MuseLetter #187 / November 2007
by Richard Heinberg

Read this on GlobalPublicMedia

Big Melt Meets Big Empty
Rethinking the Implications of Climate Change and Peak Oil

Environmental and development NGOs are now fixated on climate change to
the exclusion of nearly every other topic. Discussions in and among these
organizations center on capping carbon emissions and trading emissions
rights, and doing this internationally in a way that will be deemed
equitable by the global South and acceptable to the industrial Northern
countries.

Most of these policy organizations are seeking ways of implementing
recommendations made in 2001 by the Intergovernmental Panel on Climate
Change (IPCC), which suggested that to keep the global average temperature
rise to two degrees Celsius above pre-industrial levels (by consensus, the
maximum increase the world's climate system can absorb without triggering
catastrophic climate change), the amount of greenhouse gases in the
atmosphere must be capped at 450 parts per million of carbon dioxide
equivalents. This will require a 60 to 80 percent reduction in carbon
emissions below current levels by 2050.

In order to win any reduction agreement from less-industrialized
nations, the richer, more industrialized nations will have to promise to
reduce their emissions more and faster. A growing number of organizations
(including the Global Commons Institute, EcoEquity, the Climate Equity
Project, Feasta, Just Transition Alliance, The Sky Trust, and Third World
Network) contend that the fairest solution would be to allocate annually
capped emissions rights globally on an equal per-capita basis; then, if
wealthy nations wished to continue using proportionally more fossil fuels,
they would have to purchase emissions rights from more parsimonious
consumers in poor nations. This would result over time in both a
diminishing amount of total emissions (based on the declining trajectory of
the annual caps) and an enormous transfer of wealth from the
more-industrialized to the less-industrialized nations. Some organizations
advocate immediate allotment of equal per-capita emissions rights; others
envision a staged implementation of the program, that would give wealthier
nations time to plan and adjust (the two most widely promoted versions of
this strategy are known as "Contraction and Convergence" and "Cap and
Share").

From the perspective of less-industrialized countries, a global climate
policy that does not include an equity provision is a non-starter. The
existing humanly produced atmospheric carbon, which will continue driving
climate change for the next 40 years or so even if all emissions are halted
now, was generated overwhelmingly by rich countries in the process of
getting rich. Thus it is these countries' obligation to shoulder most of
the burden of necessary cutbacks. A second equity argument has to do with
expected population growth: since the population of the global South is
expected to double during the next 50 years while total population in rich
countries is projected to remain at current levels (the US is an
exception), even if the South reduces carbon emissions at half the rate of
the industrial North that will translate to an equivalent per-capita
cut.

If people in the industrializing countries (particularly China and
India) continue to burn more coal and drive more cars, they will
metaphorically cook the planet. These nations have the highest growth rates
for fossil fuel emissions, and China is set to soon become the world's
foremost carbon emitter if it has not already done so. These nations are in
effect saying to North America, Europe, and Japan, "Agree to reduce your
emissions faster than we do, or we won't reduce ours at all and the entire
planet will burn."

This Grand Bargain could amount to an unprecedented shift of the world's
economic center of gravity. During decades of "development" policy and aid,
the disparity between rich and poor only grew; now, however, the poor world
has a weapon - even if its use implies a suicide pact.

The environment/development advocacy community is pushing its agenda
with particular urgency for two reasons: first, scientific data show
dramatic climate impacts already appearing that could devastate global
ecosystems within decades or even years (more on that in a moment); and
second, the agenda itself promises to solve at one stroke three enormous
problems - the world's unsustainable reliance on fossil fuels, a pending
environmental catastrophe, and the global equity dilemma.

However, the Grand Bargain is going to hit three serious snags before it
can gain acceptance: politics, scarcity of fuels, and a growing perception
that it is already too late to avert catastrophic climate change. These
barriers may require new tactics if NGOs are to achieve their goals.

Has the Climate Revolver Already Fired?

