Monday, December 28, 2009

Copenhagen: how do we set about decarbonising a planet's economy?

In the aftermath of Copenhagen, I have prepared this brief introduction to the problem of what we actually do to bring about a decarbonisation of the world economy. It is by no means exhaustive, but offered as a beginner's guide.


It is vital that the world economy should move away from its dependence on fossil carbon fuels, and should maximise the use of renewable energy. The reason is not just because of the enhanced greenhouse effect from the 37% increase in Carbon Dioxide that industrialisation has caused, but also because of acidification of the ocean, and finally the imminence of Peak Oil, when demand for oil exceeds supply, resulting in inflation of the carbon price.

Many studies have shown that this transition to a zero-carbon world economy is possible. It demands an historic investment in new energy technologies and infrastructure, comparable with the kind of investment that countries at war commit to producing military hardware.

The essential aim is to reduce the rate at which carbon is burnt so that it is in line with the quantity that the planet can safely absorb. The effort must also cover other human production of other greenhouse gases such as methane.

The effort to reduce greenhouse gases must be twin track: in parallel with the drive to reduce the amount of CO2 that is injected into the atmosphere, there must be a drive to reduce the amount already in the atmosphere, since there is a 50 year lag in the effect of new CO2 in the air, and also we are already at dangerously high levels – 387 ppm when some authorities see 350 ppm as the safe limit.

There are two guiding principles for this transition:
1. Earth’s atmosphere is a common resource.
2. Every human being has an equal right and responsibility to a healthy atmosphere.

It follows from this that there must be a transfer of resources from the developed world, who have caused this problem, to the developing world, who have not caused the problem, but who will suffer most from the problem. The transfer will be to enable them to develop renewable energy.

We can control carbon before it is extracted, or after it is burnt.

Controls on Extraction

Companies are issued quotas for extraction.
Intergovernmental agreement sets limits on the amounts that coal, oil and gas that companies are allowed to extract from Earth.
This approach is simpler, since there are fewer extractors than there are polluters.

The problem is that this approach needs people, through their governments, to control powerful multinational corporations, who have arrogated to themselves more power than the governments.

Cap and Share
Here, permissions are given to each individual on the planet, as an entitlement or dividend. The individuals are able to sell their entitlements through the post office or banking system, who sell them on to extracting companies. Individuals who have a small carbon footprint will receive more in their dividend than they spend, so will profit, while those with a large carbon footprint will be worse off.

The credits are issued at individual level, not through Governments.

Controls on Emissions

Cap and Trade
This bears on companies as they emit CO2. It is a tried and tested way of controlling pollution, already in use in the US, EU, and New Zealand.

A cap is set on the total amount of emissions permits, and companies with are issued with credits as emission permits.

Companies that exceed their credits may buy credits from cleaner companies.

In some cases, they can also buy offsets
e.g. REDD (see below) – where companies can pay forest rich countries to forgo the profits that they would otherwise make from logging.

In favour of Cap and Trade is its tried and tested form.

Against cap and trade is:
Risk of corruption
Risk that credits may be set too cheap, as has happened in the European Trading Scheme.

There is a voluntary case of cap and share, where renewable energy certificates can be gained through creating renewable energy technology, and these certificates can be sold in the carbon market.

Carbon Taxes
These are simpler than cap schemes, and they do provide a general downward pressure on carbon use, but the effect is unpredictable, and it is not easily able to meet necessary targets. It might be used as an interim measure, while more precise controls are set up.
Money raised from carbon taxes must be hypothecated to renewable energy schemes.

Financial Transaction Tax

A variant of the Tobin Tax, a levy on financial transactions could supply the money needed for developing countries to mitigate and adapt to climate change.

Action in developing world
1 Solar technology development

By and large, poor countries are also hot countries. The transition to a solar energy economy will naturally rectify the gap between rich and poor countries, as previously poor countries export their surplus solar energy either as electricity along High Volt Direct Current (HVDC) long distance grids, or as hydrogen produced from electrolysis.

As well as wind, wave and geothermal energy, hot countries will benefit from Photovoltaic (PV), Solar thermal, and Concentrated Solar power (CSP). Algal oil production will flourish in hot countries.

2 Preservation of forests

REDD - Reducing Emissions from Deforestation and Forest Degradation, is the proposal on the table.

There are already institutions set up to administer this scheme, among them the UN-REDD.

The logic of REDD is sound:

1. The forests must be preserved

2. Poor countries with large forests are at risk of selling the forests for logging.

3. If they are not to profit from logging, they must receive compensation.

4. Companies supplying this compensation are effectively reducing the amount of CO2 that would have been added to the atmosphere.

Verification of REDD can be ensured both by high technology (satellite surveillance) and traditional methods (granting sovereignty to forest dwellers for the care of their lands). The Global Greens should table this latter approach.

Note that protection of forests does not preclude the use and marketing of forest products, including timber. Extraction of a tree from a forest, and use of its timber in or high value wood artefacts is a form of carbon storage, and stimulates carbon uptake because new trees will spring up in the area previously shaded by the harvested tree. Individual tree harvesting can be sustainable; clear felling is not.

The REDD scheme has many detractors, but critics need to provide a feasible alternative. These criticisms from Wikipedia:

* The availability of a large supply of potentially cheap carbon
credits could provide an avenue for companies in the developed
world to simply purchase REDD credits without providing meaningful
emission reductions at home.

A: Since we are looking at a global problem, then CO2 emissions foregone are effective, even if carried out in a different part of the globe. The offsetting company will still be incentivised to reduce its emissions in order to reduce its payments.

* Large number of carbon credits could swamp developing carbon
markets...but could also facilitate ambitious emissions targets in
a post-Kyoto agreement.

A: This is a problem to be managed by restricting the issue of carbon credits. The ETS has clearly been over-issuing and therefore undervaluing the credits, and this can be addressed my issuing less.

* Putting a commercial value on forests neglects the spiritual value they hold for Indigenous Peoples and local communities.

A: Illogical. The forests are being conserved by putting a protective monetary value on them.

* There is no consensus on a definition for forest degradation.

A: Ecologists can create an effective index of measurement.

* Fair distribution of REDD benefits will not be achieved without a
prior reform in forest governance and more secure tenure systems
in many countries.

A: Why does it have to be prior? This is to set the cart before the horse. The reforms will flow from the proper valuation of the forests.

I am aware that these views are contentious in our circles, but the key thing for the critics of REDD is to set out a feasible alternative, and of this, so far, I have seen nothing.

PS: At the same time, we should be pressing for reafforestation.

Reafforestation of earth’s desert areas could absorb 50 years’ worth of USA emissions. Increasing the density of wooded areas in the rest of the world could absorb a similar amount. There are climatic implications for full reafforestation of the deserts, but the project can start at the coasts, while the implications are worked out.

Afforestation must begin in coastal areas and extend inland from there, to utilise the moist air coming off the sea.

This reforestation effort must be ecologically diverse, and carried out by and for the benefit of local communities.

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