How to negotiate a climate agreement that will actually work

Illustration by Greg Clarke

The recent COP21 negotiations in Paris were based on the ‘pledge and review’ framework, first proposed by Japan in a memo to the UNFCCC in 1991. The pledges are the Intended Nationally Determined Contributions (INDCs). Kyoto was similarly based on individual commitments. Twenty years of failure should have taught us that individual commitments do not motivate nations to decarbonize.

Countries will promise to reduce their emissions by amounts that will be revised later. The narrative is that this will “enable an upward spiral of ambition over time”. History and the science of cooperation predict that quite the opposite will happen.

From “Price Carbon — I Will If You Will” by David J. C. MacKay, Peter Crampon, Axel Ockenfels & Steven Stoft

I expected another ineffective outcome from COP21, just more feel-good politics. The failure of Kyoto and Copenhagen had convinced me that nations would only commit to what was in their narrow self-interest. The free-rider problem seemed insurmountable. As Paris approached I thought that “We’ve seen this movie before”, so a useful agreement simply wasn’t going to happen. Because: Roger Pielke’s Iron Law. Because: lack of motivation – “the building isn’t burning yet”.

So my focus has been largely on developing clean energy options that are “cheaper than coal”. We need to fund energy innovation at multiples of current levels. This is a no-regrets approach, because the fast-growers can’t afford to decarbonize until they can buy clean energy that doesn’t retard their economic growth.

As the media frenzy built leading to COP21 I read the Nature comment by MacKay et al “Price Carbon — I Will If You Will”. I have to say that the Nature piece and the supporting papers got me excited! Then on December 8th the authors published a free eBook “Global Carbon Pricing” making it much easier for all of us to understand how much we have to gain by fixing the cause of these negotiation failures. That led to doing more research at Carbon-Price.com.

Since then I have been wondering “what if I was wrong – what if in fact we could get a commitment to, say, a $50 carbon price floor?” Why do I now think that — given the proper negotiation framework — an agreement is feasible? Well, I hadn’t done my homework on the science of cooperation. I knew about Elinor Ostrom’s 2009 Nobel prize – but I didn’t really understand the significance of her work in this context. I did not appreciate that a better negotiating framework could eliminate the free-rider roadblock. Ostrom showed how changing one negotiation-game rule could change a negotiation from impossible to optimal. For example, in Törbel, Switzerland, the common-commitment rule is “no citizen can send more cows to the alp than he could feed during the winter.”

If it works for the Swiss farmers, perhaps it can work for self-interested nations? If we change just one rule in the negotiation game – instead of the Paris result we would get cooperation. That new rule is a common price commitment. How does the proposed treaty process work? Countries pay or receive transfers Gi from the climate fund:

Gi = g × Xi × P

where g is the generosity parameter, X is the excess emissions of country i, and P is the global price. Excess emissions are defined as emissions above what would occur if the country had the global-average per capita emissions rate. Negative values of G (resulting from below average per-capita emissions) indicate a payment from the climate fund. This formula transfers funds from rich to poor countries. Climate fund payments are only paid to countries that are in compliance with the global carbon price.

The treaty negotiation proceeds in two steps:

  1. Negotiate the generosity parameter g (the g negotiation is structured with only one goal in mind—to maximize the global carbon price). 
  2. Given g, negotiate the global price-floor, P, to be flexibly met by each member of the “Climate Club”.

So what are the most important member-country incentives (in addition to the climate benefits) ?

  • Reducing absolute emissions reduces rich country costs, increases poor country payments
  • Provides an incentive for poor countries to vote for a higher level of P.

The authors recommend that g should be determined by countries that do not have a conflict of interest regarding climate-fund payments. These will be countries that have near-zero excess emissions and hence participate little in the climate fund. Such countries will be inclined to focus on getting a successful climate treaty with a high carbon price.

