Climate Change

Overview

North America After Polar Ice Melt (credit Kevin Gill using NASA Satellite Imagery from flickr.com)

We all share the same rock, the same atmosphere, the same oceans, we have to take care of it now with 7 Billion people in a post-industrial age. It requires work…the more people and the more industry the more work it takes.  In a war it can be easy to rally an economy around a common goal, there is the fear, we have to act.  In a climate situation it is much harder…. our activity is causing a long-term problem, we need to make a change, and we need to devote a lot of resources to make it right…a much tougher sell.

Preserving the world’s ecosystems should be a uniting issue for the planet, not a dividing one.  Making a change for the greater good requires overcoming fear of change, pride that an existing behavior needs changed, and the inconvenience of devoting resources and brainpower to that change.

Looking at the Data

Pre 1958: Historical CO2 record from the Law Dome DE08, DE08-2, and DSS ice cores, 1958 – Present Mauna Loa, Observatory, Hawaii. [9]
Pre 1880: Moberg, A., D.M. Sonechkin, K. Holmgren, N.M. Datsenko, and W. Karlén. 2005. Highly variable Northern Hemisphere temperatures reconstructed from low- and high-resolution proxy data. Nature, Vol. 433, pp. 613-617. [9]

1880 to Present: Lenssen, N., G. Schmidt, J. Hansen, M. Menne,A. Persin,R. Ruedy, and D. Zyss, 2019: Improvements in the GISTEMP uncertainty model. J. Geophys. Res. Atmos., 124, no. 12, 6307-6326, doi:10.1029/2018JD029522. [9]
Pre 1890: Kopp, R.E., A.C. Kemp, K. Bittermann, B.P. Horton, J.P. Donnelly, W.R. Gehreis, C.C. Hay, J.X. Mitrovica, E.D. Morrow, and S. Rahmstorf. 2016. Temperature-driven global sea-level variability in the Common Era. Proceedings of the National Academy of Sciences, Vol. 113, pp. E1434-E1441. doi:10.1073/pnas.1517056113. [9]

1890-1993: Church, J.A. and N.J. White. 2011. Sea-level rise from the late 19th to the early 21st Century. Surveys in Geophysics, doi:10.1007/s10712-011-9119-1. [9]

1993 to Present: Nerem, R. S., D. Chambers, C. Choe, and G. T. Mitchum. [9]

Clear inflection points are observed starting in the early 1900s when the Model T transformed the auto industry and electricity started to become mainstream.

Carbon Dioxide vs Methane

The accumulation of Carbon Dioxide in the atmosphere is a virtual straight line while the accumulation of methane, particularly 2000-2007 is not always straight up. 

It is an important note that methane is oxidized in the atmosphere with a half-life of 7 years turning into carbon dioxide and water.  This puts a greater emphasis on carbon dioxide emissions and perhaps methane emissions related to animals, which may be a hard sell to get rid of, less important.  Many blame the rise in methane concentration since 2007 on fracking which isn’t needed for the economy or our way of life.

Pre 1983: Law Dome, East Antarctica combined with samples from the Eurocore and GISP2 ice cores from the Summit region, Greenland, 1983-Present The Global Monitoring Division of NOAA’s Earth System. [9]

The Cost of Decreasing Carbon Emissions by Over 70%

The Fossil Fuels

Coal – mostly burned for electricity

587 million tons of coal were burned in 2019 according to the US Energy Information Agency (EIA) [10].

Natural Gas – used in electricity, residential and commercial heating/cooking, and some industry

31 trillion cubic feet of natural gas were consumed in 2019 according to the US EIA [10]

Oil – used for gasoline/diesel/jet fuel in transportation, some heating, and other lesser uses

7.5 billion barrels of oil were consumed in the United States in 2019 according to the US EIA [10]. 

These are the numbers we want to get down.  What would it take?

According to the US Energy Information Administration in 2019 the United States Consumed 4,118 billion kwh of electricity, of which 1,529 billion kwh is nuclear or renewables [10].  A rough estimate to account for fossil fuel heating and cooling and transportation is to triple this number to around 12,000 billion kwh of electricity per year.

Some emissions are hard to get rid of such as aviation, shipping, remote areas, and some industry.  Unless a substitute exists the government usually doesn’t force a change. We will continue to use oil and gas where substitutes are hard.

For the sake of a simple argument let us use Tesla solar pricing [11].  The price of the 16.32KW residential solar panels mounted on the roof with 4 powerwalls before incentives is $56,500 in California as of June 2020. Tesla provides a range estimate of 63-84kwh per day.  We will use 74kwh per day. At scale, with thin margins, no marketing, mass assessments, and assuming technology improvements let us discount 15% to $48,025 for 74kwh per day or 27,010 kwh per year, which is then $48,025/27,010kwh or $1.78 per kwh per year.

We need to create 12,000 billion kwh – 1,529 billion kwh (already renewable or nuclear) or 10,471 billion kwh/year of electricity.

10,471 billion kwh x $1.78 per kwh is $18.6 Trillion.

We are also going to subsidize new electric vehicle purchases by $7500 each at 17 million vehicles per year is $127.5 Billion.  We will assume another $22.5 billion in subsidies for large trucks/buses for an even $150 billion per year.  This will gradually turn over the vehicle fleet in about 15 years, $150 billion x 15 years is $2.25 trillion. We will add $3 trillion for utility infrastructure improvements.

