Paying the Costs of the Kyoto Protocol Climate Treaty

Yesterday, I went to a talk, "Partnerships for Clean Development, Energy Security and Climate Change," by the chairman of President Bush's Council on Environmental Quality, James Connaughton at the American Enterprise Institute. Generally Connaughton was describing various Bush Administration policies to research and address climate change, but leaving those aside, he made an very interesting observation. He pointed out that the recent run ups in the prices of oil and natural gas basically equaled what the cost of complying with the Kyoto Protocol would have been.

Critics of that climate change treaty have been concerned about the economic damage that complying with it would have caused. However, the economy has continued to hum along quite nicely despite the rise in fuel prices.

Discuss.

Comments

[Mith]

Seems like people don't like to dicuss things when told to.

[Paul Rattner]

The economy would hum along even nicer without price increases of any sort, I would imagine.

[fyodor]

Nothing is black and white in economic matters, and people who talk in such terms merely discredit themselves. Kyoto was never likely to cause some total economic meltdown or catastrophe any more than 'Peak Oil', if real, is. In either case, however, there are costs. Costs take money out of your pocket, but rarely do they take all of it, or even most of it. See, paradox solved!

[John]

Comparing the cost of Kyoto to the cost of the recent spike in oil prices is only relevent if complying with Kyoto would have prevented the rise in oil prices. Otherwise, the cost of complying with Kyoto would have been in addition to the recent spike in oil prices. I don't see any evidence that the rise in oil prices is the result of not complying with Kyoto. First, greenhouse emmissions come from a lot more than oil, so the energy consumption forgone by complying with Kyoto would not have come strictly from oil but things like coal as well. Further, a lot of the rise in oil prices has more to do with the fall of the dollar and inflationary speculation than simple supply and demand. If the fed would ease up on the easy money policy and Congress would stop spending so much, the dollar would rise and the price of oil would fall corrispondingly.

[Xmas]

Well, what are we at now, 8 or 9 months of high gasoline prices. I suppose consumers are hoping that prices will come down, eventually.

But, there's something missing here. Would Kyoto change gas prices as much? Suppose it would. With Kyoto increasing prices on gasoline and other goods, I believe there would be more political pressure to fix things. After all, high prices on goods and transportation affect the poor more than the rich. Plus Kyoto price increases would be a very long term problem as opposed to the current, real gas price problem, which has an indeterminate time frame. Even the current gas price "crisis" has resulted very little political change, although if prices are still high in November, that could change.

So, after all that processing, I think we are missing the political effects of Kyoto, especially the pressure to meddle with the economy to "fix" the price increases caused by following the treaty. And political fixes for the economy never work out well.

[Jacob]

It's impossible to know the effects of a double helping of economic damage from obeserving the effects of a single helping. That being said, we can be sure that we would be better off with fewer negative shocks.

The real travesty of Kyoto is not that it costs so much, but that the benefits are so small. Proponents leave out a very important part of the term "cost/benefit analysis" when they discuss the protocol.

The Kyoto protocol is expected to lower global temperatures by about .07C in 50 years, or in other words delay global warming by about 4 years. When the miniscule benefits of Kyoto are compared to the cost, it is seen for what it is: a ridiculously expensive feel-good policy.

http://www.junkscience.com/MSU_Temps/Kyoto_Count_Up.htm

[Evan]

As Fyodor said, the economic catastrophe pushed by some of the more hardliners was grossly inflated. But the bigger issue here is not whether Kyoto was likely to have a large negative economic effect, but whether or not the ROI would really be worth it. By almost all accounts, it would not have been, regardless of how much it damaged the economy as a whole.

As the same time, there is a pretty big typological difference between restrictive laws set in place by the government that drive up the cost of doing business, and a rise in the market cost of a product---so I don't think that this comparison is really apt except on the most abstract, simplistic level of "impact on the economy as a whole".

[Jersey McJones]

I love this whole "the economy has continued to hum along quite nicely" crappola - and this time it's not just "oh, but the economy is growing," crappola, as if that told you much, but this time it's "oh, but see how cheap imports keep prices down." Pathetic. The dollar is sinking like a rock, the markets are waking up to it, the fiat isn't worth a dime anymore, and people say, "the economy has continued to hum along quite nicely." Any other vacuus generalizations to relate?

