Climate Policy: When Starting With the Most Expensive Option Makes Sense

Yves here. While this analysis of the most effective way to combat climate change makes sense, it also means that far-ranging and high-cost investments need to be made now, and that’s even less likely than “low hanging fruit” approaches.

By Adrien Vogt-Schilb, Climate change economist, Inter-American Development Bank, Guy Meunier, Senior Research Fellow, French Agricultural Research Institute, and Stéphane Hallegatte, Lead Economist, Global Facility for Disaster Reduction and Recovery, World Bank. Originally published at VoxEU

Traditional climate economics models recommend capturing the cheapest opportunities to reduce emissions first and keeping the most difficult options for later. This column argues that when the fact that reducing emissions takes time and requires investments in long-lived goods and assets is taken into account, the most cost efficient strategy overall is to act immediately in the sectors that are the most expensive and difficult to decarbonise, even if this means investing in options that have a higher cost right now than available alternatives. Actions on urban planning and urban transport systems are especially urgent.

Imagine you want to reduce greenhouse gas emissions to stabilise climate change. Reviewing your options, you find that efficiency opportunities in the building sector can reduce emissions for $12 per avoided tonne of carbon. Other options, such as transforming transport with electric vehicles or public transit, would reduce emissions for almost twice the price – say, $21 per tonne of avoided carbon. Which option should you chose?

The question may seem silly, and the answer obvious. Traditional climate economics models recommend capturing the cheapest opportunities to reduce emissions first – the ‘low hanging fruits’ – and keeping the most difficult options for later. This approach sounds like common sense, and it is at the basis of the ‘marginal abatement cost curves’ (MACCs) approach (McKinsey and Company 2009).

But common sense sometimes gets it wrong. As is well known, investing early in relatively expensive emission-reduction options can be justified based on a technological rationale. Specifically, through learning, investing in expensive technologies would lower their cost over the long term (Wigley et al. 1996, Goulder and Mathai 2000, Bramoullé and Olson 2005, Kverndokk and Rosendahl 2007, del Rio Gonzalez 2008, Acemoglu et al. 2012, Creti et al. 2017). Indeed, it may well make sense to invest in offshore windmills even if they are more expensive than onshore windmills or solar panels, in the hope that these investments will reduce the cost of offshore wind, making it a competitive renewable energy option in the future.

Our recent paper (Vogt-Schilb et al. 2018) provides another – independent – rationale for investing early in relatively expensive emission-reduction options. Our study represents emissions reductions more realistically than in previous works, by modelling the fact that reducing emissions takes time and requires investments in long-lived goods and assets. It concludes that, even when no technical change is expected, it makes sense to start reducing emissions in the sectors where doing so is the most expensive and the most difficult, leaving the easier things for later.

Why such a counter-intuitive result? It’s actually simple. In most sectors, an abrupt transformation would be more expensive than a smooth shift towards zero net emissions. In sectors that are particularly expensive and difficult to decarbonise, like transportation, it is therefore preferable to start early to make the transformation as progressive and smooth as possible, minimising long-term costs. Even if technologies used in urban transportation are not expected to improve over time, policymakers may want to start early, given that transforming transportation systems gradually is cheaper than doing so quickly later on.

The Recommendations of the Traditional Model Are Unrealistic

The canonical climate economics model in academia originates from Nordhaus (1991), and has been used for nearly three decades to provide insights into efficient emission-reduction policies (Dietz and Stern 2014). It relies on MACCs, which provide information on abatement potential and costs for a set of technical mitigation measures for a given date (McKinsey and Company 2009). It assumes that agents can decide by how much to reduce emissions, independently, every day. And the more agents want to reduce emissions, the more expensive it becomes to reduce emissions by one more tonne – in economic terms, the marginal cost of reducing emissions is increasing.

As an illustration, Figure 1 shows the optimal timing and cost of emission reductions according to this classical model, assuming that the objective is to keep the emissions over the 2007-2030 period at a level consistent with the 2º centigrade target of the Paris Agreement. The marginal abatement cost curves are calibrated with Intergovernmental Panel on Climate Change (IPCC) data. These numbers are strictly illustrative, since this simulation ends in 2030, while an optimal strategy would need to consider a longer time scale, and because abatement costs have decreased a lot since these data were collected. Even so, they are sufficient to make our case.

