BusinessWeek: Car-Scrapping Plans: Germany’s Lessons:
The global auto industry may be facing its worst crisis ever, but you’d never know it at Ford Motor’s factory in Cologne. There, workers are putting in extra shifts on weekends to cope with demand for the compact Fiesta. In fact, Ford (F) sales have been booming in Germany. Customers have placed orders for 68,500 Fiestas, Ka subcompacts, and midsize Fusions in the four months to April, more than triple the year-earlier figure.
Thanks for this gravity-defying performance go—at least in part—to the German government’s so-called environment bonus, which Germans prefer to call the Abwrackprämie, or “wreck rebate.”
The program, launched in January and renewed in March, is Chancellor Angela Merkel’s most visible economic stimulus measure. It pays $3,320 to people who scrap a car that’s at least nine years old and buy a new car instead. The scheme has more than offset the effects of the global downturn on domestic auto sales, preserved factory jobs, and encouraged people to replace gas-guzzling, exhaust-spewing clunkers with the latest engine technology.
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But the rebate also has some major downsides. Retailers, for example, have complained bitterly that the program sucks spending from other categories. German retail sales fell 1.5% in March—the third monthly decline in a row—a decline that retail industry groups blame partly on incentives to buy cars rather than other goods.
The rebate also is expensive. Nominally it will cost $6.6 billion if Germans take full advantage of the program. The real cost is harder to figure. Increased sales will boost sales tax revenues, and the state will avoid the cost of unemployment benefits for workers who might have lost their jobs. On the negative side of the balance sheet, the program will kill jobs in other parts of the economy, for example auto repair shops or used-car dealers. A study by the Halle Economic Institute, a major think tank, estimates that the net burden on the German government budget will be $3.5 billion.
And you thought public policy involving the economy and energy would be simple… why, exactly?
Monbiot.com: How Much Should We Leave in the Ground?:
The two papers on carbon emissions published in Nature last week were ground-breaking: they show us how much carbon dioxide we can produce if we’re to have a reasonable chance of preventing two degrees of global warming. It’s a completely different approach from the UN’s and national governments’. They set targets for reductions by a certain date but have nothing to say about the total amount of carbon we can release.
One of the papers, by Myles Allen and others(1), suggests that we can burn, at most, another 400-500 billion tonnes of carbon at any time between now and the extinction of humanity if we want to avoid two degrees of warming. The other, by Malte Meinshausen and others(2), suggests that producing 1000 billion tonnes of CO2 between 2000-2050 would give us a 25% chance of exceeding two degrees. That’s a lot less than Allen’s estimate, as one tonne of carbon produces 3.667 tonnes of CO2 when it’s burnt: 1000 billion tonnes of CO2 arises from 273 billion tonnes of carbon.
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Even ignoring all unconventional sources and all other greenhouse gases and taking the most optimistic of the figures in the two Nature papers, we can afford to burn only 61% of known fossil fuel reserves between now and eternity.
Or, using Meinshausen’s figure, we can burn only 33% between now and 2050. Sorry – 33% minus however much we have burnt between 2000 and today.
So the question which arises is this: which fossil fuel reserves will we decide not to extract and burn? There is, as I have argued before(9), no point in seeking to reduce our consumption of fossil fuels unless we also seek to reduce their production. Yet, apart from the members of OPEC (who do it only to shore up the price), no government is attempting to limit the amount of fuel extracted. Far from it; they all pursue the same strategy as the United Kingdom: to “maximise economic recovery”(10).
The test of all governments’ commitment to stopping climate breakdown is this: whether they are prepared to impose a limit on the use of the reserves already discovered, and a permanent moratorium on prospecting for new reserves. Otherwise it’s all hot air.
George Monbiot gets his geek on breaks out his calculator. Worth reading.
One thing to keep in mind is how hard it is to pin down world oil reserves, a point Monbiot acknowledges. He uses a figure of 162 billion tons (not, not barrels), which is almost exactly what BP last published in their yearly energy stats compendium. The problem is that as we approach and pass peak oil and see some dramatic and sustained price rises, the incentives to find ways to improve the recovery rate for existing wells (typically about 33% today) or go after very expensive fields (like those in ultra deep water locations) will rise considerably. Oil is probably the most susceptible of the fossil fuels to this effect of resources being a function of market price.