JMJ

[ok]

ok

[Jersey McJones]

I love this whole "the economy has continued to hum along quite nicely" crappola - and this time it's not just "oh, but the economy is growing," crappola, as if that told you much, but this time it's "oh, but see how cheap imports keep prices down." Pathetic. The dollar is sinking like a rock, the markets are waking up to it, the fiat isn't worth a dime anymore, and people say, "the economy has continued to hum along quite nicely." Any other vacuus generalizations to relate?

JMJ

[happyjuggler0]

My apologies if this double posts. I'm inclined ot think this one actually got lost in H&R's ether.

I have to second Jacob's observation here, although the numbers I heard were that if we implement Kyoto then 100 years from now we delay the Earth's temperature rise (regardless of how much such a temperature rise is) by a grand total of 5 years.

I think it is also worth pointing out how Europe and Canada are meeting their Kyoto obligations. They are not reducing Greenhouse Gas Emissions (GGE's). On the contrary, their numbers are soaring. They are getting away with this by buying emission credits sold by Eastern European countries.

Kyoto is based on a 1990 timeline, and in 1990 all Eastern European countries had ridiculously high amounts of pollution, not just GGE's, and their industry was ridiculously inefficient. These countries started getting more efficient, and more "green" with regards to tradional pollution. All on their own without Kyoto. Anyway, they wound up with tons of credits available to sell to western European countries who signed Kyoto, and they have done so and will continue to do so until they run out of credits to sell.

So the Kyoto signatories aren't doing a blessed thing to reduce GGE's, either in their own countries or other countries, but the media allows them to pretend they are Green and the big bad US is not Green.

I should note that only the UK and Sweden actually seem to have a chance at actually meeting their targets without bs smoke and mirrors. everyone else is merrily polluting away.

It is also interesting to guess what the former communist countries will do when they run out of credits. Does anyone really think that Russia won't simply renege or withdraw from Kyoto once their credits are used up? What is likely is that they are simply milking the poor saps in western Europe for their billions of $ for their emissions credits, and when that stops they will say no mas.

Kyoto is a scam. Bush got something right for a change.

[MikeP]

there is a pretty big typological difference between restrictive laws set in place by the government that drive up the cost of doing business, and a rise in the market cost of a product

Exactly. As the saying goes, follow the money.

Gas prices are high today because supplies are tight. Under Kyoto gas prices would be high because demand would be artificially restricted. Big, big difference.

It does not cost that much more this year than a couple years ago to pump, transport, or refine the oil. There are large producer surplusses at the wellhead and at the refinery. So the current situation is not a loss to the economy. It is merely a transfer of economic wealth from consumers to -- for the most part -- oil companies.

Now that might induce a lot of whining. But the producers are exactly who should get surplusses in a tight-supply situation. They are the people who are best positioned and most motivated to fix the tight supply problem. It is certainly better than putting that wealth in government hands.

And, of course, under a regime like Kyoto where you have artifically restriced demand, that wealth is simply destroyed. Oil that could have been pumped isn't, and consumers who could have satisfied a need by driving somewhere or raising their thermostat don't.

[mac]

Kyoto would certainly have reduced the size of the current oil-price spike. If there had been some pro-active demand-cutting, the price wouldn't have gone up so high. By how much, I don't know. It would also make the economy less sensitive to further price spikes. Whether or not Kyoto was the right model, the notion that it would appreciably damage standards of living is pretty dubious. You are probably better off investing in efficiency while the energy price is still low, than while you are already squeezed by high energy cost.

Pure market capitalism isn't necessarily the right model here, especially in an era when the market is driven by short-term profit and there are some serious potential externalities being ignored.

Serious question: In Libertopia, would the insurance companies charge a carbon tax?

[fyodor]

If there had been some pro-active demand-cutting, the price wouldn't have gone up so high.

