William Yeatman

Biofuels as Global Warming Policy: All Pain and No Gain

by William Yeatman on July 17, 2008

The Organization for Economic Cooperation and Development (OECD) today released an Economic Assessment of Biofuel Support Policies. Several findings should be of interest to Planet Gore readers.

First, taxpayers are paying a pretty penny for biofuel subsidies and tax breaks. EU, U.S., and Canadian government support was $11 billion per year in 2006, and will rise under current policies to $25 billion per year during 2013-17.

Second, in most countries, biofuels remain highly dependent on government support. “The sometimes predicted improved economic viability of biofuel production and use associated with higher crude oil prices so far has not materialized in many countries. Most production chains for biofuels have costs per unit of fuel energy significantly above those of the fossil policy they aim to replace. Despite the rapid and substantial increase in crude oil prices and hence in the costs for gasoline and fossil diesel, the cost disadvantage of biofuels has widened in the past two years as agricultural commodity prices soared and thereby feedstock costs increased.”

Third, “The medium-term impacts of current biofuel policies on agricultural commodity prices are important, but their role should not be overestimated.” The report estimates that current biofuel support measures “increase average wheat, maize and vegetable oil prices by 5 percent, 7 percent, and 19 percent, respectively, in the medium term.” These are bigger impacts than ethanol proponents acknowledge, although smaller than those estimated by former USDA chief economist Keith Collins. Corn averaged $2 a bushel in 2006 and is forecast to remain about $6 a bushel in 2008-2010. Collins estimates that ethanol accounts for 25-55 percent of the increase in corn prices under one analytic method, and 40-60 percent under another method.

Fourth, the OECD acknowledges as “real” the concern raised some in recent studies that land conversions associated with expanded ethanol production could release huge amounts of carbon dioxide stored in forests and soils, making ethanol a significant net contributor to greenhouse gas emissions. However, the OECD finds these studies controversial and methodologically immature, and does not endorse their findings.

Nonetheless, even assuming that corn ethanol delivers net emission reductions, the costs far outweigh any potential climate benefit. The OECD comments: “Biofuels produced from wheat, sugar beet or vegetable oils rarely provide GHG emissions savings of more than 30 percent to 60 percent, while corn (maize) based ethanol generally allows for savings of less than 30 percent. Current budgetary support, mandates and trade restrictions . . . reduce net GHG emissions by less than 1 percent of total emissions from transport. Fossil fuel use is also reduced by less than 1 percent for most of these transport sectors by 2-3 percent in the EU diesel sector. These relatively modest effects come at a projected cost equivalent to about $960 to $1,700 per ton of CO2-equivalent saved, or of roughly $0.80 to $7.00 per liter of fossil fuel not used.” For perspective, $960 per ton is 15 to 17 times more expensive than the American Council on Capital Formation and the National Association of Manufacturers estimate carbon permits would cost in 2020 under the Lieberman-Warner bill — legislation that the Senate in its wisdom considered too costly to pass.

Dems’ Doublethink on Drilling

by William Yeatman on July 17, 2008

In the novel 1984, George Orwell used the word “doublethink” to describe the process of believing two contradictory ideas simultaneously. The concept invites an appropriate but superficial comparison to congressional Democrats’ current approach to gasoline prices.

Drilling in the Offshore

by William Yeatman on July 17, 2008

in Blog

After trading at a record high of $147 a barrel Friday, the price of oil saw its largest one-day drop since the 2003 beginning of the Iraq war on Tuesday, falling $6.44 a barrel. Wednesday, it fell another $3.71, to $135.03, and at one point was trading as low as $132.

Economics Trumps Environment at G8

by William Yeatman on July 17, 2008

"It is the economy, stupid!" The economic and political concerns dampened the desire of world leaders at the Group of Eight (G-8) summit in Japan to ride the hot air balloon of climate change. That's no surprise. In any contest between a present crisis and future threat, the present always wins. The G-8 leaders are hardcore politicians and recognize that in hard times, politicians must not get carried away by the future. This explains why they agreed to a future goal: 50% reduction in carbon emission by 2050, without any signposts towards that goal for the present.

