011, but somehow I missed it at the time (thanks to ace energy blogger Adam Siegel for bringing it to my attention). I shall attempt to convey the gist of it, but I highly recommend reading at least the short executive summary [PDF].

First, what is risk? In this framework, it means probability times severity. In other words, the risk of X is the probability of X happening multiplied by the severity of X should it occur. It follows that risk can be meliorated in two ways: reducing probability and reducing severity.

Humans have an unfortunate tendency to dismiss risks when they are uncertain — to confuse uncertain risk with low risk — which turns out to be an exceedingly poor strategy, especially in relation to long-term risks. In fact, greater uncertainty can mean greater risk. One of the authors of the report, Jay Gulledge, illustrates this point with a graph in a separate presentation [PDF]:

Click to embiggen.

So this is a basic risk matrix: on the vertical axis you have probability, on the horizontal axis, severity. The two lines are risk assessments. As you can see, the black line is narrowly centered around a particular severity, while the red line sprawls across a wide range of severities — in other words, there’s more uncertainty about the red scenario. Nonetheless, even though the red scenario is not as probable as the black scenario, it has long risk “tails,” including the one on the right that contains extremely severe outcomes. It contains more risk.

When it comes to risk management, uncertainty is not reason to delay planning, it is information that informs planning.

So, why should we prefer the risk management approach? Pardon me a long excerpt from the report:

Risk management is a practical process that provides a basis for decision makers to compare different policy choices. It considers the likely human and financial costs and benefits of investing in prevention, adaptation and contingency planning responses. Some risks it is not cost effective to try and reduce, just as there are some potential impacts to which we cannot feasibly adapt to while retaining current levels of development and security.

Risk management approaches do not claim to provide absolute answers but depend on the values, interests and perceptions of specific decision makers. Risk management is as much about who manages a risk as it is about the scientific measurement of a risk itself. The Maldives will have a different risk management strategy to Russia; Indian farmers will see the balance of climate risks differently from the Indian steel industry.

This is crucial: the point is not to find the “right” or optimal policy, but to provide a framework that allows comparisons between policies, a framework that incorporates both science and the “values, interests and perceptions” of local decisionmakers. The framework won’t settle the disputes, it will simply clarify them:

Legitimate differences in risk management strategies will form much of the ongoing substance of climate change politics. All societies continually run public debates on similar existential issues: the balance of nuclear deterrence vs. disarmament, civil liberties vs. anti-terrorism legislation, international intervention vs. isolationism. Decisions are constantly made even when significant differences remain over the right balance of action. Political leadership has always been a pre-requisite in the pursuit of national security. We should expect the politics of climate change to follow similar patterns.

Implementing an explicit risk management approach is not a panacea that can eliminate the politics of climate change, either within or between countries. However, it does provide a way to frame these debates around a careful consideration of all the available information, and in a way that helps create greater understanding between different actors.

With that broad-brush introduction, let’s take a quick look at how it would apply to climate change.

Getting back to our definition of risk: the risk of dangerous climate change equals the probability that it will occur multiplied by the severity of its social and economic impacts. Attempts to reduce the probability are known as mitigation. Attempts to make social and economic systems more resilient and thus reduce the severity of climate impacts are known as adaptation. Mitigation and adaptation are both tools to reduce risk.

One important feature of climate projections tends to be invisible from the cost-benefit point of view: the presence of “long-tail risks,” the low-probability, high-impact stuff out on the end of the probability curve. Think “temperature rises by 6 degrees, ice sheets collapse, seas rise by 20 meters, drought covers the globe, remaining humans run feral through a post-apocalyptic hellscape.”

We would really, really like to avoid that kind of thing. But if we’re just optimizing toward the average projection, we’ll take no account of those tails. Risk management calls for them to be incorporated.

I’m going to put another of Gulledge’s graphs below to illustrate a point. It may make your eyes bleed, but take a deep breath.

Click to embiggen.

The solid blue line is the range of projections for climate change without mitigation (don’t worry about the specific numbers; it’s meant to be illustrative). As you can see, over on the right, that blue line has a long tail of risks that are fairly low probability (5 percent or less) but extremely dangerous, with average temperatures of over 6 degrees, which would be apocalyptic. The dotted blue line is the same range of projections incorporating steady mitigation of around 1 percent a year (again, the specific numbers don’t matter).

