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Home Publications Blogs Beat the Press Global Warming and the Which Way Is Up Problem in Economics

Global Warming and the Which Way Is Up Problem in Economics

Wednesday, 02 July 2014 04:18

It is painful to read Eduardo Porter's column on the prospects for slowing global warming and China's greenhouse gas emissions. It's not that Porter got anything in particular wrong; he is presenting standard projections that are the basis for international negotiations. Rather it is the framing of the trade-offs that is painful.

Porter poses the question of the extent to which China should be willing to slow its economic growth to curb its greenhouse gas emissions, as opposed to rich countries like the United States bearing more of the burden. The reason this is painful is that most folks might recall that our major economic problem at the moment is secular stagnation. 

In case people forgot, this is a problem of inadequate demand. The story is that we don't have enough demand for goods and services to keep our workforce fully employed. As a result we have tens of millions who are unemployed, underemployed, or who have given up looking for work altogether. This is not just a U.S. problem but one that afflicts much of the world.

Okay, now bring in the problem of global warming. Isn't it horrible that we face this immense environmental problem at the same time that our economies are suffering from this horrible problem of secular stagnation? Arghhhhhh!

The problem of global warming is one that needs lot of work. We need people to retrofit our buildings to make them more energy efficient, to put up solar panels and wind turbines to get clean energy. How about paying people to drive free buses so that commuters have more incentive to leave their cars at home? We need to build smart grids to minimize energy wastage. The list is really long.

This issue comes up very directly in terms of our economic relations with China. Our big complaint (at least publicly) is that China is deliberately keeping down the value of its currency against the dollar in order to export more to the United States. That's a too little demand story again. But, we also want them to spend more on curbing greenhouse gas emissions. That's a perfect way to address the too little demand story.

Instead of subsidizing its exports to the United States (the effect of China's present trade policy), China could redirect these resources to subsidizing its installation of solar panels. Everyone stays fully employed and we get fewer greenhouse gas emissions.

These transitions are not all simple and easy, but the basic point is that two problems fit together perfectly. The enormous spending associated with World War II was the cure for our last depression. No one in their right mind would want to see another catastrophic war, but a massive deployment of resources to curb greenhouse gas emissions worldwide would serve the same purpose.

Come on folks, this really isn't hard.

Comments (21)Add Comment
Manhatten Project to Save Civilization
written by Robert Salzberg, July 02, 2014 6:13
Nuclear fusion is the most promising long term solution to our clean energy problems. The first working fusion reactor is being built in France funded by 13 billion Euros from 20 countries.

If we spent 10 times that amount, it is very likely fusion energy would happen much faster and have a decent chance of stopping global warming before it becomes catastrophic.

We managed to have a Manhattan Project to develop nuclear weapons. Too bad the world isn't as committed to forging a true clean energy future.

The American Desperation to Celebrate a Victory: Sock Puppet Propaganda 101
written by Last Mover, July 02, 2014 7:31

Only in America. The concocted fraud that government caused the Great Recession prevents government from correcting it. That sets the bar very high to justify falsely, even further job loss by claiming the parallel concoction that government takes more jobs when it offsets climate change.

This is right up there with the recent SCOTUS decision on Hobby Lobby. The fanatical cheering of the decision for a corporation as a person to be free from government oppression as it oppresses its own employees.

Look what it sells, arts and crafts supplies imported with China's subsidized currency which replaces domestic demand in America while growing it in China to burn more fossil fuel and commit a whole range of right-to-life crimes against its own people.

And what do the crazies on the right scream about through their sock puppets? Not just a victory for freedom, but how much further it should be extended, as in preventing taxes from funding birth control anywhere and everywhere. Uh huh, like they really supported those war protesters of the past who refused to fund immoral wars with their taxes didn't they.

Think of it this way. SCOTUS is one of the few areas in government where anything still gets done at all with some clarity and finality, however narrow the context. Thus the eruption of clashing celebration and criticism from opposing sides so desperate for effective movement somewhere, anywhere in government these days.

