6. Stern Review
Posted by: "Ted Trainer" F.Trainer@unsw.edu.au
Date: Mon Nov 20, 2006 3:57 pm ((PST))
THE STERN REVIEW; CRITICAL NOTES ON ITS ABATEMENT OPTIMISM
Ted Trainer.
Sir N. Stern, Review on the Economics of
Climate Change, H.M.Treasury, UK, Oct., 2006.
My concern in these notes is with Stern's claim
that sufficient remedial action on the greenhouse
problem would not cost much, indeed only 1% of
GDP p.a. From my previous investigation of
energy issues it is my firm view that
industrial-affluent-consumer societies are
grossly unsustainable and that they cannot adapt
to the coming energy and other major global
problems. I have therefore been very interested
to see how Stern could come to his surprising
conclusion, (·which is so very consoling for
business, governments and consumers·no need to
think about abandoning affluence and growth.)
Following are some brief notes deriving from a
superficial reading of sections of the Review. I
am not confident about the views presented below
but they raise issues people need to settle
before the Review's discussion of abatement is
accepted.
I should stress that these comments do not
question the Review's claims re the seriousness
of the greenhouse problem.
1. The carbon target is too high.
The Review takes 550 ppm, double the
pre-industrial level, as the concentration of
CO2 in the atmosphere to be achieved, which will
require a 25% reduction in CO2 emissions by 2050.
However many have worried that a 400 to 450 ppm
target leaves us open to potentially disastrous
consequences. For instance the Tyndall Centre
for Climate Change Research concluded that the
goal should be no more than 450 ppm, meaning that
a 90% reduction is needed. Stern stresses that
to take 450 ppm as the target would make a big
difference to the difficulty of the task. This
is evident in the IPCC graphs where the 550 ppm
reduction curve is not far below the present
level by 2050, but the 450 ppm curve is a long
way below. According to Stern's Table 1.1 11
studies indicate that a 400 ppm level could be
associated with a remarkable 4.9 degree
temperature rise·without taking into account any
feedback effects (e.g., warming drying out
wetlands and releasing methane.)
2. The 550 ppm target is far from achieved by 2050.
The Review seems to be saying, and has been
widely reported as saying, that at about 1% of
GDP cost we can do what is required re the
greenhouse problem. But this is far from what it
is actually saying.
The IPCC emission reduction curve if a 450 ppm
target is to be achieved starts to fall from
present levels soon, and rapidly. However the
550 curve is quite different; emissions can rise
for some time and by 2050 do not have to fall
far. Stern takes the level of this curve in 2050
as his target, and this corresponds to an
emission of 18 GT, or 75% of the present level.
The point is that this is all that has to be done
by 2050 to be on curve - but it is just the
beginning and a whole lot more would have to be
done in the years after 2050 if the 550 ppm level
is to be achieved eventually. Even if the 1% of
GDP cost and the available alternative
technologies make it possible for us to be on
curve in 2050, this says nothing about whether we
can follow the curve all the way down to where it
has to go. Where does it have to go? To about
28% of the present emission rate, whereas if
Stern's proposals work we will only have gone
down to 75% by 2050. In other words the reducing
will barely have begun by 2050 yet Sterns review
reads as if the steps he recommends will have
solved the problem by 2050 by spending a mere 1%
of GDP p.a.
In fact in the fine print Stern does recognise
that long run stabilisation will require eventual
reduction to under 20% of present emissions (p.
197), and possibly to 1 GT/y in view of evidence
on the weakening of ocean absorption capacity. He
also recognises how much more difficult the 450
ppm target would be by stating that for 550 ppm
the rate of reduction would have to be 1% p.a but
for the lower target it would have to be 7%. (p.
201.) He in effect says the cost would be
unacceptable.
3. The energy target is too low.
Stern takes as the 2050 global energy consumption
the usual amount expected by IEA et al,, which is
around 2 - 2.5 times the present amount. But
this is far below the amount that would be needed
to provide present rich world per capita energy
use to all 9 billion people expected soon after
2050. That would require 2 -3 times the amount
Stern takes as his target.