I don’t quite get his point about distinguishing between leaving the evil stuff in the ground instead of not using it. If consumers greatly slow their use of fossil fuels, I guarantee that producers will stop mining or pumping them. (For example, there’s been a lot of talk lately about how there’s 100 million barrels of oil sitting in tankers at sea, waiting for a customer, as if that’s a tremendous amount. It’s about 1.2 days of world consumption, so I’m not impressed.)
FT.com: US carbon cap-and-trade – more data on its effects:
The Pew Center on Global Climate Change has become the latest organisation to wade into the murky waters of the Waxman-Markey bill, the proposed legislation that would introduce a cap-and-trade system for carbon dioxide in the US.
The Pew Center’s analysis suggests that the impact of a cap-and-trade programme on energy-intensive manufacturers would be small. The analysts based their study on an examination of historical trends among energy-intensive manufacturing industries, using 20 years of data on 400 energy-intensive subsectors.
They found that energy-intensive manufacturing industries would on average lose only 1 per cent of their annual production to imports, if a carbon price of $15 per tonne was assumed, and if there was no carbon price in other countries.
(That $15 figure comes from projections of the carbon price under Waxman-Markey produced by the U.S. Energy Information Administration and Environmental Protection Agency.)
Such a small impact could easily be addressed through policies targeted to energy-intensive sectors, the authors of the report said, including straightforward compensation or more complex border adjustment measures (tariffs) for imported energy-intensive goods.
In all candor, I’m not sure where I stand on the issue of the impact of a price of carbon on various parts of the US economy. I’m reasonably sure that $15/ton won’t be nearly enough to trigger the cuts we’ll need by 2050, but it’s probably a good start. The key point, as I’ve argued before, is that no one knows in advance how a given amount of reduction in CO2 emissions maps to a market price, which is one reason why we should control the level of emissions (via a cap) and let the evolving market decide on the price (via trade).
Oceanographers Jim Bishop and Todd Wood of the US Department of Energy’s Lawrence Berkeley National Laboratory have measured the fate of carbon particles originating in plankton blooms in the Southern Ocean, using data that deep-diving Carbon Explorer floats collected around the clock for well over a year. Their study reveals that most of the carbon from lush plankton blooms never reaches the deep ocean.
The results weaken the applicability of the simplest version of the Iron Hypothesis as a geo-engineering approach to climate change. Iron Hypothesis adherents suggest global warming can be slowed or even reversed by fertilizing plankton with iron in regions that are iron-poor but rich in other nutrients like nitrogen, silicon, and phosphorus. The Southern Ocean is one of the most important such regions.
Oops.
Translation: This lesson in the hubris of geoengineering was brought to you by reality. Remember–if it’s not Reality, it just ain’t real!
People just now seem to be waking up to the fact that, golly gee, the Intertubes run on electrons, and it uses a lot of them.
Two related articles:
guardian.co.uk: Web providers must limit internet’s carbon footprint, say experts
New Scientist: Unknown web: Is the net hurting the environment?
The one thing to keep in mind is that what matters is not merely the cost of the Internet but what we get for it. For example, how many errands do I have to avoid by doing online banking or shopping before I completely offset the carbon footprint of all the Internet resources I use in the process? I’m guessing it’s a very favorable ratio; even several errands bundled together in a single 20 mile trip in my Scion xA would seem to emit far more CO2 than hours of online activity.
Another issue is that a large portion of the Internet infrastructure was built with little attention to electricity consumption. The benefit of adding Internet capacity is (or is perceived to be) high, while the price of electricity is relatively low, so we’ll only feel pressure to make it more efficient as we run up against limits of electricity supply or funding.
Finally, the big issue with data center electricity consumption is cooling. I’ve seen figures that estimate that for ever watt of power spent on running hardware another 1.5 watts is used in cooling it. This means that lower-temp chips and drives could do a lot to reduce data center energy consumption, far more than just the their own power consumption figures might suggest.