In a paper titled "Climate Change and Trace Gases" published in the
Philosophical Transactions of the Royal Society earlier this year,
six of America's leading climate scientists, led by James Hansen, director
of NASA's Goddard Institute for Space Studies, warned that the Earth is
rapidly approaching a "tipping point" beyond which climate change will
become unstoppable (www.planetwork.net/climate/Hansen2007.pdf). The
authors discussed feedback mechanisms not included in the assessments of
the IPCC and argued that unless effective measures are put in place to
control CO2 emissions over the next ten years, the rise in the Earth's
temperature could set loose self-reinforcing processes that would be beyond
human control.

Some critics said Hansen was overstating his case. Richard Peltier, a
University of Toronto physicist and the director of the Centre for Global
Change Science, criticized the tone of the paper and the use of words such
as "cataclysm," saying that Hansen had moved "dangerously away from
scientific discourse to advocacy" (http://postcarboncities.net/node/1018).

But this was before the summer Arctic ice melt of 2007.

This year, Arctic ice reached a minimum extent of 4.13 million square
kilometers, compared to the previous record low of 5.32 million square
kilometers in 2005. This represented a decline of 22 per cent in just two
years; the difference amounted to an expanse of ice roughly the size of
Texas and California combined. Between 1979 and 2005, the rate of Arctic
ice retreat had averaged 7 percent per decade; in the two years from
September 2005 to September 2007 that rate increased to more than 20
percent. Moreover, the average thickness of the ice has declined by about
half since 2001. Altogether, taking into account both geographic extent and
thickness, summer Arctic sea ice has lost more than 80 per cent of its
volume in four decades. While sea levels will not be directly affected by
the total melting of the northern icecap since it floats on and thus
displaces ocean water, that event will severely destabilize Greenland's ice
pack - whose disappearance would cause sea levels to rise by several
meters, inundating coastal cities home to hundreds of millions.

The organization Carbon Equity issued a report last month, "The Big
Melt: Lessons from the Arctic Summer of 2007" (www.carbonequity.info/PDFs/Arctic.pdf), which draws
conclusions from this disturbing new information:

The data surveyed suggests strongly that in many key areas the
IPCC process has been so deficient as to be an unreliable and indeed a
misleading basis for policy-making. . . . Take just one example: the most
fundamental and widely supported tenet - that 2°C represents a reasonable
maximum target if we are to avoid dangerous climate change - can no longer
be defended. Today at less than a 1°C rise the Arctic sea ice is headed for
very rapid disintegration, in all likelihood triggering the irreversible
loss of the Greenland ice sheet and catastrophic sea level increases. Many
species are on the precipice, climatechange- induced drought or changing
monsoon patterns are sweeping every continent, the carbon sinks are losing
capacity and the seas are acidifying. . . . The Arctic began to lose volume
at least 20 years ago when the global temperature was about 0.5°C over the
pre-industrial level. So we can now see that to protect the Arctic the
average global temperature rise should be under 0.5°C.

According to the report, if this suggested 0.5°C precautionary warming
cap were adopted, the target for allowable concentrations of atmospheric
greenhouse gases would have to be about 320 ppm CO2 equivalents, a level
that was passed more than 50 years ago.

Another report published this month, this one in the Proceedings of
the National Academy of Sciences (www.guardian.co.uk/environment/2007/oct/23/climatechange.carbonemissions),
documents that carbon is accumulating in the atmosphere much faster than
previously thought, and only adds weight to the Carbon Equity
recommendations. While global carbon dioxide emissions from fossil fuel
burning rose annually by 0.7 percent in the 1990s, the new study shows they
have increased by an average 2.9 percent each year since 2000.

What would targets of 0.5 degrees warming over pre-industrial levels,
and 320 ppm CO2e, mean in terms of policy? While the Carbon Equity report
doesn't say so, if all nations were to bear the brunt of equal emissions
cuts the latter would have to be huge - well over 90 percent in just three
or four decades. But if international equity is also targeted, this means
that for the wealthy nations more than 100 percent reduction would
be needed. In other words, leaving aside the notion of carbon capture and
storage (discussed below), not only would wealthy nations have to transform
their economies to run entirely without fossil fuels (which currently
supply 85 percent of world energy), but they would need to spend
considerable capital on efforts to capture and sequester existing
atmospheric carbon - for example, through massive reforestation projects.
One has to wonder: With all the energy and investment that would be needed
to de-carbonize industrial economies (by developing renewable energy
sources, building public transportation infrastructure, and so on) and
store carbon, what money and energy would be left to run existing
economies, much less to fuel growth in goods and services to the
population?

