This was evidence to the Treasury Committee, January 2007 Climate change and the Stern review: the implications for HM Treasury policy on tax and the environment.
EXECUTIVE SUMMARY
The UK generates a small percentage of the world’s CO2. The best role for the UK is to show the rest of the world that pleasant environmentally friendly lifestyles are possible. Economic mechanisms such as earmarked taxes are necessary but it will be necessary to go beyond purely economic disciplines.
Large budgets for education and promotion are necessary to gain public acceptance. So are large environmental lifestyle projects such as model settlements. The finance can be found within the planning system. It should be recognised that the planning system creates very large amounts of wealth, which can be traded on an international scale. It is possible that existing development corporation legislation can be used to this effect.
1. Environmental leadership means drastic changes in lifestyles
The UK generates a small percentage of the world’s CO2e, although, per capita, its citizens produce much more than the world average. The useful role that the UK can play is one of leadership to show the rest of the world that pleasant yet sustainable lifestyles are possible. Sustainable lifestyles might require a cut in the generation of CO2e of a factor of three or more. Technological advances may help but personal rationing of CO2e will be needed. If the personal allowance is to be set at the level currently thought to be necessary to achieve world sustainability significant changes in lifestyle will be inevitable. The Fishergate Environmental Panel is currently engaged in an assessment of a reasonable figure for a daily ration of the individual production of CO2e. The panel has accepted, for the time being, that 10 kg of CO2e per day (3.65 tonnes CO2e per year) is a target that fits with current thinking on climate change.
But no sign of a leveling off in atmospheric concentrations.
Remaining carbon budget – pick a number
The world is heading for catastrophic climate change.
The fifth assessment report of the Intergovernmental Panel on Climate Change (IPCC AR5) in 2013 was the first to include an assessment of a “carbon budget” – a finite amount of carbon that can be burnt before it becomes unlikely we can avoid more than 2°C of global warming. Later they issued a budget for 1.5°C, which Carbon Brief updated in Six years worth of current emissions would blow the carbon budget for 1.5 degrees.
“It will take just six years of current emissions to exhaust a carbon budget that would give a good chance of keeping global warming below 1.5 degrees Celsius, based on figures from the Intergovernmental Panel on Climate Change (IPCC).
The IPCC’s new budget, revealed earlier this month, calculates the remaining amount of carbon dioxide humans can emit and still hope to cap global warming at less than 1.5 degrees Celsius above pre-industrial levels.
Limiting warming to 1.5 degrees has become a political rallying call for some nations and Non-Governmental Organisations (NGOs). The IPCC’s calculations suggest hopes of preventing temperatures from ever crossing the 1.5 degree threshold are slim to none. But the IPCC suggests that options to temporarily exceed the target and return to lower temperatures later in the century could still be on the table.”
Carbon Brief’s updated figure for the IPCC’s remaining carbon budget is 243 billion tonnes of CO2, with counting starting in 2015. Dividing this budget by the population of the world gives 33 tonnes per person. To keep within 2°C the budget is 115 tonnes. In Is Green Growth a Fantasy?, I accepted the assumption that in the second half of this century, the world will be able to extract enough carbon from the atmosphere to balance emissions. This meant the remaining carbon budget of 115 tonnes CO2e must be eked out until this “carbon extraction safety zone” is reached. That is when carbon extraction balances carbon emissions.
Some problems with this line of argument argument are:
However, to have some figure in mind, let’s assume a target for remaining carbon budget of 100 tonnes CO2 to keep below 2°C. (2°C is goodbye to Tuvalu).
This leaves the question: How can we devise lifestyles that can cause less than 100 tonnes of CO2e to be emitted over the next 40, 50 or 60 years. If the carbon extraction safety zone can be reached in 40 years the target is 2.5 tonnes per year. If it’s reached in 50 years the target emissions become 2 tonnes a year.
UK carbon emissions – pick another number
For the purposes of the UK Climate Change Act (2008), UK greenhouse gas emissions are measured on a production basis: they are measured as the emissions made within the UK. Closing steel production in the UK cuts the UK’s production carbon emissions. However, the emissions caused by UK consumption does not fall because UK steel is replaced by imported imported steel: Measured on a consumption basis, UK carbon emissions have not been falling.
There are several other complications to measuring per capita carbon emissions but to pick some numbers for yearly emissions: 10 tonnes CO2e for production emissions and 20 tonnes for consumption emissions are plausible. Put simply: If the rest of the world had consumption emissions like the UK the 2°C remaining carbon budget would be exhausted within 5 or six years of the UK’s consumption.
Carbon emissions from everyday activities – pick some more numbers
For the purposes of this post, emissions from developed economies like the UK are of less interest than the emissions from the elements “modern” living. It is these that are of interest in designing a low carbon lifestyle. There is plenty of room for argument about carbon counting methodology but here are some reasonable estimates of the CO2 emissions for some of our everyday activities.