In panel A, we see that this model recommends reducing emissions immediately in the cheapest sector (here, a reduction by almost 5 billion tons of CO2the first year in the building sector), and to start more slowly in the more expensive sectors (like transport and industries). Once all options to reduce emissions have been used in a given sector (for instance, once all buildings are retrofitted), efforts in that sector plateau, and increase in other, more expensive sectors. At each point in time, more emission reductions are done in the sectors where it is the cheapest, reflecting the fact that all sectors reduce emissions at the same marginalcost, as seen in Panel B.

Figure 1 Optimal timing and cost of emission reductions in the traditional model

Note: MAC is the marginal adjustment cost for each sector – it is the same for all sectors.

But we argue that the recommendations of the traditional model are unrealistic. It recommends a drastic reduction in emissions in the building sector, by magically retrofitting 80% of buildings overnight. This happens because MACCs do not convey information on the time dimension – that is, how long it takes to implement a measure, and how the cost depends on the time it takes to implement a measure. Another oddity is that in the traditional model, if we were to stop paying for emission reductions after a couple of decades, then emissions would return to their baseline level immediately. For example, if climate change policies were repealed 20 years from now, emissions would instantaneously return to the level they would have been in 2038 in the absence of those policies. This absurd outcome is the result of an absence of the time dimension (‘inertia’) in the model of the system – emission reductions are determined each year independently.

Our Model Represents Emission Reduction Decisions as Investments With Long-Term Consequences

Given the shortcomings of the traditional model, our model introduces a very simple tweak to make it more realistic, by representing emission reductions as investments. Now agents cannot directly decide every year how much to reduce emissions. But they can decide every year how much emission reduction equipment to build – for example, items such as electric cars, building insulation, windmills, or metro lines, that will stick around for decades to centuries once built.

We also introduce nonlinear investment costs, often called ‘adjustment costs’ by economists (Lucas 1967). Low-carbon investments are more expensive if they are rushed than if they are smoothed over time. Imagine you want to retrofit all buildings in a country with great thermal insulation and efficient appliances. It would be cheaper to do that over a couple of decades, making use of the existing industry and skilled workers, rather than rushing it over a single year, which could require diverting a substantial share of the workforce and capital away from other productive uses in the economy.

Figure 2 shows the optimal timing and cost of emission reductions with the same objective as in Figure 1, but according to our new model.  In panel A, we see that emissions do not ‘jump’ anymore, and it takes years of investment to achieve significant emission reductions.

Figure 2 Optimal emission reduction strategy with investments in emission reduction in our model

Note: LCCC is the ‘levelised’ cost of conserved carbon (the cost paid for the last ton of emission that is avoided) and is the equivalent to the marginal abatement cost in our model. It varies by sector and follows a bell-shape trajectory.

We see also that the cost of reducing emissions is different across sectors, and it follows a bell-shape curve instead of increasing regularly over time. This optimal strategy, using the same IPCC calibration as before, looks more realistic, with smoother, progressive decarbonisation strategies. Now years of climate policies also have a long-term impact. For example, if we stopped investing in emission reductions after 20 years, emissions would remain for years at a level that is lower than what they would have been if no policy had been implemented in the first place – thanks to all the low-carbon equipment that would be present after 20 years of climate policies.

Most importantly, the optimal emission-reduction strategy is now completely different. First, the strategy looks much more like a transition, with large investments at the beginning to transform the economic system, and smaller efforts over the long term.

Second, the strategy calls for a very different allocation of efforts across sectors, with immediate and large investments in sectors with long-term potential (such as transportation or industry). In particular, the optimal solution is to invest in options with a higher cost, in the sectors where reducing investment is more expensive. For instance, an investment that cost $21 per tonne in the transport sector makes sense, even if alternative options exist at $12 in the building sector. The rationale is that since the transport sector is difficult and expensive to decarbonise, policymakers should spread the effort over time, even if it means accepting higher costs per ton of emission reductions in the short term.