The politicos seem to have drawn their lessons from the Kyoto Protocol, two decades earlier, when they burnt their fingers by accepting short-term goals of emission cuts by 2012. Those targets will, of course, elude most signatories. And so, the leaders at this G-8 meet expressed a desire to reduce emissions by 2050, when few can be held accountable.

Clearly, it suited all not to push the agenda too far. With the economic slowdown, funding for new investments in alternative energy and desire for technology transfer will inevitably get squeezed. Consequently, there is little inducement for major emerging economies to even consider climate goals. This prospect was not lost among the climate change community. As the G-8 leaders were gathering in Japan, the Intergovernmental Panel on Climate Change (IPCC) made a pitch to the European Union to take the lead role. A group of senior corporate executives publicly appealed for funds to facilitate the development of

energy- and emission-related technologies. It was clear that, in hard times, everyone could do with some spare funds!

The National Action Plan for Climate Change (NAPCC) that Prime Minister Manmohan Singh released a week before he left for the G-8 summit seems to have accepted this political reality. And so, India found itself in a comfortable situation at the side meetings at G-8; none of the core points of NAPCC was questioned.

With oil prices at record highs, it is natural that NAPCC will be seen more in the context of energy security, not just climate change.

Virtually all the eight missions of NAPCC are policies identified much earlier, but progress has been mixed. NAPCC talks of benchmarking certain energy-intensive sectors. But some of the sectors that have seen dramatic improvement in energy efficiency are those that experienced greater global competition. So the lesson is that, rather than setting industry-specific benchmarks, deepening the reforms process can greatly help in improving industrial competitiveness and efficiency.

Perhaps, it is this relationship between economy, energy efficiency and emissions which made Singh assert that India is unlikely to cross the per capita energy consumption and emission levels of richer, industrialized countries. Increased commerce and competition will motivate Indian companies to leapfrog to higher levels of efficiency with increased access to global technologies.

However, it has dawned on policymakers that there is a real and rising threat of using climate change arguments to restrict commerce. With economic slowdown, the political climate could easily turn protectionist in the richer countries. Thus, it is even more important for India to identify and argue for the economic and environmental benefits of liberalization and free trade.

A key element of India's position is that the developmental aspirations of its people cannot be sacrificed for emission targets. India's per capita emission, at 1.2 tonne, is far lower than the world average of 3 tonnes-plus, and a fraction of that in rich countries. Besides, the "historical responsibility" for the anthropogenic greenhouse gases

(GHGs) in the atmosphere lay squarely with the developed world. NAPCC also questions the role of man-made GHGs – it observes changes in climatic behaviour in India, such as a 0.4 degree Centigrade increase in surface temperature over the past century or about 1mm per year sea-level rise in northern Indian Ocean or wider variation in rainfall patterns. Yet, it affirms that no firm link between documented changes and warming due to anthropogenic climate change has yet been established.

This vital question needs to be read along with the last of NAPCC missions, which talks of the strategic knowledge sharing platform to identify challenges of, and response to, climate change and funding for focused research. This can help open the debate to more critical scientific scrutiny and generate more creative policy responses.

IPCC's repeated assertion that there is a scientific consensus behind its reports and policy prescriptions reflects its own unscientific foundation. Science progresses by continuously questioning existing orthodoxy. The earth's climate may or may not be changing, but the global economic slowdown and the rise of India among the emerging economies have opened a window of opportunity to change the climate of discourse, by grounding it to real-world concerns. Ultimately, the hard reality is that the political leaders can no longer afford to sacrifice the poor today for the sake of the rich tomorrow. India can legitimately play a leadership role and change the climate of discussion on climate change.

Carbon Copies Down Under

by William Yeatman on July 17, 2008

in Blog

The global warming craze officially landed in Canberra yesterday, as the Labor government released a sketch of what it calls "one of the highest priorities of the Australian government": its carbon trading scheme. That should signal the beginning of an important debate about the costs of this grand plan. But can the opposition Liberal Party muster a coherent argument?

Some Finding Gore’s Timing Inconvenient

by William Yeatman on July 17, 2008

in Blog

Al Gore hopes to put global warming back at the top of Washington’s agenda Thursday, but some Democrats in Congress are questioning his timing when they are getting pummeled by Republicans over record gas prices.

