The blog has moved.

Thursday, November 03, 2011 / Posted by Kevin O'Rourke / comments (0)

I've found wordpress.com to be an easier to use blog program, so subsequent posts will be at my new address. Thanks for reading!

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The End of Macro-Economics as We Know It?

Thursday, June 23, 2011 / Posted by Kevin O'Rourke / comments (0)

Before that question can be answered, a very brief history of how human civilization got to this point.

Today the Earth contains nearly 7 billion human inhabitants, most of whom are interconnected via the internet, free trade agreements, and an economic model that requires infinite growth. All of these facts are extremely recent developments on the geological time scale of the planet's history. The industrial revolution that enabled technological innovation in the extraction and use of energy, which, while drastically increasing the health and living standards for a very small portion of the 7 billion - has also brought with it a human population explosion. This population explosion is currently testing the resiliency of the ecosystems on the one planet that we have. While climate change may be a major problem, it simply a symptom of an economic system that cannot stop consuming until it inevitably collapses on itself.

We are now likely living during that major turning point in human history. This post will mainly pertain to the incompatibility of the current dominant economic model and the reality of living on a planet with finite resources. We may not be near the immediate end of economic growth - but we are rapidly heading there. Since my own history begins with the 1980's, that is where this brief history continues.





The Global Dominance of U.S. State Directed Capitalism

Throughout post-agricultural revolution human history, a common theme exists, that between any two nations in conflict, the nation with the most advanced military technology and abundant natural resources will prevail. The post WWII battle for ideological world control between the United States and the Soviet Union was no different.

In the late 80′s/early 90′s, the end of the Cold War signaled the triumph of the U.S. state directed capitalism economic model over the Soviet’s state directed communist model. This triumph was due to many factors, but to greatly oversimplify the issue, it can be primarily attributed to the superior efficiency and the resulting economic advantage of “free” markets versus a top-down state-planned economic model. The efficiency of the “free market” capitalist model, combined with America’s more abundant domestic natural resources was the right recipe for the technological innovations that powered our nation past the Soviets and into a few decades of global economic dominance.

During the Reagan Era of the 1980′s, globalization took off. The financial markets were allowed to run wild, and with the Soviet Union slowly internally crumbling, the U.S. was able to maintain its dominance of world markets with its newly gained unrivaled military power, achieved though the competitive arms race of the Cold War. Armed with the threat, trade, and use of that military power, the U.S. and often the World Bank and the IMF covertly (as well as overtly) continued to spread the ideals of free market efficiency throughout the developing world.  The words “Democracy,” have been attached as a moral underpinning – but an underpinning that has too often served more as a marketing ploy than a reality.

More recently, the unchallenged international power that the U.S. has enjoyed for several decades has begun to wane, triggered by years of large trade deficits, the loss of manufacturing jobs to globalized markets, and two unpaid-for wars.

Development of “Turbo-Capitalism”

Meanwhile, China, with a rapidly urbanizing population, has pursued a slightly different model of state directed capitalism – one without “democracy” attached. This model has allowed the Chinese economy to grow at unprecedented rates. Without the “burdens” of Democracy such as due process, expansive individual rights, and environmental protections; the Chinese turbo-charged economic model has quickly risen past the U.S.. In their newly created “totalitarian capitalism” model, the Chinese have a process even more readily equipped to rapidly exploit natural capital.

However, in this global race for rapid growth to fuel international economic and political dominance, a key piece of the economic puzzle has been discarded. The simple fact that the planet is a finite system; more importantly, one with a finite amount of easy to access, cheap fossil fuels. The previous centuries’ unprecedented growth had been “fueled” mostly by the technical innovation in the exploitation of these natural energy resources. This tremendous economic growth has allowed a significant portion of the 21st century humans to live with amenities that only royalty of past centuries could have dreamed of.

In the U.S., our “free market” created super-corporations have left our country’s citizens victims of our own market design success. Laissez-faire capitalism has eroded our own Democracy and left our country with wealth and income distribution as unequal as many “developing” countries. This disparity has placed the U.S. political system in the grips of the few dominant economic interests that can continue our sputtering GDP growth, in what is now a diminishing empire. Moreover, in other countries in the world, those who were either late to the “free market” game, or those who had the “free market” imposed on them – the conditions are much worse. For billions of humans, life on this planet today consists of living without access to simple Western luxuries such as clean water or electricity, two of the key ingredients for basic health and education. When the growth engine slows, these are the who are the most vulnerable. In a world whose economic fate is currently intertwined with fossil fuel use, when supply does not meet demand, our fossil fuel dependent agricultural system suffers, people start going hungry and Arab uprisings start happening.


The Imminent Collapse of Economics as We Know It?

As we stand here at the beginning of the 21st century, the cracks in the success of this economic system have begun to be more readily apparent. When the removal of 2 mb/d of crude from the world oil markets can cause prices to skyrocket; politicians begin pointing fingers about speculation, and bombs get dropped. Eventually, when the world markets cannot react to provide additional supply, strategic oil reserves are tapped, and everyone just tries to move on like everything is just fine.

Except, we have a big problem. Absent a huge leap forward in nuclear power, no amount of technical innovation can solve diminishing return on energy investment. Simply put, the remaining hard to reach energy sources are expensive to extract, both in terms of energy and dollars.

This is not a new story. Starting in 2006, global production of conventional oil peaked and leveled off, as previously discovered oil beds began to steeply decline in production, while new discoveries were unable to replace them. The energy inputs required for extraction, both in terms of physical energy and in terms of  the fiscal markers that represent the energy inputs, began to exponentially increase. However, the markets, population pressure, and therefore the government, demand continued full-steam economic growth. This remains true today, despite the fact that ever-increasing burning of fossil fuels is altering the very atmospheric  conditions on the planet that have allowed for our unprecedented expansion in the first place.

