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Wed, 14 Nov 2007
As soon as it came out, I read "Hot Air - Meeting Canada's Climate Change Challenge", by Jeffrey Simpson, Mark Jaccard, and Nic Rivers. It's an interesting writing style. The first part is historical fiction, without the constraints of chronological presentation, and the second part is fantasy.
The reason why there are three authors is, presumably, because this is the list of people he is in agreement with. This makes for an odd selection of material. The purpose of the book is so that Jaccard, the archetypal one-handed economist, can expound on how everyone else is wrong, even those who claim to agree with him, how they have all been wrong for decades and how they will all fail miserably in the future unless they do precisely what he says. On the other hand, Simpson's journalistic instincts probably made him slip in the facts that prove the opposite point of view, unredacted. I don't know whether Simpson is responsible for the various gratuitous negative comments about Quebeckers, or whether he was the one that toned them down. The book judges harshly any politicians and public servants that don't do what he says, which is to say all of them. Except for anonymous ones who they claim privately agree with him but never say so. It dismisses most studies and consultations on the subject of climate change as wastes of time, presumably with the exception of when the government consults him or pays him for a study.
It would take a while to go through the list of flaws and contradictions in the book, but I will just focus on the two principal ones: First, Jaccard says that there are four possible policy tools available to governments, command-and-control regulations, market-oriented regulations, subsidies, and information, and of those the last two are guaranteed to have no effect. Now, if we start counting the policy tools that have no effect, there are a lot more than two. But seriously, Jaccard is quick to dismiss the non-economic policy tools without a shred of evidence to support his claims (as he admits at one point). He even puts his assumptions that subsidies don't work into his CIMS model, which, reduced to the status of a ventriloquist's dummy, dutifully spits out this assumption as an output.
But the major flaw in this work is the comfortable fantasy that underlies everything he has worked on recently - that we can and should continue increasing our reliance on fossil fuels, and trust in some magic technology to capture it and bury it underground. I wish I had time to examine his figures and sources and compare them to what most people understand to be reality: this idea of capturing and sequestering carbon dioxide together is simply not feasible now, and probably it will never be feasible. Not only economics rules it out but so do the inexorable laws of thermodynamics.
The concentration of CO2 in flue gas is really quite low, about 10%. Before you can consider pumping it underground and hoping that it doesn't some day come back up and wipe out most forms of life, you have to expend considerable energy in separating it out from the other gases. As a result, the CO2 that you will be burying will have cost you $100 a tonne, not counting the fact that you have consumed nearly as much energy in processing the CO2 as you generated when you burned the coal in the first place, meaning the efficiency of production using capture-and-storage approaches zero.
Now this is the secret to Jaccard's results: the inefficiencies that he introduces into the energy production cycle by adding his imagined carbon sequestration scheme and through the more inefficient biofuels is subtracted from the efficiencies that are gained through various advances in energy efficiency and conservation. In his model, he is essentially sabotaging the energy efficiency figures by adding inefficiencies that nobody asked for, and then saying See? Energy efficiency doesn't help!
But even if we accept that people are never going to consume less energy willingly (reality begs to differ - in 2005 in Canada people consumed less energy, and the UK has made huge strides), and even accepting that the laws of thermodynamics do not apply to determined economists, there are two options before us: either we consume more energy and invest in sequestration technology, literally pouring our money into a hole in the ground, or we decide to use less energy for the same or equivalent economic results. The first gives us greater environmental impacts as we struggle to increase our energy production ever more, and increases the amount of money that we spend on energy. The second reduces our input costs, eliminates or greatly alleviates several environmental problems, and makes us more competitive on the world market. Now, Mr. Jaccard is quite right when he talks about the effect of carbon taxes and of cap-and-trade systems. They are extremely effective and relatively cheap. His figures show significant improvements with a carbon tax of merely $15 a ton of CO2. Imagine, all those people who wouldn't take the one-tonne challenge doing so if it means saving fifteen bucks.
There is a lot of willingness to change in Canada, if people had the means at their disposal. What do they need? Information. Maybe subsidies. Contrary to what the book says those have been proven to work. And yes, carbon taxes and mandatory regulations also work well, particularly for those companies that are motivated only by money. Are you listening, oil industry, and companies that make ammonia, fermentation, and adipic acid, and so forth? Controlling your emissions is cheap and now you'll have a reason to do it. As to electricity production, the idea of the utilities and the governments that own them taxing themselves into compliance was a bit silly. Here, politics is the key - people will vote for those that will shut down the fossil fuel plants. It worked in Ontario and Quebec, and it's catching on.