Climate Mitigation Through the Market

 

The largest countries at the Paris 2015 climate talks are constrained in what they can commit to, for various reasons. But if we look at what is producing the current level of carbon pollution control, it is largely the market, new innovations, and the local effect of pollution that is driving cleaner power sources.

I am not arguing that there is an “invisible hand in the market” that will solve our problems, since I don’t believe in myths. I am just pointing out instances where the market can work in favor of climate change mitigation and even be more effective than political standards, which are hard to pass and then bring into effect, and sometimes act in the wrong direction and at excessive cost.

In the US, smog, such as in California, has been the force to clean local power for decades. This predated the movement to stop climate change. Coal power has been ruled out in California, although some is still imported by Los Angeles. Clean car emission standards were pioneered in California, and carried over to nationwide use. Convenient transportation systems as in New York, Paris, and other large cities are low pollution per transport and allow residents to get by without cars.

The US requirement of fuel mileage of 55 mpg for model year 2025 was worked out in cooperation with industry in order to include feasible new technology. It also includes a fleet that maintains the profitable SUV lines, but also reduces the fleet fuel mileage to an estimated 43 mpg. This is a market compatible improvement.

Recently, the decline in emissions in the US and Russia is due to the economic slowdown. Before the last year, with the steep drop in the price of gas by a half, smaller, more efficient cars were selling well. Commuting was lower with fewer jobs. Less power was needed for less production.

The internet has led to Amazon and other internet sellers, which save a lot of driving and comparison shopping at various stores, and replaced by efficient serial postal delivery.

The recent research and development on solar cells, will increase their efficiency by 50%. The competitive approach of China has made the cost of solar power affordable, and China is the leading solar country. China has also taken over the lead in making wind power turbines.

The technology innovation of fracturing to produce natural gas has increased the amount produced in the US, and lowered the price to that below coal. This has caused a downturn in coal, without the new EPA regulations, which are being challenged and delayed in court. Despite the howls of politicians from coal states against the EPA, some coal production has already dropped by half by market competition with natural gas. People around the country are also protesting the atmospheric pollution of coal versus clean burning natural gas. The strip mining of hilltops and the water pollution and danger and accidents with coal ash hills are also leading to the shutdown of coal plants and the prevention of new plants. Coal plants also lead to acid rain, mercury pollution, NOx production, soot, and arsenic and selenium production.  Coal plants have now been shown to be four times as deadly for heart attacks as other forms of pollution.

China has been suffering from air pollution in all of its large cities, which is at least an order of magnitude greater than that allowed in US cities. They have a program of shutting a thousand of their most inefficient coal plants.  They have now promised to reduce emissions from coal plants by 60% by 2020.  Plants that can’t upgrade to emission standards will be closed.   They have contracted for new natural gas from Russia, along with building new pipelines for natural gas. They are considering many new hydro plants, after having built giant ones across their main rivers. The dams also lower the threat of floods, and set up irrigation systems. They are planning many nuclear reactors, which are also several times the size of US reactors.  China has pledged to peak its CO2 emissions by 2030 at the latest, and to lower the carbon intensity of GDP by 60-65% below 2005 levels by then.  They also plan for clean energy to be 20% of total supply by then.  There are perceptions that their economy is slowing down and increasing its service sector.

Air pollution has been shown to be very costly, as well as unhealthy and inconvenient. China has to close plants when air pollution is too high. Workers and students are often out with sickness and may require medical treatment. Productive lives are shortened. Families split with children moving out to the countryside, or even out of the country.

While the modern interest is in solar electric power, many countries use solar water heating systems that are a quarter the cost of solar power for a house, and save from the pollution of burning coal, or using natural gas that can then be used for power.

While in California we think that transportation means individually driving our own cars, people in developing countries often squeeze into vans or busses with many passengers, which follow fixed routes. We also waste a lot of time in stalled roads and freeways. The fact that we use at least double the energy per capita than other countries do, does not mean that our lifestyle is one which other countries should strive for. It could just mean that we are very wasteful with energy. Other countries that may have an outlook of cooperation and joint action, as opposed to our emphasis on individualism, may well achieve the same happiness without having to expend the level of energy that we do.

Cities in India are also polluted, although their per capita CO2 emissions are far below ours. They will have more severe problems if they do not include a lot of clean energy sources. Even coal dependent countries can build more efficient coal systems, using a second stage of energy extraction from the heated water. In a large city or development, the heated water can also be circulated for hot water and radiator space heating.

If there is a true cost of CO2 pollution imposed as a carbon tax or cap and trade system, which many states or countries have or will adopt, clean and reliable nuclear power as base power with modern, safer plants can be developed. The CO2 pollution cost will also stimulate and help fund renewable power with highly efficient natural gas plants to fill in to produce a stable power output.

The largest polluting countries cannot commit to severe cuts because of hesitancy over unknowns in the future energy market, or political opposition to making international commitments. However, the changing market and unexpected innovations may well dominate the future climate change mitigations, as they have in the past.

About Dennis SILVERMAN

I am a retired Professor of Physics and Astronomy at U C Irvine. For two decades I have been active in learning about energy and the environment, and in reporting on those topics for a decade. For the last four years I have added science policy. Lately, I have been reporting on the Covid-19 pandemic of our times.
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