So desperate they don't hesitate to extend it immediately to all things economic, as confirmation of their belief in where things are headed, like jobs associated with economic stagnation and climate change.

But they're grasping at incremental straws of certainty, trading them to ignore the big picture that moves with its own momentum, the calculated ignorance of which is propelled by the economic predators and their sock puppets who are literally running the country into the ground.

History will show the obvious solution could have happened but didn't for the sock puppet propaganda. The Great Recession could have been avoided in large part by offsetting climate change at the same time, an ideal match for using idled resources with zero opportunity cost.

But no, the sock puppets had to preserve freedom didn't they. You see, freedom is not free is it. In fact, freedom is worth the cost of economic stagnation and climate change combined isn't it.
written by ltr, July 02, 2014 8:30

Change are to our --

Porter poses the question of the extent to which China should be willing to slow its economic growth to curb its greenhouse gas emissions, as opposed to rich countries like the United States bearing more of the burden. The reason this is painful is that most folks might recall that our major economic problem at the moment is secular stagnation.
True Cost of Products and Services
written by James, July 02, 2014 10:38
True costs of production are never totally calculated. The price you pay for an iPhone is actually not the bottom-line costs. What is missing are the environmental and health-care costs that are being subsidized by the Chinese. Thousands of Chinese die each year from cancers that can be attributed to pollution from manufacturing and fossil fuel burning plants. Someone pays, it is just costs are hidden.

As a minimum all products we buy should have emitted C02 values to produce the product. Consumers should get the full picture of what they are getting.
Fight Global Warming By Shortening The Work Week
written by Tyler, July 02, 2014 12:17
Is it really necessary for the work week to be forty hours? Keynes envisioned the work week being much shorter by now. Let's bring it down to thirty hours.
written by urban legend, July 02, 2014 4:30
But not so much northern Europe -- or for that matter, France, where despite the high headline unemployment rate the employment rate in the prime working age unaffected by schooling and retirements -- 25-54 -- is 81%, about four percentage points higher than in the U.S. for that age group. It is that rate in that segment -- where most other countries have recovered most of the percentage lost in the Great Recession -- that reveals most starkly how far -- very, very far -- we are from "full employment."
American Commitments
written by John Parks, July 02, 2014 7:10
Sorry Eduardo.........the Chinese are smart enough to know that "American Commitments" is another oxymoron.
With good reason, they are not going to sign onto any such agreement knowing full well that the winds of political will here in the US are mere gusts and never steady or reliable.
Ask an American Indian.
Why expect China to do what we say ?
written by John Puma, July 03, 2014 2:11
I suspect that China would be more likely to do as is suggested in the article if WE were to divert say 10% of OUR perpetual war budget to production of OUR renewable energy infrastructure.

By my estimate (see http://tinyurl.com/6aj4zqu), this would be about $150 billion annually and the work it would finance would be appropriate to the same companies that are now taking that sum for war-making. That is, some put upon warmongers might loose macho talking points but would experience essentially no financial hardship.

Note this figure: " ... the total spent by the Department of Energy on renewables over the last 33 years ($29 billion in 2010 dollars) ... "
That's less than $1 billion per year. No there is no guarantee that increasing that 150x, as I propose, will be sufficient BUT less than $1 billion per year is an existential insult to the human species. http://tinyurl.com/kt8xnhh
written by liberal, July 03, 2014 7:08
Robert Salzberg,
Nuclear fusion is the most promising long term solution to our clean energy problems.

How are you going to solve the neutron flux problem?
For liberal
written by L. Ol, July 03, 2014 8:58
This indicates how the problem is being addressed. Why is the US letting Europe and Japan take the lead. Lemme guess: Big Oil?
the predicament, and the economic co-benefits of its resolution, are greater than is yet recognized
written by Lewis Cleverdon, July 03, 2014 10:43
A major part of the costs, and the stimulus effect, of ending FF use surely reflects the rate of their displacement. Given the record of cost reductions for both wind and solar, and the fact that we've yet to invest sensibly in the R&D of baseload options such as wave and geothermal, it seems clear that in combination these could be deployed over time to meet new global demand as well as to replace old fossil plant as it rusts out, particularly given a far greater pressure on energy efficiency and the adoption of tranche-pricing to deter wasteful energy use.

