Asian Perspectives
Global Issues

It’s not just about “carbon”

Posted by Michael Edesess on Apr 17, 2012

Tags: Climate change , Energy , Water , China , Growth model

Theme(s): Sustainability

These days it seems like almost half the events I attend are about “carbon”: carbon pricing, carbon footprints, carbon auditing, reducing carbon emissions, and of course the climate change that emissions of greenhouse gases – which are made mostly of carbon – are in all probability causing.

“Carbon” has become shorthand for the threat of global climate change. This is all well and good; but I worry that the discussion will suffer from the “fallacy of misplaced concreteness” – the phrase coined by philosopher-mathematician Alfred North Whitehead that means mistaking the abstract for the concrete.

Environmentalists have been trying for years to get people to focus on the fact that fossil fuels are limited. Plenty of other natural resources are limited too, but energy limitations are the most stringent. If you have unlimited low-cost energy, other limitations become less important. Fresh water becomes unlimited because you have the energy to transport it wherever you want it, and to extract it from seawater. Other resource limitations become less consequential too. But if energy grows much more scarce and costly, civilisation based on modern technology will be at risk.

Virtually all of what we call modern civilisation has only been built because we began discovering massive deposits of fossil fuels less than 200 years ago. If that hadn’t happened modern society would be what it was in 1800, which wasn’t that much different, technologically at least, from what it was in 1500 or even 500 or 500 BC. It’s difficult to say with any certainty but we’re probably more than halfway through the recoverable supply of those massive deposits; certainly their costs will increase, most likely in a series of rude bumps. We don’t really know what the after-effects of this fossil fuel bubble will be – one of them of course is the buildup of CO2 in the atmosphere.

Fossil fuels have been criticised by environmentalists in the past for causing noxious emissions of sulfur dioxide and nitrogen oxides. These sources of pollution have been ameliorated by technology and are now of less concern, except in the fast-developing countries of Asia.

The latest effort to get people’s minds to focus on the dangers of our fossil fuel dependency is centered on climate change, and the elevated atmospheric carbon dioxide (and methane) levels that are its chief cause. These gases are emitted principally because of our reliance on fossil fuels, though also due to deforestation.

It is good to educate the public about the dangers of climate change; but I’m afraid that because of the complexity and uncertainty of the details, the simplification delivered for public consumption is merely that it is an urgent and apocalyptic problem. This is an overstatement that can – and has – provoked an overreaction.

But then, there’s the larger consideration of fossil fuels. Although the international negotiations through the UNFCCC (UN Framework Convention on Climate Change) to come up with a successor agreement to the Kyoto Protocol to limit greenhouse gas emissions have been foundering, several nations and regional governmental bodies are establishing their own greenhouse gas emissions controls. Most notable is China, which plans – perhaps optimistically – a national cap-and-trade system for greenhouse gases by 2015.

Is this because of concern over climate change? No doubt, in part – but certainly not solely. China’s more looming concern is over fossil energy supply and security – especially petroleum, but also coal. It needs a way to contain fossil fuel use and sees a cap-and-trade regime as a way to do it. Countries like Turkey, Mexico, Chile, New Zealand, Australia and others are creating such systems, for a variety of their own reasons. These regional greenhouse gas emissions trading regimes will probably eventually knit together into a self-organising international system, making the UNFCCC process superfluous.

I believe this is all a way not only to (1) forestall the most catastrophic climate change scenarios, but also to (2) begin dealing seriously with the long-term dwindling of fossil fuels. Engaging with the latter issue will require a lead time of possibly as much as 100 years. We’re starting to do it now in earnest for the first time.

Not to minimise the climate change threat, but why do environmentalists have to keep coming up with various peripheral scares instead of going to the heart of the problem – that our short-term (in the timescale of human history) reliance on fossil fuels can’t last? Is it only because, short-term as it may be, it is still long-term for most people’s myopic vision?

I think it is also because of the sorry state of economic modeling. Running out of something over time, like fossil fuels, is not just a slow whimper. It is a series of increasingly disruptive bangs – supply and demand shocks and wildly volatile prices.

Yet economic “growth” models – the only excuse we have for a mainstream evolutionary theory of the economy – depict economic growth as a smoothly-increasing exponential curve. Many economists are enamoured of Austrian economist Joseph Schumpeter’s magnificently evocative term “creative destruction,” but you’d be hard-pressed to find what role it actually plays in neoclassical economic modelling.

Running out of fossil fuels will be like a long, slow, painful death, involving periodic, urgent, life-threatening crises. There may still be much oil left, but unlike the East Texas “gushers” that helped win World War II, now US oil has to be expensively cracked from the deep earth using high technology and high pressures – and it is economical only because world oil prices have soared. But difficult as this death may be, it could, creatively managed, engender a vibrant rebirth.

Economists need to develop a new and better evolutionary model of the global economy, based on the assumption of major creative-destructive episodes, periodic crises, and volatile price paths. Then we – and the public – may have a better understanding of the fact that fossil fuel limitations are not just for the long run, but now.