It Does Not Make Sense to Compare Options to Reduce Emissions Solely on Their Cost

While our numerical results are only illustrative, they have important policy and operational implications. They show that it makes no sense to compare options to reduce emissions solely on marginal abatement costs. A policy that reduces emissions at a cost of $100 per avoided tonne may be desirable – even if other options exist to reduce emissions at $20 per tonne – if investing now at $100 per tonne prevents the need to reduce emissions later in a rush at a much higher cost. As already stated, investing early in relatively expensive emission reduction options can also be justified by the benefits from induced technical change. In the real world, the two arguments add up – early investments make sense in sectors that are long and expensive to decarbonise, and in sectors where we expect a lot of technological progress to happen as countries invest.

In sum, our recommendations are different than those that stem from the traditional abatement cost curve model. We argue that instead of selecting the lowest cost options every day, there is a need to work backwards from the long-term objective of reaching zero net emissions, and think today about the short-term decarbonisation pathways that can put the economy on track to reach this goal at the lowest possible cost, as follows (Clarke et al. 2014, Fay et al. 2015, Bataille et al. 2016).

  • First, policymakers need to consider a long-term objective consistent with the Paris Agreement, such as reducing emissions by 50% by 2050.
  • Next, they can identify what needs to happen to achieve these objectives in every sector and derive sectoral objectives. For instance, reducing emissions by 50% may require retrofitting all buildings and transforming transportation systems.
  • Then, they should analyse what actionable short-term targets would put their country on track to achieve these sectoral objectives at the lowest possible cost. For instance, retrofitting all buildings by 2050 may be achieved at the lowest cost if they start investing a significant amount of resources by 2020.
  • The final step would be to design the combination of policies and measures – from performance standards to innovation subsidies and infrastructure investment – that are able to effectively deliver those targets (Altenburg et al. 2017).

Typically, this approach will result in a recommendation not to delay action in the sectors that are the most expensive and difficult to decarbonise, especially as far as long-lived infrastructure systems are involved. For example, it will not be possible to transform cities in just a couple of decades – not at an acceptable cost. Thus, actions on urban planning and urban transport systems are especially urgent.

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  1. PlutoniumKun

    A lot of this is very much common sense to those of us who’ve been following the debates for many years. It is absolutely vital to invest early in promising technologies in order to get them over the finishing line of viability.

    Nearly 10 years ago the late Peter McKay wrote what was considered one of the best books on the topic, Sustainable Energy: Without Hot Air (this was mostly written from a UK/European perspective). Its interesting to compare his analysis to the current situation. A very obvious feature is that the costs of photoelectric solar and off-shore wind have fallen far faster than he (or nearly anyone else) anticipated). There were various reasons for this, but a key issue was the willingness of both governments and some investors to accept high costs and losses in order to drive the technology forward. McKay was a nuclear enthusiast. I don’t think he would ever have dreamed that by 2017 the UK would generate more energy from renewables than from nuclear, despite the relatively pathetic support given to renewables.

    In some respects it may be that it is politically easier to go for longer term objectives rather than low hanging fruit. The German investment in solar energy was possible because they got industry on board with the promise of lots of subsidies and future market opportunities. Off-shore wind investment has been seen in Europe as a means of keeping shipyards ticking over (in the US, you guys just order another few aircraft carriers to do the same thing). The Germans and Japanese support public transit investments worldwide because its good for their industry (the Chinese are increasingly doing the same thing). In many ways, its all down to framing. Its been noticeable of course that many of the biggest renewables breakthroughs in the US has been driven by the military, as that seems to the the correct ‘framing’ to get industry policy working.

    1. Ignacio

      I pretty much agree.
      From a smaller or “micro” point of view what I have learnt about renewables and energy efficiency is that the best approach is “holistic” in the case of buildings. Considering everything –heating, cooling, electricity, water– before doing anything, will give better results although probably with more expensive investments. If you just think on the low hanging fruit, you can miss better opportunities and make wasteful, although cheap investments. For instance, I tend to think that solar thermal, which is promoted by the spanish building code, in some many cases does not make sense when compared with other strategies. Solar thermal could be most effective when combined with radiating floor which in turn is expensive refurbishment. An alternative could be heating tiles (yes, joule effect, but very efficient) with photovoltaic. Deciding which is best will depend on factors that should be analysed case by case.