Given the design life of major plants, that rate of displacement would get us to near-zero FFs around 2060, with most outlay in developed countries being in scheduled replacement, not additional capacity, and thus not actually providing them with all that much of an economic stimulus.

The latter would occur primarily via a policy of replacing FF plants well before the end of their design life, thus incurring both loss of income and extra new-plant costs. Infrastructure spending - from loft insulation to free buses - could add to that stimulus but short of a radically rapid transition being agreed as a global treaty commitment, it is hard to see it as offering anywhere near the stimulus of WW2. It may also be noted that one empire and various nations were bankrupted by the latter event, on which the USA grew fat.

However, to avoid the terminal acidification of the oceans on which the biosphere depends, and to avoid the 100yr residence of our peak level of CO2 in the atmosphere pushing the feedbacks on AGW far past the point of their emissions fully offsetting our best efforts at emissions control, we are going to require a new global industry of Carbon Recovery to cleanse the excess CO2 from the atmosphere.

Discounting the high tech CCS options for their inherent inefficiency in sequestering CO2 rather than carbon (charcoal) with less than 1/3rd of the weight, the operation's scale is still vast even if the completion date is set at 2100. Assuming a peak CO2 of 450ppm (parts per million) occurred in 2050, the task of restoring the natural stable level of 280ppm would be of recovering 170ppm plus around 50ppm re-emerging from the oceans. 220ppm at 2.1GtsC per ppm amounts to around 462 billion tonnes of charcoal, or 9.2GtsC being sequestered each year for 50yrs.

The approach known as "Carbon Recovery for Food Security" aims to utilize that charcoal and its production for maximum benefit across economic, social and ecological fields. Since charcoal cut with a little organic fertilizer (aka biochar) can act as a valuable soil enhancer and soil-moisture regulator (after being plowed in as a part of normal cultivation) those benefits should include:
- raised farm yields and drought resistance,
- a very large area globally of native coppice afforestation for feedstock supply (using neither farmland nor old forest) that accommodates high biodiversity,
- a major new source of rural employment globally in forestry and processing helping to halt the urban drift,
- a co-product output of methanol made from waste gasses of over a barrel of petrol-equivalent liquid fuel per tonne of charcoal,
- and the critical factor of this technique being largely self-funding from its two income streams.

This I'd suggest is an essential addition to emissions control measures to resolve the climate predicament, and it provides a major additional economic stimulus for the rest of this century that, like deploying the renewable energies, is of economic growth based on remedial measures to make good the damage of previous generations' ecologically-incompetent policies.


About those subsidies for solar...
written by Mike, July 03, 2014 3:50
China has been subsidizing solar and the countervailing duties are about to be put into effect.

From the NYTimes June 3, 2014

"The Commerce Department on Tuesday imposed steep duties on importers of Chinese solar panels made from certain components, asserting that the manufacturers had benefited from unfair subsidies.

The duties will range from 18.56 to 35.21 percent, the department said.

The decision, in a long-simmering trade dispute, addresses one of the main charges in a petition brought by the manufacturer SolarWorld Industries America. While it is preliminary, the ruling means that the United States will begin collecting the tariffs in advance of the final decision, expected later this year.

“Today is a strong win for the U.S. solar industry,” said Mukesh Dulani, president of SolarWorld Industries America, based in Hillsboro, Ore. “We look forward to the end of illegal Chinese government intervention in the U.S. solar market, and we applaud Commerce for its work that supports fair trade.”

For a great story on how China is working to bring down solar panel costs to make it cheaper than coal read this:


I've tried to understand what Lewis Cleverdon wrote.
written by John Wright, July 04, 2014 7:45
If I understand what Lewis Cleverdon wrote in his comment, he views the solution to AGW as a combination of replacement of Fossil Fuel power plants with wind and solar and recovery of elemental carbon from atmospheric CO2.