Table: Greenhouse gas emissions in tonnes CO2e over 10 years
(1) Tail pipe emissions from the SMMT for new cars in 2015 (including VW?) uprated a bit – because published figures only account for measured tail-pipe emissions. They do not include emissions in processing and transporting oil. Average distance per year is taken as 12,700 km
From now until the carbon extraction safety zone may be 4, 5 or 6 decades, so the figures in the table for one decade would be multiplied by 4, 5 or 6 – if emissions were to continue at similar rates. Some of the sample activities shown above can, by themselves, bust the 100 tonne budget for a 2°C rise. 1.5°C? Some hopes.
The move to cities?
Worse still, official sources say billions of people will move into cities in the next few decades. Building urban infrastructure with bricks steel, concrete and tarmac causes very large emissions of greenhouse gasses. In The carbon cost of achieving low carbon lifestyles, I estimated that the carbon emissions from constructing the urban infrastructure for an extra city dweller was of the order of 100 tonnes CO2e, about equal to the personal carbon budget that remains for the 2°C rise in global temperature. To avoid catastrophic climate change, cities will have to be rather different.
Pick any numbers you want, climate and carbon emissions are worse than you think.
I wrote this note to economist Philippe Aghion after a conference, “Economics of Innovation, Diffusion, Growth and the Environment” in September 2015 organised by the Grantham Institute of the LSE.
Below I ask the question:
If one section of the population (e.g. motorists) cause a fall in the
consumer surplus of another section (e.g. bus users), how should
economists regard this? Can it be classed as an external cost?
Dr Antoine Dechezleprêtre of the Grantham Institute
has kindly allowed me to publish his answer.
The answer is “Yes”.
Dear Professor Aghion,
Thank you for your excellent presentation at the conference. As an occasional follower of economics since the late sixties, I found most of the talks at the conference, instructive and even understood some of the equations.
Congestion and pollution
You may remember we spoke about the problems of traffic in Paris.
We have been aware for many decades of the external costs imposed by traffic on fellow travellers through congestion and on residents by noise and air pollution. There is also an increasing awareness of the carbon footprint of travel. However, the demand for transport has increased. In the case of most cities, the cars and taxis are easily the biggest volumes although there is increasing traffic from light goods vehicles. This has led to proposals like the congestion charges and pollution taxes.
Spatial development and increased travelling
These charges and taxes can be seen as an attempt to internalise external costs by “making the polluter pay”. A topic that deserves more attention from economists is the relationship between travel and the spatial development of settlements. As the cost of travel decreases to the consumer travel increases. This enables populations to relocate (i.e. spread out) and this further increases the amount travelled.
Policy makers have growing concerns about the low-density sprawl of cities and the environmental consequences, especially the effects on carbon emissions. This has led planners in the UK, at least, advocating high urban densities and good public transport. This argument worries me for several reasons. One is that modern construction techniques in cities have very large embodied carbon.
Methane or ‘natural gas’ is an important player in UK lifestyles, we heat our homes with it, we generate 30% of our electricity with it and the cattle that provide dairy products and red meat create substantial amounts of it.
The arguments over methane are fraught with controversy. Do leaks of methane make it as climate damaging in creating electricity as coal? Will the leaks from fracking increase the UK’s carbon footprint by much? Should we “kill all the cows and eat them now” to protect the climate?
My experience leads me to believe that the UK Government is not keen to answer such questions (e.g. Buried by Defra?) but there is a debate amongst scientists about what policies should be taken to limit methane emissions – and how soon. Some say we can wait but others see that curbing methane emissions will really help to reduce climate change.
Buying time or loosing time?
Scientists Ramanathan and Victor say that reducing emissions of two powerful and fast-acting causes of global warming – methane and soot – will not stop global warming but it could buy time. This might allow a few decades, for the world to put in place more difficult efforts to regulate carbon dioxide and keep Global Temperature Rise below the so-called danger level of 2°C. However, Ray Pierre Humbert thinks this might detract from the task of reducing the emissions of the main greenhouse gas, carbon dioxide. He says
There was an interesting presentation by Roger Fouquet similar to his The Importance of History. The presentation had a graph showing the net welfare of personal transport (consumer surplus less net external costs?). I think the graph can be interpreted as “cars have made a large increase in net welfare”.
At the time, I suggested that many would prefer to live in Venice, where there are few cars, rather than Los Angeles, where there are lots. If this is true, how does the high net welfare in Dr Fouquet’s work fit in for the residents of Venice? One explanation may be that his external costs (e.g. pollution and congestion) are too low. Another is that external costs do not apply uniformly to a complete population – some people suffer more from noise and bad air quality than others.