The main problem underlying everything is that the modern world has been built on a false premise of infinite economic growth in a finite system. The economy is only composed of our natural resources, used and altered to be traded amongst ourselves. Yet the powers that be in the world want, even need, to ignore this basic fact. Our debt based market economies require the political push for increased growth to continue; to create new jobs for the ever-increasing population and to simply generate more capital to service these debts. This model, the one that had allowed for  the global economic dominance by the U.S., is one that comes with no “golden parachute.” As the U.S. government debates debt ceilings, regulation, and market bubbles, the underlying reality is that the era of cheap energy is over, and with it the limits to growth are staring us in the face, whether we would like to see them or not.

As a result, the debate has become whether our decades old environmental regulations are too stringent; and thus should resource protection and human health be abandoned to continue our growth structures at any cost. This is where we are today.  How we proceed from here is undetermined, but when resources  can  not meet demand and there is no market substitute (as is the case with oil), when the externalities of coal use and nuclear waste are continually passed on to future generations; when government cannot “fuel” the growth necessary for the capital markets to continue growing – what will take its place?

The answer to that question will be the start of the next chapter in the human story and it is likely that you and I will be living through it.

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Why Energy Policy Should Outweigh Any Other Discussion In Washington

Tuesday, December 28, 2010 / Posted by Kevin O'Rourke / comments (0)

Since I have now completed the in-class portion of my law school career, a post updating this site is long overdue. However, in the interest of time, I have decided to add a portion of one of my final papers from last semester. Titled "Bridging the Gap: Progressive Fusion in Politics", this paper synthesizes much of what I have learned from my energy policy coursework at Vermont Law. Hope you find it interesting.

Background
Reshaping the United States (U.S.) energy policy is perhaps the most pressing political challenge that our country currently faces. Peak global production of conventional oil,[1] anthropocentric climate change,[2] nuclear waste storage and disposal,[3] and the ever increasing use of dangerous, expensive fossil fuel extraction techniques,[4] are among the many weighty concerns associated with the way the U.S. and the rest of the world consumes energy. The externalities of our country’s fossil fuel use go far beyond the environmental problems associated with climate change and the extraction of fossil fuels, as the U.S. foreign policy and military industrial complex have increasingly become servants to maintaining open trade routes to the least economically expensive forms of energy.[5]
Moreover, many academics, politicians, and citizens, understand the relationship between the cost of energy and macroeconomic development, yet the U.S. political process has thus far been unable to deliver a comprehensive policy to ensure a long-term transition away from the pollution and national security issues that fossil fuel use entails. Thus, the security of our country’s future economic prosperity, overall health, and social wellbeing, are inherently tied to our national energy policy. However, despite the scientific consensus of the anthropogenic cause of climate change,[6] nearly half of all Americans[7] and all but a few members of the Republican Party in Congress deny the human causes of global warming.[8] Despite this, most Democrats and Republicans can at a minimum agree that our dependence on foreign oil poses serious trade and national security issues.[9] Therefore, our oil consumption is one energy issue where there is immediate room for legislative progress. This paper will address the underlying values of the Republican Party and tap into these values to build bipartisan support for a comprehensive national energy policy that addresses the global insecurity that is the result of our fossil fuel dependence.

I. Overview of the Energy Problem
The burning of fossil fuels is the primary contributor of anthropogenic climate change[10] and the U.S. is the second largest contributor to this problem.[11] Global emissions of carbon dioxide (CO2) continue to rapidly rise as non-OECD countries such as China and India rush to install fossil fuel capacity to power their economic development.[12][13] Members of the International Panel on Climate Change (IPCC), the premier research collaborative on climate change, predict that unless global emissions of CO2 peak by 2015,[14] the world will be unable to stabilize the amount of CO2 in the atmosphere at 450 ppm (which is estimated to equate to a 1.4-3.1 temperature rise).[15] Unfortunately for all species of this planet, the results of stabilization at 450 ppm would still only create a “reasonable chance” of avoiding catastrophic consequences for human and ecological systems.[16] Due to the global nature of the problem, essentially all nations agree that some form of international policy will be necessary to achieve these stabilization goals.[17] However, thus far there has not been any success at reaching a global agreement, mainly as a result of the U.S. failure to develop and implement a domestic energy policy to limit fossil fuel consumption.[18] Although several regions[19] in the U.S. have independently begun work on policies to reduce CO2 emissions,[20] the long-term success of these programs is dependent upon the implementation of national and international binding legislative agreements. Previous global agreements such as the Kyoto Protocol, which the U.S. and China did not agree to, have subsequently been abject failures.[21]
The U.S. is by far the largest consumer[22] and importer of oil.[23] The U.S. consumes nearly twice the amount of liquid fuel that it produces per year,[24] while consuming one fifth of all oil produced.[25] The U.S. domestic production of oil peaked in the early 1970’s,[26] and has been slowly declining ever since, despite increasingly expensive and dangerous efforts to tap deep-water offshore supplies.[27] Additionally, as the oil supplies of the largest exporting nations of conventional oil are controlled by nationally owned oil firms,[28] the U.S. access to these sources is tenuous, as it is inherently dependent on favorable foreign relations with these countries.
In 2003 the U.S. led invasion of Iraq and subsequent removal of Saddam Hussein from power was in part directly related to the country’s need for uninterrupted access to regional conventional oil supplies.[29] Iraq possesses the third highest total of provable conventional oil reserves.[30] In total, Iraq and neighboring Kuwait combine to hold 219 billion or approximately 20% of the world’s conventional provable oil reserves.[31] Therefore, it was thought to be politically desirable for the U.S. to attempt to install a democracy favorable to U.S. interests in that region to ensure unimpeded access to conventional oil supplies. However, despite the continual U.S. military presence,[32] Iraq conventional oil production has not yet been able to return to the output prior to the first Iraq war.[33] Additionally, the wars in Iraq and Afghanistan have cost U.S. taxpayers over $1.1 trillion dollars thus far, [34] while neither Iraq nor Afghanistan have been able to stabilize their countries without continued U.S. military assistance.[35] Furthermore, despite a troop surge in Afghanistan,[36] violence hit an all-time high in November of 2010, up 300 percent from 2007,[37] while Afghani public opinion of the U.S. is at an all-time low.[38] For a basis of spending comparison, the 2009 federal economic stimulus package only contained about $100 billion (of the nearly $800 billion spent) in green projects, [39] while China plans to spend $738 billion over the next decade in renewable energy.[40] Clearly, the U.S. is not currently prioritizing its policy decisions around domestic energy development, and is subsequently missing out on an immense opportunity, while wasting precious lives and resources on unwinnable wars. In short, these wars have cost hundreds of thousands of lives,[41] over $1 trillion and have done little to secure future energy supplies, or even stabilize those regions.
Although the U.S. has been successful in transitioning the majority of its oil imports to more politically friendly countries in the Western hemisphere, such as Canada and Mexico, heavy reliance on these countries for oil poses a new set of problems.[42] First, Canada’s oil reserve and oil producing capacity is heavily dependent on the use of tar sands, which are expensive to produce, environmentally disastrous, water intensive, and potentially only capable of producing an extra 3 million barrels per day by 2025 (or less than one-fifth of what the U.S. consumes daily).[43] Second, Mexico’s conventional oil production has been in decline since 2004[44] and proved oil reserves have been declining since 1990.[45] Thus, Mexico cannot be relied upon to meet future U.S. oil needs if our consumption does not decrease. Therefore, due to the overall impact that the U.S. has on world energy consumption, and the fact that world supply of conventional oil will only decrease going forward, it is necessary that the U.S. lead the way with a sustainable energy policy - if the global community is to succeed in successfully addressing the issues of peak oil and climate change.
In order to achieve these broad reaching goals, a new political consensus in the U.S. needs to be achieved; one that transcends current political factions by touching on shared American values and establishes a policy path to a new future, one where all Americans have an opportunity to prosper. This begins with actively engaging those individuals most opposed to substantive change in the energy sector - the Republican Party. However, first, the next section will discuss some of the existing policy options; why they have failed, what can be learned from their failures as well as a recommendation for future policy options.