The key thing to notice: Mitigation reduces the expected change — the top point of the probability curve — 0.8 degrees, but it reduces the long-tail scenarios by 1.3 degrees. In other words, the minute you start mitigating, you start disproportionately taking the worst, scariest risks off the table.

This is a crucial benefit of mitigation that rarely shows up in our policy debates, because it doesn’t show up in risk-benefit optimizing. But eliminating or reducing those long-tail risks ought to matter. It ought to count as “added value” in our mitigation plans.

(Side note: If we have overestimated “climate sensitivity” and temperature doesn’t rise as much in response to CO2 as we expect it to, it has precisely the same effect as mitigation — moves the curve left and chops off some long-tail risks.)

Another crucial aspect of uncertainty that gets overlooked: Even the most ambitious climate plans currently on the table offer only offer a chance of limiting global temperature rise to 2 degrees (the widely agreed threshold of safety). But if a mitigation plan offers a 50 percent chance of hitting the 2 degree target, that means there’s a 50 percent chance of going higher. So even if you’re wildly aggressive on mitigation, you can’t put all your adaptation eggs in the 2 degree basket. You have to plan for the possibility of higher temperatures.

With all that said: Here is what the authors propose as a climate change risk management framework, in handy graphic form:

Click to embiggen.

The details in the right-hand column are mostly self-explanatory, though they are explored at greater length in the report. The main takeaways are on the left side: prudent risk management suggests that we should try to hit 2 degrees, build and ruggedize as though we will hit 3-4 degrees, and develop contingency plans for the catastrophic 5-7 degree scenarios.

The important thing is not the specific numbers. It may be that science will develop (or our risk tolerance will increase or decrease) and we’ll tweak them up or down. It may be that different communities will estimate the risks differently. The important thing is the framework itself, which creates a common space for divergent worldviews and perspectives. This isn’t another clash of “believers vs. skeptics.” It’s about how much risk you’re willing to take on and what risks are worth hedging against. The framework won’t end political debates — there’s no “science says to do XYZ” here — but it will allow us to clarify where, and over what, we genuinely differ.

Filed under: Article, Climate & Energy

via Grist http://grist.org/climate-energy/what-would-it-mean-to-treat-climate-change-like-a-security-threat/

Ron GautreauAquaculture projects in Long Island Sound, like the one run by the author (pictured above), are growing seaweed, mussels, and scallops stacked above oysters and clams.

They’re back: Blue mussels and menhaden have returned to Long Island Sound this year in huge numbers. On this 40th anniversary of the Clean Water Act, many of us are celebrating their homecoming as a sign of the progress made reviving the sound. More needs to be done, but this welcome news of cleaner waters opens the opportunity to begin farming the urban sea.

Aquaculture has rightly earned a reputation for growing low-quality seafood at the expense of the environment, but a new form of ocean-friendly farming has emerged right outside of New York City. These small-scale vertical farms — some of the first in the country — are designed to grow multiple species of seaweed and shellfish, have small footprints, and provide an array of environmental benefits. Picture them as three-dimensional gardens, where seaweed, mussels, and scallops grow at the top of the water column, stacked above oysters and clams below. (Full disclosure: One of the authors of this article runs such a farm. There are also several others currently in
the permitting process.)

Eating local seaweed may seem exotic, but it’s coming to a plate near you. While shellfish have seen turns as both delicacies and a staple food source in our region for hundreds of years, the seaweed that grows alongside them is less familiar. It shouldn’t be, though: A native seaweed like Nori contains more vitamin C than orange juice, more calcium than milk, and more protein than soybeans. And it might surprise those of us on the hunt for omega-3s to learn that many fish do not create these heart-healthy nutrients — they consume them. By eating the plants fish eat, we get the same benefits. Already restaurants such as Beyond Sushi in Manhattan have crafted entire menus around these sea vegetables, and a bevy of gourmet chefs are working on recipes to make locavores swoon.

The best news is that these farms do more than grow food: In every sense, they restore rather than deplete. Matched up against land-based farming, these new ocean farms win every time. Seaweed and shellfish require no inputs — no land, no fertilizer, no fresh water — and since they grow three-dimensionally, they use space more efficiently than their land-based counterparts.