You're confusing an overall demand curve with points along a demand curve. Reducing a desired good's availability would drive down the demand for that good by increasing the price, but it would have no effect on the demand for that good at any given price, which is what's actually relevant to consumer behavior in the larger picture.

[Lurker Kurt]

the fiat isn't worth a dime anymore

Jersey, are you being subtley humorous or unintentionally ironic?

Either way, I get quite a chuckle over that statement.

[joe]

The argument about the benefits of complying with Kyoto ignores the fact that the initial reductions would have required investment in technologies and practices that would have allowed for much greater reductions, at a much lower unit cost, down the line.

You don't fault drug companies for spending $100 million to develop the first $2 pill, do you?

[Jersey McJones]

Lurker - yes sir - you caught my little joke. 🙂 Facetious, yes. Point made, yes.

JMJ

[John]

"The argument about the benefits of complying with Kyoto ignores the fact that the initial reductions would have required investment in technologies and practices that would have allowed for much greater reductions, at a much lower unit cost, down the line.

You don't fault drug companies for spending $100 million to develop the first $2 pill, do you?"

Joe,

We of course don't have to sign international treaties and pass draconian laws to get them to make the $2 pill because the long term profit associated with the pill is bigger than the $100 million initial investment. If what you are saying about Kyoto is true; that the initial investment would pay for itself and then some through later energy savings, why do we need Kyoto at all? Certainly, the market would be making these investments on their own if they really were so profitable. Of course private actors do make huge investments into increased energy efficiency every day, as evidenced by the rapid overall increase of energy efficiency over the last 30 years. This of course hasn't reduced consumption; it has increased consumption by increasing the marginal benefit of each unit of energy consumed. To actually reduce emissions, Kyoto as some point would have to have mandated the reduction of energy use, this would have meant the loss of economic growth and standard of living either through outright reduction in the size of economies or in forgone growth. No matter how wonderful these mysterious technologies you speak of are, this fact is unavoidable.

[MikeP]

Serious question: In Libertopia, would the insurance companies charge a carbon tax?

I assume since you are asking about a private enterprise charging a "tax", you are talking about a libertarian anarchy.

The answer is yes and no. Yes, in that it is probably insurance companies that would have the motivation, market power, and coordination ability to internalize the externality. No, in that the problem of antropogenic CO2 is solved much better by non-tax solutions.

First, atmospheric CO2 is extremely amenable to widely dispersed sequestration solutions. And, second, the obvious Schelling point in dealing with collateral CO2 production is zero collateral CO2 production.

So if it is proven beyond a reasonable doubt that anthropogenic CO2 production imposes a high cost on third parties, the insurance companies would force the large producers who handle the fuel to guarantee that they are carbon-neutral on the balance sheet. That is, they must reduce their carbon production, sequester the carbon themselves, pay some carbon reducer to sequester it for them, or some combination of the three that yields zero net carbon.

[joe]

John,

It's called the tragedy of the commons.

If it's in everybody's interests not to overgraze the field, why put limits on the number of sheep anyone can graze?

And you might find it interesting to recall that, before it was "unavoidable" that the economy could not grow without increased energy use, it was once "unavoidable" that the economy could not grow without increasing the area of land under cultivation.

[happyjuggler0]

I left out an important part of why Kyoto is bunk. If you kill a polluting indistry in France and the rest of the Kyoto countries, the most liely result is that the industries would not end, they would merely spring up in non-signatory countries like China or India. Thus, unless everyone is on board Kyoto can't work as advertised.

To some extent this is likely already happening now with new capacity additions going to China instead of Europe.

[MikeP]

By the way, is Connaughton correct when he says that the >$1 increase in gas prices is what the do-nothing Kyoto compliance would really have cost? I am skeptical for two reasons.

First, as a Bush official, he probably wants to scare the attendees with inflated cost figures.

And, second, complete removal of the atmospheric CO2 due to burning a gallon of gas has an initial marginal cost of less than 25 cents. Why would the powers that be stomach a dollar-per-gallon cost to reduce CO2 merely as a collateral effect of reducing production itself when they could reduce it to zero outright for a quarter the cost?

[fyodor]

It's called the tragedy of the commons. If it's in everybody's interests not to overgraze the field, why put limits on the number of sheep anyone can graze?