II. Legislative Solutions: Past, Present, and Future
         A. Past as Prologue
         While there have been some legislative successes in U.S. energy policy, for every minor victory, there has been offsetting economic growth that has hindered the overall goals of reducing fossil fuel consumption and the resulting pollution. For example, although the Clean Air Act is widely considered the most successful of the major environmental statutes passed in the early 1970’s, it still has resulted in 1/3 of the current U.S. population (approximately 100 million people) living in areas where the air quality is in non-attainment of the National Ambient Air Quality standards - levels determined “unsafe” for human health.[46] In another example, in response to the OPEC oil embargo from 1973-1974 (at a time when the U.S. was only importing 35% of its oil as opposed to the 50% it imports now), former Presidents Richard Nixon and Jimmy Carter took significant energy conservation steps. During their respective terms, these Presidents established minimum efficiency standards for cars and appliances, lowered the highway speed limit to 55 mp/hr to conserve fuel, and made significant investments in energy efficiency and in solar power. However, although President Carter’s “malaise speech” about energy conservation[47] was initially well received, the public eventually would not support his suggested energy tax increases. Eventually, most of their conservation efforts were essentially disregarded when President Ronald Reagan took office, as he brought with him deregulation of the energy sector and a strong military presence in the Middle East.[48]
The problem with focusing solely on energy efficiency, however, is that it only addresses a symptom of the much larger problem - consumption in America - which is the underlying driver of our energy crisis. However, even if the focus had remained on energy efficiency, that focus would have been slightly misplaced, as efficiency without price signals[49] to change consumption behavior (or conservation behavior) simply allows for more consumption for less cost, as demonstrated by the relative increasing use of energy per person in the U.S. since the 1970’s.[50] The notion that increased efficiency simply results in increased consumption is known as “Jevons paradox” or the “Jevons effect,” in honor of William Stanley Jevons, who in 1865 noted that improvements in fuel efficiency seemed to increase fuel consumption rather than decrease it. Although this effect is often ignored by both economists and environmentalists that tout energy efficiency as a partial cure for our energy consumption problems, empirical studies in the field of ecological economics reveal that energy efficiency alone will never solve our energy dilemma.[51] Thus, without capping our consumption of nonrenewable energy, and the use of energy-intensive products and foods, the U.S. will continue to be increasingly vulnerable to oil prices and the effects of climate change. 
B. Present Failures
            The 111th Congress was supposed to be the moment where the stars aligned for comprehensive energy policy reform. Newly elected President Barrack Obama had run on a renewable energy and green jobs platform and the 2009 stimulus bill had set the ball in motion as renewable and energy efficiency projects received unprecedented federal funding. The Democrats controlled a majority in the House and a super-majority in the Senate. A catastrophic oil spill in the Gulf of Mexico outraged the public and drew new attention to the dangers of deep-water offshore drilling. However, despite these factors, there has still been a complete failure in Congress to legislate any new long-term energy bill. The one minor victory, the 2009  U.S. House of Representatives passage of the Waxman-Markey “American Clean Energy and Security Act,” (“ACESA”), contained major concessions to both coal and nuclear industries - while barely passing.[52]

            However, the ACESA suffered from similar structural flaws that previous trading programs have faced.[53] The ACESA contained weak near-term reductions in GHGs, with a 17% reduction from 2005 levels by 2020, and a 83% reduction below 2005 levels by 2050.[54] First, there is strong support showing that the initial caps were not correctly set, as recent CO2 emissions trends show the near-term caps were overallocated. A 2009 Energy Information Agency report shows that the U.S. energy related CO2 emissions have already dropped 8.5 percent from 2005 levels.[55] By not demanding enough reductions in the short term, and without any immediate way to adjust the cap, the comprehensive climate bill would have likely fallen victim to the same overallocation problems that have plagued previous cap-and-trade programs, thus not achieving the long-term reductions necessary. Second, the inclusion of international offsets for CO2 emissions would have created another massive regulatory and administrative burden that would have undoubtedly suffered from similar transparency and monitoring problems that unfolded under the Kyoto Protocol.[56] With the potential for international ‘gaming’ of the system, and the inherent difficulties of monitoring 1 billion international offsets as allocated by the act,[57] it is unlikely that it would have created a better than a business as usual scenario.