  2. Steve H.

    If long-term objectives were the determining factor, we’d turn Iceland into the global geothermal center and shut down all other sources of energy generation.

    How that gets executed is the issue. By diktat? How do you stop people who’s survival depends on three-stone fires? Where cries of ‘Liberty’ are dependent upon a low local EROEI?

    The problem is dumping the heat generated on every energy transfer and transformation. That’s the Law.

    There is no doubt that focus on carbon can help slow down the positive feedback loops that have been initiated. But NC readers, who I believe want a deeper understanding, should keep an eye on distribution of wealth and resources as a determining factor for what and how things get done.

  3. Linden S.

    Since the biggest carbon-emitters did not start winding down their emissions decades ago, to avoid catastrophic warming they have to very quickly wind down emissions to essentially zero by 2050 or earlier. Here is a video I linked another time that talks about some of the numbers behind the carbon budget: Kevin Anderson on the carbon budget.

    One thing I have thought about some, but don’t have any expertise in, is how *all* aspects of the economy can de-carbonize. Is there anything on this list that I am missing?

    Big Ag: reliant on heavy machinery that probably can’t be battery powered, fertilizer releases nitrous oxide, and livestock agriculture releases methane.

    Transport: I assume big passenger and cargo jets can’t be made to run on batteries. I assume enormous cargo ships can be made more efficient, but can’t be made to run entirely on battery power.

    Construction: reliant on heavy machinery that probably can’t be battery powered

    Industry: cement/steel production done without net carbon emissions?

    New infrastructure: road maintenance, trains and tracks, solar panels + wind turbines, grid batteries, electric cars. Can all these be installed/built with net zero carbon emissions?

    These are ridiculous questions to ask, which is why people pray that that carbon dioxide removal (CDR) technologies will one day just suck CO2 out of the air. Absolutely none of them (except for re-planting lost forests and restoring damaged soils) are proven, and none of them are effective enough to draw down atmospheric CO2 if we continue to emit 11 PgC of carbon into the atmosphere a year. There is a huge disconnect between what climate scientists say is necessary, and what countries think they can do to maintain continued economic growth..

    1. UserFriendly

      Transport: I assume big passenger and cargo jets can’t be made to run on batteries. I assume enormous cargo ships can be made more efficient, but can’t be made to run entirely on battery power.

      Biodiesel and ethanol are carbon neutral because they absorb CO2 first then emit it later. There is also just using hydrogen as a fuel too. It is relatively straightforward to do, but until we have an excess of green electricity not all that useful.

      New infrastructure: road maintenance, trains and tracks, solar panels + wind turbines, grid batteries, electric cars. Can all these be installed/built with net zero carbon emissions?

      Yes, obviously they can. They require energy to build but there is no reason it can’t be green energy. The problem I think you are getting at is that the energy required to manufacture a solar array means that it has to operate for a year before it is carbon neutral which means the time to start that transition was a decade ago.

      1. gepay

        A study using real data from sunny Spain suggests the EROI (energy return on investment) from solar is small – maybe 3.5. whereas solar adherents believe EROIs of 19 to 38 even up to 60 but not calculated from real world data.. We now know Peak Oil was not the world running out of oil but running out of cheap to produce oil with an EROI in the 30s and higher in the past. It is now below 20 and fracking is lucky to get an EROI of 4. Coal’s EROI (9 to 25) has not declined so much but is clean coal feasible? Ethanol’s EROI doesn’t even make it to 1.00 much like most biodiesel except for that from sugar cane getting 9.2.
        Although not being a believer in man made CO2 being a pollutant causing catastrophic climate I do believe we need to move away from using fossil fuels I would support:
        “According to the Rodale Institute, the application of regenerative farming on a global scale could have revolutionary results:
        Simply put, recent data from farming systems and pasture trials around the globe show that we could sequester more than 100 percent of current annual CO2 emissions with a switch to widely available and inexpensive organic management practices, which we term ‘regenerative organic agriculture’… These practices work to maximize carbon fixation while minimizing the loss of that carbon once returned to the soil, reversing the greenhouse effect.”
        “This has been widely corroborated. For instance, a 2015 study part-funded by the Chinese Academy of Sciences found that “replacing chemical fertilizer with organic manure significantly decreased the emission of GHGs [greenhouse gases]. Yields of wheat and corn also increased as the soil fertility was improved by the application of cattle manure. Totally replacing chemical fertilizer with organic manure decreased GHG emissions, which reversed the agriculture ecosystem from a carbon source… to a carbon sink.”
        Wouldn’t this along with increasing efficiency and recycling be a lot easier than getting everybody to make radical changes in a decade or so – or reducing the world’s population to a billion people – or keeping most of them in energy poverty.