You've switched arguments, joe. If indeed there is a serious threat to an unavoidable and necessary commons such that your analogy has any validity, then perhaps some collective action is called for. But there will still be costs, and unlike the (seeming?) implication of your previous analogy to pharmaceutical investments these costs are not recuped and turned into profit. The only thing that would justify said costs is if they indeed avoided greater mutual costs down the road. But that's different from saying we'd come out ahead.

And you might find it interesting to recall that, before it was "unavoidable" that the economy could not grow without increased energy use, it was once "unavoidable" that the economy could not grow without increasing the area of land under cultivation.

Not sure what your point is. As I've stated much earlier in this very thread, black/white thinking about these matters is never the best model, whomever it comes from. Maybe the economy will still grow if energy use is forceably capped, but only because it would have grown more otherwise. There will still be costs, and potentially very large costs. Furthermore, there's no comparison between changes that come about as a result of market driven efficiencies and changes that come about as a result of centrally planned and coerced mandates. And you might recall that we libertoids are big believers in market driven efficiencies, no need to remind US of that!!

[joe]

happyjuggler, you are correct about countries getting a free pass. That was the reason the Senate rejected it. A revised version to address this shortcoming would have passed, as a majority of the No voters stated at the time.

fyodor,

John switched arguments, so I followed him. I know, maybe not the smartest choice...

He raised the issue of cost/benefit, I responded by saying that the cost/benefit ratio would change as technology advanced. He then asked how such a positive cost/benefit ratio could be ignored by the private market, and I responded to that argument, as well.

"But that's different from saying we'd come out ahead." I'm not saying we'd generate actual wealth from implementing greenhouse gas reductions, just avoid costs down the road. It was not I who first referred to the avoidance of global warming damage as a "benefit," either. I'm just using the terminology in play. Sorry if that wasn't clear - this whole debate is about what will be the lesser cost, global warming or greenhouse gas reductions, and the term "benefit" refers only to the reduction of that cost.

"Not sure what your point is." My point is merely that statements very similar to John's assertion that we can't grow without expanding energy use has been made before, and proven wrong before, with other economic inputs. Labor - field workers - ok, slaves and peasants - was once considered to be the limiting factor in economic growth.

[Sam]

I was always of the opinion that Kyoto Treaty 1 was meant to be experimental in nature. It doesn't matter if it alone has any real effect on the climate; it matters if it helps finds out what means really works to control the global climate.

[fyodor]

I'm not saying we'd generate actual wealth from implementing greenhouse gas reductions, just avoid costs down the road.

Well okay then, but that's not what you seemed to be saying! Especially with your analogy to the investments of pharmaceutical companies. If everyone misunderstands you, I'd venture to say you weren't being clear.

Anyway it's pointless to argue whether growth is possible with X or Y amount of energy use. Less government interference means more economic growth and wealth. More growth and wealth generally leads to more efficient use of all resources, natural and otherwise. These axioms hold true at all points of the spectrum.

[R C Dean]

this whole debate is about what will be the lesser cost, global warming or greenhouse gas reductions, and the term "benefit" refers only to the reduction of that cost.

Even posing the question that way assumes something not yet in evidence - namely, that the current warming trend, unique among all warming trends in the history of the planet, is caused by anthropogenic CO2.

It also assumes that global warming will be a net cost to humanity, also not in evidence. While we know pretty much for certain that reducing energy use will have human costs because it will retard economic growth, we don't know if global warming will be, on net, good or bad for people.

[SmokingPenguin]

...If you kill a polluting indistry in France and the rest of the Kyoto countries, the most li[k]ely result is that the industries would ...merely spring up in non-signatory countries like China or India...

Happyjuggler, since countries like India & China use a lot of messier fuels such as high sulfur coal, this could mean that Kyoto actually winds up increasing atmospheric CO2.

[Johnny]

The only thing more worthless than arguments against Kyoto are arguments in favor of it.

Power blocs lost in solopistry. populist blocs from the right and left of those who "know" before they learn, talking past each other.

And the science, whether physical or econimic is harmed by finding ones end point prior to hearing the evidence. Which both sides do.