             On the Senate side, the Kerry-Lieberman legislation was similarly structurally flawed, yet with a super majority requirement for floor debate, the bill never even made it to the floor. Despite their inclusion of industry leaders in the bill drafting process, Kerry and Lieberman failed to satisfy Senate Republicans (who felt the bill would hurt the economy), and many Democrats (who felt that there were too many concessions in the bill favoring coal and nuclear).[58] The result is that the American people are left with a short-term boost to renewable development and energy efficiency programs through the provisions in the 2009 stimulus package, but no long-term federal incentives that will be necessary to keep the renewable energy market cost competitive, creating jobs, and changing how the U.S. consumes energy.

            Inherent in the failure of these two bills, is the underlying vulnerability of our economy to fluctuations in energy prices, a problem that has been unresolved since the 1970’s. 70% of our GDP is based on consumer spending[59] and the economy needs to grow at a rate unprecedented since the early 1950’s to employ new entrants to the job market as well as those who lost their jobs in the current recession.[60] Moreover, our income and wealth distribution are incredibly stratified, with the top 1% of earners (approximately 3 million people) making more than the bottom 50% combined (150 million people).[61] The average American citizen has $43,874 in debt[62] while the median household income is only $52,029.[63] Furthermore, energy price increases disproportionately affect the middle and lower classes as they have the least disposable income.