      2. Linden S.

        I am very skeptical of biofuels. Depending on how the crops are fertilized and grown, processed into fuel, transported to distribution points, and then how the land is used afterwards biofuels can easily add, not remove carbon from the atmosphere. Not sure how it will ever be policed so that every instance of it is carbon-neutral. Hopefully I am wrong though.

  4. Jim Tarrant

    Increased urbanization itself reduces energy consumption per capita. You are correct that extensive investment in expensive technologies can reduce their cost per kWh as was the case for solar (thanks China) and wind (thanks Cali). Energy efficiency is the key for cities and that can take unexpected forms. It means massive investment in mass transit (mainly light rail) and fast transit between cities. Asian developing and developed countries are already doing this as is Europe. The US and Russia are hopeless retrogrades. Most of Africa doesn’t matter (yet) from a net emissions standpoint.

    The other inescapable and expensive alternative is massive reforestation of the devastated lands of the tropics (Brazil and Indonesia especially) and protection of peatlands and mangroves. The other issue is the melting of the Canadian/Russian permafrost, which will release massive amounts of carbon from pre-history (and who knows what else).

  5. Jef

    Attempting to focus capitalism on addressing the converging causes of catabolic collapse is the definition of insanity.

    Capitalism requires growth. Anyone who argues this fact is free to be ignorant.
    There is no such thing as “sustainable growth”, “Green economy”, “steady state economy”, etc.

    1. Linden S.


      I realize there are a lot of socialist/anarchist ideas that are pretty much pipe dreams, but is degrowth ever talked about by “Serious” People?

      1. polecat

        ‘Depopulation’ would have to be congruent with ‘degrowth, in order to have a more ‘sustainable’ environment. How to get there .. well, that is a conundrum, isn’t it !?!
        You would essentialy need the cooperation of nearly everybody on the planet to attain such a goal. I don’t see that happening, sooo .. it’s looks like it will come down to the good ol’ four horsemen and evolution, for life ( including us humans , if we’re lucky) to get there through a series of evolutionary bottlenecks !
        I’m not very optimistic regarding our collective fate …

        1. John Wright

          Has depopulation ever occurred without some external event such as disease, famine, drought, war or economic collapse (such as the collapse of the Soviet Union)?

          Modern day Japan might be a rare example of a shrinking population base without one of these causes.

          But Japan is frequently criticized for creating a “demographic time bomb” because they are not growing their population.

          How does a country decrease its population, short of selectively killing off senior citizens, without creating a “demographic time bomb”?

          In my simplistic view, the total stress on the world’s environment by a growing human population is unlikely to decrease as more people, anywhere in the world, are added to the world’s population.

          The future for humans may be foretold by the on-going extinction of other species who are serving as sacrificial “canaries in the mineshaft” for us.

          But TPTB can always find an economist to firmly state “must grow the economy, must grow the population” as if it is an obvious truism any sophisticated person will agree with.

          But the same economist probably understands the concept of carrying capacity when he is in an elevator.

          1. a different chris

            >How does a country decrease its population, short of selectively killing off senior citizens,

            Ugh, I hate to point out but: Any analysis of, uh, let’s call it culling, would tell you to kill the procreative-able, e.g. young women. Just invert your local farmer’s attitude towards cows.

            Fortunately the young women themselves, in first world countries so far, are no longer forced to have even a replacement number of babies. Thus Japan. Thus more and more parts of Europe. Maybe some hope, not much.