Politics: An Alternate Reality

Climate science exists in a different world from the one peopled by
politicians. Inhabitants of both worlds think of themselves as
realists: while scientists study the real physical world,
politicians are arbiters of what can and will get done in the real human
socio-economic world.

In general, any policy that means voluntary economic contraction of any
noticeable magnitude doesn't stand much of a chance in the real world of
politics. At least in the current political climate, absent a massive
public education effort, voters will not support it and no politician will
stake her career on it.

This in itself constitutes an enormous roadblock to the achievement even
of the IPCC recommendations, much less the far more stringent targets (but
more "realistic" ones in the scientific sense) that Carbon Equity is
proposing. Faced with this roadblock, climate activists typically respond
by minimizing the estimated cost of de-carbonizing economies, and by
assuring one and all that economic growth can continue into the indefinite
future while industrial nations radically reduce their consumption of the
very fuels that made the industrial revolution possible. But if this
sanguine, politically acceptable notion is at least arguable in the case of
the IPCC reduction targets, it is hardly credible when it comes to the
emissions reduction trajectory suggested by Carbon Equity.

Take the US as an atypical but essential example. One can realistically
calculate a possible 50 percent reduction in fossil fuel consumption for
the country through conservation (though that will be an enormous job,
requiring extensive new electrified public transport infrastructure, new
housing codes, subsidized energy retrofit programs, and so on). Another 25
percent of current fossil fuel consumption could be offset with renewable
energy sources. All of this would take a few decades, and during that time
we have to assume no population growth and no economic growth. That gets us
to 75 percent reduction from current levels. Beyond that, it is difficult
to see how more could be achieved - unless America continues burning fossil
fuels but captures and stores the carbon. Suddenly with that possibility a
relief valve is opened: coal-based electricity could flow in to fill the
void.

This is why carbon capture and storage is the technical centerpiece of
most politically acceptable prescriptions for climate salvation. However,
technologies for carbon capture will add to the cost of energy, will reduce
the amount of useful energy derivable from fossil fuels, and won't be ready
for widespread commercial application for about three decades. We do not
even know if the captured carbon will stay where we put it. These are not
trivial problems, and the first two will bite hard in the emerging context
of scarce energy supplies and high prices (more on that below).

Still, politicians are feeling increasing pressure from constituents,
NGOs, and the scientific community to agree at least to the IPCC target of
60 to 80 percent emissions reductions by 2050. The European nations have
signed on to a carbon reduction scheme, as has the state of California. The
method being adopted is capand- trade - the creation of a carbon emissions
rights market that, according to its critics, is actually an elaborate
shell game that enables wealthy nations and energy corporations to continue
burning fuels at high rates by paying others to do the hard work of
figuring out how to get by on less fuel (a point hilariously illustrated on
the website www.cheatneutral.com). While cap-and-trade employs
many of the same basic mechanisms as the emissions rights distribution
programs advocated by the environmental/equity NGOs, there are also
substantial differences: governments and corporations envision high caps
and free or auctioned distribution of emissions rights to industry; the
NGOs advocate much lower caps and free distribution of rights to the
people. Resolving these two visions of the process will be no small
matter.

But let's assume the best - that cap-and-trade will in fact move nations
toward their targeted reductions; in that case, would promises continue to
be met if compliance began to compromise economic growth? Significantly,
California's climate law, AB32, contains an escape clause:

1. In the event of extraordinary circumstances, catastrophic events, or
   threat of significant economic harm, the Governor may adjust the applicable
   deadlines for individual regulations, or for the state in the aggregate, to
   the earliest feasible date after that deadline.
2. The adjustment period may not exceed one year unless the Governor makes
   an additional adjustment pursuant to subdivision (a).

In other words, the Governor can essentially cancel the state's
greenhouse gas reduction efforts for a year, then do the same the next
year, and so on.