Shellfish and seaweed also act as filters, drawing out nitrogen and heavy metals — the primary objective of the Clean Water Act. While an important nutrient for humans, excess nitrogen from residential and agricultural runoff into the sound regularly triggers large-scale algae blooms that deplete oxygen levels, killing marine life and forcing beach closures. With a single oyster filtering up to 50 gallons of water a day, even small farms can have measurable impacts on water quality. Farms in waters polluted by heavy metals are cultivating shellfish and seaweed not for food production, but for the continued rehabilitation of the sound. One local initiative, spearheaded by the Bronx-based nonprofit Rocking the Boat and Charles Yarish of the University of Connecticut, grows kelp and mussels in the Bronx River to filter out mercury and other pollutants. Other local projects are even building oyster reefs to protect New York from storm surges and flooding.

Still not convinced? Local ocean farms are also emerging as a viable source for alternative energy. As the fastest-growing plant in the world, kelp is capable of producing over 2,000 gallons of biofuel per acre annually — five times more than the ethanol produced by corn and up to 30 times more per acre than soybeans. With companies like RPM Sustainable Technologies already working with Long Island Sound farmers to source kelp for their biofuel operations, the promise of growing alternative energy in local waters is on its way to becoming a reality.

Ocean farms open both new and old pathways for economic development. A decentralized system of small-scale operations could revitalize life along the shoreline, first by creating new green jobs on farms and in the biofuel industry and then, as the sea recovers, perhaps opening up old fisheries and bringing back traditional means of making a living. In April, the New Amsterdam Market staged a one-day outdoor fish market at the old Fulton Docks in lower Manhattan, demonstrating that the neighborhood has the potential to be home to local seafood, not just financial markets.

The urban sea promises to be one of New York’s great comeback stories. After 40 years of slow but steady progress under the Clean Water Act, it is time to deputize a new generation of ocean farmers to protect our sound and grow the green economy.

Filed under: Article, Food

via Grist http://grist.org/food/farming-the-urban-sea/

Planting at OAEC as part of food forest workshop
One of the basic ideas of permaculture is that its principles remain the same though they are reflected uniquely in every site. Recently I’ve done plantings at two different food forestry courses that demonstrate this quite nicely.

The first course was at Woodbine Ecology Center in [...]

via Permaculture Courses, Information, Forums, News http://permaculturenews.org/2012/09/28/the-all-native-ethnobotanical-rainwater-harvesting-food-forest/

How much is it worth to us today to avoid climate disruption later this century? To understand how that question has typically been answered, you need to understand what economists call “discount rates,” key parameters in the economic models used to assess climate policy costs. Such models inform policymaking and shape conventional wisdom, but their use of discount rates has led them to lowball the threat and recommend insufficient action to meet it.

YAAAwwwnnn. “Hm? Parameterzzz…”

You see my problem here: You’re already bored as sh*t. And the literature on this is as voluminous as it is technical. You could be much more bored. Trust me.

But don’t give up! It really does matter. Understanding discount rates will help you understand the climate-policy landscape — not only the technical details, but the struggle over values that lurks underneath them.

So stick with me. To help counter the soporific effects of the subject, I shall endeavor to explain it in a lively, accessible fashion. Failing that, I’ll use otters.

“Yes? We’re listening.”

OK! Let’s recall a vexing fact about climate change: There’s a substantial time lag between causes and effects. Greenhouse gases emitted today affect global temperatures in 50 years or so, just as we’re experiencing temperature rise caused by emissions 50 years ago. This time lag complicates efforts to do something about the problem, to say the least, as people are not generally temperamentally inclined to sacrifice now to gain benefits (or to avoid costs) 50 years down the road. We prefer instant gratification; we’re pretty myopic.

The policy challenge, then, is to pull those damages out of the future and into the present. We need to amplify that distant signal so that it is heard in everyday economic decision-making.

The preferred way to achieve this goal is to put a price on carbon, via a tax or a cap. The carbon price is meant to reflect the damages emissions will cause later, or, in dork-speak, to “internalize the externalities.”