  6. steven

    Would someone please explain this for me:

    if climate change policies were repealed 20 years from now, emissions would instantaneously return to the level they would have been in 2038 in the absence of those policies.

    what types of ‘low hanging fruit’ investments would cause emissions to “instantaneously” bounce back “to the level they would have been in 2038 in the absence of those policies.”

    P.S. I like the thrust of the article. Here in Arizona the state’s electrical utilities are using the lack of an overwhelming economic justification for investing in battery storage in their attempt to hang white elephant, stranded asset investments in infrastructure like Reciprocating Engine, Electrical and Electronic Engine Control Systems (RICE) generators. Representatives of our local utility Tucson Electric Power say they want to protect rate payers by not becoming beta testers for battery storage.

    1. Arizona Slim

      TEP protecting rate payers? Hah, that is funny! Just go to their Taj Mahal headquarters in Downtown Tucson and you’ll see what I mean.

    2. Oregoncharles

      They’re saying that that’s a flaw in the usual models – they imply that it would revert immediately. Not that it really would.

      The authors’ model proposes to correct that flaw by introducing a time factor.

  7. Eric

    This hysteria is channelling lot’s of monies to professional engineering firms like mine. The science is interesting and like space and military programs creates spin off technologies. We’ll see if it really matters to our planet’s heritability years from now. My expectation is no.

    1. pretzelattack

      I’m not sure what hysteria you are referring to, and am also unclear what you mean by the planet’s “heritability”.

  8. Louis Fyne

    i’ve become fatalistic. when many ‘environmentalists’ (helped by greenwashing from power generating cos.) are cheering that dual-fueled natural gas/fuel oil power plants are prematurely retiring nuclear power plants, leading to a net increase in CO2 per kilowatt-hour. whatever.

    virtue-signalling > math. I guess certain acid-ifcation of the oceans is preferable to a remote possibility of another 3 mile island or fukushima.

    que sera, sera.

  9. Kevin L

    Modern Capitalism in particular is so precariously structured around the assumption of indefinite growth as defined by the state of the current system, to point that 1) unexpected delays, reductions, and deviations from projections cause systemic ripples and potential collapses as demonstrated in the 2008 Financial Crisis and recent economic developments, and 2) no one is interested in long term investment both because of the allure of financial adventurism and general uncertainty of actual future prospects for the global economy. The notion of working in the system is then tantamount to wishful and fantastical thinking, since even if we treat investors as akin to most idealistic in the field today, like Musk, all we would be seeing is talk about going to Mars rather than actually cleaning up the state of the world.

    Most governments are not going to take the initiative since it would make the traditional energy sector very unhappy, and such considerations operate in the forefront of most thoughts echoing in the heads of politician. This does not even get into the “principled” stance of small government-anti regulation acolytes or even the outright deniers. Only nations at the level of geopolitical small fry nations and those experiencing global hardball like China are even willing to look at a full scale energy restructuring, and in the case of China it is probably more to due with U.S. domination of the Middle-East Oil fields and it overt geopolitical position to stop an ascendant China at all costs.

    Truthfully, nothing short of collapse is probably going to provide the necessary motivation for addressing societal restructuring of energy infrastructure, as well as the other social and economic ailments of 21st Century Modernity. I could be very wrong, but honestly an in system solution is probably going to be both mediocre and late coming, and, knowing Capitalism, exploitative the global desperation caused in the by Global Climate Change.

    1. Jeremy Grimm

      I agree with your assertion “…nothing short of collapse is probably going to provide the necessary motivation for addressing societal restructuring of energy infrastructure, as well as the other social and economic ailments of 21st Century Modernity.” And I can agree with the section heading in the post “It Does Not Make Sense to Compare Options to Reduce Emissions Solely on Their Cost”. What costs do we assign to some of the little ‘externalities’ of Climate Disruption like extensive coastal flooding of the world’s great cities, mass migrations, water shortages, crop failures and food shortages, dead oceans, and dying plants and animals on land, just to mention a few small impacts of Climate Disruption. What economic model is there for handling these little costs?

      And if costs can be assigned, how do they fit into a carbon budget? While on the subject of carbon budgets, it might be of interest to mention a rapidly reached and rather unhappy temperature plateau observed in paleoclimate data that seems relatively stable as long as we don’t exceed 600 parts per million of CO2 in the atmosphere. Beyond 600 parts per million CO2 the paleoclimate data showed another rapid increase in temperature to an even higher and more unhappy temperature plateau.