            Thus, under our current economic structure, unless we keep consuming, the GDP will not grow, jobs will not be created, and our debt-based economy will collapse under loan defaults. Therefore, finding a way to avoid the lower and middle classes bearing the lion’s share of the burden of higher energy prices, as well as creating long-term incentives to rebuild our manufacturing job base through the production of renewable energy sources, will have to be central features of any successful comprehensive energy policy.
            C. Future Solutions
After the failure of the comprehensive cap-and-trade bills, many commentators and politicians have noted that perhaps more of a piecemeal approach will be necessary.[62][63] A piecemeal approach, unlike comprehensive legislation, could potentially remedy some of the flaws in the political process that have plagued prior efforts. By passing legislation in small chunks, it would be easier for legislators to avoid incurring the lobbying wrath of 12,488 registered lobbyists in D.C.[64] Although a piecemeal approach would be an incomplete start to what would eventually have to be legislated to achieve the GHG reductions necessary to match up with climate science, this approach seems to be the path of least resistance at the moment. First, at a minimum, there will need to be a utility only cap-and-trade program. The electricity generating sector accounts for 41% of total greenhouse gas emissions[65] and as the country moves towards more electric vehicles to reduce its oil dependence, the electric grid will play potentially play an ever-increasing role in the total U.S. GHG emissions. Thus, capping emissions on the electricity grid will ensure that all future electricity generation will only come from sources with less GHG emissions such as renewables or natural gas. A utility only cap-and-trade system was discussed in the Senate during the 111th Congress and did receive some bipartisan support,[66] but as with the Kerry-Lieberman proposal, it did not make it to a Senate floor debate. Central to the success of any future cap-and-trade proposal is that initial allowances must be auctioned rather than handed out for free, as an allowance auction would raise revenue to offset increases in utility bills for middle-lower income consumers.
Second, any future legislation needs to be paired with strong federal goals to reduce oil consumption. There are a variety of policy tools at the legislatures disposal including: (1) raising CAFE standards on automobiles in a tiered fashion with attainable yet extremely progressive goals; (2) a tax and dividend scheme at the pump, which would increase gasoline taxes, the revenues of which could be earmarked to provide tax credits or rebates to purchasers of vehicles with a miles per gallon standard that would increase over time; (3) develop and implement a federal plan for high-speed rail both for commercial and passenger transit to reorganize the way our infrastructure ships transports goods; and (4) federally mandate and setup federal block grant loan programs to develop affordable, reliable, and comprehensive public transportation systems for all major metropolitan areas.
Lastly, with a cap on utilities, and rising energy rates, it would be necessary to further incentivize energy efficiency from the federal level. Although the energy efficiency and conservation block grant program (EECBG) was one of the success stories of the 2009 stimulus package, there is still much work to be done in making U.S. commercial buildings and homes more energy efficient. Using Denmark, an international leader in energy efficiency, as an example, the U.S. could duplicate some of their policy choices including: (1) requiring labeling of energy use all houses when they are sold; (2) strengthening regional building codes to require more efficient homes and buildings; (3) revolving loan funds at the state level to provide energy efficiency retrofits for low-income housing that pays upfront cost and then charges consumers on a monthly basis through their normal electricity bill.
However, for any of these policies choices to succeed, a new political consensus will need to be built at the federal level. This will require effective messaging of the importance of long-term energy policy strategy as vital to the U.S.’s economic and national security interests. Likewise, the messaging must transcend party lines and focus instead upon shared values. The remainder of this paper will be devoted to addressing the key constituencies that make up the Republican party that must be energized and motivated to generate upward political pressure for substantive change.
[1] International Energy Agency, (World production of conventional oil peaked in 2006), http://www.iea.org/speech/2010/Tanaka/WEO2010Washington.pdf, (retrieved December 4, 2010).
[2] IPCC AR4 Synthesis Report Summary for Policymakers (2007), “Causes of Change”, International Panel on Climate Change, (Noting that there is a “very high confidence” that the net effect of human activities since 1750 has been one of warming.) http://www.ipcc.ch/publications_and_data/ar4/syr/en/spms2.html, (retrieved December 4, 2010).
[3] Nuclear Information and Resource Service, “Yucca Mountain: No Place for Nuclear Waste”, http://www.nirs.org/radwaste/yucca/yuccaltrbycorbin102400.htm, (retrieved December 13, 2010).
[4] Gross, Daniel, Slate, “The dangerous new era of extreme energy,” http://www.slate.com/id/2255906/, (retrieved December 13, 2010).
[5] Klare, Michael, “Resource Wars: The new landscape of global conflict”, pg. 8, (“The uninterrupted flow of energy supplies is especially critical; as the world’s leading consumer of oil and gas, the United States must retain access to overseas supplies or its entire economy will face collapse.”).
[6] Anderegg, William, “97% of top climate researchers agree on the anthropogenic nature of climate change,” http://news.stanford.edu/pr/2010/pr-climate-change-doubters-062510.html, (retrieved December 4, 2010) Letter to the U.S. Congress from 18 scientific organizations to U.S. Congress, http://www.aaas.org/news/releases/2009/media/1021climate_letter.pdf, (retrieved December 4, 2010).
[7] Gallup Polls, “Americans’ Global Warming Concerns Continue to Drop,” March 11, 2010, http://www.gallup.com/poll/126560/Americans-Global-Warming-Concerns-Continue-Drop.aspx, (retrieved December 13, 2010).
[8] Johnson, Brad, Think Progress, “Amid Army of GOP Denies Vying for Senate Seats only Mike Castle Supports Climate Action, http://wonkroom.thinkprogress.org/2010/09/13/gop-senate-deniers/, (retrieved December 4, 2010).
[9] Bush, George W., State of the Union Address, Jan. 31, 2006, “America is addicted to foreign oil” http://www.washingtonpost.com/wp-dyn/content/article/2006/01/31/AR2006013101468.html, (retrieved December 12, 2010), Obama, Barrack, White House Energy and the Environment, (“Our addiction to foreign oil and fossil fuels puts our economy, our national security and our environment at risk.”)(Thus, each of the last two presidents, one Republican, one Democrat have consistently addressed the necessity of dealing with our oil demand problem.) http://www.whitehouse.gov/issues/energy-and-environment, (retrieved December 12, 2010).
[10] IPCC, supra, note 2, “Global increases in CO2 concentrations are due primarily to fossil fuel use.”
[11] Union of Concerned Scientists, “Each Country’s Share of CO2 Emissions”, (Using data obtained from the Energy Information Agency.) http://www.ucsusa.org/global_warming/science_and_impacts/science/each-countrys-share-of-co2.html, (retrieved December 4, 2010).
[12] Energy Information Agency, EIA 2010 International Energy Outlook, Energy-Related Carbon Dioxide Emissions. (“From 2006 to 2007, total energy-related carbon dioxide emissions from non-OECD countries grew by 4.9 percent, while emissions from OECD countries increased by 1.0 percent.”) http://www.eia.doe.gov/oiaf/ieo/emissions.html, (retrieved December 4, 2010). [herein after EIA]
[13] EIA, U.S. Carbon Emissions in 2009: A Retrospective Review, (U.S. CO2 emissions have actually been declining overall since 2005, we are already a total of 8.5% below 2005 numbers) http://www.eia.doe.gov/oiaf/environment/emissions/carbon/index.html, (retrieved August 2, 2010.)
[14] St. James Palace Nobel Laureate Symposium, “Action for a Low Carbon and Equitable Future”, http://www.pik-potsdam.de/news/press-releases/files/sjp-memorandum.pdf, (retrieved December 12, 2010).
[15] IPCC, supra, note 2.
[16] Id. at chapter 10, Table 10.8.
[17] RTE News “Nations agree on a climate deal” (Almost two hundred countries have reached a deal to help combat climate change, including a new fund to help poor nations.) http://www.rte.ie/news/2010/1211/climate.html, (retrieved December 10, 2010).
[18] Porter, Andrew, The Telegraph, “China and America to blame for Copenhagen failure, says Brown.” http://www.telegraph.co.uk/news/newstopics/politics/6859567/Gordon-Brown-Copenhagen-China.html . (“If America and China were able to show that they were doing more, and I believe that they could, then all countries - Australia, Brazil, Japan, Korea - all these countries that have got ranges would be prepared to go to their highest level of ambition.” Quoting British prime minister Gordon Brown.) (retrieved December 4, 2010), see also CBC News, “U.S. to blame for climate summit failure: Gore.” (“The United States deserves much of the blame for the failure of the Copenhagen climate summit after it turned its back on a little-known offer from China, former U.S. vice-president Al Gore said Thursday.”) http://www.cbc.ca/canada/montreal/story/2010/04/22/mtl-gore-millenium-summit.html (retrieved December 4, 2010).