Why is this treaty process politically feasible? As far as I can tell all of the Kyoto-style global cap and trade faults have been eliminated by design:

  1. The proposed treaty structure is extremely flexible: each nation can choose its preferred machinery to meet their average carbon price commitment.
  2. The carbon price floor doesn’t directly cost a member country anything. The most obvious case is the countries that choose a revenue-neutral carbon tax, like James Hansen’s “Fee and Dividend”.
  3. There is no forced compliance with the scheme. No nation need join the treaty Climate Club if they don’t like it.

The decarbonization math tells us it is going to be really expensive if we don’t get started actually doing decarbonization soon. We know that the largest increases in future emissions will come from the fast-growers, the LDCs, the global south. The proposed treaty structure should provide the financial incentives to motivate the LDCs to pay attention to decarbonization – in addition to their focus on growth.

The truth of where we are now is that the 2C target is toast. We should be emphasizing not “numerology” but specific plans to decarbonize and reduce the chance that we are facing 4C by 2100. For those of us striving to accelerate development of reliable, clean energy that is “cheaper than coal” — what would it mean if the US and China had a $50 revenue-neutral carbon price? Globally we have some fifty advanced nuclear innovators needing billions of capital to prove their designs. What would a global carbon price do to enhance their financing, to build and operate the required national test and research facilities?

A global carbon price treaty would mean a new seriousness amongst the OECD political class. Imagine if the political leadership was actually committed to decarbonizing? I think that would translate into much more interest in policies that will work (instead of feel-good like Energiewende). For example, I think that would mean leadership focus to get organized to deploy nuclear power fast, like France and Sweden did in the 1980s and 90s. I think Global Carbon Pricing [PDF] will work. What am I missing?

Some footnotes:

[1] COP21 in Paris Will Block all 2C Scenarios.

[2] Kevin Anderson’s summary of COP21 and how the remaining shreds of 2C scenarios depend on BECCS. Didn’t you know?

Caltech lecture: Climate Change and Energy in the 21st Century by Burton Richter

NewImage

The seminar announcement of Burt Richter’s 18 Feb, 2015 presentation for the Chen-Huang Sustainable Energy Seminar Series. The timing of the seminar is driven by the release of the second edition “Beyond Smoke and Mirrors”.

Burton Richter’s award winning book assesses energy demand over the century and the sensible, senseless and biased proposals for averting the potentially disastrous consequences of global warming, allowing the reader to draw their own conclusions on switching to more sustainable energy provision. 

The video of the lecture is 96 minutes.

Ken Caldeira: From an email to a friend, skeptical about the reality of human-induced climate change

Ken Caldeira explains what we know about climate change to a skeptical friend.  Originally published at the Ken Caldeira blog.

Without carbon dioxide in the atmosphere, the Earth would be a frozen orb.

It is known with a very high degree of certainty that carbon dioxide keeps the Earth warm and more of it will make the Earth warmer.

It is also known with a very high degree of confidence that humans activities have increased atmospheric CO2 content by about 40% since the dawn of the industrial revolution.

There is close to universal consensus among well-informed climate scientists that most of the global warming over the past 50 years was associated with our greenhouse gas emissions.

There is substantial uncertainty regarding how sensitive our climate system is to added CO2, where something like 3 C per CO2 doubling (about 5 F) might be somewhere near the central expectations but with semi-reasonable people arguing for half this or double this.

There is very little consensus regarding how adaptable humans will be to these changes. Humans already live from the equator to the Arctic circle. Houston used to be a malarial hell-hole and now it is a modern air-conditioned city.

At the one end of the spectrum there are people thinking climate change will be an existential threat to human existence. At the other end, there are people who think most people will barely notice the effects of climate change. Neither end of this spectrum represents a tenable position.

My own view is that climate change will impose a substantial cost on society but that climate change is unlikely to be the biggest problem that most people will face in their lives. This is less true for sensitive ecosystems such as coral reef systems.