I do not understand how the world is to pull CO2 out of the atmosphere and convert it to elemental carbon and oxygen. Is this to be done by "afforestation" = plant photosynthesis? Given that the original CO2 was produced as hydrocarbons were burned to produce H2O,C02 + energy, if this elemental carbon is to be recovered by other than plant growth, it will take a large quantity of energy from the wind/solar supply to accomplish.

And what countries will provide the "afforestation" acreage when the opposite (deforestation) is occurring in many places such as the Amazon?

I suspect that USA and many other governments of the world will open their game playbooks, see the same play that worked in the past, and posit that climate change will be handled by some future technological breakthrough ("cold fusion"?) and then continue to push for population growth and economic growth.

But as ecologist Guy McPherson says, "Nature bats last".
Another question for Lewis C.
written by John Puma, July 04, 2014 6:30
Please, a bit more detail on your proposal to convert CO2 to elemental carbon, especially the energy required to do so: both to affect the basic reaction AND to produce reactants other than the CO2.

On Carbon Recovery for Food Security - as part of a commensurate mitigation strategy
written by Lewis Cleverdon, July 04, 2014 9:17
John Wright and John Puma - thanks for your responses.

The production of charcoal, which is quite close to pure carbon and is exceptionally inert and durable when buried, will certainly require very large acreages of native coppice afforestation for feedstock. (Coppice being an ancient mode of foresty that maximizes yield by felling at 7 to 28yrs of growth and allowing rapid re-growth from the stump's large extant rootball).
The area globally available of afforestable non-farmland and non-forestland was identified in a joint study by WRI & WFN as being around 1.6GHa.s (1.6 billion hectares or ~4.0 billion acres). A further major source of biomass feedstock is the urban, farm and forestry wastes which are currently burnt or rotted down.
The optimum processing of the feedstock is via village scale retorts, to minimize the unproductive haulage of the wood, which is generally only about 49% carbon. A charcoal retort differs from a charcoal pit or kiln in that besides excluding oxygen and so causing the wood not to burn but to pyrolize (convert to charcoal and waste gasses) it uses a fraction of those combustible waste gasses as fuel to provide heat under the feedstock container, thus avoiding the major inefficiency of having to get the wood burning well before enclosing it. While a pit system will yield as little as 5% by weight of the feedstock as charcoal, a kiln can give up to ~17% and a simple efficient retort can give 33%. Being highly exothermic the process requires no external energy, with surplus heat available to generate process power for milling the charcoal to an optimum 2mm size, and a fraction of the methanol output (made from hydrocarbon waste gasses including CO, H2, CH4 and others) being used for the product's haulage to farms for plowing in.

For further information on (the high-tech end of) 'biochar' production and use the "International Biochar Initiative" is worth searching, as is "Terra preta".

With regard to John McPherson's despairing outlook on the predicament, while I respect his integrity as a scientist I observe that in making highly subjective assumptions about probable political responses he is way out of his field of expertize - and in this he has no more authority that any ordinary person. I'd agree entirely with him that the threat is much greater than is generally recognized, but then so are the options for its mitigation, and in my view it is up to us to encourage and empower people to join in effective pressure for that mitigation to begin.



Re: Carbon Recovery for Food Security
written by John Puma, July 05, 2014 12:25
To Lewis: The International Biochar Initiative reference suggests that it is only an after thought that the process you propose is a reduction of "emissions from biomass that would otherwise naturally degrade to greenhouse gases."
The biochar is primarily touted as a fertilizer.

Why do you propose to carbonize coppiced wood? If it is allowed to grow it will incorporate atmospheric CO2 into its structure. It is only a source of emission if cut.

I refer you (and John Wright) to the table on page 6 of the 2013 paper at the link below.

It shows that total annual biomass emission is one-quarter that attributed to fossil fuel use plus cement production. In addition, only half of that is CO2 emission from burning forest deforestation while the other emissions are mainly CH4 and NO2.

Reducing meat production would reduce the CH4 and the NO2 is a component of the natural soil nitrogen cycle and as such is a fertilizer for plant growth. The Initiative site treats it as if it were something undesirable.