[digamma]

Then there's the fact that the Iraq war has been more expensive than Kyoto would have been....

[happyjuggler0]

Happyjuggler, since countries like India & China use a lot of messier fuels such as high sulfur coal, this could mean that Kyoto actually winds up increasing atmospheric CO2.

Correct you are! I'm sure I'll get to use that idea at some point in the future....

Thanks for fixing my misspelling of likely as liely. Oops. You did leave in indistry though. At least I spelled the plural correctly though, industries. I never said I could type. 🙂

[trainwreck]

CO2 is Good For You!!

[SmokingPenguin]

...You did leave in indistry though...

Guess I wasn't indistrious enough to catch that one.

I'm still waiting for the vegan/NORML crowd to try to more agressively promote growing marijuana to eliminate atmospheric O2. I heard this argument once - the basic thread was that since it was a very fast growing plant, it took a lot of CO2 out of the air rather quickly. I don't think it would work, but I agree with it nonetheless.

[trainwreck]

John, you just got PWN3D!!!!

http://www.ens-newswire.com/ens/aug2004/2004-08-03-03.asp

But Professor Sami Solanki, solar physicist and director at the Max Planck Institute for Solar System Research, is not convinced that the increased activity of the Sun is responsible for global warming.

He says that based on his team's research, the Sun can be responsible for, at most, only a small part of the warming over the last 20 to 30 years.

"Just how large this role is, must still be investigated," he says, "since, according to our latest knowledge on the variations of the solar magnetic field, the significant increase in the Earth's temperature since 1980 is indeed to be ascribed to the greenhouse effect caused by carbon dioxide."

[John]

My point Trainwreck is that we really don't know for sure and that it is far from settled science how much greenhouse gases letalone manmade greenhouse gases are causing warming and that biases in the climatology community are likely to hamper us figuring it out.

[happyjuggler0]

This link is a Reason interview with a solar expert eight years ago which argues in the same vein as John's post. Granted, we know more now than eight years ago, but it is worth reading for an "alternative" point of view if one hasn't already read it.

[trainwreck]

John,

Amateur hour is over. Let the scientists go about their business now.

[joe]

Look trainwreck, when your so-called "scientists" go up against John's gut, who do you think is going to win the battle for John's brain?

[John]

Yes Joe, no reasonable person could ever disagree with you because you are right about everything!!! Man it must be fun to be that smug.

[TokyoTom]

Ron, you're not trying to get Connaughton in trouble with his bosses, are you? Cass Sunstein at U. Chi. made the same point about the comparative inexpensiveness of Kyoto in WaPo on May 9: http://www.washingtonpost.com/wp-dyn/content/article/2006/05/09/AR2006050901502.html.

I would say that it appears that with this post you are asking some of the right questions, but there is another very important observation that you've implied but is not explicit: why does the Administration choose to engage in what looks like a largely counterproductive war in Iraq, for purposes that appear entirely illusory, that all-in will cost us about $1 trillion or so, and has already cost us more than estimates for global implementation of the Kyoto protocol over several decades, but in case of climate change we have nothing but research and a new pact to shove subsidies at China and India?

A full discussion of the Iraq war is off-thread, but I think it is fair to note that partisan political advantage was one factor. But for purposes of the comparison with climate change, can't we draw on public choice theory and libertarianism to see the rich vein of public money and public resources that favored corporate interests have been exploiting through successful "rent-seeking" behavior, coupled with rampant influence-peddling inside the Administration and Congress?

In the case of climate change, industrialists and fossil fuel producers have successfully coopted policy and spun uncertainty, getting continued free use of the atmosphere at the cost of us all and future generations, and despite the opposition of the many firms in the Pew coalition, insurance firms and the utilities who have been clamoring for rational regulation so they can invest in clean, GHG-free coal gasification technologies as opposed to dirty coal-buring facilities. Note that the firms opposed to regulating GHGs at home did not object to the use of further tax dollars to subsidize research - these dollars don't come out of their pockets. And in the case of the now "long" "war on terror", it is clear that a number of favored firms and industries linked to the military are making out like bandits with our tax dollars (some being shifted to our children).