[19] Regional Greenhouse Gas Initiative, http://www.rggi.org/home, (retrieved December 12, 2010)., California Environmental Protection Agency, Air Resources Board, Cap-and-Trade, (The New England region as well as West Coast states have initiated regional cap-and-trade programs without federal support).http://www.arb.ca.gov/cc/capandtrade/capandtrade.htm, (retrieved December 12, 2010).
[20] EIA supra, note 13.
[21] Prins, Gwyn and Rayner, Steve (2007) Time to ditch Kyoto. Nature, 449 (7165). pp. 973-976.
[22] EIA, “Country Energy Profiles,” (In 2008, the U.S. consumed approximately 19,498,000 barrel of oil per day. This is more than double the consumption of China (7,831,000), and more than the entire European Union (13,680,000, 2007 est)), https://www.cia.gov/library/publications/the-world-factbook/rankorder/2174rank.html. (retrieved December 4, 2010).
[23] Id.
[24] EIA, “Short Term Energy Outlook”, (U.S. imports 9.67 mb/d of total liquid fuels more than we produce.) http://www.eia.doe.gov/emeu/steo/pub/cf_tables/steotables.cfm?tableNumber=9, (retrieved December 12, 2010).
[25] EIA, Oil: Crude and Petroleum Products – Energy Explained, Your Guide to Understanding Energy (US Petroleum Consumption 18,771,000 barrels/day, World Production 84,365,095 barrels/day.) http://www.eia.doe.gov/energyexplained/index.cfm?page=oil_home#tab2 , (retrieved December 12, 2010).
[26] EIA, “U.S. Field Production of Crude Oil (Thousands of Barrels per Day).” http://www.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M, (retrieved December 4, 2010).
[27] National Ocean and Atmospheric Administration, “Deepwater Horizon/BP Oil Response”, (see generally, Deepwater Horizon spill, worst in U.S. history) http://response.restoration.noaa.gov/dwh.php?entry_id=809, (retrieved December 12, 2010)
[28] The Economist, “National oil companies: Really Big Oil”, (Nationally owned companies own 90% of the world’s oil) http://www.economist.com/node/7276986?story_id=7276986, (retrieved December 4, 2010).
[29] Klare, supra, note 5.
[30] EIA, “Provable World Oil Reserves,” http://www.eia.doe.gov/pub/international/iealf/crudeoilreserves.xls, (retrieved December 12, 2010).
[31] Id.
[32] ABC News, “US Forces Still in Fight at End of Combat Mission” (As of September 2, there are still nearly 50,000 combat troops in Iraq, who are still dealing with violence on a daily basis). http://abcnews.go.com/International/wireStory?id=11530832, (retrieved December 12, 2010).
[33] EIA, “Table 11.5 World Crude Oil Production, 1960-2009”, http://www.eia.doe.gov/aer/txt/ptb1105.html, retrieved December 12, 2010.
[34] Congressional Research Service, “The Cost of the Wars in Iraq, Afghanistan, and Other Global War on Terror Operations Since 9/11.” (“Congress has approved a total of $1.121 trillion for military operations, base security, reconstruction, foreign aid, embassy costs, and veterans’ health care for the three operations initiated since the 9/11 attacks”) http://www.fas.org/sgp/crs/natsec/RL33110.pdf, (retrieved December 12, 2010).
[35] Jane’s Sentinel Country Risk, (Afghansitan ranked as #3 least stable country, Iraq as number 22, despite U.S. military presence). http://www.janes.com/news/security/countryrisk/, (retrieved December 12, 2010).
[36] Tiron, Roxanna, The Hill, “CBO: Troop surge in Afghanistan to cost $36 billion over the next 3 years.” http://thehill.com/homenews/administration/77619-cbo-troop-surge-to-cost-36-billion-over-three-years, (retrieved December 4, 2010).
[37] Ryan, Missy, Reuters News Service, “Afghan violence soars, insurgency expanding,” http://www.reuters.com/article/idUSTRE6AM5WB20101123, (retrieved December 4, 2010).
[38] Global Post, “Afghanistan War: Public opinion turns sharply against the US forces” (Poll conducted by the Afghan Center for Socio-Economic and Opinion Research, showed that only 6% of Afghani people view the U.S. “very favorably”, only slightly better than the 2% that Osama Bin Laden received.) http://www.globalpost.com/dispatch/afghanistan/101208/afghanistan-war-us-troops-counterinsurgency-public-opinion (retrieved December 12, 2010).
[39] Hargreaves, Steve, CNN, “The ‘green share of the stimulus,” http://money.cnn.com/2009/02/04/news/economy/green_stimulus/, (retrieved December 12, 2010).
[40] Ying, Wang, Bloomberg News, “China may spend about $738 Billion on clean energy projects in the next decade.” http://www.bloomberg.com/news/2010-07-20/china-may-spend-about-738-billion-on-clean-energy-projects-in-next-decade.html, (retrieved December 12, 2010).
[41] The Washington Post, “Faces of the Fallen: Iraq and Afghanistan Casualties”. (The U.S. has lost 5,829 soldiers in Operation Iraqi Freedom and Operation Enduring Freedom combined.) http://projects.washingtonpost.com/fallen/ (retrieved December 12, 2010). Just Foreign Policy, “Iraq Deaths” (Based off the main study published in the medical journal The Lancet, as of 2006 it was estimated that over 600,000 Iraq civilians have died as result of the invasion. Iraqbodycount.com estimates 99,025-108,102 civilian deaths) http://www.justforeignpolicy.org/iraq (retrieved December 12, 2010).
[42] EIA, “EIA’s Energy in Brief: How dependent are we on foreign oil?”(Mexico and Canada combine for 32% of the U.S. total oil and petroleum product imports), http://www.eia.doe.gov/energy_in_brief/foreign_oil_dependence.cfm, (retrieved December 12, 2010).
[43] King, Byron G., Money Week, “Are Canadian tar sand the answer to our oil needs?” http://www.moneyweek.com/investments/commodities/are-canadian-tar-sands-the-answer-to-our-oil-needs.aspx, (retrieved December 12, 2010).
[44] EIA, “International Energy Statistics,” http://tonto.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=5&pid=53&aid=1&cid=regions&syid=1989&eyid=2010&unit=TBPD, (retrieved December 12, 2010).
[45] EIA, E“International Energy Statistics,” http://tonto.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=5&pid=57&aid=6&cid=MX,&syid=1985&eyid=2010&unit=BB, (retrieved December 12, 2010).
[51] Alcott, Blake, “Jevons Paradox.” Ecological Economics, Vol.54 p9-21 (2005).
[52] U.S. EPA, Economic Analyses, Climate Change, Executive Summary, Waxman-Markey Draft, http://www.epa.gov/climatechange/economics/pdfs/WaxmanMarkeyExecutiveSummary.pdf, (last visited, August 2, 2010).
[53] Lesley K. McAllister, The Over Allocation Problem in Cap-and-Trade: Moving toward Stringency, 34 Colum. J. Envtl. L. 395, 396 (2009).
[54] Id.
[55] see note 13, supra.
[56] David G. Victor, The Collapse of the Kyoto Protocol and the Struggle to Slow Global Warming, http://press.princeton.edu/chapters/s7029.pdf (last visited August 2, 2010.).
[57] Id.
[58] Lizza, Ryan, The New Yorker, “As the World Burns: How the Senate and the White House missed the best chance to deal with Climate Change.” http://www.newyorker.com/reporting/2010/10/11/101011fa_fact_lizza, (retrieved December 12, 2010).
[59] Maiello, Michael, Forbes Magazine Online, “GDP and the Hamptons”, http://www.forbes.com/2009/09/08/gdp-consumer-spending-intelligent-investing-hamptons.html, (retrieved December 12, 2010).
[60] Shierholz, Heidi, Economic Policy Institute, “Signs of healing in the labor market although unemployment remains in the double digits,” http://www.epi.org/analysis_and_opinion/entry/signs_of_healing_in_the_labor_market_though_unemployment_remains_in_double_/ . (retrieved December 12, 2010).
[61] PoliticFact.com, http://www.politifact.com/truth-o-meter/statements/2010/dec/10/bernie-s/bernie-sanders-viral-speech-says-top-1-percent-ear/, (retrieved December 14, 2010).
[62] Whitehouse, Mark, Wall St. Journal Online, “Americans Pare Debt,” http://online.wsj.com/article/SB10001424052748703625304575115672827553404.html, (retrieved December 12, 2010).
[63] U.S. Census Bureau, “USA Quick Facts from US Census Bureau”, http://quickfacts.census.gov/qfd/states/00000.html
[64] Geman, Ben, The Hill, Reid: Next climate bill should be ‘piecemeal’”, http://thehill.com/blogs/e2-wire/677-e2-wire/117555-reid-next-climate-bill-should-be-piecemeal, (retrieved December 12, 2010).
[65] Roberts, Dave, Grist, “Is a utility-only cap-and-trade bill worth passing?” (“At this point, however, the question may no longer be whether a comprehensive bill is preferable to a utility-only bill, but whether a utility-only bill is preferable to the energy-only bill the Senate seems bent on passing. Judged against that somewhat pathetic baseline, it is, in fact, preferable.”) http://www.grist.org/article/2010-06-21-is-a-utility-only-cap-and-trade-bill-worth-passing/ , (retrieved December 12, 2010).
[66] OpenSecrets, “Lobbying Database”, http://www.opensecrets.org/lobby/, (retrieved December 12, 2010).
[67] EPA Climate Change FAQ sheet, http://www.epa.gov/climatechange/emissions/co2_human.html, (retrieved December 12, 2010).
[68] New York Times, “Senate Climate Bill’s Boosters try a Smorgasbord Strategy in Bid for Votes,” http://www.nytimes.com/gwire/2010/06/09/09greenwire-senate-climate-bills-boosters-try-smorgasbord-68212.html?pagewanted=all, (Sen. Linsey Graham, originally a cosponsor of the Kerry-Lieberman legistlation, removed his name after a debate with Sen. Harry Reid over bringing immigration policy reform prior to the energy legislation that he had spent 9 months working on.) (retrieved December 12, 2010). Politico, “Bingaman eyes utility-only approach to climate bill”, http://www.politico.com/news/stories/0710/39669.html (“The Bingaman legislation focuses on power plants, which produce about one-third of the nation’s annual emissions, but also includes provisions allowing energy-intensive manufacturers to sign up after 2011 if they want to gain regulatory certainty on climate change rather than face the prospect of new Environmental Protection Agency rules.”)