Meanwhile, international bargaining on the equity issue will be a
nightmare. The "North/South" terminology used by development NGOs utterly
fails to capture the complexity of the negotiations. The reality is that
"North" consists primarily of the US, Europe, Japan, Australia, Canada, and
South Korea, which have quite different energy trajectories and political
positions. "South" consists of rapidly industrializing countries (China,
India), really poor countries whose economies are stagnant or declining
(Zimbabwe, for example), as well as major fossil fuel exporters (OPEC)
whose revenues are increasing but whose industrial base is small. Again,
these categories of countries have very different energy mixes and
bargaining positions that are poorly captured by a single term.

China represents itself as speaking for the entire less-industrialized
world in insisting on an equity provision, and in some ways this makes
sense: its voice is much louder than that of Zimbabwe, so the latter gets a
free megaphone. But China can easily afford to bid up energy prices and can
continue to grow its economy even with oil at $100 per barrel, while
Zimbabwe can't afford much fuel at all at current prices even if it is
permitted to burn all it likes under climate accords. Thus the practical
climate mitigation question that must be addressed with regard to the South
is not whether the desperately poor in fuel-importing nations should have
the right to industrialize using coal or oil - that is not an option, given
global supply constraints (which, again, we will address in a moment); the
question, rather, is whether China and India will continue to industrialize
by burning coal.

Russia is in a category of its own, but due to its wealth of remaining
fuels it will be a key player in the energy and climate discussions.

And so, while in some ways the situation is more complex than it is
represented to be, in another it is simpler. As James Hansen has recently
noted (http://pubs.giss.nasa.gov/docs/notyet/submitted_Kharecha_Hansen.pdf),
the resolution of the climate dilemma really centers on coal (it is the
world's fastest growing energy source because of its current cheapness and
abundance, while it is also the most carbon-intensive of fuels), and thus
it revolves mostly around four nations - China, the US, India, and Russia
(the US and Russia have the largest reserves; China is the foremost
consumer; and India has both large reserves and fastgrowing consumption
levels). Getting these countries to agree on major reductions in coal
consumption, in which the US reduces much faster than India and China for
the sake of global equity while Russia keeps its treasure chest of fuels
buried, is going to be . . . well, difficult. Moreover, since China
consumes twice as much coal as the US, arguing for the US to reduce faster
than China is also, in effect, arguing for slower total declines in
emissions from coal.

And we must remember: the global South may have a leverage point here,
but the North still has the guns. In history, nations have gone to war to
enforce or avoid transfers of wealth much smaller than those implied in
some climate equity proposals.

But What About Supply?

Conventional cap-and-trade carbon markets work by creating a scarce
commodity (rights to emit) and then allocating that commodity by price. If
the commodity turns out not to be scarce, its price will collapse and so
will the market. If fossil fuel depletion means that carbon emissions will
be declining anyway, rights to emit carbon will cease to be scarce. People
will buy such rights only if they can afford the fuel. When fuel is
expensive and the supply is shrinking at a rate comparable to reduction
rates mandated by caps, the carbon market becomes utterly irrelevant.

That is essentially the situation we face.

Global oil production has probably already peaked, as was affirmed just
this month by an authoritative report from the Energy Watch Group of
Germany (www.energywatchgroup.de/Erdoel-Report.32+M5d637b1e38d.0.html).
The peak for global natural gas production is likely to follow in a few
years, perhaps a decade or two at most. And, according to another Energy
Watch Group study, "Coal: Resources and Future Production," published
earlier this year, global coal production is likely to peak between 2025
and 2030 (www.energywatchgroup.org/files/Coalreport.pdf). With
oil past its peak, and with gas and coal able to do little to compensate,
total energy derived from fossil fuels will peak around 2010, while total
CO2 emissions will peak somewhat later due to the fact that coal will
commence its decline after oil and gas.

Aside from the fact that it undermines the efficacy of carbon trading,
this news has one good, one not-so-good, and one rather terrible
implication.

On the good side, the early peaking of fossil fuels means that most
estimates of future global carbon emissions will never be realized. The
Special Report on Emissions Scenarios (SRES) of the IPCC presents 40
scenarios for future CO2 emissions. Most scenarios show growth in emissions
to 2100; the average of all 40 shows fossil fuel consumption in 2100 at
about twice current levels. The Report offers no discussion of supply
constraints for oil, gas, or coal.