To do this properly — to figure out the “right” price for a ton of CO2 emissions — we have to answer two questions. One, how much damage will a ton of carbon do? And two, how much is it worth to us to avoid that amount of damage?

Climate science can help answer the first question, though it can’t, and likely never will be able to, give us a precise figure. Especially at regional or more granular levels, precision is impossible given the limitations of current science and the inherent complexities of the global atmospheric system. But if we want a figure or range of figures to work with, we can choose from the center of the probability distribution and get something that’s “good enough for government work,” as they say.

The second question is trickier. The physical sciences cannot answer it. How much future climate mitigation is worth to us today — what’s called the social cost of carbon — is a matter for economics and ethics. And it’s here that discount rates enter the picture. We must prepare ourselves with an otter.

“This is a chewy topic!”

To get our heads around discount rates, let’s first focus on how they work in individual decision-making. There are two concepts to grasp here: revealed time preferences and opportunity costs. (Hey, I just gave you an otter.)

Here’s a thought experiment. Say I gave you a choice: I’ll give you $100 today or $100 in 10 years. You’d choose today, obviously. What if the choice was $70 today or $100 in 10 years? Hm … tougher. $50 today? If you choose $50, you’re saying that dollars today are worth twice what dollars in 10 years are worth.

The degree to which you prefer present benefits (money today) over future benefits (money in the future) is known as your “revealed time preference.” It is “revealed” in that it is reflected in your savings and investment decisions, even if it is never articulated.

Now, here’s another scenario. What would you pay today to avoid $100 in damage to your car a year from now? In making this decision, you would think about what else you could do with the money in the meantime. “Hm, I could put $100 in a bank account and, at a 3 percent interest rate, in a year I’d have $103. I could pay off the repair bill and pocket $3 in profit!” In a situation of 3 percent interest rates, it’s only worth $97 to you today to avoid $100 in damage a year from now. Otherwise you could make more by investing the money differently. What if the $100 in damage was in 10 years? Then it would only be worth $67. How about 30 years? Just $41.

How much an investment pays relative to other uses of the same resources is known as its “opportunity cost.”

Revealed time preference and opportunity cost are conceptually distinct, but they both point in the same direction: You value present costs and benefits more than future costs and benefits. Think of it like compound interest, only run in reverse; to an investor today, returns lose some percentage of their “net present value” each year they recede into the future. That percentage is the discount rate. In financial transactions, the discount rate is typically set around prevailing market interest rates.

OK! We know what discount rates are and how they factor into savings and investment decisions. So far so good. Things get a little stickier and more complicated when it comes to climate change, though. So let’s take a quick otter break.

“Yo Vinnie, I got yer discount rate right here, am I right?”

Why are discount rates a vexed subject when it comes to climate change? Mainly because climate change involves long time spans and globe-spanning geography — and therefore multiple generations and multiple societies.

Let’s focus on the time spans. Consider: If we have a discount rate of 3 percent — which is a fairly representative rate in economics — and we face $100 of climate damages in 2100 (roughly 87 years from now), it is worth about $7 to us to avoid it. Hardly anything.

To make it more vivid, imagine climate change were on track to cause $5 trillion ($5,000,000,000,000) in damages by the end of the century. That’s an unthinkably large number. (Go ahead, try to think about it.) But at a discount rate of 3 percent, it would be worth just $382 billion to us today to avoid it. For perspective, that’s a little more than half the annual U.S. military budget.

It starts to seem a little absurd. And it gets even crazier if you apply a discount rate of 5 percent, as some people suggest (5 percent is roughly the return on U.S. Treasury bills). That would mean avoiding $5 trillion in damages in 2100 is worth about $72 billion today. By comparison, that’s just over what China expects to invest in high-speed rail this year.

So you see: If we use discount rates in the 3-5 percent range, we can’t justify spending much of anything on climate policy today. And that’s what some popular modeling shows. Yale economist William Nordhaus, for instance, uses a discount rate of 3 percent, so his modeling tells us that all we need at the moment is a modest (around $5/ton) carbon tax. (Or, put another way, the social cost of carbon is $5 in today’s dollars.) [UPDATE: OK, this is slightly off. Nordhaus's optimal CO2 price was $7.40 a ton in 2005, meant to rise 2 or 3 percent a year, so it would be around $9 or $10 today. Still pretty low.]