      As far as acting on high or low cost options for reducing carbon emissions how much success there has been with very low cost options like eliminating oil’s depletion allowances and taking a more critical look at some of the legal arrangements made at state and federal level enabling shale oil fracking and its widespread pollution of fresh water. If “actions on urban planning and urban transport systems are especially urgent” is there any possibility some of that action might be putting some efforts into actually building more mass transit without all the pork barreling?

  10. Wukchumni

    Imagine the heating sources we’re leaving for future versions of us?

    We’re presently drilling down miles and then abruptly making a turn sideways for miles-losing money all along the way. A shale game if you will. Same thing with coal, all the easy stuff is long since gone.

    All that would be left will be trees, and they can’t hide from blade runners.

  11. agkaiser

    With all the talk about cost per ton, no one addresses the overall potential of various schemes. By how many tons can a given system reduce emissions? If a $10/ton technology can only, if fully deployed, reduce emissions by x tons and 100x tons is a meaningful target …

    Engineers and scientists, not economists, must have the final say if the problem is to be solved before extinction by short term thinking and greed.

  12. Notorious P.A.T.

    It seems to me that the crucial factor isn’t money (which we can create at will, anyway) but time. We don’t have a lot of time to mess around. Reducing carbon emissions has to be done as soon as possible.

  13. Darius

    None of this is going to happen absent a pricing mechanism, aka a carbon tax. Once the incentives are right, a lot of things start happening without policy. There should be policy. But a carbon tax should be the first thing. Otherwise other measures are just winking while the price of fossil fuels says go ahead and burn as much as you can.

    1. blennylips

      Careful what you wish for Darius.

      From the very article that spawned the vampire squid wrapped around the face of humanity meme back in 2010, The Great American Bubble Machine

      From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression — and they’re about to do it again

      Goldman Sachs invented cap and trade, and as Matt Tiabbi explains:

      Well, you might say, who cares? If cap-and-trade succeeds, won’t we all be saved from the catastrophe of global warming? Maybe — but cap-and-trade, as envisioned by Goldman, is really just a carbon tax structured so that private interests collect the revenues.

      How can action precede policy? Sounds like a Vampyroteuthis infernalis tactic to me.

      1. Oregoncharles

        A carbon tax is not “cap and trade.” It may be politically difficult, but it doesn’t provide opportunities for Gold Sacks to “trade.”

        And I think the same applies to Europe’s experience – wasn’t that cap and trade, not a tax?

        Another option is a user fee on disposal, one which would ratchet up fairly rapidly over time. But the carbon tax is the simplest. One problem: it has to be levied at the ports, too, and the trade agreements have been written to rule that out.

        1. drumlin woodchuckles

          So abrogate and disavow all the trade agreements. Then we can set up any punitive fossil-carbon tax system we want and ban economic contact with any country which doesn’t adopt an equally punitive fossil-carbon tax system.

          And if any foreign Most-Honorable Perry-San sends over a Fleet of Most Honorable Perry-San Black Ships to try forcing America back into the Trade Agreement System, we sink all the Most Honorable Perry-San Black Ships with the Defensive Armed Forces we have been smart enough to retain for just that eventuality.

      1. Grebo

        The clue is in the word ‘market’. An actual tax on fossil carbon use (not tradable permits), redistributed equally to each citizen, would not be subject to gaming by traders as there is nothing to trade. It would discourage carbon use without hitting the poor disproportionately. Simple to enforce as it is already collected to some degree. It is not discussed politically because it would be effective.

  14. James Trigg

    If your not talking nuclear you just spitting in the wind. To get rid of of markets will take a bloody dictator.
    You talk like children. The people with smart phones are going to live simple conservative lives? What is the cost of Yuma AZ going CO2 free with all the sun there? The Paris Agreement has already broken down. Al Gore is your pope? The guy that owns Virgin Airlines is an environmentalist? If we started living quietly and simple 15 years ago something might have been done. But your high priest Al Gore lives like a pig. Your are sheep. You are children.