I would assume it would be as difficult to install the local retorts necessary for efficient realization of your proposal as to achieve for the drastic reduction in deforestation.

Until deforestation is eliminated it is deforestation refuse that should the input for biochar, not independently harvested coppice material.

I'd suggest a more direct approach: incorporate refuse directly into the soil. Any large scale use of biochar will require use of tractors and fossil fuel that can be employed for this. One may as well substitute a flail mower for the biochar kiln to chip deforestation refuse before its incorporation into the soil.

Correct me if I am confused.

John - your confusion reflects only a lack of background on this subject; some notes may be of interest.
written by Lewis Cleverdon, July 05, 2014 7:31
First, Carbon Recovery for Food Security [CRFS] is my title, but it is chosen to describe a means of Carbon Recovery that has been proposed for a decade or more and that has been endorsed as essential and uniquely effective by scientists of the standing of Lovelock and Hansen.

Second, afforestation that is left to mature will sequester carbon, but even if it is managed to become mixed age forest so that its trees don't all die and rot and release their carbon as CO2 & CH4 at about the same time, all that is gained is a relatively slow carbon uptake for about 60yrs, after which it forms a standing stock of carbon with negligeable net carbon intake to the soil in both tropical and boreal ecologies.
By contrast, native coppice for biochar maintains a maximum rate of intake of carbon to the forest potentially in perpetuity, from where it is harvested, processed and sequestered. In offering a valuable soil-enhancement product, unlike the plant-&-forget approach, it provides a major part of the incentive needed for the massive scale of native afforestation now required.

Third, wood that is chipped and plowed in rapidly rots down and outgasses most of its carbon to the atmosphere as CO2 and CH4, with the latter being 86 times as potent a GHG over a 20yr period. This practice would be antithetical to lowering airborne CO2 and reducing AGW.

Fourth, Nitrous Oxide emissions have a CO2 equivalence of 268 and are thus a highly potent GHG. Efforts to control this emission do not in any way reduce the nitrogen available to plants' roots. On the contrary, biochar is shown in many countries to actively assist that availability.

Fifth, traditional rotational livestock grazing systems can be highly beneficial in raising the carbon taken into the soil from the atmosphere. Factory farming and concentrated animal feedlot operations are by contrast significant emitters of GHGs and warrant closure ASAP for this and several other pressing reasons.

Sixth, utilizing waste wood from deforestation for biochar would inevitably facilitate that very undesirable practice, and the volume in question is anyway only a rather minor and declining resource compared to the requisite scale for cleansing the atmosphere of its anthro-CO2. The sooner the program of CRFS begins the planting of native coppice alongside stringent emissions control, the sooner we shall halt the rise of airborne CO2 and its acidification of the oceans.



To Lewis
written by John Puma, July 06, 2014 2:44
What is the mechanism of biochar soil-enhancement. Or, are you sure you won't go through the effort to harvest, process and distribute of the biochar to the soil simply to have it ultimately be converted to CO2 by microorganisms via essentially the same mechanism you describe for incorporated wood chips?

CO2 itself, at appropriate levels, literally makes possible "life as we know it" but at higher levels is detrimental to that life. There is no reason to assume that this is not a possibility for elemental carbon in the soil.

So, is there established a maximum level of biochar in the soil? Has the question been asked by biochar advocates?

One of the products of biochar production is CO since the process is essentially partial burning of forest material, either specifically raised for the purpose or deforestation waste. Is this not readily convertible into CO2 in the atmosphere.

Is there a full CO2 accounting for the cycle: amount of CO2 spent to make/incorporate Kg biochar per Kg sequestered?

John - some further notes
written by Lewis Cleverdon, July 06, 2014 6:41
- Not being a soil scientist I couldn't describe the subtle mechanisms of biochar's enhancement of the soil to a scientist's satisfaction, so this is only as best a layman understands it.

When wood is pyrolysed to charcoal what remains is the carbon structure around the tree's cells, which gives an oddly huge internal surface area - about the size of a tennis court per gram of charcoal. This micro-structure is utilized by the soil's microbial and fungal ecology for the retention of nutrients in the cell spaces, which both minimize nutrients' loss to leaching-out by rainfall and ensure their availability to plants at the time required, after which they appear to be returned to the biochar. The name biochar reflects the mixing of a small percentage of organic fertilizer with the charcoal before burial to prime this storage function.