If that doesn’t jibe with your moral intuitions, you’re not alone. U.K. economist Nicholas Stern, in his famed Stern Review, used largely the same scientific data as Nordhaus, but with a discount rate of just 0.1 percent. [UPDATE: Johnson emails to inform me that Stern used 0.1 percent for time preference but 1.4 percent for the full discount rate.] Not surprisingly, Stern’s modeling suggests that the price of a ton of CO2 is closer to $85 a ton and rising.

Again, these two, the “delayer” and the “alarmist,” do not disagree on the scientific facts, they just disagree about how much we should value economic impacts on future people. That’s the difference between apathy and panic.

What should the discount rate be in economic modeling of climate change? And how do we decide? Before we get into that heaviness, we need a little otter.

“Oy, this is starting to make my head hurt.”

So who’s right about the discount rate, Nordhaus or Stern? Suffice to say, this is a subject of vigorous dispute. If you want to dig in, you have many long and excruciatingly boring journal articles to choose from. I will merely scratch the surface here. Long story short: There’s no “right” answer, only a judgment call.

Those who argue for a higher discount rate (in the 3-5 percent range), like Nordhaus himself [PDF], favor what they see as a descriptive rather than prescriptive approach. Ours is not to ask what the discount rate “should” be, ours is but to determine people’s actual time preferences as revealed in their everyday market behavior (i.e., look to prevailing market interest rates). It’s the only way to avoid “paternalism,” smuggling moral judgments into economics.

One of their primary assumptions is that people in the future will be richer than us, and thus better prepared to deal with climate damages. If it’s a choice between making them richer and reducing their climate damages, we should generally lean toward making them richer. Only if climate mitigation investments offer a rate of return higher than prevailing interest rates are they worthwhile. Otherwise, we’d be better off just putting the money in a bank.

“Don’t discount us!”

For my part, I find arguments for a lower (or even zero) discount rate much more persuasive. This does not strike me as an area where “paternalism” can or should be avoided. We’re literally the parents (and grandparents) in this situation!

First, let’s discuss this notion that people’s revealed time preferences are a kind of neutral baseline discount rate, devoid of ethical judgment. I like this point from professor Paul Kelleher, who wrote a short review on “energy policy and the social discount rate” [PDF]. He’s responding here to Martin Weitzman, who argues that the social discount rate should reflect prevailing interest rates (i.e, prevailing time preferences):

Weitzman is surely correct that prevailing interest rates reveal ethically relevant information. But it is information about how individuals, acting as individuals and largely in their own interests, weight present versus future well-being. However, the social discount rate should reflect explicitly moral, other-regarding judgments about the relative importance of well-being that exists far into the future. It is by no means clear that individuals’ self-regarding behavior yields any insight whatsoever about what even those same individuals believe we owe to future generations.

Right. It’s one thing for an investor to make decisions about how much future value she will sacrifice for present value. It’s another for her to make decisions about how much value future people will sacrifice for her present value. Those are decisions that affect other people, paradigmatically ethical decisions, so it is no longer her discount rate alone that’s relevant. There’s no avoiding ethical judgment here.

More arguments against high discount rates can be found in this post from NRDC chief economist Laurie Johnson (to whom we will return later). I’ll share her top-line points:

An increasingly disrupted climate may hamper economic productivity, causing economic growth rates to deviate below their historical trajectories. If worse-case climate risks materialize, climate change could even reverse economic growth. In that instance, people in the future would be poorer than people today, not wealthier.

This is the big one for me. Recent science is pointing more and more strongly to the danger of 4, 5, even 6 degree Celsius temperature rise by 2100, while at least some climate scientists are warning that “economic growth cannot be reconciled with the breadth and rate of impacts as the temperature rises towards 4°C and beyond.” Avoiding impacts that scientists characterize as dangerous and irreversible will require heroic effort.

Are we really so sure economic growth will continue as it has during our age of energy (and carbon) abundance? It’s always seemed to me that economists have near-religious faith in economic growth; models show everyone getting richer because models reflect that faith. But in an age of climate disruption, amidst “long tail” risks of truly catastrophic, even species-threatening damages, it seems insanely risky to try to dial the economic knobs to maximize returns. Surely a more precautionary approach, akin to purchasing insurance, is appropriate.