[TokyoTom]

Ron, you're not trying to get Connaughton in trouble with his bosses, are you? Cass Sunstein at U. Chi. made the same point about the comparative inexpensiveness of Kyoto in WaPo on May 9: http://www.washingtonpost.com/wp-dyn/content/article/2006/05/09/AR2006050901502.html.

I would say that it appears that with this post you are asking some of the right questions, but there is another very important observation that you've implied but is not explicit: why does the Administration choose to engage in what looks like a largely counterproductive war in Iraq, for purposes that appear entirely illusory, that all-in will cost us about $1 trillion or so, and has already cost us more than estimates for global implementation of the Kyoto protocol over several decades, but in case of climate change we have nothing but research and a new pact to shove subsidies at China and India?

A full discussion of the Iraq war is off-thread, but I think it is fair to note that partisan political advantage was one factor. But for purposes of the comparison with climate change, can't we draw on public choice theory and libertarianism to see the rich vein of public money and public resources that favored corporate interests have been exploiting through successful "rent-seeking" behavior, coupled with rampant influence-peddling inside the Administration and Congress?

In the case of climate change, industrialists and fossil fuel producers have successfully coopted policy and spun uncertainty, getting continued free use of the atmosphere at the cost of us all and future generations, and despite the opposition of the many firms in the Pew coalition, insurance firms and the utilities who have been clamoring for rational regulation so they can invest in clean, GHG-free coal gasification technologies as opposed to dirty coal-buring facilities. Note that the firms opposed to regulating GHGs at home did not object to the use of further tax dollars to subsidize research - these dollars don't come out of their pockets. And in the case of the now "long" "war on terror", it is clear that a number of favored firms and industries linked to the military are making out like bandits with our tax dollars (some being shifted to our children).

There's nothing particularly surprising about this rent-seeking behavior by large corporations, but what is surprising is how little play it gets from libertarians when they rail at "fear-mongering" "enviros" who are also seeking a place at the public table, both on environmentla issues generally and on climate change in particular. Why is it that one spin machine is slammed, while another's is ignored? This is particularly galling on environmental issues, as environmentalists are aroused on these issues because there is either a real market failure involved, or the government is providing a handout to its friends.

I'll comment on costs on another post.

[Kahn]

happyjuggler,

the most liely result is that the industries would not end, they would merely spring up in non-signatory countries like China or India. Thus, unless everyone is on board Kyoto can't work as advertised.

Listen juggler, you're just muddying up the waters here. Watch it or joe is going to get batman after you.

Though ironically, much of our engineering and industry is moving to China and India already, in 10 years it might make much difference anyway. The lion's share of our energy consumption has always been industrial.

Kyoto could have had the effect of accelerating a trend that's already in motion. Not that this is any reason to joint Kyoto.

Even posing the question that way assumes something not yet in evidence - namely, that the current warming trend, unique among all warming trends in the history of the planet, is caused by anthropogenic CO2.

They're going to get batman after you too RC, I just know it.

[Kahn]

In the case of climate change, industrialists and fossil fuel producers have successfully coopted policy and spun uncertainty, getting continued free use of the atmosphere at the cost of us all and future generations

Looks like we got us a live, on the hoof tree hugger.

I'll take him seriously just as soon as he convinced me that he really does live in a cave and wears nothing but all-natural, self caught deer skin.

[Kahn]

The environmental movement has, in fact, made substantial contributions to CO2 emissions in recent decades. By opposing the construction of new base electric generators, they've forced utility companies in big city areas to meet base line capacity using gas turbines instead.

Gas turbines would usually only be used to meet peak demand, because their efficiency (around 15-18%) is less than half what a decent steam plant is (a little less than 40%). But gas turbines are easy to turn on and off, which is why they get used to meet peak demand.

Letting those evil industrialist capitalist pig animal (add explitive of your choice here) jerks do their normal thing -- which would be, to build more efficient base generating capacity -- would in fact have reduced CO2 emissions over at least the past 25 years.

We won't even get into the fact that the free market never got a chance to figure out if nukes would really have made economic sense or not. I suspect we may never find out the truth of this one.