Presumably Stern is not in favour of a grossly
unequal world distribution of access to energy,
and presumably shares the conventional assumption
that the free-market and growth-for-ever economy
will in time raise all to rich world affluence.
If so then his task is to explain how world
energy demand of 1980 EJ can be met with only 18
GJ of CO2 emitted. In terms of carbon released
per unit of energy used the 9 billion task is
about 4 times as difficult as the 550 ppm task
Stern takes on. Anderson (whose figures Stern
uses) similarly assumes 35,000TWh of electricity
supplied in 2050 (Table 2.2a), which for 9
billion people would be a per capita use only 37%
of the present Australian figure.
Taking together the more responsible greenhouse
target and the more appropriate 2050 energy
target, the task could be 3x4 = 12 times as big
as the one Stern tackles.
4. The questionable logic.
Stern's method is to ask what would be the dollar
cost of avoiding the emission of a tonne of CO2
by adopting conservation, wind, solar, biomass
etc. technologies, then to simply multiply this
by the volume of energy his 2050 scenario assumes
for each of these, and to then total the dollar
cost. (The resulting total CO2 assumed to be
saved is 42 billion tonnes.)
The highly problematic assumption here is that
one can go on replacing tonne after tonne of CO2
by paying for unit after unit of wind etc. at the
assumed rate, until the whole 42 b tonne
abatement total has been accounted for. In the
real world there are likely to be several reasons
why this is an invalid assumption, and some of
these reasons have little or nothing to do with
dollar costs.
Firstly Stern does not seem to deal with the "low
hanging fruit" or diminishing returns effect.
Pollution reduction, energy conservation and
efficiency improvements are all subject to
rapidly rising diminishing return curves; the
first gains are the easiest but the options then
become more scarce, difficult and costly, or dry
up entirely. (Stern himself notes that major
improvements in aircraft efficiency are not
likely from here on.) So it is probably highly
misleading to take the dollar cost of avoiding
carbon release that we will have to pay when we
start as a figure we can expect to go on paying.
Stern notes but does not seem to take into
account one of the factors likely to cause
diminishing returns, the fact that as temperature
increases the carbon absorption capacity of soils
and seas will deteriorate (positive feedback
effects.). (p. 196.)
Stern assumes that the opposite of diminishing
returns will occur, i.e., that experience will
see continual improvement in technical capacity
to eliminate CO2. Anderson's Table 2.1 assumes a
general decline from 225 pounds per tonne of CO2
abatement to 60 pounds by 2050 (p. 44.) There
will of course be a tendency for technical
advance to move costs in this direction but it is
not at all clear that it will be stronger than
the opposite, diminishing returns effect.
More importantly there are good reasons for
thinking that some of the strategies Stern
assumes will go well in the early stages will hit
limits. Some might suddenly cease being
applicable. Some might not be applicable at all.
Chapter 6 of my Renewable Energy Cannot Sustain
Consumer Society (to be published by Springer,
2007) outlines the reasons why many believe there
will never be a hydrogen economy, or the hydrogen
powered vehicles Stern assumes. He does not deal
with the claim by Bossell and others that to
deliver 1 unit of energy to wheels via hydrogen 4
energy units must be produced, in view of the
heavy losses in hydrogen production and
distribution. Chapter 8 sketches the reasons for
thinking sequestration of carbon will not be
viable, and Stern assumes sequestration will
account for some 25% of his 2050 abatement
achievement. Chapter 9 explains why many believe
nuclear energy can't solve the problem, but Stern
relies heavily on it. (For instance his 2050
nuclear assumption would have used up all the
uranium Leeuwin and Smith believe is accessible.)
Totally overlooked in the Review are the possible
limits to the extension of renewable energy
technologies. He assumes wind will provide some
50 times the present amount of energy, with no
assessment of whether enough sites for this are
likely to be found. (He does recognise this could
be a problem.) Some European countries are
already probably close to their limits. He does
not discuss the major limits for wind and solar,
the difficulty of integrating these variable
sources into the grid, and the impossibility of
storing large volumes of electricity.