Total Cost is $18.6 trillion + $2.25 trillion + $3 trillion = $23.85 Trillion.

Savings – after the renewable energy is built the cost to generate energy is much less.  Electric cars are much simpler and cheaper to operate than gasoline.

About 60% of the 7.5 billion barrels of oil is used in gasoline or diesel for road transport [12]. At 42 gallons per barrel that equates to 189 billion gallons.  At $3 a gallon that is $567 Billion.

The utility portion of the economy was $337.8 Billion in 2019 according to the US Bureau of Economic Analysis [13].

The government’s ability to borrow money for long periods of time (decades) is strong.  Essentially it can borrow at about the rate the economy grows (like a 0-interest loan).  If we assume the government can recoup $400 billion a year of the over $900 billion spent on road transport oil and utilities that will add up.  For instance, we tax vehicle registrations per year at the equivalent of what the individual is saving on gas.  Utility bills could stay the same but a portion goes to those operating the utility and a portion goes to the government since the cost to operate the utility is much less.

That is $4 Trillion per decade, or it pays for itself in under 6 decades with no tax increases, just borrowing and recouping would be fossil fuel expenditures over decades.  This coincides with common literature of renewables or electric cars paying for themselves in under half that time.

If we wanted to tax our $21 Trillion/year economy, $1 Trillion in a top-heavy manner and not go into debt, that too would not be hard. During World War II we generated over 40% of economic activity to go to the war effort. 

Other Big Numbers if we Project over 30 Years (2019 Dollars)

$14.7 Trillion ($491 Billion per Year) – Taxes on pace to go uncollected that are owed

Applying the 85.8% net compliance rate (IRS 2011-2013 study) [14] to 2019 revenue (3.46 trillion – Congressional Budget Office) [15].

$129 Trillion ($4.3 Trillion per Year) – Economic activity going to finance/insurance/real estate (FIRE) more and more being questioned by goodwill economists.

$36 Trillion – end of 2019 assets of the 1% accumulated largely from under taxing of the last 40 years

$630 Trillion – Current GDP Level over 30 Years

$252 Trillion – the equivalent of spending 40% of economic output on something (WWII peak level)

$69 Trillion ($2.3 Trillion per Year) – Corporate profits

$30 Trillion ($1 Trillion per Year) – income of the 1% above a doctor’s salary (300k)

If we wanted to, how much could we grow the economy with more labor hours? More hours, higher employment, less school, later retirement (if possible)….a lot.

This will take a great marketing campaign and lots of hand holding.  It will take a focus on great works of previous generations.  It is an opportunity for this generation to leave a great positive mark, and experience the joy that can be had when we come together to work on something positive.

How the Economy Transforms in War

Let us look at how the economy transforms during war.  It is the same process if you want to transform the economy for a war, lots of infrastructure, build giant wonders or a large environmental initiative. 

DURING A LARGE GOVERNMENT EXPENDITURE

The overarching idea is we the people need to produce more than we consume so that our production can go to something else like a war.

During World War II

Moving assets around after the war is not hard, mostly if you have debt (like the government) you will benefit and if you are owed (like bondholders) you will lose through inflation.  The government is going to pay for all this by issuing bonds and raising taxes.  You aren’t going to save much money during a period like this.  During WWII bonds paid 1.5% to 3%.  After the war, inflation greatly exceeded these rates, so by the time these are paid off the benefactor is getting less back than he or she paid in, but still better than putting the money under the mattress.

The critical factor is in the time of spending itself (like WWII) how much production can you either create (like more labor hours) or take from private purposes to devote to what you want.  Not actually different than a family planning for a big expenditure.  After the war the government can print money or tax whoever has the money to pay for what it needs to, unless it’s an entity outside its borders which would obviously create conflict.  Private business that go into debt building what they need to benefit after the war too. Life goes on, the economy evolves. After the war the factories go back to producing goods to meet the pent-up demands of the public.

Some have estimated about a $1 Trillion per year budget for climate change.  How would that look relative to world war II?

References

9. The 2 Degrees Institute. Interactive real-time climate graphs. Global Methane, Global Carbon Dioxide, Global Mean Sea Level, Global Temperature. www.2degreesinstitute.org. Accessed December 29, 2019.

10. U.S. Energy Information Administration. Annual Energy Review (2019). Tables from 5.1b, 6.1, 7.1, 8.1 and 8.2a https://www.eia.gov/totalenergy/data/annual/. Accessed April 7, 2020.

11. Tesla Solar. https://www.tesla.com/energy/design. Accessed June 25, 2020.

12. U.S. Energy Information Administration. Oil: crude and petroleum products explained. https://www.eia.gov/energyexplained/oil-and-petroleum-products/use-of-oil.php. Accessed January 30, 2020.

13. U.S. Bureau of Economic Analysis. Gross Domestic Product by Industry – Fourth Quarter and Year 2019. https://www.bea.gov/system/files/2020-04/gdpind419.pdf. Page 10. Accessed June 7, 2020.

14. U.S. Internal Revenue Service. Tax Gap Estimates for Year 2011-2013. https://www.irs.gov/newsroom/the-tax-gap. Accessed April 7, 2020.

15. Congressional Budget Office. Budget and Economic Data. Historical Budget Data. January 2020. https://www.cbo.gov/about/products/budget-economic-data#2. Accessed June 20, 2020.