More from Johnson:

Private investors (and hence market returns) do not take into account pollution externalities resulting from production, such as the depreciation of natural capital (e.g., loss of natural habitats to development and pollution) and public health damages, or other potentially negative social impacts related to economic production, such as inequality. They therefore tend to overestimate the impact growth has on real social welfare.

Yes. Private investment decisions are made entirely within market rules, but some market rules may be maladapted to social welfare, especially future social welfare. (“You can emit carbon for free,” for instance, seems like a rather imprudent rule.) Market growth in these circumstances only exacerbates maladaption. Social and ethical decisions must encompass a broader perspective than markets can provide.

Even if income grows under a changing climate, it is unlikely that the people most harmed by climate change will be the recipients of that growth.

The more provocative way to put this point is that global economic growth is entirely consistent with the loss of the entire African continent to drought and disease. After all, Africa doesn’t contribute much to global GDP.

This gets back to climate change’s global reach. When Americans say “future generations” will benefit from our money more than our mitigation, we should be clear that we’re talking about future generations of us, the people with the wealth necessary to weather climate disruption. Future generations of the poor and vulnerable will suffer far more than they otherwise would have. We will be displacing suffering temporally and geographically. Call it the “geographical discount rate.”

And finally, there’s this old chestnut:

Money isn’t everything.

True!

Say you could ask the people of 2100 (some of whom may be your children or grandchildren), “would you rather inherit $1 trillion in cash or $1 trillion worth of avoided drought, storm, and famine?” Which do you think they would choose? They will have lost biodiversity, up to half the species on the planet, that will never return. They will have lost millions of acres of old-growth and tropical forest, most of the world’s coral reefs, and the bulk of world’s annual sea ice. Those things will never return, not in time spans relevant to our species. The natural world that has provided us sustenance since we were primates can not be restored once it’s gone.

There’s more to the biosphere than the “services” it provides humans. Some damages cannot be captured in dollar terms.

Anyway, them’s the arguments for a low-or-zero discount rate. Or at least some of the arguments. Sounds like time for an otter.

“Your post has gotten this long.”

Say we’re convinced by these arguments and adopt a low discount rate, a social cost of carbon that reflects that low discount rate, and a price on carbon that reflects our new social cost of carbon. What are the consequences?

Well, for one thing, renewable power immediately becomes cheaper than fossil-fuel power, including natural gas.

That’s the sexy conclusion. Let’s run through the argument, which is in two parts.

First is a new paper out in the Journal of Environmental Studies and Sciences, by the aforementioned Laurie Johnson and her colleague Chris Hope of Cambridge. In it, they argue that the U.S. government has substantially underestimated the social cost of carbon, which threatens to distort future regulatory and legislative decisions.

“Say whaaa?” you ask. “The U.S. government has put on a price on carbon?” Why yes! Here’s the situation:

In 2010, as part of a rulemaking on efficiency standards, the U.S. government published its first estimates of the benefits of reducing CO2 emissions, referred to as the social cost of carbon (SCC). Using three climate economic models, an interagency task force concluded that regulatory impact analyses should use a central value of $21 per metric ton of CO2 for the monetized benefits of emission reductions.

The problems with the economic models the government used are twofold, say Johnson and Hope. The first, as you likely guessed, is about discount rates. The government instructed the task force to consider only three discount rates: 2.5, 3, and 5 percent. Three percent was considered the mean, or “central” value.

As we’ve seen, that might make sense for costs and benefits confined to a single generation, but across generations, a rate that high is not ethically justified. Even the government agrees: The Office of Management and Budget has official guidelines [PDF] on the use of discount rates in inter-generational cost-benefit analysis. It says they can range from 1 to 3 percent. Yet somehow 3 ended up as the task force’s “mean.”

So, Johnson and Hope modeled different (and more appropriate) discount rates: 1, 1.5, and 2 percent.

They also made another change. The task force models treat damages equally across geographic regions. They use a geographical discount rate of zero; a dollar of damage here is equal to a dollar of damage there. But fairness and decency would indicate that a dollar of damages in a poor region is worse — reduces human well-being more — than a dollar of damages in a rich region.