A further explanation is that the infrastructure in Venice is different and more supportive of a lifestyle with fewer cars.
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Disaggregation of populations and consumer surplus
This is a note I sent to Dr Mike Weightman in 2011. He was then Chief Inspector of nuclear installations and head of the Office for Nuclear Regulation.
He was reporting on the safety of nuclear power after the accident at Fukushima.
Are there additional concerns on the safety of nuclear power?
Dear Dr Weightman,
I understand that you are conducting a review on the safety of nuclear power plants following the recent events in Japan.
I have consulted the following: “Review of medium to long term coastal risks associated with British Energy sites: Climate Change Effects – Final Report, by Mark L Gallani, Met Office 22 February 2007. I make the following comments:
Missing climate feedbacks
The report relies on the HadRM3 Regional Climate Model. This may underestimate or omit the effects of certain climate feedbacks which are mentioned on the NERC website:
– reduced sea ice cover – reflecting less of the sun’s heat back out to space, changing ocean circulation patterns
– less carbon dioxide absorption by the oceans
– increased soil respiration
– more forest fires
– melting permafrost
– increased decomposition of wetlands
The transition to low carbon, “modern” lifestyles may break existing carbon budgets.
Carbon Brief reports: the remaining carbon budget to give a 66% chance of keeping global warming below 1.5°C is 243 billion tonnes. That means, if humanity emits another 243 billion tonnes of CO2e, global temperatures will rise to 1.5°C above pre-industrial levels. Using the same calculations, the remaining carbon budget, to keep below 2°C is 843 billion tonnes.
An earlier piece, “Is Green Growth a Fantasy?“, explained how this was converted to personal carbon budgets:
“World population was estimated recently at 7,317,801,293 by Worldometers. Dividing the remaining carbon budgets by the world’s population gives 33 tonnes of CO2e for a 1.5°C rise. For a 2°C rise this calculates as 115 tonnes per person.”
Is Green Growth a Fantasy? also made the assumption that this budget should last until it is possible to extract carbon dioxide from the atmosphere on a mass scale. It assumed this could start in 2050. Relying on carbon extraction maybe risky, but, according to the IPCC (and now others), there is little choice.
“Zero Carbon Britain (ZCB) scenario demonstrates that we could rapidly reduce UK greenhouse gas (GHG) emissions to net zero by 2030, using only currently available technology.”
“We can do this whilst maintaining a modern standard of living.”
ZCB envisages some changes to lifestyles: Less travelling, a changed diet but at the same time maintaining “a modern standard of living”.
Carbon emissions must be reduced to avoid dangerous climate change. Economic growth will increase emissions unless production is decarbonised.
Can the world’s economy be decarbonised fast enough to allow growth that is also green?
Or must the world’s economy shrink?
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The carbon intensity of production
The total production of the world economy is the combined production of all the countries in the world. It is called the gross world product (GWP). In dollar terms, this has been estimated as $87 trillion for 2013.
The amount of greenhouse gasses humans emit is determined partly by GWP. It is also also determined by how much greenhouse gas is emitted for each unit of GWP. Roughly 400 grammes of CO2 are emitted for each dollar’s worth of production. This the Carbon Intensity. It gives
Oxfam graphic: The rich cause most of the CO2 emissions
Worldwide personal carbon budget: 33 tonnes CO2e
(or if we risk 2˚C it’s 115 tonnes)
Carbon Brief reports the remaining carbon budget to give a 66% chance of keeping global warming below 1.5˚C as 243 billion tonnes. That means, if humanity emits 243 billion tonnes more of CO2e global temperature will rise to 1.5˚C above pre-industrial. Using the same calculations, the remaining carbon budget to keep below 2˚C is 843 billion tonnes.
World population was estimated recently at 7,317,801,293 by Worldometers. Dividing Carbon Brief’s remaining carbon budgets by the world’s population sets the remaining worldwide personal carbon budget at a maximum of 33 tonnes CO2e for a 1.5˚C rise or 115 tonnes for a 2˚C rise.
The UK Government aims at a peak temperature 2°C?
But is 2°C safe? Not according to James Hansen. A few days ago, on Australia’s RN breakfast, he said:
Below I list some recent complaints I made to the BBC on the coverage of business and climate change.
The complaints and replies below aren’t easy reading and I have not enough energy to follow through with a considered complaint to the BBC Trust as the last reply suggests.
A quick glance at the membership of the BBC Trust suggests a leaning towards a business that would make them unprepared to accept necessary lessons on climate change. For example, Rona Fairhead was previously head of the Financial Times Group and was appointed a British business ambassador by the prime minister.
The BBC dropped the the Green Party from the election debates. We need a debate between the BBC and a prominent green.
What about George Mombiot on the green side and Rona Fairhead for the BBC?
Would be a good debate. Much more gripping than the stuff below.
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