If you reduce efficiency when generating power, for any purpose, then the net effect is that more fuel must be used to generate a given amount of power. This means you get more CO2 emissions.

May the tree huggers continue to shoot their own feet.

I wonder -- if we signed onto Kyoto, but simultaneously got rid of all the stupid EPA regulations (and their state equivalents), would it be a net wash economically? It's entirely possible. If you're buying "rights" to burn fuel, on top of the fuel cost, then you'll be motivated to push efficiency up.

Of course, power companies are "public" so they just pass the cost (whatever it is) onto their customers, who may bitch but really have no choice unless they want to live in cold dark caves.

Uh oh, I think I see the bat signal now.

[Adriana]

The one thing to consider about costs is not how much, but how spread out. A fixed amount distributed evenly over the months is a lot more beareable than an undeterminate amount hitting all of a sudden. Let's say that you give a pint of blood every three or four months. At the end of five years you'll have hit over a gallon, and will keep on going. This amount is certainly much greater than five pints. But if you lose just those five pints at once you go into irreversible shock and die.

This is the same logic that dictates that paying in installments is preferable to paying all at once even if the price is higher. It is not the total amount, but how many resources you have left for other needs after a payment. And why car insurance payments add up after the years much more than the cost of the one occassional car repair, and are still thought of as a good deal.

So I think we may have to look at the costs of the Kyoto treaty. Are they spread out, leaving plenty of resources for other needs? How does that compare to the disruption caused by spiking oil prices?

Will the terms of the treaty spur out work on alternatives to fossil fuels, thus setting up a cushion against such spikes?

[Urinated State of America]

"Comparing the cost of Kyoto to the cost of the recent spike in oil prices is only relevent if complying with Kyoto would have prevented the rise in oil prices."

Why? The higher end of costs for CO2 mitigation, (e.g. $50-60/tonne CO2 for point-source capture at power generation plants with current technology), translate into a 50c/gallon increase in gasoline prices. We've been able to absorb a lesser increase quite well. (Of course, if such a rise were caused by Kyoto, we'd have reverted to using stone tools.)

A rise in the price of energy is an effective tax on economic activity. With Kyoto, it would have went to our government. With the current situation, it's going to Chavez, the Sheikhs and the Ayatollahs.

"First, greenhouse emmissions come from a lot more than oil, so the energy consumption forgone by complying with Kyoto would not have come strictly from oil but things like coal as well."

Yes, but energy markets don't move independently. A rise in oil prices is coupled with an increase in coal and natural gas prices.

Fydor wrote:
"You're confusing an overall demand curve with points along a demand curve. "

Think it's you who are confused. Shifting the supply curve up, in the short run, wouldn't affect the demand curve, but conservation measures would shift the demand curve leftwards.

"Gas turbines would usually only be used to meet peak demand, because their efficiency (around 15-18%) is less than half what a decent steam plant is (a little less than 40%). But gas turbines are easy to turn on and off, which is why they get used to meet peak demand."

You are absolutely full of it. Combined-cycle gas turbine plants are hitting over 60% conversion efficiency.

"I'm still waiting for the vegan/NORML crowd to try to more agressively promote growing marijuana to eliminate atmospheric O2. I heard this argument once - the basic thread was that since it was a very fast growing plant, it took a lot of CO2 out of the air rather quickly. I don't think it would work, but I agree with it nonetheless."

Nah. Biosequestration (reforestration, no-till farming) is nice and cheap, but it's potential to fix carbon is pretty small relative to the projected emissions over the next 100 years. It's only part of the solution.

John quotes stories on Solanki's research and says: "From the London Times Today. The "scientific consensus" on global warming is not quite what it is made out to be."

1. This is not from today's London Times. This is a two-year old study. The results were qualified by the Max Planck Institute later:

"These scientific results therefore bring the influence of the Sun on the terrestrial climate, and in particular its contribution to the global warming of the 20th century, into the forefront of current interest. However, researchers at the MPS have shown that the Sun can be responsible for, at most, only a small part of the warming over the last 20-30 years. They took the measured and calculated variations in the solar brightness over the last 150 years and compared them to the temperature of the Earth. Although the changes in the two values tend to follow each other for roughly the first 120 years, the Earth's temperature has risen dramatically in the last 30 years while the solar brightness has not appreciably increased in this time."