So Johnson and Hope added “equity weights” to regional damages, based on relative income levels.

[UPDATE: To clarify: Johnson and Hope ran the models with low discount rates, then they ran a few with equity weights separately, for illustrative purposes. The two tweaks were not combined in any model runs; if they had been, the estimates of SCC would have been even higher.]

With those changes (effectively reflecting Stern’s assumptions rather than Nordhaus’s), the authors found a social cost of carbon “2.6 to over 12 times larger” than the $21 central estimate of conventional models, which indicates that “regulatory impact analyses that use the government’s limited range of SCC estimates will significantly understate potential benefits of climate mitigation.” That matters a lot, especially at a time when EPA carbon emissions are subject to such intense political scrutiny.

The second half of the argument … comes after an otter.

“It’s almost over. Hold me.”

In a supplemental piece, Johnson compares the levelized costs of different forms of power in light of her new social cost of carbon.

Overall, the analysis shows that if the well-being of future generations is properly taken into consideration, the benefits of cleaner electricity sources are greater than their upfront costs, both for new generation, and for replacing our dirtiest plants. In contrast, using the government’s estimate of CO2 damage costs tends to favor dirtier energy sources, and an ever riskier climate. [my emphasis]

So if you take equity into account and use a low discount rate — that is, if you choose to treat future generations and vulnerable peoples with moral regard — clean energy is already cheaper than dirty energy.

That’s something I wish I could get people to understand: The “cost” of a form of energy is not an objective property of the universe, measured by a market cost-o-meter. It’s a social construct, the result of assumptions built into the way we calculate value. Those assumptions are not holy writ. They can be contested.

Along those lines, check out this response to Johnson’s work from one of the modelers involved in the government commission:

Michael Greenstone, a former chief economist for the president’s Council of Economic Advisers who helped create the $21 price tag back in 2010, said he stands by the 2010 analysis.

“I’m not overwhelmed by the opinions of two people, experts as they may be, about what the proper assumptions are, not compared to the collective effort of a dozen federal agencies and leading experts from the wide variety of disciplines that have insight into the climate change problem,” Dr. Greenstone said. “Calculating the social cost of carbon requires many, many assumptions.”

“What the authors of this study are highlighting is that as you change those assumptions, you can make the number go up or down,” he said. “There are other people that believe the discount rate should be even higher, which would lead to a substantially smaller social cost of carbon.” he said.

It’s true that there are many assumptions involved in determining a social cost of carbon. What’s also true is that many of those assumptions are based, in part, on moral judgments.

As cultures, as polities, how should we make those kind of judgments? Frank Partnoy, a professor of law and finance at the University of San Diego, makes the right point:

“Ultimately, we can’t rely on only numbers — we have to make really hard value judgments,” Dr. Partnoy said. “We should stop pretending this is a science and admit it is an art and talk about this in terms of ethics and fairness, not what we can observe in the markets.”

That, to me, is the key take-home message about discount rates: They are social and ethical disputes being waged under cover of math, as though they are nothing but technical matters to be determined by “experts.” But social and ethical judgments should be made in an open, transparent way, not buried in models as inscrutable parameters.

I mean, we’re talking about how much we value our children and grandchildren. Surely that’s a matter for democratic discussion and debate!

Now you know what discount rates are and you can participate in those debates. You deserve an otter.

“zzzmmmfff … oh, you’re done? mmkaysszzzz…”

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I’m trying this out as a system for keeping track of my planting and garden maintenance, and to be honest it’s more of a system than I ever had before. Feel free to follow along if you’re interested.

This is the garden space I have to work with:

And this is my downstairs neighbor’s little patch:

Which means I get to grow my weedy little watercress and beans and enjoy his beautiful flowers without ever having to do the work of keeping up a large ornamental garden. But I confess a little jealousy…

You say climate chaos is HOW close?!

In my previous post, I discussed some new modeling which shows that avoiding climate chaos — limiting average global temperature rise to 2 degrees, generally agreed to be the threshold of danger — is still possible, but just barely, and only with massive, immediate, coordinated global action.

Can we make the radical changes necessary to meet that challenge? No, say climate scientists Kevin Anderson and Alice Bows in a recent commentary in Nature Climate Change, not “within orthodox political and economic constraints.”