Beside nutrient governance a further major enhancement is provided by charcoal's well known function as a soil moisture regulator, retaining water in times of drought and improving drainage in times of saturation.

For further study the following widely cited article gives a good basic outline, and there are many other serious papers on the web.

Prof. Johannes Lehmann 2007. Bio-energy in the black. Frontiers in Ecology and the Environment 5: 381–387. http://dx.doi.org/10.1890/1540-9295(2007)5[381:BITB]2.0.CO;2

"At best, common renewable energy strategies can only offset fossil fuel emissions of CO2 – they cannot reverse climate change. One promising approach to lowering CO2 in the atmosphere while producing energy is biochar bio-energy, based on low-temperature pyrolysis. This technology relies on capturing the off-gases from thermal decomposition of wood or grasses to produce heat, electricity, or biofuels. Biochar is a major by-product of this pyrolysis, and has remarkable environmental properties. In soil, biochar was shown to persist longer and to retain cations better than other forms of soil organic matter. The precise half-life of biochar is still disputed, however, and this will have important implications for the value of the technology, particularly in carbon trading. Furthermore, the cation retention of fresh biochar is relatively low compared to aged biochar in soil, and it is not clear under what conditions, and over what period of time, biochar develops its adsorbing properties. Research is still needed to maximize the favorable attributes of biochar and to fully evaluate environmental risks, but this technology has the potential to provide an important carbon sink and to reduce environmental pollution by fertilizers."

Department of Crop and Soil Sciences, College of Agriculture and Life Sciences, Cornell University, Ithaca, NY 14853 ( E-mail: CL273@cornell.edu)

- The origin of interest in biochar was the discovery of a huge area of 'Terra Preta' or 'dark earth' in the Amazon (equal in total to France + Spain, mostly in small plots but with some of up to 400ha.s) where the soil has been treated with charcoal. These have been radio-carbon dated mostly to around 2,000 years ago, but with some going back 12,000yrs. These areas are highly prized for farming as they give abundant crops and can continue to do so without additional fertilizers, when by contrast the surrounding untreated poor tropical forest soils are exhausted of nutrients 3 or four years after the forest clearance. In places the charcoal-treated soil is over a metre deep, so some really immense volumes of charcoal have been dug in over the years without hitting a ceiling on the benefits.

As Lehmann makes clear, there is much research ongoing (with trials in over 20 countries last I heard) into precisely how biochar functions, how long it takes to mature to its full effect and how the effect and its durability can best be optimized, but this is led by observation of its remarkable increase in crop yields of up to 200% or 300% when used in poor soils with appropriate priming.

written by Lewis Cleverdon, July 06, 2014 6:47
With regard to the CO output in the waste gasses from a charcoal retort, CO is a prime combustible gas and a component of methanol (CH3OH), so none is released.

The carbon accounting of the "Carbon Recovery for Food Security" proposal is uniquely positive among all of the various productive interactions with the natural ecology. It sequesters up to 2/3rds of the carbon in the wood potentially for thousands of years, while also providing a liquid fuel that is exceptionally close to carbon neutral. The very minor decrement is from the predictable use in early years of petrol chainsaws and diesel vehicles for harvesting in developed countries (in most developing countries machetes and ox-wains are a more practical option and more economic). But given that there is no FF used in growing the feedstock or in its processing or in the products' delivery, the methanol output is far closer to being fully carbon neutral than any of the 'agri-fuels'. However, with around 11kgs of CO2 recovered and its carbon sequestered for each litre of methanol's miniscule FF-CO2 output, the overall carbon balance is hugely and uniquely positive.


Thanks Lewis
written by John Puma, July 06, 2014 1:54
I'll check out the reference.

Biochar's presumed activity, not surprisingly, is similar to properties of "activated charcoal."

I will be doing some informal research in my garden.

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Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.