Humans are like weeds. We are the invasive generalists par excellence. We spread rapidly, grow quickly, and successfully inhabit almost any environment.

Climate change will impact the delicate flowers tuned to a narrow range of environmental conditions; climate change will benefit many weeds, which can take advantage of disruption.

Carbon dioxide also acts as a fertilizer for plants, so there is potential for crop yields to increase under a high-CO2 atmosphere.

When the dinosaurs were around, the atmosphere was rich with CO2 and life flourished. We are not followers of Leibniz and do not think we are living in the best of all possible worlds. There is nothing particularly special about the climate of the pre-industrial era, although it does seem to have been a particularly stable climatic period.

The problem is not that greenhouse gases are pushing us from a better climate to a worse climate so much as the problem is one of rates of change. Will climate change occur so rapidly that the transition imposes costs that were not anticipated, costs that are larger than we would like to deal with?

[Just in case it is not clear, my answer to the final question is ‘yes’. Not only that, even anticipated changes are sufficient to motivate eliminating fossil-fuel CO2 emissions as soon as is practicable.]

Posted on 21 August 2015 by Ken Caldeira, Carnegie Institution for Science, Department of Global Ecology at Stanford University

James Hansen on Big Green – it’s all about the money

The truth is that present energy and climate policies of the United States and the United Nations are dishonest and tragic.

In October 2014 Dr. Hansen wrote an essay covering some of his personal history. I would like to highlight a just few words that support my explanation:

Why do the big name “environmental” NGOs seem to support every policy except the ones that will actually work.

My thesis is they prefer to raise money over promoting sound policy. Their big contributors do not like nuclear power. But oh my, they do so love Amory Lovins’ soft power. So the NGO leaders have a stark choice – support policies that will impact emissions. Or raise more and more money. Dr. Hansen:

It is not always easy to speak truth to power, but all citizens have the opportunity if they choose. I have one minor, easy suggestion for you to consider, and another requiring more effort.

The first concerns “Big Green,” the large environmental organizations, which have become one of the biggest obstacles to solving the climate problem. After I joined other scientists in requesting the leaders of Big Green to reconsider their adamant opposition to nuclear power, and was rebuffed, I learned from discussions with them the major reason: They feared losing donor support. Money, it seems, is the language they understand. Thus my suggestion: The next time you receive a donation request, doubtless accompanied with a photo of a cuddly bear or the like, toss it in the waste bin and return a note saying that you will consider a donation in the future, if they objectively evaluate the best interests of young people and nature.

The other suggestion is to donate time to Citizens Climate Lobby. They need people to write letters to the editor and op-eds, and to visit members of Congress. The aim is to make the price of energy honest, in a way that spurs our economy, creates good jobs, and enhances the future of young people and nature. To be sure, our democracy has developed flaws, especially the inordinate role of money in Washington, but we still have the opportunity to make it work.

My view is the Big Greens have blood on their hands. Greenpeace in particular because they not only block nuclear around the world but they continue to block live saving advances like Golden Rice. Shame!

And kudos to James Hansen: Who speaks truth to power.

Forget NIMBYs. We have moved into the era of the BANANA

Rendering of Transatomic nuclear plant

Robert Wilson ridicules the UK voters and status quo interest groups who collectively manage to prevent nearly every kind of substitute for fossil generation. Robert wrote:

And this is where we are going. Forget NIMBYs. We have moved into the era of the BANANA. Build Absolutely Nothing Anywhere Near Anything. Eventually, we will act like China and erect an island in the North Sea – near Dogger Bank perhaps – where everything will be done out of sight, out of mind. No one must now see how things are made in the country of the Industrial Revolution.

Robert got me wondering if there is a “third way”? We know that India, Africa, and Indonesia will be building coal plants about as fast as they can organize the financing. How could the UK convert natural NIMBY incentives into high impact investments – in the places where the most serious new emissions threats will be originating? 