Honesty Requires the Term “Regional Warming”

by William Yeatman on July 16, 2008

The penguin scientists didn’t get the memo. The globe hasn’t warmed since 1995, so those cute penguin chicks can’t be dying now from “global climate change.” However, though Antarctica as a whole hasn’t warmed, the Antarctic Peninsula (where the penguin chicks are) has warmed. The world hasn’t, but certain regions have, primarily the US and the Arctic.

Many studies and articles are written blaming fill-in-the-blank change on global warming. But here’s a question I often scream when I watch news on climate change: if that region hasn’t even warmed in the last decade, how can that specific catastrophe even be due to global warming? 

Journalistic integrity could be maintained if reporters would do a simple check to see if the region in question has actually warmed. They can put their desired time period, say June 2007 to June 2008, into this NASA form using their desired base period, perhaps 1995 to 2000. This will show them a map of the world with the regions that have lately warmed and those that have cooled.

No Consensus and No Warming, Either

by William Yeatman on July 16, 2008

What consensus? The American Physical Society reports:

 

“There is a considerable presence within the scientific community of people who do not agree with the IPCC conclusion that anthropogenic CO2 emissions are very probably likely to be primarily responsible for the global warming that has occurred since the Industrial Revolution.”

 

So it has opened a debate, kicked off by Christopher Monckton:

 

“The Intergovernmental Panel on Climate Change (IPCC, 2007) concluded that anthropogenic CO2 emissions probably caused more than half of the “global warming” of the past 50 years and would cause further rapid warming. However, global mean surface temperature has not risen since 1998 and may have fallen since late 2001. The present analysis suggests that the failure of the IPCC’s models to predict this and many other climatic phenomena arises from defects in its evaluation of the three factors whose product is climate sensitivity…”

 

More importantly, the conclusion is that, perhaps, there is no “climate crisis”, and that currently-fashionable efforts by governments to reduce anthropogenic CO2 emissions are pointless, may be ill-conceived, and could even be harmful.

 

What follows is a detailed argument on mathematics and climate theory that ends with this brilliant and irresistible conclusion:

 

“Even if temperature had risen above natural variability, the recent solar Grand Maximum may have been chiefly responsible. Even if the sun were not chiefly to blame for the past half-century’s warming, the IPCC has not demonstrated that, since CO2 occupies only one-ten-thousandth part more of the atmosphere that it did in 1750, it has contributed more than a small fraction of the warming. Even if carbon dioxide were chiefly responsible for the warming that ceased in 1998 and may not resume until 2015, the distinctive, projected fingerprint of anthropogenic “greenhouse-gas” warming is entirely absent from the observed record. Even if the fingerprint were present, computer models are long proven to be inherently incapable of providing projections of the future state of the climate that are sound enough for policymaking. Even if per impossibile the models could ever become reliable, the present paper demonstrates that it is not at all likely that the world will warm as much as the IPCC imagines. Even if the world were to warm that much, the overwhelming majority of the scientific, peer-reviewed literature does not predict that catastrophe would ensue. Even if catastrophe might ensue, even the most drastic proposals to mitigate future climate change by reducing emissions of carbon dioxide would make very little difference to the climate… “

 

The correct policy approach to a non-problem is to have the courage to do nothing.

Irresistible? Well, not quite: David Hafemeister and Peter Schwartz in the same issue argue that the IPCC theory that man is heating the world is the best that’s available.

New Climate Deal May Collapse, EU Trade Commissioner Warns

by William Yeatman on July 16, 2008

in Blog

Speaking a week ahead of a crucial World Trade Organisation ministerial meeting on 21 July, EU Trade Commissioner Peter Mandelson urged the 27 EU countries, including France, to "show unity" towards achieving a breakthrough or risk the collapse of other international endeavours such as talks on climate change.

EU Climate Proposal Hurts Industry, Says Germany

by William Yeatman on July 16, 2008

in Blog

The German Economy Ministry has attacked EU proposals to tackle climate change as "pointless" if other major contributors to greenhouse gas emissions are not also committed to significant reductions.

← Previous Entries

Next Entries →