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Global Warming; The Current State of Affairs (pt. 3 of 4)

Sunday, May 24, 2009 / Posted by Kevin O'Rourke / comments (0)

The last two posts have attempted to lay the foundation of the scientific study and "debate" of global warming, while this post will focus on the state of the planet as it is today. This post will break down the current state of affairs on the planet into two main sections. First, a discussion on the current levels of CO2 in the atmosphere and the source of the major contributors to the problem. Second, the effects that the increase has already caused and how close are we to the "dam" breaking and semi-permanent catastrophic change occurring. The goal of this part of the series is to provide insight into the reasons why global action is already being taken and why these efforts need to be accelerated if the world is going to be able to mitigate the most severe effects that will inevitably occur if we simply maintain a "business as usual" attitude.

What We Are Emitting Today

According to the latest report from the National Oceanic and Atmospheric Administration (NOAA), as of March 2009, carbon dioxide in the Earth's atmosphere is at a concentration of 387 ppm by volume. Currently it is increasing at a rate of about 2 ppm every year, however, this rate has been gradually increasing as China and India are scrambling to power their emerging economies with the cheapest (and consequently dirtiest) power sources possible. As of 2006 the U.S. and China are the two countries producing the most greenhouse gases, accounting for nearly half of the worlds total CO2 emissions.


To narrow the focus to our own country, in the U.S. as of 2006, the main source of our CO2 emissions were from our electricity generation and our transportation, as the chart below shows.




As the chart above shows, basically all of our energy used for transportation comes from oil, which is a major problem in its own right, due to the complexities of peak oil, which will be discussed in the next series of posts. The chart below shows that the overwhelming majority of our electricity production comes from our coal plants, which unfortunately emit the most greenhouse gas of any form of electricity production, but since they are currently the cheapest way to produce energy, they subsequently dominate our electricity market.




This is a result of coal still being fairly abundant and the health risks that are associated with its extraction, transportation, storage and burning not being factored into the cost of construction of the plants or their continued operation. These costs are considered "externalities", and although they are very important in determining the true cost of our energy choices, they have yet to be factored into the operation of these plants. This is due to the fact that quantifying these costs is such a complex issue that has to account for so many different factors, that it is has thus far been impossible to find experts that can put an accurate dollar figure on the long term health care costs that our country will incur from pursuing the cheapest short term energy option. However, currently there is pending legislation in the form of the Waxman-Markey bill that is proposing a "cap and trade" system on greenhouse gas emissions. This bill along with other proposed solutions will be discussed in more detail in the next post, but in brief, it has been hotly debated thus far as to how effective it will be in addressing climate change.

Current Effects of Global Warming

Already we are seeing rising sea levels, glacier retreat, shrinkage of the Arctic circles and negative impacts on agriculture. Of these problems, perhaps the most immediate and most severe impacts have come in the form of glacier retreat and rising sea levels.

Many of the world's glaciers are melting at unprecendented rates, causing flooding and eventually will lead to freshwater shortages as glaciers are responsible for 70% of all the freshwater sources on the planet.