Engineering professor David Rutledge of the California Institute of
Technology has authored an online article titled "The Coal Question and
Climate Change" (www.theoildrum.com/node/2697), in which he applies
techniques typically used to forecast oil production peaks to coal,
arriving at conclusions similar to those of the Energy Watch Group. In his
analysis, supply constraints will yield lower emissions from coal than
envisioned in any of the 40 IPCC scenarios. On the basis of supply
constraints alone - not assuming any voluntary emissions-based consumption
cuts - atmospheric CO2 will peak at 460 ppm by 2070. Rutledge writes:

The maximum temperature rise for our Producer-Limited Profile
is 1.8°C in 2150. The . . . part of the temperature rise that is associated
with future fossilfuel use . . . is calculated by running the simulation
with and without future fossil fuels, and subtracting. It turns out that
the maximum temperature rise associated with future fossil fuel use is only
0.8°C, less than half of the total. This means that the contributions to
the temperature rise from fossil fuels that have already been consumed, and
from deforestation, and from other greenhouse gases amount to more than the
contribution from future fossilfuel use.

So much for the good implication of fuel supply constraints. The
not-so-good implication is that, while shortages of extractable oil, gas,
and coal will nearly ensure the achievement of the low-range IPCC targets
of 60 percent reduction in carbon emissions by 2050, they will not
guarantee the more than 90 percent reductions by 2040 that will be required
if we are to come close to achieving 320 ppm CO2e before the end of the
century. Thus deep carbon cuts will still be needed if there is yet hope of
averting catastrophic climate change.

The terrible implication is that a relentlessly declining fuel supply
will almost certainly have devastating economic, social, and political
impacts. Trade, manufacturing, and farming will be hard hit. No nation is
prepared to deal with the high prices and shortages for energy that will
soon begin to work their way through the entire global economic system.

Political Reality Confronts Physical Reality

Taking all of this information together - the physical realities of
climate data and fuel supply projections, and the political realities
previously mentioned - what conclusions can be drawn? Perhaps the best way
to find out would be to bring together several of the most knowledgeable
and open-minded experts in relevant fields and let them talk these issues
through for a few days away from the public eye. However, until that
happens here are a few thoughts of my own.

Some kind of climate agreement will probably emerge within the next two
years due to pressure from NGOs and the real concerns of governments. But
the economic self-interest of those governments (and major corporations)
will most likely ensure that only a watered-down version will be agreed to.
Some form of carbon market will be deemed the acceptable means of
implementing it. And its terms will include a mild equity provision that
won't make anyone happy.

At the same time, supply constraints will be starting to hit hard -
globally for oil, regionally for gas, and in China for coal. Ultimately,
these supply shortfalls may drive policy far more than fear of climate
change. The response of governments to fuel shortages will be one of
desperation: climate mitigation efforts will fall by the wayside as nations
flail about attempting to keep their food and transport systems
functioning. International conflict is likely.

This clearly is not the optimal scenario. What alternative policies
would yield different results, and how might we go about assessing policy
options in the light of factors discussed above?

One way to begin the assessment process would be to list and rank
candidate policies in a two-by-three matrix. Start with two vertical
columns; in the first, list those that could actually achieve emissions
reductions; in the second, list those that could actually help societies
adapt to scarce and expensive energy. In these first two columns, order
policies in terms of the degree of positive impact anticipated. Then in
three rows, rank those policies in terms of (1) how they will affect
equity; (2) how politically viable they are now; and (3) how politically
viable they are likely to be in the context of energy scarcity.

If a policy is likely to be highly efficacious but is politically
unacceptable now or later, we might leave it on the table for further
consideration while taking note of the problem. (The fact is, policies that
rank well under the heading of what is politically viable now may not
correspond with much of anything in the high range of the two columns.)

It would be interesting to see if different organizations would arrive
at similar or widely varying conclusions from this exercise. The following
are some observations from my own initial run-through.