Is it possible that rich-country voters would prefer to enable the low-carbon generation where it’s “Not In Their Back Yards”? At least until new tomato farms are sprouting in Scotland? Would a UK taxpayer spend 1 £ to prevent 5 £ of new Nigerian coal plants that will emit for 50 years?

One pathway is to create a UK fund or agency authorized to write loan guarantees for qualifying projects. My hypothesis is that local (or foreign) equity investments could be encouraged by access to low interest rate loans. 

Imagine the political advertisements promoting the new fund:

Support New Conservative Labour’s “Clean Power Africa Initiative”. Turbines for every ridge top! Nuclear plants for every Megacity! All paid for by OPM (Other People’s Money)!

Thanks to Transatomic Power for the very cool rendering. I wish I had an eye-catching image of coal CCS – because that would also surely be a priority for the fund. Not glamorous, just effective.

Carbon Caps & Demand Reductions vs. Better Technology:

Today there is another Twitter discussion featuring “We need carbon limits and demand reduction” vs. “Better technology to improve rate of decarbonization”. My thumbnail summary is the result of “Caps and Limits”, in particular Kyoto which Feels Good while fossil continues to dominate:

 

And this is the result of better technology (France decarbonizing electrical generation via nuclear in 20 years):

Why this is true is explored in depth by the Hartwell Paper and Kyoto Wrong Trousers.

James Hansen calls out “Big Green” (Part 2)

James Hansen

More disconcerting is the pressure from environmental organizations and the liberal media.

A year ago James Hansen published a “draft opinion” on the Columbia University website: Renewable Energy, Nuclear Power and Galileo: Do Scientists Have a Duty to Expose Popular Misconceptions? The PDF received surprisingly little attention considering the importance of the issues covered. I found the piece when I was researching thinking on how we could dramatically increase China US Nuclear Cooperation.

Here I’ll just highlight some of Dr. Hansen’s remarks on the how he sees the workings of the anti-nuclear lobby. In his closing paragraphs What Can the Public and Scientists Do? he writes

(…snip…) I also recommend that the public stop providing funds to anti nuke environmental groups. Send a letter saying why you are withdrawing your support. Their position is based partly on fear of losing support from anti-nuke donors, and they are not likely to listen to anything other than financial pressure. If they are allowed to continue to spread misinformation about nuclear power, it is unlikely that we can stop expanded hydro-fracking, continued destructive coal mining, and irreversible climate change.

(…snip…) The public is unaware of pressure put on scientists to be silent about nuclear power. After I mention nuclear power I receive numerous messages, often heart-breaking in their sincerity as they repeat Caldicott-like unfounded assertions and beg me not to mention nuclear power. More disconcerting is the pressure from environmental organizations and the liberal media. Each large environmental organization has a nuclear “expert” (often a lawyer, not a physicist) with a well- developed script to respond to any positive statement about nuclear power. Liberal media follow precisely the “merchants of doubt” approach that the right-wing media use to block action on climate change; raising fears about nuclear power is enough to stymie support. The liberal media employ not only environmental organization “experts”, but former heads of the Nuclear Regulatory Commission (NRC) appointed during Democratic Administrations.

These NRC talking heads are well-spoken professionals with a spiel that has been honed over years. And they have a track record. The NRC, despite its many dedicated capable employees, has been converted from the top into a lawyer-laden organization that can take many months or years to approve even simple adjustments to plans. It is almost impossible to build a nuclear power plant in the United States in less than 10 years, and this is not because an American worker cannot lay one brick on top of another as fast as a Chinese worker. Anti-nukes know that the best way to kill nuclear power is to make it more expensive.

Given this situation, my suggestion to other scientists, when they are queried, is to point the public toward valid scientific information, such as the “radiation 101” page written by Bob Hargraves. “Sustainable Energy – Without the Hot Air” by David MacKay lets the public understand calculations as in the footnote above, thus helping the public to choose between renewables and nuclear power in any given situation – there is a role for both.