    1. Jeremy Grimm

      This child is frightened of the near proximity of so many existing nuclear power plants to the rising and increasingly angry ocean and more often flooding rivers and great lakes. Would you please remove these poison makers before putting in new ones? And don’t leave any nuclear waste trash just lying around. You can keep it at your house … as long as you live far far away from me deep inside a deep deep sealed cavern.

      Cell phone lovers will not love the near future, but the future does look bleak so we should all fasten our seatbelts and clinch tightly. Yuma, Arizona is already too hot and dry in the Summer and too cold in the Winter whether CO2 free or not, but that will not matter without water. Yes, the low cards can paint the roses or what-you-will with green paint instead of red. And if you name Al Gore the wizard of environmentalism I will name General Curtis LeMay as the wizard of nuclear power, a dual-use technology as the military might say.

      1. James Trigg

        If you do not use nuclear you can not lower CO2. Then we need to live like peaceful hippies. I denounce Curtis LeMay do you renounce Al Gore? Lets give up are cars and our computers.
        To spin science fiction tales of wind power and what not just pumps up your ego but does not mitigate CO2.

        1. blennylips

          Please explain how using nuclear lowers C02.

          I think you are confusing the rate of emissions with the atmospheric concentration. Sure, it could be that using nukes lowers the emission rate (many disagree, but whatever) compared to some other path, but even cutting emissions to zero does nothing to decrease C02 in the air, which can take many hundreds of years to dissipate on its own, either way, you’ve mitigated next to nothing.

          Pulling C02 out of the atmosphere is only one step in avoiding catabolic collapse. Reducing emissions now makes our task a bit easier in the 10-15+ years it takes for newly minted C02 to have its full climate effect.

            1. The Rev Kev

              Maybe, but how many tens of thousands of years do you have to store the byproducts of wind and solar? That’s the trouble with economics – it does not look at the whole term of life or any externalities. In this case, nuclear power has a longer term of life than the history of civilization due to nuclear wastes.

        2. Grebo

          The notion that Al Gore looms large in the conciousness of the average environmentalist is a right-wing delusion.
          He is a rich politician. He has, apparently sincerely, been campaigning about some of the issues that most politicians prefer to ignore since the 1980s. He has also made a lot of money, and burned a lot of carbon, doing it.
          No doubt he has raised the profile of some important subjects in the minds of the previously oblivious, but the non-oblivious pay him little attention.

          1. James Trigg

            If you do not think you need a Gandi or a Buddha, well good luck. If you are not going to build nuclear power plants then you have to change the people to drastically live cheaper.
            I am sorry I was mean but the article just seemed like a smart guy trying to impress. No common sense.

  15. Oregoncharles

    Somebody must have said this already, but:

    Why choose? If you’re serious, you do everything first.

    Not that that is actually going to happen, but as long as we’re dreaming.

    Incidentally, I don’t see why reforming urban planning would be all that expensive. Granted, the bureaucrats don’t work all that cheap, but you’re paying them anyway.

    1. Linden S.

      I agree. Isn’t that another way of saying that *all* market mechanisms to address climate change will be a failure?

  16. Loblolly

    I have discovered a process that sequesters carbon at enormous rates. It is a simple process that utilizes radiation to break the bonds of both carbon dioxide and water and transforms the constituents elements into a complex carbohydrate and a surplus of oxygen.

    My process can provide everything from food to engineering materials, and is flexible enough to perform in almost any region on earth and undeveloped economies.

    My conscience dictates that I give this idea to humanity such that we stave off global warming, peak oil, carbon credits, undergraduate hysteria and especially fellowships and chairs that turn taxes into non-renewable position papers, glossy mailers and simplistic propaganda for children.

    Please, remember we are in this together and let us not lose sight of the forest for the trees.

    1. drumlin woodchuckles

      Plants themselves discovered it a long time before you did. And they do it all by themselves every daylight hour of the growing season. All growing season long.

      Now . . . if we can manage our management of self and our management of our managed multi-plant systems to keep stored and sequestered some of the skycarbon they suck down every photon of the day, then we will make some real progress at turning skycarbon-suckdown into soilcarbon buildup.

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