There is no political or economic constraint more orthodox than the primacy of economic growth. No solution to climate change that threatens economic growth can get any traction at all — even the most “alarmist” climate hawks fear to tread there. Which is too bad, Anderson and Bows say, because “climate change commitments are incompatible with short- to medium-term economic growth (in other words, for 10 to 20 years).” What’s worse, “work on adapting to climate change suggests that economic growth cannot be reconciled with the breadth and rate of impacts as the temperature rises towards 4 °C and beyond.” In other words: We either give up economic growth voluntarily for a little while or suffer a climate that will reverse economic growth long-term.

Yikes. I’ve cited papers by Anderson and Bows before, in my “brutal logic” series. They are extremely pessimistic about the chances of constraining temperature rise to 2 or even 3 degrees. They identify several ways that most climate modeling downplays the severity of the challenge, but their difference with, say, the U.K. group I wrote about yesterday is not so much over projections as what the projections mean in political economy terms.

The U.K. group stresses that 2 degrees is still possible. Anderson and Bows stress that, “within orthodox political and economic constraints,” hitting such a target is wildly unlikely. Absent some pretty revolutionary political and economic changes, it won’t happen. For obvious reasons, scientists shy away from saying this kind of thing in public. They don’t want to depress people or come off as “political.” However, say Anderson and Bows, “away from the microphone and despite claims of ‘green growth’, few if any scientists working on climate change would disagree with the broad thrust of this candid conclusion.”

Should scientists speak up more about this harsh reality? Anderson and Bows note that “academic training has begun to foster the ability of researchers to embed quantitative analysis within a wider sociopolitical and economic context.” Nonetheless, scientists remain reticent, often assuming that “the most effective way of engaging is by presenting evidence, without daring to venture, at least explicitly, broader academic judgment.” This kind of just-the-facts reticence, Anderson and Bows say, is neither warranted nor wise given the urgency of current climate circumstances:

[W]e need to be less afraid of making academic judgments. Not unsubstantiated opinions and prejudice, but applying a mix of academic rigour, courage and humility to bring new and interdisciplinary insights into the emerging era.

This would be controversial enough in itself. Various social and professional incentives work against academic researchers speaking out beyond their narrow specialties. And there is an entire cottage industry devoted to scolding climate scientists for going “beyond the science” to political analysis or policy advocacy. These latter sins, they are warned, threaten their status as “trusted brokers.” (Because the trusted-broker thing is working so well so far, climate-wise.)

What else can you do, though, when danger of such unthinkable scope and permanence is looming and humanity’s actions in the coming decade will determine the fate of future generations? I mean, it sounds like a sci-fi movie, but it’s real. What can you do if you’re one of the scientists who understands how dire the situation is? These are not ordinary times.

Anyway, as controversial as it is to ask climate researchers to venture broad social and economic judgments, the specific critique that Anderson and Bows offer is even more likely to make some of their straight-laced colleagues wince. It has to do with the “catastrophic and ongoing failure of market economics and the laissez-faire rhetoric accompanying it.” Specifically, market economists (and the politicians and scientists in thrall to them) suffer the “misguided belief that commitments to avoid warming of 2°C can still be realized with incremental adjustments to economic incentives.” They urge their colleagues:

Leave the market economists to fight among themselves over the right price of carbon — let them relive their groundhog day if they wish. The world is moving on and we need to have the audacity to think differently and conceive of alternative futures.

Anderson and Bows say we are in the midst of a “paradigm shift” that will eventually supersede market economics like Einstein superseded Newton. Sounds exciting!

Unfortunately, and rather incredibly, they don’t tell us what the audacious new paradigm is. They don’t so much as hint at it. In a paper with “paradigm shift” in the title, I find that rather anti-climactic. (I assume they are fans of some version of steady-state economics, but I’m only guessing.)

I don’t know that I fully agree with Anderson and Bows, either about scientists becoming socioeconomic commentators or the imminent death of market economics. At the very least both subjects warrant far more discussion.

I do think, however, that it’s instructive to see how unsettled some climate scientists are becoming. They see that we need a massive response, and soon, and they don’t see current social and economic institutions as capable of mustering such a response. Do you?

Filed under: Article, Climate & Energy

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