Monday, January 14, 2013

Low Carbon Economy

Let's make no mistake: every alternative to fossil fuels is considerably more expensive.  The reason we have not moved to a "low carbon" economy is not a philosophical one, it is an economical one. 

However, just as a mind experiment, let's imagine how the world would change if the fundamental means to reduce humanity's carbon emissions was implemented: behavior modifying (in other words, painful) carbon taxes.

Sure, the only way for governments to proceed with this measure is if their citizens, in general, supported these taxes, if not, the governments could be brought down overnight.

But again, this is a mind experiment and thus let's assume that most of the seven billion plus persons on Earth support these taxes.

In order for these taxes to be "behavior modifying" they would have to increase the price of natural gas by, say, 300%, oil 400% and coal by 500%.  The differences in taxing obey to the relative "carbon intensity" of each energy source.

Not to tax all economies to death, these taxes will go hand in hand with the total elimination of all energy subsidies (both to renewables as well as to fossil fuels).  Let's say (and since we are in a planetary emergency) that in five years the full burden of these taxes goes into effect.  On the other hand, these carbon taxes could be "revenue neutral" for governments.

This is what we anticipate will happen:
  • SUVs will completely be a thing of the past.
  • Car sales will plummet but hybrids will dominate the (much reduced) market.  The smaller the car, the better.  Even then, full electrics will barely dent the market. 
  •  Public transportation will flourish as well as "alternate" means of transportation: bicycles, electric scooters, Segways, etc.
  • Buildings all over the place will be carefully insulated.
  • Public lightning will be upgraded with LED technology and presence sensors: only when a person is near them will the lamps turn on.  These same technologies will be used at home and business: no longer will illumination be left on all night for decorative or safety purposes.
  • Air travel will become extremely expensive and consequently its use will plummet.
  • There would be an uptick on solar and wind power, but the lion's share of low carbon energy will be supplied by nuclear power.  Massive investments in new nuclear generating capacity will happen all over the world.
  • Standards of efficiency will go up on all types of devices: air conditioners, fridges, TVs, computers, etc., but at the same time people will turn them off as soon as they are done using them.
  • World trade will decline since fossil fuel vessels transport almost all merchandise.
  • Almost everything will go up in price so people and companies will drastically curtail their consumption. 
  • Zoning laws will change all over so that tight-nit communities can again be the norm: school, shopping, work, will tend to be walking distance away. 
  • Innovation to replace fossil fuels will blossom.  However, no amount of innovation will stop the outrageous increase in energy prices. 
  • In spite of efficiency improvements A/C will be so expensive that weather related migrations will be common place. 
  • People will NOT necessarily be less happy, because consumption above a certain point doesn't add to happiness. 
  • Carbon emissions WILL go down very significantly.
Now, what would happen at the global stage?
  • Nations that depend on oil for most of their revenue will fall into a profound depression.  The price of oil (aside from the carbon taxes) will sink almost overnight and its consumption will be severely curtailed. Revolutions will bring down governments on these countries, but the new governments will not be able to cope either with the sudden and catastrophic reductions in revenue.  
  • Car companies, airlines, trucking companies will fold left and right.  The wave of bankruptcies won't stop there as almost every other sector of the economy will be profoundly affected.
  • China will be among the most affected countries since most of its manufacturing energy comes from coal and additionally transportation costs for its products will rise exponentially. 
  • European countries and the USA would be relatively less affected, but the standards of living of their populations will also suffer greatly.
  • Highways will be eerily empty and eventually many will be reclaimed for other uses. 
  • Although the 21st Century will still be firmly in place (we'll still have our smart phones and other sophisticated technology), energy-wise we will return to the early 1900s.  Energy will be an expensive luxury and only rich people will be able to consume as much as they want.  Anything combustible, including our forests, will be under siege. 
  • Food prices will skyrocket. 
  • Serious social upheavals will happen all over the world.  The human population will drop considerably. At the same time the climate crisis will seem to be getting even worse due to the inertia of the Earth's systems.
Conclusion: no wonder humanity resists with all its might any reduction in carbon emissions.  In the very short term the medicine certainly seems worse than the sickness, but in the medium and long term not starting to fix the sickness today will almost certainly mean even worse consequences.

Let's all stay tuned...

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At 1:39 AM, Blogger Annette Engelsgaard said...

When do we start???!!!!!!!!

At 9:14 AM, Blogger Keith Woodward said...

Thanks for writing this thoughtful piece, I think another consequence might be increased development of alternative (to fossil fuel) power sources, i.e. nuclear


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