US China Relations

Earlier I was very downcast about the potential for China-American cooperation. James Fallows, among others, hit back against this train of thought by arguing that this sort of diplomatic engagement takes time, and more progress would surely follow.

Now Fallows links to an account of Copenhagen, supposedly by someone "in the room" so to speak during the US-China negotiations. The claim is that China deliberately scuttled the talks to maximize blame on the West generally, and America in particular.

Obviously, I can't vouch for the validity of the claim. But the fact of its plausibility highlights that the climate change talks are prominent not because they represent the pathway to progress, but because they're perpetually deadlocked. The China-US G2 relationship receives so much press coverage not because it is the fundamental driver of global governance, as the Europeans seem to fear, but because that relationship is so badly dysfunctional. The BRICs have the political power of major powers yet behave like the poor countries they really are.

Causality and Climate Change

I've believed for a while that the debate over climate change is troubled in part because of a slippery grasp of causality. I've been thinking of an analogy to make the point, and Richard Lindzen provides one:

Consider the following example. Suppose that I leave a box on the floor, and my wife trips on it, falling against my son, who is carrying a carton of eggs, which then fall and break. Our present approach to emissions would be analogous to deciding that the best way to prevent the breakage of eggs would be to outlaw leaving boxes on the floor.

What does this have to do with anything? Well, consider the doomesday scenarios being tossed around. The Maldives, for instance, is in threat of ending up under the waves due to rising sea levels. Water wars are supposedly looming in other countries, and so forth.

But the causality here is a little mixed. It's not the case, for instance, that every country faces the threat of going underwater. The Netherlands has set up a fancy water wall that will contain the effects of higher sea levels. The EU will handle any future political turmoil just fine. Climate change will have very different consequences in different places.

So you cannot isolate certain effects, dub them the "result" of global warming, and see carbon cuts as the only solution. Rather, climate change intersects with multiple problems--chief among them poverty, political instability, and bad institutions--that combine to cause further issues down the road. It's by no means obvious that targeting climate change on its own is the best way to address these issues, let alone whether action against climate change is the most cost-effective way to improve welfare in the developing world. All of the problems above will continue to exist whatever the state of the climate; yet we continue to weight deaths due to climate fluctuations far more than deaths due to dysentery and the like.

This is particularly problematic as proposed action against climate change--carbon dioxide reduction in one form of another--harms growth and so destroys economic base necessary to adapt to and mitigate the effects of a warmer world. Back to the Maldives--the government plans to turn the country into a Prius and go carbon-neutral. This is all well and good as a publicity stunt. But it is a waste of resources that comes exactly when the government needs to figure out its climate adaption strategy--throwing up sand bars, buying up land elsewhere, or what have you.

Indur Goklani has an analysis which makes this point clearly. He estimates the GDP per capita in 2100 of developing countries under energy-intensive development with global warming–$72,800–and under a more environmentally friendly regime–$40,200. Ignoring (important) distributional effects, the welfare consequences of enduring lower growth outweight the costs of global warming--even for developing countries.

There is also an incredible amount of status-quo bias in this debate. Can anyone really say that the temperature that prevailed in, say, 1900 was really the optimal temperature for humanity? Is it obvious that a warmer planet is worse; and, if so, wouldn't that imply that a global temperature colder than it is now would be better? Of course a temperature change of any magnitude would change settled patterns and (again) imply distribution effects. Yet a quick scan across America--where temperatures varies substantially without a corresponding variation in income--suggests that climate matters very little in determining the quality of life in a developed economy. Maybe things are different elsewhere. But that's all the more reason for them to develop quickly--something which will be harder for them to do with carbon targets.

I say all of this without questioning the science behind climate change (which Richard Lindzen does) or opposing a revenue-neutral carbon tax. But the broader point is that climate change is crowding out other fruitful tactics for improving the lot of the poor; carbon cuts are crowding out other strategies for dealing with the consequences of climate change; and a focus on reducing emissions by raising taxes ignores other cheap hanging fruit like technology transfers and preventing deforestation.

Copenhagen and Climate Change

The White House has released a joint statement in the aftermath of Manmohan Singh's visit. On the subject of climate change, the agreement promises a program to advance clean energy to counter climate change.

This statement follows direct negotiations with China, and is accompanied by announcements of US cuts "in the range of 17 percent below 2005 levels in 2020 and ultimately in line with final U.S. energy and climate legislation." These negotiations have raised the possibility of a meaningful deal at Copenhagen.

Not so fast. There is much less progress on contentious issues than meets the eye.

First, the House, but not the Senate, has signed off on those emissions cuts--which are in any case half-achieved due to ongoing economic troubles. Thus Obama will address a global audience asking them to trust that he can get the Senate to sign off, despite no evidence that it will do so.