Let me repeat: "the Earth's temperature has risen dramatically in the last 30 years while the solar brightness has not appreciably increased in this time."

[Kahn]

Urinated State of America,

You are absolutely full of it. Combined-cycle gas turbine plants are hitting over 60% conversion efficiency.

It would be really nice if you had ANY idea what the hell you were talking about. Unfortunately you don't.

I worked in the power generation industry for 10 years. Do you even know what a peaking turbine is? Clearly you don't.

And btw, you better go learn something about how to calculate efficiency while you're at it. IGCC vs conventional steam vs gas turbine = three very different animals.

How many combined cycle plants do you think are out there, compared to the number of conventional plants? And do you have any clue as to how extensive the use of peaking turbines is?

You're talking to somebody who knows because he's been there, so check it out before you tell me I'm full of it again.

[Kahn]

Urinated State of America,

Given that you obviously don't know, I'll give you a few hints on where to find the answer. To make it easy, suppose you're running a natural gas fired power plant. What's the absolute upper limit on efficiency that plant could possible produce?

Hint: think "Carnot Engine". The calculation is childishly simple, a 6th grader ought to be able to plug the numbers in and turn the crank.

I'd have asked you about oil or coal fired plants but that's a little unfair, because the HHV has some variability. Natural gas is pretty well fixed.

When you've got that one figured out, here's the next question. What cycle would give you the absolute highest efficiency possible?

Hint: it's the one where you loose the distinction between gas and liquid phases.

[joe]

"The lion's share of our energy consumption has always been industrial."

Actually, Khan, transportation accounts for half of all of America's energy usage and 2/3 of its petroleum usage.

So no, I don't find your assertions about energy uses terribly credible. Could it possibly be that someone with an economic interest in fossil fuels has come to believe things that are in his own self interest?

[geeber]

How much of that energy in general (and petroleum in particular) is consumed by trucks and rail lines transporting goods? Wouldn't that fall under both the "transportation" and "industrial" categories?

[TokyoTom]

Ron, on costs you might want to note the following:

1. There have been tremendous opportunities costs to us delaying action on climate change. We saw dangerous shoals years ago, but instead of trying to alter course or slow down, we have simply accelerated. To avoid the shoals now will be that much more costly - which is why guys like you are now talking about adaptation rather than prevention. But we all know that an ounce of prevention is worth a pound of cure.

2. Costs are already upon us - what is the value of the northern forests that pine bark beetles are now destrying due to mild winters?

3. Theoretically, excluding the adminstrative costs of regulation, fixing a market failure actually costs less than allowing the market failure to continue unaddressed, as the status quo simply represents continued public subsidies to destructive exploitation. In other words, you can turn the question around - in a perfect world, economic actors would have to bear the costs of their behavior (even if they have a property right to pollute, the right has a value measured by what others are willing to pay them not to pollute); what are the costs that free use of the atmosphere is imposing on everyone, including public resources?

4. Have you seen the comments of William Prindle of the ACEEE to the Senate Energy Committee, on how the calculations on the costs of climate change regulation are probably wrong: http://energy.senate.gov/public/_files/AdditionalComments.pdf?

[TokyoTom]

Ron, I think you are right to indicate that the Incredible Bread Machine will not be destroyed if we try to push for more accurate pricing signals in the market by addressing the tragedy of the commons aspect of climate change through creating transferable private rights in GHGs. We can then stand back at let the markets continue to innovate and find ways to use energy more efficiently, to reduce and sequester GHGs, and to reduce costs of transactions.

It is tricky to eliminate free riders and cheating, but once a market is established (and we have sufficent carrots and sticks to get everyone on board), incentives will exist to expose cheating.

[Sam]

on a slightly seperate note,

A real Skeptic speaks:

http://www.sciam.com/article.cfm?articleID=000B557A-71ED-146C-ADB783414B7F0000