In many parts of the world glaciers are the only source of fresh water supply throughout the year. In the dry season in China and India the Gangotri Glacier in the Himalaya Mountains feeds the Ganges, Yellow and Yangtze Rivers which in turn supplies 100's of millions of people with fresh water to be used as irrigation water for their rice and wheat crops. China and India together produce more than half the world's wheat and rice, and the three river basins supply much of it. A major disruption in the water supply for this region would have a major effect on food prices around the world.

Sea level rise, another potentially damaging effect of global warming, is an issue that will be on the immediate horizon if nothing is changed. In a climate conference in Copenhagen this past March, scientists warn that if CO2 emissions continue to rise unabated, that by 2100, sea levels would rise about 3 feet and would completely submerge islands such as the Maldives, the Sunderbans in the Bay of Bengal, and Kiribati and Tuvalu in the Pacific. The US, with roughly 12,400 miles of coastline and more than 19,900 square miles of coastal wetlands, would face a bill of hundreds of billions of dollars to protect this land. Additionally, rising oceans will also contaminate both surface and underground fresh water supplies, worsening the world's existing fresh-water shortage. Underground water sources in Thailand, Israel, China and Vietnam are already experiencing salt-water contamination.


Where We Are Headed

Blomstrandbreen Glacier, Norway, March 1928 v. March 2002

Due to the complexity of the issue, with the consequences of the continuing increase in CO2 levels unknown, it is often hypothesized that there is a "tipping point" where the earth cannot handle and process (via trees recycling CO2 and oceans storing it) the CO2 in the atmosphere and the planet will simply start to shut down, and rather than trees and oceans being carbon "sinks" that hold CO2, they will begin releasing more than normal and will begin to accelerate temperature rise regardless of whether or not we continue to increase our CO2 emissions. This is the scenario on the "doomsday" end of the spectrum, and although it does not seem likely, it is unfortunately firmly in the realm of possibilities. While no one can say for sure where these type of effects would start occurring, the current number that scientists and politicians are generally looking towards as a line not to cross, is an atmosphere concentration of over 450 ppm (which would cause a worldwide temperature increase of about 2 degrees). In order to do this, a recent study estimated that humans would need to cut their greenhouse gas emissions to 30-50% of 1990 levels by 2050.

It is at this point that drastic effects such as ocean acidification, further desertification as the tropic lines expand and more severe tropical storms (an increase in ocean temperatures in theory would cause more powerful hurricanes), are hypothesized to occur.

So, to extrapolate the current data, even if there is no growth in CO2 emissions (which would mean no economic growth for the next 30 years, which would be counter to the last few hundred years of human existence), we will reach the 450 ppm number within 30 years. However, I do at this point need to again bring up the issue of peak oil. It is an issue that most global warming studies are not considering in regards to the projected outcomes of our fossil fuel consumption, but it is a huge corollary problem and is intrinsically related to the issue and subsequently will be the subject of my next series of posts. To summarize the concept as briefly as possible, there is a finite amount of oil in the earth; we have already extracted the "easiest" reserves to reach, and the remaining reserves will get increasingly costly to extract while the demand from developing third world countries as their populations continue to boom and they chase the western ideal of capitalist success ratchet up their demand for oil. Oil is literally the lifeline that powers the world economy, so much so that it has recently been suggested that oil (or energy) replace the U.S. dollar as the main form of exchange on the world markets.

Regardless of whether or not this takes effect, the reality is simple, the world has either reached peak production of oil or will do so in the next few years. This is a fact not in debate. Therefore, there will not be as much CO2 released into the atmosphere from emissions from cars and machinery over the next decade or so as increase in demand with the diminishing supply will cause prices to continue to rise. This issue will undoubtedly cause economic and social disruption as well, as the world is simply not currently set up to smoothly transition from an oil based economy to renewable energy sources. The bright side of this is however, that it is very unlikely that we will continue rising the CO2 levels in the atmosphere at the same rate, is it will be likely be financially impossible to consume as much oil and thus produce CO2 at the same rate (unless in switching to electric cars or hybrids we continue to produce the majority of our electricity from fossil fuel). So although it is likely that CO2 emissions will either remain constant or rise in the near future, fortunately the constraints of the planet (ie. there simply will not be enough fuel to burn) will eventually limit the increase. Hopefully this will occur before we get too close to planetary shutdown, as thus far the political response has been slow and not very encouraging, especially in the U.S.. Due to this reality, I am not particularly worried about the most severe catastrophic effects of global warming, as it looks like it will not even be feasible to continue releasing CO2 at the same rates as we were previously. However, this does not mean we can delay the transition of our economy and the structure of our society towards renewable power any longer, as oil shortages will severely effect this country sooner or later and the less reliant we are on oil as a transportation method the better off we will be.

To summarize, it is granted that nothing on this planet is static; global climate conditions can and do change as a result of natural processes that are out of our control. However, in this case, in our lifetimes, we are rapidly changing the planet's climate at an unprecedented rate and although these changes will certainly lead to innovation, migration, and transformation of how the world is organized, as with any large scale change in climate conditions, it is best if we either slow or mitigate these changes as much as possible to avoid economic and social unrest in the areas most directly affected. Water shortages and scarcity can and will lead to armed conflict if it is not dealt with proactively, as today we are already beginning to see the world degrade into energy driven warfare (ie. our current occupation of Iraq, which gives our country and corporations access to the worlds 4th largest oil reserves).

As I have stated before, there are already solutions to these problems, with new ideas and innovations emerging on a daily basis. This is an exciting yet frustrating time to be alive, as the answers to these major problems are available, but they will only happen if somehow the average citizen wakes up to these issues before they actually start affecting our day to day lives. Politicians are generally only as good as those that are pressuring/financing them and we currently live in a world where corporate interests are dominating the coffers, and thus the control of political decisions. An unengaged, uneducated population will remain at the whims of these interests unless they do something to mobilize, make their voices and opinions heard and literally force politicians to do things in their long term best interests rather than for corporate short term profits. The next and final post in this series will discuss some of the energy solutions already available that show promise and how you can get involved to make your voice heard, actually using the benefits of living in a democracy where it is still possible to make a difference if you want it enough.

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