Second, Chinese commitments are themselves weak. China has pledged to reduce only the intensity of its emissions in the long-run, safely after the tenure of current political leadership. Plainly China has demonstrated that it will not sacrifice its growth trajectory unless greater financial inducements are on the table.

Finally, the list of goodies offered by America are rather weak. A number of US-India partnerships on clean energy have been offered, but it is unlikely that their aggregate impact will be large. To meet India's energy needs, wind and solar are not enough.

For signs of a more proactive approach, one need look only as far as George Bush. The Indian-US Nuclear Deal has the potential to generate 470 GW of electricity by 2050. Construction of foreign-aided nuclear plants is well under way. These efforts will likely dwarf anything Obama achieves on climate change in India.

In fact, the probability of a meaningful deal at Copenhagen is minimal. In all likelihood, failure to reach a deal will cause a number of climate-related problems. Yet the best solution to these problems is not to further go down the rabbit hole of global negotiations; but to increase economic growth. Wealth and technology are the best weapons to fight unanticipated changes in the climate, as richer countries are better able to mitigate and adapt to any possible changes. For instance, the Maldives are currently under threat of going underwater, yet the country could easily meet the cost of building levies if it were a rich country (as the Netherlands does with its sea wall, for instance). Whatever the consequences of climate change, a wealthy India will be able to bear them. A poor India will face serious problems regardless of the state of global coordination.

In this respect, costly negotiations that involve expensive subsidies or onerous environmental regulations may do more harm than good. Indur Goklani has an analysis which makes this point clearly. He estimates the GDP per capita in 2100 of developing countries under energy-intensive development--$72,800--and under a more environmentally friendly regime--$40,200. For the next hundred years, at least, countries like India are far better off with high economic development and more climate change than without. Pranab Mukherjee, not Jairam Ramesh, will have the biggest impact on India's sensitivity to climate change in the long-run.

Be More Like France

Ed Glaeser says (via The Economist):

[I]f China’s per capita carbon dioxide emissions increase by 14.4 tons and reach United States levels, then world carbon dioxide emissions will increase by about 19 billion tons or 67 percent.

If per capita carbon emissions in both China and India rise to United States per capita levels, then global carbon emissions will rise 138 percent. If the emissions of these rising superpowers stop at French, rather than American, levels, global emissions will only increase by about 28 percent.

This suggests the biggest contribution that the United States can make to reducing world carbon emissions is to persuade the Indians and Chinese to use energy like Frenchmen rather than Americans.

This is true. However, it's important to know why France has lower emissions. It's not because they obsess more about the green content of their packaging or worry more about leaving the lights on as they leave the room, or because the French are more moral or better people. In huge part, it's because the French went all-nuclear after the '70s Energy Crisis, while the US enacted an array of environmental-pushed regulatory barriers on nuclear after Three Mile Incident. As a result, the US uses lots of carbon-intensive coal to generate power.

India and China also have huge coal stores, but they've been more farsighted about taking a look at nuclear power. China has plans to generate about 250 GW of energy (about five times the total output of Britain) by 2030. The India-US nuclear deal has paved the way for the Indian nuclear program; with potential output of 470 GW by 2050. Obviously, both of these are optimistic projections; but certainly energy of this magnitude is going to come online either from coal or nuclear, and a share of nuclear this large is the only way to ensure that China and India approach France-like levels of carbon emissions rather than US-levels. Incidentally, by signing this bill, Bush possibly did more for reducing global carbon emissions than Obama (though he voted for the bill) ever will.

The US could get down to French levels as well. For various reasons, the feel-good technologies like wind and solar will probably not get us there--they're too expensive, too intermittent, and not scalable enough to replace coal as a source of base energy--nor will green jobs materialize. Yet nuclear power, especially linked with battery cars, can cut US emissions drastically with no increase in costs. Switching over to electricity instead of gas would also end persistent trade imbalances which have been implicated in the financial collapse, and eliminate oil shocks as a source of economic problems.

Fortunately, Carlos Ghosn is hard at work on electric cars (though Chevy has backed away, despite this being the rationale for their bailout); the Energy Secretary is pro-nuclear; and there are encouraging signs that the bipartisan deal being brokered over Cap and Trade will feature a heavy nuclear component as well.

The takeaway here, as usual, is that the environmental movement is its own worst enemy. Their emotional and fear-based attacks against all things nuclear have jeopardized the only clean, cheap, and scalable source of combating global warming.

They've chosen to highlight global warming on grounds of personal morality; spreading "awareness" and emphasising how we all need to inconvenience ourselves in ways that address our guilt in destroying the world, but which ultimately are not effective. If they got together and emphasized rational, cost-effective policies like nuclear power, geoengineering, or carbon taxes; we would make much more progress, both here and other countries.