Above all Stern does not show that biomass can
meet the huge demand it would be subject to in a
renewable energy world. Chapter 5 of RE details
the reasons for concluding that biomass cannot
provide more than a very small fraction of
present liquid fuel demand, in the region of 5%.
There is far to little forest or land for biomass
to meet demand. It doesn't matter how optimistic
assumptions re future technology and yields are,
there would seem to be no possibility of
replacing fossil transport fuels with ethanol or
methanol etc·. or of running transport on
hydrogen, ·or electricity from renewables because
they will be more than taken up providing
electricity. (It seems clear to me that combining
all these renewable sources would still require
use of far too much fossil fuel to enable
sensible greenhouse targets to be met; see RE
Chapter 8.)
The amount of biomass Stern assumes seems
feasible to me, but it would enable only a tiny
proportion of present world transport fuel, let
alone 2050 fuel·let alone demand in 2070 for 9
billion people living as we do now·let alone for
9 billion in 2050 with the levels of affluence we
expect then given 3% economic growth!
Other minor difficulties.
One might confidently predict that the cost for
wind energy assumed in the Review does not
include the cost of building the back-up fossil
or nuclear plant required cover times when the
winds are down, which according to E. On Netz,
the biggest German wind company, might have to be
equivalent to 80% of the wind plant capacity.
Nor will it have included the cost of
restructuring the grids to take large amounts of
energy suddenly from wherever the winds are up,
also stressed by E. On Netz reports.
Anderson (p. 60) says bio-ethanol can be produced
at 2.5 - 3.5 kWh/m, equal to 2 - 3 tonnes of oil
per ha. This is about 2.5 times the rate biomass
I think is likely to be harvested from very large
land areas (and therefore less than ideal land),
i.e., about 7 t/ha.
Anderson's Figure 2.2b shows 2050 petrol and
diesel consumption of about 290 EJ, some 70%
greater than at present. Many of us think oil
supply is near its peak but evidently there's
nothing to worry about.
Finally, no account is taken of the implications
of much higher energy prices for all the
calculations feeding into the Review and its
conclusions. Energy is going to cost a lot more,
and this will multiply into the costs of
alternatives, as all use materials etc, require
energy to produce. Another diminishing returns
effect.
Conclusions.
These have been brief indications of the reasons
why I think the Stern Review is grossly
misleading re the possibility of abatement. His
statement "·the expected annual cost of achieving
emissions reductions consistent with an emissions
trajectory leading to stabilisation at around 550
ppm is likely to be around 1% of GDP by 2050·"
(p. 239.) could be quite true·but it is highly
misleading. His basic message , "·mitigation of
climate change is technically and economically
feasible·" (p. 240) is emphatically not shown
and indeed not discussed; i.e., again he does not
deal with the steps that would have to be taken
after 2050 to achieve mitigation, let alone show
that it will be possible to take them.
The central argument in RE is that affluent
consumer society is irredeemable, not just
because it is far beyond sustainable resource use
levels but also because it is built on an
grotesquely unjust global economic system which
allocates most of the world's wealth to a rich
few. Ch 10 of RE summarises these arguments,
concluding that affluent consumer society is not
viable, and that there is no solution to the
alarming global predicament without huge and
radical transition away from the obsession with
affluence and growth and to some kind of Simpler
Way (outlined in Ch.11.) In my view it is not
likely that such a transition will be made.
For detail on these themes see The
Simpler Way website;
http://socialwork.arts.unsw.edu.au/tsw/
For an outline of Renewable Energy Cannot Sustain
Consumer Society, see
http://socialwork.arts.unsw.edu.au/tsw/D100.RE.cant.save.25.7.o6.html
Ted Trainer.
Social Work
Univ. of NSW.
Kensington 2052.
--
Ted Trainer
School of Social Work,
University of New South Wales,
Kensington. 2052. Australia.
02.93851871
Fax: 02 96628991
Email: F.Trainer@unsw.edu.au
Website: http://www.arts.unsw.edu.au/tsw/
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