At the top of the two columns should be some overall umbrella policy to
manage the transition away from fossil fuels. We have already seen the
potential problems with cap-and-trade resulting from fuel shortages. Those
problems could be addressed by lowering the caps with the goal of making
emissions rights scarce again, but in a contracting economy this might not
work, and most people would see the effort as arbitrary and onerous anyway.
Distribution of emissions rights directly to the people on an equal
per-capita basis might help avert a carbon market collapse (as long as
there was a demand for fuel, there would also be demand for the emissions
rights). But why not just cap the extraction, and ration the distribution,
of fuels themselves instead of regulating the emissions they
produce? The rationing of scarce fuels is historically proven; this
approach would be both more effective, and more intuitively reasonable and
understandable to all concerned. Two existing proposals could be helpful
here - the Oil Depletion Protocol (www.oildepletionprotocol.org), which if generalized
would provide a direct mechanism for capping fossil fuel extraction and
consumption; and Tradable Energy Quotas (www.teqs.net), guaranteeing equitable access to the
available domestic supply of scarce fuels - a basic electronic rationing
scheme that will be essential when oil outages begin, and that needs to be
installed in advance.

Since fuel depletion alone will not result in emissions cuts sufficient
to achieve an atmospheric greenhouse gas concentration of 320 ppm CO2e, and
since carbon capture and storage is problematic, if nations are serious
about climate protection the discussion must center on leaving coal and
other low-grade fossil fuels (such as tar sands) in the ground. The fact
that this is a politically distasteful notion now, and is likely to become
even more so, puts a big burden on the persuasive abilities of all of us
who care about the climate. But this is the one policy that will assuredly
work to achieve our goal.

As for equity: Since we live on a finite planet, equity for the global
poor can only really be achieved by a reduction in material living
standards for the billion or so inhabitants of wealthy nations. As we have
seen, this notion is extremely difficult to sell to the governments of
industrialized democracies now, and it will be no less so when their
economies are in tatters.

However, steep declines in standards of living will be hitting these
wealthy countries anyway, due simply to depletion of important energy
resources, starting with oil. The only way to avert massive social chaos
and famine as extraction levels decline will be to devote public capital
domestically toward the building of lowenergy infrastructure (e.g.,
electrified rail networks, trolley lines, wind farms) while moving many
people to rural areas and teaching them to farm sustainably. Production and
consumption will have to be largely re-localized, essential goods rationed
by quota. Basically the same thing will have to happen in the poor
nations.

One end result will be a world characterized by much greater
international equity - but this will have been achieved without enormous
direct international wealth transfers. Another result might be the
reduction of control by the present power-holders within all nations, since
their power is currently maintained and exerted in the context of giant
centralized systems of production and distribution.

One more helpful equity strategy would consist of the transfer of
renewable energy technologies from rich to poor countries for domestic
implementation free of intellectual property rights.

The single factor that would undermine the energy transition and bring
everyone to ruin is resource wars.

Some of the policies mentioned (such as the development of renewables
and reforms to industrial agriculture) are ones climate activists are
hoping to promote indirectly through emissions caps. My analysis suggests
that it may be better to champion these policies more directly, and to
buttress the argument with depletion data.

Ultimately, power holders must be convinced that such policies, if
obnoxious to them now, will be far less destructive to their interests than
a complete breakdown of society and biosphere - which is the very real
alternative. For a historic example of a similar conversion of elites think
of the 1930s New Deal: then the titans of industry had to sacrifice some of
their financial power in order to keep from losing it all. Many wealthy
individuals never forgave Franklin Roosevelt, whom they regarded as a
"traitor to his class," but most of them reluctantly agreed that
redistribution represented the lesser of evils.

Today the central question facing us is not whether the world
will move away from fossil fuels, but how. The primary dispute will
be between those who look for short-term solutions to energy supply shocks
(burn the last of the coal, attempt to expand the use of other low-grade
fossil fuels, go to war to control remaining highgrade fuel deposits), and
policy advocates with a long-range plan for dealing effectively and
peacefully with climate change, adaptation to scarcity, and global
inequity. If NGOs are stuck fighting for policies that simply won't work,
then the short-term options, however disastrous, will win by default.

At best, this article can only describe the situation in general terms,
point to a few of the possible policy options, and begin assessing them,
without delving into messy but essential details. Much more analysis is
clearly required. It is surely time for the climate and equity policy
discussion to broaden to include the challenge of impending energy resource
scarcity, as well as a more nuanced reconnoitering of the current and
future political terrain. Perhaps this essay can serve as a conversation
opener.