James Hansen calls out “Big Green”, its the money that drives their anti-nuclear dogma

James Hansen

It is not always easy to speak truth to power, but all citizens have the opportunity if they choose. I have one minor, easy suggestion for you to consider, and another requiring more effort.

The first concerns “Big Green,” the large environmental organizations, which have become one of the biggest obstacles to solving the climate problem. After I joined other scientists in requesting the leaders of Big Green to reconsider their adamant opposition to nuclear power, and was rebuffed, I learned from discussions with them the major reason: They feared losing donor support. Money, it seems, is the language they understand. Thus my suggestion: The next time you receive a donation request, doubtless accompanied with a photo of a cuddly bear or the like, toss it in the waste bin and return a note saying that you will consider a donation in the future, if they objectively evaluate the best interests of young people and nature. — James Hansen October 11, 2014

If you think about this a bit, isn’t it obvious that the leaders of “Big Green” are driven by the same motivations as politicians — Power. Power is increased by raising more money every year. That is their goal. It is that simple. I’m talking about the rich and famous NGOs: Greenpeace, Sierra Club, Friends of the Earth, National Resources Defense Council, Union of Concerned Scientists, and so forth. 

 Please don’t let your friends donate to Big Green! If you’ve not read ‘To Those Influencing Environmental Policy But Opposed to Nuclear Power‘ this would be a fine time.

A Global Quorum for Fee & Dividend?

NewImage

I felt more optimistic for a few seconds after reading James Hansen’s latest Assuring Real Progress on Climate. I won’t spoil your Holiday Spirit by enumerating the reasons my optimism quickly faded. Hopefully you will come back with compelling arguments why this time is different: multi-national negotiations will produce a binding commitment to Fee & Dividend. The main argument:

Alternative 2: Courageous leadership emerges. In this scenario, actions proposed in Lima are adopted, but also plans for a rising carbon fee to come into force once approved back home by a quorum of nations. Quorum is defined so that Protocol initiation practically requires acceptance by either the United States or the European Union and either China or a combination of nations such as India and Brazil. The gradually rising carbon fee would be accompanied by border duties on products from non-participating nations, collected by the importing country, unless the exporting country shows that no fossil fuel carbon was emitted in production of the product.

In Alternative 2 no single nation can blackmail humanity. Once a quorum is achieved, there is a huge incentive for other nations to join, to avoid economic disadvantage and enjoy the economic stimulation. A carbon fee, which would be collected at domestic mines and ports of entry, spurs an economy if the funds are fully distributed to the public. However, the fee becomes a tax and a drag on the economy if a government keeps the funds to expand its programs. Governments are prohibited from returning the funds to the fossil fuel industry as subsidies. Otherwise specific use of the fee is a national prerogative. However, it is noted that equal division of funds among residents tends to address income disparities, providing opportunities for low income people, while spurring essential efforts in conservation, energy efficiency and clean no-carbon energies. Alternative 2 is a challenge, but one that we must fight for with all our strength and intelligence.

I think the economic outcome will be net-positive over a couple of decades. I’m not confident the near term jobs & incomes data will be comforting to politicians who find themselves out of work after implementing a binding form of Alternative 2. What is our best evidence that Fee & Dividend will boost GDP per capita? Over what time frame?

PWC: Heading for 4°C, pledging for 3°C, talking about 2°C


Globally we are out of time – now need to increase decarbonization rate by factor of five. From PWC: Low Carbon Economy Index 2014 | 2 degrees of separation: ambition and reality

The PWC 6th annual Low Carbon Economy Index 2014 (LCEI) tracks the rate that G20 countries are decarbonizing their economies. Globally we are achieving only 1% pa vs. the 6.2% pa we need to meet the 50% chance of 2°C or less. PWC has published an important contribution, very well-explained and illustrated. If you are in a big hurry, then at least look at the 2.7 minute video (with transcript).